The entire refinancing package is cross-conditioned and contingent on closing all three tranches simultaneously. The key binary risk is the DPA Order litigation — a preliminary injunction against the DPA Order would halt oil sales and likely trigger a liquidity crisis, as the company would have no revenue to service $975M in debt. Monitor the July 7, 2026 PHMSA hearing and the supplemental briefing on the DPA preliminary injunction. The $3.08/share common stock offering price represents a 55.8% discount to the $6.97 closing price, signaling severe dilution and potential further downside.
Price Chart
Executive Summary
Sable Offshore Corp. is offering $300M of 6.5% convertible senior notes due 2031, with an underwriter option for an additional $45M. The offering is cross-conditioned with a concurrent $100M common stock offering and a new $675M Term Loan B, all used to repay the ~$979.5M Exxon term loan maturing July 24, 2026. The company is currently producing ~43,000 bbl/d from 52 wells, but faces massive legal and regulatory overhang from California agencies challenging its pipeline operations under the DPA Order, which could halt revenue generation.
Key Facts
- $300M aggregate principal of 6.5% convertible senior notes due 2031, plus $45M over-allotment option
- Initial conversion price ~$4.00/share (249.7502 shares per $1,000 principal), stock closed at $6.97 on June 29, 2026
- Concurrent $100M common stock offering (32,467,533 shares at $3.08/share) plus 15% over-allotment
- New $675M Term Loan B at 15% interest, maturing Dec 15, 2028, secured by substantially all assets
- Proceeds repay ~$979.5M Exxon term loan (as of May 31, 2026) maturing July 24, 2026
- Pro forma debt of $975M ($1.02B with over-allotment) vs. $679M market cap — extreme leverage
- Production at ~43,000 bbl/d from 52 of 77 completed wells; Platform Hondo expected Q3 2026
- DPA Order under legal challenge by California; hearing on preliminary injunction held June 8, 2026, supplemental briefing completed June 18, 2026
- Multiple active litigations: Coastal Commission, CalGEM, State Parks, PHMSA, SB 237, criminal complaint, SEC/SDNY subpoenas
- Existing Senior Secured Term Loan amendment on June 22, 2026 extended maturity to July 24, 2026; $30M amendment fee paid
Financial Impact
Total new debt of $975M ($1.02B with over-allotment) on a $679M market cap; net proceeds ~$288.8M from notes + ~$92.8M from common stock + $675M Term Loan B = ~$1.056B total sources to repay ~$979.5M Exxon loan and ~$50M fees
Risk Factors
- DPA Order litigation could halt all oil sales, eliminating revenue to service $975M in debt
- Extreme leverage: pro forma debt of $975M vs. $679M market cap; notes are effectively subordinated to $675M secured Term Loan B
- Massive dilution: 32.5M new shares (21.6% of current 150.3M outstanding) at $3.08 — a 55.8% discount to market
- Multiple active litigations with California agencies could disrupt operations or impose material penalties
- SEC/SDNY subpoenas create regulatory overhang and potential liability
- Mandatory hedging of 100% of production through Dec 2028 limits upside from oil price increases
Market Snapshot
Investment Themes
Documents Analyzed
This report is based on 4 SEC documents filed with EDGAR.
| Document | Accession Number |
|---|---|
| 424B5 Filing (Primary) | 0001831481-26-000089 |
| Document: 0001831481-26-000089-index-headers.html | 0001831481-26-000089 |
| Document: 0001831481-26-000089-index.html | 0001831481-26-000089 |
| Document: 0001831481-26-000089.txt | 0001831481-26-000089 |
Filters
| Type | Now | ||||
|---|---|---|---|---|---|
Oct 19, 2026 8d ago | SC 13G | $3.19 | awaiting T+60 | — | $3.08 (−3.45%) |
Oct 8, 2026 19d ago | SC 13G/A | $3.72 | awaiting T+60 | — | $3.08 (−17.20%) |
Jul 1, 2026 16w ago | 424B5 | $4.25 $3.97 | ▲ +6.59% | ▲ +9.60% | $3.08 (+27.53%) |
Jul 1, 2026 16w ago | 424B5 | $4.40 $3.97 | ▲ +9.77% | ▲ +12.73% | $3.08 (+30.00%) |
Jun 30, 2026 17w ago | 424B5 | $3.08 $4.15 | ▼ −34.74% | ▼ −31.18% | $3.08 (+0.00%) |
Jun 30, 2026 17w ago | 424B5 | $3.08 $4.15 | ▼ −34.74% | ▼ −31.18% | $3.08 (+0.00%) |
Jun 22, 2026 18w ago | 8-K | $9.37 $4.96 | ▼ −47.07% | ▼ −48.81% | $3.08 (−67.13%) |
Jun 17, 2026 19w ago | Court Ruling | $10.25 $5.17 | ▲ +49.56% | ▲ +52.71% | $3.08 (+69.95%) |
Jun 16, 2026 19w ago | 8-K | $9.99 $4.92 | ▼ −50.75% | ▼ −51.75% | $3.08 (−69.17%) |
May 6, 2026 24w ago | 8-K | $12.83 $4.82 | ▲ +62.43% | ▲ +66.26% | $3.08 (+75.99%) |
US Market Status
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