Sable Offshore: The Fork In The Road

Plan A vs. Plan B & The Path Forward From Here

It seems like every couple weeks there is something new going on with Sable Offshore SOC 0.00%↑, and I get to spend a ton of time on the phone trying to figure out what’s going on. We have heard rumblings of federal involvement and a potential FPSO, which would avoid oil going through the state of California altogether. We have also heard that all of the work on the pipeline is done, and that Fire Marshal approval is in the final stages.

I’m going to keep it pretty short today, because we will know for sure where things are going in the next week or two. After SB 237 passed, it effectively put the deadline for Sable at January 1, 2026. I think that’s part of why the discussion about an FPSO (aka Plan B) has popped up recently. If Newsom wanted to try to kill Sable by now, he would have, and now he has a choice to make. He can either have the Fire Marshal give the approval and start the 10 day countdown (Plan A), or he can take his chances with the political circus that would come with Plan B.

If you look at the incentives, I don’t see why this thing ends up going down the route of federal involvement, an FPSO, and a new takings claim, but that’s certainly a possibility if the Fire Marshal doesn’t sign off soon. Plan A seems a lot cleaner and quieter, even with the complaints from the EDC and other similar groups. Plan B is messy for the State of California, the Governor, and the company, and the logic doesn’t seem to point in that direction, at least from my point of view. Either way, we will know soon enough, but my expectation is that we will see Fire Marshal approval and that 8-K in the near future. If not, then we can expect the gloves to come off with Plan B.

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Disclaimer

I own shares and calls on Sable Offshore. You should do your own research before making any investment decisions. Different investment strategies have different risk/return profiles which should be considered before making any decisions.

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