10-Q · May 6, 2026
Sable Offshore Corp.'s Q1 2026 report reveals a significant increase in operating expenses due to the resumption of oil sales, with a net loss of $197 million. The company generated $1.3 million in revenue from oil…
Earnings analysis · 10-Q
SOC earnings analysis
Filed August 10, 2026 · Our reading of the company's report
The latest report
Sable moved from pre-revenue operations to $137.1 million of Q2 revenue after restarting oil sales, with Q2 EPS improving to $(0.42) from $(1.40) year over year and $(1.37) in Q1. However, the company remained…
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Sable moved from pre-revenue operations to $137.1 million of Q2 revenue after restarting oil sales, with Q2 EPS improving to $(0.42) from $(1.40) year over year and $(1.37) in Q1. However, the company remained loss-making, generated negative operating cash flow of $72.8 million year to date, and had only $21.6 million of cash against substantial debt obligations. The July refinancing removed the prior going-concern uncertainty and supports a production ramp, but high interest costs, regulatory litigation, DPA Order dependence, and mandatory hedging remain significant constraints.
How we read each report
Our analysis across the last few reports.
Our model's reading of each filing, not the share price or the market's reaction. Annual and quarterly reports each occupy one position.
Reported figures
- Earnings per share
- $-0.42
- Operating margin
- -48.8%
- Segment
- Santa Ynez Unit (SYU): oil and NGL revenue of $136.7 million in Q2 2026; the filing does not report separate operating segments.
What stood out
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Oil sales restarted at scale
Q2 revenue was $137.1 million versus $0 in Q2 2025 and approximately $1.0 million in Q1 2026, reflecting the restart of oil sales. Oil and NGL sales were $136.7 million, supported by 1,910 MBOE of sales volumes.
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Operating loss and EPS improved
Q2 operating loss narrowed to $66.9 million from $128.9 million in Q2 2025, and the operating margin improved to approximately negative 48.8% from no meaningful prior-year margin because prior-year revenue was $0. EPS improved to a loss of $0.42 from a loss of $1.40 and from $(1.37) in Q1 2026.
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Restart costs remain elevated
Operations and maintenance expense increased 125% year over year to $113.5 million, including $18.5 million of start-up demurrage charges and $12.0 million of operator-rights expenditures. Management said non-recurring commissioning expenses are not expected to recur, although costs should remain elevated until all wells are online.
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Refinancing removed near-term maturity pressure
The July 2 refinancing eliminated the prior going-concern uncertainty: management stated that substantial doubt no longer exists. The transaction included $345.0 million of 6.5% convertible notes, a $675.0 million Term Loan B due December 15, 2028, and approximately $107.0 million of net common-stock proceeds.
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Production ramp expected in Q3
Management expects all 77 Harmony and Heritage production wells to be online during Q3 2026; in July, approximately 47 wells were online producing approximately 720 gross barrels per day per well. Platform Hondo is expected to begin production in September 2026.
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Cash burn and capex moderated
Six-month operating cash burn improved to $72.8 million from $142.9 million, while capital expenditures fell to $52.6 million from $193.0 million. Derived six-month free cash flow remained negative at approximately $125.4 million, and ending cash was only $21.6 million.
What to watch
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High leverage and liquidity burden
The company had $21.6 million of unrestricted cash and $236.7 million of current debt at June 30, 2026, while six-month net loss was $261.2 million and accumulated deficit was $1.4 billion. Although refinancing extended maturities, the new Term Loan B bears 15.00% interest and requires 100% of excess cash flow for mandatory prepayment.
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DPA Order litigation threatens revenue
The company’s ability to transport oil and generate revenue is tied to the DPA Order, which is being challenged by California. Q2 revenue was $137.1 million, and an adverse ruling could require the company to cease or curtail transportation through the SYPS and materially reduce or terminate oil sales.
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Expanding California regulatory exposure
California’s Coastal Commission imposed an approximately $18.0 million administrative penalty in April 2025 and issued a June 9, 2026 notice alleging unpermitted reactivation of the pipelines. Separately, CalGEM is seeking a $57.3 million bond and filed a cross-complaint for injunctive relief and civil penalties on July 14, 2026.
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Mandatory hedging limits upside
The company entered into costless collars covering approximately 28.0 Mbo/d through December 2026, 25.0 Mbo/d in 2027, and 21.0 Mbo/d in 2028, with $65.00 puts and calls of $89.39, $80.00, and $73.17, respectively. These arrangements limit upside if oil prices rise and could create liquidity pressure if production is below hedged volumes.
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Cost base rises with production ramp
Operations and maintenance expense reached $113.5 million in Q2, up 125% year over year, while depletion, depreciation, amortization and accretion rose 910% to $32.0 million. Management expects operating and maintenance costs to remain elevated until all production wells are online and depletion expense to increase as production grows.
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Capital needs exceed current cash generation
The company estimates approximately $148.5 million of 2026 capital expenditures, including $85.9 million in the second half, while six-month operating cash flow was negative $72.8 million. The company also estimates potential OS&T and Buoy strategies would require approximately $475.0 million and $125.0 million, respectively, although neither is planned for near-term execution.
Management's outlook
No explicit numeric EPS or revenue guidance was provided. Management expects all 77 production wells on Platforms Harmony and Heritage online during Q3 2026, expects Platform Hondo to commence production in September 2026, and forecasts approximately $148.5 million of full-year 2026 capital expenditures, including $85.9 million in the remainder of 2026.
Earlier filings 4
10-K · February 27, 2026
Sable Offshore restarted limited production at the Santa Ynez Unit (SYU) on May 15, 2025 (~6,000 bbl/d initial rate) and obtained PHMSA approval of its Restart Plan on December 22, 2025 and an Emergency Special Permit…
10-Q · November 13, 2025
Sable Offshore reported no revenue for Q3 2025 and a narrowed net loss of $110,378 (thousands) and diluted loss per share of $(1.11), improved from a loss of $255,570 and $(4.11) in Q3 2024. Liquidity and refinancing…
10-Q · November 14, 2024
Sable Offshore reported no revenue for Q3 (oil & gas sales $0) and a large reported net loss of $255.6 million (three months ended September 30, 2024), or $(4.11) per share. Liquidity was materially bolstered by equity…
This is our reading of a public filing, not the filing itself. Analysis can contain errors; check the source document for full context.