Los Angeles, California Nov 17, 2025 (Issuewire.com) - According to HFI Research (https://x.com/HFI_Research/status/1990098063613100089), the critical path to federal support—requiring, at a minimum, both NEPA (National Environmental Policy Act) and a BOEM (Bureau of Ocean Energy Management) permit—cannot be completed before Sable exhausts its cash reserves by January 2026. The timeline for even a best-case regulatory scenario vastly exceeds the company’s remaining financial runway. Securing a BOEM permit would necessitate a Coastal Zone Management Act review, a six-month process for which there is no preemptive override. Only following a formal rejection by the California Coastal Commission could the Commerce Secretary intervene, and even then, such an override would take considerable time. Compounding these obstacles, Sable faces a major gating item in its struggle to comply with Santa Barbara County’s stringent air permit requirements, which mandate the “best available technology.” This standard cannot be met within Sable’s $450 million capital expenditure framework, as the required vessel would cost over $1 billion and take two to three years to deliver. Furthermore, an alternative plan to relocate the Offshore Storage & Tanker twenty-five miles offshore would require an 18-month subsea tie-back project, bringing its own regulatory and technical difficulties. The only possible, yet highly improbable, route to federal support would be an intervention on the grounds of national security via the Department of Defense—a scenario for which there is no historical precedent, especially for a company with zero current production, and one HFI deems extremely unlikely given the prospect that Exxon would repossess the assets in liquidation. As a result, without the ability to secure a BOEM permit and with no credible pathway to a federally-backed loan, Sable is forecasted by HFI Research to run out of money by January, effectively ending any hope of continued operations or revival in the near term.
Simultaneously, the collapse of Sable’s prospects is playing out as a dramatic regulatory and investor crisis, amplified by the findings of HFI Research and widespread media coverage. In their widely circulated analysis, HFI Research declares the Sable narrative has entered a “reflexive death spiral” driven by regulatory dead-ends, a $2.5 billion capital shortfall, and the demise of the company’s Floating Production Storage and Offloading (FPSO) ambitions (https://seekingalpha.com/mp/1108-hfi-research-natural-gas/articles/6214524-idea-sable-offshore-the-end-is-near). The situation escalated dramatically after Sable’s pipeline route was pronounced dead following the California Office of the State Fire Marshal’s disclosure of compliance deficiencies, which triggered the chain reaction visible today. This event coincided with the exit of HFI Research from a long position in SOC shares, following the exercise of put options and the stock’s precipitous 26.4% collapse. Despite Sable management’s public statements asserting full regulatory compliance, HFI, citing internal sources, confirmed the pipeline section’s anomaly repairs were incomplete, having been halted by a California Coastal Commission cease-and-desist order, with the decision upheld in court on October 14, 2025. For Sable to regain operational status, it would need to overturn multiple legal and regulatory setbacks, complete long-delayed repairs, and achieve an improbable sequence of court victories, all prior to a looming January 1, 2026, deadline. HFI describes the odds of success as virtually zero and characterizes Sable’s ongoing communications as “fake it till you make it,” noting repeated management misrepresentations and rapid-fire legal claims as signals of desperation.
This regulatory quagmire and Sable’s financial unraveling have triggered a wave of legal actions. Two major investor law firms—Bronstein, Gewirtz & Grossman, LLC and Faruqi & Faruqi, LLP—have launched investigations into allegations of securities fraud and misleading disclosures. Shareholders who acquired SOC stock before May 21, 2025, are encouraged to visit www.bgandg.com/SOC. The ongoing Faruqi & Faruqi, LLP probe zeroes in on the pipeline repair halt, which wiped $5.04 per share from SOC’s value in a single day. The repercussions reverberate in national business press, with Reuters chronicling the share price’s 26.4% premarket fall and emphasizing the mounting delays and overruns linked to regulatory compliance failures (https://www.reuters.com/business/energy/california-judge-blocks-efforts-restart-santa-ynez-oil-pipeline-2025-10-14/). Compounding these woes, HFI dismantles Sable’s FPSO pivot as a mirage, stating that management’s $100 million retrofitting projection ignores more than $2.5 billion in actual required outlays, including $920 million in Exxon debt retirement, $500 million for the OS&T purchase, hundreds of millions in bonding, operations, and pre-restart interest, and resulting in negative free cash flow even with federal intervention.
The financing strategy modeled by HFI Research suggests that even a generous hybrid scenario—where a federal credit facility is exchanged for a 10% stake plus further equity issuance—would trigger massive dilution, swelling shares outstanding by 150% to nearly 275 million, with a discounted cash flow NPV slumping to just $5.01 per share. Should real project costs climb as predicted, dilution would accelerate, driving NPV down to $3.24 per share. HFI’s assessment is blunt: Sable “put all its eggs in one basket—the pipeline—and that route is dead.” The “last-ditch” FPSO strategy, HFI asserts, is void of strategy and driven by necessity rather than sound planning (https://www.hfir.com/p/idea-sable-offshore-the-end?utm_campaign=email-post&r=ryrug&utm_source=substack&utm_medium=email).
This cascade of setbacks is now feeding a self-reinforcing collapse in shareholder value, as investors—confronted with the unvarnished reality of permanent project delays, vanished regulatory pathways, and capital deficits—abandon the stock, exacerbating the death spiral and rendering Sable Offshore effectively defunct absent an immediate, highly improbable intervention at the federal level. The Santa Ynez project, long stymied since a 2015 Exxon spill, appeared poised in May 2025 for a tentative revival but has instead become mired in chronic regulatory and technical failures, with legal battles and air permit disputes piling up, stretching federal and local tolerance to the breaking point. HFI’s conclusion is unequivocal: management has consistently misled shareholders, regulatory timelines are unrealistic, and with punitive financing and evaporating cash, permanent damage is now all but assured. Shareholders are strongly encouraged to contact investigating firms now.
#sable #sable offshore #soc #NYSE: SOC
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