On May 26, Jefferies reiterated its Buy rating on Sable Offshore Corp. (NYSE:SOC) and hiked its price target to $38 from $36 after the company initiated oil production at the Santa Ynez Unit off the coast of California.
A worker in a hard hat standing in front of a giant oil refinery, the stark blue sky and grey refinery in the background.
The Santa Ynez Unit is one of the three platforms in California where production was shut down in 2015. The shutdown came following a corroded onshore pipeline rupture that resulted in the release of about 450,000 gallons. Fast forward, Sable Offshore initiated oil flow from six wells of the Santa Ynez unit at a rate of 6,000 barrels of oil a day.
Jefferies hiked its price target following the developments to reflect updated production expectations and risk profile. In addition, the research firm expects the company to secure loan financing that would allow it to ramp up its production operations.
Sable Offshore delivered a net loss of $109.5 million for its first quarter of 2025, attributed to production restart at the California facility. Nevertheless, it needed the quarter with a cash and cash equivalent balance of $189 million, with an exclusive cash balance of $35.5 million. Consequently, it remains in a solid financial position to proceed with operations at the Santa Ynez unit.
Sable Offshore Corp. is a U.S.-based independent oil and gas company, operating three offshore platforms in federal waters near California. The company holds 16 federal leases covering 76,000 acres and manages subsea pipelines that transport crude oil, natural gas, and produced water to onshore processing facilities.
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