Sable Offshore Corp: A Tough Week – What‘s Next?

Research evidence excerpt

Sable Offshore Corp: A Tough Week – What‘s Next?

66/sh. However,

we believe this is unlikely.

With $1,075mn raised, SOC can now repay the XOM loan at ~$992mn, pay for ~$50mn in

associated capital markets costs, and deliver ~$33mn in excess cash to the balance sheet.

What's Next? With the refinancing complete, we expect SOC to imminently lock in hedges on all

NSAI PDP production through Dec '28. In our model, we do not currently include hedges and note

that strip prices are marginally below our deck. We will review numbers once in place.

The market continues to monitor Judge Wilson's decision in the Consent Decree case, with a

decision expected in July. Both parties in the case provided briefings of their positions to Judge

Wilson in late June. We expect a positive ruling. We also expect updates this summer on the

California SPR. In addition, PHMSA granted SOC its special permit on Friday and the next hearing

for the case is on July 7.

Through the balance of '26 and 1H27, we expect SOC to direct FCF to deleveraging before pursuing

a refinancing of the Term Loan B and the Convertible Loan in 2Q27. With more production history

and greater legal clarity, we expect SOC to look to refinance. We model SOC refinancing ~$830mn

in debt between the 2 facilities at a 10% interest rate. We will monitor debt paydown.

Lloyd Byrne * | Equity Analyst

Valuation. We value SOC on a DCF with a 15% discount rate, which gets us to our $11/sh PT. In our +1 (212) 323-7528 | lloyd.byrne@jefferies.com

valuation, we conservatively incorporate potential dilution from the convertible note, despite SOC

Emma Schwartz * | Equity Analystlooking to exercise for cash. We still see attractive FCF yields.

1 (212) 336-7254 | emma.schwartz@jefferies.com

John Edelman * | Equity Analyst