Sable Offshore sinks to record low after warning of going-concern risk
SOC•Sable Offshore shares fell 60.5% to a record low after the oil producer warned of substantial doubt about its ability to continue as a going concern. The company cited strained liquidity after its main crude-oil buyer reduced purchases.
1. Liquidity warning
Sable Offshore said reduced purchases by its main crude-oil buyer forced it to cut production and are expected to leave it short of liquidity to meet obligations when due. The company does not expect operating cash flow and remaining refinancing proceeds to cover near-term operating costs and debt payments.
2. Seeking funding options
The disruption continued through the filing date, prompting Sable to cut output to manage inventories. The company said it has begun selling to other buyers and is pursuing inventory sales, equity and unsecured debt financing, but the timing and success of those efforts remain uncertain.
3. Earlier refinancing
Sable issued a going-concern warning in March over debt maturities and liquidity, but that eased after refinancing transactions completed in July extended debt maturities and improved liquidity.
