Sable Offshore Shares Tank as Main Buyer Cuts Purchases, Warns It May Go Under

Sable Offshore slumped 60.5 per cent to a record low on Monday after the oil producer raised “substantial doubt” about its ability to continue as a going concern, citing strained liquidity due to sales disruption to its main buyer.

The ongoing purchase reductions by its main crude-oil buyer have forced the company to reduce production and are expected to leave it short of liquidity to meet obligations when they fall due.

Sable said it does not expect operating cash flow and remaining refinancing proceeds to cover near-term operating costs and debt payments.

In March, the company issued a going-concern warning due to its debt maturities and liquidity position, but that eased after refinancing transactions completed in July extended debt maturities and improved liquidity.

The latest disruption, which continued through the filing date, prompted the company to cut output to manage inventories.

Sable said it is looking at options to resolve near-term working capital constraints caused by the downstream purchaser disruption, and is evaluating selling crude oil currently held in inventory via a bulk sale agreement.

The company said in an SEC filing it has begun selling to other buyers and is pursuing inventory sales, equity and unsecured debt financing, but said the timing and success of those efforts remain uncertain.