Sable Offshore Corp. Announces $150 Million Private Placement of Shares and Update on Warrant Exercises

Rhea-AI Summary

Sable Offshore Corp. (NYSE: SOC) has announced a $150 million private placement of 7,500,000 shares of common stock to institutional investors, expected to close on September 23, 2024. The company plans to use the proceeds for capital expenditures, working capital, and general corporate purposes.

Additionally, Sable has received $64,829,491 from warrant exercises as of September 18, 2024, issuing 5,637,347 shares of common stock to exercising warrant holders. These proceeds will also be used for capital expenditures, working capital, and general corporate purposes.

TD Cowen and Jefferies are acting as joint placement agents, with Intrepid Partners as co-placement agent for the private placement. The shares being issued have not been registered under the Securities Act of 1933 and are subject to registration requirements or exemptions.

Positive

• Secured $150 million in gross proceeds through private placement
• Received $64,829,491 from warrant exercises
• Strengthened balance sheet for capital expenditures and working capital

Negative

• Potential dilution of existing shareholders due to new share issuance
• Shares issued in private placement not registered under Securities Act, limiting tradability

Financial Analyst

This $150 million private placement and $64.8 million from warrant exercises significantly bolster Sable Offshore's financial position. The total influx of $214.8 million provides substantial liquidity for capital expenditures and working capital. This cash injection is particularly important in the capital-intensive offshore industry, potentially accelerating Sable's growth plans or strengthening its balance sheet. However, investors should note the 5.8% dilution from the new 7.5 million shares. The warrant exercises, while dilutive, bring in cash at pre-determined prices, which is generally positive. The use of institutional investors for the placement suggests confidence in Sable's prospects. Overall, this financing round positions Sable more competitively in the offshore sector.

Legal Expert

The private placement's structure as an unregistered offering under the Securities Act of 1933 is a common approach for expedited fundraising. Sable's commitment to file a registration statement for resale is important for the investors' liquidity. Key legal considerations include:

• Compliance with Regulation D exemptions
• Potential restrictions on resale for a specified period
• Accuracy of disclosures to avoid securities law violations

The involvement of reputable placement agents (TD Cowen, Jefferies) adds credibility and suggests thorough due diligence. Investors should be aware that until the registration statement becomes effective, the new shares will have liquidity. This financing approach balances the company's need for capital with regulatory compliance.

Market Research Analyst

This substantial capital raise signals strong institutional interest in Sable Offshore, potentially indicating positive sector sentiment. The offshore industry has been rebounding, driven by increasing energy demand and higher oil prices. Sable's ability to secure $150 million in this environment suggests investor confidence in its growth strategy. The additional $64.8 million from warrant exercises further validates this optimism. However, it's important to consider the broader market context:

• How does this financing compare to peers?
• What specific projects might Sable be targeting?
• How might this impact Sable's market position?

While the capital injection is positive, its true value will depend on Sable's execution and the evolving offshore market dynamics.

HOUSTON--(BUSINESS WIRE)-- Sable Offshore Corp. (NYSE: SOC, “Sable”, or the “Company”) today announced it has entered into subscription agreements to issue 7,500,000 shares of its common stock in a private placement to institutional investors. Sable expects to receive gross proceeds of approximately $150 million, before deducting placement agent fees and other offering expenses.

The private placement is expected to close on September 23, 2024, subject to the satisfaction of customary closing conditions. The Company intends to use the proceeds from the private placement for capital expenditures, working capital, and other general corporate purposes.

Sable also announced that as of September 18, 2024, it has received proceeds of $64,829,491 from the exercise of outstanding warrants to purchase the Company’s common stock. Sable has issued 5,637,347 shares of its common stock to exercising warrant holders. The Company intends to use the proceeds from the warrant exercises for capital expenditures, working capital, and other general corporate purposes.

TD Cowen and Jefferies are acting as joint placement agents and Intrepid Partners is acting as co-placement agent for the private placement.

The shares of common stock being issued and sold in the private placement have not been registered under the Securities Act of 1933, as amended, or applicable state securities laws and may not be offered or sold in the United States except pursuant to an effective registration statement or an applicable exemption from the registration requirements. Sable has agreed to file a registration statement to register the resale of the shares of common stock being sold in the private placement.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy any securities described herein, nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any such state or jurisdiction.

About Sable

Sable Offshore Corp. is an independent oil and gas company, headquartered in Houston, Texas, focused on responsibly developing the Santa Ynez Unit in federal waters offshore California. The Sable team has extensive experience safely operating in California.

Forward-Looking Statements

The information in this press release include “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. When used in this press release, the words “could,” “should,” “will,” “ may,” “ believe,” “ anticipate,” “ intend,” “ estimate,” “expect,” “project,” “continue,” “plan,” forecast,” “predict,” “potential,” “future,” “outlook,” and “target,” the negative of such terms and other similar expressions are intended to identify forward-looking statements, although not all forward-looking statements will contain such identifying words. These statements are based on the current beliefs and expectations of Sable’s management and are subject to significant risks and uncertainties. Actual results may differ materially from those described in the forward-looking statements. Factors that could cause Sable’s actual results to differ materially from those described in the forward-looking statements include: the ability to recommence production of the Santa Ynez Unit assets and the cost and time required therefor; global economic conditions and inflation; increased operating costs; lack of availability of drilling and production equipment, supplies, services and qualified personnel; geographical concentration of operations; environmental and weather risks; regulatory changes and uncertainties; litigation, complaints and/or adverse publicity; privacy and data protection laws, privacy or data breaches, or loss of data; our ability to comply with laws and regulations applicable to our business; and other one-time events and other factors that can be found in Sable’s Annual Report on Form 10-K for the year ended December 31, 2023, and any subsequent Quarterly Report on Form 10-Q or Current Report on Form 8-K, which are filed with the Securities and Exchange Commission and are available on Sable’s website (www.sableoffshore.com) and on the Securities and Exchange Commission’s website (www.sec.gov). Except as required by applicable law, Sable undertakes no obligation to publicly release the result of any revisions to these forward-looking statements to reflect the impact of events or circumstances that may arise after the date of this press release.

Disclaimers

Non-Producing Assets

The Santa Ynez Unit assets have not produced commercial quantities of hydrocarbons since such assets were shut in during May of 2015 when the only pipeline transporting hydrocarbons produced from such assets to market ceased operations. There can be no assurance that the necessary permits will be obtained that would allow the pipeline to recommence transportation and allow the assets to recommence production. If production is not recommenced by January 1, 2026, the terms of the asset acquisition with ExxonMobil Corporation would potentially result in the assets being reverted to ExxonMobil Corporation without any compensation to Sable therefor.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240919762228/en/

Investor Contact:

Harrison Breaud

Director, Finance & Investor Relations

IR@sableoffshore.com

713-579-8111

Source: Sable Offshore Corp.

FAQ

How much did Sable Offshore Corp (NYSE: SOC) raise in its private placement?

Sable Offshore Corp (NYSE: SOC) raised approximately $150 million in gross proceeds through a private placement of 7,500,000 shares of common stock to institutional investors.

When is the private placement for Sable Offshore Corp (NYSE: SOC) expected to close?

The private placement for Sable Offshore Corp (NYSE: SOC) is expected to close on September 23, 2024, subject to customary closing conditions.

How much has Sable Offshore Corp (NYSE: SOC) received from warrant exercises?

As of September 18, 2024, Sable Offshore Corp (NYSE: SOC) has received $64,829,491 from the exercise of outstanding warrants to purchase the company's common stock.

What will Sable Offshore Corp (NYSE: SOC) use the proceeds for?

Sable Offshore Corp (NYSE: SOC) intends to use the proceeds from both the private placement and warrant exercises for capital expenditures, working capital, and other general corporate purposes.