Sable Offshore Corp. Announces Redemption of Public Warrants

Rhea-AI Summary

Sable Offshore Corp. (NYSE: SOC) has announced the redemption of all outstanding public warrants to purchase common stock, issued under the Warrant Agreement dated February 24, 2021. The redemption will occur on November 4, 2024 at 5:00 p.m. New York City time, for a price of $0.01 per warrant. This redemption applies only to public warrants from the company's IPO, not those issued in private placements.

Warrant holders can exercise their rights until the redemption date at an exercise price of $11.50 per share. Public warrants will cease trading on the NYSE on October 31, 2024. Any unexercised warrants after the redemption date will be void. The company has registered the underlying common stock with the SEC under Registration No. 333-277072.

Positive

• Company's stock price has met the $18.00 threshold required for warrant redemption
• Potential increase in cash flow from warrant exercises at $11.50 per share
• Simplification of capital structure by eliminating outstanding warrants

Negative

• Potential dilution of existing shareholders if many warrant holders choose to exercise
• Loss of future potential capital if warrants are not exercised before redemption

Insights

Financial Analyst

Sable Offshore Corp's decision to redeem its outstanding public warrants is a significant financial move. The redemption price of $0.01 per warrant is substantially below the $11.50 exercise price, creating a strong incentive for warrant holders to exercise before the redemption date. This could potentially bring in up to $11.50 per warrant in fresh capital for the company, minus the $0.01 redemption cost.

The redemption is triggered by the stock price maintaining at least $18.00 per share over a specified period, indicating strong recent performance. This move will simplify Sable's capital structure by eliminating the warrants, which can be seen as a form of "overhang" on the stock. It also suggests management's confidence in the company's valuation and future prospects.

For investors, this action could lead to dilution if many warrants are exercised, but it also removes uncertainty and potentially improves the stock's appeal to institutional investors who prefer cleaner capital structures. The market's reaction to this news will be important to watch in the coming days.

Legal Expert

The warrant redemption announcement by Sable Offshore Corp. is a complex legal and financial maneuver that requires careful scrutiny. Key legal aspects include:

• Compliance with the Warrant Agreement dated February 24, 2021
• Proper notification to warrant holders
• Adherence to SEC regulations regarding registered shares
• Clear communication of exercise rights and deadlines

The company appears to have met these requirements, providing ample notice and detailing the process for warrant exercise or redemption. The registration of underlying shares on Form S-1 ensures compliance with securities laws, protecting both the company and investors.

However, the disclaimer regarding "no representation or recommendation" on exercising warrants is crucial, as it shields the company from potential claims of undue influence on investor decisions. This approach aligns with best practices in corporate governance and securities law compliance.

HOUSTON--(BUSINESS WIRE)-- Sable Offshore Corp. (NYSE: SOC, “Sable”, or the “Company”) today announced that the Company will redeem all of its outstanding warrants (the “Public Warrants”) to purchase shares of the Company’s common stock, par value $0.0001 per share (the “Common Stock”), that were issued under the Warrant Agreement, dated February 24, 2021 (the “Warrant Agreement”), by and between the Company and Equiniti Trust Company, LLC (f/k/a American Stock Transfer & Trust Company, LLC), as warrant agent (the “Warrant Agent”), as part of the units sold in the Company’s initial public offering (the “IPO”) and that remain outstanding at 5:00 p.m. New York City time on November 4, 2024 (the “Redemption Date”) for a redemption price of $0.01 per Public Warrant. Warrants to purchase Common Stock that were issued under the Warrant Agreement in a private placement simultaneously with the IPO and that are still held by the initial holders thereof or their permitted transferees are not subject to this redemption.

Under the terms of the Warrant Agreement, the Company is entitled to redeem all of the outstanding Public Warrants if the last sales price of the Common Stock is at least $18.00 per share on each of twenty trading days within any thirty-day trading period ending on the third trading day prior to the date on which a notice of redemption is given. At the direction of the Company, the Warrant Agent will deliver a notice of redemption to each of the registered holders of the outstanding Public Warrants.

At 5:00 p.m. New York City time on October 31, 2024, the Public Warrants will cease trading on the New York Stock Exchange. The Public Warrants may be exercised by the holders thereof until 5:00 p.m. New York City time on the Redemption Date to purchase fully paid and non-assessable shares of Common Stock underlying such warrants, at the exercise price of $11.50 per share. Any Public Warrants that remain unexercised at 5:00 p.m. New York City time on the Redemption Date will be void and no longer exercisable, and the holders of those Public Warrants will be entitled to receive only the redemption price of $0.01 per warrant.

None of the Company, its board of directors or employees, including management, has made or is making any representation or recommendation to any holder of the Public Warrants as to whether to exercise or refrain from exercising any Public Warrants.

The shares of Common Stock underlying the Public Warrants have been registered by the Company under the Securities Act of 1933, as amended, and are covered by a registration statement filed on Form S-1 with, and declared effective by, the Securities and Exchange Commission (Registration No. 333-277072). The SEC maintains an Internet website that contains a copy of this prospectus. The address of that site is www.sec.gov. Alternatively, you can obtain a copy of the prospectus from our website at https://www.sableoffshore.com.

Questions concerning redemption and exercise of the Public Warrants can be directed to Equiniti Trust Company, LLC, Operations Center, Attn: Reorganization Department, 55 Challenger Road, Suite 200, Ridgefield Park, New Jersey 07660, telephone number (718) 921-8317.

No Offer or Solicitation

This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any offer of any of the Company’s securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any such 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 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/20241003212289/en/

Investor Contact:

Harrison Breaud

Director, Finance & Investor Relations

IR@sableoffshore.com

713-579-8111

Source: Sable Offshore Corp.

FAQ

When will Sable Offshore Corp (NYSE: SOC) redeem its public warrants?

Sable Offshore Corp will redeem all outstanding public warrants on November 4, 2024 at 5:00 p.m. New York City time.

What is the redemption price for Sable Offshore Corp's (NYSE: SOC) public warrants?

The redemption price for Sable Offshore Corp's public warrants is $0.01 per warrant.

What is the exercise price for Sable Offshore Corp's (NYSE: SOC) public warrants?

The exercise price for Sable Offshore Corp's public warrants is $11.50 per share of common stock.

When will Sable Offshore Corp's (NYSE: SOC) public warrants cease trading on the NYSE?

Sable Offshore Corp's public warrants will cease trading on the NYSE on October 31, 2024 at 5:00 p.m. New York City time.