Nyse Order Imbalance 920852.0 Shares On Sell Side

By Benoît Morenne

Oil giants have fled California, but James Flores is desperate to get in, even if it means crossing swords with the state.

His company, Houston-based Sable Offshore, wants to reboot dormant oil platforms it bought from Exxon Mobil in federal waters near Santa Barbara. Flores, Sable's chief executive, wagered that he could patch a leaky pipeline that once caused a disastrous oil spill, ship tens of thousands of barrels of crude to California's refineries — and earn a windfall.

He faces an uphill battle.

Although California has wrestled with high fuel prices and recently encouraged inland drilling in the state, its newfound goodwill hasn't extended to Sable. Officials have blasted the company as a fly-by-night outfit that poses an environmental risk to sensitive coastal areas. Gov. Gavin Newsom has signed a bill that seeks to stonewall the project.

Investors have grown skeptical of Sable, whose entire business hinges on the California bet. Its market capitalization has melted from about $3.2 billion in July to about $600 million.

But Flores, who is known in the industry as a hard-charging CEO, is digging in. Sable has turned to President Trump's administration for help financing and permitting an expensive pivot to load crude onto tankers in the middle of the ocean — a bid to sidestep the need for a pipeline that California would have to approve.

Flores has pitched Sable as a solution to California's energy woes and echoed the administration's criticism of the state's climate-focused policies. The administration just announced plans to open waters off California's coast to drilling, which Newsom called "dead on arrival."

"Sable is very concerned about the state's crumbling energy complex," Flores said in a statement last month. "California's economy will face dire consequences if refineries continue to close due to the lack of domestic production."

Flores's persistence has puzzled even some of his industry peers, who say that California's regulatory regime is kryptonite for oil-and-gas firms. Exxon, Shell and Occidental Petroleum have shed their oil-and-gas production businesses there, and Chevron last year moved its global headquarters to Houston from San Ramon, Calif.

"Offshore oil in California is a nightmare. The regulatory and reputational risks are off the charts," said Robert Collier, CEO of BlueLift, a company that specializes in decommissioning offshore platforms. "The oil companies just see much better options elsewhere."

A spokesman with the California Natural Resources Agency said the state remains committed to prohibiting new offshore drilling and protecting coastline communities. He said there are still many regulatory steps involved with Sable.

Some analysts peg the value of the offshore resource at north of $6.5 billion, and Flores stands to potentially make tens of millions of dollars if he can jump-start the platforms. If he fails, Sable risks defaulting on a loan that Exxon made to the company to facilitate the sale, and the assets could wind up back in Exxon's hands. That would wipe out Flores's roughly 8% stake and leave investors dry.

Sable's travails have spilled outside California. Last month, independent media outlet Hunterbrook Media said Flores may have shared insider information with investors including golf star Phil Mickelson. Hunterbrook, which is connected to a hedge fund that has a short position in Sable, said that Mickelson was in a private group chat with select Sable investors and that he shared insights from his conversations with Flores. On X, the golfer has called on the administration and Newsom to "enable Sable."

Sable has appointed a special committee of independent directors to investigate the allegations.

Tom Clare, a defamation lawyer representing Mickelson, pointed to an X post by the golfer in which he described the reports as false.

Opportunistic buyer

Flores, 66, built his career buying old wells from bigger peers, refurbishing them and squeezing the last drops. He got his start in Louisiana, where he and a partner grew the middling business they co-founded into Ocean Energy, a large independent with holdings in West Africa and in the Gulf of Mexico that was eventually bought by rival Devon Energy.

Flores then took over oil-and-gas producer Plains Exploration & Production and waded into California politics. He oversaw a plan to drill new wells in state waters in exchange for agreeing to shut down four offshore platforms at a later time, which California ultimately rejected in 2009. Miner Freeport-McMoRan Copper & Gold bought Plains four years later.

In 2017, Flores became CEO of privately owned Sable Permian Resources, a West Texas driller that was burdened by debt and went bankrupt during the Covid-19 pandemic.

Flores's enterprises have made him wealthy. He owns Little Pecan, a private island in the Louisiana marshes and a hunting paradise. Upon landing in a private airport, visitors get a luggage tag that some businessmen like to keep on their bags as a clubby accessory.

The oilman's deal appetite drew him to California. In 2021, he asked Exxon if it would sell three platforms in the Pacific's shallow waters. The units, situated 5 to 9 miles from Santa Barbara County's coastline, were shut-in after a corroded pipeline released nearly 3,000 barrels of oil in 2015. The spill blackened popular beaches, killed wildlife and hurt tourism and fishing.

Flores's venture paid about $204 million in cash and, to finance the rest, took on a $625 million loan from Exxon. Sable is expected to pay more than $1.1 billion in total for the assets.

Crucially, the deal provided that if Sable didn't restart production by a certain date, Exxon could reclaim the platforms. Sable quickly got to work but soon ran into a thicket of litigation. Environmental groups tried to sink the project in court. In April, the California Coastal Commission fined Sable about $18 million for defying state orders to stop pipeline repairs.

About a month later, Sable said that it had restarted production and that it expected to sell the oil from the pipeline in July. Its stock soared. Interior Department Secretary Doug Burgum later celebrated the news, writing on X that "Interior is bringing oil production BACK to the Pacific."

But obstacles to the project kept piling on. In September, California passed legislation to encourage new drilling in oil-rich Kern County, while at the same time raising the bar to restart Sable's pipelines — an apparent concession to green groups that opposed the project. California regulators who oversee the pipes told Sable that it hadn't met all repair requirements and that this prevented a restart. The firm has yet to sell a single barrel of oil.

Sable says it has worked lawfully with all state and federal agencies toward a restart. It says it plans to pursue all legal remedies and monetary damages related to stranded assets and expenditures on the pipeline system.

Mounting woes

Sable has hatched a bid to escape California's regulatory reach. It intends to take on new debt and spend some $450 million to install a floating vessel to treat and transfer crude to tankers in federal waters. It has requested expedited permits from the Interior Department and has said it is pursuing multiple avenues of federal financing.

"Increasing domestic offshore oil-and-gas production in federal waters is critical to addressing the National Energy Emergency," an Interior spokeswoman said, adding that the agency is working with Sable on next steps.

Some regulatory experts say that it could take years to fend off likely challenges from state and local agencies and that the company risks running out cash before it clears these hurdles.

"It's pretty bleak, honestly, in terms of going forward to actual production," said Elmer Danenberger, an independent expert who worked for 38 years in the Interior Department's offshore oil-and-gas program.

Write to Benoît Morenne at benoit.morenne@wsj.com

Sable Offshore Corp. (SOC) filed a Form 8K - Director, Officer or Compensation Filing - with the U.S Securities and Exchange Commission on November 26, 2025.

On November 20, 2025, Sable Offshore Corp. (the "Company") announced a series of management changes. The changes include the promotion of J. Caldwell Flores, the current President of the Company, to President and Chief Operating Officer of the Company. Mr. Flores is an executive officer of the Company, as such term is defined in Rule 3b-7 promulgated under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and additional biographical information about Mr. Flores can be found in the Company's definitive proxy statement for the 2025 annual meeting of shareholders, filed with the Securities and Exchange Commission ("SEC") on April 17, 2025. In connection with these management changes, Doss Bourgeois transitioned from Executive Vice President and Chief Operating Officer of the Company to Vice Chairman of the Company, effective November 20, 2025, and is no longer an executive officer of the Company as such term is defined in Rule 3b-7 promulgated under the Exchange Act.

The full text of this SEC filing can be retrieved at: https://www.sec.gov/Archives/edgar/data/1831481/000183148125000113/socc-20251126.htm

Any exhibits and associated documents for this SEC filing can be retrieved at: https://www.sec.gov/Archives/edgar/data/1831481/000183148125000113/0001831481-25-000113-index.htm

Public companies must file a Form 8-K, or current report, with the SEC generally within four days of any event that could materially affect a company's financial position or the value of its shares.