Sable Offshore Stock Surges 23% on Key Pipeline Restart Approval
Federal green light for the Las Flores Pipeline unlocks a path to revitalize a major California oil field, dormant for nearly a decade.
Shares of Sable Offshore Corp. (NYSE: SOC) soared more than 23% on Monday after the company secured a long-awaited federal approval to restart a critical pipeline system in Southern California, a pivotal step in its plan to resurrect the prolific Santa Ynez oil field.
The U.S. Pipeline and Hazardous Materials Safety Administration (PHMSA) granted Sable permission to resume operations of its Las Flores Pipeline System. The approval allows for the transport of oil and gas from the offshore Santa Ynez Unit (SYU) to an onshore processing facility in Kern County, removing a significant logistical barrier that has choked production for years.
Sable's stock jumped $1.76 to close at $9.36 in heavy trading, pushing its market capitalization to over $586 million. The regulatory green light is the most significant milestone for Sable since it acquired the Santa Ynez assets from ExxonMobil in February 2024, aiming to bring one of California's largest oil fields back to life.
The Santa Ynez Unit, which includes three offshore platforms, was shut down in May 2015 following a leak on a separate, third-party pipeline that transported crude from the field. While Sable's infrastructure was not involved in the 2015 incident, the shutdown of the transportation network left the vast reserves stranded.
In a Form 8-K filing with the SEC, the company confirmed it had received the written approval from PHMSA after a thorough review of the pipeline's integrity and the company's restart procedures.
For Sable, the approval is a de-risking event that transforms its operational outlook. The company had already initiated a partial restart of the field, announcing in May 2025 that it had begun producing approximately 6,000 barrels of oil per day from Platform Harmony. However, without the pipeline, its ability to scale production was severely limited.
With the Las Flores system now cleared for service, Sable can move forward with its plan to bring the other two platforms online and ramp up total output. The company has previously stated a goal of reaching a production capacity of over 50,000 barrels per day by the fourth quarter of 2026. At its historical peak in the 1980s, the Santa Ynez field produced over 41,000 barrels per day.
The market's enthusiastic reaction reflects the potential revenue unlocked by the PHMSA decision. While the company is not yet generating significant revenue, the path to becoming a major producer is now substantially clearer. Wall Street analysts currently have an average price target of $22.20 on the stock, suggesting a belief that significant upside remains as the company executes its production ramp-up.
The journey to restart has been a complex undertaking, involving not only the acquisition and refurbishment of the assets but also navigating a stringent regulatory environment in California. This approval follows extensive safety inspections and procedural reviews, marking a crucial vote of confidence from federal regulators in Sable's operational capabilities.
Looking ahead, investors will be closely watching for updates on production volumes and the timeline for bringing the remaining platforms into service. While the regulatory hurdle has been cleared, the company still faces the operational challenge of scaling production from a legacy field. However, Monday's news validates the core of Sable's strategy: acquiring undervalued, non-producing assets and methodically bringing them back online.