Sable Offshore stocks took a precipitous tumble early this week after the Houston-based oil company announced it may not have sufficient operating revenues to make it through the year after the Chevron refinery to the south that’s been processing all the company’s oil pumped off the coast of Santa Barbara stopped buying its crude about a month ago due to maintenance work at the refinery.
On November 9, Sable issued the financial reporting equivalent of a red flag. Company president Jim Flores announced the company had located three smaller buyers to pick up some but not all of the production slack confronting the company. He also announced the company intended a large-scale bulk sale of oil that the company had been amassing in storage tanks.
While all this might help soften the pinch of the company’s cash flow challenges, it’s not enough to bridge the gap. Flores noted the company is hoping to bring Platform Hondo online sometime within the month. The quality of oil generated at Platform Hondo reportedly requires less processing work and is easier to sell and more lucrative too…