SABLE OFFSHORE CORP. 3Q 2026 EARNINGS CALL - SABLE OFFSHORE CORP

Hello and welcome to the Disabled Offshore Corp Earnings Call. We ask that you please hold all questions until the completion of the formal remarks, at which time you will be given instructions for the question and answer session. Also, as a reminder, this conference is being recorded today. If you have any objections, please disconnect at this time. Harrison Brough, you may begin. Thank you, Ronnie. Good morning, everyone, and welcome to our third quarter 2026 earnings conference call. I am Harrison Breaux, Vice President of Finance and Investor Relations for Sable Offshore Corp. And joining me today to discuss our results are the following Sable Executive Committee members. Jim Flores, Chairman and Chief Executive Officer. Caldwell Flores President and Chief Operating Officer. Gregory Patronelli, Executive vice president and chief financial officer and anthony dunner executive vice president general counsel and secretary as well as various other members of the sable team please refer to our website to download a copy of our new investor presentation posted today as well as our recently filed financial statements which will both be discussed on this call we will actively display the presentation on this webcast and may reference certain content by page number our executive team will be available after prepared remarks for q a please note that we will be making statements during this call that are forward-looking these statements are based on current expectations and assumptions and are subject to risks and uncertainties actual results could differ materially from those described in the forward-thinking statements because of factors discussed in our earnings release in our investor presentation in the comments made during this conference call and in our most recent form 10k forms 10q and other reports and filings with the sec we do not undertake any duty to update any forward-looking statement with that i will proceed to our prepared remarks stable offshore delivered another quarter of growth and progress towards realizing the full value of the santa ynez unit the third quarter of 2026 was our second full quarter of oil sales as previously announced we increased our volume sold by nearly 30 percent quarter over over quarter and we are continually working to improve our ability to unleash the full capability of the santinez unit platform harmony and platform heritage wells are outperforming with little to no decline in production from existing wells additionally results from per fat operations remain encouraging and have performed at the upper end of management expectations at an average observed rate of over 700 barrels per day of additional production per curve ad financially this was our second quarter with revenue full quarter with revenue and we were pleased to see 13 quarter over quarter growth from a balance sheet perspective we completed our refinancing in the beginning of the quarter and began to deleverage the business with our initial amortization payment on the term loan b at the end of the third quarter we look forward to receiving our updated year-end reserve report reflecting the strong well results we have seen to date into further optimization of our balance sheet with longer term cheaper debt in q3 our liquidity was impacted by the previously announced downstream constraints and we prudently deployed our ATM program to bolster our working capital. Sable has not utilized the ATM thus far in the fourth quarter, and we are not permitted to comment on potential ATM usage or potential lack of usage on a forward-looking basis. With that, I will turn it over to Jim Flores for an operational update. Thank you, Harrison. And the company had a great third quarter as far as progress, uh still working on the sales aspect but rolling into the fourth quarter uh early october last month sable sold crude purchaser refinery uh began to reduce sable syu ocs crude purchases after two and a half weeks without crude purchases sable management began remarketing our crew to the other three refineries in the los angeles market sable has now successfully entered into sales agreements with all three refineries as of last week all have resumed sales uh uh to those refinerries and all four of our refinerys uh uh are now taking our crew table expects the sales volumes to increase once each refinery uh understands best how to refine our sable syu ocs crude oil going forward sable will have a balanced sales marketing strategy with all four refineris and we appreciate their cooperation from our bio refinerie and pipeline partners with most of our october production inventory uh in in in the sable onshore storage tanks and pipeline facilities sable management began marketing this inventory as a bulk crude sale in november sable's act uh actively in discussions with over half a dozen crude purchases to buy up to 1.3 million barrels of sable oil and a lump sum payment made in november with sable delivering that crude on agreed agreed upon schedule the amount of oil we sold in october was about 160 000 barrels before we were shut in so we uh at nine additional 900 000 barrels is our is our bogey for uh october but we're putting a whole 1.3 million barrels for sale and and to achieve our achieve our revenue goals for up for october in our november check Stable is also working with JP Morgan on potential opportunities to utilize our $100 million unsecured loan basket permitted under our senior secured term loan agreement. And furthermore, as a third option for additional funds if needed, we would offer a pipe opportunity to investors to provide necessary liquidity to our company in the fourth quarter. And looking forward to a strong 2027 with our SYU field on full production. Direct operations platform Harmony and heritage continue to have strong production performance with no increase in gas production along with steady oil rates and wellhead pressures at platform hondo sable operating teams completed the reconstruction internal operating operational commissions commissioning in the third quarter and in the fourth quarter thus far sable submitted all the final paperwork to the marine minerals administration or mma reflected all the the platform upgrades both in-person mma safety inspection and restart production and restarted production are scheduled within the month of november uh ahead of fully ramped up ramping up the platform and flowing all of its 15 producing wells to sales in december this year we are proud of the work we've done on platform hunt and bringing it up to modern safety standards like its sister platforms harmony and heritage and preparing to uh safety deliver the barrels to the market along with the five completed perf ads we look forward to robust production out of our platform contact harrison with that i'll turn it over back to you or just in q a ronnie please proceed with uh q a i believe we have uh neil dingman from william blair first thank you at this time if you would like to ask a question please click on the raised hand button which can be found on the black bar at the bottom of your screen when it is your turn you will receive a message on your screen from the host allowing you to talk and then you will hear your name called please accept unmute your audio and ask your question we will wait one moment to allow the queue to form your first question will come from neil dingman with william blair please unmute your audio and ask your questions good morning thanks for the time jim um did my first question just Maybe on the Honda, you gave a lot of comments on the press release. Maybe just any more color you could get, it seems like, and a lot of confidence that that will be coming in November. So I guess call it sort of cross the T's, dotting the I's, and again, everything with the state and the agencies seem to be on track, but anything you can add on that just for November? Well, the best thing about November structurally is that when you're looking for approval from regulators and so forth having the thanksgiving holidays as a backstop so we fully expect to be flowing wells in the last week of uh november and ramped up into december and that's going to be key for our year-end reserve report getting 30 days of good production on those on those wells are close to it so our third-party engineers can give us full credit for that and that really still achieves our target uh we're not that concerned with you know uh you know not having production here in November out of Hondo because we couldn't sell the oil anyway from a standpoint of we've got plenty of oil to sell and and what we look forward to having that crude oil in December once we have all all four of our fineries all ramped up and and taking all of our crude so that that's the first available time we could take the crude for sales anyway so unfortunately that's how it all fits together. Fantastic and then just secondly just on the political environment around the california spr jim i mean you know any more less confident more confident um you know just obviously given what happened with the election and all just maybe talk about uh how you see the landscape going forward um around the California spr yeah i guess i guess the underlying factor there is there's a lot of studies going on uh we're here at doe and stuff like that trying to you know make sure they're doing it the right way and everything But remember, there's no legislation needed for the SBR. It's already been laws passed on the 1975 Strategic Petroleum Reserve Act, and we follow under that law and so forth. All it needs now is strictly executive action out of DOE. And as long as we still have the White House support, which as late as yesterday, that got affirmed to us, they're just trying to make sure they dot the I's and cross all the T's. And I'm sure they want to, you know, there's other political things going on in Washington these days that, I mean, timing is everything. But we're still very encouraged by that, as well as additional legislation we have in Congress right now through the NDAA that we think is going to be very beneficial to our same cause. Your next question will come from Michael Furrow with Pickering Energy Partners. Please unmute your audio and ask your question. hey morning stable team can you hear me okay yeah okay great all right look um i think we just maybe want to start with uh liquidity right i think that's probably the number one question people are trying to get answered here and jim appreciate the comments about the um 100 million dollar unsecured loan basket and the potential pipe but maybe we could just start with the 1.3 million barrels of bulk crude available for sale can you provide more details about where you're at in that process and can you explain how 1.3 million barrels of crude is available just given the storage capacity at las flores canyon i think we're trying to get an idea of what what options are available and what kind of working capital uh tailwinds you could have from this potential sale sure um starting at starting at the uh uh uh syu inlet valve to our our tanks at las flores canyons you have 540 000 barrels of tank capacity there so we're you're the the sales point is upstream upstream of those tanks so you include those tanks plus the 520 000 barrels of lime fill plus the tanks we have at pentland and the and the pipeline between pentland in a media and a media to line 2000. you add all that together it's about 1.3 uh seven million barrels of total capacity so we we're what we're doing right now uh as we're flowing uh heritage and harm we're packing that system so we'll have three 1.3 million barrels that system the whole time so at the time we do that the ford sale it will be a it'll be a third-party purchase just like our our normal course of business they will take title to the crude oil we will continue to provide storage services and and transportation services uh on the crude all uh to the sales point uh below meteo at line 2000 but those at 1.3 million barrels the deficit that we of production that we had in october is just over 900 000 barrels the reason why we're offering the whole 1. 3 million barrels obviously there's going to be costs involved and and the purchaser has to make a profit so a discount so we're looking to plug all the october revenues with the uh with the sale revenue deficit with the sale of the uh of of the oil that we have in those in those storage facilities always all the way to below a media and the 1.3 is all the barrels we have there we'd sell more if we had them you know revenues or revenues but that's that's the target where everybody's working for now we've been in touch with our refiners our pipelines and also traditional crude trading houses but so forth and we've had robust results we've got all the NDA signed last week they're all doing their work we expect term sheets as early as this week and it's It's going to be price and timing, and who wants the crude oil. And so there's a hungry appetite market from the refining market and so forth. So it's just a back-to-back. They buy the crude, and they'll resell it to the refiners there on the L.A. market. So it'S a simple transaction. And we've also got approval from our lender, J.P. Morgan, to sign off on leasing the lean. So it' s a true transfer of a product like we do on a daily basis. with selling crude that uh that will not have any uh any clawback by by any of the holders here here at sable offshore so uh we've done this in the past uh mainly with tankers internationally and that type of thing so uh uh it's the same same concept but that's that's where all the crude oil is and i hope i was clear on that yeah no that makes sense thanks thanks for the answer jim uh maybe we could follow up on on kind of the sales ramp into year end um you know i think you you disclosed 31,000 as the targeted November number. I mean, what's a reasonable sales number for that month and why? And then can you help us bridge to the 51,000 expected in December? I think, you know, any concrete details regarding, you know, what volumes have been committed with which offtakers would be helpful to the extent that you could share that. Well, let's start with pipeline availability. In line 2,000 is 45,000 barrels of farm capacity that we have allocated, that we're holding on to. On top of that, there's line M70, which is now that we're selling to PBF. We hope to, by then, be selling oil directly into PBF as well. That's not confirmed, but that could be another 10,000 to 15,000 barrels a day there. That is the optimal mixture of 45 on line 2000 and 15 on line M 70, once we get everything all settled out. Do we get that done by December 1st? I hope so, but That's an unknown at this point in time, other than the 45,000 barrels on line 2,000. Your next question will come from David Beckelbaum with Stifle. Please unmute your audio and ask your question. Thanks for taking my questions, Jim. Sure. I wanted to just get back to the conversation around mix. um you you introduce like the three new refiners um and the sales agreements can you provide any color on how that influences um your your differentials relative to Brent and then the capacity that you're selling into I think that you disclosed on those three uh refiners you know look like it's it's just under 20,000 barrels a day like is that capacity amongst the new refiners anticipated to grow X that line 70? Yes. All three of them are starter levels. They just pick different levels. For instance, Marathon picked 1,000 barrels today. They've just ran to 30,000, and we haven't heard that they had any complaints or whatever, so they're coming back to us. What we push the three new refiners to is longer-term term contracts with better pricing. Right now, for the month of November, we have walk-up differentials, which you know they average around the same same thing we were getting with chevron no improvement uh from a standpoint uh some are a little better some a little worse but when we when we go into hopefully term contracts and you know six months or a year contracts that we're trying to we're trying to uh give these cats then then we'll have well we could have we could see some differential improvement there but not not in the not in november and december or maybe by december but not sure if you're not November so I guess it seems as as we we walk through all of these right if the company is going to be approaching you know the mid to upper 30s on a gross basis so you should be approaching free cash neutrality without what you know or perhaps even some generation with upside obviously as you you bring more barrels online maybe you could square how you you see the progression towards free cash and maybe add a little bit of color on what's happening on the operating cost side in the fourth quarter because it was my understanding that 3q would obviously be high because you're still carrying that excess crew around hondo yeah so so just thinking about uh uh the volumes and so forth like we talked about the 45,000 barrels in line 2000 plus additional sales in the M-70 line to PBF now that we're selling to those guys. Those can be critical in the volumes. We'll be able to hit those volumes pretty easy with all the wells. As far as LOE analysis, the LOEs in the fourth quarter will not be the lowest because of the additional hondo commissioning that we've had to do but by first quarter so everything just kind of rolls over in the first quarter when you look at you look the gap of production 930 940 000 barrels in october that's the revenues we're trying to plug with the with the bulk crude oil sales or the are tapping the unsecured credit are are are thirdly in in some equity in the pipe we're going to make sure we make it through all the way through to the first corner then then you're looking at a situation where it's going to be volume would be settled down between you know 15 to 20 000 barrels per refiner nice comfortable amount and they all do a lot of blending of the different barrels to get the right cocktail for their their refineries and they can all easily digest digest that amount so i think in the first quarter we're looking at a real good balance uh marking slate and hopefully with some term contracts with some better better differentials to them but uh that's that's all going to be you know based on all the hard work we're going to do here in the fourth quarter to get that kicked off I appreciate the color. Good luck to you, guys. Thank you. Our next question will come from Leo Mariani with Roth. Please unmute your audio and ask your question. Thanks. So just looking at your kind of revised guidance on sales for the second half of 26, it's still a very wide range here. Can you just provide a little bit of color around that range? I guess presumably at the lower end, perhaps you can't make the bulk sale. And maybe just provide kind of a little more insight on that would be great. Well, you take the sales in our projection here, what is it, 20-something Harrison that we have in the presentation? 20 to 30. 20 to 30, and you can add about 14,000 barrels a day, which is about a million two, a million three, in the bulk sale on a per-day basis, and end up with 35,000 to 38,000 barrels a for the fourth quarter, not including any kind of ramp in December. Including the ramp in the December, we could be at 38 to 40 as far as guidance in the fourth quarter. Okay, so that 20 to 30 did not assume the bulk sale. That's correct, Leo. The 20 to 33 doesn't include the bulk sales, and it also includes the impact of the third quarter, you know, third-party midstream production and sales constraints. Got it. Okay. And I guess just, you Know, presumably, you obviously haven't executed the bulk sell yet, but just wanted to be a little clearer on the dips. Should we assume kind of a similar diff in 4Q versus third quarter, which I guess was around $30 last quarter? Is that reasonable, or do you think it could be a little worse this quarter? Yeah, I've said that earlier. That's the right zip code. Yeah, well, this is Gregory Patronelli. We're in active negotiations on longer-term contracts, and we'll update the market when it's appropriate on the diffs. Got it. Okay. your next question will come from charles meade with johnson rice please unmute your audio and ask your question yes good morning uh jim to you and your whole team there at at sable um i think you uh i want to ask you about this this sales and current rate i think you i think you addressed this in in your answer to the last question but um could you clarify the the uh the sales that you're guiding to for uh i think it was uh uh i'm thinking of slide seven and the number was uh 31 000 gross um could you tell us how much are you selling you know today or this week and just clarify that 31 000 doesn't include or doesn't included any contribution from from the bulk sale yeah that's that's correct charles and and the sales we're all sharing line 2000 you're batching, we'll sell 80,000 barrels one day and we'll sell 20,000 the next. It moves all around based on availability and plane schedule, refinery schedule for their service in that whole LA basin. So the aspect of that when we put it on a per day basis, that's where they come out on a 30-day scale, but it moves around. That's why keeping our midstream tanks and pipeline completely full and and have as much crude ready to go is going to be real important to maximize the sales and also for the physical delivery to the refineries, but also maximizing the proceeds on our bulk sale here toward the end of November. Got it. Thank you. And I think someone else said before, I appreciate that you outlined some of your liquidity sources. That was helpful. So can you give us an idea what are the covenants or what are the constraints that you are focused on internally? I mean, is there a covenant or is it really just the amortization payments on the debt? What's really the ball to watch on that front? Charles, it's strictly cash needed. We have a 900,000 barrel hole in our oil sales forecast. you know and then you take the take the expenses and that we got we have to plug that hole and so forth i'll turn it over to gregory to give you some of the details but that's it's it's that simple it's in and out yeah i i would say yeah as we disclosed in our materials you know you've got 110 to 120 million dollars of cash spend between opex gna and capex for for the fourth quarter um that is prior to the amortization and interest payments uh on december 31 roughly call it 53 million bucks so you've got about you know 165 175 million dollars of cash spend uh in the fourth quarter we think between you know the current cash balance is about 38 million bucks the the november the rev november revenue from our from our sales of 31 000 barrels a day and the proceeds from this bulk sale will you know could potentially solve this solve this whole and if there's a need beyond that you know like as jim mentioned we've got options available to us under the 100 million dollar unsecured basket to top that up or if we need to we can do a you know a pipe offering uh but that's that's how we're that's what we're thinking about it yeah and charles put a little finer point on it if let's say we get 60 million dollars out of the bulk sale i'm not pricing 75 whatever the highest price is going to be and if we can make up the the deficit on that with the unsecured line of credit, we're good. If we need to top it off with a small pipe, we'll do it at that point in time. But it's going to roll from that standpoint. We may just do the first option, may just see the first two options, may have to do all three, but we'll get to the objective liquidity and get into the first quarter of 27 when we get to all our free cash flow. Your next question will come from Noel Parks with Tuohy Brothers Investment research. Please unmute your audio and ask your question. While your line is open, please unmute your audio and answer your question Hi, good morning. Can you hear me now? Yeah. Oh, great. You know, I want to sort of step back a bit and just, you know, from the perspective of perhaps somebody who's looking at the story, the Sable story at arm's length right now, maybe if they're not too familiar with it. You know, on the one hand, there is the production and the resource in place that you have, you know, well-established resource just historically, and then, you Know, with the performance matching your expectations as you, you've, you know, brought the field back online. And then sort of separate from that, there is, you know, takeaway, marketing, the sorts of issues that have, of course, been, you know, coming and going, you Know, recently. And so, but of course everything that's happening on that end really, you know, to my mind, there's no comment on the geology that comes out of any of the sort of the near term sort of, you marketing or delivery issues so um i guess i'm just uh wondering to sort of help somebody along with understanding sort of the the near-term variability and you know risk on the delivery side versus kind of what you've already established as far as the geology oil in place productivity of the of the wells doesn't really just kind of help put that sort of more of an arm's length um Great. Let's talk about geology and production first, okay? And then we'll go to the next one. The aspect that we have not seen the best of this field yet. We're studying the field from a standpoint of the last 11 years being shut in and the repressurization of the field. It's almost like you get to study the field, and then if there's any change of strategy, you get to start over with almost a brand new oil field. And when we look at the large oil fields around the world and we look at uh uh oil fields like prudhoe bay and gawar and people like that that when they injected the gas never never took any of the gas out because they couldn't sell the gas at prudho and gowar they wanted to make sure they maintain the maintain the gr reservoir pressure when they did that their their recoveries are in the high 50 percent we're we're uh projecting a 15 recovery in oral oil field but as as as we've seen where the gas has gone back in the solution we're making almost all the wall and very little just enough gas to run our equipment and so forth we are we're we've done our internal study when we meet with our third-party engineers to make sure they understand that we're not going to be selling gas out of this field going forward but we're going to produce a lot more oil a lot of recovery and we expect our recoveries to as much as double from 15 to 30 percent and when you multiply the times 15.6 billion barrels you get some big numbers and the thought process there is also uh uh bound in in in the science because what happens is with that gas uh pressurization maintenance and leaving things at the go are the same and and oil and solution is that you get a much lower decline curve like right now right now our decline for base decline is eight percent uh we we think the decline curve under that scenario will be four percent and that's one of the things it'll take a little little time maybe this year coming up as far as our third-party reservoir engineers but we use a four percent decline rate for a field of this size on on prove reserves and and and pdp and then we convert the pdmp you get to some really big numbers so wow we haven't all the production has been robust and and so forth and the pressures have been incredibly uh stable is that we haven't seen the best of it yet and we're going to manage this field differently going forward with with the benefit of hindsight of of of how the field performed when they were playing you know they were selling a lot of gas off the field so that's a big upside coming on the production side on the on the surface side uh initially the marketing was all political uh when we had to work through santa barbara county and all their problems and issues and and do everything safely as well as through state state california their their requirements and then make sure we met all the requirements of the U.S. government, the Department of Transportation, PHMSA, and Department of Energy, and the Department Interior. We've done all that, and we've won almost all of our lawsuits there that matter, and some of them are still pending, and we're cleaning all that up by early next year. We continue to operate under the Defense Production Act authorization by the President of the United States, and we continue to build STRATEGIES AROUND THE SPR AND ALSO LEGISLATIVE STRATEGIES TO HAVE ENDURING POSTURE ON THAT TO WHERE WE GET ON WITH JUST DOING OUR BUSINESS SAFELY AND PROFESSIONALLY PRODUCING OIL AND GAS FOR ALL OF CALIFORNIA. WE FILL UP 72 MILLION CARS A YEAR IN CALIIFORNia AND THAT'S NOT insignificant we're about 22 to 25 percent of the uh of the total total in state california and when the when the program uh uh war we talked to them and so forth about force preparedness and force uh force projection we're a cornerstone of their strategy and we continue to enjoy their support to make sure they have enough fuel to fuel the jets and stuff if anything happens in the pacific theater so the eyes are wide open on how important this asset is to the united states and also california even besides all the the uh the friction we have now selling into a into a confined or concentrated uh refinery market we had a goal a first quarter starting to diversify our refinery uh uh customers for our crude oil obviously in october it blew up in our face and we're very apologetic for that and uh and i would think after 45 years i should know better but I've kind of fell asleep because of our cozy relationship there. And due to some tank issues with the refiner and so forth, they wanted to upgrade their tanks and it just doesn't fit with our timing. We'll never get caught like that again. So we're going to get out of this liquidity squeeze right here one way or the other, and then we'll have a balanced sales force going forward. We'll have 92 wells on production or some similar to those wells on production with high divisible rates and we're looking forward to an outstanding 2027. Great, thanks a lot for, yeah, thanks, it's just sort of the sort of scope I was looking for and thinking about the reserves coming up and you mentioned ideally your 30 days of production by the end of the year uh should be helpful as far as just um input for the engineers for your reserves i guess i'm thinking sort of on maybe a worst case or more sort of conservative scenario can you give a sense of what you are pretty confident you will be able to put forth in terms of data of course 12 31 is the sort of the end date for for the sec quarter you know adjustments and so forth that can be made heading into the k but i'm just trying a sense of even kind of regardless of what happens with the sec numbers we have i assume you'll have some ability to talk about you know updates to your your research and play if you go down putting out 3p reserves or something but again just sort of independent of exactly what happens over the next month just what sort of be able to give on reserves yeah we normally build off our pdp reserve report with netherland sewell and so forth so that we'll build off that same thing that to add reserves and our goal by in the next year with our with our our gas injection strategy to have have all of our uh 3p resorts audited by netherlands school by the end of next year and that that will will will understand what we're doing they'll understand what they're doing and put the best foot forward so we're still we're probably 13 months away from the best picture but it's been a lot better picture in the first quarter than what you saw last in the first quarter last year our last question will come from david deckelbaum with stifle please unmute your audio and ask your question yeah sorry to sneak another one in here um Jim, I just wanted to ask, as you think about Hondo and December, once we get through approvals on the MMA side, can you remind us the uplift that you expect on the pricing for those barrels? and if we were in the same environment today, would you just be curtailing more production and heritage in Harmony and producing in Tejando at the full 10,000 a day gross so that you would see that a third of your production would be benefiting from perhaps pricing that's more analogous to Brent? Yeah, that's what we're going to try to achieve, David. Again, it's trying to achieve and seeing the reality of it. I'm just kind of hesitant there from a standpoint. We'll do that but one one thing one thing that we uh uh uh you know because these wells are outperforming and not only outperform on the oil side also with water production and so forth we've got to make sure that we manage that through our lost voice canyon processing facility mainly on the water handling and so on uh uh exxon is down that downsides some of the equipment we have huge pipes we can on a volumetric pipe basis we can do a lot but as far as the processing equipment and we don't want to overload that so you're going to see the the the uh emphasis be on the wells with the higher oil cut and and and versus versus the versus the lower oil cut and the higher water cut so we'll we'll manage to do that so we should have to have an improvement there what we're hoping to do is is really on the term contracts get better get better pricing that's going to be the key and so uh these the other refiners are really interested in term contracts and we'll try to we're going to try to push that as far as we can but right now it's a tough market you've got you've the western canada select coming in the pacific pacific rim you got a lot of the uh venezuelan crew that used to go to china now coming you know coming to the gulf coast and some of that's bouncing through the animal canal so the heavy heavy crude market is just is one of these is one these point times where it's got it's got ample supply and the refiners are taking their taking advantage of it so we're we're happy that they're taking our crude we we're looking forward to the better pricing if we can get it but we got to be realistic about the market we're in right now i i mean when i first started in in the la basin back in you know 100 years ago you know we had 50 deaths and we were lucky lucky you know selling all 18 18 bucks we we got got nine dollars and you know uh and it was it was we're glad to get it and then i got the point where we got down to down to three percent deaths We're selling oil to Conoco and Santa Maria out of PXP, which was onshore, and just the same heavy oil we had here was a premium. So the market's going to move around. We're basically going to have to be a price taker from that standpoint. But right now, we're focused on volumes, and then we'll spend all next year working on differentials. That's just another area where we can improve. That's what we're looking at from here. But we can't give you any concrete beyond where the diffs are right now. We have time for one more question from Lloyd Byrne with Jefferies. Please unmute your audio and ask your question. Hey, Jim, can you just go back through, is there anything left with the MMA that you guys have to provide? And then are there any hurdles left on their approval of Hondo? and then i just want quick follow-up yeah yeah uh lloyd that the answer to that is not to our knowledge the the key thing about honda we've we've tested all the valves we've tested all all the things that can go wrong we think from a standpoint uh on the deal so they've been out there personally testing so that's the critical area if we have a problem with one of those valves you have to go replace it and we can't find it you know it turns into three-week delay it doesn't sound like much but you can imagine this kind of operation it is So we've gotten over that deal and so forth. It's all with them. We have a very close relationship with everybody, the MMA, Kenny and those guys. And with the Thanksgiving holidays coming up, we think we have the right backstop to get everything through the government approval. And we've heard nothing to the contrary there. And so we're scheduled right now to start flowing well the Monday after Thanksgiving. Okay. And then is there anything on the legal side that's pending that we should keep an eye out for? Any court decisions that you would highlight? Yeah, what I'd highlight basically is all the court decisions that we've won, they're obviously all in appeal. The Ninth Circuit and so forth is going through all those appeals and so fourth. The Judge Wilson ruling was key, where they defended the FEMSA jurisdiction on the pipeline and so forth. So as the U.S. Justice Department and the federal government continues to iron this thing out, that it's going to be more of a cleanup all the way through the middle of next year along those lines. We don't see any obstacles there. We're continuing to work with supporting the DPA through the SBR, and that's just political timing at this point in time. There's no legislation required to get that approved, and then there's additional legislation on the NDAA that hopefully we'll get signed before year-end that cleans up those issues. So we've done everything we could there and we'll continue to monitor it, and as long as we have White House support, then we're in good shape, so that's where we are. This completes the allotted time for questions. I will now turn the call back over to Jim Flores for any closing remarks. Thank you all for participating. We're on it, and we look forward to making all our liquidity announcements and getting everybody right with the world. And thank you all. Thank you for your support, and We'll be back in touch. Goodbye. Thank you. Thank you so much for joining the Sable Offshore Corp Investor Update Call. You may now disconnect.