Sable Offshore Corp. — Second Quarter 2026 Earnings Summary

Financial Performance

• Generated $137.1 million in total revenue for Q2 2026, marking the first full quarter of revenue generation since inception.
• Reported $9.4 million in positive cash flows from operating activities for Q2 2026.
• Recorded $39.4 million in capital expenditures for the quarter.
• Ended the quarter with 154,531,910 shares of Common Stock outstanding.
• Incurred $18.5 million in non-recurring demurrage charges recognized in operational expenses due to California regulatory constraints on local refinery planning.

Guidance and Future Outlook

• Reduced 2H 2026E midpoint capital expenditures by 41% to $85 million to optimize cash flow and accelerate debt amortization.
• Increased 2027 expected oil ratio to approximately 100% from a prior midpoint of 91% due to deferred gas plant capital items and stronger oil cuts.
• Provided 2H 2026E guidance for Gross Average Daily Sales of 47,500 Boe/d and Net Average Daily Sales of 40,000 Boe/d.
• Provided FY 2027E guidance for Gross Average Daily Sales of 50,000 Boe/d and Net Average Daily Sales of 42,500 Boe/d.
• FY 2027E guidance reflects expected normalization of fully ramped, post-restart operations.
• Guidance assumes no benefits from waterborne marketing solutions, chemical treatments, or broader California infrastructure improvements.

Business Segments and Product Lines

• Achieved average daily net sales volumes of approximately 21,000 barrels of oil per day (Bo/d) in Q2 2026, increasing to approximately 40,000 net Bo/d by quarter-end (149% growth from the first day of the quarter).
• Produced at an average rate of 723 Bo/d per well from an average of 35 producing wells throughout the quarter.
• Increased online wells from an average of 26 in April 2026 to approximately 39 in June 2026 (50% increase).
• Las Flores Canyon crude oil inventory grew 49% in the quarter, rising from 212,390 to 316,495 barrels; inventory stood at approximately 224,000 barrels as of August 9, 2026.
• Resumed oil production from Platform Heritage in early April 2026.
• Average of approximately 47 wells were online at Platforms Harmony and Heritage in July 2026, producing 721 Bo/d per well.
• Five completed Perforation Additions ("Perf Adds") at Platform Hondo are expected to come online in September 2026, forecasted to produce an incremental 600 Bo/d each.
• Four additional Perf Adds at Platform Hondo are planned for early Q4 2026, forecasted to produce an incremental 600 Bo/d each.
• Sable expects to bring all 77 production wells at Platforms Harmony and Heritage online during Q3 2026 and Platform Hondo to come online in September 2026.

Market and Competitive Landscape

• Local California refineries were unable to plan for SYU first sales, forcing them to displace imported cargos in Q2 2026.
• A sudden supply influx of Pacific Outer Continental Shelf ("Pacific OCS") crude has led refiners to temporarily limit throughput and charge quality deducts for sulfur content.
• Sable was temporarily constrained to a maximum of 40,000 average gross Bo/d of oil sales throughput by downstream partners starting in July 2026; this constraint is expected to be alleviated in the back half of August.
• California refineries are expected to adjust their crude oil supply slate starting in September 2026 to accept more Pacific OCS barrels from the SYU and fewer imported barrels.
• Platform Hondo is expected to produce lower sulfur content oil, which should normalize field-wide sulfur levels upon restart in September 2026.
• Chemical-based solutions to sweeten SYU crude production are expected to be tested in Q4 2026, with full implementation anticipated in 2027.
• Sable is in active negotiations to implement waterborne crude oil marketing solutions from existing marine terminals in the Los Angeles area.
• The pending acquisition of the Crimson Utilities (San Pablo Bay Pipeline) network by a third party could provide further relief and marketing optionality to California oil producers.

Risks and Challenges

• Short-term midstream throughput constraints and widened differentials affecting sales volumes.
• California regulatory environment impacting refinery planning and causing non-recurring demurrage charges.
• Quality deducts charged by refiners for sulfur content and other items on Pacific OCS crude.
• Forward-looking statements are subject to risks including the ability to recommence full production, cost and time required for restarts, availability of future financing, and regulatory changes.

Management Commentary and Tone

• Chairman and CEO Jim Flores stated the team made strong progress in ramping up operations in Q2 2026.
• Management expressed encouragement regarding well productivity at the Santa Ynez Unit ("SYU"), noting higher than expected production with minimal to no observable decline.
• Management indicated a focus on working with midstream and downstream partners to maximize domestic crude oil delivery to market for California consumers and U.S. military allies.

Other Key Points

• Completed refinancing transactions on July 2, 2026, extending the maturity runway to year-end 2028.
• New debt structure includes a $675.0 million Senior Secured Term Loan B (15.0% annual coupon, maturing December 15, 2028) and $345.0 million 6.5% Convertible Senior Notes due July 1, 2031 (initial conversion price of $4.00/share).
• Issued $115.0 million of Common Stock at $3.08/share as part of the refinancing.
• Established a $500.0 million Senior Revolving Credit Facility (RCF) for commodity hedging purposes with a borrowing base of $0, maturing December 15, 2028.
• Commenced a commodity hedging program with $65/Bbl Brent floor prices to fulfill TLB post-closing requirements; expects to opportunistically hedge additional volumes as production ramps up.
• No ATM equity sales occurred in Q3 2026 to date.
• Wireline campaign for Perforation Additions and well optimization at Platform Harmony commenced in August 2026.