Sable Pursues Federal Funding to Ramp Up Santa Ynez Oil Production

(Update) April 22, 2026, 6:14 AM GMT: Article updated with note on comment requests in last paragraph.

Sable Offshore Corp said Monday it was in talks with the Trump administration on potential "federal credit support options" to scale up production at its Santa Ynez Unit (SYU) project in California.

Recently Houston, Texas-based Sable restarted oil sales from the offshore project, as announced by the company March 30. That was after Sable secured an order from Energy Secretary Chris Wright to reactivate SYU and the associated pipeline system, despite ongoing compliance demands by local and state authorities.

In issuing the order March 13 the Department of Energy (DOE) cited energy security risks amid the disruption of oil shipping in the Strait of Hormuz. The Trump government, however, had already expressed support for SYU's restart before the Iran war, amid Sable's regulatory disputes with authorities in the county of Santa Barbara and the state of California.

SYU stopped flows 2015 after an oil spill that according to the California Coastal Commission (CCC) released 123,000 gallons of oil and caused environmental damage to 150 miles of coastline. The project was then owned by Plains Pipeline LP, which sold the assets to Exxon Mobil Corp in 2022. Sable acquired SYU from ExxonMobil in 2024.

On Monday Sable said SYU is currently producing 30,000 barrels of oil per day through two of the project's three platforms: Harmony and Heritage. "Once all 74 production wells on these two platforms are online, Sable expects the average production per well to be approximately 700 gross barrels of oil per day", Sable said.

"Sable expects Platform Hondo to come online in June 2026 with an estimated fully ramped production rate of approximately 10,000 gross barrels of oil per day.

"Capital spend across Sable’s assets is expected to be approximately $180 million from April 2026 through December 2026 as the company focuses on facility upgrades, maintenance capex, and low-cost production optimization operations".

Besides the engagement with the federal government for funding, Sable said it had already raised $95 million from share issuances.

"The company plans to consummate a debt refinancing of its senior secured term loan in the second quarter of 2026", it said.

"Concurrent with the refinancing, Sable plans to implement a commodity hedging program focused on cash flow protection and upside preservation", Sable added.

Sable's annual report published February 27, 2026 showed the company had $921.6 million in short-term outstanding debt and $97.7 million in cash and cash equivalents at yearend 2025.

Monday's statement added, "Sable is coordinating with the federal government in various legal matters to defend its vested rights to operate its assets and ensure compliance with certain federal mandates, including the Defense Production Act".

"Sable is also actively pursuing damages and taking proactive legal action to curb state and county regulatory overreach", the company added.

It is pursuing damages of at least $347 million from the CCC via litigation, as well as over $100 million from the county government for "unlawfully withholding the transfer of certain permits to Sable from the prior operator", the company said.

The CCC declined to comment, while the county government said it does not comment on pending litigation, in response to Rigzone's requests.

To contact the author, email jov.onsat@rigzone.com