Sable Offshore Corp. (SOC)

CIK: 0001831481. SIC: 1311 Crude Petroleum & Natural Gas. Latest 10-K as of: 2026-02-27.

SIC breadcrumb: Mining > SIC Major Group 13 > SIC 1311 Crude Petroleum & Natural Gas

SEC company page: https://www.sec.gov/edgar/browse/?CIK=1831481. Latest filing source: 0001831481-26-000026.

Selected Fundamentals

Financials

Annual standardized facts from SEC companyfacts as of latest extracted filing date 2026-02-27. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001831481.json. Derived margins, ratios, and free cash flow are computed from the extracted annual SEC facts.

Flow metrics use full-year FY periods from 10-K/10-K/A filings; balance-sheet metrics use FY-end instants. Free cash flow = operating cash flow - capital expenditures. Missing metrics are omitted rather than fabricated.

Ratios

ROE and ROA use period-end equity/assets. Liabilities / equity uses total liabilities divided by stockholders' equity. Current ratio uses current assets divided by current liabilities when both are reported.

Financial Charts

Quarterly

Quarterly standardized facts from SEC companyfacts as of latest extracted filing date 2026-05-06. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001831481.json.

Flow metrics use discrete quarter-length periods from 10-Q/10-Q/A filings. Q4 revenue and net income are derived only when annual FY and nine-month YTD facts exist for the same fiscal year; derived Q4 values are labeled. EPS Q4 is not derived.

Quarterly Charts

Macro Cross-References

• CPIAUCSL - Consumer Price Index for All Urban Consumers: All Items in U.S. City Average
• UNRATE - Unemployment Rate
• FEDFUNDS - Federal Funds Effective Rate
• CES0500000003 - Average Hourly Earnings of All Employees, Total Private
• DFEDTARU - Federal Funds Target Range - Upper Limit
• DFEDTARL - Federal Funds Target Range - Lower Limit
• DGS3MO - Market Yield on U.S. Treasury Securities at 3-Month Constant Maturity
• DGS2 - Market Yield on U.S. Treasury Securities at 2-Year Constant Maturity
• DGS10 - Market Yield on U.S. Treasury Securities at 10-Year Constant Maturity
• DGS30 - Market Yield on U.S. Treasury Securities at 30-Year Constant Maturity
• T10Y2Y - 10-Year Treasury Constant Maturity Minus 2-Year Treasury Constant Maturity
• CPILFESL - Consumer Price Index for All Urban Consumers: All Items Less Food and Energy
• CPIUFDSL - Consumer Price Index for All Urban Consumers: Food
• CPIENGSL - Consumer Price Index for All Urban Consumers: Energy
• CUSR0000SAH1 - Consumer Price Index for All Urban Consumers: Shelter
• PCEPI - Personal Consumption Expenditures: Chain-type Price Index
• PCEPILFE - Personal Consumption Expenditures Excluding Food and Energy: Chain-type Price Index
• PPIACO - Producer Price Index by Commodity: All Commodities
• T10YIE - 10-Year Breakeven Inflation Rate
• U6RATE - Total Unemployed, Plus All Marginally Attached Workers Plus Total Employed Part Time for Economic Reasons
• PAYEMS - All Employees, Total Nonfarm
• CIVPART - Labor Force Participation Rate
• EMRATIO - Employment-Population Ratio
• UNEMPLOY - Unemployed
• CE16OV - Employment Level
• ICSA - Initial Claims
• JTSJOL - Job Openings: Total Nonfarm
• JTSQUR - Quits: Total Nonfarm
• GDPC1 - Real Gross Domestic Product
• A191RL1Q225SBEA - Real Gross Domestic Product: Percent Change from Preceding Period
• INDPRO - Industrial Production: Total Index
• TCU - Capacity Utilization: Total Index
• HOUST - New Privately-Owned Housing Units Started: Total Units
• PERMIT - New Privately-Owned Housing Units Authorized in Permit-Issuing Places: Total Units
• RSAFS - Advance Retail Sales: Retail Trade
• PCE - Personal Consumption Expenditures
• DSPIC96 - Real Disposable Personal Income
• PSAVERT - Personal Saving Rate
• M2SL - M2
• BOPGSTB - U.S. International Trade in Goods and Services: Balance
• MSPUS - Median Sales Price of Houses Sold for the United States
• HSN1F - New One Family Houses Sold: United States
• RHORUSQ156N - Homeownership Rate in the United States
• TTLCONS - Total Construction Spending: Total Construction in the United States
• RRVRUSQ156N - Rental Vacancy Rate in the United States
• TOTALSL - Total Consumer Credit Owned and Securitized
• REVOLSL - Revolving Consumer Credit Owned and Securitized
• DRCCLACBS - Delinquency Rate on Credit Card Loans, All Commercial Banks
• GDP - Gross Domestic Product
• GPDI - Gross Private Domestic Investment
• GCE - Government Consumption Expenditures and Gross Investment
• PCEC - Personal Consumption Expenditures
• NETEXP - Net Exports of Goods and Services
• GFDEBTN - Federal Debt: Total Public Debt
• GFDEGDQ188S - Federal Debt: Total Public Debt as Percent of Gross Domestic Product
• FYFSD - Federal Surplus or Deficit
• FGRECPT - Federal Government Current Receipts
• FGEXPND - Federal Government: Current Expenditures
• MANEMP - All Employees, Manufacturing
• USCONS - All Employees, Construction
• USTRADE - All Employees, Retail Trade
• USFIRE - All Employees, Financial Activities
• USGOVT - All Employees, Government
• AWHAETP - Average Weekly Hours of All Employees, Total Private
• DGORDER - Manufacturers' New Orders: Durable Goods
• NEWORDER - Manufacturers' New Orders: Nondefense Capital Goods Excluding Aircraft
• BUSINV - Total Business Inventories
• EXPGS - Exports of Goods and Services
• IMPGS - Imports of Goods and Services
• IR - Import Price Index (End Use): All Commodities
• PPIFIS - Producer Price Index by Commodity: Final Demand

Latest quarter (10-Q)

Latest 10-Q source: 0001831481-26-000049.

Extracted structurally from real Item 2 body heading to real Item 3/4 boundary. Confidence: high. Filing date: 2026-05-06. Report date: 2026-03-31.

ITEM 2.      MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Unless otherwise noted or the context otherwise requires, references to (i) the “Company”, “Sable”, “we”, “us”, or “our” in this Item 2 are to Sable Offshore Corp, a Delaware corporation, and its consolidated subsidiaries, following the Business Combination, (ii) “Flame” are to Flame Acquisition Corp. prior to the Business Combination, (iii) the “Santa Ynez Unit” or “SYU” are to the 16 federal leases, three offshore platforms (Hondo, Harmony and Heritage), and associated ancillary facilities located in federal water offshore California, and (iv) the “Santa Ynez Pipeline System” (or “SYPS”) are to the interstate pipeline connecting the SYU to the Pentland Station terminal, inclusive of “Pipeline Segment 324” and “Pipeline Segment 325”, or collectively referred to as “Pipeline Segments 324 and 325” (formerly known as “901/903 Assets” and as defined in the Sable-EM Purchase Agreement), the Las Flores Canyon (“LFC”) onshore processing. storage, and related pipeline assets, and the offshore pipeline connecting the SYU to LFC. The SYU Assets include the SYU and the SYPS. The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our financial statements and related notes thereto included elsewhere in this Quarterly Report. Certain information contained in the discussion and analysis set forth below includes forward-looking statements that involve risks and uncertainties.

Cautionary Note Regarding Forward-Looking Statements

The unaudited condensed consolidated financial statements include forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). We have based these forward-looking statements on our current expectations and projections about future events. These forward-looking statements are subject to known and unknown risks, uncertainties and assumptions about us that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by such forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “may,” “should,” “could,” “would,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “continue,” or the negative of such terms or other similar expressions. A number of factors could cause actual events, performance or results to differ materially from the events, performance and results discussed in the forward-looking statements. For information identifying important factors that could cause actual results to differ materially from those anticipated in the forward-looking statements, please refer to the risk factors described in Part I, Item 1A “Risk Factors” included in our Annual Report on Form 10-K for the year ended December 31, 2025, and those described in our other SEC filings. The Company’s securities filings can be accessed on the EDGAR section of the Securities and Exchange Commission (“SEC”) website at www.sec.gov. Except as expressly required by applicable securities law, the Company disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise.

Recent and Significant Events

Defense Production Act Order

On March 13, 2026, the President of the United States, Donald J. Trump, signed an Executive Order to, among other things, delegate certain authorities under the Defense Production Act of 1950 (“DPA”) to the United States Secretary of Energy. Subsequently, on March 13, 2026, the United States Secretary of Energy, Chris Wright, issued an order to the Company invoking the DPA (the “DPA Order”) to immediately prioritize and allocate pipeline transportation services for hydrocarbons from the SYU through the SYPS in order to address the energy scarcity and supply disruption risks caused by California policies that have left the region and U.S. military forces dependent on foreign oil.

Resuming Petroleum Transportation through SYPS Segments 324 and 325

On March 14, 2026, the Company resumed the transportation of hydrocarbons (oil) produced at the SYU through the SYPS at the direction of the United States Secretary of Energy, Chris Wright, in compliance with the DPA Order. In doing so, the Company facilitates the supply of domestically produced crude oil through U.S. pipeline infrastructure to U.S. refineries, supporting domestic consumers and the U.S. military.

The resumption of oil transportation through Segments 324 and 325 of the SYPS was executed in compliance with all applicable safety standards through the Company’s comprehensive pipeline integrity management program. Sable is pleased with its operational performance across the SYU and the SYPS during this critical period. Sable is also proud to create new, well-paying jobs for the people of California and throughout America.

25

Table of Contents

Initiation of Oil Sales

On March 29, 2026, the Company initiated oil sales upon filling the SYPS, resulting in total oil sales volumes of approximately 13,380 barrels for the period ended March 31, 2026.

Consent Decree

The United States Department of Justice has moved to terminate or modify the Consent Decree in the United States District Court, Central District of California. Sable is not a party to this litigation, but is participating in briefing related to the Consent Decree termination or modification, which is set to be heard on June 1, 2026.

Offshore Storage and Treating Vessel Offtake Strategy

On September 29, 2025, Sable announced that it is evaluating and pursuing an offshore storage and treating vessel (“OS&T”) strategy to provide access to domestic and global markets via shuttle tankers for federal crude oil produced from the SYU in the Pacific Outer Continental Shelf Area (the “OS&T Strategy”). On October 9, 2025, Sable submitted a Development and Production Plan update for the SYU to the Bureau of Ocean Energy Management (“BOEM”). Prior to implementation of the OS&T strategy, regulatory authorizations are required, including clearance from BOEM.

Following the resumption of oil transportation through Segments 324 and 325 of the SYPS, the OS&T Strategy is no longer the Company’s primary development pathway. Under the DPA Order, the Company has been directed to immediately prioritize and allocate pipeline transportation services for oil transportation from the SYU through the SYPS. Nonetheless, the Company continues to evaluate the OS&T Strategy as a longer-term option to diversify sales channels, expand access to domestic and international purchasers, and provide additional flexibility in navigating potential regulatory developments.

At–the–Market Common Stock Offering

On February 2, 2026, the Company entered into a Sales Agreement (the “Agreement”) with TD Securities (USA) LLC and Jefferies LLC, as agents (the “Agents”), under which the Company may offer and sell, from time to time at its sole discretion, an aggregate gross sale price of up to $250.0 million of shares of its Common Stock through the Agents, pursuant to an effective shelf registration statement on Form S-3 (Registration No. 333-286675), which was declared effective by the SEC on May 1, 2025. The Company filed a prospectus supplement with the SEC on February 2, 2026 in connection with the offering. Under the terms of the Agreement, the Agents may sell the Company’s Common Stock by any method permitted by law deemed to be an “at the market offering” as defined in Rule 415 of the Securities Act of 1933, as amended.

During the three months ended March 31, 2026, the Company issued 5,359,790 shares of its Common Stock for aggregate gross proceeds of approximately $72.4 million. Associated marketing and legal fees of approximately $1.6 million were paid and recognized as an offset to the proceeds within Additional paid-in capital in the unaudited condensed consolidated balance sheet and statement of changes in stockholders’ equity as of March 31, 2026.

Recent Trends and Outlook

Trends

Commodity prices were volatile during the first quarter of 2026, and the Company expects continued volatility for the remainder of 2026 due to macroeconomic conditions, evolving regulatory frameworks, geopolitical developments, and potential changes in trade policies, including the imposition of domestic and foreign tariffs. The Company’s revenues, profitability, liquidity, and financial condition are expected to be impacted by market prices for crude oil and, to a lesser extent, NGLs and natural gas.

In July 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted, and the current U.S. administration has issued executive orders and indicated the potential for additional regulatory and trade policy changes that may affect the oil and gas industry. The OBBBA may favorably affect the Company’s future cash income tax obligations, including the potential deferral of certain federal income taxes; however, the extent and timing of such impacts remain uncertain. Changes in trade policy, including the potential imposition of tariffs, could result in reciprocal actions by foreign governments, which may affect demand for crude oil, increase costs for materials and services, and impact broader economic conditions, including interest rates.

The Company is subject to ongoing litigation and regulatory proceedings, including matters involving California state agencies, refer to Note 6 — Commitments and Contingencies for additional details. Continued regulatory scrutiny and legal

26

Table of Contents

proceedings contribute to an uncertain operating environment and may result in increased compliance costs, operational delays, or other constraints, which could adversely affect the Company’s business, results of operations, financial condition, and capital expenditures.

Outlook

As of April 2026, approximately 40 wells at Platforms Harmony and Heritage are online, producing an average of approximately 750 gross barrels of oil per day per well. Upon bringing all 74 production wells on these platforms online, which is expected during the second quarter of 2026, the Company expects average production of approximately 700 gross barrels of oil per day per well. The Company expects Platform Hondo to commence production in June 2026.

The Company intends to pursue a refinancing of its Senior Secured Term Loan during the second quarter of 2026. In addition to engaging with its existing banking partners, the Company is evaluating potential federal credit support options. The Company also expects to implement a commodity hedging program designed to support cash flow stability while retaining exposure to favorable commodity price movements.

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.

Components of Results of Operations

Revenue

On March 29, 2026, the Company initiated oil sales after filling the SYPS with oil produced from Platform Harmony. In April 2026, the Company resumed oil production from Platform Heritage with such produced oil contributing to sales thereafter. The Company expects to resume oil production from Platform Hondo by the end of the second quarter of 2026. The Company’s revenue stems from the sale of the oil produced from the SYU, processed by LFC, and transported via the interstate SYPS to its ultimate sales point at Pentland Station.

Operating Expenses

•Operations and maintenance. The Company’s most significant costs

[Excerpt truncated for page length; source filing is linked above.]

Latest 10-K MD&A

Extracted structurally from real Item 7 body heading to real Item 7A/8 boundary. Confidence: high. Filing date: 2026-02-27. Report date: 2025-12-31.

ITEM 7.      MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis should be read in conjunction with our consolidated financial statements and notes thereto in Item 8. Financial Statements and Supplementary Data of this report. In addition to historical data, this discussion contains forward-looking statements about our business, operations and financial performance based on current expectations that involve risks, uncertainties and assumptions. Our actual results may differ materially from those discussed in the forward-looking statements as a result of various factors, including but not limited to those discussed in “Cautionary Note Regarding Forward-Looking Statements” and Part I, Item 1A. “Risk Factors.”

A discussion of the year ended December 31, 2024, compared to the year ended December 31, 2023, has been reported previously under “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2024, filed with the SEC on March 17, 2025.

Overview

We are a Houston-based independent upstream company focused on responsibly developing the Santa Ynez Unit in federal waters offshore California. Our team has decades of experience safely operating in California and creating value for stakeholders. We have one reportable segment, the oil and gas segment, refer to Note 1—Organization, and Business Operations and Going Concern and Note 2—Significant Accounting Policies in Item 8. Financial Statements and Supplementary Data of this report for further discussion.

For the purposes of this discussion, periods on or before February 13, 2024 reflect the financial position, results of operations and cash flows of SYU prior to the Business Combination, referred to herein as the “Predecessor,” and periods beginning on or after February 14, 2024 reflect the financial position, results of operations and cash flows of the Company as a result of the Business Combination, referred to herein as the “Successor.”

2025 Operational and Financial Highlights

•On May 19, 2025, we announced that (i) as of May 15, 2025, we had restarted production at the Santa Ynez Unit and begun flowing oil production to Las Flores Canyon and (ii) we completed our anomaly repair program on Pipeline Segments 324 and 325 of the Santa Ynez Pipeline System as specified by the Consent Decree.

•On May 23, 2025, we closed an upsized underwritten public offering of 10,000,000 shares of Common Stock at a public offering price of $29.50 per share. The gross proceeds from the offering, before deducting discounts and commissions and estimated expenses, were approximately $295.0 million.

•On May 28, 2025, we announced that we successfully completed hydrotests of all segments of the Santa Ynez Pipeline System, satisfying the final operational condition to resume petroleum transportation through Pipeline Segments 324 and 325 as outlined in the Consent Decree.

•As an alternative to the Santa Ynez Pipeline System, we announced that we are also pursuing an OS&T strategy to provide access to domestic and global markets via shuttle tankers for federal crude oil produced from the Santa Ynez Unit in the Pacific Outer Continental Shelf Area.

•On November 10, 2025, we entered into subscription agreements to issue 45,454,546 shares of Common Stock in a private placement to institutional investors at a purchase price of $5.50 per share, raising $250.0 million in gross proceeds.

•On November 24, 2025, we satisfied all conditions to effectiveness of the Second Amendment to the Senior Secured Term Loan, thereby extending the maturity date of the Senior Secured Term Loan to the earlier of (i) March 31, 2027 or (ii) the date falling 90 days after first sales of hydrocarbons. The Second Amendment increased the interest rate from ten percent (10%) per annum to fifteen percent (15%) per annum, compounded annually.

•On December 17, 2025, PHMSA notified us that it concurred with our determination that the Santa Ynez Pipeline System is an interstate pipeline facility under the Pipeline Safety Act, pursuant to which PHMSA is vested with exclusive regulatory authority over interstate pipelines. In its notification, PHMSA additionally states that it considers the Santa Ynez Pipeline System to be an “active” pipeline according to PHMSA regulations.

50

Table of Contents

•On December 23, 2025, PHMSA issued an emergency special permit for segments of the interstate Santa Ynez Pipeline System (specifically Pipeline Segments 324 and 325), related to cathodic protection and seam weld corrosion along Pipeline Segments 324 and 325.

•We reported a net loss of $410.2 million, primarily attributable to production restart related operating expenses, general & administrative expenses, and non-cash interest expense, partially offset by a non-cash change in fair value of warrant liabilities.

•We ended the year with short-term outstanding debt of $921.6 million, inclusive of paid-in-kind interest, and a cash and cash equivalents balance of $97.7 million.

SYU Assets

Beginning in 1968 and over the course of 14 years, EM consolidated more than a dozen offshore federal oil leases and organized them into a streamlined production unit known as the SYU. The SYU remained in continuous operation until 2015. In May 2015, Pipeline Segment 324 (then known as “Line 901”) experienced a leak while operated by Plains. The SYU suspended production after the Line 901 incident and the facilities were maintained in a safe state. On May 19, 2025, the Company announced that as of May 15, 2025, it had restarted production at the SYU and begun flowing oil production from six wells at SYU’s Platform Harmony to the Company’s storage and processing facilities at LFC.

Prior to May 15, 2025, the SYU had not produced oil and gas since May 2015; however, all equipment remained in place in an operation-ready state, requiring ongoing inspections, maintenance and surveillance. As part of these efforts, all equipment was drained, flushed and purged in 2016. The Santa Ynez Pipeline System was maintained in a safe state and regularly monitored.

The discussion of the results of operations for the Predecessor periods below do not include the results from the Pipeline Segments 324 and 325, and the Pipeline Segments 324 and 325 are not included in the combined financial statements of the Predecessor included in the financial statements and related notes thereto included elsewhere in this Annual Report. Financial statements of the Pipeline Segments 324 and 325 have not been included because SEC guidance provides that the financial statements of recently acquired businesses such as the Pipeline Segments 324 and 325 need not be filed unless their omission would render Predecessors combined financial statements misleading or substantially incomplete. Based upon our quantitative and qualitative analysis, we do not believe omitting the financial statements of the Pipeline Segments 324 and 325 renders the Predecessor combined financial statements misleading or substantially incomplete. The Successor financial statements include the results from the Pipeline Segments 324 and 325 and the Pipeline Segments 324 and 325 are included in the consolidated financial statements.

Outlook

The future operating and financial performance of the Company is expected to be driven primarily by our ability to establish a lawful, reliable, and economic pathway to market crude oil and natural gas produced from the SYU, resume sustained offshore production, and manage regulatory, legal, and commodity price risks associated with its federal offshore and California onshore and offshore assets.

Recommencing Oil Sales

Our near-term outlook is highly dependent on our ability to recommence oil transportation through the Santa Ynez Pipeline System. As previously noted, PHMSA confirmed that the Santa Ynez Pipeline System is classified as active interstate pipeline subject to federal jurisdiction under the Pipeline Safety Act. Additionally, we received an Emergency Special Permit from PHMSA related to cathodic protection and seam weld corrosion along Pipeline Segments 324 and 325. This permit is conditional in nature and requires ongoing compliance with specified operational and reporting obligations, including enhanced integrity management, inspection, testing, and monitoring requirements. The emergency special permit expired on February 21, 2026. By letter dated February 13, 2026 to PHMSA, the Company committed to continued compliance with the conditions of the emergency special permit until PHMSA makes a determination on the Company’s application for Special Permit (which was submitted on January 22, 2026).

On December 31, 2025, the U.S. Court of Appeals for the Ninth Circuit denied a motion to stay PHMSA’s approvals of the Company’s Restart Plan and Emergency Special Permit, allowing those approvals to remain in effect during the pendency of the appeal. While the appeal remains ongoing, the Company may continue to advance activities related to resuming petroleum transportation through Pipeline Segments 324 and 325, subject to satisfaction of all applicable regulatory, operational, and commercial requirements.

51

Table of Contents

On January 23, 2026, a second petition was filed in the U.S. Court of Appeals for the Ninth Circuit by the State of California, also against the U.S. Department of Transportation; Sean Duffy, in his official capacity as Secretary of the U.S. Department of Transportation; PHMSA; and Paul Roberti, in his official capacity as Administrator of PHMSA. The second petition, filed by the State of California, Attorney General and OSFM, challenges the Emergency Special Permit, but also challenges PHMSA’s assertion of jurisdiction over the Santa Ynez Pipeline System.

We cannot generate material oil sales without a functioning transportation solution. As a result, any delay, suspension, or revocation of PHMSA’s approvals, or any operational issue encountered during commissioning Pipeline Segments 324 and 325, could materially delay the resumption of commercial oil sales and adversely affect future revenues and cash flows. “Risk Factors—We are subject to complex federal, state, local and other laws, regulations and permits that could adversely affect the cost, manner, ability or feasibility of conducting our operations.”

Offshore Storage and Treating Vessel (OS&T) Alternative

In parallel with pursuing oil sales via Santa Ynez Pipeline System, we continue to evaluate an OS&T vessel as a potential alternative pathway to market crude oil. Under this concept, produced fluids would be processed offshore, stored on a floating vessel, and periodically offloaded to shuttle tankers for delivery to third-party purchasers.

The OS&T Strategy is significantly more capital-intensive than the Santa Ynez Pipeline System, requiring an estimated capital investment of approximately $475.0 million, inclusive of vessel acquisition, configuration, offshore integration, regulatory compliance, and related infrastructure. Based on current assessments, we do not expect to commence commercial oil sales under an OS&T Strategy until approximately the fourth quarter of 2026, assuming timely execution, regulatory approvals, and availability of capital.

While the OS&T Strategy could reduce reliance on the Santa Ynez Pipeline System, which may enhance our marketing strategy going forward by providing flexibility to sell production to additional purchasers through the OS&T rather than being limited to a purchaser under a pipeline-only sales configuration, it presents substantial execution, financing, regulatory, and operational risks. These risks include vessel availability, permitting complexity, higher operating costs, exposure to marine operational risks, and uncertainty regarding the economic returns relative to pipeline transportation. We have not made a final investment decision with respect to an OS&T vessel, and there can be no assurance that such a project would be pursued, financed, or completed on acceptable terms, if at all. See “Risk Factors—Risks Associated with Our Operations—In order to commence operations pursuant to an OS&T offtake strategy, we will require clearances and permitting, including from BOEM” and “Risk Factors—Risks Associated with Our Operations—Our assumptions and estimates regarding the total costs associated with recommencing oil sales may be inaccurate.”

Legal and Regulatory Environment

The Company’s assets are located in California, a jurisdiction with a complex regulatory framework and heightened environmental oversight. PHMSA’s approvals related to the Santa Ynez Pipeline System have been challenged by third parties through litigation, and the outcome of such proceedings is uncertain. Adverse court rulings, including the issuance of injunctions or stays, could delay or prevent pipeline operations regardless of the Company’s technical readiness.

In addition to federal oversight, the Company remains subject to state and local regulatory agencies, including the California Geologic Energy Management Division and other environmental and land-use authorities. While these agencies do not directly regulate interstate pipeline safety, their actions may affect related permits, inspections, or operational approvals, which could influence the timing, cost, or feasibility of both pipeline and OS&T-based solutions.

We are involved in various legal and regulatory proceedings, including matters related to our pipeline operations and permitting activities, which are at various stages of resolution; while these matters are subject to inherent uncertainty, we currently believe that the outcomes are not probable of resulting in a material loss and, accordingly, no litigation-related accruals have been recorded as of the reporting date. Refer to Part II, Item 8, “Financial Statements and Supplementary Data – Notes to the Consolidated Financial Statements, Note 8—Commitments and Contingencies” for further information regarding ongoing litigation.

Production Ramp-Up and Operational Execution

Assuming a transportation solution is established, our future performance will depend on our ability to safely ramp up offshore production, manage operating costs, and maintain asset integrity following an extended period of curtailed operations. Restarting production from offshore facilities involves inherent operational risks, including mechanical failures, unplanned downtime, and higher-than-expected maintenance or remediation costs, any of which could adversely affect production volumes and operating margins.

52

Table of Contents

Capital and Financing Requirements

Until sustained commercial oil sales are achieved, our liquidity will depend on available cash balances, access to raise additional capital from investors, and the timing of expenditures related to regulatory compliance, litigation, offshore facility maintenance, and potential alternative transportation solutions. The OS&T vessel alternative, in particular, would require substantial external financing or strategic arrangements and could materially increase our leverage or dilution. There can be no assurance that such financing would be available on acceptable terms, or at all.

Capital Expenditures. During 2025, we funded $417.6 million in development and other property, plant and equipment expenditures primarily by utilizing net cash provided by our financing activities and cash on hand.

We currently estimate no remaining start-up expenses to recommence oil sales via the Santa Ynez Pipeline System, other than applicable legal expenses. Upon resuming petroleum transportation through the Santa Ynez Pipeline System, we anticipate approximately $100.0 million to $200.0 million in additional post-sales capital expenditures for 2026, primarily related to facilities, pipeline ramp-up activities, and other property, plant and equipment, depending on timing and excluding any OS&T-related capital expenditures. Alternatively, if we elect to pursue the OS&T Strategy, total anticipated 2026 capital expenditures are estimated to be approximately $475.0 million, including costs to acquire and purchase the vessel in addition to incremental investments associated with related infrastructure. Depending on the timing and outcome of regulatory approvals and the execution of commercial arrangements, we could incur capital expenditures beyond these ranges. We cannot provide any assurances that our assumptions used to estimate our liquidity requirements, our anticipated cost savings or reductions, or the costs required to achieve operations under the OS&T Strategy will be correct, as we have not previously undertaken such actions and as a consequence, our ability to predict such amounts is uncertain and may be impacted by factors outside of our control.

Debt Financing. As of December 31, 2025, we had gross indebtedness of $921.6 million outstanding under the Senior Secured Term Loan, (refer to Note 6—Debt to the consolidated financial statements). On November 3, 2025, we entered into the Second Debt Amendment, which became effective on November 24, 2025 following the completion of the Third PIPE Investment and satisfaction of all conditions to effectiveness. Pursuant to the Second Debt Amendment, the maturity date of the Senior Secured Term Loan was extended to the earlier of (i) March 31, 2027 or (ii) 90 days after the Company’s first sales of hydrocarbons. In connection with the Second Debt Amendment, the interest rate on the Senior Secured Term Loan increased from ten percent (10.0%) per annum to fifteen percent (15.0%) per annum, computed on a 360-day year, compounded annually, and payable in arrears on January 1 of each year. Notwithstanding the maturity extension, the Senior Secured Term Loan is classified as a current liability on the Company’s consolidated balance sheet as of December 31, 2025 due to management’s expected maturity date based on anticipated first sales from SYU.

After we are able to recommence oil sales and improve our operating cash flows, we expect to pursue a refinancing of the Senior Secured Term Loan, which may include a new credit facility, term notes, or other debt capital market transactions. We believe that demonstrating sustained oil sales and cash flow generation in the future could improve our access to financing and potentially reduce our overall cost of capital. Any refinancing would be subject to market conditions, lender requirements, regulatory developments, and other factors outside our control. There can be no assurance that such a refinancing will be completed on favorable terms, or at all.

Components of Results of Operations

Revenue

The Company has not had any substantial revenues since its inception. The Company’s various operating expenses are the principal metrics used to assess its performance.

Operating Expenses

•Operations and maintenance. The Company’s most significant costs to operate and maintain its assets are direct labor and supervision, power, repair and maintenance expenses, and equipment rentals. Fluctuations in commodity prices impact operating cost elements both directly and indirectly. For example, commodity prices directly impact costs such as power and fuel, which are expenses that increase (or decrease) in line with changes in commodity prices. Commodity prices also affect industry activity and demand, thus indirectly impacting the cost of items such as labor and equipment rentals.

•Depreciation, depletion, amortization, and accretion. Depreciation, depletion and amortization are primarily determined under either the unit-of-production method or the straight-line method, which is based on estimated asset service life taking obsolescence into consideration. Since 2015 when production temporarily ceased, no depletion has been expensed for the Successor periods presented. However, depletion associated

53

Table of Contents

with the current production has been capitalized to Inventory for produced barrels in storage at SYU (see further discussion in Note 2—Significant Accounting Policies to the consolidated financial statements). An immaterial amount of depreciation was reflected for idle plants in the historical Predecessor financial statements. Also included in the Successor and Predecessor financial statements is the accretion associated with the Company’s estimated asset retirement obligations (“ARO”). The ARO liabilities are initially recorded at their fair value and then are accreted using the Company’s applicable discount rate over the period for the change in their present value until the estimated retirement of the asset.

•General and administrative. General and administrative (“G&A”) costs are comprised of overhead expenditures directly and indirectly associated with operating the assets. These support services include information technology, risk management, corporate planning, accounting, cash management, human resources, and other general corporate services. For the Predecessor period, any general and administrative expenses that were not specifically identifiable to SYU were allocated to SYU for the period from January 1, 2024 to February 13, 2024. To calculate a reasonable allocation, aggregated historical benchmarking data from comparable companies with similar operated upstream assets was used to identify general and administrative expenses as a proportion of operating expenses. Increased general and administrative services may be required in the future, commensurate with planned operations activity levels.

•Taxes other than income. Management anticipates future increases in ad valorem taxes, in line with the projected restarting sales of production volumes.

Results of Operations

This section discusses certain year-to-year comparisons between year ended December 31, 2025 (Successor) vs. the periods from January 1, 2024 through February 13, 2024 (Predecessor) and February 14, 2024 through December 31, 2024 (Successor), which should be read in conjunction with the consolidated financial statements and notes thereto in Item 8. Financial Statements and Supplementary Data of this report.

The following table presents selected consolidated financial results of operations for the Successor and Predecessor periods presented.

54

Table of Contents

Year Ended December 31, 2025 (Successor) vs. the periods from January 1, 2024 through February 13, 2024 (Predecessor) and February 14, 2024 through December 31, 2024 (Successor).

The following table presents selected consolidated financial results of operations for the Successor and Predecessor periods presented.

Successor

Predecessor

Increase (Decrease)

(in thousands)

Year Ended December 31, 2025

February 14—December 31, 2024

January 1—February 13, 2024

$

%

Revenue

Oil and gas sales

$

— 

$

— 

$

— 

$

— 

— 

Total Revenue

— 

— 

— 

— 

— 

Operating Expenses

Operations and maintenance expenses

219,198 

87,877 

7,320 

124,001 

130 

%

Depletion, depreciation, amortization and accretion

12,888 

9,734 

2,627 

527 

4 

%

General and administrative expenses

176,197 

229,140 

1,714 

(54,657)

(24)

%

Total operating expenses

408,283 

326,751 

11,661 

69,871 

21 

%

Loss from operations

(408,283)

(326,751)

(11,661)

(69,871)

21 

%

Other (income) expenses:

Change in fair value of warrant liabilities

(89,203)

227,454 

— 

(316,657)

nm

Other (income) expense

(8,834)

(4,193)

128 

(4,769)

nm

Interest expense

88,245 

67,314 

— 

20,931 

nm

Total other (income) expense, net

(9,792)

290,575 

128 

(300,495)

nm

Loss before income taxes

(398,491)

(617,326)

(11,789)

230,624 

(37)

%

Income tax expense (benefit)

11,671 

(48)

— 

11,719 

nm

Net loss

$

(410,162)

$

(617,278)

$

(11,789)

$

218,905 

(35)

%

nm: not meaningful

Operating and maintenance expenses. Operating and maintenance expenses were $219.2 million for the year ended December 31, 2025, representing an increase of $124.0 million, or 130%, compared to $7.3 million for the period from January 1, 2024 through February 13, 2024 (Predecessor) and $87.9 million for the period February 14, 2024 through December 31, 2024 (Successor), respectively, or a combined $95.2 million. The increase in operating and maintenance expenses is primarily attributable to additional maintenance expenses incurred in connection with restart efforts, which includes a 37% increase in operations employee headcount since the prior year, $28.0 million related to operator rights expenditures, and $6.6 million related to restart incentive compensation, partially offset by $6.1 million of operating expense capitalized as Inventory on the consolidated balance sheet as of December 31, 2025. Operations and maintenance expenses are expected to remain elevated prior to our commencement of sales of production.

Depletion, depreciation, amortization and accretion. Depletion, depreciation, amortization and accretion was $12.9 million for the year ended December 31, 2025, representing an increase of $0.5 million, or 4%, compared to $2.6 million for the period January 1, 2024 through February 13, 2024 (Predecessor) and $9.7 million for the period February 14, 2024 through December 31, 2024 (Successor), respectively, or a combined $12.4 million. The increase between comparative periods is attributable to ARO accretion and its compounding effect year over year. Depletion, depreciation and amortization of $6.0 million associated with the SYU Assets was recognized during the year ended December 31, 2025; however, as the associated production remained in the Company’s storage tanks as of December 31, 2025, the entire amount has been capitalized as Inventory on the consolidated balance sheet. Recognition of depletion expense will resume once sales volumes are achieved. Depletion, depreciation, amortization and accretion expense is expected to increase prior to our commencement of sales of production.

General and administrative expenses. G&A expenses were $176.2 million for the year ended December 31, 2025, representing a decrease of $54.7 million compared to $1.7 million for the period January 1, 2024 through February 13, 2024 (Predecessor) and $229.1 million for the period February 14, 2024 through December 31, 2024 (Successor), respectively, or a combined $230.9 million. This decrease is primarily attributable to higher non-recurring G&A expenses recognized for the period February 14, 2024 through December 31, 2024 (Successor) such as the $70.0 million accrued

55

Table of Contents

settlement of the Grey Fox Matter (Refer to Note 8—Commitments and Contingencies) and $16.8 million in legal expenses and professional fees related to the Business Combination. Also contributing to the decrease in G&A expenses was a $49.0 million decrease in share-based compensation expense between reporting periods. These decreases were partially offset by $35.7 million in higher compensation related to restart incentive compensation costs, $29.7 million in higher legal expenses and professional fees attributable to our continued pursuit of achieving first sales, and the recognition of salaries and wages for the full year ended December 31, 2025, compared to the Successor period February 14, 2024 through December 31, 2024. Predecessor G&A expenses were allocated to SYU as a portion of certain other operating costs based on aggregated historical benchmarking data as previously noted (Refer to Note 2—Significant Accounting Policies).

Total other (income) expense, net. Total other income, net was $9.8 million for the year ended December 31, 2025 compared to other expense, net of $0.1 million for the period January 1, 2024 through February 13, 2024 (Predecessor) and other expense of $290.6 million for the period February 14, 2024 through December 31, 2024 (Successor), respectively, or a combined expense of $290.7 million, representing a favorable year-over-year change of $300.5 million. The change in total other (income) expense, net was primarily attributable to a decrease of $316.7 million in the fair value of the warrants, due to fewer warrants outstanding for the year ended December 31, 2025 after all public warrants were redeemed during the year ended December 31, 2024, an increase in the market price of the Common Stock in the prior period compared to a decrease in the market price of the Common Stock in the current year, and a $4.8 million decrease in other (income) expense attributable to $5.0 million of other expense recognized during the period February 14, 2024 through December 31, 2024 (Successor) related to the First Amendment to the Senior Secured Term Loan (Refer to Note 6—Debt for additional details regarding the First Amendment to the Senior Secured Term Loan), partially offset by $20.9 million in higher interest expense for the year ended December 31, 2025 due to higher debt balance over the comparative periods and the increased interest rate following the Second Debt Amendment (Refer to Note 6—Debt for additional details regarding the Second Debt Amendment). The Predecessor did not have any debt or associated interest expense, warrants, or interest income.

Income tax expense (benefit). Income tax expense for the year ended December 31, 2025 was $11.7 million, representing an increase of $11.7 million compared to zero for the period January 1, 2024 through February 13, 2024 (Predecessor) and less than $0.1 million for the period February 14, 2024 through December 31, 2024 (Successor), respectively, or a combined less than $0.1 million. Utilizing provisions of ASC 740, the Company’s effective tax rate was negative 2.9%, and less than negative 0.01% for the year ended December 31, 2025 and the period February 14, 2024 through December 31, 2024 (Successor) respectively. The negative tax rates were due to our ongoing assessment of our ability to recover our deferred tax assets, in which we concluded that it was more likely than not that our deferred tax assets in excess of deferred tax liabilities would not be realized. The negative income tax rate was greater for the year ended December 31, 2025 due to an increase in the valuation allowance primarily associated with net operating losses not expected to be realized in future periods.

Liquidity and Capital Resources

Overview. Our plans for recommencing sales of production volumes, including restarting the remainder of the existing wells and facilities that have not been restarted and recommencing oil transportation through the Santa Ynez Pipeline System or via OS&T, will require significant capital expenditures in excess of current operational cash flow. Historically, SYU’s primary source of liquidity has been its operational cash flow and, since 2015 when production temporarily ceased, capital contributions from its parent. While production has restarted, prior to generating sales and positive cash flow from production, our capital expenditure needs have been and will continue to be substantial.

As of December 31, 2025, we had unrestricted cash and cash equivalents of $97.7 million. Our total debt as of December 31, 2025 was $921.6 million, comprised of principal and paid-in-kind accrued interest on the Senior Secured Term Loan, which matures on the earlier of (i) March 31, 2027 or (ii) the date falling 90 days after first sales of Hydrocarbons (as defined in the Senior Secured Term Loan, refer to further discussion of the Second Debt Amendment at Note 6—Debt in the consolidated financial statements).

Capital Raising Activities. Prior to the Business Combination, Flame had approximately $62.2 million in its trust account, which consisted of proceeds from the public stockholders and the private placement investors in connection with the Company’s initial public offering, less redemptions. On the Closing Date, the Company issued 44,024,910 shares of Common Stock of the Company, at a price of $10.00 per share for aggregate gross proceeds of $440.2 million (the “First PIPE Investment”). On September 26, 2024, the Company issued 7,500,000 shares of Common Stock of the Company, at a price of $20.00 per share for aggregate gross proceeds of approximately $150.0 million (“Second PIPE Investment”).

56

Table of Contents

Additionally, the Company received approximately $183.5 million in gross proceeds from the exercise of 15,957,820 warrants for 15,957,820 shares of Common Stock.

In May 2025, the Company raised an additional $295.0 million in gross proceeds from the sale of 10,000,000 shares of Common Stock in the 2025 Offering. On November 12, 2025, the Company issued 45,454,546 shares of Common Stock of the Company, at a price of $5.50 per share for aggregate gross proceeds of approximately $250.0 million (“Third PIPE Investment”). Further, more than $600 million of the Purchase Price (as defined in the Senior Secured Term Loan) was seller-financed through the Senior Secured Term Loan.

On February 2, 2026, the Company established an “at-the-market” equity offering program pursuant to a sales agreement with TD Securities (USA) LLC and Jefferies LLC (collectively, the “Sales Agents”) under which the Company may offer and sell, at its discretion, shares of its Common Stock from time to time. The aggregate offering size under the program is up to $250.0 million of Common Stock, and any sales completed by the Sales Agents thereunder will be made pursuant to the Company’s effective shelf registration statement on Form S-3 and an accompanying prospectus supplement. The Company expects to use the net proceeds from any sales under the program for general corporate purposes, and restart-related capital expenditures.

Liquidity Requirements and Capital Expenditures. We currently estimate no remaining start-up expenses to recommence oil sales via the Santa Ynez Pipeline System, other than applicable legal expenses. Upon resuming petroleum transportation through the Santa Ynez Pipeline System, we anticipate approximately $100.0 million to $200.0 million in additional post-sales capital expenditures for 2026, primarily related to facilities, pipeline ramp-up activities, and other property, plant and equipment, depending on timing and excluding any OS&T-related capital expenditures. Alternatively, if we elect to pursue the OS&T Strategy, total anticipated 2026 capital expenditures are estimated to be approximately $475.0 million, including costs to acquire and purchase the vessel in addition to incremental investments associated with related infrastructure. Depending on the timing and outcome of regulatory approvals and the execution of commercial arrangements, we could incur capital expenditures beyond these ranges. We cannot provide any assurances that our assumptions used to estimate our liquidity requirements, our anticipated cost savings or reductions, or the costs required to achieve operations under the OS&T Strategy will be correct, as we have not previously undertaken such actions and as a consequence, our ability to predict such amounts is uncertain and may be impacted by factors outside of our control.

After either (i) resumption of oil sales through the Santa Ynez Pipeline System, or (ii) continued receipt of clearance from regulators with respect to the OS&T Strategy, we expect to pursue additional debt financing options, which may include the issuance of public or private debt securities, bank financing or a combination thereof. However, there can be no assurance that we will be able to obtain such additional debt financing on commercially agreeable terms, or at all. After sales of production commences, we expect an increase in operating cash flows that should allow us to fund further capital expenditures. If we are unable to obtain funds or provide funds as needed for the planned capital expenditure program, we may not be able to finance the capital expenditures necessary to restart production sales or sustain production thereafter.

Going Concern

Since the Business Combination the Company has been strictly focused on recommencing oil sales from the SYU Assets, including capital expenditures to repair and maintain the SYU Assets. Much like other pre-revenue companies, the Company has experienced losses from operations and has negative cash flows from operations since inception. We have addressed near-term capital funding needs with proceeds from the First PIPE Investment, the Second PIPE Investment, the exercise of Warrants (refer to Note 7—Warrants for additional details regarding the warrant exercises), the 2025 Offering, and the Third PIPE Investment. However, our plans for recommencement of sales of production are contingent upon approvals from federal, state and local regulators.

As of December 31, 2025, the Company reported unrestricted cash of $97.7 million, total debt of $921.6 million, and an accumulated deficit of $1.1 billion. On November 20, 2025 the maturity date was successfully extended upon the effectiveness of the Second Debt Amendment to the earlier of (i) March 31, 2027 or (ii) the date falling 90 days after first sales of Hydrocarbons (as defined in the Senior Secured Term Loan, refer to Note 6—Debt for additional details regarding the Second Debt Amendment).

If our estimates of the costs to reach first sales via the Santa Ynez Pipeline System or the OS&T are less than the actual amounts necessary to do so, we may have insufficient funds available to operate our business prior to first sales of production and will need to raise additional capital. If we are unable to raise additional capital, we may be required to take additional measures to conserve liquidity, which could include, among other things, reducing overhead expenses.

Due to the uncertainty regarding our resumption of sales of production volumes, and lack of assurance that new financing, or refinancing of the Senior Secured Term Loan, will be available to us on commercially acceptable terms, if at all,

57

Table of Contents

substantial doubt exists about the Company’s ability to continue as a going concern. The financial statements included in this annual report do not include any adjustments relating to the recovery of the recorded assets or the classification of the liabilities that could be necessary if the Company is unable to continue as a going concern.

Cash Flows

The following table summarizes cash flows from Operating, Investing and Financing activities:

Successor

Predecessor

Change

(dollars in thousands)

Year Ended December 31, 2025

February 14—December 31, 2024

January 1—February 13, 2024

$

%

Cash flows (used in) provided by:

Operating activities

$

(351,702)

$

(162,968)

$

(22,474)

$

(166,260)

(90)

%

Investing activities

(417,624)

(276,247)

— 

(141,377)

(51)

%

Financing activities

531,238 

721,653 

22,474 

(212,889)

(29)

%

Net change in cash and cash equivalents

$

(238,088)

$

282,438 

$

— 

Cash Flows from Operating Activities. Since petroleum has not been transported through Pipeline Segments 324 and 325, no operating revenues have been recognized for the comparative periods. The net cash used in operating activities for the Company was $351.7 million for the year ended December 31, 2025, representing an increase in cash used in operating activities of $166.3 million, or 90%, compared to net cash used in operating activities of $22.5 million for the period January 1, 2024 through February 13, 2024 (Predecessor) and $163.0 million net cash used in operating activities from February 14, 2024 through December 31, 2024 (Successor), respectively, or a combined $185.4 million. The primary use of cash can be attributed to maintenance and operational readiness activities in the Predecessor and Successor periods, with additional general and administrative costs incurred post the Business Combination in the Successor period.

For the year ended December 31, 2025, we had a net loss of $410.2 million, which consists of a non-cash decrease of $89.2 million in fair value of the warrants, non-cash paid-in-kind interest of $87.7 million, non-cash stock-based compensation of $42.7 million, non-cash tax expense of $11.7 million, and non-cash depreciation, depletion, amortization and accretion of $12.9 million. Changes in Inventory for the period of $6.1 million is attributable to the cash paid for expenses capitalized as Inventory on the consolidated balance sheet as of December 31, 2025 and changes of Prepaid expenses and other assets for the period of $7.5 million is attributable to the cash paid for future period expenses, net of non-cash amortization of such payments. For the period January 1, 2024 through February 13, 2024 (Predecessor), SYU incurred a net loss of $11.8 million and for the period February 14, 2024 through December 31, 2024 (Successor) the Company incurred a net loss of $617.3 million, respectively, or a combined $629.1 million. Our combined net loss was partially offset by a non-cash increase in the fair value of our warrant liabilities of $227.5 million, non-cash stock based compensation of $91.6 million, and non-cash paid-in-kind interest $66.3 million. Changes in accounts payable of $46.0 million is primarily attributable to the Grey Fox Matter settlement, with $35.0 million in accounts payable and accrued liabilities as of December 31, 2024 (Refer to Note 2—Significant Accounting Policies). Future cash flow from operations will depend on our ability to recognize sales of production volumes, as well as the prices of oil, natural gas and NGLs.

Cash Flows from Investing Activities. Net cash used in investing activities was $417.6 million for the year ended December 31, 2025, representing an increase in cash used in investing activities of $141.4 million, or 51%, compared to the net cash used investing activities of zero for the period January 1, 2024 through February 13, 2024 (Predecessor) and $276.2 million for the period February 14, 2024 through December 31, 2024 (Successor), or a combined $276.2 million. Investing cash flow for the year ended December 31, 2025 consists of cash paid for capital expenditures associated with restart efforts and for the period February 14, 2024 through December 31, 2024 (Successor) is comprised of $203.9 million paid to EM at Closing per settlement statement and $72.3 million paid for capital expenditures associated with restart efforts. There was no net cash used in investing activities for the Predecessor period since production from the SYU Assets temporarily ceased in 2015 and had no investing activities.

Cash Flows from Financing Activities. Net cash provided by financing activities was $531.2 million for the year ended December 31, 2025, consisting of $545.0 million in aggregate gross proceeds from our 2025 offerings, net of related fees paid of $13.8 million. Net cash provided by financing activities for the period January 1, 2024 through February 13, 2024 (Predecessor) was $22.5 million and net cash provided by financing activities for the period February 14, 2024 through December 31, 2024 (Successor) was $721.7 million, respectively, or a combined $744.1 million.

58

Table of Contents

Financing activities for the period January 1, 2024 through February 13, 2024 (Predecessor) consists of EM capital contributions financing the maintenance and operational readiness activities. Financing activities for the period February 14, 2024 through December 31, 2024 (Successor) are comprised of $440.2 million of gross proceeds from the First PIPE Investment, $150.0 million of gross proceeds from the Second PIPE Investment, or $590.2 million in aggregate gross private offering proceeds, net of $30.6 million of capitalized transaction expenses, or $559.7 million net, plus $183.5 million net cash received from warrant exercises, less deposit paid to EM for the Term Loan of $18.8 million, payment of debt issuance costs of $1.6 million, and repayment of Flame non-convertible promissory notes — related parties for $1.1 million.

Contractual Obligations

Pursuant to the Senior Secured Term Loan, which financed most of the Purchase Price (as defined in the Senior Secured Term Loan), Sable incurred interest for the period prior to the effectiveness of the Second Debt Amendment of ten percent (10%) per annum, and fifteen percent (15%) per annum subsequent to the Second Debt Amendment, compounded annually (refer to Note 6—Debt for additional details regarding the Second Debt Amendment). Interest on the Senior Secured Term Loan is payable in arrears on January 1st of each year but, at Sable’s election, accrued but unpaid interest may be deemed paid on each interest payment date by adding the amount of interest owed to the outstanding principal (paid-in-kind) amount. On December 13, 2024, the Company entered into the Fourth Amendment to the Sable-EM Purchase Agreement, pursuant to which the following definitions were amended. “Restart Production” was redefined as 150 days after first production, extending the maturity date of the EM Term Loan by 60 days. “Restart Failure Date” was extended an additional 60 days to March 1, 2026.

On May 15, 2025, the Company restarted production at SYU and as a result, required the Senior Secured Term Loan to be refinanced or otherwise paid in full within 240 days following such first production date, or January 9, 2026. On November 24, 2025 the Second Debt Amendment became effective and extended the maturity date to the earlier of (i) March 31, 2027 or (ii) the date falling 90 days after first sales of Hydrocarbons (as defined in the Senior Secured Term Loan).

Additional obligations include the performance of ARO as referenced under “Critical Accounting Policies and Estimates—Asset Retirement Obligations” below.

Off Balance Sheet Arrangements

As of December 31, 2025, the Company had no off-balance sheet arrangements.

Critical Accounting Estimates

The preparation of consolidated financial statements and related disclosures in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the combined financial statements, and income and expenses during the periods reported. Actual results could materially differ from those estimates.

Property, Plant and Equipment.

Cost Basis. Oil and gas producing activities are accounted for under the successful efforts method of accounting. Under this method, costs are accumulated on a field-by-field basis. Costs incurred to purchase, lease, or otherwise acquire a property (whether unproved or proved) are capitalized when incurred. Exploratory well costs are carried as an asset when the well has found a sufficient quantity of resources to justify its completion as a producing well and where sufficient progress assessing the resources and the economic and operating viability of the project is being made. Exploratory well costs not meeting these criteria are charged to expense. Other exploratory expenditures, including geophysical costs and annual lease rentals, are expensed as incurred. Development costs, including costs of productive wells and development dry holes, are capitalized.

Other Property and Equipment. Other property and equipment primarily consist of onshore midstream facilities, transportation assets and assets related to the Company’s corporate office (the “Office Assets”). Due to the nature of such assets, the onshore midstream facilities are presented within oil and gas properties, while the transportation assets and the Office Assets are presented within other assets on the consolidated balance sheets.

Depreciation, Depletion and Amortization. Depreciation, depletion and amortization are primarily determined under the unit-of-production method, which is based on estimated asset service life taking obsolescence into consideration.

Acquisition costs of proved properties are amortized using a unit-of-production method, computed on the basis of total proved oil and natural gas reserve volumes. Capitalized exploratory drilling and development costs associated with

59

Table of Contents

productive depletable extractive properties are amortized using the unit-of-production rates based on the amount of proved developed resources of oil and gas that are estimated to be recoverable from existing facilities using current operating methods. Under the unit-of-production method, oil and natural gas volumes are considered produced once they have been measured through meters at custody transfer or sales transaction points at the outlet valve on the lease or field storage tank. Maintenance and repairs, including planned major maintenance, are expensed as incurred. Major renewals and improvements are capitalized and the assets replaced are retired.

The SYU Assets had not produced oil and gas since 2015 due to a pipeline incident but had been maintained by EM to preserve it in an operation-ready state and thus no depletion had been recognized prior to achieving first production on May 15, 2025. Depletion, depreciation and amortization of $6.0 million associated with the SYU Assets was recognized during the year ended December 31, 2025; however, as the associated production remained in the Company’s storage tanks as of December 31, 2025, the entire amount has been capitalized as Inventory on the consolidated balance sheet. The recognition of depletion expense on the consolidated statement of operations will commence upon the commencement of sales of production.

Inventory. Production volumes for the period from May 15, 2025 through December 31, 2025 were retained within the Company’s storage tanks and recognized as short term oil inventory, and the associated depletion expense was capitalized, as noted above. ASC 330 dictates that inventory shall initially be valued at the price paid or consideration given to acquire an asset. By analogy, the Company capitalized the costs incurred that were directly attributable to producing and transporting the production to the onshore storage tanks, including associated depreciation, depletion, and amortization. Inventory is presented as its own line in the consolidated balance sheet.

The Company has oil inventory storage capacity of 540 MBbls onshore at LFC. The Company generally expects the inventory volumes to fluctuate over time to maintain optimal operational efficiencies. The ending volume of inventory that remains in the onshore storage tanks is measured at the current period’s cost, and a lower of cost or net realizable value assessment is performed for each reporting period.

Impairment Assessment. Assets are tested for recoverability on an ongoing basis whenever events or changes in circumstances indicate that the carrying amounts may not be recoverable. Among the events or changes in circumstances which could indicate that the carrying value of an asset or asset group may not be recoverable are the following:

•a significant decrease in the market price of a long-lived asset;

•a significant adverse change in the extent or manner in which an asset is being used or in its physical condition, including a significant decrease in current and projected resource or reserve volumes;

•a significant adverse change in legal factors or in the business climate that could affect the value, including an adverse action or assessment by a regulator;

•an accumulation of project costs significantly in excess of the amount originally expected; and

•a current-period operating loss combined with a history and forecast of operating or cash flow losses.

We monitor for indicators of potential impairment throughout the year. This process is aligned with the requirements of ASC 360 and ASC 932. Asset valuation analysis, profitability reviews and other periodic control processes assist in assessing whether events or changes in circumstances indicate the carrying amounts of any of the assets may not be recoverable.

If events or changes in circumstances indicate that the carrying value of an asset may not be recoverable, management estimates the future undiscounted cash flows of the affected properties to judge the recoverability of carrying amounts. In performing this assessment, assets are grouped at the lowest level for which there are identifiable cash flows that are largely independent of the cash flows of other groups of assets. Cash flows used in recoverability assessments are based on assumptions which are developed by management and are consistent with the criteria management uses to evaluate investment opportunities. These evaluations make use of assumptions of future capital allocations, crude oil and natural gas commodity prices including price differentials, refining and chemical margins, volumes, and development and operating costs. Volumes are based on projected field and facility production profiles, throughput, or sales. Management’s estimate of upstream production volumes used for projected cash flows makes use of proved reserve quantities and may include risk-adjusted unproved reserve quantities.

An asset group is impaired if its estimated undiscounted cash flows are less than the asset group’s carrying value. Impairments are measured by the amount by which the carrying value exceeds fair value. The assessment of fair value is

60

Table of Contents

based upon the views of a likely market participant. The principal parameters used to establish fair value include estimates of acreage values and flowing production metrics from comparable market transactions, market-based estimates of historical cash flow multiples, and discounted cash flows. Inputs and assumptions used in discounted cash flow models include estimates of future production volumes, throughput and product sales volumes, commodity prices which are consistent with the average of third-party industry experts and government agencies, refining and chemical margins, drilling and development costs, operating costs and discount rates which are reflective of the characteristics of the asset group.

Asset Retirement Obligations. The Company’s ARO primarily relate to the future plugging and abandonment of oil and gas properties and related facilities. The fair values of these obligations are recorded as liabilities on a discounted basis, which is typically at the time the assets are installed. In the estimation of fair value, the Company uses assumptions and judgments regarding such factors as the existence of a legal obligation for an asset retirement obligation, technical assessments of the assets, estimated amounts and timing of settlements, discount rates, and inflation rates.

Derivative Warrant Liabilities. We do not use derivative instruments to hedge exposures to cash flow, market, or foreign currency risks. We evaluate all of our financial instruments, including issued stock purchase warrants, to determine if such instruments are derivatives or contain features that qualify as embedded derivatives, pursuant to ASC 480 and ASC 815-15. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is re-assessed at the end of each reporting period.

All of our outstanding warrants are recognized as derivative liabilities in accordance with ASC 815-40. Accordingly, we recognize the warrant instruments as liabilities at fair value and adjust the instruments to fair value at each reporting period. The liabilities are subject to re-measurement at each balance sheet date until exercised, and any change in fair value is recognized in our statement of operations. The private placement warrants and the working capital warrants are measured at fair value using the Modified Black-Scholes Optional Pricing Model.

Recent Accounting Pronouncements

In November 2024, the FASB issued ASU 2024-03, Income Statement — Reporting Comprehensive Income — Expense Disaggregation Disclosures (Subtopic 220-40) — “Disaggregation of Income Statement Expenses.” The FASB issued this ASU to improve the disclosures about a public business entity’s expenses and address requests from investors for more detailed information about the types of expenses (including purchases of inventory, employee compensation, depreciation, amortization, and depletion) in commonly presented expenses captions (such as cost of sales, SG&A, and research and development). The amendments in this ASU are effective for annual periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. Early adoption is permitted. The Company is currently reviewing what impact, if any, adoption will have on its disclosures.

Our management does not believe that any other recently issued, but not yet effective, accounting standards if currently adopted would have a material effect on our financial statements.