Sable Offshore Corp: A Bullish Thesis with Uncertain Timing and High Potential Upside

Sable Offshore Corp. (SOC) is a high-value investment with uncertain timing, offering a >90% probability of a +150% upside within the next year. The company is focused on reopening an old oilfield in California, previously operated by Exxon, but litigation from environmental groups has delayed the process. Recent developments suggest opposition is running out of viable avenues, and court proceedings are expected to conclude soon. If litigation is resolved, SOC's stock should re-rate as the company generates production and revenue, driving material value creation. Timing remains uncertain, but the asymmetry of risk and reward is highly favorable.

Sable Offshore Corp. (SOC) presents a high-value investment with significant potential but also uncertainty regarding its timing. The company is focused on reopening an old oilfield in California, previously operated by ExxonMobil, to resume production. Despite persistent litigation from environmental groups, recent developments suggest that opposition may be running out of viable avenues, with court proceedings expected to conclude soon. If the litigation is resolved, SOC's stock is likely to re-rate as the company begins to generate production and revenue, driving material value creation.

The investment thesis hinges on the resumption of production once the pipeline is brought back online. The primary obstacle has been persistent litigation, which has delayed the process through legal challenges. However, recent developments suggest that opposition is running out of viable avenues, and court proceedings are expected to conclude in the near term. The company's share was trading at $28.80 as of August 18th, with a trailing P/E ratio of 47.20 [2].

While timing remains uncertain—it could be as soon as August or delayed into 2026—the asymmetry of risk and reward remains highly favorable. Investors face the possibility of capital loss, but the combination of visible reserves, strategic positioning, and a clear operational pathway create a compelling setup. The result is a rare case of a high-probability, high-reward investment with multiple catalysts, where timing is the only significant variable.

Sable Offshore Corp. is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 29 hedge fund portfolios held SOC at the end of the first quarter, which was 28 in the previous quarter. While we acknowledge the potential of SOC as an investment, certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock [2].

Recent legal developments have impacted SOC's stock price. On May 28, 2025, the Santa Barbara County Superior Court granted a preliminary injunction from the California Coastal Commission regarding Sable's maintenance and repair work in the coastal zone related to the Onshore Pipeline. This news caused Sable's stock price to fall $5.04 per share, or 15.3%, to close at $27.89 [3].

In conclusion, Sable Offshore Corp. offers a high-probability, high-reward investment with multiple catalysts. However, the timing of the resolution of the litigation remains uncertain. Investors should carefully consider the risks and rewards before making any investment decisions.

References:
[1] https://www.reuters.com/business/energy/us-russian-officials-discussed-energy-deals-alongside-latest-ukraine-peace-talks-2025-08-26/
[2] https://ca.finance.yahoo.com/news/sable-offshore-corp-soc-bull-100615688.html
[3] https://www.marketscreener.com/news/pomerantz-law-firm-reminds-investors-with-losses-on-their-investment-in-sable-offshore-corp-of-clas-ce7c50d8df8bf227