Sable Offshore shares plunged 54% on Monday after the California oil producer warned there was substantial doubt about its ability to keep trading, overshadowing third-quarter results that beat revenue expectations.

The shares closed at $0.88 on Monday 9 November, down from $1.93 at Friday's close, after touching an intraday low of $0.51. The sell-off came as investors digested a going-concern warning in the company's quarterly filing with the US Securities and Exchange Commission.

A $269m quarterly loss

Sable reported a third-quarter net loss of $269.3 million, or $1.37 a share, for the three months to 30 September, against a loss of $110.4 million a year earlier. Revenue was $154.4 million, up 13% on the previous quarter and ahead of analyst expectations.

The loss was driven in part by a $168.7 million loss on derivatives, while total operating expenses rose to $196 million. On an adjusted basis, Sable lost $0.41 a share, against a consensus forecast of a $0.36 loss.

The company ended the quarter with $38 million in cash, down from $97.7 million at the end of 2025, while total liabilities stood at $1.51 billion against assets of $1.83 billion.

Buyer halt cut off sales

The crisis began in early October, when Sable's sole crude oil buyer stopped purchases for refinery maintenance and upgrades. With no other buyer in place, sales dried up and crude inventories built up, forcing the company to cut production.

Sable cut its guidance for second-half 2026 net sales to between 20,000 and 30,000 barrels a day, down from a previous range of 40,000 to 45,000 barrels a day.

JPMorgan analyst Arun Jayaram said third-quarter adjusted earnings before interest, tax, depreciation and amortisation of $2 million came in far below his $21 million estimate and Wall Street's $16 million forecast. He kept an Overweight rating on the shares, with a $10 price target.

New buyers and a restart

Sable said it had begun selling crude to three additional refineries in the Los Angeles area in early November, reducing its reliance on the original buyer. It expects gross daily crude sales to reach 31,000 barrels this month, potentially rising to 50,000 barrels in December.

The delayed restart of Platform Hondo, one of the three platforms in its Santa Ynez Unit off the California coast, is now scheduled for November, with first production expected that month and all producing wells online in December.

The company maintained its 2027 guidance, targeting gross production and sales of between 50,000 and 55,000 barrels of oil equivalent a day.

Whether that recovery arrives in time is now the question for investors. The going-concern warning means management believes operating cash flow may not cover expenses and debt payments over the next 12 months, and the company has said it is considering a bulk sale of crude inventory to raise working capital.