Key California oil giant on life support after Chevron makes crucial decision

A Houston-based independent upstream company that restarted oil drilling off the Santa Barbara coast earlier this year is struggling to stay afloat.

The shares of Sable Offshore Corp. crashed to an all-time low Monday after it warned it could run out of money.

The stock fell 60.5% to 76 cents a share. It later recovered slightly but was still down 57.6%, Reuters reported. The drop followed Sable’s disclosure of “substantial doubt” about its ability to keep operating.

Sable’s troubles began in early October when Chevron, the refinery that buys all of its oil, stopped taking deliveries.

In its Nov. 9, 2026 filing with the US Securities and Exchange Commission, Sable said the refinery was repairing and upgrading its storage tanks, with work expected to be finished quickly. But the pause lasted all month and is still going on, the company said.

“On Oct. 6, 2026, the Company’s single downstream purchaser of crude oil temporarily curtailed its purchases of the Company’s crude oil due to maintenance and upgrades to storage tanks at its refinery, which were expected to be resolved promptly,” the SEC filing said.

With nowhere to send its oil, Sable cut back production so its own storage tanks would not overflow.

In a press release the same day, the company said, “Crude oil sales were halted by our sole downstream crude purchaser in early October 2026 due to maintenance and upgrades to storage tanks at their refinery.”

Without regular sales, money has stopped coming in. Sable said it expects to be unable to pay its bills soon.

“As a result of these developments, the Company does not expect to have sufficient liquidity to meet its obligations as they become due in the near term,” the SEC filing said.

The company said it hopes its main customer will start buying again soon, but it could not say when or how much. “However, the timing and volume of any such resumption are uncertain,” the filing said.

Sable says it is looking for other ways to bring in cash. Since early November, it has been selling oil to three other Los Angeles-area refineries. The company says it expects that more buyers will mean more sales over time.

“Sable expects all four major Los Angeles-area refineries to increase their purchases of SYU crude over time,” the company said. SYU stands for Santa Ynez Unit, the group of offshore platforms Sable operates.

The company is also trying to sell the oil it has stockpiled and to raise money by selling new shares and borrowing from lenders.

“Sable is evaluating all options to resolve near-term working capital constraints caused by the downstream purchaser disruption, including selling its crude oil currently held in inventory via a bulk sale agreement,” the press release noted.

The company said that “physical MMA inspections on Platform Hondo and initial production are scheduled for November,” adding that Platform Hondo’s crude oil, which is lighter and has less sulfur, is expected to improve the overall quality of its oil.

The setback follows a high-profile restart that Sable announced on March 16. The refinery resumed pumping oil from its Santa Barbara offshore platforms earlier this year, and the oil flows through a pipeline that has not carried oil since 2015.

The restart got quickly caught up in a legal fight. In March, US Energy Secretary Chris Wright ordered Sable, under the Defense Production Act, to prioritize transporting oil from its Santa Barbara-area platforms, allegedly in the interest of national defense.

California sued to overturn the order. In October, environmental groups, members of Congress, legal experts, business leaders, and 20 other states filed briefs in the Ninth Circuit Court of Appeals backing the state. The federal government claims the order cannot be reviewed by courts.

The environmental groups say the refinery’s restart is unsafe and unlawful. The pipeline is the same one that failed in 2015 because of severe corrosion, causing one of the worst oil spills in California history at Refugio State Beach.

“We’re facing an unprecedented situation where the federal government is brazenly undermining laws, court orders, and even state property rights for the benefit of one oil company,” said Maggie Hall, deputy chief counsel at the Environmental Defense Center, in an Oct. 22 press release.

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