Sable Offshore Corp. (SOC) shares took a beating on Friday, dropping nearly 16% after Hunterbrook Media published an updated investigation into what short sellers are now calling a "zombie pipeline." The timing couldn't be worse for the company—California Attorney General Rob Bonta simultaneously filed a lawsuit against the Trump administration seeking to block the restart of oil transport through Sable's pipeline.
Hunterbrook Capital, which has taken a short position on the stock, argues that despite Sable's optimistic public timelines, the project faces overwhelming odds. The company is "quickly running out of cash" and may never reach the point where it actually sells oil, according to the firm's research.
CEO Comments Spark Controversy
Perhaps most damaging are leaked recordings obtained by Hunterbrook that allegedly capture CEO Jim Flores disparaging the California Coastal Commission as having an "eco-Nazi attitude." That's not exactly the kind of rhetoric that smooths the path toward securing the Coastal Development Permits Sable desperately needs.
Regulatory and Technical Roadblocks Pile Up
The challenges extend beyond public relations missteps. Under California law SB 237, Sable must install specific safety valves—a requirement the company has reportedly struggled to meet, creating both technical and regulatory delays.
Meanwhile, Santa Barbara County has already moved to deny the transfer of essential permits from Exxon to Sable, citing the 2015 Refugio oil spill as justification for their concerns. That historical context matters when local communities are being asked to trust a new operator with aging infrastructure.
Caught Between Federal Support and State Opposition
The situation puts Sable in an increasingly uncomfortable position. Federal regulators appear willing to greenlight the project, but California has now launched a major legal offensive to stop it. It's a classic regulatory standoff, and Sable is stuck in the middle with a dwindling bank account.
Hunterbrook's thesis is straightforward: combine a CEO who has allegedly alienated local regulators, a balance sheet that's rapidly depleting, and mounting legal obstacles, and you've got a pipeline future that looks more like a "pipe dream."
SOC Price Action: Sable Offshore shares fell 15.89% to $10.43 on Friday, according to market data.
