Keeley Gabelli SMID Cap Value Fund on Sable Offshore Corp.
Thesis
Sable made progress toward restarting production from dormant offshore California platforms. The main challenge is financing, as the company struggled to refinance a seller note owed to ExxonMobil. It ultimately used a dilutive combination of new equity and convertible notes, preserving operating upside but increasing capital-structure risk.
“Despite favorable developments with a restart of oil production from dormant offshore platforms.”
Key risks
- Difficulty obtaining favorable financing
- Dilution from equity and convertible notes