Benchmark starts Sable Offshore with a Buy ahead of ‘significant catalyst’

As previously reported, Benchmark analyst Subash Chandra initiated coverage of Sable Offshore with a Buy rating and $24 price target. Sable is “on the cusp of a significant company catalyst,” says the analyst, who calls final permits to revive the Santa Ynez Unit, offshore California, the “largest relative catalyst we are aware of in the E&P sector.” Permits will allow Sable to scale oil volumes at a substantially lower cost than onshore, according to the firm, which estimates a net asset value in the mid $20’s per share with first production, rising thereafter from artificial lift and development drilling. In addition, Sable will file Class VI permits by year-end to launch a CCS business that is not in the firm’s model yet, the analyst noted.