JPMorgan Shops Sable’s $1 Billion Debt at 15% Yield Before June 26 Maturity

Q: Facing criminal charges and a court injunction, can Sable Offshore secure its crucial $1 billion loan before the June 26 deadline?

Yes—but only narrowly, and with unusually high financing costs. Sable Offshore is actively trying to refinance the Exxon-backed term loan, which is due June 26, and JPMorgan is already marketing a replacement package to investors at steep terms: about 15% interest and 20% amortization. That indicates lenders still see a path to a deal, but only if they are paid for very high risk. Sable also has some positives to show creditors: it restarted crude sales in March, has produced more than 1 million barrels from the Santa Ynez Unit, and has federal backing tied to the restart. High oil prices and expected production growth also improve the credit story. The obstacle is legal risk. Sable is operating while facing a state court injunction, a possible contempt finding, and reported criminal charges tied to pipeline and environmental compliance. Courts in Santa Barbara have refused to lift the injunction, and California agencies continue to challenge the restart. That creates real uncertainty over whether production can continue uninterrupted—the key issue for any lender underwriting a near-$1 billion loan. So the refinancing is possible before June 26, but far from assured. The fact that JPMorgan is still in talks suggests the market has not closed to Sable. Still, the company’s legal exposure, regulatory conflict and recent losses mean any deal is likely to be expensive, tightly structured and potentially dependent on continued federal support or other credit enhancement.

1 articles · Updated · Bloomberg · Jun 8

JPMorgan is sounding out investors on refinancing nearly $1 billion of Sable Offshore debt at a 15% coupon, with the driller’s existing loan due on June 26.
The proposed financing would replace a term loan from Exxon Mobil and includes 20% amortization payments, according to people familiar with the talks.
Sable resumed selling crude in March after more than a decade offline, making the refinancing a key test of investor appetite for the Trump-backed oil producer.
The effort underscores how costly capital remains for smaller energy borrowers even as Sable returns to production and seeks to stabilize its balance sheet.