Business Combination and Financing - The Business Combination was completed on February 14, 2024, resulting in the issuance of 44,024,910 shares of Common Stock for gross proceeds of $440.2 million[169]. - A second PIPE Investment occurred on September 26, 2024, raising approximately $150.0 million through the issuance of 7,500,000 shares at $20.00 per share[170]. - The company has raised approximately $440.2 million from the First PIPE Investment and $150.0 million from the Second PIPE Investment in connection with the Business Combination[194]. - The net cash provided by financing activities for the period February 14, 2024, through March 31, 2024, was $396.0 million, contributing to a combined total of $418.5 million for the two periods[203]. Operational Performance - The Company has not had any substantial revenues since the shut-in, with operating expenses being the principal metrics for performance assessment[182]. - Operating and maintenance expenses for the three months ended March 31, 2025, were $34.4 million, an increase of $19.8 million, or 135.3%, compared to $7.3 million for the Predecessor period[188]. - Depletion, depreciation, amortization, and accretion for the same period was $3.0 million, a decrease of $1.0 million, or 24.6%, compared to $4.0 million for the combined Predecessor periods[189]. - General and administrative expenses were $22.3 million for the three months ended March 31, 2025, a decrease of $129.8 million compared to $152.2 million for the combined Predecessor periods[190]. - Total other expense, net was $38.9 million for the three months ended March 31, 2025, an increase of $31.2 million compared to $7.7 million for the combined Predecessor periods[192]. - Income tax expense for the three months ended March 31, 2025, was $10.9 million, a decrease of $2.5 million compared to $13.4 million for the period February 14, 2024 through March 31, 2024[193]. - Cash flows used in operating activities were $47.9 million for the three months ended March 31, 2025, a decrease of $10.7 million, or 18.2%, compared to $58.6 million for the combined Predecessor periods[199]. - For the three months ended March 31, 2025, the company reported a net loss of $109.5 million, which includes non-cash expenses totaling $62.2 million[200]. - The company incurred a combined net loss of $191.9 million for the periods from January 1, 2024, through March 31, 2024[200]. Future Outlook - Sable estimates remaining start-up expenses of approximately $44.1 million to restart production in the second quarter of 2025[195]. - The company expects production to restart in the second quarter of 2025, after which operating cash flows are anticipated to be sufficient to cover operating expenses and debt[194]. - Future cash flow from operations will depend on the ability to restart oil and gas production and prevailing commodity prices[200]. - There is substantial doubt about the company's ability to continue as a going concern due to the need for regulatory approvals and potential cost overruns in restarting production[198]. Regulatory and Compliance Issues - The Coastal Commission issued a Notice of Violation regarding unpermitted development activities, which the Company is addressing through compliance measures[177]. - The Company is actively engaged in legal proceedings against the Coastal Commission regarding the authority to prohibit work authorized by existing permits[181]. - The Company has implemented enhanced integrity standards for the Pipeline as approved by the California Office of the State Fire Marshal[176]. Company Classification and Structure - The company is classified as an "emerging growth company" and a "smaller reporting company," allowing for reduced public company reporting requirements[221][222]. - The company has no off-balance sheet arrangements as of March 31, 2025[207]. - The Senior Secured Term Loan requires interest payments at 10% per annum, with specific conditions for paid-in-kind interest[205]. Asset Management - The SYU Assets, which include three offshore platforms and an onshore processing facility, have been shut in since 2015 and are not currently producing oil and gas[172]. - The company has maintained the SYU Assets in an operation-ready state since 2015, with no depletion recorded during the periods presented[213]. - The comparability of operating results for the three months ended March 31, 2025, was impacted by the Business Combination, with results from the Predecessor not included in the Successor's financial statements[184].
Flame Acquisition (FLME) - 2025 Q1 - Quarterly Report