By Nate Wolf
Shares of Sable Offshore surged Friday after a federal court denied environmental groups' request to halt the restart of the company's oil pipeline in central California.
Organizations led by the Environmental Defense Center had asked the U.S. Court of Appeals for the Ninth Circuit for an emergency stay. They are challenging the U.S. Transportation Department's decision to issue an emergency special permit approving Sable's restart plan for the Las Flores pipelines, which are part of the Santa Ynez Unit system.
Litigation in the case will continue in 2026 without an order halting the pipeline.
Sable shares tumbled 13% last Friday after the groups filed the request, before recovering some of those losses this week. The stock was up 20% to $10.79 in premarket trading Friday.
The potential restart of the Santa Ynez system, which includes lines that run more than 124 miles inland from the coast of Santa Barbara County, has been contentious in the region. A leak led to an oil spill off the coast of Santa Barbara County in 2015. Sable bought the lines in 2024 from Exxon Mobil, which had acquired them from Plains All American after the spill.
Sable's permit from the Transportation Department's Pipeline and Hazardous Materials Safety Administration, or PHMSA, waived the requirement to evaluate and remedy corrosion in the pipeline. Sable requested expedited review of its application, citing President Donald Trump's declaration of a national energy emergency.
"Sable is rushing to restart this failed oil pipeline without following basic safety laws and without even making the necessary repairs, posing an immediate threat to lives, property, and the environment across a large part of our state," Linda Krop, chief counsel of the Environmental Defense Center, said in a statement.
Sable declined to comment, and PHMSA didn't immediately respond to Barron's request.
The Santa Ynez Unit is now "the closest it has been to restart," said Benchmark Equity Research analyst Subash Chandra in a research note Friday. "Additional legal challenges are expected but this initial ruling in Sable's favor is promising."
Benchmark, which has a Buy rating and a $20 price target on Sable shares, said the company is likely preparing to begin pumping oil through the pipeline. When oil flows begin and Sable realizes cash flow from the oil sales, shares can potentially double, the firm argued.
Write to Nate Wolf at nate.wolf@barrons.com
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(END) Dow Jones Newswires
January 02, 2026 09:36 ET (14:36 GMT)
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