I am happy to say that the end is near for our involvement with Sable Offshore. As I will explain in this article, the path forward will be contingent on some of the key events on the horizon:
Sable vs CCC case on Oct 15 with tentative ruling on Oct 14.
FOIA Sable final restart plan being made available, if any, by Oct 24.
Looking back, the “Fire Marshal approval” thesis has been a thesis drift in the making. In our September 14 write-up titled “Last Update On Sable Offshore,” we wrote:
What could delay the approval?
It would have to be something operational to delay the restart. But given that the plan was resubmitted again on Sept 11, we think SOC has already triple checked. This is the final rubber stamp, which should happen next week.
Outside of operational delays, which we think there are none, the only other reason for delays is political. For us, next week is the barometer for SOC. If no OSFM approval comes next week, then the odds that OSFM is compromised vastly increase by each passing day. We would have to exit by the end of next week if there is no OSFM approval.
And no, we did not listen to our own advice.
Background of the Story
Starting on September 15, we made efforts to contact the OSFM to get clarity as to when the redacted restart plan would be posted on the website. Our logic at the time was that the redacted plan would only be posted if it was the approved plan. Why would the OSFM go through the trouble of redacting a restart plan only to deny it?
The logic was correct, and it was confirmed later by Wendy Collins that when the redacted plan is posted, it will be the approved plan.
During that week, the OSFM’s response to when the redacted plan would be posted was “as soon as possible.” This was later clarified by Christine McMorrow, Deputy Director of Strategic Communications, on September 18 that the redacted restart plan would be posted “sometime next week”.
This was the crucial information that made us hold onto our Sable long position. Without this information, we would’ve stuck to our original timeline of exiting by the end of the week in the absence of OSFM approval.
Fast forwarding to the week of the 22nd, and that’s when the dam broke. Following the Assemblymember Hart’s visit to Sacramento (Sept 19), where he was present for the bill signing (SB 237), he said publicly that he will get assurances from Newsom’s office on the OSFM withholding approval until after the CCC case.
Here’s the video evidence of Hart stating that (5:30 min mark).
That same week, the tone changed from the OSFM. What was initially an expectation for imminent redacted plan posting changed to automatic email responses. The OSFM also stopped returning phone calls. Jim Hosler, the chief of pipeline safety, went on a month-long vacation and is slated to come back on Oct 26. In addition, another Sable long had previously FOIA (Freedom of Information Act) the OSFM regarding the redacted restart plan, and Mark Springer, attorney for OSFM, replied that the redacted plan would be made available by, if any, on Oct 24. This was also validated by us last week.
In essence, the OSFM is stalling its approval until after the CCC case. While you can never confirm that Hart was successful in pressuring Newsom to withhold approval from OSFM until after the CCC case, it is now evident that the OSFM is waiting until the end of October to do this.
Why am I explaining this story?
Because it is important to understand in the context of what’s to come next.
In the following section, I will go through he following:
The incoming price path and the trading strategies associated with it.
What am I doing about it.