Investing.com - Jefferies reiterated a Buy rating and $28.00 price target on Sable Offshore Corp. (NYSE:SOC) following a Department of Justice legal opinion issued Monday regarding the Defense Production Act. Shares jumped 27.6% over the past week to $12.97, though the stock remains well below its 52-week high of $35.
The DOJ issued a formal opinion on March 3 affirming that use of the DPA is legal and effective to override California laws blocking offshore oil production and pipelines. A DPA order would preempt state law and shield Sable Offshore from penalties.
The memorandum is a formal legal opinion issued by the US Department of Justice, prepared at the request of the Department of Energy. Sable Offshore asked DOE in late 2025 to evaluate whether the federal government could lawfully intervene after California laws and regulatory actions blocked the company from restarting oil production and pipeline operations at the Santa Ynez Unit.
Sable Offshore does not have a DPA order and would still need an order from President Trump. No fixed timeline exists for issuance of a DPA order.
The opinion does not establish any timelines and a DPA can be challenged in court. The order remains in force as long as the national defense need is declared.Investors should note that InvestingPro data shows the company is quickly burning through cash and operates with a significant debt burden.
In other recent news, Sable Offshore Corp. announced a $250 million "at the market" stock offering program, collaborating with TD Securities and Jefferies as agents. The company has the discretion to sell its common stock up to this amount, with no obligation to sell any shares. Additionally, Sable Offshore is currently embroiled in a legal dispute with California's attorney general over the restart of oil pumping through two state pipelines, a project that has faced opposition since a 2015 oil spill. Despite the legal challenges, Benchmark reiterated its Buy rating with a price target of $20.00, focusing on the potential restart of the company's Santa Ynez Unit. Jefferies also maintained a Buy rating, setting a $19.00 price target, following the issuance of an Emergency Special Permit by the Pipeline and Hazardous Materials Safety Administration. This permit represents a significant regulatory milestone for Sable's pipeline operations. Both Benchmark and Jefferies continue to express confidence in the company's prospects amid ongoing regulatory and legal developments.
This article was generated with the support of AI and reviewed by an editor.