Investors were hardly turned on by Sable Offshore (SOC 13.49%) on the last Friday trading session of 2025. On news of a lawsuit that might halt the oil flow through its pipeline system, they aggressively sold out of the energy company, leaving it with a more than 13% loss in price on the day.
Up high, then down low
Sable was quite a roller coaster of a stock before and after Christmas Day. On the 24th, investors couldn't get enough of it, following a federal regulator's approval of the restart of the Las Flores pipeline system in California.
Image source: Getty Images.
That regulator, the Department of Transportation's (DoT) Pipeline and Hazardous Materials Safety Administration (PHMSA), recently ruled that sections of the pipeline fell under federal, rather than state, oversight.
This infrastructure has a troubled history, as in 2015, over 100,000 gallons of oil spilled from the system, with more than 20,000 gallons ending up in the Pacific Ocean. At the time, Las Flores was owned by Plains All American Pipeline.
On Friday, environmental groups, including the Sierra Club, filed suit in a federal appeals court in California to challenge the PHMSA's decision. They are seeking an emergency stay of the order to halt the restart.
Neither Sable nor the DoT has commented on the lawsuit yet.
NYSE: SOC
Key Data Points
Legal headache
It isn't all that surprising that a lawsuit would arise from the PHMSA's move. The ruling that the federal agency now has oversight of Las Flores feels sudden and is in line with recent federal government moves to have more influence on certain sectors of the nation's economy, notably the energy industry.
I think this is a fight that could drag on for some time, as jurisdictional disputes often prove difficult to untangle. I don't think Sable has a clear advantage here, so I'd avoid the stock for now.
