Exxon Mobil Corp will take up to a $2 billion loss on the highly leveraged sale of a troubled California offshore oil and gas field that has been idle since a 2015 pipeline spill.
The sale comes after a failed bid this year to restart production at the site and as Exxon culls poor performing businesses. Santa Barbara officials in March rejected an Exxon plan to restart operations and ship oil via dozens of tanker trucks each day to inland refineries.
Sable Offshore, a blank cheque company founded by industry veteran James Flores, will borrow 97 per cent of the $643 million purchase price from Exxon under a five-year loan. Blank cheque companies raise money to acquire operating businesses. If Mr Flores fails to restart production at the Santa Ynez field by the start of 2026, Exxon could take back the entire operation, Sable disclosed in a filing.
Exxon was not immediately available to comment on terms of the deal. It has accelerated asset sales to cut operating costs and improve returns after a historic loss in 2020.
Mr Flores will seek permits to restart Santa Ynez and expects to pump about 28,100 barrels of oil and gas per day beginning in 2024, according to a Sable investor presentation. The field has 112 wells and the potential for at least another 100 wells, its presentation showed.
A subsea pipeline leak seven years ago sent 2,400 barrels of the Santa Ynez oil into the Pacific Ocean, leading to a shutdown. Exxon acquired the pipeline from its owner and has been trying to resume production.
The Santa Ynez sale includes three oil and gas platforms that sit up to 14 kilometres off the California coast, a pipeline and oil and gas processing facilities. The first platform, built in the 1970s, began producing oil in 1981.
Mr Flores has a long history of buying and selling companies. He has run five US oil companies beginning with Flores & Rucks Inc in 1992, and often sold his companies at sizeable gains. His last business, Sable Permian Resources, filed for Chapter 11 bankruptcy in 2020 as oil prices tumbled.
Last year, he raised $287.5m through an initial public offering for the company that became Sable Offshore. Sable must complete a deal by March 1 or return the money to its IPO investors, its filings show.
What the law says
Micro-retirement is not a recognised concept or employment status under Federal Decree Law No. 33 of 2021 on the Regulation of Labour Relations (as amended) (UAE Labour Law). As such, it reflects a voluntary work-life balance practice, rather than a recognised legal employment category, according to Dilini Loku, senior associate for law firm Gateley Middle East.
“Some companies may offer formal sabbatical policies or career break programmes; however, beyond such arrangements, there is no automatic right or statutory entitlement to extended breaks,” she explains.
“Any leave taken beyond statutory entitlements, such as annual leave, is typically regarded as unpaid leave in accordance with Article 33 of the UAE Labour Law. While employees may legally take unpaid leave, such requests are subject to the employer’s discretion and require approval.”
If an employee resigns to pursue micro-retirement, the employment contract is terminated, and the employer is under no legal obligation to rehire the employee in the future unless specific contractual agreements are in place (such as return-to-work arrangements), which are generally uncommon, Ms Loku adds.
MATCH INFO
Barcelona 4 (Suarez 27', Vidal 32', Dembele 35', Messi 78')
Sevilla 0
Red cards: Ronald Araujo, Ousmane Dembele (Barcelona)
RESULT
RS Leipzig 3
Marcel Sabitzer 10', 21'
Emil Forsberg 87'
Tottenham 0
UAE currency: the story behind the money in your pockets
Desert Warrior
Starring: Anthony Mackie, Aiysha Hart, Ben Kingsley
Director: Rupert Wyatt
Rating: 3/5
Who was Alfred Nobel?
The Nobel Prize was created by wealthy Swedish chemist and entrepreneur Alfred Nobel.
- In his will he dictated that the bulk of his estate should be used to fund "prizes to those who, during the preceding year, have conferred the greatest benefit to humankind".
- Nobel is best known as the inventor of dynamite, but also wrote poetry and drama and could speak Russian, French, English and German by the age of 17. The five original prize categories reflect the interests closest to his heart.
- Nobel died in 1896 but it took until 1901, following a legal battle over his will, before the first prizes were awarded.
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Killing of Qassem Suleimani
