Sable Offshore Corp.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

SEPTEMBER 30, 2026

Note 1 — Organization, Business Operations, and Going Concern

Organization and General

Sable Offshore Corp. (“Sable,” the “Company” or “we”) (formerly known as Flame Acquisition Corp. or “Flame”) is an independent oil and gas company headquartered in Houston, Texas. Flame was initially formed as a special purpose acquisition company for the purpose of entering into a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses.

On November 2, 2022, the Company entered into an agreement and plan of merger, dated as of November 2, 2022 (as amended, supplemented, or otherwise modified from time to time, the “Merger Agreement”), with Sable Offshore Corp., a Texas corporation (“SOC”), and Sable Offshore Holdings, LLC, a Delaware limited liability company and the parent company of SOC (“Holdco” and, together with SOC, “Legacy Sable”). Pursuant to the Merger Agreement, on February 14, 2024, (i) Holdco merged with and into Flame, with Flame surviving such merger (the “Holdco Merger”) and (ii) Legacy Sable merged with and into Flame, with Flame surviving such merger (the “SOC Merger” and, together with the Holdco Merger, the “Mergers” and, along with the other transactions contemplated by the Merger Agreement, the “Merger”).

On November 1, 2022, SOC, entered into a purchase and sale agreement (as amended, the “Sable-EM Purchase Agreement”) with Exxon Mobil Corporation (“Exxon”) and Mobil Pacific Pipeline Company (“MPPC,” and together with Exxon, “EM”) pursuant to which SOC agreed to acquire from EM certain assets constituting the Santa Ynez field in Federal waters offshore California (“SYU”) and associated onshore processing and pipeline assets (such “Assets,” as defined in the Sable-EM Purchase Agreement, collectively the “SYU Assets”). The SYU Assets include the Santa Ynez Pipeline System (“SYPS”), which is a single, integrated and continuous interstate pipeline system that transports crude oil from the SYU onshore and then inland. Specifically, the SYPS is primarily comprised of offshore pipeline segments that transport crude oil from the SYU onshore, midstream processing and storage facilities at Las Flores Canyon (“LFC”) and onshore pipeline segments that transport crude oil to Pentland Station in Kern County, CA.

On February 14, 2024 (the “Closing Date”), the Company consummated the Merger and related transactions (the “Business Combination”) contemplated by the Merger Agreement, following which Flame was renamed “Sable Offshore Corp.”. Pursuant to the terms and subject to the conditions set forth in the Sable-EM Purchase Agreement, the transactions contemplated by the Sable-EM Purchase Agreement were also consummated on February 14, 2024 (“Sable-EM Closing Date”), immediately after the Business Combination, as a result of which Sable purchased the SYU Assets, effective as of January 1, 2022. On February 15, 2024, Sable’s shares of Common Stock, par value $0.0001 per share (“Common Stock”) and warrants to purchase Common Stock at an exercise price of $11.50 per share (the “Public Warrants”) began trading on NYSE under the symbols, “SOC” and “SOC.WS,” respectively.

On March 13, 2026, the President of the United States, Donald J. Trump, signed an Executive Order to, among other things, delegate certain authorities under the Defense Production Act of 1950 (“DPA”) to the United States Secretary of Energy. Subsequently, on March 13, 2026, the United States Secretary of Energy, Chris Wright, issued an order to the Company invoking the DPA (the “DPA Order”) to immediately prioritize and allocate pipeline transportation services for hydrocarbons from the SYU through the SYPS in order to address the energy scarcity and supply disruption risks caused by California policies that have left the region and U.S. military forces dependent on foreign oil.

On March 14, 2026, the Company resumed the transportation of hydrocarbons (i.e., oil) produced at the SYU through the SYPS at the direction of the United States Secretary of Energy, Chris Wright, in compliance with the DPA Order. In doing so, the Company facilitates the supply of domestically produced crude oil through U.S. pipeline infrastructure to U.S. refineries, supporting domestic consumers and the U.S. military.

On March 29, 2026, the Company initiated oil sales upon filling the SYPS, resulting in total sales volumes of approximately 4.4 million barrels of oil equivalent (“MMboe”) for the nine months ended September 30, 2026.

Unless otherwise noted or the context otherwise requires, references to (i) the “Company,” “Sable,” “we,” “us,” or “our” are to Sable Offshore Corp, a Delaware corporation, and its consolidated subsidiaries, following the Business Combination, (ii) “Flame” refers to Flame Acquisition Corp. prior to the Business Combination, (iii) the SYU refers to the 16 federal leases, three offshore production platforms (Hondo, Harmony, and Heritage), and associated ancillary facilities located in federal waters offshore California, and (iv) the SYPS refers to the interstate pipeline connecting the SYU to the Pentland Station terminal, inclusive of “Pipeline Segment 324” and “Pipeline Segment 325”, or collectively referred to as “Pipeline

Segments 324 and 325” (formerly known as “901/903 Assets” and as defined in the Sable-EM Purchase Agreement), the Las Flores Canyon (“LFC”) onshore processing, storage, and related pipeline assets, and the offshore pipeline connecting the SYU to LFC. The SYU Assets include the SYU and the SYPS.

These unaudited condensed consolidated financial statements and notes should be read in conjunction with our audited consolidated financial statements and the notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2025.

On July 2, 2026, the Company consummated a series of transactions intended to refinance its existing indebtedness, strengthen its liquidity position, and extend its debt maturities (collectively, the “2026 Refinancing Transactions”). The 2026 Refinancing Transactions consisted of (i) the issuance of approximately $675.0 million aggregate principal amount of a Senior Secured Term Loan B (the “Term Loan B”) due December 15, 2028, (ii) the issuance of $345.0 million aggregate principal amount of 6.5% Convertible Senior Notes due 2031 (the “Convertible Notes”), (iii) an underwritten public offering of 37,337,662 shares of Common Stock for gross proceeds of approximately $115.0 million, and (iv) the entry into a new senior secured reserve-based revolving credit facility providing commitments of up to $500.0 million (the “Senior Revolver”), initially subject to azero borrowing base. The Term Loan B and the Senior Revolver are collectively referred to as the “New Senior Secured Credit Facilities.” The net proceeds from the 2026 Refinancing Transactions were used to repay the Company’s existing Senior Secured Term Loan (“Senior Secured Term Loan”) with Exxon Mobil Corporation in full (refer to Note 4—Debt), pay related fees and expenses, and provide additional liquidity for general corporate purposes. The Senior Revolver was entered into to support the Company’s hedging and cash management needs and hadno borrowing availability at closing given its initial zero borrowing base. In conjunction with the 2026 Refinancing Transactions, the Company was required to enter into hedging agreements within five days of closing. Refer to Note 4—Debt for additional information regarding the new debt instruments and to Note 8—Derivative Instruments for additional information regarding the Company’s new commodity derivative contracts related to the Senior Revolver.

Going Concern

In connection with the preparation of its unaudited condensed consolidated financial statements as of and for the three months ended March 31, 2026, management evaluated the Company’s ability to continue as a going concern in accordance with ASC 205-40, Presentation of Financial Statements — Going Concern, and concluded that substantial doubt existed regarding the Company’s ability to continue as a going concern within one year of the date such financial statements were issued, due to the Company’s then current debt maturity profile and related liquidity considerations.

On July 2, 2026, the Company completed the 2026 Refinancing Transactions, which extended the maturity of the Company’s debt obligations and improved its liquidity position. As a result, as reported in the Company’s Form 10-Q filing for the period ending June 30, 2026, management re-evaluated the Company’s ability to continue as a going concern and concluded that the conditions and events that previously raised substantial doubt had been alleviated. However, subsequent to September 30, 2026, conditions and events arose that again raise substantial doubt about the Company’s ability to continue as a going concern.

On October 6, 2026, the Company’s single downstream purchaser of crude oil temporarily curtailed its purchases of the Company’s crude oil due to maintenance and upgrades to storage tanks at its refinery, which were expected to be resolved promptly. The curtailment of sales from our primary purchaser continued throughout October 2026 and remains ongoing as of the date of this filing. In response, the Company has reduced production to manage crude oil inventory levels at its dedicated storage facilities. In early November 2026, the Company began selling crude oil to additional purchasers, and the Company anticipates that its primary purchaser will resume purchasing barrels in the near term. However, the timing and volume of any such resumption are uncertain.

As a result of these developments, the Company does not expect to have sufficient liquidity to meet its obligations as they become due in the near term. Management is actively pursuing a sale of its current crude oil inventory and additional marketing options for its future production, as well as pursuing other liquidity solutions, including equity and unsecured debt offerings. However, there can be no assurance that these efforts will be successful or that any such transactions will be completed on acceptable terms or in a timely manner. Accordingly, management has concluded that substantial doubt exists regarding the Company’s ability to continue as a going concern within one year after the issuance date of the unaudited condensed consolidated financial statements contained in this Quarterly Report, which have been prepared on a basis that assumes the Company will continue as a going concern. The unaudited condensed consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Note 2 — Significant Accounting Policies

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and in accordance with the instructions to Form 10-Q and Article 8 of Regulation S-X of the U.S. Securities and Exchange Commission (“SEC”). Certain information or footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted, pursuant to the rules and regulations of the SEC for interim financial reporting. Accordingly, they do not include all the information and footnotes necessary for a complete presentation of financial position, results of operations, or cash flows. In the opinion of management, the accompanying unaudited condensed consolidated financial statements include all adjustments, consisting of a normal recurring nature, which are necessary for a fair presentation of the financial position, operating results and cash flows for the periods presented. Financial presentation in prior periods has been adjusted to conform with current period presentation. These unaudited condensed consolidated financial statements for the quarterly period ended September 30, 2026 may not be representative of the financial results for the full year 2026.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period.

While management believes these estimates are reasonable, changes in facts and assumptions or the discovery of new information may result in revised estimates. Actual results could differ from these estimates, and it is at least reasonably possible these estimates could be revised in the near term, and these revisions could be material.

Revenue Recognition

As of September 30, 2026, the Company has sold all of its crude oil to a single purchaser under a short-term agreement at prevailing market prices, with certain adjustments for product quality and geographic location. The Company recognizes revenue at the point in time when its performance obligation is satisfied and control transfers to the purchaser, which occurs at the delivery point. Accordingly, the Company is dependent on this purchaser for substantially all of its revenue. Refer to Note 1 — Organization, Business Operations, and Going Concern for a discussion of the purchaser’s curtailment of crude oil purchases beginning October 6, 2026.

Accounts Receivable

Accounts receivable consist of receivables from sales of oil and natural gas liquids production delivered to purchasers. The purchasers remit payment for production directly to the Company. Most payments for production are received within one to two months after the production date.

Accounts receivable are stated at amounts due from purchasers, net of an allowance for expected losses as estimated by the Company. The Company determines its allowance for receivables utilizing the loss-rate method, which considers a number of factors, including the length of time accounts receivable are past due, the Company’s previous loss history, the purchaser’s current ability to pay its obligation to the Company, the condition of the general economy and the industry as a whole. At September 30, 2026, the Company’s allowances for credit losses related to sales of oil and natural gas liquids sales waszero.

Oil and Gas Properties

Linefill. The SYPS is an interstate pipeline that transports crude oil from the SYU through LFC in Santa Barbara County, California, to Pentland Station in Kern County, California. The Company classifies the quantity of oil used to fill the portion of the SYPS from LFC to Pentland as linefill, such that when an incremental barrel of oil is pumped into that portion of the SYPS, it forces oil out at the Pentland Station sales point. The linefill capacity is approximately 540 thousand barrels (“MBbls”). Crude oil linefill is carried at historical cost and classified as a long-term asset within Oil and gas properties on the unaudited condensed consolidated balance sheets.

The Company capitalized costs incurred that were directly attributable to filling the portion of SYPS described above, including associated depletion, depreciation, and amortization. Linefill will not be depreciated, but is subject to impairment in accordance with Financial Accounting Standards Board (“FASB”) guidance with respect to accounting for the impairment or disposal of long-lived assets. Carrying amounts that are not expected to be recoverable through future cash flows are written down to estimated fair value.

Derivative Instruments

The Company uses derivative instruments to hedge its exposure to cash flow variability from commodity prices. Financial commodity derivative instruments are recorded at fair value and included on the unaudited condensed consolidated balance sheets as assets or liabilities with such amounts classified as current or long-term based on their anticipated settlement dates. The Company marks its derivative instruments to fair value and recognizes the cash and non-cash change in fair value on derivative instruments for each period as Loss on derivatives, net in the unaudited condensed consolidated statements of operations. The related cash flow impact of settled contracts is reflected as cash flows from operating activities. To the extent that contracts with the same counterparty are allowed to be netted upon payment subject to a master netting arrangement, these amounts are reported on a net basis on the unaudited condensed consolidated balance sheets.

By using derivative instruments to economically hedge exposure to changes in commodity prices, the Company exposes itself to credit risk and market risk. Credit risk is the failure of the counterparty to perform under the terms of the derivative contract. When the fair value of a derivative contract is positive, the counterparty owes the Company, which creates credit risk. The Company has entered into commodity derivative instruments only with counterparties that are also lenders under the Senior Revolver and have been deemed an acceptable credit risk. As such, collateral is not required from either the counterparties or the Company on its outstanding commodity derivative contracts. As of September 30, 2026, the Company had derivative positions with two counterparties. Refer to Note 8—Derivative Instruments for additional information.

Income Taxes

The Company accounts for income taxes under FASB Accounting Standards Codification (“ASC”) Topic 740, “Income Taxes” (“ASC 740”). ASC 740 requires the recognition of deferred tax assets and liabilities for both the expected impact of differences between the financial statements and tax basis of assets and liabilities and for the expected future tax benefit to be derived from tax loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that included the enactment date. ASC 740 additionally requires a valuation allowance to be established when it is more likely than not that all or a portion of deferred tax assets will not be realized.

In accordance with ASC 740, the Company’s effective tax rate was 1.0% and negative 4.8% for the three and nine months ended September 30, 2026, respectively, and negative 6.4% and negative 7.9% for the three and nine months ended September 30, 2025, respectively. The effective tax rate for the three months ended September 30, 2026 reflects the cumulative effect of a change in the estimated annual effective tax rate, which the Company had estimated to be negative 11.5% as of June 30, 2026. In accordance with ASC 740-270-35-2, the effect of a change in the estimated annual effective tax rate is recognized in the interim period in which the change occurs, resulting in a disproportionate rate for the current quarter relative to the year-to-date rate. The Company recognized a discrete tax expense of $2.2 million for the three months ended June 30, 2026, resulting from a tax shortfall on stock-based compensation vesting for which the related deduction did not fully offset the associated book expense. For the three and nine months ended September 30, 2026 and the three and nine months ended September 30, 2025, the effective tax rate differed from the U.S. federal statutory tax rate of 21.0% primarily due to changes in valuation allowance on the deferred tax assets and disallowed expenses.

Management’s assessment of the realizability of deferred tax assets requires significant judgment and is subject to change in future periods. Changes in these estimates could materially affect the Company’s income tax provision in the period of change.

Accounts Payable and Accrued Liabilities

Accounts payable and accrued liabilities include obligations incurred in the ordinary operation of the business for services performed and products received, including capital expenditures that are capitalized as oil and gas properties. Accounts payable and accrued liabilities consisted of the following as of:

Net Loss Per Share of Common Stock

The Company complies with accounting and disclosure requirements of FASB ASC Topic 260,“Earnings Per Share.” Net loss per share of Common Stock is computed by dividing net loss by the weighted average number of shares of Common Stock outstanding for the period.

The following table reflects the calculation of basic and diluted net loss per share of Common Stock.

Diluted net loss per share excludes the following securities for the three and nine months ended September 30, 2026, because their effect would have been anti-dilutive:

•7,568,870 warrants;

•8,813,510 unvested restricted share units; and

•86,163,819 shares issuable upon the conversion of the Convertible Notes. This share count is based on the initial conversion rate of 249.7502 shares per $1,000 principal amount of the $345.0 million aggregate principal amount of the Convertible Notes, which is subject to adjustment upon the occurrence of certain events. Refer to Note 4 — Debt for details regarding the Convertible Notes.

For the three and nine months ended September 30, 2025, diluted net loss per share excludes 8,987,062 warrants and 10,460,465 unvested restricted share units.

Note 3 — Asset Retirement Obligations

The Company’s asset retirement obligations relate to the future plugging and abandonment of oil and gas properties and related facilities. The following table describes the changes to the Company’s asset retirement obligations liability as of:

Note 4 — Debt

The Company’s debt consisted of the following as of the periods presented:

On July 2, 2026, the Company completed the 2026 Refinancing Transactions, as described in Note 1—Organization, and Business Operations, which included (i) the issuance of the Term Loan B, (ii) the issuance of the Convertible Notes, and (iii) the entry into the Senior Revolver, each as described further below. As a result of the 2026 Refinancing Transactions, the Company repaid the existing Senior Secured Term Loan in full.

Senior Secured Term Loan

The Senior Secured Term Loan was secured by first-priority liens on substantially all of the Company’s assets and accrued interest at 15.0% per annum, which the Company elected to accrue and compound annually as paid-in-kind interest. On July 2, 2026, in full satisfaction of the existing obligations for the Senior Secured Term Loan, the Company repaid $695.5 million in cash (the “Cash Settlement”) and exchanged $299.2 million in a non-cash transaction for an equal principal amount of the Term Loan B held by an affiliate of Exxon (the “Non-Cash Exchange”, and together with the Cash Settlement the “Senior Secured Term Loan Refinancing”). The Company evaluated the Senior Secured Term Loan Refinancing on a lender-by-lender basis in accordance with ASC 470-50, Debt — Modifications and Extinguishments, causing the Cash Settlement to be accounted for as a debt extinguishment while the Non-Cash Exchange was accounted for as a modification of debt. As a result, a $15.0 million loss on extinguishment of debt was recognized for the Cash Settlement on the unaudited condensed consolidated statements of operations for the three and nine months ended September 30, 2026 and reflected as a non-cash transaction on the unaudited condensed consolidated statements of cash flows for the nine months ended September 30, 2026. Additionally, $6.5 million of unamortized debt issuance costs of the Senior Secured Term Loan were reflected as additional debt issuance costs of Term Loan B for the Non-Cash Exchange, and $0.8 million of third-party issuance costs incurred in connection with the Non-Cash Exchange were expensed as incurred and are included in General and administrative expenses on the unaudited condensed consolidated statements of operations for the three and nine months ended September 30, 2026.

For the three and nine months ended September 30, 2026, the Company incurred interest expense on the Senior Secured Term Loan of $4.6 million and $82.3 million, respectively, and $21.0 million and $63.0 million for the three and nine months ended September 30, 2025, respectively, which is included as Interest expense on the unaudited condensed consolidated statements of operations. Paid-in-kind interest was accrued and included in Current debt, net on the unaudited condensed consolidated balance sheet as of December 31, 2025, and the amount ultimately repaid as part of the Senior Secured Term Loan Refinancing. The effective interest rate for the Senior Secured Term Loan was approximately 17.9% for the portion of the nine months ended September 30, 2026 that the Senior Secured Term Loan was outstanding and approximately 10.0% for both the three and nine months ended September 30, 2025, respectively.

Prior to the 2026 Refinancing Transactions and in connection with Senior Secured Term Loan, the Company obtained a Limited Waiver from Exxon and Mobil Pacific Pipeline Company that defers the Company’s obligation to provide plugging and abandonment financial security under the Sable-EM Purchase Agreement until the earliest of: (i)

December 22, 2028, (ii) the date on which the Term Loan B is redeemed, repaid or otherwise refinanced; or (iii) the occurrence of an event of default.

No amounts remain outstanding under the Senior Secured Term Loan as of September 30, 2026.

Term Loan B

On July 2, 2026, the Company entered into the Term Loan B with JPMorgan Chase Bank, N.A., as administrative agent and collateral agent, and the lenders party thereto, providing for a $675.0 million aggregate principal amount. The Term Loan B matures on December 15, 2028 and is secured by first-priority liens on substantially all Company and material subsidiary assets as part of a first lien intercreditor agreement entered into in connection with the Senior Revolver. The Term Loan B contains customary events of default, including nonpayment of principal or interest, breach of covenants, cross-default to other material indebtedness, bankruptcy, and change of control, upon the occurrence of which the lenders may accelerate the outstanding obligations.

Discount and issuance costs. The Term Loan B was funded net of an original issue discount of 3.0%, or $20.3 million. Net proceeds were approximately $345.5 million, after deducting the $299.2 million Non-Cash Exchange from the Senior Secured Term Loan previously discussed, the original issue discount of $20.3 million, and third party debt issuance costs of $10.0 million. The original issue discount and debt issuance costs are presented as a direct deduction from the carrying amount of the Term Loan B and are amortized to interest expense over the term of the loan using the effective interest method.

Interest. The Term Loan B bears interest at a fixed rate of 15.0% per annum, computed on an actual 365-day basis (or 366 days in a leap year). Interest is payable quarterly in arrears on the last business day of March, June, September and December of each year during the tenor of the Term Loan B. Upon certain payment or events of default (as defined in the Term Loan B agreement), the rate increases automatically by 2.0% per annum. Upon any other event of default, the rate increases by 2.0% per annum at the election of the required lenders. For both the three and nine months ended September 30, 2026, the Company incurred interest expense of $30.1 million for the Term Loan B which is included as Interest expense on the unaudited condensed consolidated statements of operations. The effective interest rate for the Term Loan B was approximately 20.2% for the three and nine months ended September 30, 2026.

Scheduled principal payments. The Term Loan B amortizes quarterly. Payments are equal to 2.5% of the initial aggregate principal amount, or $16.9 million, for the fiscal quarters ending September 30, 2026 and December 31, 2026, and of 5.0% of the initial aggregate principal amount, or $33.8 million, for each fiscal quarters thereafter. The Term Loan B is also subject to the mandatory prepayments described below.

Mandatory prepayments. In addition to the scheduled principal payments, the Term Loan B requires mandatory prepayments equal to 100% of excess cash flow,100% of the net cash proceeds from certain permitted asset sales and 100% of the net cash proceeds from other specified events, as defined in the Term Loan B agreement. The excess cash flow for any fiscal quarter is subject to a minimum liquidity requirement such that, after giving effect to the mandatory prepayment, our aggregate unrestricted cash and cash equivalents may not be less than $25.0 million.

MOIC. The Company may prepay the Term Loan B at any time. In connection with any repayment or prepayment in full of the obligations under the Term Loan B, whether at maturity, by prepayment or refinancing, or upon acceleration following an event of default thereunder, the Company must include additional amounts, if necessary, for the lenders to achieve a 1.25 to 1.00 minimum multiple on invested capital (“MOIC”). MOIC is calculated with (A) all cash received by the lenders, including original issue discount, interest and principal repayments and prepayments, as the numerator and (B) the aggregate principal amount as the denominator. Based on the scheduled principal payments and the contractual interest payments expected over the tenor the Term Loan B, the Company expects that cumulative payments to the lenders will exceed the MOIC. Accordingly, no additional payments related to the MOIC have been included in the calculation of the effective interest rate, and no amounts have been accrued as of September 30, 2026.

Exit Fee. In connection with any repayment or prepayment in full of the obligations under the Term Loan B, the Company may be obligated to pay an exit fee to each lender equal to: (a)1.00% during the period commencing June 30, 2027 through December 30, 2027, (b)2.00% during the period commencing December 31, 2027 through June 29, 2028 and (c)3.00% during the period commencing June 30, 2028 through the maturity date of the Term Loan B. However, any exit fee paid by the Company does not contribute towards the numerator in the MOIC calculation. If the Term Loan B is repaid or prepaid in full prior to June 30, 2027, the Company will not be obligated to pay an exit fee. Based on the scheduled principal payments and the remaining principal amount that is due upon the maturity of the Term Loan B, the Company is accruing a 3.00% exit fee by including such amount in the calculation of the effective interest rate. As of September 30,

2026, the Company accrued $1.3 million for the exit fee which is presented within Non-current debt, net on the unaudited condensed consolidated balance sheet.

Covenants. The Term Loan B does not include financial ratio maintenance covenants. It includes the following affirmative and negative covenants:

•General and administrative costs, as defined by the agreement governing the Term Loan B, may not exceed $90.0 million for each of the fiscal years 2027 and 2028. For the purposes of this covenant, general and administrative costs exclude (a) legal costs and expenses and (b) non-cash charges or losses, including any non-cash stock compensation;

•The Company must use commercially reasonable efforts to hedge 100% of anticipated crude oil production from proved developed producing reserves through maturity. The hedges must be swaps, costless collars or puts, with floor or strike prices of at least 80% of the NYMEX forward curve;

•Debt is restricted. Permitted debt includes convertible notes of up to $350.0 million and other unsecured debt of up to $100.0 million;

•Liens, investments, capital expenditures, asset sales, mergers and transactions with affiliates are restricted; and

•Cash dividends on the Company’s common stock are effectively prohibited.

As of September 30, 2026, the Company was in compliance with all covenants under the Term Loan B.

Balance sheet classification. As of September 30, 2026, $112.2 million of the net carrying value of the Term Loan B was classified as current and presented as Current debt, net on the unaudited condensed consolidated balance sheet. This amount reflects $118.1 million of scheduled principal payments contractually required within the next twelve months, net of the related unamortized original issue discount and debt issuance costs. Based on the Company’s calculation, no mandatory prepayment under the Term Loan B’s excess cash flow provision was required for the quarterly measurement period ended September 30, 2026. The current portion excludes mandatory prepayments for future quarterly measurement periods. Those prepayments are based on the Company’s excess cash flow for each such period and are therefore not determinable, and do not become payable, until excess cash flow is calculated following the end of the applicable period. The remaining net carrying value is presented as Non-current debt, net on the unaudited condensed consolidated balance sheet. The Company reassesses the classification each reporting period.

Senior Revolver

On July 2, 2026, in connection with the issuance of the Term Loan B, the Company entered into the Senior Revolver with JPMorgan Chase Bank, N.A., as administrative agent and collateral agent, and the lenders and issuing banks from time to time party thereto. The Senior Revolver has an aggregate maximum credit amount of $500.0 million and was entered into primarily to facilitate secured hedging and secured cash management arrangements.

Availability under the Senior Revolver, including for letters of credit, is limited to the lesser of (i) the aggregate maximum credit amount (or the letter of credit commitment, as applicable) and (ii) the borrowing base then in effect. The administrative agent will determine the borrowing base based on, among other factors, the value of the Company’s proved oil and gas reserves. That determination will occur only after the Term Loan B has been repaid in full in cash and terminated, including any secured permitted refinancing of it. The borrowing base waszero at closing. The Senior Revolver therefore will not provide revolving availability until a borrowing base is established. As of September 30, 2026, no borrowings or letters of credit were outstanding under the Senior Revolver.

The Senior Revolver matures on December 15, 2028. Borrowings, if any, will bear interest at the Company’s election at either Term SOFR plus an applicable margin of 3.00% to 4.00%, or the base rate plus an applicable margin of 2.00% to 3.00%. In each case the margin is based on borrowing base utilization.

The Senior Revolver contains the same affirmative and negative covenants as the Term Loan B. Once a borrowing base greater than zero is established, it also includes the following financial covenants:

•a maximum consolidated total leverage ratio of 3.00 x, tested quarterly on a rolling four-quarter basis; and

•a minimum current ratio of 1.00 x, tested quarterly.

Convertible Notes

On July 2, 2026, the Company issued $345.0 million aggregate principal amount of the Convertible Notes pursuant to, and governed by, an indenture (the “Base Indenture”), dated as of July 2, 2026, between the Company and U.S. Bank Trust Company, National Association, as trustee (the “Trustee”), as supplemented by a first supplemental indenture (the “Supplemental Indenture,” and the Base Indenture, as supplemented by the Supplemental Indenture, the “Indenture”), dated as of July 2, 2026, between the Company and the Trustee. The Convertible Notes accrue interest at 6.5% per annum, payable semi-annually in arrears on January 1 and July 1 of each year, beginning January 1, 2027. The Convertible Notes will mature on July 1, 2031, unless earlier converted, redeemed or repurchased. The Convertible Notes contain customary events of default, including nonpayment of principal or interest, failure to convert, breach of covenants, cross-default to other material indebtedness, and certain events of bankruptcy, insolvency and reorganization. Net proceeds from the issuance of the Convertible Notes were approximately $332.7 million, after deducting issuance costs of $12.3 million.

Conversion. The initial conversion rate is 249.7502 shares of common stock per $1,000 principal amount of the Convertible Notes. This is equivalent to an initial conversion price of approximately $4.00 per share. The conversion rate is subject to customary anti-dilution adjustments. Before April 1, 2031, holders may convert their notes only under the following circumstances:

•During any calendar quarter beginning after September 30, 2026, if the last reported sale price of the Company's common stock exceeds 130% of the conversion price on at least 20 trading days, whether or not consecutive, during the 30 consecutive trading days ending on the last trading day of the preceding calendar quarter;

•During thefive consecutive business days after any 10-consecutive-trading-day measurement period in which the trading price per $1,000 principal amount of notes was less than 98% of the product of the last reported sale price of the common stock and the conversion rate on each trading day;

•Upon the occurrence of specified distributions to holders of common stock or specified corporate events; and

•If the Company calls the notes for redemption, until the close of business on the second business day before the redemption date.

On or after April 1, 2031, holders may convert at any time until the close of business on the second scheduled trading day before the maturity date.

Settlement. Upon conversion, the Company may elect to settle in one of three ways: in shares of common stock (plus cash in lieu of fractional shares), in cash, or in a combination of cash and shares. The default settlement method is physical settlement in shares, which applies unless the Company elects otherwise. The Company may irrevocably fix or eliminate one or more settlement methods at any time by providing notice to holders.

Make-whole fundamental change. Holders who convert in connection with a make-whole fundamental change, as defined in the Indenture, or in connection with a redemption notice, may be entitled to an increase in the conversion rate. The increase depends on the effective date of the event and the Company's stock price. The conversion rate will not exceed 324.6753 shares per $1,000 principal amount of notes, subject to anti-dilution adjustment.

Optional redemption. The Company may not redeem the Convertible Notes before July 6, 2029. On or after July 6, 2029, and on or before the 40 th scheduled trading day before maturity, the Company may redeem all or any portion of the notes for cash if both of the following conditions are met:

•The last reported sale price of the common stock exceeds 175% of the conversion price on at least 20 trading days, whether or not consecutive, during the 30 consecutive trading days ending on the trading day before the redemption notice date.

•The price condition is also met on the trading day immediately before the redemption notice date.

The redemption price equals 100% of the principal amount plus accrued and unpaid interest. If the Company redeems less than all outstanding notes, at least $100.0 million aggregate principal amount must remain outstanding and not called for redemption. No sinking fund is provided for the notes.

Holder repurchase rights. Holders may require the Company to repurchase all or any portion of their notes for cash on July 6, 2029. Holders may also require the Company to repurchase their notes for cash upon a fundamental change, as defined in the Indenture. In either case, the repurchase price equals 100% of the principal amount plus accrued and unpaid interest. The July 6, 2029 repurchase right does not apply if the Company has called all outstanding notes for redemption before that date. Due to the holders’ repurchase rights, debt issuance costs associated with the Convertible Notes are amortized to interest expense through July 6, 2029.

Interest expense recognized for the Convertible Notes consists of the following:

The effective interest rate for the Convertible Notes was approximately 7.7% for the three and nine months ended September 30, 2026.

Balance sheet classification. The Convertible Notes are classified as Non-current debt, net on the unaudited condensed consolidated balance sheet as of September 30, 2026. As of September 30, 2026, no specified events have taken place which would require current classification and the stock price condition which would allow for conversion was not satisfied. Accordingly, the notes are not currently convertible at the option of holders based on the stock price condition.

The net carrying amount of the Convertible Notes consists of the following as of:

Refer to Note 9 — Fair Value Measurements for fair value disclosures regarding the Company’s debt instruments.

Financing Costs

The following table presents the components of the Company’s financing costs:

Note 5 — Warrants

There were 7,568,870 and 8,987,062 warrants outstanding as of September 30, 2026 and December 31, 2025, respectively. There were no changes in the number of warrants outstanding for the three and nine months ended September 30, 2025. The table below reflects warrant activity during the three and nine months ended September 30, 2026:

There wereno warrants exercised during the three and nine months ended September 30, 2026 and 2025.

The Private Placement Warrants and Working Capital Warrants outstanding as of September 30, 2026 and December 31, 2025 are accounted for as liabilities and remeasured at fair value each reporting period, with changes in fair value recognized as Changes in fair value of warrant liabilities in the unaudited condensed consolidated statements of operations. Refer to Note 9 — Fair Value Measurements for additional information.