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Today – taking a break from our normal publishing schedule – we are continuing our “12 Days Of Christmas” series.

Better than four calling birds and even five golden rings, Porter & Co.’s version of the “12 Days Of Christmas” brings you something actually useful: hard-earned investment lessons to guide you through 2026. For the remainder of the year – in place of our regular research and insights – we will dish out key lessons from 2025… some earned from pain and others from gain.

Over the past year, editors across all of our publications have recommended stocks, bonds, or other trades that have resulted in a mix of outsized performances and humbling underachievements. Having begun on Tuesday, December 23, and extending through January 2, we will reveal a pivotal lesson – about why a stock soared to double-digit returns, or why one languished. We will also explore the ones that got away – that we sold too soon or that we didn’t recommend at all.

Today, we share a lesson from one of our biggest losers of 2025: our recommendation of oil-focused exploration and production (“E&P”) firm Sable Offshore in Porter & Co.’s Asymmetry – a Partner-only service that does not follow a regular publishing schedule.

As its name implies, Asymmetry is our advisory dedicated to identifying asymmetric investment opportunities – those with massive upside potential and relatively limited and defined downside risk. While we have had some notable winners in Asymmetry so far – such as our recommendations of mortgage finance firms Fannie Mae and Freddie Mac, both up more than 60% to date – these ideas tend to be more speculative in nature and don’t always work out in our favor. This was certainly the case with Sable…

Sable Offshore (NYSE: SOC) appeared to be an ideal Asymmetry recommendation: A world-class asset… priced like a busted lottery ticket… with a massive near-term catalyst triggered by change in Washington, D.C.

The Santa Ynez Unit (“SYU”) – a once-prominent offshore oil field holding over 1 billion barrels of recoverable oil off the coast of Southern California – had been a cash machine in the 1990s. But a 2015 pipeline spill changed everything.

Production stopped. Regulators cracked down. And its owner, ExxonMobil (XOM), got stuck paying upkeep and fighting a maze of permits and hostile stakeholders for years. 

Eventually, Exxon had enough. In early 2024, it sold the entire SYU complex to Sable – even financing 97% of the $643 million purchase price itself. Exxon effectively said, “Please take this headache off our hands – we’ll even lend you the money to do it.”

Our thesis for adding Sable to the Asymmetry portfolio in late May was simple:

In short, Sable appeared to have relatively limited downside risk and a clear path to 2x-3x returns or better over the next couple years. Unfortunately, our thesis was challenged almost immediately.

Beginning in June 2025 and continuing throughout the summer, environmental groups and the California state government launched a new legal siege. The courts imposed a temporary restraining order intended to block the pipeline restart. And the state legislature passed Senate Bill (“SB”) 237 to tighten the screws on offshore drilling.

Through it all, we maintained a bullish stance. Our analysis suggested that because the SYU operated under federal authority, these local roadblocks were temporary. We bet that the law was on our side… and that a pro-oil Trump administration would make things happen.

We were wrong.

On October 14, 2025, our thesis officially broke.

Santa Barbara County Judge Thomas Anderle issued a ruling that effectively shut down Sable’s plan to restart oil flows through the Las Flores pipeline system. 

The case stemmed from Sable’s lawsuit against the California Coastal Commission (“CCC”) – the state agency with quasi-judicial control of land along the state’s coastline.

The CCC had previously issued cease-and-desist orders that halted repairs and testing on the Las Flores Pipeline System. Sable claimed that the CCC did not have jurisdiction to interfere with its efforts to restart the pipeline, and that its Coastal Development Permit issued from the federal government naturally took precedence over CCC’s authority. 

However, Judge Anderle denied the claims in Sable’s lawsuit and upheld the CCC’s authority to enforce environmental regulations over the project. This ruling didn’t just delay the project. It handed veto power to a regulatory body openly hostile to fossil fuels.

We didn’t hesitate. The next morning, October 15, we issued a Sell Alert to subscribers, and recorded a 56% loss on the position.

Could Sable eventually win on appeal? Maybe.

Could it pursue (and win) a new environmental permit from the CCC? Perhaps – but highly unlikely.

Could President Donald Trump and the federal government intervene with a “Hail Mary” order to force the pipeline open? Possibly… more on this in a moment. 

But at Porter & Co., we don’t invest in “Hail Marys.” When the core thesis of an investment – in this case, the legal right for Sable to operate – is invalidated, we must sell.

The loss in Sable was disappointing, but it also reinforced two critical lessons: 

1. Political risk is not just a nuisance when investing – it can be an existential threat.

When you invest in physical assets – mines, oil fields, pipelines, etc. – the quality of the asset matters, but the government that controls the jurisdiction the asset is located in often matters more. Fighting city hall is often a losing battle.

2. Intelligent position sizing is critical in asymmetric investing.

Losses like the one with Sable are part of the game when investing in high-risk, high-reward opportunities. And given the more volatile – and often binary – nature of these opportunities, risk-management tools like stop losses won’t necessarily protect you. The key to managing risk is to size your positions appropriately, only allocating capital you can afford to lose.

We took a swing at a massive asymmetrical opportunity. And we missed. But because we respected the risk, we live to swing again.

Finally, we will note that earlier this month, the U.S. Department of Transportation’s Pipeline and Hazardous Materials Safety Administration (“PHMSA)” announced that the Las Flores pipeline qualifies as an interstate pipeline, which places the system under exclusive federal jurisdiction. PHMSA also determined that the pipeline should be treated as an “active” line under federal safety rules, which may remove the requirement for Sable to obtain coastal permits under California’s recently-passed legislation.

This may, in fact, be the “Hail Mary” save we mentioned earlier… However, it’s still very early, and the California government has demonstrated it will use every available means to prevent a restart. We expect this fight could drag on for some time. Sable’s success is still far from guaranteed.

In the meantime, Sable is facing significant financial challenges as it struggles to come up with cash to service its debts. The company issued nearly 50 million shares to raise $250 million earlier this month, which should buy it some time. However, if the regulatory standoff continues, it will likely need to issue additional shares down the line. And with significant dilution, shareholders may have a difficult time making any real returns for some time, even if Sable ultimately wins.

As mentioned, Asymmetry – along with numerous other Porter & Co. services – is produced exclusively for Partner Pass members. 

To become a Partner Pass member contact our Customer Care team at 888-610-8895, or +1 443-815-4447 internationally.

Porter & Co.
Stevenson, Maryland