Sable Offshore's stock jumped 12% Thursday after the Department of Justice's Office of Legal Counsel issued a legal opinion supporting the company's right to operate its Santa Ynez Unit offshore facility. The March 3, 2026 memorandum concluded that presidential orders under the Defense Production Act can preempt state laws, potentially overriding California's restrictions on the oil and gas operation.

The legal opinion addressed a question from the Department of Energy regarding Sable Offshore's operations in federal waters off California. California state laws have prevented the company from operating the facility and transporting production through associated pipeline infrastructure. The DOJ stated that Defense Production Act orders carry the force of federal law under the Supremacy Clause, allowing them to override conflicting state regulations.

Sable Offshore holds the lease and operates the Santa Ynez Unit, working with the Department of the Interior to update a Development and Production Plan for continuous production. The company and federal agencies cite energy vulnerabilities on the West Coast as justification for the facility's operation. However, CFRA analyst Michael Gordon expressed skepticism about the memo's broader implications, noting it is not binding on courts and questioning whether presidential authority under the DPA extends as far as the opinion suggests.