Item 1.01. Entry into a Material Definitive Agreement

Merger Agreement

On November 2, 2022, Flame Acquisition Corp., a Delaware corporation ("Flame"), entered into an Agreement and Plan of Merger, dated as of November 2, 2022 (as it may be 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, "Sable"). James C. Flores serves as Flame's Chairman, Chief Executive Officer and President, and is also the sole equity owner of Holdco.

The independent members of the board of directors of Flame (the "Flame Board") approved, and recommended that the Flame Board approve, the Merger Agreement and the transactions contemplated thereby. Subsequently, the Flame Board approved the Merger Agreement and the transactions contemplated thereby. In addition, board of directors of SOC and the sole member of Holdco each approved the Merger Agreement and the transactions contemplated thereby.

The Business Combination

The Merger Agreement provides for, among other things, the following transactions at the closing: (i) Holdco will merge with and into Flame, with Flame as the surviving company in the merger (the "Holdco Merger"), and (ii) immediately following the effective time of the Holdco Merger, SOC will merge with and into Flame, with Flame as the surviving company in the merger (the "SOC Merger"). The Holdco Merger together with the SOC Merger are referred to as the "Merger," and the Merger and other transactions contemplated by the Merger Agreement are referred to as the "Business Combination."

The closing of the Merger is expected to occur on the third business day after the satisfaction or waiver (if legally permissible) of the conditions set forth in the Merger Agreement, except as otherwise mutually agreed by the parties.



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In connection with the Business Combination, Flame will change its name to Sable Offshore Corp ("New Sable"). Upon the consummation of the Business Combination, the Flame Board will continue to be composed of four members. The directors of Flame prior to the consummation of the Business Combination will continue to serve as the directors of New Sable following the consummation of the Business Combination.

Business Combination Consideration

At the closing of the Business Combination (the "Closing"), on the terms and subject to the conditions of the Merger Agreement:



  •   at the effective time of the Holdco Merger, all of the limited liability
      company membership interests in Holdco designated as Class A shares ("Holdco
      Class A shares") issued and outstanding immediately prior to the effective
      time of the Holdco Merger, other than the shares described in the bullet
      point immediately below, will be converted into the right to receive
      3,000,000 shares of Class A common stock, par value $0.0001 per share, of
      Flame ("Flame Class A common stock");



  •   at the effective time of the Holdco Merger, each Holdco Class A share held in
      treasury or owned by Flame will be canceled and no consideration will be
      delivered in exchange for those shares; and



  •   at the effective time of the SOC Merger, each share of common stock, par
      value $0.01 per share, of SOC that is issued and outstanding immediately
      prior to the effective time of the SOC Merger will be canceled and no
      consideration will be delivered in exchange for those shares.

Founder Shares Conversion

In accordance with the terms and conditions of the Merger Agreement, and pursuant to the Flame certificate of incorporation, immediately prior to the effective time of the Holdco Merger, each share of Class B common stock, par value $0.0001 per share, of Flame, issued and outstanding immediately prior to the effective time of the Holdco Merger will automatically be converted into shares of Flame Class A common stock on a one-for-one basis.

Representations and Warranties; Covenants

The Merger Agreement contains representations, warranties and covenants of each of the parties thereto that are customary for transactions of this type, including with respect to the operations of Flame and Sable. Additionally, Sable made representations and warranties to Flame relating to the Sable-EM Purchase Agreement (as defined below) providing that (i) the representations and warranties of the parties to the Sable-EM Purchase Agreement are incorporated by reference in the Merger Agreement; and (ii) Sable has no reason to believe that (x) the conditions precedent to the financing contemplated by the Sable-EM Purchase Agreement and the Term Loan Agreement (as defined below) will not be satisfied on a timely basis, (y) the financing contemplated in the Term Loan Agreement will not be available in order to complete the transactions contemplated by the Sable-EM Purchase Agreement contemporaneously with the Closing or (z) any default or event of default under the Term Loan Agreement will occur upon the closing of the Term Loan Agreement.

The Merger Agreement contains customary covenants, including, among others, (i) covenants with respect to the conduct of the businesses of Flame and Sable prior to the Closing (subject to certain limitations), (ii) covenants providing for Flame and Sable to use commercially reasonable efforts to obtain necessary regulatory approvals, including under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR Act") (subject to certain limitations and conditions), (iii) covenants requiring the parties to prepare . . .

Item 3.02. Unregistered Sales of Equity Securities.

The disclosure set forth above in Item 1.01 of this Current Report on Form 8-K with respect to the Merger Agreement and the PIPE Subscription Agreements is incorporated by reference herein. The shares of Flame Class A common stock to be issued (i) in exchange for Holdco Class A shares pursuant to the Merger Agreement and (ii) pursuant to the PIPE Subscription Agreements, in each case, will not be registered under the Securities Act in reliance upon the exemption provided in Section 4(a)(2) of the Securities Act and/or Regulation D promulgated thereunder.




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Item 7.01. Regulation FD Disclosure.

On November 2, 2022, Flame and Sable issued a press release announcing their entry into the Merger Agreement. The press release is attached hereto as Exhibit 99.1 and incorporated by reference herein.

Furnished as Exhibit 99.2 hereto and incorporated into this Item 7.01 by reference is the investor presentation that Flame and Sable have prepared for use in presentations to the PIPE Investors and other persons with respect to the transactions contemplated by the Merger Agreement.

The statements under this Item 7.01 and Exhibits 99.1 and 99.2 are being furnished pursuant to Item 7.01 and will not be deemed to be filed for purposes of Section 18 of the Exchange Act or otherwise be subject to the liabilities of that section, nor will they be deemed to be incorporated by reference in any filing under the Securities Act or the Exchange Act.

Item 8.01. Other Events

Sable-EM Purchase Agreement and Term Loan Agreement

On November 1, 2022, SOC entered into a Purchase and Sale Agreement (the "Sable-EM Purchase Agreement") pursuant to which SOC agreed to acquire from Exxon Mobil Corporation ("Exxon") and Mobil Pacific Pipeline Company ("MPPC," and together with Exxon, "EM"), certain assets constituting the Santa Ynez field in Federal waters offshore California and associated onshore processing and pipeline assets (such "Assets," as defined in the Sable-EM Purchase Agreement, the "SYU Assets"). The SYU Assets include certain pipeline facilities, equipment, contracts, permits and related real property and easements acquired by EM and its subsidiary pursuant to an Asset Purchase and Sale Agreement, dated October 10, 2022 (the "EM-Plains Purchase Agreement"), by and between MPPC and Plains Pipeline L.P.

The transactions contemplated by the Sable-EM Purchase Agreement will be effective as of January 1, 2022 at 12:00:01 a.m. (Houston time) (the "Sable-EM Effective Time"). The aggregate consideration for the SYU Assets is $625 million (the "Sable-EM Purchase Price"), and 3% of the Sable-EM Purchase Price is required to be paid to EM at the closing as a down payment (the "Sable-EM Down Payment"). The Sable-EM Purchase Price is subject to certain other customary adjustments, including property expenses, proceeds and revenues, the value of all hydrocarbons in storage, property taxes, imbalances, overhead costs, materials and supply inventory values, title benefits, title defects, environmental defects, certain plugging and decommissioning of facilities, excluded assets, and casualty loss amounts. At the closing under the Sable-EM Purchase Agreement, SOC will also enter into a five-year secured term loan with Exxon (the "Term Loan Agreement"), which provides that SOC will pay to Exxon, on or before the payment due date, the principal amount of the Sable-EM Purchase Price, less the Sable-EM Down Payment, plus upward adjustments for (i) certain inventory and (ii) in the case that all governmental approvals necessary to begin installation of valves on certain pipelines have been obtained on or prior to the date of the closing of the transactions contemplated by the Sable-EM Purchase Agreement, an additional $75 million.

The closing of the transactions contemplated by the Sable-EM Purchase Agreement is scheduled to take place on February 1, 2023 (the "Sable-EM Scheduled Closing Date"), unless one or more of the conditions to closing described in the Sable-EM Purchase Agreement have not been satisfied as of the Sable-EM Scheduled Closing Date, in which case the closing will be held three business days after all such conditions have been satisfied or waived, or such other date as the parties may mutually agree in writing, but in no event later than June 30, 2023. Each of SOC's and EM's obligation to consummate the transactions contemplated by the Sable-EM Purchase Agreement is conditioned on, among other conditions, the Business Combination having been consummated or being consummated concurrently with the closing under the Sable-EM Purchase Agreement.

Upon the consummation of the Business Combination, and by virtue of the Merger, Flame will succeed by operation of law to all of the rights, privileges, liabilities and obligations of SOC under the Sable-EM Purchase Agreement and the Term Loan Agreement, including any rights, privileges, liabilities and obligations of EM under the EM-Plains Purchase Agreement which are acquired or assumed by SOC pursuant to the Sable-EM Purchase Agreement.

Copies of the Sable-EM Purchase Agreement, the Term Loan Agreement and the EM-Plains Purchase Agreement will be filed with the SEC prior to the distribution of the Proxy Statement to Flame's shareholders, and the foregoing description of such agreements is qualified in its entirety by those agreements.



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Item 9.01 Financial Statements and Exhibits





(d) Exhibits



Exhibit
  No.                              Description of Exhibits

 2.1†        Agreement and Plan of Merger, dated November 2, 2022, by and among
           Flame Acquisition Corp., Sable Offshore Corp. and Sable Offshore
           Holdings LLC.

10.1*        Form of Subscription Agreement.

10.2         Form of Registration Rights Agreement.

99.1         Press Release, dated November 2, 2022.

99.2         Investor Presentation, dated November 2, 2022.

104        Cover page Interactive data file (embedded within the inline XBRL
           document).

† Certain exhibits and schedules to this Exhibit have been omitted in accordance

with Regulation S-K Item 601(b)(2). The Registrant agrees to furnish

supplementally a copy of all omitted exhibits and schedules to the Securities

and Exchange Commission upon its request.

* Certain exhibits and schedules to this Exhibit have been omitted in accordance

with Regulation S-K Item 601(a)(5). The Registrant agrees to furnish

supplementally a copy of all omitted exhibits and schedules to the Securities

and Exchange Commission upon its request.





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