According to informed sources, JPMorgan is in discussions with investors to refinance a loan of nearly $1 billion carrying a 15% interest rate for oil drilling company Sable Offshore Corp. (SOC.US), which has the backing of the former Trump administration. The company resumed crude oil sales this March after a hiatus of over a decade, and its existing term loan from Exxon Mobil Corp. is set to mature on June 26.

The sources indicate that Sable Offshore Corp.'s lead bank, JPMorgan, has been negotiating refinancing terms with potential investors, proposing to issue bonds with a 15% coupon and a 20% amortization rate. One source added that the bank is considering issuing these bonds at 98 cents on the dollar.

"You certainly don't want a judge stepping in and halting the project just before you invest," said Leo Mariani, an analyst at Roth Capital Partners, in an interview, referring to the state-level lawsuit currently challenging Sable Offshore Corp.'s operating rights. Mariani further noted that the debt terms are particularly onerous due to the significant legal risks the company carries.

Headquartered in Houston, Sable currently produces 46,000 barrels of crude oil per day from a group of platforms off the coast of Santa Barbara. Former President Trump previously invoked Cold War-era powers to overturn state-level opposition to the project. These platforms were formerly owned by Exxon Mobil and had been largely idled since a pipeline owned by Plains All American LP ruptured in 2015, an incident that polluted beaches and sparked alarm among regulators, environmentalists, and local residents.

Last week, U.S. Energy Secretary Chris Wright and Interior Secretary Doug Burgum toured Sable Offshore Corp.'s facilities and held a press conference with the company's CEO, Jim Flores, at its onshore processing plant. At the facility in Goleta, California, Burgum stated that if the state "continues to pursue anti-energy policies instead of affordable, reliable, and secure energy supplementation," it will continue to lose residents and see "historically low levels of funding" attracted to its next-generation economy.

During an investor call last week, CEO Jim Flores expressed optimism about the prospects of finalizing the deal. "While there are many variables here, we have great confidence in our lead bank, JPMorgan, and the team they've assembled to have ample time to execute this plan," Flores said.