benefits of streaming
Traditional development of energy assets requires intensive capital investment and if proven successful, results in large future cashflows.
Traditional financing does not address the unique risks of large resource development and continues to be a major hurdle for many projects to get approved.
Streaming offers the operators a large portion of future production cash flow today to offset risk while maintaining robust returns.
Background
Our Partners are paid today for production tomorrow.
A stream is a contractual agreement that, in exchange for an upfront payment, provides the right to purchase all or a portion of a predefined assets production at a preset price
Streams are similar to royalties, but unlike royalties, require ongoing cash payments to purchase the oil and gas produced
Companies typically focus on their core asset and other assets are starved for capital
Fixed capex and opex for stream
SEP receives perpetual interest in production
SEP adopts a portion of development risk
Streaming Advantages for Companies
Relatively simple documentation under ISDA
Potentially above EBITDA line / non-debt treatment
Competitive Discount Rate
Implicit hedge on future production – if commodity prices fall, the operator is effectively delivering a lower cash amount to SEP
No equity dilution
Preserve management control
Less financial covenants
Speed of financing
No government regulatory approvals required
Achieve positive cash flow faster
Lower upfront capital required from the operator
Use existing asset value to unlock future asset value, sooner