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What is a Stream?

A stream is a contract to purchase a percentage of an oil & gas company’s production from a specific license or a field.

It is not an agreement to take any interest in the oil & gas company’s license.

The purchase is financially settled, FlowStream does not take physical product.

In summary a stream is very much like a royalty except it is created to solve a funding need.

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When to Stream

  • SITUATIONS WHERE A STREAM CAN PLAY A ROLE

  • When Requiring Capital For Development Capex

  • When Seeking Capital For An Acquisition

  • When Seeking To Reduce Exposure To An
    Asset (Farm-down Replacement)

  • When Looking To Reduce Leverage
    (Is Not Accounted For As Debt)

  • When Looking To Alleviate Financial Covenants
    (Does Not Reduce Ebitdax)


When Would FlowStream Invest?

FlowStream’s streams are typically available before debt funding becomes available in the field’s life cycle.

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Rationale for Streaming

Benefits of a Stream

    • Not treated as debt under IFRS/GAAP
    • Not treated as debt by rating agencies
    • No coupons
    • No bullet payments
    • No redeterminations
    • No amortisation schedule
    • No long due diligence process
    • No multiple, bureaucratic credit committees
    • No derivatives treatment
      • No mark-to-market in your accounts
      • No “hidden options pricing”
    • Highly flexible to match your assets’ operating characteristics
    • No required incremental public disclosure
    • Sometimes a stream’s cost of capital is cheaper than debt
    • Cheaper than equity
    • No dilution to existing shareholders
    • Faster than an equity issuance
    • No stock overhang
    • No underwriting fees
    • No offering documents
    • No changes in bookable reserves
    • No change in production forecasts
    • No new participant in the JOA or Technical Committees
    • No dilution of votes in the license
    • Usually no government/regulatory approvals post signing