STW plans a multi-faceted deployment model tailored to the specifics of a customer's needs and the unique capabilities of selected manufacturers' technologies. This includes sale of equipment, build/own/operate, build/own and build/consult/operate. In some of the deployment scenarios, STW will have a contract with either one or multiple producers (captive or shared) to process their shale water, while for other scenarios; the equipment operator has a similar contract.
The Company's multi-pronged financing strategy is designed to address our customers' needs. It encompasses corporate financing (debt or equity), project financing, purchase and equipment lease financing.
Corporate Financing: As a publicly traded company, STW has a liquid currency to be used for equity raises. Corporate-level financing will be used for general corporate expenses, marketing (including education of customers, regulators and communities) and outright purchase of certain equipment.
Project Financing: Certain projects require large outlays for capital equipment purchase and for engineering procurement and construction costs. These projects will have a clearly defined customer base and water contracts, making them ideal for project-level financings. The equity portion will be provided by funds raised through corporate financing. Mobile/portable units, depending on the complexity and cost, may be similarly financed.
Equipment Lease and/or Financing: Traditional collateralized equipment lease or purchase financing may be employed for the acquisition and deployment of mobile or portable units for AMD and shale water processing. These assets have typically long asset lives and a predictable revenue stream, making leasing an appropriate option for lessors and conserving cash for STW.
