Paid in Barrels, Not Dollars

Most capital that reaches oil producers is repaid the ordinary way. Cash, on a schedule. Inclusive Energy built its model around a different form of repayment. Barrels.

Under its prepay structure, Inclusive Energy pays a producer upfront against future production and takes that production itself as repayment, then hedges the barrels to manage price exposure. The producer gets capital at the point where it is most useful, before the revenue arrives. Inclusive Energy gets repaid in the asset it understands better than almost anything else.

The financing goes well past the equipment.

Inclusive Energy is known first as an oilfield equipment supplier. The prepay model is something else entirely. It is production based financing, structured and carried by a company that spends its days around the very assets it lends against.

The model runs on a few moving parts. Inclusive Energy advances capital to a producer against future output. Repayment comes in barrels rather than dollars. The production is hedged so that price swings do not undo the structure. Alongside the prepay work, Inclusive Energy funds drilling programs directly and takes security against the underlying asset.

A recent structure.

In one recent deal, Inclusive Energy financed a producer's drilling program and took security against the asset itself. Capital went in against a defined program of work, and the structure was built so that both repayment and security tracked the production it helped bring online. No two of these are identical. Each one is shaped around the specific asset, the producer, and the barrels in question.

Why an equipment company is structuring capital.

An oilfield supplier writing prepay deals against future barrels is unusual, and the reason it works is the same reason it is rare. It takes real familiarity with the assets to underwrite them this way.

Inclusive Energy came up through surface production equipment. Storage tanks, separators, line heaters, rig matting, and custom fabrication out of yards in Crossfield, Lloydminster, and Edson. That history is exactly what makes the financing credible. The company knows what the equipment does, what a wellsite costs to stand up, and what a given asset can realistically produce. Underwriting production is far less abstract when you have spent years supplying the sites that generate it.

“Anyone can lend against equipment. Structuring capital against future production takes knowing exactly what an asset can do. That is the part most lenders cannot price, and it is the part Inclusive Energy has been doing for years.”

The structures are not small, and they are not one size. Individual transactions have ranged from around a million dollars at the entry point to considerably larger deals, built against producing assets valued in the tens of millions. Inclusive Energy has worked across a range of financing structures rather than a single template, matching the shape of the capital to the shape of the asset.

The throughline.

Whether what leaves the yard is a separator or a financing structure, the logic holds. Inclusive Energy backs production it understands, on terms built around the asset, and stays close to the barrels the whole way through.