Adam Waterous - M&A Mastery in Oil and Gas

Sep 21, 2025

Adam Waterous, founder of Waterous Energy Fund and a former top executive at Scotiabank, shares his insights into oil and gas investing. He reveals how he revolutionized the competitive sales process in Canada and navigated the market's technological shifts post-2012. Adam discusses his value investing approach, the significance of acquiring quality assets, and the art of consolidation. With a focus on hiring high performers, he emphasizes the need for a decentralized operational structure and offers tips for running successful competitive sales processes.

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ANECDOTE

From Unknown To Market Leader

Adam Waterous started an energy-focused investment bank in Calgary despite lacking oil & gas roots and quickly captured half the city's advisory market by 1995.
He expanded internationally after pioneering competitive auctions and hiring technical staff to win business.

INSIGHT

The Scarcity Era Ended

A 50-year industry view treated oil & gas as scarce, prioritizing growth and frequent buying of small producers to offset decline.
That dynamic ended after circa 2012 when shale and SAGD tech made North America drilling-location rich, collapsing buyer demand.

ADVICE

Align Pay With Controllable Outcomes

Do structure compensation to reward controllable actions: cash pay plus equity ownership at prevailing prices to align incentives with operators.
Avoid option-heavy long-term incentive plans that incentivize outcomes outside management's control like commodity prices.

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Adam Waterous is the founder of Waterous Energy Fund, the largest private equity fund in Canada’s oil and gas sector. He gives us a masterclass on the past fifty years of oil and gas investing. From humble roots and with no background in oil and gas, he pioneered the competitive sales process in Canada, identified the critical shift in the market and technology after 2012, used a value investing strategy influenced by Buffett to build his firm, and tells us about the importance of finding good rock and the power of consolidation.

Adam Waterous began his career in management consulting with McKinsey & Company in Toronto, then transitioned to mergers and acquisitions at First Boston in New York. In 1991, he co-founded Waterous & Co., an investment banking firm specializing in the energy sector, which was later acquired by Scotiabank in 2005. At Scotiabank, he served as Global Head of Investment Banking, where he completed over 250 transactions valued at over $200 billion. In 2017, he founded the Waterous Energy Fund, a private equity firm focused on the Canadian energy sector, which under his leadership built Strathcona Resources Ltd. from scratch into one of Canada's largest oil companies through strategic acquisitions and organic growth. Adam is a graduate of Western Ontario University and Harvard Business School.

Please enjoy my interview with Adam Waterous.

Waterous Energy Fund website: https://waterous.com

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