Waterous Energy Fund

What is Waterous Energy Fund?

Waterous Energy Fund (WEF) is a Calgary-based private equity firm focused on investments in the Canadian oil and gas sector, established in 2017. WEF has secured over $3 billion in capital commitments across five distinct fundraises since inception, making them Canada's largest oil and gas private equity manager.

Their approach differs from traditional growth equity and venture capital methods in oil and gas private equity, which typically back start-up teams to build junior companies by de-risking emerging plays. Instead, WEF adopts a value-based investment strategy and concentrates on established businesses with top-quality assets that are currently operational.

Their investment philosophy is centered around three guiding principles: Compound long-term intrinsic value per share, which prioritizes growth over short-term market narratives; Maintain a margin of safety by investing in high-quality assets with established production histories as a counterbalance to technical and commodity price risk; and Consolidate core areas by acquiring geographically concentrated businesses and scaling them up to enhance margins of safety and cost capital improvements.

WEF takes pride in having a highly concentrated portfolio of scaled businesses rather than a large number of smaller companies, believing this structure to reduce investment risk in the sector. The firm is led by Managing Partner and CEO Adam Waterous, who, prior to founding WEF, served as Global Head of Investment Banking at Scotiabank and was instrumental in the success of Scotia Waterous in the oil and gas acquisition and divestiture market.

The leadership team includes individuals with extensive experience in energy investment and management.

WEF's most significant undertaking is Strathcona Resources, the fifth-largest oil company in Canada by liquids production, with a focus on long reserve life index, low breakeven points, and robust growth potential. WEF's strategy has been successful in delivering significant per share growth while maintaining a margin of safety when compared to public peers. WEF is not a venture capitalist but values investors with a unique perspective on consolidating and scaling oil and gas businesses for value-based growth.