We’re Not Venture Capitalists, We’re Restructuring Partners
Waterous Energy Fund is a North American private equity firm seeking to invest $200 to $400 million in established oil and gas businesses with top quartile assets, requiring recapitalizing, restructuring or repositioning. We believe that the combination of lower commodity prices, new technology and consequent industry dislocation have made this an ideal time to invest in the oil patch.
We Seek to Buy Complexity and Sell Simplicity.
We believe now is an exciting time to be investing in the oil patch. At the macro level, despite a more favourable supply and demand balance than in recent years, the forward curves for both oil and natural gas are now essentially flat. At the asset level, improvements in technology have produced drilling returns in select areas which are among the highest return and lowest risk in recent history. At the industry level, companies saddled with legacy capital structures and business plans create opportunities for repositioning.
Responding to these changing industry dynamics, Waterous Energy Fund has a differentiated investment strategy. While most oil and gas private equity firms focus on providing growth capital – backing start-up management teams to build junior companies by de-risking emerging plays – we believe this venture capital approach is now severely challenged due to a lack of exits. The same changes in technology which have increased drilling returns have created a glut of organic growth opportunities, significantly decreasing demand for sub-scale businesses, especially those without top quartile asset quality.
Instead, Waterous Energy Fund will focus on acquiring established businesses with scale, management and top-quartile assets, but which require recapitalizing, restructuring or repositioning to unlock value (WEF’s “3 R’s”). Rather than a large portfolio of smaller companies, Waterous Energy Fund seeks to build a concentrated portfolio of businesses with sufficient scale and asset quality to maximize liquidity options and earn premium valuations. This concentrated portfolio will allow us to actively partner with management in each investment.
Adam most recently served as Global Head of Investment Banking and Head of Energy and Power, North America at Scotiabank, where he was responsible for all of Scotiabank's global Equity and Advisory activities and Scotia Waterous.
Under Adam’s leadership from 2005 to 2016, Scotia Waterous was among the most active advisors in the oil and gas acquisition and divestiture market with transactions roughly evenly split between Canada, the United States and other countries.
Adam co-founded Waterous & Co., a predecessor firm to Scotia Waterous, in September 1991 where he was a member of the firm's Executive Committee and the head of the firm. Scotia Capital acquired Waterous & Co. in 2005.
Before co-founding Waterous & Co., Adam worked in the Mergers and Acquisitions department with First Boston Corporation in New York and in management consulting with McKinsey & Company in Toronto.
Adam has been active in many industry, community, health, arts, and education organizations. Adam is currently on the board of directors of the United Way of Calgary and the Harvard College Fund Executive Committee. In 2013, Adam was awarded the Queen Elizabeth II Diamond Jubilee Medal for his contributions to the community. In 2017, Adam received the Lifetime Achievement Award from the Oil and Gas Council.
Adam holds an Honours Business Administration degree from the University of Western Ontario and a MBA from Harvard Business School. Being in the top five percent of his class at Harvard, he was designated a Baker Scholar.
Prior to joining Waterous Energy Fund, Michael was a Managing Director with Scotia Waterous in Houston with responsibility for advising clients in the energy sector on M&A and capital markets transactions. Michael has extensive experience working with private and public exploration and production companies operating in the U.S. shale plays, with a particular focus on the Permian Basin and the Eagle Ford Shale.
Michael has 14 years of investment banking experience with Scotia, UBS and Morgan Stanley and has advised on over US $30 billion in M&A transactions in the energy sector. Michael’s advisory assignments have included numerous projects for private equity firms and investment groups involving the analysis and valuation of oil & gas assets.
Michael holds a B.A. in International Relations from the University of California at Los Angeles, and an MBA in Finance from the Wharton School at the University of Pennsylvania. Prior to attending business school, Michael served as an officer in the United States Marine Corp and the U.S. Foreign Service.
Prior to joining Waterous Energy Fund, Connor was an associate on the energy team for Kohlberg Kravis Roberts, where he was involved in a variety of corporate and asset-level oil and gas transactions from 2014 to 2017.
Prior to joining KKR, Connor was a member of the energy private equity team at the Blackstone Group. Prior to that, Connor began his career at Barclays Capital, where he was a member of the firm’s natural resources investment banking group.
Connor has been a member of a variety of community organizations, including the Catholic Big Brothers and Big Sisters, and is currently a member of the Strathcona-Tweedsmuir School Alumni Board.
Connor holds a B.A. with a concentration in Economics from Harvard College where he graduated Magna Cum Laude, and was elected Phi Beta Kappa. Being in the top five percent of his class, he was designated a John Harvard Scholar.
Andrew Kim is Chartered Professional Accountant, with extensive experience working with a variety of private and publicly traded companies across North America.
Andrew has held various leadership positions of several Toronto Stock Exchange Issuers including President of Crescentwood Capital Corp., President of Pyxis Capital Inc., President of HAL Concepts Ltd., President of Graystone Corporation, President and Director of Stonington Capital Corporation, President and Director of CBOC Continental Corporation, and Vice-President, Finance of Unicorp Energy Corporation.
Mr. Kim was appointed to the Strath Resources Ltd. board of directors in January 2017 and was appointed as Audit Committee Chairman in May 2017.
Andrew holds an Honours Bachelor of Mathematics degree from the University of Waterloo.
Strath Resources is a 100% WEF owned private oil and gas producer, formed in January 2017 to acquire certain assets out of the Mosaic Energy receivership process. Strath’s assets cover over 100,000 acres in the liquids-rich Kakwa region of the Montney, with additional uphole zones targeting the Wilrich and Dunvegan, and are currently producing over 5,000 boe / d. The Montney Kakwa region is recognized as among the top decile plays for drilling returns in North America.
Cona Resources, 67% owned by WEF, is a publicly traded (TSX:CONA) heavy oil producer in southwest Saskatchewan currently producing over 17,000 bbls/d of oil. Cona’s core asset, Cactus Lake, is the largest vertical well polymer flood in North America, and is marked by an exceptionally low base decline and high netbacks. WEF acquired its interest in Cona’s predecessor, Northern Blizzard Resources, in May 2017, by purchasing the shares directly from Northern Blizzard’s original private equity sponsors. Cona has among the highest debt adjusted free cash flow yields and lowest decline rates of all public oil and gas companies in Canada.