Join today and have your say! It’s FREE!

Become a member today, It's free!

We will not release or resell your information to third parties without your permission.
Please Try Again
{{ error }}
By providing my email, I consent to receiving investment related electronic messages from Stockhouse.

or

Sign In

Please Try Again
{{ error }}
Password Hint : {{passwordHint}}
Forgot Password?

or

Please Try Again {{ error }}

Send my password

SUCCESS
An email was sent with password retrieval instructions. Please go to the link in the email message to retrieve your password.

Become a member today, It's free!

We will not release or resell your information to third parties without your permission.
Quote  |  Bullboard  |  News  |  Opinion  |  Profile  |  Peers  |  Filings  |  Financials  |  Options  |  Price History  |  Ratios  |  Ownership  |  Insiders  |  Valuation

Strathcona Resources Ltd T.SCR

Alternate Symbol(s):  STHRF

Strathcona Resources Ltd. is a Canada-based oil and gas producers with operations focused on thermal oil, enhanced oil recovery and liquids-rich natural gas. The Company has three operations, including Lloydminster Heavy Oil, Cold Lake Thermal Oil and Montney. The Lloydminster Heavy Oil segment has multiple large oil-in-place reservoirs with existing and expanding enhanced oil recovery (EOR) opportunities primarily located in southwest Saskatchewan. Its Saskatchewan thermal properties rely on the same steam-assisted gravity drainage (SAGD) processes as its Cold Lake Thermal properties. It is a producer in the Cold Lake region of Alberta. Its operations include thermal oil producing assets at Lindbergh, Orion and Tucker, with production from SAGD oil assets. Its Montney development is positioned in some of the active regions in the Montney basin, the condensate-rich Kakwa, Grande Prairie, and Groundbirch regions, and produces liquids-rich gas.


TSX:SCR - Post by User

Post by Huntamun1234on Mar 25, 2024 9:56am
187 Views
Post# 35950506

A mouthful, but intriguing

A mouthful, but intriguing(NPW) How an oil tycoon plans to transform an iconic mountain town; Infrastructure; Waterous has been working on rail line linking
How an oil tycoon plans to transform an iconic mountain town; Infrastructure; Waterous has been working on rail line linking
2024-03-23 04:23:07.311 GMT


How an oil tycoon plans to transform an iconic mountain town; 
Infrastructure; Waterous has been working on rail line linking 
calgary to banff for a decade

By Joe O'Connor
March 23 (National Post) -- It's 7 a.m. and the fresh cup 
of coffee in Adam Waterous'hands isn't providing him fuel to 
pump Strathcona Resources Ltd., which he built from scratch to 
become Canada's fifth-largest oil producer before taking it 
public five months ago.
Instead, the former investment banker is sitting with his 
wife Jan and eager to talk about a project that seems 
diametrically opposed to the interests of the Calgary-based oil 
company he's executive chair of, and the oilpatch in general. 
But before wading into that story, Waterous had a revealing 
coming-of-age tale to share.
He and a high school buddy took the subway to what were 
then Toronto's northern extremes, stuck out their thumbs and 
promptly caught a lift from a kind, elderly couple in a 
Cadillac who dropped the boys about an hour north of the city. 
The plan was to hitchhike to Banff, Alta. It was 1979.
"I thought, 'This is going to be easy,'" he said.
That burst of early optimism died by the side of the 
highway in Sudbury, Ont., where the friends were marooned for 
three days waiting for a ride. Eventually, they reached the 
iconic Canadian mountain town with the breathtaking scenery and 
abundance of outdoorsy stuff to do. Waterous was hooked.
So much so that after spending the summer in Banff, he 
spent the next two decades trying to figure out how to get back 
and make it his home.
Jan, a Torontonian, likewise enjoyed a youthful brush with 
the town, and was keen to do the same. Today, the couple are 
the proud owners of the Mt. Norquay ski resort and, despite 
their Calgary digs, consider Banff as their permanent address.
But skiing is not what Waterous is known for in business. 
The 62-year-old made a mint doing deals in the oilpatch as an 
investment banker with Bank of Nova Scotia before striking out 
on his own in 2017 to found Waterous Energy Fund, a private-
equity player that snapped up a bunch of small oil producers, 
creating the not-so-small Strathcona Resources.
Potentially far more transformative and, on its surface, 
perplexing - given the origins of Waterous'substantial wealth - 
than shaking things up in the energy sector is the hydrocarbon-
tycoon's plan to shake up things in Alberta and North American 
mass transit circles by building a 150-kilometre rail line 
connecting Banff to Calgary and to service it with an 
environmentally friendly, hydrogen-powered train.
This is it not a save-the-planet solo-effort, mind you, 
but a Waterous family affair, equally propelled along by Jan, a 
public relations whiz, who parked a big corporate job in 
Toronto to move west, and to a lesser degree the couple's 
three, Harvard-educated sons who, incidentally, all have day 
jobs at Waterous Energy Fund.
"Without Adam and Jan, the train would still be the most 
talked about thing in Banff that is never going to happen," 
Mike Mendelman, a Banff restaurateur, said. "There have been so 
many hurdles related to this project, and anybody but them 
would have tired of it long ago and thrown in the towel, but 
they just keep going."
In the days of yore, part of the wonder of Banff was the 
journey to get there. Starting in 1888, it was a trip often 
undertaken by train that delivered generations of tourists to 
what was then Canadian Pacific Railway's Banff Springs Hotel, 
and parts thereabouts. That passenger train kept chugging in 
gradually diminishing grandeur as the town grew until 1990 when 
Via Rail Canada Inc., a Crown corporation that was bleeding 
money, cut its service to the mountains, cutting travellers off 
from Banff unless they wanted to drive or take the bus.
Lo and behold, drive they did: around 6.5 million vehicles 
pull into Banff each year, according to town statistics. That's 
a lot of cars for a place with not a lot of roads to 
accommodate them. During the summer tourist high season and at 
points during the winter, the resort town at the heart of Banff 
National Park experiences traffic jams, not on a nightmare 
Toronto scale, but at a level that is neither a win for the 
locals'disposition nor the environment.
On top of their aggravation is an acute housing and 
affordability crisis, such that a tourist destination that 
desperately needs workers to serve its more than four million 
annual visitors has nowhere for those workers to live, unless 
they happen to luck into a studio apartment - for $1,700 a 
month.
A train, in theory, would dramatically decrease the volume 
of cars and increase the labour supply by attracting workers 
from stops along the line with more affordable housing options, 
or so the argument goes. It is a perfectly common-sense 
solution that has long seemed obvious to Banffites, Mendelman 
included, and yet equally obvious was that no level of 
government was poking around town to ask whether Banff wanted 
its train back, or whose responsibility it was to build, 
operate and fund the line.
Enter Adam and Jan Waterous, two incurable doers with 
three inquisitive sons, and a zest for freewheeling family 
dialogues. The town's infernal traffic problem came up over 
breakfast eight years ago, and not for the first time.
"You keep asking the question, 'Well, what are they going 
to do about it?'and it occurred to us, sitting around with the 
boys, who is this they?" Jan said.
In that moment, the family decided the "they" would be 
them. Nearly a decade on, it still is.
In the interim, the Waterouses, through the family holding 
company Liricon Capital Inc., have invested millions of their 
own fortune into the proposal to build a train. The wider 
aspects of the project would involve restoring Banff's historic 
train station, expanding upon an intercept parking lot with 600 
free parking spaces intended to get drivers out of their cars 
and onto shuttle buses the Waterouses already operate, and 
adding a gondola service to whisk people from the train station 
to Mt. Norquay's slopes.
Plenary Americas, a portfolio company of Quebec's pension 
fund, the Caisse de dpt et placement du Qubec, sure seems 
bullish on the idea, and has signed on as the co-developer of 
the train. The other partner, should the project get the green 
light, would be the Canada Infrastructure Bank, which would put 
up half the estimated $2-billion construction cost. Alberta 
Premier Danielle Smith likewise seems keen, to the extent the 
province committed millions to explore connecting passenger 
rail service to Alberta's Rocky Mountain parks system in its 
Feb. 29 budget.
It is fair to say none of the above would have happened if 
a couple of opposites, who have been together for almost 40 
years, had not said enough was enough. Adam and Jan's divergent 
natures were not evident when they were classmates (in 
political theory) at Western University in London, Ont., but 
they became clear upon bumping into one another in an elevator 
in Toronto during the summer of 1984.
Adam was wearing an "Elect Brian Mulroney" button; Jan an 
elect "John Turner" button. Both were volunteers for the 
opposing campaigns to be prime minister. A wager was struck on 
the outcome, and a lunch subsequently purchased by the loser 
for the winner at Bemelmans, a popular Toronto haunt.
"And the rest is history," Jan said.
Part of that history, as it relates to an ambitious, 
unsolicited proposal to get a $2-billion infrastructure project 
built in Alberta, revolves around Adam's dogged persistence. 
Back in the day, when he was a wheeling-and-dealing banker, he 
had a reputation among colleagues for quirky boardroom 
presentations, at times relying more on using old movie clips 
rather than spreadsheets.
"Adam is clearly super smart," David Potter, who worked 
closely with Waterous at Scotiabank, said. "But what really 
sets him apart from all the other sharp minds I've met or 
worked with over my career are his resilience and persistence. 
Adam bounces back from bad news like no one else. Just moments 
after suffering a business setback, he's already imagining and 
planning the next even bigger success."
Jan said her husband's unbridled optimism in the wake of 
apparent disaster has been crucial in their dealings with 
bureaucracy: a morass of red tape, involving three levels of 
government, and a cast of changing characters.
Since the train project got rolling in 2016, the 
Waterouses have had brushes with three different premiers 
(Rachel Notley, Jason Kenney and Smith), seven transportation 
ministers, seven mayors and four communities, plus some mucky 
mucks from Parks Canada who, according to the couple, love 
nothing better than to say no.
"I hear 'no'as no, but Adam hears 'no'as maybe," Jan said. 
"He loves to quote that line from the movie, The Big Lebowski, 
'Yeah, well, that's just like your opinion, man.'" In other 
words, Waterous doesn't get too fussed about opinions or the 
personalities delivering them, but stays focused on the merits 
of the project. Those merits don't require consultants in fancy 
suits to sell them to the powers-that-be. Adam and Jan show up 
to meetings themselves, including in 2017, when they first met 
Jeff Genung, the mayor of Cochrane, Alta., for coffee.
Genung immediately warmed to the idea and the people 
pitching it. A train would provide commuters an alternative 
option from driving, ease the burden on an overburdened highway 
network, increase labour mobility and attract more tourists to 
Cochrane - about 30 minutes northwest of Calgary and the 
hypothetical train's first stop - even if the sum of their 
visit meant getting off the train to stretch their legs and 
grab a bite to eat.
The mayor understands the train would be operated as a 
business, with profits derived from ticket sales and a three-
tiered pricing model, with the most luxurious seats reserved 
for domestic and international travellers of means bound for 
some good times in Banff. But he has never sensed the 
Waterouses were in it for the money.
"I genuinely think their interest in the train is doing 
something that is legacy, something that could really improve 
the lives of Albertans," he said.
Jan said the project isn't indeed an act of philanthropy, 
though she said there are much "easier ways" to make money, and 
most involve fewer headaches and substantially less red tape.
"Philanthropy, as admirable as it is, is not sustainable," 
she said. "Our model is based on the premise that the only way 
to ensure that a solution is environmentally sustainable is to 
also make it economically sustainable."
As for the environment, if and when the hydrogen-powered 
train gets built as proposed, the line would track within the 
existing Canadian Pacific Kansas City Ltd. freight rail 
corridor, thereby nixing the need to cut great swaths of forest 
and blast through mountains. That's a good news story for the 
planet.
But pitching a clean-tech transit line that takes cars off 
the road on the one hand while fuelling those cars and the 
carbon economy on the other might annoy a few people in the 
green camp. Strathcona Resources produces about 200,000 barrels 
of oil a day, and the company plans to boost production to 
325,000 barrels over the next eight years.
And yet Waterous doesn't see any contradiction between 
what he does for a living and what he is trying to do for 
Banff. Portraying oil as a public enemy gets him pretty 
animated, and he argues that millions of people in the 
developing world die each year of "energy poverty" because they 
lack access to cheap fuel sources to heat, cool and cook in 
their homes.
The clearest path to eliminate those deaths, he said, is 
to ramp up energy production in the west while ramping down our 
own energy-intensive hypocrisy by parking our cars, building 
and using mass transit, and having energy producers such as 
Strathcona invest in technologies that can help decarbonize the 
hydrocarbon system.
"We actually think there is a moral obligation for Canada 
to try and double its production over the next 15 years," he 
said.
Morals aside, a Calgary-Banff train polls favourably with 
the public, with 85 per cent of Calgarians expressing support 
for the idea. But there is still plenty of convincing to do.
Count Sarah Elmeligi among the skeptics. The NDP MLA for 
the region that includes Banff had a long pre-political career 
in conservation. She is reportedly not anti-train, but wants to 
see more data on what the impact on the environment and 
wildlife corridors might be and whether, say, an expanded bus 
service might negate the need for a multi-billion 
infrastructure project before championing the cause.
Waiting on feasibility and wildlife impact studies 
requires patience, but, according to Jan, the couple dutifully 
take their "vitamins," and, according to Adam, they feel like a 
couple of "kids" despite being in their early 60s. They are not 
going anywhere.
But just in case, mom and dad have some backup. Liam, 
their youngest son, was 16 when the train project started. He 
recalls its humble beginnings at a makeshift booth on Banff 
Avenue collecting signatures with his parents from locals in 
support of the train. His parents carried the resulting data 
with them to their initial meeting with the Canada 
Infrastructure Bank.
Now 24, Liam is an associate with wide-ranging duties at 
Waterous Energy Fund. Among his tasks on a recent morning was 
doing some financial modelling for the train. Jan said her boys 
bring boundless energy, spreadsheet chops and the insights of 
the not-alwayscar-owning millennial to the table. Liam believes 
his buddies would be willing to pay between $20 and $30 for a 
ticket to Banff.
Liam describes his parents as a "funny pair." Jan is the 
calm one, the listener, sounding board and a sage giver of good 
advice to Adam, the "China breaker" who is constantly pushing 
new ideas, and occasionally requiring his spouse to rein him in.
"Obviously, the relationship works," Liam said.
Mendelman, the Banff restaurateur, delights in a story 
about Adam from around the time Strathcona Resources went 
public. The hard-charging tycoon and his sons flew to Toronto 
to ring the opening bell at the Toronto Stock Exchange. And yet 
when Mendelman ran into Adam sometime after, he glossed over 
going public and got right down to business: "How was the 
skiing?" he wondered.
"Adam doesn't seem to dwell on past accomplishments," 
Mendelman said. "He seems much more interested in the future of 
Banff."
It was now 9 a.m. in Calgary, and the sun was streaking 
through the windows of the Waterouses'city house. Adam's coffee 
was empty, but his day had just begun. It was time to get to 
work as chief executive of an oil-focused energy fund, but he 
was still eager to talk of hydrogen trains.
"What Jan and I are doing with the train, gondola and 
intercept parking - none of these are our ideas - they have all 
been around forever," he said. "We always thought they were 
really good ideas, and like a lot of things in life, this is 
all about leaning in and saying, 'Fine, we'll do it.'Somebody 
has got to lead the parade."
Financial Post joconnor@postmedia.com
<< Previous
Bullboard Posts
Next >>