Title: Adam Waterous: Canada Can Become the Next Energy Superpower Show: In the Money with Amber Kanwar Guest: Adam Waterous, Founder & CEO, Waterous Energy Fund (controlling shareholder of Strathcona Resources and Greenfire Resources) Date: 2026-08-18 URL: https://youtu.be/DfjUR_AAYNI Length: ~44 min (2648s) Note: YouTube auto-transcript; [music]/[laughter]/[clears throat]/[snorts] artifacts and pure fillers (um/uh/you know as interjection, tic "like", contentless "sort of/kind of") removed and stutters/false starts collapsed — wording otherwise verbatim. Auto-transcript name garbles corrected: "Adam Waters"=Adam Waterous, "Amber Canmore"=Amber Kanwar, "me/Meg energy"=MEG Energy, "Strath Kona/Strathon/South"=Strathcona, "Senovas"=Cenovus, "Pemba"=Pembina, "Southbo/South Bow"=South Bow, "Aabaska/Atabasa"=Athabasca, "Clear Water"=Clearwater (the play), "prairie connector"=Prairie Connector, "C69/C48"=Bill C-69 / Bill C-48, "IBATA"=EBITDA, "8 n 10 year"="8, 9, 10 year", "cree cash flow"=free cash flow, "perian"=Permian, "aggregorate"=aggregate, "Daniel Smith"=Danielle Smith, "John McKenzie"=Jon McKenzie. Recorded in July in Calgary at ATB's offices; aired August. Sponsor reads (Forum Asset Management ~00:01, ATB Financial ~01:44, Raymond James ~11:03, Hamilton ETFs ~21:32, EQB ~34:32) retained as advertisements, not commentary.
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00:51 That episode comes out September 1st. To learn more or to invest alongside Forum, visit forumam.com. That's forumam.com. Hey everyone, welcome to a brand new episode of In the Money with Amber Kanwar. We are continuing our special on whether Canada can meet the moment. In this episode, we are talking about the energy sector with Adam Waterous.
01:13 When I first interviewed him this time a year ago, he was fighting two battles. One, the battle for MEG Energy and two, the battle for the Canadian energy sector and whether this country could finally take its dominant place around the world. He might have lost out on the bid for MEG, but maybe he's winning the war when it comes to putting Canada in pole position for the energy sector, because now we have Canadian politicians saying the exact same thing.
01:44 Adam talks about the compromises that are being made in order to get to that end goal and how he's positioning his company to benefit from it. Let's get into it. Thank you to our partners at ATB Financial. With over a 100 billion in assets, ATB Financial is powering possibilities for more than 843,000 financial services clients.
02:12 ATB Capital Markets is a leading North American investment firm providing holistic corporate and capital markets advice and full service financial solutions. Visit atb.com/inthemoney for more information.
02:32 The content provided in this podcast is for informational purposes only and does not constitute financial, investment or professional advice. The views expressed by the host and the guest are their own and do not necessarily reflect the opinions of any organization or company. The host and guest may maintain positions in any securities discussed on the podcast. Always consult with a qualified financial adviser or professional before making any investment decisions.
02:49 Adam Waterous, thank you so much for joining us on the podcast again. >> Nice to see you again. >> We're here in Calgary and I talked to you this time last year and the mood was very different. You were pursuing a hostile takeover. You were agitating for change in the country. I'd say you got one of two of your wishes.
03:15 One out of two, right? You didn't get MEG. But boy are we talking about a different landscape for the Canadian energy sector right now. We're talking about Canada as an energy superpower. I've counted not one but two pipeline proposals with government support. You must have been a good boy at Christmas because you're getting all your wishes.
03:34 >> Well, I don't know if it's just me, but here's maybe give you a perspective. Amber, if you look at the macro, there's macro and micro. Macro is where is this headed and the micro is just how you execute things. The macro what we talk a lot about at our firm is down five up five.
03:59 And what we mean by down five is that we think that the United States over the next 10 years is going to lose about 5 million barrels a day of production. It's going to go from roughly about 13 million barrels a day to about 8 million barrels a day. And maybe just to give you a quick perspective, why is that — the United States has a very short reserve life index.
04:23 It's in the 8, 9, 10 year, very very short. And to give you a sense on that, the last time the United States started losing production, that was in 1986. And between 1986 and 2006, so over a 20-year period, it went from 9 million barrels a day to 5 million barrels a day. So its compound annual decline rate was about 2.7%.
04:50 Now, that was the good old days though, because those are vertical wells and vertical wells, they don't produce a lot but they decline very slowly. Now what's happened is the US production is based on horizontal wells which have big production but they decline very fast. So we expect the decline rate to be higher, and to give you a rough sense we think it'll probably be at least double the decline rate. So instead of 2.
05:18 7% it'll be about 5.4%. So when that starts happening, we think that roughly that's going to take the US production from about 13.5 million barrels a day to about 8.2 million barrels a day. And of course, I'd rather be generally correct than precisely wrong. Maybe it takes 12 years to decline or maybe it takes nine, but that's the order of magnitude.
05:43 And I quickly would say this is not a big minority report. A lot of the CEOs of the big oil companies in the United States talk about the challenge of this reserve life index. So United States has gone down about 5 million barrels a day for the next 10 years. At the same time, we think now Canada is going to go up about 5 million barrels a day and that's a result of both Prime Minister Mark Carney and Premier Danielle Smith agreeing that Canada be an energy superpower.
06:12 And Premier Smith has defined what is an energy superpower — the goal of doubling oil and gas production over about 10 years. And for your listeners to appreciate, Canada today produces about 5 million barrels a day of liquids and so it would go from 5 to 10, hence down five up five. Now what's very convenient about that is that we're right next door — as they're going down five we're going up five, so it's very complimentary.
06:45 Now that dynamic is super powerful and is what will really drive a lot of not only the relationship between Canada and the United States over the next decade, but it's going to be a huge driver for the Canadian economy. And to give you a sense for that perspective, we're actually here in ATB's offices today and ATB did a great study, came out about a month or month or two ago, and it did an analysis on what is the GDP impact of a million barrel a day pipeline, and essentially how it works is that for every million barrels a day
07:27 that Canada increases production it increases GDP in the country about 21 billion dollars per year. Which is about .8 of a percent adding to growth. So if you go to 5 million barrels a day, that's over a hundred billion dollars per year in incremental GDP growth, about 4%.
07:49 >> That math was always true, right? That was true five years ago. That was true 10 years ago. There's something about the math now that people are, for lack of a better word, they're listening to it, right? There's been — the kids will call it a vibe shift. How do you feel and experience that shift even from a year ago from when we spoke? >> So I think the big vibe shift is clearly coming from the federal government.
08:21 And I really would emphasize you can really get lost in the day-to-day cut and thrust of politics and negotiations and things. What's the real most important thing not to lose sight of is what is the objective? And Prime Minister Carney has embraced the energy superpower.
08:42 Let's add 5 million barrels a day. And I really would emphasize that I would congratulate both Premier Smith and Mark Carney for reaching this agreement, because while we can debate merits of the agreement, we talk about that maybe in a second. >> Yeah. >> The objective is going to be transformational.
09:00 To give you a sense, back to that math, the agreement that the premier and the prime minister have just reached — the only thing that's comparable to this in the last 50 years in Canada in terms of GDP impact is the NAFTA free trade agreement. And of course the NAFTA free trade agreement of about almost 40 years ago has defined much of how Canada's economy has developed since then.
09:30 We think the same thing is going to happen now. Over the next four decades Canada becoming an energy superpower will really dominate the development of Canada's economy. And just give you some perspective on that. Let's just assume that Canada does reach 10 million barrels a day in about 10 years.
09:52 We think at that point the United States will be about 8 million barrels a day. We think Russia probably around about 8 million barrels a day as well. And so Canada is going to be arm wrestling with Saudi Arabia as the world's largest oil producer. Now, I quickly would say is if you just squint into the future and think about this, if Canada is close or maybe in first place as the largest oil producer in the world, no one's going to describe us as a middle power, meaning this is a very dramatic repositioning of Canada on the world
10:28 stage. >> That could actually happen. >> Oh, yeah. So I would say our firm has been advocating doubling oil and gas production for half a dozen years. And so the others have embraced it because of that. This is something that we have as a strategy — our firm has focused on long life assets, and why we like long life assets is you have the opportunity to rapidly increase production from them. And so now we can do this — our own firms that
11:03 we're invested in, we have business plans over the next 10 years to more than double production and we think the entire country can be able to do that. >> When you choose a Raymond James adviser, you're getting more than independent financial management. You're getting access to complete financial guidance under one roof.
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12:02 Now, I've heard the US ambassador to Canada downplay the dependency they have on Canadian energy because of a little operation in Venezuela. >> Yeah. So I could say — well, Donald Trump is often seen as a challenging guy to negotiate with. Mercurial, volatile is often how he gets characterized.
12:38 Donald Trump has been super consistent for 11 years, meaning starting in 2015 when he was running for the Republican primaries, he wants one thing from Canada and that's our oil. Meaning he has never deviated from this. And the reason being is he might be many things but he's actually quite well informed on the oil business.
13:02 Now he has a number of people in the oil industry that he's close to and they have clearly communicated to him the challenge that the United States — put other ways it's been great, the US's increased oil production, but going back to that increase, bottomed at five, got to 13 in 2019, 7 years ago, and it dipped during COVID but it's been around 13 million barrels a day for seven years. It's plateaued and now is just how fast and how steep is that ski slope
13:34 going to be. >> So at a high level, and you say it's important to look at the macro, which is what we've done. And it sounds like you're saying yes, Canada can meet the moment. We're finally all pointed towards the same goal. >> Oh, absolutely. And so the debate has been not on the objective, but on the implementation.
13:57 So how do you get there? How do you go from 5 million to 10 million barrels a day? And so the discussion, debate over the last year, year and a bit has been — does the private sector lead that or does the public sector lead that? And about a year, almost a year and a half ago, the private sector, the 10 largest oil companies, oil and gas companies, the four largest pipeline companies, put out a letter to the prime minister and basically a how-to: if you want to use the private sector to be
14:36 able to meet this objective of adding 5 million barrels a day, well, this is the regulatory reforms that would be required. And it's a very public letter. There's a lot of discussion about it. It was scrapping Bill C-69, the environmental impact assessment, Bill C-48, the BC tanker ban, the industrial carbon tax, having a six-month deadline for project approvals.
15:00 So it was very prescriptive >> for all of them. >> Well, that's what I'd say — I would emphasize there's a fork in the road to be able to have this increase in production. You can do two things: you can rely on the private sector, and if you're going to lean on the private sector, that was the items that had to be changed. But that's not the only way you can do it. You can also use the public sector, and essentially
15:29 what has happened after lots of discussion between primarily the province of Alberta and the federal government — what has been arrived at is that on the first half of the initiative, which is the pipeline, >> Mhm. >> it's been opted for a public solution and they said, you know what, we can't make these changes.
15:56 We can't scrap C-69. We can't scrap C-48. We can't scrap the industrial carbon tax. Whether can't or won't, you debate that. And so therefore it's not going to be the private sector. So by definition it'll be the public sector and that's what they've elected to develop the pipeline.
16:16 >> So that's interesting, because you're right, the proposal is essentially the proponent is Trans Mountain which is a crown corporation, and then Pembina is going to be assisting, but they're very "we could walk away at any time" and they're very non-committal about the whole thing. I think because of scars in the industry of how much these companies have poured in. But it sounds like you're saying this is a deliberate feature not a bug.
16:42 I think the industry is asking, well, where's private sector participation? And you're saying they made a choice. >> Yeah, no private sector participation. The government said — and by the way, just to give you >> they needed to keep the tanker ban and all. >> Yeah. They made some decisions on regulatory change or not. So these are — now give you some quick sense on some math on it.
17:03 A million barrel a day pipeline, the private sector alternative. We've just had one and that is South Bow, public, has this Prairie Connector, and went to the private sector, the oil producers said hey we want to build this pipeline, and it's initially for 550,000 barrels a day but it could be grossed up to a million. And just to give you an order of magnitude here, that's going to cost about 15 billion dollars to build, and what that results in is that for South Bow to earn a target rate of return, which I'm
17:40 actually not sure what they're earning, but if I'm to guess, I'd say maybe they're earning a 12% rate of return. I'm not sure about that number, but that's probably — it's not a bad guess. Then they had to charge the producers $9 a barrel. And so if you want a million barrel a day going to the States, it's a $9 toll and it's cost you 15 billion.
18:02 Now what's just happened with the west coast pipeline — the estimates are that it's going to be I think 36 to 43, probably more thinking like 43, given the track record. >> So what's notable about that is if you are on the west coast you might get about a $2 a barrel higher price.
18:26 So call it — that allows you to pay say a 20% higher toll, just to keep the math round. So what that means is that you could spend 20% more than the private sector for a West Coast pipeline. So instead of being 15 billion, private sector could afford an $18 billion cost base, not 43.
18:51 So what's essentially happened is that the federal government has said, because we're not going to change the regulations, we're not going to make it competitive to be able to develop a West Coast pipeline, the federal government effectively is covering the extra 25 billion. >> That's 25 billion here, 25 billion there.
19:17 It kind of adds up. Now, that doesn't include the extra 10 billion that they've also announced for the Vancouver Port. >> Yeah. >> So now the federal government said, "No, no, no. We're making money on this." And they are. But again, you can do the math in your head. Let's say South Bow on a $15 billion pipeline is making 12% on a market toll — on 43 billion on a market toll instead, which costs essentially 2.
19:46 4 times more. Well, you can just do the math. Instead of being a 12% rate of return, the federal government will probably earn a 5% rate of return. >> So >> now the 5% rate of return — I say federal government loses lots of money on lots of things. Now, of course, if you're the federal government, you'll say, "Yeah, 5% ain't that great.
20:04 It won't attract private sector capital, but there's corporate income taxes, there's personal income taxes around, there's the strategic leverage that they now will have against the United States as they're negotiating for incremental access to oil." So there's lots of things. But when I say why is the private sector not investing in this, there is essentially two reasons. One, there's the risk, but fundamentally the incremental costs that all of these regulations have added have
20:35 fundamentally taken a pipeline that probably should cost in the private sector between 15 and 20, to 43. >> So we're doing the right thing but maybe we're not doing it in the most efficient way possible. >> Well I would say there have been lots of times in Canada's history when the federal government has decided they'd rather have a public sector solution than a private sector solution, particularly energy industry.
21:04 50 years ago the federal government said, hey, the energy industry is really strategically important to us, we want to do it directly, and that's why they created Petro-Canada >> and so this is a circling back to 50 years ago where the federal government wants to directly invest and develop and control the energy sector.
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22:16 In this episode, we're asking whether Canada can meet the moment. Hamilton ETFs has spent the past decade doing exactly that, challenging convention, developing new investment solutions, and making sophisticated strategies more accessible to everyday investors. >> There are other complaints.
22:34 In fact, I don't know if you and Jon McKenzie over at Cenovus ever made nice. >> Oh, yeah. No, I talk to him all the time. >> Okay. So, you know that about a month ago, in June — we're filming this in July. It's coming out August. So I think it was around in June >> at a big energy conference. He really came out swinging and it wasn't even really about pipelines.
22:52 It was about the industrial carbon tax. It was about the carbon capture, right? Asking producers, in addition to deal with all the regulatory stuff, to spend billions on another project, and he's saying on one hand you want us to increase production and then on the other hand you're going to penalize us for doing so. So you like math.
23:15 How does that math work and can the sector get over it? >> Yes. So I said back to this letter, 10 oil and gas companies, four pipelines. What the federal government and the provincial government elected to do is let's focus on the pipelines first. And that's what all this has been about, and the pipeline to the west coast, where they elected, hey, we're not going to change the legislation.
23:45 So because they're not changing the legislation, it forced the federal government to actually have to build the pipeline. Now I say building a pipeline is only half the solution. You have to get the producers to drill wells, make investments themselves to fill the pipeline. And so that goes back.
24:04 So now what about the producers? Well, the challenge or dynamic is that as part of this so-called grand bargain in getting a pipeline to the West Coast, the province of Alberta agreed with the federal government to increase the carbon tax.
24:31 And as Mark Carney said at the time at the press conference when they announced the original implementation agreement, he said this has led to a 6 and a half times increase on the carbon tax — which is a tough message for investors in the sector to hear. And at the same time they haven't really changed the legislation. No change to C-69, no change — obviously C-48, which is now moved to the tanker ban, still has a two-year approval process. So in terms
25:08 of now, the challenge that the province is left with is how to fill this. And so what Premier Smith said at the time of this announcement last week with the pipeline announcement is that the province will provide some kind of incentive program to producers on new production.
25:35 And that has not been announced yet. Some kind of maybe lower royalties on new production. Because here's another way of putting it. Essentially what's happened is for all the producers, their existing production — as Mark Carney said, the carbon tax went up six and a half times on your existing production.
25:55 And it's like, hey, you own a house and the annual property tax was $10,000 a year, and one day city council voted to make it go up six and a half times. So it's now $65,000 a year, not $10,000 a year. Well, what does that do to the value of your house? >> Down.
26:16 >> Down. This is not complicated. So that's what's just happened on all of your existing production. >> Yeah, the value's gone down. >> Now, of course that's concerning to the province, because obviously the province is looking to increase production as it should to fill these pipelines and become the energy superpower.
26:39 So that's why effectively the onus now is going to be on the province to incentivize industry to go out and actually grow in the face of these new taxes. >> But you're going to grow. You told me that's your strategy. So you're still doing that. Why are you still doing it? >> Well, what you're referring to, Amber, is Strathcona has publicly disclosed that our business plan is to grow about 10% a year. >> Yeah.
27:05 And in part because we have a very long reserve life index, about 60 years, and so we can grow that fast for about 10 years and still have a north of 20 year reserve life index. And so we're in a fortunate situation to be able to do that. I'd rather more focus on what the industry has been doing, and the industry has been growing for the last decade.
27:30 The industry has had slow growth on it, meaning the regulatory headwinds has restricted investment capital to it. I really would emphasize, if you talk to all the CEOs who run these oil companies, they always want to grow. They always want to build production. Everyone's always activity oriented.
27:54 The challenge is convincing investors >> to give the money, because what the investors are always going to be thinking about is, well, I might give some money in Canada but I might be able to give it to the United States, American producers, and so you always have to stay competitive with that.
28:11 But I could say I'm very optimistic. This is a very solvable problem. But it is interesting. What essentially has happened is that this bargain is that because the federal government was not prepared to change the regulations, that put the onus on the federal government — you have to build the pipeline and spend the extra 25 billion.
28:31 But it also then put the onus on the province to say, well, if you're going to now grow production because the federal government's putting a higher tax on it, you're going to have to provide some kind of royalty inducement of some kind. >> I want to pick up on that point about investors and attracting investors.
28:48 This is a big focus of the prime minister. He's having a summit in September to showcase Canada's wares and attract foreign investors. So with that in mind, that Canada's energy sector is moving directionally in the right way for growth, but it's not perfect. It's maybe not what private industry wants.
29:10 So where does that leave the investor? Do you think investors will show up to be part of this Canadian growth story? >> So the quick answer is yes with a caveat. >> Okay. >> Let me actually start with the caveat. We're talking about this right in the middle of a government regulatory and fiscal change which is not yet finished.
29:45 They've got the pipeline baked but they haven't yet announced what requirements to increase production, for maybe some kind of royalty. And so I'm not sure what it's going to be, but also at the same time they haven't yet specified exactly what Pathways, which is a group of oil sands companies, what their obligations are going to be under carbon capture and storage. I've got an oil sands company, we have our own separate carbon capture and storage, but we're not part of Pathways.
30:16 So that's going to be a very big card turned up. >> Yeah. >> I have some optimism — maybe I'm overly optimistic, but I have some optimism that the province is going to put in an attractive fiscal arrangement, change in royalties or some kind of fiscal settlement to increase production, that will — because people say, the producer effectively saying, my existing production's gone down in value because I have a higher tax because of the carbon tax, but I'll
30:48 look forward and try and make it back up by rapidly increasing production. To give you a mental picture, let's say if the industry instead of growing at 2 or 3% a year starts growing at 5 or 7% a year, that's a huge win for the province and it's good for the producers as well.
31:07 So I actually think that the investors are going to look at that and say, once we've got that fiscal arrangement in place, that's a great place to put money, because Canada will be unique in certainly the developed world of being able to rapidly increase production. Again, going back to my down five, up five.
31:27 >> Yeah. >> We think that the shine is increasingly going to become off the US from an investor perspective. >> Why? >> So what's tough is that when you have a short reserve life index, it's very difficult to earn a sustainable rate of return. And just without going into the math too much, but to give you some sense on this — because we get pitched companies all the time in the United States to buy, like in the Permian, and the profile will be something like, hey, it's got an 8, 9, 10
31:59 year reserve life index but it has a 40% decline rate. And it always depends at what price, but say it's $70 a barrel WTI, it would be not uncommon that to hold production flat you'd have to spend 70 or 80% of your cash flow, of your EBITDA, to hold production flat. >> And so you're getting a little bit of free cash flow at the end of the year.
32:26 And so you work hard like crazy, drill all these wells, you hold production flat, and at the end of the year, your prize is your reserve life index is one year shorter. Used to be nine, now it's eight. And you didn't get much cash flow. >> Are you getting a lot of pitches? Because people know this math in the US.
32:44 >> Yeah. Well, we're known as buyers and so we get lots of pitches. But when we get that pitch, if someone says to me, you don't get that much free cash flow, it's declining like this, every year gets shorter and shorter — I say, I'm not sure this is worth like two times cash flow.
33:01 >> What's on your valuation checklist if you're going to buy something? Walk me through the criteria. >> So it's not that fancy. >> Okay. >> It's funny, the oil and gas industry by its nature is prone to discounted cash flow analysis.
33:26 And why — its nature is you have this long stream. You have these engineering reports go about 50 years. And so it's really easy to build these Excel spreadsheets. You put a discount rate and you discount — a very common way of thinking about it, we do lots of these models. But what we prefer is a very old-fashioned way of thinking about it, which is a concept of payout, and that is if I invest $100, how long is it going to take me to get that $100 back? And generally speaking we're just holding production flat, and
34:03 if it doesn't take too long, we think that sounds pretty good. And we have a really long reserve life index, and we generally like buying reserves in the 50, 60 year reserve life index. So I said these 8, 9, 10 years — to give you some sense, if I owned a business that had an 8, 9, 10 year reserve life index, I would find it hard to sleep at night. Those are going-out-of-business sale businesses.
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35:17 It's a Canadian growth story powered by innovation, purpose, and a different way of thinking about banking. EQB, the company behind EQ Bank, Canada's challenger bank. >> So you didn't get MEG. Sorry to keep wrapping your — >> That's okay. >> But how many of those kind of assets are out there
35:43 that meet your qualifications? >> So a couple of thoughts. The thermal oil sands business, which is the steam assisted gravity drainage business, is highly consolidated in Canada. Approximately five companies have certainly over 90, maybe 95% of the assets. Strathcona, one of our two companies, is number five, but it's the smallest of the five.
36:11 And so there's nothing left to buy, but it has largely been consolidated. Meaning a lot of people come up to me and say, wow, you built this big business, and yeah that's a good idea, I want to do that too. I say, well, it's kind of like >> too late >> well, it's kind of like someone coming up to a Google or a Facebook and saying, hey, I want to build a web browser or a social network. And they say, there was a time to do that. We started consolidating the thermal oil business seven years ago and
36:45 we've made 10 acquisitions, of just 10 oil acquisitions, and it was a pretty good idea seven years ago. Now there's not much left to buy. And one of the keys is that these individual small companies, 5, 10, 20,000 barrels a day, it's hard to optimize them.
37:12 You really need economies of scale. The trick in this, and it's not unique to this industry, is that you get really powerful economies of scale if you get large. And so what's large — you need to be over 50, ideally over 100,000 barrels a day. These are pretty big businesses. So it's not something you can really dip your toe in the water on. Having said that, why I say about M&A — for us, we have so much organic growth now, because we went and bought all that stuff. M&A is not as
37:46 important to us as it once was. >> Okay. So it's sort of off the table. People think, "What's Adam going to buy next?" >> Well, I do have a predilection to keep my ear to the ground on what things — put it this way. At this point, you're really filling in the last few pieces of the jigsaw puzzle.
38:14 >> Yeah. >> So there's nothing to buy, but the time to consolidate the industry was like seven years ago. >> And now you just grow. You grow with >> and now we're going to be able to organically grow. >> Everybody talks about you and Strathcona, but you've also got this little outfit called Greenfire, and it's kind of a similar story to Strathcona maybe a couple of years ago where you own a big chunk.
38:40 The float is thin. It's about a billion dollars market cap. What are you doing there? How is it similar from Strathcona? How is it different? >> So it's a lot more similar than different, in that one of the things that we identified is that there are powerful economies of scale if you can buy adjacent producers.
39:06 You can save a lot of money in overhead but also you learn a lot of technical know-how between assets of how to develop them better, and that's what we've done with Strathcona. In the case of Strathcona, we went into three different geographic areas: the Cold Lake area, the Saskatchewan thermal area, and the Saskatchewan conventional heavy oil area.
39:30 And in each one of those, we made between two and four acquisitions that were complimentary. And each time we made one of these acquisitions, not only were we able to end up having better performance with what we bought, but the existing stuff that we already had, we were able to improve our performance. So the key was having things that were geographically tight.
39:52 In the case of Greenfire, it was in a fourth area, and this fourth area was in the Athabasca region and this was particularly the central Athabasca region. Strathcona's Cold Lake area, that's the southern end of the Athabasca region, and because it was in a totally different area we said, it's very different, I think it would be better just to be in a separate company. We've kept it in a separate company. But just like in Strathcona, part of the art, if there is any art in acquisitions, is not
40:25 only just buying the first thing but thinking about what's next you can buy. And we've liked the real estate analogy of you find a good neighborhood, you find a good street, you buy a house, then you buy up the block. >> That's why everyone thinks you're going to buy Athabasca Oil. >> Well, people always think I'm buying everything.
40:44 Okay. But we like when we find a neighborhood, it's one of the things we like. We've always said about Greenfire, we liked the neighborhood. I mean, we think we bought a very good house on the street. And now we want to see what else we might be able to aggregate in the neighborhood.
41:01 >> Another neighborhood that people like and talk a lot about is Clearwater. >> Yeah. >> And you're not there. >> Nope. >> But >> so I think it's a great asset. One of the things we like, you could do there. It's not going to be for us, but I think it's a wonderful asset.
41:21 And one of the things we like about the Clearwater is it's helped to attract some capital to the sector because it's been a great success. It's had very compelling economics. It has been for us primarily because it's very good. It's just quite small. It's just not that big.
41:42 It's comparatively small asset but fantastic for the people who originally invested in it. It has been spectacular for it, and it keeps the exploration juices going in the basin — that every once in a while you can find something that's really quite spectacular in terms of its returns.
42:01 >> I always love sitting with you talking about the macro and the micro. I'll end with kind of how we started. Can Canada meet this moment? Your answer today. Are you the most optimistic you've been? >> I would say Canada's position in the world has never been so strong. Meaning we have never been in a situation where we have the opportunity to have a huge growth in a critically important industry in the world and become world dominant.
42:41 I say, hey, yeah, we're trying to arm wrestle with Saudi Arabia as who's the biggest oil producer in the world. We should be the envy of every developed nation in the world to be able to do that. What's particularly exciting, what's the icing on the cake is that we have a very natural customer, the United States, right next door, who really needs the product.
43:09 So it also makes me very optimistic about having a constructive resolution to the trade issue between the two countries, because the oil that we have provides us the only economic hard power of any scale that any country has with the United States. I mean that any country — meaning I think ultimately Canada is going to get the best trade deal of any country in the world with the United States. And forget China.
43:37 We have more economic power, hard power against the United States than China does. >> Well, we'll see if we can use it. Adam, that's a great place to end. Thank you so much for joining us. >> Thanks for your time as always, Amber.