North of the ever-graying Western Canadian Sedimentary Basin lies the wild frontier of the Canadian oil industry, where temperatures usually hover around freezing and the black gold that lies beneath the surface is so thick it can't be pumped; it has to be mined. The oil sands have been news for years, with companies anxious for a piece of a discovery the size of those that created the basin. But in 2007, the area has begun to gush. Multibillion-dollar oil-sands transactions have dwarfed anything that could be conceived of in the southern part of Canada so far this year. According to Adam Waterous, vice chairman, president and head of Calgary-based M&A advisory firm Scotia Waterous, this is only the beginning. "The oil sands are the dominant M&A factor in the marketplace today," Waterous says. "Anadarko Canada was a C$4-billion deal and that was the big deal last year. The privatization of Shell Canada alone was a C$7.7-billion deal." The dominant players in the oil sands aren't just Canadian companies. The area has put out its welcome mat to many foreign companies with plenty of capital looking for a bigger playground than the deepwater Gulf of Mexico or the North Sea. At the end of June, Oslo-based Statoil ASA completed its acquisition of North American Oil Sands Corp. for C$2.2 billion. Through this acquisition, Statoil gained access to 257,200 acres of oil-sands leases in the Athabasca region of Alberta. For more on this, see the October issue of Oil and Gas Investor. For a subscription, call 713-260-6441.

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