Shell, a major oil company, has finalized a $22 billion agreement to purchase ARC Resources Ltd. This acquisition merges the leading partner in Canada’s initial operational liquefied natural gas project with a significant producer in one of North America’s most lucrative shale regions.
Wael Sawan, the CEO of Shell, stated on Monday that this deal “establishes Canada as a heartland for Shell,” as the company had previously reduced its substantial presence in the oilsands. Sawan emphasized the access to strategically positioned assets and the expertise of ARC’s team, which, combined with Shell’s strong performance, presents a compelling opportunity for shareholders.
ARC Resources specializes in the Montney, a shale formation spanning northeastern British Columbia and northwestern Alberta. ARC’s CEO, Terry Anderson, expressed enthusiasm, stating that this transaction will unlock significant value and integrate ARC into a dynamic global energy leader, contributing to Canada’s promising energy future.
Last year, ARC achieved a daily production of 374,000 barrels of oil equivalent before royalties. Notably, the company’s operations are adjacent to Shell’s Montney holdings in both provinces. This acquisition underscores the Montney’s exceptional resource potential, according to Tom Pavic, President of Sayer Energy Advisors in Calgary, who predicts increased merger and acquisition activity in the Montney region.
Under the terms of the agreement, ARC shareholders will receive 0.40247 Shell shares and $8.20 in cash for each ARC share, valuing the offer at $32.80 per ARC share. The deal, encompassing assumed debt, amounts to $22 billion in total, as disclosed by the companies.
Shell, together with four Asian partners, owns the LNG Canada plant in Kitimat, B.C., which commenced operations last summer. The plant processes natural gas from Montney fields and other Western Canadian sources for exportation to Asia. The consortium is contemplating doubling the plant’s capacity, with industry experts indicating a positive final investment decision following the recent deal.
ARC’s engagement in the LNG sector includes long-term supply contracts with projects like LNG Canada and Cedar LNG. Shell’s focus in Canada has shifted towards gas production and exportation, refining oil, and managing a chain of Shell-branded retail outlets, after divesting its oilsands holdings in 2025.
The acquisition aligns with Shell’s strategy to target high-quality resources globally, with a specific interest in Canada’s Montney gas reserves and oilsands. The deal reaffirms the Montney’s competitive position in the global gas market and Shell’s commitment to an integrated gas business.
The recent acquisition is part of a trend of acquisitions in the Western Canadian shale gas sector. Enbridge Inc. has also shown confidence in Canadian natural gas with its $4 billion plan to expand the Westcoast pipeline in B.C., receiving government approval for the project last week.
The Shell-ARC deal, slated for closure in the second half of this year, is contingent on shareholder, court, and regulatory approvals, including those under the Investment Canada Act.