Shell, a major oil company, has finalized a $22 billion agreement to purchase ARC Resources Ltd., uniting a leading partner in Canada’s initial operating liquefied natural gas project with a significant producer in one of the continent’s most lucrative shale regions. Wael Sawan, the CEO of the UK-based global energy corporation, stated on Monday that the deal “establishes Canada as a core location for Shell,” which had previously reduced its substantial presence in the oilsands. ARC Resources is primarily engaged in the Montney, a shale formation spanning parts of northeastern British Columbia and northwestern Alberta.
“This transaction enables us to access strategically positioned assets and integrate colleagues with profound expertise, which, when combined with Shell’s robust basin-level performance, presents an appealing opportunity for shareholders,” elaborated Sawan. Terry Anderson, ARC’s CEO, expressed enthusiasm, emphasizing that the deal would unlock significant value and position the company as part of a dynamic global energy leader poised to capitalize on Canada’s promising energy future.
Last year, ARC achieved a daily production of 374,000 barrels of oil equivalent before royalties. Its activities align closely with Shell’s Montney holdings in both provinces. Tom Pavic, President of Sayer Energy Advisors in Calgary, highlighted the transaction’s significance, stating that it underscores the Montney’s status as a world-class resource play and anticipates heightened merger and acquisition activity in the region.
Under the terms of the agreement, ARC shareholders will receive 0.40247 of a Shell share and $8.20 in cash for each ARC share, valuing the offer at $32.80 per ARC share based on the closing prices of Shell shares and exchange rates on April 24. The total deal, including assumed debt, is valued at $22 billion. Shell, along with four Asian partners, owns the LNG Canada plant in Kitimat, British Columbia, which commenced operations last summer. The consortium is considering doubling the plant’s capacity in a second phase, with industry experts suggesting a positive final investment decision is probable.
Apart from its involvement in the LNG sector through long-term contracts, ARC has also signed agreements with Cedar LNG, a joint venture between Pembina Pipeline and the Haisla Nation, for liquefaction tolling services. Shell divested its oilsands assets in Alberta in early 2025 and has since concentrated on gas production and exports, oil refining, and operating Shell-branded retail outlets in Canada. Andrew Dittmar, Principal Analyst at Enverus Intelligence Research, emphasized the scarcity of attractive acquisition opportunities for major energy companies and highlighted Canada as an appealing destination due to its high-quality gas and crude resources.
The acquisition of ARC Resources by Shell is the latest in a series of transactions focusing on western Canadian shale gas. Enbridge Inc., a pipeline operator, recently received approval for a $4 billion expansion of its Westcoast pipeline in British Columbia, signaling optimism about Canadian natural gas. The completion of the Shell-ARC deal, anticipated to occur in the second half of this year, is contingent on shareholder, court, and regulatory approvals under the Investment Canada Act.