Oil company Shell has finalized a $22 billion agreement to purchase ARC Resources Ltd., uniting the prime partner in Canada’s initial operational liquefied natural gas venture with a key producer in one of the most lucrative shale areas on the continent.
Wael Sawan, CEO of the British-based global energy titan, stated on Monday that the deal “establishes Canada as a central location for Shell,” which previously reduced its substantial presence in the oilsands.
“We are gaining access to uniquely positioned assets and embracing colleagues with profound expertise which, when combined with Shell’s robust performance at the basin level, offers an attractive proposition for shareholders,” Sawan added.
ARC Resources concentrates on the Montney, a shale deposit extending across portions of northeastern British Columbia and northwestern Alberta. ARC’s CEO Terry Anderson remarked, “Through this transaction, we will unlock substantial value and join a dynamic global energy leader capable of maximizing our business’s full potential and contributing to Canada’s promising energy future.”
Last year, ARC achieved a daily production of 374,000 barrels of oil equivalent before royalties. Its operations are in close proximity to Shell’s Montney holdings in both provinces.
The proposed acquisition underscores the Montney’s exceptional resource potential, as noted by Tom Pavic, president of Sayer Energy Advisors in Calgary, who anticipates increased merger and acquisition activity within the Montney.
Under the terms, ARC shareholders will receive 0.40247 of a Shell share and $8.20 in cash for each ARC share exchanged. The offer values each ARC share at $32.80, based on the closing prices of Shell shares and exchange rates on April 24, when ARC shares concluded at $25.77.
The total deal, encompassing assumed debt, is estimated at $22 billion.
Shell, alongside four Asian firms, owns the LNG Canada plant in Kitimat, B.C., which commenced operations last summer. The plant processes natural gas from Montney and other western Canadian fields into a liquid state for export across the Pacific.
The consortium is contemplating expanding the plant’s capacity in a second phase, with analysts suggesting a positive final investment decision post the recent deal.
ARC is involved in the LNG sector through long-term supply contracts, including with LNG Canada, and has a deal with Cedar LNG, a plant under construction in Kitimat. Shell divested its oilsands holdings in Alberta in early 2025 and has since focused on gas production and export, oil refining, and operating Shell-branded retail outlets in Canada.
Andrew Dittmar, principal analyst at Enverus Intelligence Research, highlighted Canada’s appeal as an attractive opportunity for Shell, emphasizing the high-quality resource duration in the Montney and oilsands.
The acquisition announced on Monday is the latest in a series of acquisitions centered on Western Canadian shale gas. Enbridge’s $4 billion plan to expand its Westcoast pipeline in B.C., recently approved by the federal government, further accentuates the bullish outlook on Canadian natural gas.
Apart from shareholder and court approvals, the Shell-ARC deal is subject to regulatory clearance, including under the Investment Canada Act, with the transaction anticipated to conclude in the second half of this year.
