Oil company Shell has struck a significant $22 billion agreement to purchase ARC Resources Ltd., uniting the primary partner in Canada’s inaugural operational liquefied natural gas venture with a major producer in one of North America’s most lucrative shale regions. Wael Sawan, CEO of the U.K.-based global energy titan, declared on Monday that the deal “establishes Canada as a core area for Shell,” which had previously divested its substantial presence in the oilsands. ARC Resources is concentrated on the Montney, a shale formation spanning parts of northeastern British Columbia and northwestern Alberta.
ARC Resources CEO Terry Anderson stated, “Through this deal, we will unlock immense value and become part of a vibrant global energy leader capable of realizing our business’s full potential and contributing to Canada’s promising energy future.” Last year, ARC produced 374,000 barrels of oil equivalent per day before royalties, with operations adjacent to Shell’s Montney holdings in both provinces. Tom Pavic, president of Sayer Energy Advisors in Calgary, remarked that the proposed acquisition underscores the Montney’s status as a top-tier resource play, hinting at potential future merger and acquisition activity in the region.
Under the terms, 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 companies estimate the deal at $22 billion, encompassing assumed debt.
Shell, along with four Asian firms, co-owns the LNG Canada plant in Kitimat, B.C., where natural gas from Montney fields and other western Canadian locations is liquefied for export. The consortium is considering doubling the plant’s capacity, with industry experts suggesting that the recent acquisition indicates a probable positive final investment decision. ARC is actively engaged in the LNG sector through long-term supplier contracts, including with LNG Canada, and a liquefaction tolling services agreement with Cedar LNG, a plant under construction in Kitimat.
Having divested its Alberta oilsands assets in early 2025, Shell has shifted its focus in Canada to gas production and export, oil refining, and retail operations. Analyst Andrew Dittmar of Enverus Intelligence Research noted the scarcity of appealing, long-term acquisition opportunities for energy majors like Shell, highlighting Canada’s high-quality gas and oil resources. The acquisition of ARC Resources affirms the Montney’s competitive standing in the global gas landscape.
The Shell-ARC deal is the latest in a series of acquisitions centered on western Canadian shale gas. Enbridge Inc. has demonstrated confidence in Canadian natural gas with a $4 billion plan to enhance its Westcoast pipeline in B.C., recently receiving government approval for the expansion. The transaction is expected to be finalized in the second half of the year, pending shareholder, court, and regulatory approvals.
