Oil company Shell has entered into a $22 billion agreement to purchase ARC Resources Ltd., uniting the primary partner in Canada’s initial operational liquefied natural gas initiative with a significant producer in one of North America’s most lucrative shale areas. Wael Sawan, CEO of the U.K.-based global energy giant, declared on Monday that the deal “positions Canada as a core region for Shell,” which had previously reduced its substantial presence in the oilsands. Sawan emphasized that the acquisition provides access to strategically located assets and skilled personnel, enhancing shareholder value.
ARC Resources is concentrated on the Montney, a shale deposit spanning regions of northeastern British Columbia and northwestern Alberta. Terry Anderson, CEO of ARC, expressed enthusiasm about the agreement, stating that it will unlock substantial value and integrate the company into a dynamic global energy leader, fostering Canada’s promising energy prospects.
Last year, ARC achieved a daily production of 374,000 barrels of oil equivalent before royalties. Its operations overlap with Shell’s Montney holdings in both provinces, underscoring the Montney’s world-class resource potential, according to Tom Pavic, president of Sayer Energy Advisors in Calgary. The proposed acquisition is anticipated to catalyze further merger and acquisition activities in the Montney region.
The deal structure entails ARC shareholders receiving 0.40247 Shell shares and $8.20 in cash for each ARC share, valuing the offer at $32.80 per ARC share based on closing prices on April 24. The transaction, including assumed debt, is valued at $22 billion by both companies.
Shell, along with four Asian firms, jointly owns the LNG Canada plant in Kitimat, B.C., which commenced operations last summer. The plant processes natural gas sourced from Montney fields and other Western Canadian locations for export via specialized tankers across the Pacific. The consortium is contemplating doubling the plant’s capacity with a second phase, and industry experts view the recent deal as a positive indicator for an imminent final investment decision.
In the LNG sector, ARC has secured long-term contracts as a supplier, including agreements with LNG Canada and Cedar LNG. Shell divested its remaining oilsands assets in early 2025 and shifted its focus in Canada to gas production and export, oil refining, and operating Shell-branded retail outlets. The move to acquire ARC underscores Shell’s strategic interest in high-quality resources, particularly in the Montney gas play.
The recent acquisition aligns with a trend of significant acquisitions in Western Canadian shale gas, with Ovintiv Inc.’s plan to purchase NuVista Energy Ltd. for $3.8 billion and Cygnet Energy Ltd.’s acquisition of Kiwetinohk Energy Corp. for $1.4 billion. Enbridge Inc. is also demonstrating optimism in Canadian natural gas by investing $4 billion to expand its Westcoast pipeline in B.C., which recently received federal approval for enhancements.
Apart from shareholder and court approvals, the Shell-ARC transaction is subject to regulatory clearances, including those under the Investment Canada Act. The deal is anticipated to conclude in the latter half of this year.
