Shell announced it has entered into a definitive agreement to acquire ARC Resources Ltd. in a transaction valued at approximately $13.6 billion in equity, as the company looks to strengthen its position in Canada’s Montney shale basin and expand long-term production capacity.
The deal, which also includes the assumption of roughly $2.8 billion in net debt and leases, brings the total enterprise value to about $16.4 billion. The acquisition will be funded through a combination of $3.4 billion in cash and $10.2 billion in Shell shares.
Under the terms of the agreement, ARC shareholders will receive CAD 8.20 in cash and 0.40247 Shell shares per ARC share, representing a total value of CAD 32.80 per share and a 20 percent premium to the company’s 30-day volume-weighted average price.
The acquisition is expected to significantly enhance Shell’s production profile, adding approximately 370 thousand barrels of oil equivalent per day and increasing its projected production compound annual growth rate to 4 percent through 2030, compared to 2025 levels.
ARC’s assets include more than 1.5 million net acres in the Montney formation, which will be combined with Shell’s existing ~440 thousand net acres in the region. The transaction also adds around 2 billion barrels of oil equivalent in proved and probable reserves, supporting Shell’s long-term resource base and liquefied natural gas ambitions in Canada.
Shell said the acquisition aligns with its strategy to focus on low-cost, lower-carbon intensity production while delivering stronger cash flows and shareholder returns. The company expects the deal to generate double-digit returns and become accretive to free cash flow per share starting in 2027.
The combined operations are expected to generate approximately $250 million in annual synergies within a year of closing. ARC’s business will be integrated into Shell’s Integrated Gas division, complementing its existing LNG infrastructure and downstream operations in the region.
The transaction has been unanimously approved by the boards of both companies and is expected to close in the second half of 2026, subject to shareholder, court, and regulatory approvals.
Support: Goldman Sachs International is acting as exclusive financial advisor to Shell. And RBC Capital Markets is acting as exclusive financial advisor to ARC.
KEY QUOTES:
“ARC is a high-quality, low-cost and top quartile low carbon intensity producer operating in the Montney shale basin that complements our existing footprint in Canada and strengthens our resource base for decades to come. We are accessing uniquely positioned assets and welcoming colleagues that bring deep expertise which, combined with Shell’s strong basin level performance, provides a compelling proposition for shareholders.”
Wael Sawan, Chief Executive Officer, Shell plc
“This combination is a great opportunity for ARC to realise value for our shareholders and continue to benefit from Shell’s success in the future. ARC is combining with a company that has a global portfolio of best-in-class assets. I’m excited that ARC’s assets and world class people will play an important role in helping Shell to further strengthen Canada’s resource landscape whilst also providing the secure energy that the world needs.”
Terry Anderson, President And CEO, ARC Resources Ltd.
