Oil company Shell has finalized a $22 billion agreement to purchase ARC Resources Ltd., uniting the primary partner in Canada’s initial functioning liquefied natural gas project with a significant producer in one of the most lucrative shale regions on the continent. Wael Sawan, CEO of the U.K.-based global energy giant, stated on Monday that the deal “establishes Canada as a core area for Shell,” which had previously divested its substantial presence in the oilsands. “We are acquiring strategically positioned assets and embracing colleagues with profound expertise that, when combined with Shell’s robust performance at the basin level, presents an appealing proposition for shareholders.”
ARC Resources concentrates on the Montney, a shale deposit extending across northeastern British Columbia and northwestern Alberta. “Through this acquisition, we will unlock this great value and integrate into a dynamic global energy leader capable of maximizing our business’s full potential and contributing to Canada’s promising energy future,” said ARC CEO Terry Anderson in a statement.
Last year, ARC generated 374,000 barrels of oil equivalent per day before royalties. Its operations are in close proximity to Shell’s Montney assets in both provinces. “It reinforces the Montney’s status as a world-class resource play,” remarked Tom Pavic, president of Sayer Energy Advisors in Calgary, regarding the proposed takeover. “I believe we will witness more merger and acquisition activity in the Montney, without a doubt.”
In the proposed deal, ARC shareholders will receive 0.40247 of a Shell share and $8.20 in cash for each ARC share. Based on the closing price of Shell shares and exchange rates on April 24, when ARC shares concluded at $25.77, the offer is valued at $32.80 per ARC share. In total, the companies assess the deal at $22 billion, encompassing assumed debt.
Shell and four Asian partners own the LNG Canada facility in Kitimat, B.C., which commenced operations last summer. At the plant, natural gas from the Montney and other western Canadian fields is liquefied and exported across the Pacific. The consortium is contemplating doubling the plant’s capacity with a second phase, and Pavic indicated that Monday’s agreement suggests a probable positive final investment decision.
ARC is involved in the LNG sector through long-term contracts as a supplier, including to LNG Canada. Additionally, it signed a lengthy liquefaction tolling services agreement two years ago with Cedar LNG, another Kitimat plant developed as a partnership between Pembina Pipeline and the Haisla Nation.
Shell, once a major player in Alberta’s oilsands, completely divested its holdings in that sector in early 2025 through an asset-swap deal with Canadian Natural Resources Ltd. Since then, its Canadian operations have focused on gas production and export, refining oil into higher-value products, and operating a network of Shell-branded retail outlets. Andrew Dittmar, principal analyst at Enverus Intelligence Research, noted that there has been a scarcity of appealing, long-life acquisition prospects for energy majors like Shell. “Within a global context, Canada stands out as one of the most compelling opportunities with high-quality resource longevity for both gas in the Montney and crude in the oilsands,” Dittmar stated.
The acquisition announced on Monday marks the latest development centered on western Canadian shale gas. In November, Ovintiv Inc. from Denver disclosed plans to acquire NuVista Energy Ltd. for $3.8 billion. The month before, Cygnet Energy Ltd., a private energy firm, agreed to purchase Kiwetinohk Energy Corp. for $1.4 billion. Furthermore, pipeline operator Enbridge Inc. demonstrated optimism about Canadian natural gas with a $4 billion initiative to expand its Westcoast pipeline in B.C. The project received federal government approval last week to add new pipeline sections to the system, which transports gas from northern B.C. and southern Alberta to the Canada-U.S. border.
In addition to shareholder and court endorsements, the Shell-ARC deal is subject to regulatory approvals, including under the Investment Canada Act. The transaction is anticipated to be finalized in the latter part of this year.