Oil company Shell has finalized a substantial $22 billion agreement to purchase ARC Resources Ltd. This deal merges the primary partner in Canada’s inaugural operational liquefied natural gas initiative with a significant producer in one of North America’s most lucrative shale regions.
Wael Sawan, the CEO of the UK-based global energy giant, emphasized that this acquisition solidifies Canada as a central location for Shell, which had previously reduced its extensive presence in the oilsands. Sawan stated, “We are acquiring strategically positioned assets and incorporating experienced colleagues who, in conjunction with Shell’s robust performance at the basin level, present an attractive opportunity for shareholders.”
ARC Resources specializes in the Montney shale formation spanning parts of northeastern British Columbia and northwestern Alberta. ARC’s CEO Terry Anderson expressed enthusiasm about the acquisition, stating, “Through this deal, we will unlock significant value and join forces with a dynamic global energy leader capable of maximizing our business potential and contributing to Canada’s promising energy landscape.”
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, reinforcing the Montney’s status as a top-tier resource play, as highlighted by Tom Pavic, President of Sayer Energy Advisors in Calgary.
The proposed transaction offers ARC shareholders 0.40247 of a Shell share and $8.20 in cash per ARC share, valuing the offer at $32.80 per ARC share based on the closing prices of Shell shares and exchange rates. The overall deal is estimated at $22 billion, inclusive of assumed debt.
Shell, along with four Asian partners, owns the LNG Canada plant in Kitimat, B.C., which commenced operations last year. The plant processes natural gas from Montney fields and other locations in western Canada for exportation across the Pacific after being liquefied. The consortium is contemplating doubling the plant’s capacity, signaling a probable positive decision on further investment.
Furthermore, ARC is actively engaged in the LNG sector through long-term contracts as a supplier, including commitments to LNG Canada. The company also holds a long-term agreement for liquefaction tolling services with Cedar LNG, a plant under construction in Kitimat in partnership with Pembina Pipeline and the Haisla Nation.
Shell divested its remaining oilsands assets in Alberta in early 2025, redirecting its Canadian focus towards gas production and exportation, oil refining, and operating Shell-branded retail outlets. Analyst Andrew Dittmar from Enverus Intelligence Research highlighted Canada’s appeal as an attractive destination for energy majors like Shell, citing the high-quality resource potential in both the Montney gas region and the oilsands.
The recent acquisition of ARC Resources by Shell is part of a trend focusing on western Canadian shale gas. This includes Ovintiv Inc.’s acquisition of NuVista Energy Ltd. for $3.8 billion and Cygnet Energy Ltd.’s agreement to purchase Kiwetinohk Energy Corp. for $1.4 billion. Enbridge Inc. has also shown optimism in Canadian natural gas with a $4 billion expansion plan for its Westcoast pipeline in B.C., which recently received federal approval for the expansion project.
In addition to shareholder and court approvals, the Shell-ARC deal is subject to regulatory clearance under the Investment Canada Act. The transaction is anticipated to be completed in the second half of the year.