Oil giant Shell has finalized a $22-billion agreement to purchase ARC Resources Ltd., uniting the principal partner in Canada’s initial operational liquefied natural gas project with a significant producer in one of North America’s most lucrative shale regions. Wael Sawan, the chief executive of the U.K.-based global energy powerhouse, declared on Monday that the deal “establishes Canada as a core area for Shell,” which had previously divested its substantial presence in the oilsands. Sawan highlighted the acquisition of strategically positioned assets and the addition of skilled colleagues, coupled with Shell’s robust performance at the basin level, as a compelling proposition for shareholders.
ARC Resources focuses on the Montney, a shale formation spanning parts of northeastern British Columbia and northwestern Alberta. ARC’s CEO, Terry Anderson, emphasized the substantial value realization and integration into a dynamic global energy leader, underlining the potential for maximizing business opportunities and contributing to Canada’s promising energy sector.
Last year, ARC achieved a daily production of 374,000 barrels of oil equivalent before royalties. The company’s operations are in close proximity to Shell’s Montney holdings in both provinces. Tom Pavic, the president of Sayer Energy Advisors in Calgary, noted that the proposed acquisition underscores the Montney’s status as a world-class resource play, hinting at possible future merger and acquisition activities within the region.
The deal structure entails that ARC shareholders will receive 0.40247 of a Shell share and $8.20 in cash for each ARC share. The offer translates to $32.80 per ARC share, calculated based on the closing prices of Shell shares and exchange rates on April 24, when ARC shares concluded at $25.77. The total value of the transaction, encompassing assumed debt, amounts to $22 billion.
Shell, in partnership with four Asian firms, operates the LNG Canada plant in Kitimat, B.C., which commenced operations last summer. The plant processes natural gas sourced from Montney fields and other regions in western Canada, converting it into a liquid state for export via specialized tankers across the Pacific. There are deliberations to double the plant’s capacity through a second phase, with industry experts indicating a positive outlook on the anticipated final investment decision.
ARC’s involvement in the LNG sector includes long-term supply contracts, including agreements with LNG Canada. Additionally, the company has signed a long-term liquefaction tolling services deal with Cedar LNG, a joint venture between Pembina Pipeline and the Haisla Nation, for another plant under construction in Kitimat.
Shell, previously a prominent player in Alberta’s oilsands, concluded its divestment from the sector in early 2025 through an asset-swap arrangement with Canadian Natural Resources Ltd. The company has since concentrated on gas production and exports, refining oil into higher-value products, and managing a network of Shell-branded retail outlets. Analysts highlight the attractiveness of Canada as a strategic investment destination, particularly citing the Montney’s high-quality gas resources and the oilsands’ crude reserves.
The acquisition announced on Monday aligns with a trend of recent acquisitions focused on western Canadian shale gas. Notable transactions include 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., a major pipeline operator, plans to invest $4 billion in expanding its Westcoast pipeline in B.C., a move endorsed by federal government approval to enhance gas transportation from northern B.C. and southern Alberta to the Canada-U.S. border.
In addition to approvals from shareholders and courts, the Shell-ARC deal is subject to regulatory clearances, including those under the Investment Canada Act. The transaction is anticipated to be finalized in the latter half of this year.