Shell plc has entered into a definitive agreement to acquire ARC Resources Ltd., an energy company focused on the Montney shale basin in British Columbia and Alberta, Canada.
“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.” said Shell’s chief executive officer, Wael Sawan. “This establishes Canada as a heartland for Shell while furthering our strategy to deliver more value with less emissions.”
“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,” said ARC president and CEO, Terry Anderson. “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.”
This ARC Resources acquisition increases Shell’s production CAGR from 1% as outlined at our 2025 Capital Market’s Day to 4%3, compared to 2025, and supports Shell’s aim to sustain material liquids production of ~1.4 million barrels per day towards 2030 and beyond. The transaction combines ARC’s more than 1.5 million net acres with Shell’s ~440 thousand net acres in the Montney formation and adds ~2 billion barrels of oil equivalent proved plus probable reserves at the end of 20254. Last year, ~40 per cent of ARC’s production was liquids, which accounted for ~70 per cent of its revenues. In addition, ARC’s proved plus probable gas reserves have the potential to support Shell’s growth in LNG in Canada.
Under the terms of the agreement, ARC’s shareholders will receive CAD 8.20 in cash and 0.40247 ordinary shares of Shell for each ARC share, representing approximately 25% cash and 75% shares as of the 24th April 2026 market closing. Based on Shell’s closing share price on this date of GBP 33.08 and GBP:CAD exchange ratio of 1.8480, this translates to a consideration of CAD 32.80 per share, which represents a 20 per cent premium to ARC’s 30-day5 VWAP. This equates to an equity value of approximately US$13.6 billion. Shell will take on approximately US$2.8 billion in net debt and leases resulting in an enterprise value of approximately US$16.4 billion. The equity value of US$13.6 billion will be funded via US$3.4 billion in cash and US$10.2 billion in Shell shares, the latter valued based on Shell’s closing price on the 24th April and the issuance of approximately 228 million ordinary shares.
The boards of both companies have unanimously supported the transaction, which is expected to close in the second half of 2026, subject to ARC shareholder, court and regulatory approvals.
