Shell Plc has agreed to acquire Canadian shale specialist ARC Resources Ltd. in a transaction valued at US$16.4 billion (AU$25.1 billion).
The deal ramps up the energy giant’s presence in North America, specifically within the premier Montney basin of British Columbia and Alberta.
By absorbing ARC’s high-quality assets, Shell will immediately add 370,000 barrels of oil equivalent per day to its portfolio, boosting its projected production growth rate from 1 per cent to 4 per cent through to the end of the decade.
“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,” said Shell’s CEO Wael Sawan.
“This establishes Canada as a heartland for Shell while furthering our strategy to deliver more value with less emissions.”
The deal combines ARC’s 1.5 million net acres with Shell’s existing 440,000 acres in the Montney formation. This synergy is expected to yield annual savings of approximately US$250 million within a year of the deal closing.
The acquisition is particularly attractive due to its top quartile low carbon intensity and long-duration reserves.
Around 40 per cent of ARC’s production is liquids, highly profitable for Shell’s bottom line, while its vast gas reserves are set to feed Shell’s growing LNG interests in Canada, including the LNG Canada plant.
Under the terms of the agreement, ARC shareholders will receive CAD$32.80 per share, and 0.40247 ordinary shares of Shell for each ARC share, representing approximately 25 per cent cash and 75 per cent shares.
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.
Shell expects to absorb the additional organic cash capital expenditure within its existing cash Capex ceiling, post 2026. The cash capex range for 2027 to 2028 will remain unchanged at US$20 billion to US$22 billion.
The transaction has received unanimous support from the boards of both companies and is expected to be finalised in the second half of 2026, pending regulatory and shareholder approval.
