Shell has entered into a definitive agreement to acquire ARC Resources, an energy company focused on the Montney shale basin in British Columbia and Alberta, Canada.
The acquisition accelerates Shell’s strategy by adding 370 kboe/d immediately across liquids and gas, leading to a 4% production CAGR through to 2030, compared to 2025. The transaction is expected to generate double-digit returns, bolstering long-term cashflows, and is accretive to free cash flow per share from 2027 onwards.
‘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,’ says 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,’ adds 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 acquisition increases Shell’s production CAGR from 1% as outlined at our 2025 Capital Market’s Day to 4%, 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% of ARC’s production was liquids, which accounted for ~70% of its revenues. In addition, ARC’s proved plus probable gas reserves have the potential to support Shell’s growth in LNG in Canada.
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.
