After eyeing ARC Resources and its Montney Basin assets for more than 2 years, Shell is acquiring the Canadian company in a deal valued at $16.4 billion (CAD $22 billion).
During a 28 April Q&A session, Shell CEO Wael Sawan said part of ARC’s appeal was its substantial portfolio of undeveloped tier-one inventory in the Montney that are complimentary to Shell’s assets in the area.
“Their acreage is highly contiguous with Shell's existing Groundbirch and Gold Creek assets and creates optionality across our portfolio,” he said.
Shell’s Groundbirch assets supply gas to LNG Canada’s liquefaction facility in Kitimat, British Columbia, as well as to the domestic gas market.
He said the ARC assets Shell plans to acquire are well within Montney’s liquid-rich window in a stable, infrastructure-adjacent jurisdiction, with low unit operating costs about 50% below those of Montney peers.
These characteristics, he said, strengthen the supermajor’s margins and portfolio resilience in the area.
ARC “sits on some of the highest-quality resources, lowest-cost resources, the longest-duration resources, and some of the lowest-carbon-intensity resources in that basin,” Sawan said, noting it is a company “we have been looking at for more than 2 years.”
With the purchase, Shell is adding more than 1.5 million net acres to its existing roughly 440,000 net acres in the Montney formation, as well as about 2 billion BOE of proved and probable reserves as of the end of 2025. In 2025, ARC reported producing 374,000 BOEPD.
According to ARC’s first-quarter 2026 investor presentation, the combination will position Shell as Canada’s largest condensate producer and its third-largest natural gas producer.
About 70% of ARC’s revenue comes from liquids, which made up about 40% of the company’s production volume in 2025, with the gas resources presenting potentially billions of dollars of upside, Sawan said.
“The value we are getting is from the liquids, and the volume that we are accessing is natural gas, which we can upgrade to LNG,” if Shell and partners sanction the second phase of LNG Canada later this year, he said.
Both ARC Resources and Shell announced the planned acquisition on 27 April. The deal is valued at about $16.4 billion (CAD $22 billion), including assumed net debt. The purchase price of $23.96 (CAD $32.80) per share will be paid via 75% ordinary Shell shares and 25% cash.
The deal is subject to shareholder, court, and regulatory approvals, and is expected to close in the second half of 2026, if approvals are granted.
Shell has said the transaction is expected to generate double-digit returns. It is also expected to bring annualized synergies of around $250 million within a year of closing.
In a press release, Terry Anderson, ARC’s president and CEO, said, “Over our 30-year history, we have built a strong and resilient Canadian energy company defined by the depth of our world-class Montney assets, low-cost operations, leadership in responsible development, and high-performance people and culture."
