London-based Shell plc has reached an agreement to buy Calgary-based ARC Resources Ltd., one of Canada's largest natural gas and oil producers, in a cash and share deal worth approximately $22 billion (US$16.4 billion), including debt that Shell will take on. Announced on April 27, 2026, the deal is Shell's largest purchase in more than a decade.
The deal brings together ARC's more than 1.5 million net acres of land in the Montney region of British Columbia and Alberta with Shell's roughly 440,000 net acres in the same area, and adds about 2 billion barrels of oil equivalent in reserves at the end of 2025. Last year, about 40 per cent of ARC's production was liquids such as oil and condensate, which generated roughly 70 per cent of the company's revenue, while ARC's natural gas reserves are expected to support Shell's growing liquefied natural gas business in Canada. The acquisition is expected to immediately add 370,000 barrels of oil equivalent per day to Shell's output.
Under the agreement, ARC shareholders will receive 0.40247 of a Shell share plus $8.20 in cash for every ARC share they own, for a total of $32.80 per share. The total equity value of the deal is roughly US$13.6 billion, made up of US$3.4 billion in cash and about 228 million newly issued Shell shares worth US$10.2 billion, with Shell also taking on about US$2.8 billion in debt and lease obligations, bringing the overall value of the transaction to approximately US$16.4 billion.
The deal is intended to make Canada a low-cost hub for Shell's global operations, strengthening its natural gas business and giving it a new base for growth by adding long-life Montney resources, while ARC employees bring local expertise that will complement Shell's team. Shell's Groundbirch operations already supply gas to the LNG Canada plant in Kitimat, B.C., where Shell holds a 40 per cent stake, and ARC will be folded into Shell's integrated gas division.
"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," Shell CEO Wael Sawan said in a press release. "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. This establishes Canada as a heartland for Shell while furthering our strategy to deliver more value with less emissions."
"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," said ARC president and CEO Terry Anderson. "Through this transaction, we will realize this tremendous value and become part of a dynamic global energy leader capable of realizing the full potential of our business and delivering on Canada's exciting energy future."
On the legal side, Burnet, Duckworth & Palmer LLP is acting as lead legal counsel to ARC Resources. Freshfields LLP is acting as U.K. counsel and U.S. corporate, securities and tax counsel to ARC. Baker Botts L.L.P. is serving as U.S. regulatory counsel to ARC. On the financial side, Goldman Sachs International is acting as sole financial advisor to Shell, while RBC Capital Markets is the sole financial advisor to ARC and has provided a fairness opinion to the ARC board.
The deal is expected to close in the second half of 2026, subject to customary closing conditions.
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