Shell to buy ARC Resources for $13.6B to boost reserves, output

Shell Plc has agreed to acquire Canadian energy producer ARC Resources Ltd. in a deal valued at about $13.6 billion, as the oil major looks to strengthen its reserves base and expand production.

The transaction, which also includes the assumption of roughly $2.8 billion in debt, values ARC at a premium to its recent trading levels and marks a renewed push by Shell into North American shale assets.

The company will fund the deal with a mix of approximately 25% cash and 75% shares.

Shell said the acquisition would add around 370,000 barrels of oil equivalent per day of production and approximately 2 billion barrels of reserves, helping address investor concerns about the longevity of its resource base.

Deal structure and valuation

Under the terms of the agreement, ARC shareholders will receive 8.20 Canadian dollars (about $6) in cash and 0.40247 of a Shell share for each ARC share.

This implies a total consideration of around C$32.80 per share, representing a premium of 27%, from the last closing price.

The deal has been unanimously approved by the boards of both companies and is expected to close in the second half of 2026, subject to shareholder, court, and regulatory approvals.

ARC’s asset base, located primarily in the Montney shale basin across British Columbia and Alberta, is seen as complementary to Shell’s existing operations in the region, including its Groundbirch asset and Gold Creek project.

The Canadian producer reported output of about 374,000 barrels of oil equivalent per day last year, before royalties.

Strategic push into core hydrocarbons

The acquisition comes as major oil companies refocus on their core oil and gas businesses to improve returns to shareholders.

Shell, in particular, has faced scrutiny over whether its current reserves are sufficient to sustain production over the coming decade.

“This establishes Canada as a heartland for Shell while furthering our strategy to deliver more value with less emissions,” said Chief Executive Officer Wael Sawan. The ARC acquisition “strengthens our resource base for decades to come", he added.

The deal is expected to support Shell’s target of maintaining hydrocarbon liquids production of around 1.4 million barrels per day through 2030 and beyond.

The company also said the acquisition would generate double-digit returns and boost free cash flow per share from 2027.

Market reaction and broader context

Shell shares pared earlier losses following the announcement and were trading 0.03% lower at 3,306.5 pence in London.

The move marks a notable return to shale investment for Shell, five years after it exited the Permian Basin in Texas by selling its assets to ConocoPhillips for $9.5 billion.

The ARC deal signals a renewed confidence in low-cost shale gas and liquids, particularly in Canada’s Montney basin.

By adding scale in a region where it already operates, Shell is positioning itself to enhance operational efficiency while reinforcing its long-term production outlook.