By Christie U. Omonigho with Media Agency
- Acquisition accelerates Shell’s strategy by adding 370 kboe/d1immediately across liquids and gas leading to a 4% production CAGR2 through to 2030, compared to 2025
- Increases Shell’s exposure to long-duration, low-cost and top quartile low carbon intensity shale gas and liquids production in Canada’s Montney basin, delivering value for decades
- Transaction expected to generate double digit returns, bolstering long-term cashflows, and is accretive to free cash flow per share from 2027 onwards.
Energy Window International (Media) gathers that Shell plc, with the descriptions as (LSE, NYSE: Shell, Euronext: Shell) has entered into a “definitive” agreement to acquire ARC Resources Ltd. (TSX: ARX), an energy company focused on the Montney shale basin in British Columbia and Alberta, Canada.
“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 emission.”
Terry Anderson, described as ARC president and CEO was also captured to have said: “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.”
“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.”
The acquisition EnergyNow reported would increase Shell’s production CAGR from 1% to 4%, even as it (Shell) earlieron outlined at its 2025 Capital Market’s Day in 2025, a step which it also said would be supportive of its objective to sustain material liquids production of ~1.4 million barrels per day towards 2030 and beyond. The transaction also 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 2025, EnergyNow Media reported. It reports that last year, ~40 per cent of ARC’s production was liquids, which accounted for ~70 per cent of its revenues. ARC was equally reported to have proved there were additional gas reserves with the potential to support Shell’s growth in LNG in Canada.
ARC’s shareholders, under the terms of this agreement, will receive CAD 8.20 in cash and 0.40247 ordinary shares of Shell for each ARC share which according to Shell represents approximately 25% cash and 75% shares as of the 24th April 2026 market closing. Based on Shell’s closing share price on this date of GBP 33.08 and GBP:CAD exchange ratio of 1.8480, this translates to a consideration of CAD 32.80 per share, which also represents, as Energy Window International (Media) has gathered, a 20 per cent premium to ARC’s 30-day5 VWAP. This equates to an equity value of approximately US$13.6 billion. It’s expected that 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. The equity value of US$13.6 billion will be funded via US$3.4 billion in cash and US$10.2 billion in Shell shares, the latter valued based on Shell’s closing price on the 24th April and the issuance of approximately 228 million ordinary shares.
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.
It’s worthy to note that,
- Last year, ARC reported production of 374 thousand barrels of oil equivalent per day (before royalty burdens). Its operations are situated in the same region as Shell’s existing Groundbirch asset in British Columbia and Gold Creek project in neighbouring Alberta.
- Shell’s Groundbirch assets supply gas to the LNG Canada liquefaction plant (Shell share 40 per cent) and the domestic gas market. ARC’s business will therefore also be reported as part of Shell’s leading Integrated Gas division.
- The agreement grows Shell’s producing interests in Canada and complements Shell’s existing LNG footprint and extensive downstream businesses including refining, chemicals, fuel retail, aviation, lubricants and low-carbon solutions.
- Shell’s 2030 climate-related targets and ambition remain unchanged.
About Shell’s Financial Framework,
- 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 $20–22 billion.
- The transaction is expected to bring annualised synergies of around $250 million within a year of closing.
- Our shareholder distribution policy remains unchanged, with distributions of 40-50% of CFFO through the cycle via our 4% progressive annual dividend growth and buybacks.
- The next tranche of buybacks will be announced with the Q1 results announcement, subject to board approval.
- Shell aims to maintain a strong investment grade credit rating through the cycle.
Conference call indicates that,
- Wael Sawan (CEO, Shell plc) and Sinead Gorman (CFO, Shell plc) will host a Q&A session today 28th April 2026 which will begin at 2:30pm BST (3:30pm CEST, 9:30am EST, 7:30am MST) and last for one hour.
Source: EnergyNow.ca
