**Shell Plc has entered into a definitive agreement to acquire Canadian oil and gas producer ARC Resources Ltd. for $13.6 billion, as announced on April 27, 2026. The deal represents a significant expansion of Shell's oil and gas production capabilities in Canada, with the transaction expected to close in the second half of 2026, subject to ARC shareholder, court and regulatory approvals. According to Shell's CEO Wael Sawan, "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." The acquisition will increase Shell's production growth outlook, targeting a compound annual growth rate of around 4% through 2030, while maintaining a focus on low-cost, lower-emissions assets.
The acquisition will be funded through approximately 25% cash and 75% shares, with ARC's shareholders receiving CAD 8.20 in cash and 0.40247 ordinary shares of Shell for each ARC share as of the 24th April 2026 market closing. Based on Shell's closing share price of GBP 33.08 and GBP:CAD exchange ratio of 1.8480, this translates to a consideration of CAD 32.80 per share, representing a 20% premium to ARC's 30-day VWAP. 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 and issuance of approximately 228 million ordinary shares. 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 transaction is expected to generate double-digit returns and bolster long-term cashflows, with the deal being accretive to free cash flow per share from 2027 onwards.
The acquisition significantly accelerates Shell's growth strategy, increasing Shell's production CAGR from 1% as outlined at their 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 approximately 2 billion barrels of oil equivalent proved plus probable reserves at the end of 2025. The acquisition will add roughly 370,000 boed of production to Shell's portfolio, with ARC reported production of 374 thousand barrels of oil equivalent per day (before royalty burdens) last year, where approximately 40% of ARC's production being liquids, which accounted for ~70% of its revenues. According to ARC's CEO Terry Anderson, "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."
The deal is expected to generate double-digit returns and bolster long-term cashflows, with the transaction expected to bring annualised synergies of around $250 million within a year of closing. Shell expects to absorb the additional organic cash capital expenditure within its existing Cash Capex ceiling, with the cash capex range for 2027 to 2028 remaining unchanged at $20–22 billion. The transaction is accretive to free cash flow per share from 2027 onwards, with Shell's shareholder distribution policy remaining unchanged at distributions of 40-50% of CFFO through the cycle via their 4% progressive annual dividend growth and buybacks. The next tranche of buybacks will be announced with the Q1 results announcement, subject to board approval. The acquisition underscores continued consolidation in North American shale and highlights the strategic importance of Canadian gas resources tied to LNG export growth.
The acquisition establishes Canada as a heartland for Shell while furthering their strategy to deliver more value with less emissions. ARC's operations are situated in the same region as Shell's existing Groundbirch asset in British Columbia and Gold Creek project in neighbouring Alberta. ARC's assets are concentrated in the Montney formation in British Columbia and Alberta, one of North America's most prolific unconventional plays. ARC's business will be reported as part of Shell's leading Integrated Gas division, with ARC's proved plus probable gas reserves having the potential to support Shell's growth in LNG in Canada. The agreement grows Shell's producing interests in Canada and complements their existing LNG footprint and extensive downstream businesses, while Shell's 2030 climate-related targets and ambition remain unchanged. Goldman Sachs International is acting as exclusive financial advisor to Shell, with RBC Capital Markets acting as exclusive financial advisor to ARC.
