Shell to buy Canada's ARC Resources in $16.4bn deal

(Sharecast News) - Shell said on Monday that it has agreed to buy Canada's ARC Resources in a $16.4bn cash and stock deal. Shell said the acquisition accelerates its strategy by adding 370,000 barrels of oil equivalent per day immediately across liquids and gas, leading to a 4% production compound annual growth rate through to 2030, compared to 2025.

It also increases the company'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".

Shell said the deal is expected to generate double-digit returns, bolstering long-term cashflows, and is accretive to free cash flow per share from 2027 onwards.

Chief executive Wael Sawan said: "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.

"This establishes Canada as a heartland for Shell while furthering our strategy to deliver more value with less emissions."

Last year, ARC reported production of 374,000 barrels of oil equivalent per day. Its operations are situated in the same region as Shell's existing Groundbirch asset in British Columbia and Gold Creek project in neighbouring Alberta.

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