Shell says it has entered into a definitive agreement to acquire ARC Resources Ltd, a Calgary based energy company focused on the Montney shale basin in British Columbia and Alberta.

The deal is worth $22 billion Canadian, ($13.6 billion US in cash and shares) and includes taking over ARC’s debts. Financial analysts report that offer is a 20 per cent premium to ARC's average share price over the last 30 days.

ARC's production fields are close to Shell's existing Groundbirch asset in British Columbia and Gold Creek project in neighbouring Alberta.

Groundbirch  supplies gas to the LNG Canada liquefaction and the domestic gas market. ARC’s business will  in the future be reported as part of Shell’s leading Integrated Gas division.
ARC's output is around 60 per cent natural gas and 40 per cent oil.

In a news release Shell’s chief executive officer, 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.”

In its news release  ARC said the deal adds significant opportunities to unlock and accelerate LNG-related value through Shell's integrated natural gas value chain – scale, infrastructure footprint and global reach underpin enhanced long-term profitability adding that President and CEO Terry Anderson said the company’s assets and staff “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 deal could add about 370,000 barrels a day of oil and gas to Shell’s worldwide production and the deal could boost production growth from one per cent a year to four per cent and add 2 billion barrels to its proven and probable reserves.

Shell said that it either “owns” or is “involved" with more than 30 percent of global LNG capacity, making the company the world’s largest seller of LNG.

The acquisition requires approval by shareholders and the courts and regulatory approvals, including the Investment Canada Act.

Back in 2021, Shell had sold off most of its North American shale oil fields. The major energy companies have now reversed course and are buying up assets. Some analysts say while the purchases have been going  for the past year,  the war with Iran has accelerated the moves, since as the Wall Street Journal headline says “Shell buys a gas producer far from the Middle East."