Shell has completed its acquisition of Canadian oil and gas producer ARC Resources after receiving the required shareholder, court and regulatory approvals, the companies announced on September 2. Based on Shell's closing share price and current exchange rates, the transaction carries an equity value of about $13.9 billion and an enterprise value of roughly $16.5 billion, including debt and leases assumed by Shell.
The combination immediately adds about 370,000 barrels of oil equivalent a day to Shell's production across natural gas, crude oil and other liquids. Shell said the new assets lift its expected production compound annual growth rate to around 4% through 2030 from a 2025 base, compared with the 1% rate the group outlined before announcing the deal in April.
ARC shareholders are entitled to C$8.20 in cash and 0.40247 Shell ordinary shares for every ARC share they held. At September 2 market prices, Shell valued the equity consideration at approximately $3.3 billion in cash and $10.6 billion in newly issued shares. The company will also assume about $2.5 billion of ARC net debt and lease obligations, while delivery of the Shell shares is expected to take several days.
The acquisition significantly expands Shell's position in the Montney formation of northeastern British Columbia and northwestern Alberta, one of North America's largest natural gas and liquids resources. Materials issued when the agreement was announced said ARC contributed about 1.5 million net acres and approximately 2 billion barrels of oil equivalent in proved plus probable reserves, complementing Shell's existing Montney holdings and Canadian liquefied natural gas interests.
Shell chief executive Wael Sawan said in a paraphrased statement that ARC's operating record and technical expertise would help the group develop long-duration, low-cost liquids production. Shell expects the transaction to produce double-digit returns, strengthen long-term cash flow and increase free cash flow per share from 2027, although those projections remain subject to commodity prices, integration performance and other business risks.
ARC said the arrangement, valued at about C$22 billion including assumed net debt, became effective on September 2 and made the Calgary-based producer an indirect wholly owned subsidiary of Shell Canada. The closing ends the approval phase of a transaction first announced on April 27; attention now turns to integrating the businesses and delivering the production growth and financial benefits forecast by Shell.
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