The deal, announced Monday, is expected to increase Shell’s output by about 370,000 barrels of oil equivalent per day (boed). It represents the company’s biggest acquisition since its 2016 purchase of BG Group, a move that significantly expanded its liquefied natural gas (LNG) portfolio.
ARC’s assets are strategically located near Shell’s existing Canadian operations, which supply the LNG Canada facility—where Shell holds a 40% stake. This proximity is expected to enhance operational efficiency and improve access to Asian LNG markets, where shipping routes are shorter compared to much of North America.
Under the terms of the agreement, ARC shareholders will receive C$8.20 in cash and 0.40247 Shell shares per share—equating to roughly 25% cash and 75% equity. The offer represents a 20% premium to ARC’s average share price over the past month. Shell said it would also assume approximately $2.8 billion in net debt, bringing the total enterprise value of the deal to $16.4 billion, with equity valued at $13.6 billion.
The acquisition is expected to add around 2 billion barrels of oil equivalent in reserves to Shell’s portfolio and generate double-digit returns. The company said it would also boost free cash flow per share from 2027 without altering its planned capital expenditure of $20 billion to $22 billion through 2028.
The move comes as Shell faces pressure from ageing fields and declining reserves. Its reserve life—an indicator of how long proven reserves can sustain production—fell to less than eight years in 2025, down from nine years the previous year and the lowest level since 2021. Total reserves dropped to 8.1 billion barrels of oil equivalent, the lowest in over a decade.
With the addition of ARC’s production, Shell said it would raise its compound annual production growth target for the decade from 1% to 4% relative to 2025 levels. The company also plans to maintain liquids output at around 1.4 million barrels per day through 2030 and beyond.
ARC reported record average production of 374,000 boed in 2025, with natural gas accounting for 59% and crude oil and liquids making up the remainder. By comparison, Shell’s total oil and gas production stood at 2.8 million boed at the end of the same year.
Despite the scale of the transaction, the deal remains smaller than recent industry mega-mergers, including Chevron’s $55 billion acquisition of Hess Corporation, completed in 2025.
Shell shares were marginally lower following the announcement, even as the broader European energy sector recorded gains.