Shell has signed a deal to acquire ARC Resources, a Calgary-based energy company, in a stock and cash deal valued at $22 billion (including assumed debt). The deal will unite the lead partner in Canada’s first operating liquefied natural gas project with a major producer in one of the continent’s most profitable shale regions.
For years, Shell has divested from the oilsands, but once again, as Chief Executive Wael Sawan said, the transaction “establishes Canada as a heartland for Shell. 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.”
ARC Resources has maintained a focus on the Montney shale formation that runs through parts of northeastern British Columbia and northwestern Alberta, producing 374,000 barrels of oil equivalent per day before royalties last year. Its operations are close to Shell’s Montney holdings in both provinces, which reinforces the play’s value.
“Through this transaction, we will realize this tremendous value and become part of a dynamic global energy leader capable of realizing the full potential of our business and delivering on Canada’s exciting energy future,” ARC Chief Executive Terry Anderson said in a statement.
ARC shareholders are set to receive 0.40247 of a Shell share and $8.20 in cash in exchange for each ARC share. The offer is valued at $32.80 per ARC share, based on the closing price for Shell shares and exchange rates on April 24 when ARC shares closed at $25.77.
