Shell has struck its largest acquisition in over a decade, agreeing to buy ARC Resources for $13.6 billion in equity value. The transaction carries a 20% premium to ARC’s 30-day average share price and will be funded with approximately 25% cash and 75% Shell shares, with closing expected in H2 2026 subject to approvals.

The deal adds 1.26 billion barrels of 1P reserves and expands Shell’s commercial resource base by 33% to 27 billion boe. Management projects sustaining hydrocarbon liquids output at around 1.4 million bpd through 2030, with over $250 million of annual synergies from drilling efficiencies and integration into LNG Canada and Cedar LNG supply agreements.

CEO Wael Sawan highlighted that restoring output delayed by Strait of Hormuz closures could take several months, reflecting the scale of the production backlog. He stressed the need for operational flexibility and planned capital allocation to manage supply disruptions and maintain delivery targets.

Sawan described Shell as entering an inflection point with rising Middle East supply constraints and strong global energy demand driving strategic decisions. He signaled a more assertive capital deployment approach, emphasizing core oil and gas M&A to bolster resource life and free cash flow growth.