Shell’s recently announced agreement to acquire Western Canadian E&P ARC Resources Ltd. for C$22 billion (US$16.4 billion) affirms the global energy giant’s new strategic focus, enhances the prospects for Phase 2 of the LNG Canada megaproject, and supports the view that the Montney Formation may be replacing the Permian as the epicenter of oil and gas M&A. In today’s RBN blog, we discuss the ARC Resources deal — Shell’s largest in 11 years — and what it means for Shell, Western Canada and the Asia-Pacific LNG market.
At its Capital Markets Day (CMD) in June 2023, Shell’s then-new CEO, Wael Sawan, said that while the London-based company would maintain its effort to ratchet down carbon emissions, it would be pivoting from its years-old strategy of reducing liquids production and ramping up renewables. Shell’s new focus, he said, would be on capital discipline, divesting low-margin assets, expanding its “integrated gas” business (natural gas production and LNG exports), and maintaining its crude oil and NGL output. The theme? “Delivering more value with less emissions.”
At Shell’s next CMD in March 2025, Sawan said the new strategy was working, noting that supplying LNG “will be the biggest contribution we will make to the energy transition over the next decade and we are positioning our portfolio to match this.” He added that “continued investment in oil will be needed to offset the natural decline rates of oil fields.”
Shell announced April 27 that it had reached a definitive agreement to acquire ARC Resources of Calgary, AB, which is the largest pure-play producer in the Montney Formation, the largest condensate producer and third-largest natural gas producer in Canada. The deal is expected to close in H2 2026, subject to ARC shareholder, court and regulatory approvals. In a presentation the following day, Sawan said, “As we outlined at our Capital Markets Day, where we see value, we will take the opportunity to add high-margin, low-cost and lower-carbon-intensity production to our portfolio in areas where we have competitive advantages. ARC delivers exactly that,” he said, noting that ARC has a substantial portfolio of Tier 1 undeveloped inventory of liquids-rich gas complementary to Shell’s Montney assets.
Figure 1. Shell’s and ARC Resources’ Production Assets in the Montney. Sources: Shell, ARC Resources
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About the song
“Closer to the Heart” was written by Alex Lifeson, Geddy Lee, Neil Peart and Peter Talbot. It appears as the first song on side two of Rush’s fifth studio album, A Farewell to Kings. The song is an anthem for positive social change and creating a better world with a unified effort from everyone. It was the first Rush song to feature a writer outside the band. Peter Talbot was a good friend of Rush drummer Neil Peart and contributed to the song’s lyrics. Released as the first single from the album in November 1977, it went to #76 on the Billboard Hot 100 Singles chart and #13 on the Canadian Singles chart. Personnel on the record were: Geddy Lee (vocals, bass), Alex Lifeson (guitars), and Neil Peart (drums, bells, percussion).
A Farewell to Kings was recorded in June and July 1977 at Rockfield in Rockfield, Wales, with Rush and Terry Brown producing. Released in August 1977, it went to #33 on the Billboard 200 Albums chart and #11 on the Canada Top Albums chart. It has been certified Platinum by the Recording Industry Association of America. Two singles were released from the LP.
Rush is a Canadian rock band formed in Toronto in 1968 by guitarist Alex Lifeson, drummer John Rutsey, and bassist/vocalist Jeff Jones. Geddy Lee replaced Jones in late 1968, and Neil Peart joined the band as its drummer in July 1974. The trio of Lifeson, Lee and Peart became the core group that went on to massive success. They have released 19 studio albums, 11 live albums, 12 compilation albums, two EPs, and 38 singles and have sold more than 45 million records worldwide. The band has won 10 Juno Awards, are members of the Rock and Roll Hall of Fame and the Canadian Music Hall of Fame, are Officers of the Order of Canada, and have a star on the Hollywood Walk of Fame. They are known for their progressive approach to hard rock music, with eclectic lyrical themes. Canada considers the band a national treasure. Drummer Neil Peart retired from music due to health issues in 2015 and died in Santa Monica, CA, in January 2020 at 67. After retiring the band in 2018, Lifeson and Lee announced a 2026-27 reunion of the band with Anika Nilles on drums and Loren Gold on keyboards. They are resuming their worldwide tour in June and will be touring through April 2027.
"About the Song" -- written by Mickey McMahan , RBN Director of Musicology
