$ARX.TO

ARC Resources Q1 Per Share C$1.03 Vs $0.69 a Year Earlier; Comes Days After News It Will Be Acquired By Shell

ARC Resources Downgraded to Market Perform at BMO Following Shell's Acquisition Offer; Price Target at C$32.00

BMO Capital Markets on Tuesday downgraded its rating on the shares of ARC Resources (ARX.TO) to market perform from outperform while raising its price target to C$32.00 price target from an undisclosed prior level, just under the US$32.80 per share Shell (SHEL) agreed to pay for the Western Canadian natural-gas producer in its C$22 billion acquisition offer on Monday."Another high-quality Canadian company is set to disappear with Shell plc's offer to acquire ARC Resources for roughly $22 billion. The implied transaction metrics screen better than recent Montney deals; however, we believe Shell is getting a good deal given ARX's size/scale and high-quality asset base. The transaction also appears to imply that Shell-operated LNG Canada Phase 2 could proceed, which could support a re-rating of other gas-weighted companies. We downgrade ARX to Market Perform but increase our target price to $32," analyst Randy Ollenberger noted..(covers equity, commodity and economic research from major banks and research firms in North America, Asia and Europe. Research providers may contact us here: https://www..com/contact-us)

TSX Down 122 Points at Midday in Broad Decline

The Toronto Stock Exchange is down 122 points at midday with most sectors lower.Energy, up 1.8% is the best performer, led by gains in ARC Resources (ARX.TO) which has jumped 21% higher to $31.28 after announcing this morning it agreed to be acquired by Shell. Shareholders will receive $8.20 in cash and 0.40247 ordinary shares of Shell per ARC share.On the economic front, Prime Minister Mark Carney announced Canada's first national sovereign wealth fund, the "Canada Strong Fund," at a press conference in Ottawa on Monday. The federal government will endow $25 billion into the fund, which Carney says will function as a "national savings and investment account designed to grow wealth for future generations of Canadians." A government statement said the fund will invest in projects in "clean and conventional energy, critical minerals, agriculture, and infrastructure." Investments will be conducted alongside the private sector.

Update: ARC Resources Agrees to be Acquired by Shell for C$22 Billion; Shares up 21%

(Adds analyst comment in the 7th paragraph; updates shares.)ARC Resources (ARX.TO) agreed Monday to be acquired by Shell plc (SHEL) for C$22 billion, including debt, as the global oil and gas producer looks to add exposure to the prolific Montney shale-gas in northeastern British Columbia.Shell is offering C$32.80 per ARC share, a 27% premium to its Friday closing price on the Toronto Stock Exchange. The amount will be paid 75% with Shell shares and 25% in cash.The agreement will see Shell add ARC's 374,336 barrels of oil equivalent per day (boe/d)of natural gas and natural-gas liquids production from the Montney field at the end of last year, which is expected to grow to between 405,000 and 420,000 boe/d this year. It also adds supply for the LNG Canada facility on northern British Columbia's Pacific coast, which is 40% owned by Shell."ARC is a high-quality, low-cost and top quartile low carbon intensity producer operating in the Montney shale basin that complements our existing footprint in Canada and strengthens our resource base for decades to come. 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," Shell chief executive Wael Sawan said in a release.ARC holds 1.5-million acres of lands in the Montney region, which will add to Shell's holdings of 440,000 acres in the field. It also brings adds around two-billion boe/d of reserves.The acquisition re-establishes Canada as a major center for the global producer, which has been retreating from the country after selling off most of its oil-sands operations to Canadian Natural Resources (CNQ.TO) in 2017 and completed its exit from the oil sands in 2025 by selling its remaining oil-sands interest to the Canadian producer. It still operates an oil-sands upgrader, refinery and carbon-capture facility near Edmonton, Alberta, as well as a refinery in Sarnia, Ontario, and owns 1,400 retail gasoline stations in Canada."We note that while ARC is a strong operator with a vast undeveloped inventory (which is likely to be accelerated given acquirer's access to global markets) and a top-tier resource base, this deal clearly signals a compounding benefit to the Canadian gas market with global integrated names showing an appetite for Canadian resources, which we haven't seen in a while," National Bank Financial analyst Travis Wood wrote.ARC said Shell approached the company in March and its board formed a special committee to assess the offer, which it determined to be fair and in the best interest of shareholders."The ARC Board unanimously recommends this strategic transaction to our shareholders," board chair Hal Kvisle said in a statement. "This agreement delivers compelling value for our shareholders and brings together two companies with shared commitments to safety, operational excellence and care for communities and people - strengthening our ability to deliver resilient, long-term value creation for many years to come."The sale is expected to close in the second half of this year.ARC shares were last seen up $5.52 to $31.29 on the Toronto Stock Exchange.Price: $31.25, Change: $+5.48, Percent Change: +21.27%

ARC Resources Agrees to be Acquired by Shell for C$22 Billion

ARC Resources (ARX.TO) agreed Monday to be acquired by Shell plc (SHEL) for C$22 billion, including debt, as the global oil and gas producer looks to add exposure to the prolific Montney shale-gas in northeastern British Columbia.Shell is offering C$32.80 per ARC share, a 27% premium to its Friday closing price on the Toronto Stock Exchange. The amount will be paid 75% with Shell shares and 25% in cash.The agreement will see Shell add ARC's 374,336 barrels of oil equivalent per day (boe/d)of natural gas and natural-gas liquids production from the Montney field at the end of last year, which is expected to grow to between 405,000 and 420,000 boe/d this year. It also adds supply for the LNG Canada facility on northern British Columbia's Pacific coast, which is 40% owned by Shell."ARC is a high-quality, low-cost and top quartile low carbon intensity producer operating in the Montney shale basin that complements our existing footprint in Canada and strengthens our resource base for decades to come. 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," Shell chief executive Wael Sawan said in a release.ARC holds 1.5-million acres of lands in the Montney region, which will add to Shell's holdings of 440,000 acres in the field. It also brings adds around two-billion boe/d of reserves.The acquisition re-establishes Canada as a major center for the global producer, which has been retreating from the country after selling off most of its oil-sands operations to Canadian Natural Resources (CNQ.TO) in 2017 and completed exit from the oil sands in 2025 by selling its remaining oil-sands interest to the Canadian producer. It still operates an oil-sands upgrader, refinery and carbon-capture facility near Edmonton, Alberta, as well as a refinery in Sarnia, Ontario, and owns 1,400 retail gasoline stations in Canada.ARC said Shell approached the company in March and its board formed a special committee to assess the offer, which it determined to be fair and in the best interest of shareholders."The ARC Board unanimously recommends this strategic transaction to our shareholders," board chair Hal Kvisle said in a statement. "This agreement delivers compelling value for our shareholders and brings together two companies with shared commitments to safety, operational excellence and care for communities and people - strengthening our ability to deliver resilient, long-term value creation for many years to come."The sale is expected to close in the second half of this year.ARC shares closed down C$0.35 to C$25.77 Friday on the Toronto Stock Exchange.

ARC Resources Says $32.80 Per Share Purchase Price Represents a 27% Premium to Its April 24 Closing Price on TSX

ARC Resources To Be Acquired By Shell In a Cash and Share Transaction Valued at Near $22B, Including Assumed Net Debt

ARC Resources To Be Acquired By Shell

RBC Expects Canadian E&P Companies to Discuss Use of Free Cash Flows During Q1 Earnings Season

RBC Capital Markets on Monday said it expects Canadian oil and gas exploration and production companies to discuss the use of free cash flows amid higher crude prices during the earnings reporting season for the first quarter.RBC expects the companies to outline their near-term focus on higher buybacks and debt repayment, with capital programs to increase later this year if pricing remains robust.According to RBC, AECO natural-gas prices experienced a brief rebound during the first quarter, but have since pulled back as supplies have remained robust, keeping pace with increased demand from LNG Canada.RBC said its estimates are largely above FactSet consensus forecasts for now.The earnings season will kick off April 20 with PrairieSky Royalty (PSK.TO) reporting after market close.Price: $10.11, Change: $+0.01, Percent Change: +0.10%