On May 14, 2025, ARC Resources Ltd. announced a definitive agreement to acquire condensate-rich Montney assets in Alberta’s Kakwa region from Strathcona Resources Ltd. for approximately $1.6 billion (C$2.2 billion at time of announcement). The all-cash transaction, effective April 1, 2025, is expected to close in early July 2025, pending customary closing conditions. The assets, adjacent to ARC’s existing Kakwa operations, will add around 40,000 boe/day of production—split evenly between natural gas and liquids, including approximately 11,000 bbl/day of condensate—significantly enhancing ARC’s footprint and reinforcing its position as Canada’s top Montney and condensate producer.

The acquisition is aligned with ARC’s strategy to grow free funds flow per share and deliver strong capital returns, with the transaction expected to increase free funds flow per share by approximately 10% in 2026. Additionally, ARC anticipates $200 million in incremental free funds flow in 2026, before synergies. The deal also includes full ownership of two gas processing facilities and condensate handling infrastructure, along with a 19% stake in a third-party gas facility.

Scotiabank acted as financial advisor to ARC, while RBC Capital Markets served as strategic advisor. Burnet, Duckworth & Palmer LLP advised ARC legally. Strathcona was advised by Blake, Cassels & Graydon LLP. The transaction will be financed through a new $1.0 billion committed two-year term loan provided by Royal Bank of Canada and The Bank of Nova Scotia, as underwriters and bookrunners, and supplemented by ARC’s existing credit facilities.