Shell is acquiring Canadian producer Arc Resources for $13.6 billion, a move that will lift its output in the Montney shale basin of British Columbia and Alberta.

Under the deal, Arc shareholders receive 8.20 Canadian dollars in cash and 0.40247 of a Shell share per Arc share, totaling C$32.80 per share—a 27% premium over the last close. Both boards have approved the transaction, which should finish in the second half of the year.

Arc’s operations sit beside Shell’s existing Groundbirch and Gold Creek assets, positioning the combined entity to streamline development and enhance economies of scale. The purchase strengthens Shell’s North American footprint and could boost its production pipeline by adding 374,000 barrels of oil equivalent per day, as reported last year.