Canada’s Arc Resources Ltd. and Seven Generations Energy Ltd. (7G) agreed to merge on Wednesday, a combination that would create one of the top natural gas operators in the country, with output centered in the Montney Shale.

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Combined production this year is estimated at 340,000 boe/d-plus, including 1.2 Bcf/d of gas and 138,000 b/d of condensate. The merged portfolio would be 60% weighted to natural gas and 40% to liquids.

Once completed, the exploration and production (E&P) company would carry the Arc Resources brand and become Canada’s largest condensate explorer and third-largest gas producer. Arc also would become the sixth-largest upstream energy company in the country, executives said.

The E&P when merged would have 1.16 million acres (1,812 square miles) of...