Oil prices help Co. switch to green power

This energy company is turning to hydrogen, but it still has interests in the oil and gas sector.

The invasion of Ukraine and the economic fallout from the pandemic are pushing global crude oil and natural gas prices to levels not seen in eight years – the price of crude oil has soared to over $100 a barrel.

Over the past two years, Jericho Energy Ventures Inc. (JEV: TSX.V; JROOF: OTCMKTS) has begun to focus on green energy. But it still owns oil and gas assets, and the company said it expects to see its cash flow increase by around 15% to 18% in the sector this year compared to last year.

Those profits flow directly into Jericho’s push for hydrogen, said chief executive Brian Williamson. Streetwise Reports.

“Hydrogen really is clean energy, and most people don’t understand why it’s so clean and how easily it can be implemented. Project deliveries will make that more tangible for investors.”

—PennyQueen Independent Investor

“It just creates cash flow to move us further up the hydrogen value chain to do what we want to do with our business,” Williamson said. “We like where we’re positioned. … We’ve never given up on our oil assets, and we don’t envision a world where gas isn’t part of the future, at least in our lifetimes. But we have the feel like we’re perfectly positioned for this time of day.”

Independent investor PennyQueen agreed, saying it expects the clean energy transition to take up to 25 to 30 years.

“I expect the trajectory of hydrogen to become apparent to the world over the next two years, but I expect Jericho’s price to move significantly over the next 12 to 18 months as orders and deliveries are increasing,” PennyQueen said. Streetwise Reports. “Hydrogen really is clean energy, and most people don’t understand why it’s so clean and how easily it can be implemented. Project deliveries will make that more tangible for investors.”

The journey to green

But hydrocarbons are still responsible for around 85% of the world’s energy consumption, Jericho said.

Jericho began its transition to green energy in June 2020. In January 2021, it announced the acquisition of Hydrogen Technologies, which developed a high-temperature dynamic combustor boiler with zero-emission hydrogen to generate heat, hot water, steam and combined heat. and power. Last year, Jericho announced it would work with Rémy Cointreau’s Bruichladdich distillery in Scotland to install the boiler to run its stills that produce Scotch and craft gin.

In July 2021, Jericho invested in H2U Technologies Inc., a company developing a “proprietary AI-driven ultra-high throughput electrocatalyst discovery process for electrolyzer and fuel cell applications” with Southern California Gas Co.

Jericho has also invested in Supercritical Solutions Ltd., which is developing a new class of water electrolyzers that will enable low-cost hydrogen production. Jericho led the seed series funding round for SuperCritical and was joined by Chris Sacca’s Lowercarbon Capital as a co-investor.

The company said its oil and gas assets are primarily concentrated in the Hunton, Mississippi Lime, Woodford Shale and Anadarko Basin STACK Play formations in Oklahoma, where it holds about 52,000 net acres.

“Our goal for the future”

That oil and gas business had been the foundation of the company since its inception in 2014. But with years of low prices, the sector has been “beaten”, Williamson said.

Williamson remembers being virtually alone at investor conferences. “No one cared anymore,” he said. “People had given up on oil and gas – people had had enough.”

But the pause during COVID-19 allowed the company to slow down and consider a new path. And it wasn’t that different from the path he was on. Jericho realized he could take his same expertise and strengths and apply them to green energy.

“We realized we really liked the hydrogen positioning because it leveraged everything we knew,” Williamson said. “It gave us a chance to really make sure our research was right and what we were trying to achieve was achievable. … We are committed to making hydrogen our priority going forward.”

The sector is also a win for investors on more than one level, according to PennyQueen.

“Investing in clean tech is a way to feel good, knowing that you are directly influencing environmental change while increasing your capital,” she said.

Jericho has 225 million shares outstanding and trades in a 52-week range of CA$0.98 and CA$0.36. Its market cap is C$84.48 million.

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Felix J. Dixon