Record Oil, Gas Profits To Help Co.'s Clean Energy Push

Jericho Energy Ventures Inc. (JEV:TSX.V; JROOF:OTC PINK: JLM:FRA) recorded record oil and gas joint venture profits for FY 2022, driven by elevated crude oil and natural gas prices.

The money is likely to help the company as it continues to invest in green energy technologies like its hydrogen Dynamic Combustion Chamber™, or DCC, boiler.

Jericho said from FY 2021 to FY 2022, its JV oil and gas ventures grew 37% year-over-year in product revenues from US$8.2 million to US$11.3 million.

During that time, the average realized oil price increased by 42% YoY, and the average realized natural gas price increased by about 48%.

Total adjusted joint venture income grew 63% YoY from US$2.2 million to US$3.6 million, and Jericho's share of adjusted JV income grew from US$1.1 million in FY 2021 to US$1.7 million in FY 2022.

"Our oil and gas operations benefitted from higher realized oil and natural gas prices throughout the year, providing strong growth in product revenues that largely fell to our joint ventures' bottom line," said Jericho Chief Executive Officer Brian Williamson. "Our stable low-decline production provides strong cash flows and underpins our strategy to produce hydrocarbons today and lower carbon forms of energy tomorrow. We intend to increase production, cash flows, reserves, and shareholder value in 2023 through the drill bit as well as potential opportunistic asset acquisitions."

Earlier this year, the company announced the results of a December 2022 reserves evaluation for its oil and gas properties in Oklahoma.

Total proved reserves before tax increased 26% YoY to US$43.7 million, total proved developed reserves increased 32% to US$27 million, and proved plus probable reserves before tax increased 37% to US$48.3 million, the company said.

The Catalyst: Transitioning to Clean Energy

Jericho is not alone as an energy company with oil and gas interests investing in clean energy, Deloitte said in a recent report on the outlook for the oil and gas industry.

The U.S. Department of Energy recently announced grant funding of up to 80% for businesses interested in deploying hydrogen boilers like those developed by Jericho's subsidiary Hydrogen Technologies to decarbonize their operations.

"The oil and gas (O&G) industry earned record profits in 2022, providing ample cash flow to fund their strategies in 2023," Deloitte noted. "And while O&G companies recognize geopolitical and macroeconomic uncertainty in the year ahead, they've also been given a clear mandate to secure supply in the short term while transitioning to cleaner energy in the long term."

The oil and gas industry entered this year with a healthy balance sheet, the report said.

"This momentum could help companies overcome the energy underinvestment of recent years and help enable an accelerated energy transition," it said.

The U.S. Department of Energy recently announced grant funding of up to 80% for businesses interested in deploying hydrogen boilers like those developed by Jericho's subsidiary Hydrogen Technologies to decarbonize their operations.

'A Fuel of the Future'

Hydrogen Technologies' DCC boiler burns hydrogen and oxygen in a vacuum chamber to create high-temperature water and steam with no greenhouse gases or other pollutants.

The only by-product is water, which is recycled. It's meant to replace existing boilers that burn coal, natural gas, diesel, or fuel oil.

Newsletter writer Clive Maund wrote for Streetwise Reports that hydrogen "is a fuel of the future" and that Jericho is "moving with the times."

Newsletter writer Clive Maund of CliveMaund.com wrote for Streetwise Reports that hydrogen "is a fuel of the future" and that Jericho is "moving with the times."

The National Inflation Association predicted Jericho would be one of the market's largest percentage gainers in 2023, reaching "levels that are many times higher than today."

Jericho was also awarded the Solar Impulse Foundation's "Solar Impulse Efficient Solution" label for the DCC boiler. The label seeks to identify solutions that hit high standards in profitability and sustainability.

'Faster Action Required' in Transition

Hydrogen is the most abundant molecule in the universe, but it doesn't occur by itself naturally on Earth and must be separated from water or hydrocarbon carbons using electrolyzers.

The National Inflation Association predicted Jericho would be one of the market's largest percentage gainers in 2023, reaching "levels that are many times higher than today."

It's also a "uniquely versatile energy carrier," according to a report by the Hydrogen Council. "It can be produced using different energy inputs and different production technologies. It can also be converted to different forms and distributed through different routes — from compressed gas hydrogen in pipelines through liquid hydrogen on ships, trains or trucks, to synthesized fuel routes."

The world needs more hydrogen technology and projects if it wants to meet a net-zero emissions scenario by 2050, the International Energy Agency wrote. 

"Faster action is required on creating demand for low-emission hydrogen and unlocking investment that can accelerate production scale-up and deployment of infrastructure," the agency wrote.

Ownership and Share Structure

Around 35% of Jericho's shares are held by management, insiders, and insider institutional investors, the company said. They include CEO Brian Williamson, who owns 1.26% or about 2.85 million shares; founder Allen William Wilson, who owns 0.87% or about 1.97 million shares; and board member Nicholas Baxter, who owns 0.5%, or about 1.1 million shares, according to Reuters.

Around 10% of shares are held by non-insider institutions, and 65% are in retail, the company said. 

JEV's market cap is CA$62.2 million, and it trades in a 52-week range of CA$0.47 and CA$0.235. It has 234.9 million shares outstanding, 167.5 million of them floating.

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1. As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of Jericho Energy Ventures Inc., a company mentioned in this article.
2. Steve Sobek wrote this article for Streetwise Reports LLC and provides services to Streetwise Reports as an employee.
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