Jericho Energy Ventures Inc. (JEV:TSX.V; JROOF:OTC; JLM:FSE) reported Q3 results in line with expectations, noted Atritum Research analystss Nicholas Cortellucci and Ben Pirie in a November 23 report. The company's oil and gas joint venture (JV) posted positive EBITDA based on higher commodity prices.
According to the analystss, this shows Jericho can shift capital from the low multiple oil and gas production business to fund the growth of its high multiple hydrogen technologies division.
In Q3, the JV produced 389 barrels of oil equivalent per day, with 173 attributable to Jericho. It realized strong oil, gas, and natural gas liquids pricing, though revenue declined year-over-year.
JEV ended Q3 with US$0.5 million in cash and US$3.6 million in debt. The analysts see the company's cash flow potential strengthening in 2024 as the JV plans new drilling and benefits from higher oil prices.
On the hydrogen side, the company continues to make advancements through its Hydrogen Technologies unit and minority investments. The analysts expect initial commercial orders in 2023 and potentially larger contracts in 2024 as the hydrogen industry develops.
With progress across both the traditional energy and clean hydrogen businesses, the analysts see Jericho Energy as well positioned to scale and maintain a Buy rating and CA$0.50 price target.
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Disclosures for Atrium Research, Jericho Energy Ventures Inc., November 23, 2023
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