As a growing technology innovator, the hydrogen business will likely need access to capital. Decoupling from the oil business will expand the potential sources of funding to include ESG funds.
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Global Stocks News – In a press release dated April 17, 2024, Jericho Energy Ventures (TSXV:JEV) (OTC PINK:JROOF) (FSE:JLM) announced that it is exploring a potential spin-off and separate listing of its Hydrogen platform.
Currently, Jericho owns and operates producing oil and gas projects in Oklahoma, USA, which – although a source of revenue – dilutes the company’s green energy credentials.
As a growing technology innovator, the hydrogen business will likely need access to capital. Decoupling from the oil business will expand the potential sources of funding to include ESG funds.
“Global ESG assets are $30 trillion, and on track to surpass $40 trillion by 2030,” confirms a January 2024 ESG report from Bloomberg Intelligence.
“The last three years we have been using profits from the oil business to fund our hydrogen business,” JEV director Allen Wilson told Guy Bennett, the CEO of Global Stocks News (GSN). “At an accounting level that makes sense, but many of the funds we’ve been talking to have mandates that forbid them from investing in fossil fuels.”
“Having an oil division buried in the hydrogen business is constraining the relationships we can form, and our access to capital,” continued Allen.
JEV’s Hydrogen Portfolio:
• 100% owned subsidiary Hydrogen Technologies has developed a patented, zero-emission boiler technology to the Commercial & Industrial heat and steam industry.
• Investments and board positions in H2U Technologies - a breakthrough electrocatalyst and low-cost electrolyzer platform.
• Investments and board positions in Supercritical Solutions -developing the world's first, high pressure, ultra-efficient electrolyzer.
“Our skills, knowledge and experience in traditional energy assets has served us well,” JEV CEO Brian Williamson told GSN. “But as we move up the investor chain to institutional investors, these funds are focused on the transition away from fossil fuels. That is the largest growing pool of capital in the marketplace.”
“For us to access those pools, our hydrogen assets need to stand on their own,” confirmed Williamson. “At the same time, our oil and gas assets are getting lost in the hydrogen story. Sometimes separation is necessary for the good of the children. We feel we are at that point.”
“The objective of the Proposed Spin-Off is to create two independent, streamlined, pure-play companies focused on becoming leaders in their respective markets,” states JEV.
“This initiative intends to create two agile, specialized companies, enabling them to pursue their unique strategic objectives and position themselves advantageously for sustained growth, profitability, and heightened investor appeal," remarked Williamson.
Hydrogen produces zero emissions when burned, making it an attractive option for reducing greenhouse gas emissions. In 2024, 95% of hydrogen used is “grey hydrogen” - produced from natural gas.
“Blue hydrogen” uses carbon capture to reduce emissions up to 90%, but it still relies on fossil fuels as a feedstock.
For hydrogen to break through as major source of clean industrial energy, the world needs reliable affordable “green hydrogen”.
In the video below, Scottish Power explains what green hydrogen is:
“In order to combat climate change, we need to adopt electrification as a clean and sustainable solution to many of our transport and industrial needs,” explains Scottish Power.
“The cleanest form of hydrogen production is produced using renewable energy resulting in zero co2 emissions. Clean renewable electricity is used to power an electrolyser splitting water into hydrogen and oxygen gas with no carbon emissions.”
The push to replace fossil fuels with green hydrogen has reached all corners of the world.
“Energy storage will play a key role in achieving India’s National Green Hydrogen Mission's goal of producing more than five million metric tonnes per annum by 2030,” reports TV BRICS.
“Over 680 hydrogen projects have been announced globally, worth more than $240 billion in investment,” states the World Economic Forum (WEF). “We will work with stakeholders across industry, policy and finance to turn announcements into action and pledges into real projects.”
Jericho’s hydrogen business started with a focus on the industrial space, because this is where you find the earlier adopters, with the biggest carbon footprints.
JEV’s “spearhead” technology is the zero emission DCC boiler. The company is concurrently developing upstream technology to help solve the need for more green hydrogen.
“The average life of a boiler is 20 years, while the average age of the boilers installed in North America is 30+,” explained Williamson. “Emission profiles two decades from now will be very different. Decisions are being made today will affect industrial processes in 2040. The time is right for the industrial, decarbonisation, and we believe our DCC boiler has an important role to play.”
“Jericho's roster of major backers among its shareholders includes Edward Breen, Executive Chairman and CEO of DuPont; Belzberg & Co., led by Strauss Zelnick, chairman and CEO of video game giant Take-Two Interactive; McKenna & Associates, led by Andrew J. McKenna; the Graves family, a multi-generational U.S energy asset owner and operator; and Frank Drendel, founder and chairman emeritus of CommScope,” reports Streetwise Reports.
Ed Breen is sometimes called “The Breakup King”, having transformed numerous corporate entities, like Tyco International, and DowDuPont into more efficient focused companies.
“This model aligns perfectly with that of Jericho Energy Ventures, a small company that Breen has invested in,” stated AllPennyStocks on the Globe & Mail platform.
“Breen identifies companies with potential for hidden value trapped within a complex structure. Through divestitures, mergers, or strategic splits, he unlocks this value, allowing investors to benefit from the focused potential of the newly formed entities.”
"Should this spin-out come to fruition,” concluded Williamson. “We believe existing JEV shareholders stand to benefit from the growth prospects of owning both pure-play H2 and Oil & Gas enterprises, with each focused on maximizing value and becoming a leader within its sector."
Disclaimer: Jericho Energy Ventures paid GSN $1,500 CND for the research, writing and dissemination of this content.
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