Researchers Predict Funding for 3-State Hydrogen Hub

An analysis by independent Norwegian research house Rystad Energy predicted that the HALO Hydrogen Hub, including Jericho Energy Ventures Inc. (JEV:TSX.V; JROOF:OTC; JLM:FSE) will be among the top ten hydrogen hubs in the running for billions in government funding.

The U.S. Department of Energy's Regional Clean Hydrogen Hubs program, or H2Hubs, is expected to reveal the winners of the money to establish six to 10 hydrogen hubs across the country this fall.

The H2Hubs program includes up to US$7 billion to establish six to ten regional clean hydrogen hubs across the United States.

The HALO Hydrogen Hub is listed second out of the ten projects named as favorites by Rystad. The hub includes projects in Oklahoma, Arkansas, and Louisiana with partners such as Air Products, Baker Hughes, Cherokee Nation, GE, NextEra, and Woodside. HALO was among 22 projects that submitted a full application to the program.

An analysis by independent Norwegian research house Rystad Energy predicted that the HALO Hydrogen Hub, including Jericho Energy Ventures Inc. will be among the top ten hydrogen hubs in the running for billions in government funding.

Marina Domingues, senior analyst at Rystad's Clean Tech team, told Hydrogen Insight that the hubs should encourage more investment in clean hydrogen, a sector where banks have been reluctant to shoulder risk.

"The hubs will show the financial community where they can invest their money and get their return," Domingues said. "It reduces the technical risk because the government is investing, and because demand is baked into the proposal, it makes hydrogen projects more bankable."

Jericho subsidiary Hydgrogen 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.

The boilers are being considered for deployment at major facilities around the world, with feasibility studies being conducted or considered at dozens of locations, the company has said.

The Catalyst: 'Near-Zero' Emissions

In order to meet a net-zero emissions scenario by 2050, the world needs more hydrogen technology and projects, 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.

Atrium Research analyst Nicholas Cortellucci has aBuy rating on the stock with a target price of CA$0.50 per share.

The DOE said the hydrogen market has the "potential for near-zero greenhouse gas emissions."

"Hydrogen generates electrical power in a fuel cell, emitting only water vapor and warm air," the agency wrote. "It holds promise for growth in both the stationary and transportation energy sectors."

There's more hydrogen in the universe than anything else, but it doesn't occur on its own naturally on Earth. It needs to be separated from water or hydrocarbon carbons using electrolyzers.

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."

A Leader in Its Category

Jericho started as an oil company but is pivoting toward green energy, using profits from its oil and gas assets to fund investments in zero-emission hydrogen technologies.

The company recently announced its first sale of a DCC™ boiler system to a prominent anonymous university.

"This . . . positions JEV as a key industry leader and a first mover in its category," wrote Atrium Research analyst Nicholas Cortellucci in an Aug. 3 research note. Cortellucci has a Buy rating on the stock with a target price of CA$0.50 per share.

Another recent Jericho and Hydrogen Technologies announcement also bodes well for the company, Cortellucci wrote. The company is collaborating with a "leading global alcoholic beverage company" to study using the boilers at production facilities in four countries.

Jericho recently announced it was partnering with two other companies to manufacture, implement, and service a new DCC™ boiler-based hydrogen steam plant called the HSP3000 that will come pre-assembled in container-sized units and eliminate the CO2 equivalent of about 5,000 cars.

"The HSP3000 can also eliminate all NOx, CO2, and other GHG emissions from industrial steam and district heating applications, potentially allowing clients to harvest carbon credits," Cortellucci wrote. "We expect the product launch to expedite sales commitments across various industries including, Pulp & Paper, Food & Beverages, Pharmaceuticals, Industrial Chemicals, and O&G (oil and gas)."

Ownership and Share Structure

There are more than 660 district energy systems operating in the United States, providing heating to an estimated 5.5 billion square feet of floor space for everything from universities to business districts to hospitals and airports, according to a U.S. Energy Information report.

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 1.25% or about 3.1 million shares; founder Allen William Wilson, who owns 0.79% or about 1.97 million shares; and board member Nicholas Baxter, who owns 0.46%, or about 1.14 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$63.43 million, and it trades in a 52-week range of CA$0.44 and CA$0.22. It has 248.14 million shares outstanding, 178.38 million of them floating.

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1. Jericho Energy Ventures Inc. is a billboard sponsor of Streetwise Reports and pays SWR a monthly sponsorship fee between US$4,000 and US$5,000.
2. 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.
3. Steve Sobek wrote this article for Streetwise Reports LLC and provides services to Streetwise Reports as an employee.
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