Energy Co. Leverages Natural Gas Assets to Power AI, Data Centers

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Jericho Energy Ventures Inc. (JEV:TSX.V; JROOF:OTC; JLM:FRA) announced it is utilizing its natural gas assets and infrastructure for the development of technology driven Artificial Intelligence (AI) computing solutions by launching its Modular Data Center venture.

Jericho's Modular Data Center business will be overseen from its Tulsa, Oklahoma, regional office, where its oil and gas joint venture currently owns and operates approximately 40,000 acres of productive land.

By converting its natural gas into long-term reliable on-site power, the company said it intends to offer a secure, modular, and next generation computing infrastructure tailored for AI applications as it renewed its focus on maximizing and developing its traditional energy assets.

"JEV's management believes the company is ideally positioned to capitalize on the (U.S. President Donald) Trump administration's pro-energy and pro-development regulatory landscape by leveraging its strategic partnerships, robust infrastructure, prime acreage in Oklahoma's storied energy corridor, and abundant availability of cost-effective natural gas to power data centers," the company said in a release.

On the day of the release of the news, Technical Analyst Clive Maund noted the stock appeared to be "approaching the completion of a base pattern."

"This is potentially highly significant as the company has vast quantities of natural gas in the center of the U.S. that can be used to feed power-hungry AI data centers and it looks like this could turn out to be a major source of revenue" for the company, Maund wrote.

"The stock has been in a long and persistent severe downtrend from its early 2021 spike high that has brought it all the way down to support at a cyclical low at its 2020 lows, which is clearly a very good point for it to stabilize and start higher again," wrote Maund, who rated the stock an Immediate Speculative Buy. "This morning's news could be the catalyst."

Global Investment in AI Centers Surging

An October report from McKinsey & Co. said demand for AI-ready is offering opportunities for companies and investors across the value chain, and projects that global data center demand could grow 19-22% annually from 2023 to 2030, reaching 171-219 gigawatts (GW), Jericho said.

In a less likely scenario, demand could surge 27% to 298 GW — far exceeding today's 60 GW, the company said.

To prevent a supply shortfall, double the capacity built since 2000 would need to be constructed in under a quarter of the time, JEV said.

Global investment in U.S. data centers is surging. On January 7, 2025, Dubai-based DAMAC Properties announced plans to invest an initial US$20 billion into data centers tailored for AI and cloud computing, with the first phase of the project planned to take place in Oklahoma, Texas, Louisiana, Ohio, Illinois, and Indiana.

"We are taking a page from the playbook of our industry leaders, utilizing our natural gas and infrastructure as a means to fuel modular AI computing solutions," said Jericho Chief Executive Officer Brian Williamson. "We believe this unlocks a transformative growth opportunity. By aligning our energy resources with the booming demand for modular AI computing infrastructure, we aim to boost revenue and elevate shareholder value through an innovative, sustainable approach."

Leveraging Co.'s Long-Held Oil and Gas Assets

Last year, Jericho spun off its hydrogen solutions platform into a separate entity, Hydrogen Technologies Corp. The intention was to create two specialized companies focusing on hydrogen technology and traditional energy assets, respectively. Jericho Energy retains its traditional oil and gas assets following the separation.

"By separating our hydrogen platform, we can create two agile, focused companies . . . positioning them for long-term growth and success," Williamson said at the time.

"The stock has been in a long and persistent severe downtrend from its early 2021 spike high that has brought it all the way down to support at a cyclical low at its 2020 lows, which is clearly a very good point for it to stabilize and start higher again," wrote Maund, who rated the stock an Immediate Speculative Buy. "This morning's news could be the catalyst."

Through its wholly owned subsidiary, Hydrogen Technologies, Jericho delivers breakthrough, patented, zero-emission boiler technology to the commercial and industrial heat and steam industry.

Etna Solutions, Inc., majority owned by JEV, is developing a patent-pending, high-temperature, low-cost alkaline-based electrolyzer system, the company said. JEV also holds a strategic investment and board position in California Catalysts (formerly H2U Technologies), a leading developer of advanced materials for electrolysis.

But it's Jericho's long-held producing oil and gas JV assets in Oklahoma, which the company is developing from cash flows in an effort to further increase production, that it's using for its new Modular Data Center venture.

Jericho's portfolio there includes 65 active and producing wells with total proven reserves of 1,622 million barrels of oil (Mbo) and 2,317 million cubic feet (Mmcf) natural gas, according to Jericho's investor presentation.

Williamson said that in additional to utilizing its natural gas assets for the modular AI centers, "we will work with our local utilities and cooperatives to provide redundant cost-effective power solutions to ensure high availability."

"We also see the pathway where we can leverage our energy transition assets, offering customers a lower-carbon hydrogen fuel solution for their AI (computing)," he said.

Jericho's major backers among its shareholders includes Ed 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.

The Catalyst: Power-Hungry AI, Computer Data Centers

Demand for power is skyrocketing for AI and computer data centers which are expected to eventually overrun the traditional power grid.

The International Energy Agency reported that the situation has escalated dramatically "into a full-blown global energy crisis" after Russia's invasion of Ukraine, with natural gas prices reaching record highs and oil prices rising.

However, according to a Bloomberg report on March 24, Alibaba Group Holding Ltd. Chairman Joe Tsai warned there may be an approaching bubble in data center construction. He said the rush by big tech firms and others to erect huge server bases is starting to look indiscriminate.

"I start to see the beginning of some kind of bubble," he told delegates to the HSBC Global Investment Summit in Hong Kong last week. "I start to get worried when people are building data centers on spec. There are a number of people coming up, funds coming out, to raise billions or millions of capital."

But on average, a ChatGPT query uses 10 times as much electricity to process as a Google search, according to a report last year by Goldman Sachs.

"In that difference lies a coming sea change in how the U.S., Europe, and the world at large will consume power — and how much that will cost," Goldman Sachs said.

The widening use of AI will "imply an increase in the technology's consumption of power," the report said. "Goldman Sachs Research estimates the overall increase in data center power consumption from AI to be on the order of 200 terawatt-hours per year between 2023 and 2030. By 2028, our analysts expect AI to represent about 19% of data center power demand."

Over the last decade, U.S. power demands have grown little because of energy efficiencies like LED light.

"But that is set to change. Between 2022 and 2030, the demand for power will rise roughly 2.4%, Goldman Sachs Research estimates — and around 0.9 percent points of that figure will be tied to data centers," Goldman Sachs said.

Ownership and Share Structure

Around 41% of Jericho's shares are held by management and insiders, the company said. They include CEO Brian Williamson, who owns 1.38%; founder Allen Wilson, who owns 0.99%; and board member Nicholas Baxter, who owns 0.49%; according to Refinitiv's latest research.

Around 34% of shares are held by the company's "Top 10 external shareholders." The rest is in retail.

JEV's market cap is CA$45 million, and it trades in a 52-week range of CA$0.07 and CA$0.18. It has 303.3 million shares outstanding, approx.. 189.99 million floating.