A Texas company plans to drill for oil in Greenland despite a climate change ban and Trump’s desire to annex the territory

Greenland Energy, a new Texas-based venture, is set to become the first publicly traded company to drill for onshore oil in Greenland's Jameson Land Basin, with a first well planned for next summer. The company, formed from March GL and 80 Mile, is going public via a reverse merger with Pelican Acquisition Corp. at an implied $215 million valuation, leveraging grandfathered licenses despite Greenland's 2021 drilling moratorium. While a recent Sproule ERCE report suggests the basin could hold 9 billion net barrels of recoverable crude, presenting a potentially massive opportunity, analysts view the project as high-risk due to the remote, infrastructure-poor environment, high operational costs, and a history of failed exploration efforts in the region.

Analysis

Greenland Energy, a new Texas-based venture, is poised to become the first publicly traded company to pursue onshore oil drilling in Greenland's Jameson Land Basin, targeting a first well next summer. The company plans to go public via a reverse merger with Pelican Acquisition Corp. at an implied $215 million valuation, leveraging "grandfathered" exploration licenses despite Greenland's 2021 moratorium on new drilling. A recent Sproule ERCE report estimates the basin could hold 9 billion net barrels of recoverable crude, with the first two wells potentially yielding 1.2 to 4 billion barrels, presenting a significant resource opportunity.

However, the project faces substantial challenges, characterized by analysts as high-risk, high-reward. The remote, infrastructure-poor environment, harsh weather conditions, and lack of local labor contribute to high operational costs, exacerbated by the current low oil prices and global glut. Historically, previous exploration efforts in Greenland, including those by ARCO and Cairn Energy, have largely failed, underscoring the inherent difficulties of the region.

Geopolitical and environmental sensitivities further complicate the outlook. The project operates through a loophole in Greenlandic law amidst a moratorium driven by climate change concerns and a rapidly melting ice sheet. While management insists on a small-scale, onshore approach, the political landscape in Greenland, including potential shifts towards embracing oil for independence, remains a critical, evolving factor for this frontier exploration program.

Key Decisions for Investors

• Assess the high-risk, high-reward profile, acknowledging the significant operational, geopolitical, and environmental challenges against the potential for a multi-billion-barrel discovery
• Monitor the successful completion of the SPAC merger and the initial drilling results, as these will be critical de-risking milestones for the project
• Evaluate the long-term viability considering evolving ESG pressures, Greenland's political landscape, and global oil price trends