Potential Gold in the Ice: The High-Stakes Gamble of Pelican and Greenland Exploration

The Pelican Acquisition Corp (NASDAQ: PELI) has thrown its hat into the icy waters of frontier energy exploration with a non-binding letter of intent (LOI) to acquire Greenland Exploration Limited (GEL). The $215 million deal targets one of the last great unexplored hydrocarbon basins—the Jameson Land Basin in Greenland—while riding a wave of U.S. geopolitical interest in the Arctic. For investors, this is a classic high-risk/high-reward scenario: a bet on both the untapped potential of the basin and the strategic calculus of energy security in a volatile world.

The Deal's Structure: A SPAC's Gamble

Pelican, a special purpose acquisition company (SPAC), has agreed to acquire GEL via a share-for-share exchange, valuing GEL at $215 million. Crucially, Pelican's sponsors will surrender their founder shares post-transaction, retaining only 25% of the IPO's issued shares—a move that aligns their interests with public shareholders. Meanwhile, March GL Company, GEL's partner, could receive equity based on a $200 million valuation if the deal closes.

The transaction hinges on a 30-day exclusivity period, during which Pelican must finalize due diligence, regulatory approvals, and definitive agreements. The stakes are high: the LOI is non-binding, and the project's success depends on drilling results in a region where no commercial production has yet been established.

The Resource Play: Arctic Oil and U.S. Strategy

GEL's claim to fame is its stake in the Jameson Land Basin, where March GL holds rights to 2 million acres. The U.S. Geological Survey estimates the basin contains 31.4 billion barrels of oil equivalent—a massive prize in an era of declining conventional reserves. But the real kicker is Greenland's geopolitical significance. The U.S. has long considered Greenland a strategic bulwark against Russian influence in the Arctic, and energy independence from volatile regions like the Middle East adds to the project's appeal.

The U.S. government's support could grease regulatory wheels, though environmental and logistical hurdles loom large. March GL, backed by major oil firms like ARCO, has already invested $200 million in the basin and plans to fund 100% of costs for two exploration wells. If those wells hit, the combined entity could secure a 70% stake in the area—a potential game-changer for Pelican's valuation.

Risks: Icebergs Ahead

The risks here are as vast as the Arctic itself. First, the basin is frontier territory: drilling in Greenland's harsh climate is technically challenging and costly. Even if oil is found, building infrastructure—pipelines, refineries, ports—in a remote, ice-bound region could prove prohibitively expensive.

Second, the geopolitical calculus is a double-edged sword. While U.S. support might aid permits, any misstep could trigger environmental backlash. Greenland's self-governance and Denmark's oversight add layers of diplomatic complexity.

Third, the transaction's success depends on oil prices. With WTI fluctuating between $60 and $80 per barrel over the past year, the economics of this project—priced at a $215 million valuation—could evaporate if prices dip.

Investment Implications: A Roll of the Dice

For investors, this deal is a speculative play on two variables: the Jameson Land Basin's hydrocarbon bounty and geopolitical tailwinds. The separation of Pelican's IPO units into tradable shares and rights (PELIR) as of June 12, 2025, may improve liquidity, but it doesn't reduce the core risks.

The upside is enormous: if the wells succeed and geopolitical support materializes, GEL's valuation could soar. But the odds of failure are high. Frontier exploration routinely underperforms expectations, and the regulatory and operational challenges here are formidable.

Investment advice: This is a position for aggressive investors with a high risk tolerance. Those willing to bet on a “swing-for-the-fences” energy play should allocate no more than 1-2% of their portfolio to PELI. Cautious investors should wait for drilling results and clearer regulatory signals.

Conclusion: The Arctic's Wild West

The Pelican-Greenland deal epitomizes the new energy frontier—a mix of audacity, geopolitics, and sheer geological hope. For those who believe in the Arctic's untapped potential and the U.S. government's backing, this is a once-in-a-decade opportunity. For others, it's a reminder that in the Arctic, as in finance, not all icebergs are visible above the surface.