Harold Hamm is the Chairman and Chief Executive Officer of Continental Resources (ticker: CLR), one of the largest exploration and production companies in North America.
He has also become the nominal leader of United States shale in the faceoff with Saudi Arabia, campaigning against the kingdom’s tactics and repeatedly stressing that an oil price recovery is on the horizon. The CLR magnate backed up his beliefs with his pocketbook – CLR divested its hedges after the Saudi Arabia “market share” announcement and remains unhedged to this day.
Hamm stuck to his guns in separate interviews with Bloomberg and CNBC yesterday, accusing the Saudis of predatory pricing in an attempt to drive its unconventional competitors off the market. “Our industry has displayed a lot of resilience,” he said to CNBC. “This is the last hand the Saudis can play.”
This latest collapse differs from the downturn of the 1980’s, he added, explaining that companies have the ability to extend bank debts and keep the lights on. “We can ride it out whatever it is, but the pen does go both ways,” Hamm said, shifting his attention to his OPEC foe. “They’ve tried to drown us but haven’t been able to do it. It’s been a monumental mistake on their part – a trillion dollar mistake.”
That mistake is evident with the recent moves within Saudi, including reducing subsidy programs and discussions of a possible IPO of their government-run oil company. Hamm’s take: “It’s obviously not working for them. I think it goes against their culture to borrow money, and we’ve already seen them go to the market for bonds. They have to sustain a country. We’re sustaining companies here.”
Those companies received a boost with the recent lifting of the export ban. “Lifting the export ban put us on a level playing field,” said the CLR Chairman. “We’re no longer captive to US refiners. And now we’ll be a market of choice in the future.”
Of course, prices were scraping above the $30/barrel marker when Hamm was speaking, but the shale prognosticator remained optimistic in a recovery: “The lower it goes, the shorter time it will be there – that’s how the market works.”
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