U.S. shale oil billionaire Harold Hamm, who once called OPEC a "toothless tiger," is now crediting the 14-nation group for its steps to boost crude prices.
Hamm, founder and CEO of North Dakota oil producer Continental Resources Inc. (NYSE: CLR), acknowledged in a May 3 conference call with investors that OPEC's actions have drained a global crude glut, leading to prices near $68.50 a barrel, roughly 26% higher than when the cuts began.
"It has taken since November 2016, when OPEC entered into production cuts along with Russia, to reduce the crude oil overhang in the world to the current level," Hamm told investors.
RELATED: The Interview: Harold Hamm’s Thoughts On Exports
A joint OPEC and non-OPEC technical panel concluded last month that the 17-month-old plan to cut output by about 1.6 million barrels per day had succeeded in its mission to lower oil inventories in developed nations to a five-year average.
Hamm's change of heart comes ahead of his planned speech to an OPEC meeting next month in Vienna. He appeared to praise OPEC's strategy on May 4.
"Global crude inventories are slowly being systematically drawn down, which should bode well for stabilized oil prices for some time in the future," said Hamm, who chairs the Domestic Energy Producers Alliance (DEPA), a U.S. lobbying group.
A Continental representative did not respond to a request for additional comment on May 4.
U.S. President Donald Trump last month accused OPEC of "artificially" boosting prices, a charge the cartel denies. Hamm was one of the first U.S. executives to back Trump's 2016 presidential campaign and was briefly considered for a U.S. cabinet role.
Hamm, who has in the past used OPEC as a foil for the U.S. shale industry and was a vocal supporter of ending the U.S. crude export ban in 2016, is benefiting from OPEC's restraint.
He has repeatedly urged his U.S. shale peers not to use the crude price rebound to overproduce. Yet last quarter his company's production jumped 35%, the second consecutive quarter of year-over-year production increases.
RELATED: Hamm: EIA Forecasts Costly To Industry
Continental shareholders, including Hamm who owns three-quarters of the company, have benefited from higher prices and the company's production gains. Continental shares are up about 24% since the beginning of 2017.
Recommended Reading
Gulfport Energy to Offer $500MM Senior Notes Due 2029
2024-09-03 - Gulfport Energy Corp. also commenced a tender offer to purchase for cash its 8.0% senior notes due 2026.
ONEOK Offers $7B in Notes to Fund EnLink, Medallion Midstream Deals
2024-09-11 - ONEOK intends to use the proceeds to fund its previously announced acquisition of Global Infrastructure Partners’ interest in midstream companies EnLink and Medallion.
Kosmos to Repay Debt with $500MM Senior Notes Offer
2024-09-11 - Kosmos Energy’s offering will be used to fund a portion of its 7.125% senior notes due 2026, 7.750% senior notes due 2027 and 7.500% senior notes due 2028.
Upstream, Midstream Dividends Declared in the Week of July 8, 2024
2024-07-11 - Here is a selection of upstream and midstream dividends declared in the week of July 8.
Solaris Stock Jumps 40% On $200MM Acquisition of Distributed Power Provider
2024-07-11 - With the acquisition of distributed power provider Mobile Energy Rentals, oilfield services player Solaris sees opportunity to grow in industries outside of the oil patch—data centers, in particular.