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.
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.
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.
The shift comes as Continental Resourcs is re-orienting its production portfolio to focus more heavily on oil, CEO Bill Berry told investors during an earnings call.
SandRidge Energy agreed to the sale of its North Park Basin asset in Colorado, which marks the Oklahoma City-based independent’s transformation into a pure-play Midcontinent E&P company.
Casillas Petroleum Resource Partners sued Continental Resources, alleging the Oklahoma shale producer last month backed out of a $200 million oil and gas deal as prices crashed.