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Harold Hamm

Hamm is certain the export ban will be lifted by October just as OPEC reduces output

The global oil market is in for some big changes this fall if oil tycoon Harold Hamm’s crystal ball proves accurate.

During a quarterly update conference call on Aug. 6, the Continental Resources Chairman and Chief Executive Officer predicted an “energy paradigm shift will have profound long-term consequences worldwide starting with the U.S. crude export ban being lifted so America can finally compete freely in world energy markets.”

He foresees the world demand growth and low oil prices rebalancing eventually; meanwhile, recent world events like the Iranian nuclear agreement and the Organization of Petroleum Exporting Countries (OPEC) actions have shifted momentum to an all-time high.

“OPEC has announced plans to reduce production beginning in September and we think that may be the first of many,” Hamm said.

OPEC output dropped in July by 362,000 barrels according to a Bloomberg survey, but it still continues to produce two million barrels per day above its quota, analysts say. U.S. oil production is also dipping. On Aug. 5, the Energy Information Administration showed that U.S. crude inventory fell 4.41 million barrels which is three times more than expected.

Hamm said oil exports “make too much sense economically, especially as this administration moves to lift restrictions on Iranian oil exports.” He added that lifting the ban has bipartisan support in by both the House and Senate. Hamm was confident in his forward-looking statements, but he exhibited the same certainty in November when Continental chose to monetize nearly all of its oil contracts through 2016. Back then, Hamm said he felt oil prices were at “the bottom rung … and we’ll see them recover pretty drastically, pretty quick” only to watch prices fall even further over the past eight months.

Bakken production to drop off

Total U.S. production is expected to further decline by the end of 2015 and into 2016 if oil prices remain low, and Continental announced it would cut its rig count in the Bakken by another 20 percent in that environment. It is currently running 10 of its 25 total rigs within the region. However, Continental’s second quarter production was up 10 percent over the first quarter and continuing to increase. The company said it is “pretty impressive” since it had slashed rig count in half at the end of 2014. With greater efficiencies and enhanced completions in the Bakken, Continental is targeting 800,000 barrels of oil equivalent per well of estimated oil recovery this year compared to the 550,000 barrels it averaged in 2014. This production boost has helped cut development costs in half.

“For every dollar spent on Bakken wells in 2015, we’re getting 80 percent more reserves than in 2014,” said Jack Stark, president and COO.

However, Continental’s Bakken production will begin to taper off, the company said, as it enjoys higher rates of return and more opportunities to hold acreage by production within its projects in Oklahoma.  Hamm said the company will wait for the market to rebalance before it focuses on growth in the Bakken again.

“These reserves and resource plays are not going anywhere,” Hamm said. “We all have a long future.”

48 comments

  1. Im still trying to fnd out where it says Opec is cutting production.

  2. Hamm is full of hot air. Where in the world is he getting his information about OPEC reducing output????? TOTAL B.S.! This time last year he was talking about “…how there wasn’t a “glut” of oil…”. He’s failing to consider the “Drilled but not Complete” (DBNC) wells which are estimated at 3800. All they need is fracking to get that oil/gas into the supply chain. Combine the US DBNC wells with the Iranian 500k bbl added by November of 2015 and you are looking at $30-$35 a bbl oil WTI at LEAST until 2Q16!

  3. They are cutting but very minimaly

  4. Hamm truly thinks the US can export into a glutted market and match OPEC and Iran’s price — I don’t think so
    Did web search, several and it seems the only one Saudi told is Hamm

    • No, Thad, it is YOU who doesn’t understand although I have explained it to you OVER and OVER. Lifting the export ban will NOT increase world crude supply, which will remain 94 million bpd. Even you have said that for every barrel that the US exports, one more barrel will be imported. That means net change in world supply = ZERO.

    • Pls explain why the US should export just so they can import more– Yes it would increase the profits of the US oil companies BUT it would be at the expense of the US consumer
      Will the US export equal or exceed US inports? NO.

    • No, Thad, consumer prices will go down because the US will import more cheap, heavy crude while exporting higher priced light crude. When raw material costs decline, so do product prices.

    • Then the coke will be given away to places like China or Mexico. Like I said, the crude cost savings are so great that the coke could be given away and it would still be a great deal.

    • LOL Canada can not produce tar crude that cheap–
      Canada is having the same if not worse recession in drlg and producing tar crude

    • True. Numerous new mining projects have been canceled. But that’s analogous to stacked rigs. The existing production continues at a high level.

    • Interesting. The Web must be the holy bible.

    • Older hand would have seen it coming younger hands having no history to look back on did not.

  5. Saudi is not broke– rather than cash investment borrow against —

  6. Here’s to hoping hubby’s unemployment runs out in October so it would b nice if he goes back to work

  7. No, the Saudis are not broke, but they are hemorrhaging cash. They have a sovereign wealth fund of $672 billion that’s falling by $12 billion per month. At that rate, it will be gone in less than five years. “http://www.telegraph.co.uk/finance/oilprices/11768136/Saudi-Arabia-may-go-broke-before-the-US-oil-industry-buckles.html”

  8. Saudis would rather take 50 a barrel than let Iran get any more money.

  9. Roll up ur sleeping bags ND. Time to move on.

  10. I have researched this online and didn’t see anything. I did however find an article about the Saudis pulling back 300k barrels last month

  11. I know what’s about to happen. 2017 will be an amazing year.

  12. I would say Hamms in the know.

  13. Speculation? Something is going down with the prices of gasoline and diesel fuel on the decline prior to harvest.

  14. The Saudis won’t cut production and give up hard won market share to the Iranians . As far as crude exports, congress might end the ban but will Obama sign off? Doubtful as well

  15. And we don’t have our own socialists, Natalie Finvold

  16. Let’s give our oil away when its $40 a barrel, and when the well runs dry, we can import again! Dumbest thing ever. He has Heitkamp bought and paid for.

  17. Saudi Arabia makes money at 35 a barrel . Doesn’t affect them at all . We make money at 35 a barrel as well , just takes longer to pay off drilling and completion costs . In no way , shape or form , is anyone losing money on cheap oil . You just aren’t making the money you projected .

  18. Lok at it this way , you lose money when you buy high and sell cheap , such as stocks .

  19. With oil prices way down we pay way more for gas and diesel compared too when the prices were high ! It is time to stop all the huge subsidies the Government gives the oil companies now when they make such a huge profit !

  20. NOBODY has a crystal ball on this, but what we know is that OPEC gets together twice a year for basically a photo op. Everything else they say/do is B.S. Production “quota”. HA! No matter what they say now, or September, or if they convene a special meeting, it doesn’t matter. Saudi will do what they want. Libya will do what they want. Now, Iran will do what it wants. It’s a Middle Eastern photo op of a dying ember. And they’re shooting themselves in the foot economically. We hope Harold is right this time, and just one of the two would be nice. We’d give more weight to crude export ban being lifted making a real difference because at least that wouldn’t be an empty soundbite.

  21. Great opportunity for United States. This is Good News!

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