Going out on a limb, North Dakota oil titan scraps hedges
By Ernest Scheyder
WILLISTON N.D. (Reuters) - Harold Hamm, chief executive of Continental Resources Inc (CLR.N: Quote), stunned a bearish crude market by scrapping all of the North Dakota energy producer's oil hedges, betting that prices will recover soon after sinking 25 percent in recent months.
With the move, Hamm, who last month called OPEC a "toothless tiger," appears to be heading into a price war with Saudi Arabia, the world's biggest oil exporter, without any protection from a prolonged downturn that some analysts say is looming.
Saudi Arabia and 14 other OPEC members have shown no sign yet of moving to cut production, a step that would lift prices.
The conventional wisdom is that the country, frustrated by a global supply glut caused by soaring United States output, is prepared to let prices fall to squeeze U.S. shale oil producers out of the market.
But Hamm, striking a defiant tone, told investors Thursday the U.S. shale boom won't end any time soon.
"We see OPEC worried about that and want to slow down what we're doing," he said.
Indeed, North Dakota considers OPEC its "chief competitor," Lynn Helms, head of the state's Department of Mineral Resources, said last month.