The CEO of Oklahoma City-based petroleum producer Continental Resources is so certain oil prices will rise again that the company announced it has eliminated its oil hedges for all of 2015 and 2016.
Harold G. Hamm, whose company is the biggest oil producer in North Dakota’s Bakken oil-shale play, is “basically betting the company on the belief that oil prices won’t sink much more than the 25 percent decline they’ve experienced since June,” Forbes reported.
In its press release, which , Continental said that by eliminating its outstanding hedges, it had boosted its fourth-quarter profit by $433 million.
In the release, Hamm said:
“We view the recent downdraft in oil prices as unsustainable given the lack of fundamental change in supply and demand. Accordingly, we have elected to monetize nearly all of our outstanding oil hedges, allowing us to fully participate in what we anticipate will be an oil price recovery. While awaiting this recovery, we have elected to maintain our current level of activity and plan to defer adding rigs in 2015.”