Hamm says privately held drillers have more freedom to ramp up oil output

David Wethe and Alix Steel 12/16/2021

HOUSTON (Bloomberg) --Harold Hamm, who took Continental Resources Inc. public 14 years ago, says right now his closely held competitors can do what he simply can’t: increase oil production to meet rising demand.

The Oklahoma billionaire is acknowledging what has become a defining characteristic of the U.S. oil industry as it recovers from the worst effects of the pandemic. While publicly traded companies are pressured by investors to keep production flat and prioritize dividends and stock buybacks, private operators are adding more drill rigs across the country, responding to tight supplies and this year’s rally in crude prices.

Hamm, who owns 81% of Continental, said reverting to private ownership is appealing, if and when investor interest wanes.

“You have to do what the market wants when you’re public,” Hamm said during a Bloomberg TV interview on Thursday. “These privates, they have more freedom than we do.”

It’s not the first time Hamm has discussed the idea of taking the entire company back. In 2019, when oil stocks were trading at a 40% discount to five years previously, he told analysts and investors that he saw little benefit to remaining publicly traded.

Hamm, 76, has been expanding his grip on Continental through stock purchases while the company itself resumed a $1 billion buyback program. Since late May, Hamm has bought 1.1 million shares of Continental, according to data compiled by Bloomberg.

Shares of Continental, which have 8 buy ratings from analysts, 18 holds and 4 sells, rose 2.6% at 1:03 p.m. in New York.

The confidante of former President Donald Trump blamed the current policies of President Joe Biden for the 11-month swing from “an era of abundance to an era of scarcity.” He said the U.S. oil industry wants to start a dialogue with the current administration.

“They can’t ignore this domestic industry and keep calling OPEC and keep calling Russia for supplies,” Hamm said Thursday. “Let’s get back to helping Americans and come back to where we need to be with energy.”

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