North Dakota's largest oil company butts heads with state over emissions regulations (copy)

In this 2018 file photo, Continental Resources CEO Harold Hamm, left, speaks on the global market impact of American Energy Renaissance with Edward Lewis Moore of Citigroup Inc. at the Williston Basin Petroleum Conference.

Harold Hamm has placed a $78.1 million bet on the company he founded 53 years ago. The oil tycoon purchased 4.74 million shares of Continental Resources common stock between June 22 and June 25, paying on average, $16.62 for each share.

“I firmly believe Continental’s current share price reflects an uncommon value as the global pandemic has negatively impacted worldwide crude oil demand,” Hamm said in a media release about the purchase. “Recent purchases underscore my confidence in the Company’s continued operational excellence and strong financial performance. Continental is poised to deliver significant shareholder value for many years to come, and I believe there is no management team more aligned with shareholders than Continental.”

Hamm was CEO of Continental Resources up until the end of 2019, when he stepped into the role of its Executive Director instead. William Berry took over as the company’s CEO in January.

This is not the first time that Hamm has purchased Continental shares. Last year in June, he paid $1.5 million for 38,000 shares of the company, at an average price of $38.76.

Nor is it likely to be the last. Hamm also filed a 10b5-1 plan under the Securities Exchange Act of 1934, which outlines his intention to acquire more shares of the company’s common stock when timing, volume, and price limitations allow.

Hamm so far owns 289.7 million shares of Continental, which gives him 80 percent ownership of the company.

Last year, long before the coronavirus pandemic, Hamm had said that oil markets were broken, and announced that Continental would be buying up to $1 billion of its own shares.

The buyback wasn’t an attempt to take the company private, he said in earnings calls at the time. Markets were simply undervaluing the company. Continental had been worth between $26 to $27 billion in October of 2018, but dropped by more than half to $12.7 billion last year — even though its fundamentals had not dramatically changed.

In light of the COVID-19 pandemic, the company suspended that buy-back earlier this year, as well as the dividend it had announced alongside the buyback in November of last year.

Continental also curtailed 70 percent of its oil production for May and June. In its latest guidance, the company said it expects to resume 50 percent of its production in July.

June production is estimated to range between 150,000 to 160,000 barrels of oil per day and July production between 225,000 to 250,000 barrels of oil per day, according to that guidance. For the second quarter, production is expected to land between 200,000 to 205,000 barrels of oil per day.

“Continental elected to defer production in order to preserve shareholder value over volumes, and maximize the economics of the barrels we produce,” Berry said. “As oil prices have stabilized and begun to recover, we have partially resumed production. As improved supply and demand fundamentals benefit oil prices, we expect to continue restoring production in subsequent months.”

Continental is one of the top 10 independent oil producers in the U.S., and is the Bakken’s No. 1 oil producer. In addition to its holdings in North Dakota and Montana, the company also has assets in Oklahoma in the SCOOP and STACK plays.

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