Continental Resources CEO: We Will See U.S. Oil Production Down Much As 700,000 Barrels In A Year

The fall in crude oil prices has impacted oil and gas industry significantly. Harold Hamm, Continental Resources, Inc. CLR CEO, was on CNBC Tuesday to discuss the drastic cuts that the oil industry has had to witness in the last few months and his outlook for oil production.

Not An Easy Thing

“In the last 4 months, 1,000 rigs have been laid down and we have got 105,000 people out of work in this industry,” Hamm said. “So, it can shut down quickly, but it takes 3 to 4 times as long to bring back on…It’s not a easy thing to get all the equipment back. [Conduit], contracts, permits well permits, everything in this industry takes a good while. So, it’s about a 6 month lag, if you will.”

Impact On Production

Hamm was asked where he sees oil and natural gas prices in next 6 to 18 months. Instead of giving a specific answer on pricing, he spoke about how the production will be impacted, saying, “Well, right now as we predicted you shut down and pull back and that’s the only thing we could do, we have to react to price and so we pullback on the work we did to conserve cash.”

“I am talking about the industry, I am not talking about Continental as that Continental pullback as well, but everybody had to conserve cash so you shut down and once that happens then supplies starts to wane. It takes 2-3 months, but we are seeing that now.”

“So, already peaked out and next few months it’s going to fall. We expect in the first year just from 3 [primary plies] that in the U.S. that we will see production down much as 700,000 barrels in a year,” Hamm concluded.