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Wednesday, March 18, 2015

Despite Huge Loss Due to Oil Prices, Fracking King Harold Hamm is Optimistic

From Forbes:
Fracking pioneer Harold Hamm has lost $7 billion since the oil market imploded. But where others see disaster, he sees a vast economic opportunity—for himself, and for America. 
For someone who has lost nearly half his fortune in six months, Harold Hamm is pretty chipper when we meet up for dinner on a warm January night in Houston. He’s calm, relaxed, fit. He’s been walking a lot, tracking his steps with a pedometer, eating right, and enjoying his hometown Oklahoma City Thunder. He’s even got a lady friend who he likes to spend time with, which is sort of surprising, considering he recently wrote his ex-wife Sue Ann a $975 million check to satisfy a court ruling in their highly public, seemingly endless divorce trial. “I’m just glad that’s in my rearview mirror,” he says with half a smile. 
As much as that divorce cost, Hamm has lost a lot more to the plunge in oil prices. When Saudi Arabia elected to keep their taps wide open last November rather than ease back on production amid a global glut, it helped drive oil prices down 50% in less than six months. That has triggered some 50,000 oil patch layoffs, the mothballing of more than 400 drilling rigs, and seemingly more pain to come as traders are running out of storage tanks to squirrel away their crude. 
Yet, as we sit down to enjoy a spread of oysters, fish and a good bottle of wine at Houston’s Triniti Restaurant, it doesn’t seem so bad. The downturn in oil prices, he insists, is painful, but temporary. He still has his 70% stake inContinental (untouched in the divorce), a $2 billion personal war chest, and a million-plus acres of prime drilling land. And rather than fear the future, he sees the selloff as a way of putting himself and other American drillers back at the center of the global oil market—and maybe even to keep them there for good. ”Once you get by about a year here it’s going to open back up again,” Hamm says. “Worldwide demand is going to catch up with supply. And this thing solves itself. We could be sitting here a year from now talking about an undersupply. It’s very short term. Just doesn’t feel that way.”
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