Wednesday, July 30, 2008

Oil & Natural Gas Prices - Opinion from CLR CEO - Haynesville, Marcellus, Bakken Shale

Yesterday in Continental Resources ( CLR ) 2nd quarter conference call, The CEO, Harold Hamm gave his opinion on the Future of Oil and Natural Gas prices for the near future and 2009. He also commented on production of Natural Gas from Marcellus and Haynesville Shale. I found this interesting and hope my readers do too.

Eric Hagen - Merrill Lynch
Great. Then last one was just for Harold. Any comment on commodity prices, oil in particular. And also on the idea that the market will be swamped with gas, next year from the shale plays Marcellus Hayneville?

Harold G. Hamm - Chairman and Chief Executive Officer
You see some of these plays are atop of that gas first of all. You'll see some of these plays that come on somewhat slower. And Marcellus is going to be one of those that takes I think quite a bit slower then some of the others, basically it's due to infrastructure. Lot of needs out there for better infrastructure pipes and rigs and services and you name it. So I think that will... that's going to come up slower than some of the rest of them. And Hayneville we are seeing some opposite rates going out there. But even that play is going to, probably heat up a lot slower as far as supply coming to market. That's going to have its own challenges, pressure gas, tectonic area, under pressure systems and et cetera. So I wouldn't think next year is going to be about of gas on the market. That would count on that at all.

As far as crude oil; we've just not seen anything change in fundamentals. We've seen demand slacken a little bit in the U.S. but rest of world we've not seen that slackening happen. So the fundamentals of being short with little bit transportation fuels remains. So as far as crude oil gain offer cheap in the next foreseeable future, I'd still see that happening.

I think as we go forward its going to become even more critical in 2009 and beyond. So we... I'd kind of stay at settling down to a range maybe $120 to $135 range. And that's good, I don't think the country is ready to $200 oil. And I think it would be devastating to see that. So obviously, we have to change to natural gas as transportation fuel in the future. But there are things, and we will have adequate supply to do that. And the country needs to make that move going forward.