Continental Resources Inc. (CLR) - Get Report declared force majeure on at least one of its oil-delivery contracts after crude futures on Monday plunged to negative territory for the first time in history, according to a news report.
Shares of the Oklahoma City company at last check were 4.3% higher at $13.80.
Continental said that it could not have predicted the unprecedented retreat in energy prices caused by the coronavirus pandemic and that selling oil at a negative price would be futile, Bloomberg reported.
A representative for the company said it continued to honor its commitments and is working closely with refiners.
"Certainly this pandemic has brought about conditions under which force majeure applies," the company said in a statement.
Continental Resources has halted most of its production in North Dakota and notified some customers it would not supply crude after prices tumbled into negative territory, according to news reports.
The company, the largest oil producer in North Dakota, stopped all drilling and shut in most of its wells in the state's Bakken shale field, Reuters reported, citing three people familiar with production in North Dakota.
Global oil prices returned to the red Friday and look set for their eighth weekly loss in nine. This as investors looked to the market's historic oversupply, and the anticipated collapse in global demand, following perhaps the most volatile week for crude futures trading in at least 30 years.
Shut-ins have been particularly swift in North Dakota, which produced more than 1.4 million barrels per day of oil in 2019, making it the second-largest U.S. producing state after Texas.
State officials say production has already dropped by about 300,000 bpd. This month, North Dakota-based Whiting Petroleum (WLL) - Get Report became the first major shale producer to file under the bankruptcy laws.
Earlier this week, Harold Hamm, founder and executive chairman of Continental Resources, requested an investigation of crude oil futures for possible market manipulation or system failure.