ATLANTA - Continental Resources chief executive Harold Hamm, one of America's wealthiest and most influential businessmen, is embroiled in a contentious divorce that could lead to a record financial settlement and threaten his control of America's fastest-growing oil company.
Sue Ann Hamm, Harold Hamm's second wife and a former executive at Continental, filed for divorce on May 19, 2012, Oklahoma court records show.
Documents in the case are sealed. But in a March 7, 2013 filing obtained by Reuters, Sue Ann Hamm alleges that Harold "was having an affair" that she discovered in 2010, prompting her to later file for divorce.
Harold Hamm, 67, is a leading force behind the U.S. oil boom and served as the senior energy adviser to Republican presidential candidate Mitt Romney's campaign. Time magazine named him one of the most influential people in the world, and Forbes listed him last year among the 50 richest Americans. Ranked No. 35, Hamm is worth $11.3 billion, the magazine estimated.
His estranged wife, Sue Ann Hamm, 56, has held key posts at Continental. She has led oil-industry trade groups in Oklahoma, testified to Congress on behalf of Continental and created Continental's oil and gas marketing units. She is no longer with the company, her lawyer said.
The Hamms were married in April 1988 and have two adult children, Jane and Hilary. Harold Hamm has three children from a prior marriage that ended in divorce in 1987.
Whether the Hamms signed a prenuptial agreement is unclear. Legal analysts who reviewed court filings said that without one, the case could lead to a record-breaking financial settlement - one that could exceed the $1.7 billion paid by News Corp. founder and chairman Rupert Murdoch to ex-wife Anna in 1999. One outcome could be a split of "marital property" that may include dividing Harold Hamm's controlling 68 percent stake in Continental, currently worth $11.2 billion.
"I don't know of anything that's ever been this big," said Barbara Atwood, professor emeritus of family law at the University of Arizona. "There's just so much money involved."
Continental was subpoenaed in the case last summer, and it was ordered by the Oklahoma court to hand over documents late last year. Four other companies controlled by Hamm also were subpoenaed.
A review of Continental's Securities and Exchange Commission filings and company statements shows no mention of the divorce proceedings. Although corporate governance scholars said Continental had no legal obligation to disclose the Hamms' divorce proceedings to shareholders, "It's a lawsuit that involves a potential impact on the controlling shareholder," said Charles Elson, director of The Weinberg Center for Corporate Governance at the University of Delaware. "Certainly, it would be relevant to an investor if there is going to be or could be a shift in control."
After receiving inquiries from Reuters, Continental put out a news release acknowledging the divorce case. The fight, the company said, "is not anticipated to have any impact or effect on the company's business or operations."
Hamm couldn't be reached for comment. An attorney for Sue Ann Hamm declined to comment, citing a confidentiality agreement governing the case.
After the pending divorce was confirmed by Hamm on Thursday, Continental shares fell by 2.9 percent to $86.17 in afternoon trading.
Hamm, the 13th child of Oklahoma sharecroppers, started his career at age 20, scrubbing scum out of oil barrels. A few years later, he drilled a 75-barrel-a-day gusher in his home state, helping pay for university classes in geology.
He founded Continental in 1967, two decades before he and the former Sue Ann Arnall were married. She is an economist and a lawyer.
Hamm's biggest breakthrough came in the 1990s, when he helped discover the Bakken field of North Dakota, the largest new U.S. oil prospect since the 1960s. The discovery helped Continental lead a resurgence in U.S. oil production, using the controversial drilling method known as hydraulic fracturing, or fracking. The technique pumps water laden with sand and chemicals underground to release previously unreachable oil reserves.
Today, the Bakken yields nearly 700,000 barrels a day, roughly 10 percent of American output. Continental controls more than 1 million acres in the formation, which stretches from North Dakota to Montana. The firm also owns oil and gas rights in several other states, including Oklahoma.
Continental has said the entire Bakken field - being developed by several companies - may contain 24 billion barrels of oil. That would be enough to meet U.S. oil demand for more than three years. Drilling by Continental alone added 649 million barrels to the company's proved oil reserves between 2008 and 2012.
The firm says it controls drilling leases to more oil-rich Bakken acres than any other company, helping to make Hamm the largest oil baron in the United States.
Hamm directly controls 126.3 million shares, or 68 percent, of Oklahoma City-based Continental and more through family trusts. Those shares alone are worth at least $11.2 billion.
But his stake in Continental could change significantly as a result of a divorce settlement. The firm's massive growth occurred during the marriage. Its share price has surged nearly 500 percent in the five years since an initial public offering in 2007.
Under Oklahoma family law, wealth accrued through the efforts of either spouse during a marriage would typically be subject to "equitable distribution" between the parties.
"A court in Oklahoma may look closely at what each party has contributed," said legal specialist Atwood. "But it sounds to me like both spouses here were working hard in the business."
"Where there are concerns about company control in a settlement, a spouse would usually get paid the value of the shares," she said. "This is going to be really interesting."
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