They say it’s better to be lucky than good, and that’s true for Oklahoma oilman Harold Hamm. His $20 billion fortune is at risk in a divorce trial whose outcome could turn on whether the founder and chief executive of Continental Resources (CLR) was the beneficiary of dumb luck or an entrepreneur who amassed his wealth through smarts, sweat, and a knack for finding crude.
Having spent time with Hamm, I’ll go out on a limb and say he’s definitely both.
The distinction is crucial in the divorce trial of the 68-year-old tycoon and his wife of 26 years, Sue Ann. To determine how much of Hamm’s property is purely his or part of a marital pot and therefore subject to divvying up, Oklahoma divorce law calls for a delineation between “active” and “passive” appreciation of assets.
Boiled down, it means Sue Ann has a weaker claim on wealth her husband accumulated during their marriage due to forces beyond his control, such as the price of crude. But she could walk away with one of the biggest divorce settlements ever if evidence shows Hamm prospered because he’s damn good at what he does.
Oklahoma County Judge Howard Haralson faces the unenviable task of measuring one man’s success, down to the penny. Was it 31 percent guile and the rest good breaks? Or the reverse? Or what? Existentialism for billionaires.
With an impish grin and bright blue eyes, Hamm can resemble a leprechaun. When I interviewed him in North Dakota and Oklahoma almost three years ago, he was happy to credit his upbringing, family, mentors, and employees for his achievements. He told me, unsurprisingly, that he was a lucky man. Drilling 17 straight dry holes, as Hamm once did, can make a wildcatter realize he isn’t as wily as he thought.
Like most companies, though, Continental portrayed its CEO as a gutsy genius—for good reason. Hamm didn’t graduate from college but he took the geology, chemistry, and other courses he thought would best help him find oil. He snapped up leases in North Dakota’s rich Bakken formation before just about anybody else because he presciently envisioned technology helping him extract hard-to-reach crude at a profit. But the Bakken bet could’ve been a bust if oil prices hadn’t soared, supplying the money for costly fracking.
Hamm’s divorce trial, which has been largely closed to the public, is expected to continue for weeks. The outcome could have implications not only for Hamm but also for Continental if he has to sell much of his 68 percent stake in the company. He’s said he doesn’t expect the divorce to have a material impact. Continental’s stock price dropped after the trial started on Aug. 4, but has since rebounded. Maybe Wall Street thinks Hamm is a lucky guy, too.