Oklahoma billionaire Harold Hamm was ordered to pay $972 million of a $16.1 billion oil industry fortune to his wife, while keeping the bulk of his 68 percent stake in Continental Resources Inc. following a contentious divorce trial.
The decision was largely a victory for Hamm, who was allowed to retain control of the company in part because witnesses identified him as the driving force behind Continental, with one calling him the “captain of the ship.” Hamm, the company’s chairman, also was ordered to pay much less than what could have been awarded to his wife.
Hamm, 68, who helped pioneer shale exploration in the Bakken oil basin of North Dakota and Montana, served as an energy adviser to 2012 Republican presidential candidate Mitt Romney. He is the chairman and largest shareholder of Continental, the biggest leaseholder in the Bakken, and the region’s top oil producer.
“While a billion dollars is nothing to sneeze at, Harold Hamm and his attorneys left the courtroom very well aware that they had scored a very huge victory,” Seymour J. Reisman, a divorce lawyer with the New York firm of Reisman, Peirez, Reisman and Capobianco, said in an e-mail.
A billionaire’s spouse of several decades should’ve expected to receive at least 25 percent to 30 percent of the marital assets, which “would’ve have amounted to between $4.25 billion and $5.1 billion. Mrs. Hamm received under four percent,” he said.
“The company was his before the marriage,” said Michael Burrage, a lawyer for Hamm, who added that Hamm won’t have to liquidate any holdings. “He can handle paying what the court has ordered him to pay, and none of this will affect Continental.”
Sue Ann Hamm sued for divorce in 2012, and the couple stipulated to a “state of mutual irreconcilable incompatibility” the following year. However, they required a 10-week trial in Oklahoma City to sort out their financial differences.
After a 26-year marriage, she will receive a lump sum payment of $323 million by the end of this year, followed by $7 million a month until the balance she’s owed under the decree is paid, according to papers signed yesterday by Oklahoma state judge Howard Haralson. Along with cash, Sue Ann Hamm was awarded the couple’s $4.7 million home in Nichols Hills, Oklahoma, their $15 million ranch in California’s Carmel Valley and all of its livestock except a pair of horses named “Star” and “Uno.”
Harold Hamm was ordered to move the horses within three days.
He got the couple’s $750,000 home in Branson, Missouri, a $10 million jet and -– by the judge’s calculation -- $1.9 billion more of the marital assets than his wife, according to court papers.
“In the last minutes of the trial,” Hamm “requested that he be awarded certain family pictures, a few books, guns, shotguns, some pictures, geode in quartz display and his hand tools,” according to the divorce papers.
The court agreed to everything except the rock display, which was given to his wife, an attorney who worked for a time in Continental’s gas trading and oil marketing departments.
“Because of how much money we have at stake, I bet we’re looking at an appeal,” said M. Shane Henry, a partner with the family law firm Fry & Elder in Tulsa, Oklahoma, who wasn’t involved with the case. “It could have possibly been divided more favorably toward her, and when you’re talking about several hundred million dollars, even close to a billion dollars, I would say the expense to attempt an appeal would be justified.”
Ron Barber a lawyer for Hamm’s wife, said he is considering whether to appeal. While noting such challenges are uncommon, he acknowledged that “there’s been a lot of speculation about her recovery being in the multiple billions.”
The youngest of 13 children born to poor Oklahoma sharecroppers, Hamm got into the oil business at age 18, taking over payments on a used tank truck and borrowing $1,000 to create a one-man oilfield services business in rural Ringwood, Oklahoma.
Four years later, in 1967, he incorporated Shelly Dean Oil and started wildcatting. Shelly Dean was the start of what is now Continental Resources, one of the largest independent exploration and production oil firms in the U.S., and the source of Hamm’s multibillion-dollar fortune.
An early proponent of the Bakken field, Hamm’s company pumped 50 million barrels in 2013, and increased its proved reserves to 1.1 billion barrels, quadruple the amount it reported three years earlier. The Oklahoma City-based company also operates in Texas and Louisiana.
Hamm is the 28th-richest American. He helped develop the use of sideways drilling and hydraulic fracturing. Continental is now the biggest Bakken operator, with a 1.2 million acre leasehold that exceeds even that of Exxon Mobil Corp., the world’s largest energy producer by market value.
In the early years of their marriage, the couple frequently traveled together. She accompanied him on speaking engagements and “on weekends and other times, the parties would take family drives around western Oklahoma to look at well sites, yards and otherwise investigate oil and gas production,” according to the divorce papers.
Haralson awarded the value of all of the couple’s Continental stock to Hamm, whom witnesses described during the trial as primarily responsible for Continental’s “phenomenal growth.”
Hamm also received the bulk of the couple’s other investments in the property settlement, including all of his Continental 401(K). He offered his wife half of the almost $500,000 value of the account; she told him to keep it, according to court papers.
Continental shares were trading at $71.31 the day she filed for divorce and traded as high as $150.00 a share during the trial, according to the court papers. On the last day of the trial, Continental shares traded at $58.06 after a 2-for-1 split. The judge said he used $116.12 as the share price to calculate the value of Hamm’s stock.
In dividing up other investments, Hamm told the judge it “wouldn’t hurt his feelings” to give his $3 million stake in Orbit Gas Transmission to his wife. The judge decided a third party also owned part and gave all the shares to Hamm.
The case is Hamm v. Hamm, FD-2012-2048, District Court of Oklahoma County, Oklahoma (Oklahoma City).