* Harold Hamm's wife, Sue Ann Hamm, sues for divorce and
subpoenas financial records
* Hamm's interest in Continental Resources worth at least
* Hamm is biggest U.S. owner of oil, dominates Bakken field
* Sue Ann Hamm was a senior Continental executive, helped
* Experts: Settlement could top Murdoch's record $1.7
By Brian Grow and Joshua Schneyer
ATLANTA/NEW YORK, March 21 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
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
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."
Spokeswoman Kristin Miskovsky didn't respond to requests for
An attorney for Sue Ann Hamm declined to comment, citing a
confidentiality agreement governing the case.
Continental shares were trading down 2.1 percent at $86.86
by 3:16 p.m. EDT. They fell as low as $85.85 after the divorce
proceedings were acknowledged by Hamm.
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
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.
Continental shares have risen 21 percent this year and closed on
March 20 at $89.15, down 0.6 percent.
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
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."
Court records show that Sue Ann Hamm petitioned for divorce
in May 2012. But earlier Oklahoma court records suggest the
Hamms' relationship has been rocky.
In 1998, Harold Hamm filed for divorce and demanded that Sue
Ann undergo a psychological evaluation. He later withdrew the
divorce petition and the case file was ordered destroyed this
year, on Feb. 13, according to Oklahoma court records. What
prompted the destruction of the file is unclear. In 2005, Sue
Ann Hamm subsequently filed for divorce; that case also was
Her 2005 divorce filing is now a key issue in the Hamms'
divorce battle, according to a court document reviewed by
Reuters. Indeed, it could play a pivotal role in determining how
property - including interest in Continental - will be divided,
legal analysts said.
According to Harold Hamm, the couple "actually separated in
the fall of 2005 and have lived separate lives ever since," the
court document says.
But Sue Ann Hamm's attorneys counter that the Hamms
"continued to reside together (although they do own four homes),
travel together, attend public functions together, raise their
children together, file joint tax returns, and work together."
In May 2012, for instance, Harold and Sue Ann Hamm jointly
hosted a fundraiser for Republican presidential candidate Romney
at their $3 million mansion in Nichols Hills, Oklahoma,
according to photos and media reports. The event raised more
than $2 million for the Romney campaign.
Last September, Reuters reported that Harold Hamm had made
political contributions that exceeded federal legal limits by as
much as 41 percent during the 2011-2012 election period.
Continental said at the time that the donations were made from
an account held jointly by Harold and Sue Ann Hamm and were
intended to be split between Hamm and his wife, which would have
kept the donations within legal limits.
In 2011, Harold and Sue Ann Hamm also jointly gave $20
million to a diabetes center at the University of Oklahoma named
for Harold Hamm, who has Type II diabetes. The same year, the
couple signed up for Warren Buffett and Bill Gates' Giving
Pledge initiative, indicating their intention to dedicate most
of their wealth to philanthropy.
In a court filing two weeks ago, Sue Ann Hamm's attorneys
say the Hamms agreed "to engage in marriage counseling sessions
in an effort to save their marriage" in November 2010, after Sue
Ann Hamm concluded that her husband had been unfaithful.
Whether the Hamms separated in 2005 or more recently is
crucial as the court determines how Harold Hamm's assets will be
divided, legal analysts said. Under Oklahoma family law, the
increase in the value of an asset during marriage is considered
part of the total pool of "marital property."
"In general, if you own property prior to the marriage and
you bring it to the marriage, it is separate," said Marianne
Blair, a professor of family law at the University of Tulsa.
"But that separate property can increase in value. To the extent
the increase was due to marital efforts or marital funds," it
can be divided by the court.
Hamm divorced his first wife, Judith Ann, in 1987, according
to Oklahoma court records. A document filed by Sue Ann Hamm's
attorneys in the current case shows they received access to
marital records in the prior divorce in March.
Attorneys for both Hamms will present evidence about when
the couple separated and the resulting "date of valuation of
(the) business" on May 20, according to the court docket.
What's decided could help determine whether their divorce
settlement rivals the largest reported divorce settlement to
date - the $1.7 billion paid by Murdoch to his ex-wife Anna in
1999. That settlement, in California, directly affected
shareholders of News Corp. because it awarded Murdoch's three
eldest children stakes in the voting shares of the company.
Reports of the Murdoch divorce sent News Corp. shares lower.
Daniel Jaffe, a family law attorney in Beverly Hills,
California who represented Anna Murdoch, declined to discuss the
Murdoch case. But after reviewing the court docket and document
obtained by Reuters in the Hamm case, he said Sue Ann Hamm's
decades of work for Continental was unique compared with most
"She has a leg up because she worked for the company and she
can claim that a portion of her efforts went into making the
company what it is today," Jaffe said. "She was married to him
when the value of the company went up. She has got to be looking
for a couple of billion dollars."