Long-ago land deal may loom large in Oklahoma divorce

By Joshua Schneyer OKLAHOMA CITY (Reuters) - Continental Resources has become a leading oil driller in North Dakota’s Bakken field, which has added more than 1 million barrels per day to U.S. oil output. But SEC filings and court documents referenced in the divorce of Harold and Sue Ann Hamm show that years before Continental gained its foothold in the Bakken, a stake in the oilfield was acquired by a little-known company known as Jolette Oil. SEC filings show that Jolette’s owner was an entity controlled by Harold and Sue Ann Hamm. Continental later bought Jolette’s Bakken holdings. The chain of ownership suggests that Sue Ann Hamm played a part – at least on paper – in amassing Bakken land leases that would later allow Continental to lead the development of America’s biggest oilfield. If Special Judge Howard Haralson, the court official overseeing the couple's divorce trial, decides Sue Ann's ownership of an interest in Jolette was an active contribution to Continental's future growth, it could mean she would be awarded a larger share of the nearly $17 billion in increased share value at stake in the case. Public records show that Jolette Oil (USA), LLC was formed in Montana in 2002. Jolette’s sole shareholder was Minerals Acquisitions LLC, a company wholly owned by Harold and Sue Ann Hamm, according to a Continental filing from May, 2007. In 2003, years before Bakken oil output surged, Jolette Oil snapped up undeveloped Bakken lands and drilled a first successful well there. In a 2012 interview, Harold Hamm told the North Dakota State Historical Society that he had used Jolette to discreetly acquire up to 300,000 acres of Bakken leases and drill a well. Reuters wasn’t able to independently verify how much acreage Jolette acquired in leases. In August 2005, all of Jolette’s assets were sold to Continental for $4.5 million, which the company described as their “book value.” That transaction ended Sue Ann’s partial ownership of the Bakken assets, since a majority stake in Continental is in Harold’s name alone. Whether Sue Ann consented to Jolette’s asset transfer to Continental is unknown. Neither the company nor her lawyers responded to questions about the deal. In divorce court, Harold’s lawyers have argued that she is entitled to almost none of Continental’s wealth. As Sue Ann Hamm prepared for her divorce, she considered the Jolette Oil transaction important to her case, court documents show. Her lawyers requested documents from Continental related to its purchase of Jolette’s assets. Continental, whose ticker symbol is CLR, reported that it wasn’t able to locate the materials. “CLR states limited information was found and produced in respect to the transaction. After reasonable search and inquiry, CLR has not located a purchase and sale agreement or closing documents,” a court filing says. (Reporting By Joshua Schneyer. Editing by Blake Morrison and Michael Williams)