James MacPherson, Published May 26 2009
Billionaire oilman has ‘will to drill’
“I learn a lot when I’m out here,” Hamm said on a recent trip, eating cold french fries as he drove past some of the more than 600 wells he’s punched in North Dakota’s prairie.
“It feels pretty good here. We have found oil and we’ve been successful,” he said.
Hamm, 63, the chairman and chief executive officer of Continental Resources Inc., an independent oil and gas company based in Enid, Okla., is marking 20 years of operations in North Dakota’s oil patch.
Other than oil industry officials or mineral owners who’ve grown wealthy from Hamm’s operations, few people in the state know of him. Only his Oklahoma drawl distinguishes him as an oilman instead of a folksy local in rural North Dakota.
“Most people have no clue what he’s done for North Dakota,” said Robert Harms of Bismarck, the president of the Northern Alliance of Independent Producers, a group Hamm helped form.
“His company alone has invested nearly $2 billion in North Dakota,” said Harms, whose group represents smaller oil producers in the Dakotas and Montana. “He’s made a lot of people rich in North Dakota, no question about that.”
The state’s oil patch also has contributed to Hamm’s wealth, which has followed the radical swings in oil prices over the past few years.
Hamm ranks as the 164th-richest American this year, with a net worth of $3.5 billion, by Forbes magazine estimates. Last year, the magazine ranked him as the 42nd-richest American with a net worth of $7 billion. In 2007, Forbes was listed as No. 108 with $3.2 billion.
“Harold doesn’t count his money,” said Brian Engel, a Continental vice president who disputes those figures though he won’t elaborate. “He’s comfortable buying fast food, and he’s not flashy.”
Veteran oilman Mike Armstrong, president of Dickinson-based Armstrong Corp., calls Hamm “truly one of the last American wildcatters.”
He said he and Hamm have been competitors, colleagues and bird-hunting buddies for nearly two decades.
“He’s a rags-to-riches story who is unpretentious and very much in touch with the farmer,” Armstrong said.
Hamm is the youngest of 13 children born to sharecroppers in Oklahoma. He grew up in a one-bedroom home. In his teens, he worked at a gas station and a refinery, and later started his own oilfield service company.
Hamm drilled his first successful well in 1971 in Oklahoma, and then began taking college courses in geology. Armed with the combination of “book learnin’ and the school of hard knocks,” he began driving pipe.
“It was off to the races at that point,” Hamm said. “Oil grasped my imagination and it never did leave me.”
Hamm said his company has operations in 20 states but North Dakota is its most important at present.
The company extracted about 6.5 million barrels from North Dakota’s oil patch in 2008, up from 5.1 million barrels a year earlier.
“North Dakota is No. 1 for us in production,” said Hamm, who is the largest leaseholder in the oil-rich Bakken shale formation in western North Dakota and one of the first companies to successfully tap a well from it. About a quarter of the company’s production came from the Bakken last year.
North Dakota, which has been an oil producing state for six decades, produced a record 67.2 million barrels of oil in 2008, up from 45.1 million in 2007.
In recent months, slumping oil prices have idled rigs throughout the oil patch, from a record 96 to about a third of that in May. Hamm’s company had 10 rigs working in September compared with two in May.
“A lot of people have lost the will to drill in the U.S.,” Hamm said. “I haven’t.”
Hamm said he has several hundred employees throughout the U.S., including about 150 in North Dakota.
His employees show respect for their billionaire boss but also are quick to share a joke with him, or he with them. He’s been known to jump in on a rig to help out.
“It’s not a real stuffed-shirt deal with me,” Hamm said.
Brad Fay, who owns interest in a well with Continental near Williston, said he’s known Hamm for about a year.
“He’s a salt-of-the earth kind of guy – there is no pretense with him. What you see is what you get,” Fay said. “He’s a great risk-taker and knows how to run a company. And they know how to find oil.”
Omar Hanson has been running cows and tending crops near McGregor, in northwestern North Dakota, for most of his 73 years. Hamm put an oil well on Hanson’s land last year, and another is planned.
“He drilled one well on our land and it’s doing really well,” Hanson said. “It’s been a pretty good deal.
“He’s got a lot of wells, and even one well can really help a lot of people,” Hanson said.
Hamm has been critical of the lack of pipeline infrastructure and North Dakota oil taxes that he says are among the highest in the nation.
Sen. Byron Dorgan, D-N.D., held a Senate committee meeting in Bismarck last year to discuss increasing pipeline capacity to maximize the Bakken potential. Hamm was the only independent oil producer to testify at the hearing, said Dorgan, chairman of U.S. Senate Appropriations Subcommittee on Energy and Water Development.
Hamm criticized a Canadian company for bypassing the state’s oil patch in its plans to transport oil from Canada.
“A lot of the oil people don’t want to get crossways with the pipeline people,” Dorgan said. “Mr. Hamm was there and he wasn’t parsing language.
“He reminds me of a swashbuckler, a throwback to the old oil days,” Dorgan said.
Armstrong, the Dickinson oilman, said Hamm likely is the “biggest, most consistent player in North Dakota and he’s not afraid to put his money here.”
“He’s got great vision and recognized a lot of this before a lot of us did,” Armstrong said.
“The Bakken is the hottest oil play in the U.S., by far,” said Hamm, who has more than a half-million acres under lease in North Dakota and Montana. Now, Continental is aiming at a reservoir beneath the Bakken, and initial results have been promising, Hamm said.
Geologists and oil companies are not sure if the Three Forks-Sanish is a separate oil-producing formation or if it acts as a trap, catching oil that leaks from the Bakken shale above. Some say it could be a combination of both.
Said Hamm: “It doesn’t matter – the oil is there.”
Hamm said he once walked up to a rural home near Williston to apologize to a farmer whose wheat crop was coated with a mist of oil from a newly spudded well on his land.
Hamm prepared for a cool reception as he knocked on the farmhouse door but instead got a warm one from the farmer who knew the ruined wheat meant riches and retirement.
“He told me: ‘That won’t be a problem, that won’t be a problem at all,'" Hamm recalled with a smile.