Minority Shareholders In CLR Sue Harold Hamm Over Conflict Of Interest Business Transactions
Rigzone has a four-page Reuters internet story that begins:
A
group of minority shareholders in oil driller Continental Resources is
suing chief executive Harold Hamm, alleging that Continental's nearly
$100 million investment in a pipeline being built by another firm he
controls will benefit him at their expense.
Continental is providing partial funding for Hiland Partners, a
Hamm-owned pipeline and gas plant operator, to build the $300 million
Double H crude oil pipeline.
The 450-mile (724-km) line from North
Dakota to Wyoming is expected to start up later this year and to
eventually ship up to 100,000 barrels of oil per day.
A pension fund has filed suit in Oklahoma state court seeking damages
and the return of profits and other benefits derived from the pipeline
transaction to the company.
Deep in the article:
Eissenstat
told Reuters the firm's payments to other Hamm-affiliated firms since
2007 constituted less than 2 percent of the company's total expenses
during that period.
There is no question that Continental shareholders have been richly
rewarded.
The company's shares have risen more than sevenfold since its
2007 initial public offering, as Hamm transformed Continental into a
leading driller in North Dakota, where a boom in Bakken production has
helped push U.S. oil output to near 25-year highs.
The lawsuit questions why the driller would need access to a pipeline it
may not use. Hamm has said railroads are the firm's preferred mode of
shipping Bakken crude to market.
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