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.