MANDAN - Harold Hamm borrowed $1,000 from a bank. bought a truck and took a chance.
That's how Darrell Dorgan, executive director of the North Dakota Cowboy Hall of Fame, opened his introduction of Hamm, chairman and chief executive officer of Continental Resources Inc.
"It's truly a Horatio Alger story. And this is the guy who has led the charge on the Bakken drilling in North Dakota and has made this the hottest economy in the United States. For the first time in your life and mine we are No. 1. It's an amazing thing to have happen," Dorgan said.
Submitted Photo • Harold Hamm, chairman and chief executive officer of Continental Resources, Inc., is shown in the Bakken in North Dakota in this photo courtesy of Continental Resources.
Hamm spoke at the N.D. Cowboy Hall of Fame's annual meeting banquet Feb. 26. The event was held in the Seven Seas Hotel in Mandan.
Hamm, of Enid, Okla., has been involved in the oil and gas industry for 40-plus years. He said when Dorgan invited him to speak at the Hall of Fame event he wondered what did he have in common with western heritage and history, and preserving the arts and the West.
But thinking it over he said he decided he had quite a bit in common.
Rigs at 172
BISMARCK - Currently, 172 rigs are actively drilling in the oil fields in North Dakota, according to the North Dakota Oil and Gas Division's Web site
Last month, rig numbers reached 171 but then dropped slightly.
In mid-December 2010, the N.D. Oil and Gas Division reported 166 rigs actively working, which was considered a record at that time.
Over 95 percent of the drilling continues to target the Bakken and Three Forks formations, said Lynn Helms, director of the N.D. Department of Mineral Resources in his monthly report on the Oil and Gas Division's Web site.
"I'm kind of the original history buff, if you will. It wasn't 50 million years ago that the Bakken was laid down, it's 450 million years ago. That's what I studied. I'm a geologist," he said.
Hamm studied that geological history, but he said he's always planning for the future and runs a company which has a forward view.
However, Hamm said western heritage, its preservation, and reminding people of their roots and where they came from are very important and need to be preserved, whether it's in North Dakota or Oklahoma.
"I think about those things and it means a great deal to me," he said.
Continental Resources is the No. 1 leaseholder in the Bakken in North Dakota and Montana, and the company is No. 3 in crude oil production in the Rocky Mountain Region which includes North Dakota, said Brian Engel, vice president of Public Affairs for Continental in Enid, Okla.
A leader in oil-field technology, among Continental's achievements include: in 2008, its demonstration that the Three Forks Formation in North Dakota is a separate reservoir; in 2009, the first 24-hour continuous frac in the North Dakota Bakken; and in 2010, developed the ECO-Pad drilling concept in North Dakota.
In North Dakota, the company has offices in Killdeer, Rhame and Tioga, Engel said.
The company has contributed to the preservation of the state's history with a $1.8 million donation last year to sponsor the North Dakota Inspiration Gallery for the expansion of the North Dakota Heritage Center in Bismarck. The new gallery will interpret the state's innovators, opportunities and inspirations.
The company has donated to other projects including a $50,000 gift toward the Continental Resources Emergency Center at St. Luke's Medical Center in Crosby. Through schools it has distributed thousands of backpacks with school supplies for children including in North Dakota, Engel said.
A special project is in Oklahoma City where through their charitable foundation, in 2007, Hamm and his wife Sue Ann, committed $7 million in support of the Oklahoma Diabetes Center at the University of Oklahoma Health Sciences Center. They also gave $3 million more to help acquire the building that is now the Harold Hamm Oklahoma Diabetes Center.
Their goal is to find a cure for diabetes, said Engel.
Harold Hamm didn't always have money. He grew up poor.
"I started from some very humble beginnings," he told his audience of more than 200 N.D. Cowboy Hall of Fame members and guests Feb. 26 in Mandan.
"I remember the important things that my parents handed down to me and I appreciate that very much. It's what made me," he said.
Of the oil development going on in North Dakota, Hamm said, "It is very important, it's kind of earth shaking what's going on today. You know you can't read anything in the newspaper today, you can't pick up the newspaper that it doesn't have something about the Bakken."
"What has happened here is there has been an incredible feat that's taken place right here in North Dakota that has to do with two shale formations that were buried about 450 million years ago," Hamm said.
"We figured out how to get it out, and it wasn't very easy. It took me 20 years messing with it," he said.
"I think the legacy of the whole deal to me and why it meant so much to me is it's because of the difficulty in getting it. It wasn't like you just went out there, found it and developed it. It took us so much technology 15 years in the making horizontal drilling, long laterals, fracture stimulation, and all kinds of scientific work in the meantime to get all that done to make it what it is.," he said.
He said there is a difference between the present oil boom and the last one in North Dakota.
"The last boom you had up here hit and went, and everybody spent money for infrastructure and went busted. That one was price driven. We needed price to do it and we had a good price for awhile. The price went south and then everybody went broke and left. It was a bad deal," he said.
"Today, this one is different and you need to understand the difference," he said. He said the difference is the leaseholders. "The oil is there," he said.
He said the wells today are very high-cost development. "These wells cost $6 1/2 million to drill and complete. Some people are spending up to $8 and $10 million per well so it's a very expensive thing that we're involved in," he said.
"It's kind of fragile," he also said. "If the oil price drops below $60, we're in trouble. It takes that much to make it. So we're good where we're at today but it's a very fragile existence out there."
"But we think it will last and we'll make it last a long time with the right economic conditions," he said.
He said it isn't happening yet that costs are going down. "In fact, those costs are creeping upward so it's getting worse instead of better," he added.
Hamm said the U.S. isn't as dependent on oil outside the U.S. as it once was and the Bakken is contributing to that change.
"We're getting a lot of oil from Canada, Mexico, Venezuela, East Africa, and we've got a lot of oil right here in the Bakken. We've turned around the decline in domestic U.S. production. In 2005, we stopped the decline in U.S. production," he said.
"We've broken a paradigm that long-standing paradigm that we could not find new fields. We've broken that paradigm and the Bakken is what did it," he said.
Hamm said his company recently scoped the Bakken in October and determined the Bakken Field could potentially contain recoverable reserves of up to 24 billion barrels of oil equivalent. That amount is considerably more than the U.S. Geological Survey has estimated.
The 24 billion includes 20 billion barrels of oil and 4 billion barrels of natural gas equivalent, said Engel.
Based on the 24 billion, it means it would essentially double the U.S. proven reserves.
"That's big, it's fragile but it's going to be here for a long time, and it's going to drive up the economy here," Hamm said of the work going on in North Dakota.
"It's very tremendous and I'm glad that I was able to play the part that I had in it. It means a lot to me personally," he said.
(Prairie Profile is a weekly feature profiling interesting people in our region. We welcome suggestions from our readers. Call Regional Editor Eloise Ogden at 857-1944 or Managing Editor Kent Olson at 857-1939. Either can be reached at 1-800-735-3229. You also can send e-mail suggestions to firstname.lastname@example.org.)