Harold Hamm: pump attendant who struck oil

Oklahoma farmer's son Harold Hamm spent his early working life with engineers and geologists, picking their brains on oil production. Then he took a chance, bought some land - and struck oil.

Harold Hamm, 63, didn't get the easiest start in life. The son of a hardy set of Oklahoma share-crop farmers, who chopped and picked cotton to make ends meet, he was the last of 13 children, all raised in an unpainted, one-bedroom house, with no toilet, in rural Oklahoma. After he left high school in 1963, he was unable to afford college fees, so took a job at a petrol station in the city of Enid.

"It was an exciting time. The oil business was booming." Several companies, including Halliburton, were drilling in the local area. In fact, he says, if you stood up on a hill just two miles north of the local town of Ringwood, you could see 26 oil rigs all round. "I just knew I had to get into the business somehow."

With no geology degree, Hamm started right at the bottom, cleaning tanks for a contractor. By 1965 he could afford to buy his own Ford truck, after a friend co-signed a loan for $1,000. "I slowly started getting customers, drilling mud and hauling water to rigs," he says, all the time picking the brains of local engineers and geologists on everything from the drilling process to the production of oil.

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Working nights and weekends, Hamm pored over maps of the local area in his bedroom, until he hit upon a small oil play running across the counties of Alfalfa, Woods and Major in the northwest of Oklahoma. "It hadn't really been discovered yet," he says. A well had been started in the 1940s, but a fire had burned it down before it was completed. Hamm decided to take a chance, buying up leases in the local area, tying up the old well with another in Wood's County that had shown good potential. He then drilled a 'wildcat well' or exploratory well between the two for $90,000 in 1971. As Hamm puts it, "it came in very nice".

"The first well we drilled came in at about 20 barrels an hour; about 480 barrels a day" at a time when "oil was $4 a barrel and just becoming more valuable". A second well came in at 75 barrels an hour, and in 1973, a third at 100 barrels an hour. "It was very good timing for production, as oil prices then started spiralling up," he says. By 1974, he started a drilling firm as opposed to a pure exploratory one, with 13 rigs across Oklahoma making $150,000 a month, over $1.5m a year, in revenue.

"But I needed to learn all about what I was doing. So In 1975 I went to University to study geology. So I did it all backwards. I made my fortune, then went to college."

After Hamm's graduation, the firm, which would later become Continental Resources, began expanding across the Midwest US and the Rockies, concentrating on oil and gas exploration and hitting upon Cedar Hills Field in North Dakota in 1995, at the time the biggest onshore discovery the US had seen in over 20 years.

Today, Continental Resources boasts a market cap of $3bn, and, although Hamm is worth a reported net $7bn, the strong drive his humble upbringings gave him means he's found it hard to wind down. "I tried retirement once, but lasted six months because I feared, and I still do, that I'll fall back to that level of poverty. You really can't escape it."

Jody Clarke

Jody studied at the University of Limerick and she has been a senior writer for MoneyWeek for more than 15 years. Jody is experienced in interviewing, for example in her time she has dug into the lives of an ex-M15 agent and quirky business owners who have made millions. Jody’s other areas of expertise include advice on funds, stocks and house prices.