UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

SCHEDULE 14D-9

(Rule 14d-101)

Solicitation/Recommendation Statement

Under Section 14(d)(4) of the Securities Exchange Act of 1934

 

 

Continental Resources, Inc.

(Name of Subject Company)

 

 

Continental Resources, Inc.

(Names of Person(s) Filing Statement)

 

 

Common Stock, Par Value $0.01 Per Share

(Title of Class of Securities)

212015 10 1

(CUSIP Number of Class of Securities)

Jim Webb

Senior Vice President, General Counsel, Chief Risk Officer and Secretary

20 N. Broadway

Oklahoma City, Oklahoma 73102

(405) 234-9000

(Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications

on Behalf of the Person Filing Statement)

With copies to:

David P. Oelman

Michael S. Telle

Stephen Gill

Vinson & Elkins L.L.P.

845 Texas Avenue, Suite 4700

Houston, Texas 77002

(713) 758-2222

 

 

 

 

Check the box if the filing relates solely to preliminary communications made before the commencement of a tender offer.

 

 

 


This Schedule 14D-9 filing consists of the following communications related to a proposed tender offer by Harold G. Hamm, on behalf of himself, the Harold G. Hamm Trust and certain trusts established for the benefit of Mr. Hamm’s family members (collectively, the “Hamm Family”), to acquire for cash all of the issued and outstanding shares of common stock, $0.01 par value, of Continental Resources, Inc. (“Continental”), other than shares of Common Stock owned by the Hamm Family and shares of Common Stock underlying unvested equity awards issued under Continental’s long-term incentive plans, at a price of $70.00 per share:

 

 

Exhibit 99.1—Press Release of Continental Resources, Inc., dated June 14, 2022

 

 

Exhibit 99.2—Email communication from Harold G. Hamm to employees of Continental Resources, Inc. distributed June 14, 2022

 

 

Exhibit 99.3—Email communication from William B. Berry to employees of Continental Resources, Inc. distributed June 14, 2022

Notice to Investors

This communication is for informational purposes only and is not an offer to buy or the solicitation of an offer to sell any shares of common stock of Continental. No agreement exists with respect to the proposed tender offer described in this document and no such tender offer has been commenced. At the time a tender is commenced, if at all, an offer to purchase, a letter of transmittal and related documents will be filed with the Securities and Exchange Commission (SEC). The solicitation of offers to buy shares of Continental’s common stock will only be made pursuant to the offer to purchase, the letter of transmittal and related documents. Investors and Continental’s shareholders are strongly advised to read both the tender offer statement and the solicitation/recommendation statement that will be filed by Continental regarding the tender offer when they become available as they will contain important information. Investors and shareholders may obtain free copies of these statements (when available) and other documents filed with respect to the tender offer at the SEC’s website at www.sec.gov. In addition, copies of the tender offer statement and related materials (when available) may be obtained for free by directing such requests to the information agent named in the tender offer materials. The solicitation/recommendation statement and related documents (when available) may be obtained by directing such requests to Continental’s Investor Relations at +1-405-234-9620 or [email protected]

Cautionary Statement for the Purpose of the “Safe Harbor” Provisions of the Private Securities Litigation Reform Act of 1995

This communication includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements included in this communication and the accompanying press release other than statements of historical fact, including, but not limited to, forecasts or expectations regarding the proposed tender offer, the formation of a special committee of independent directors and the negotiation and consummation of any transaction in respect of the proposal are forward-looking statements. Forward-looking statements are based on current expectations and assumptions about future events and currently available information as to the outcome and timing of future events. Such statements are inherently subject to numerous business, economic, competitive, regulatory and other risks and uncertainties, most of which are difficult to predict and many of which are beyond Continental’s control. No assurance can be given that such expectations will be correct or achieved or that the assumptions are accurate or that any transaction will ultimately be consummated. The risk and uncertainties include, but are not limited to, commodity price volatility; the geographic concentration of Continental operations; financial market and economic volatility; the effects of any national or international health crisis; the inability to access needed capital; the risks and potential liabilities inherent in crude oil and natural gas drilling and production and the availability of insurance to cover any losses resulting therefrom; difficulties in estimating proved reserves and other reserves-based measures; declines in the values of our crude oil and natural gas properties resulting in impairment charges; our ability to replace proved reserves and sustain production; our ability to pay future dividends or complete share repurchases; the availability or cost of equipment and oilfield services; leasehold terms expiring on undeveloped acreage before production can be established; our ability to project future production, achieve targeted results in drilling and well operations and predict the amount and timing of development expenditures; the availability and cost of transportation, processing and refining facilities; legislative and regulatory changes adversely affecting our industry and our business, including initiatives related to hydraulic fracturing and greenhouse gas emissions; increased market and industry competition, including from alternative fuels and other energy sources; and the other risks described under Part I, Item 1A. Risk Factors and elsewhere in Continental’s Annual Report on Form 10-K for the year ended December 31, 2021, registration statements and other reports filed from time to time with the SEC, and other announcements Continental makes from time to time. Readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date on which such statement is made. Should one or more of the risks or uncertainties described in this communication occur, or should underlying assumptions prove incorrect, Continental’s actual results and plans could differ materially from those expressed in any forward-looking statements. All forward-looking statements are expressly qualified in their entirety by this cautionary statement. Except as otherwise required by applicable law, Continental undertakes no obligation to publicly correct or update any forward-looking statement whether as a result of new information, future events or circumstances after the date of this report, or otherwise.

Exhibit 99.1

Continental Resources Announces Receipt of

“Take Private” Proposal From Hamm Family

OKLAHOMA CITY— June 14, 2022 — PR Newswire — Continental Resources, Inc. (NYSE: CLR) today announced that its board of directors (the “Board”) has received a non-binding proposal letter, dated June 13, 2022, from Harold G. Hamm, on behalf of himself, the Harold G. Hamm Trust and certain trusts established for the benefit of Mr. Hamm’s family members (collectively, the “Hamm Family”) to acquire for cash all of the outstanding shares of common stock (the “Common Stock”) of Continental, other than shares of Common Stock owned by the Hamm Family and shares of Common Stock underlying unvested equity awards issued pursuant to Continental’s long-term incentive plans. A copy of the proposal letter is attached as Annex A to this press release.

The Hamm Family’s proposal of $70.00 per share represents an approximate 9% premium over Continental’s closing price on June 13, 2022, a premium of approximately 11% to its volume weighted average price during the last 30 trading days through June 13, 2022 and a 21% premium to the volume weighted average price of the Common Stock traded during 2022. The Hamm Family collectively holds approximately 83% of the total outstanding shares of Common Stock (based on outstanding shares reported by Continental in its Quarterly Report on Form 10-Q filed with the SEC on May 4, 2022).

The Board intends to establish a special committee consisting of independent directors of the Board to consider the proposal. The Board expects that the special committee will retain independent advisors, including independent financial and legal advisors, to assist it in this process.

Continental cautions its shareholders and others considering trading in Continental’s securities that Continental has only recently received the Hamm Family’s proposal and has not had an opportunity to carefully review and evaluate the proposal or make any decision with respect to Continental’s response to the proposal. The proposal constitutes only an indication of interest by the Hamm Family and does not constitute a binding commitment with respect to the proposed transaction or any other transaction. No agreement, arrangement or understanding between Continental and the Hamm Family relating to any proposed transaction will be created unless definitive documentation is executed and delivered by the Hamm Family, Continental, and all other appropriate parties.

Continental does not undertake any obligation to provide any updates with respect to this or any other transaction, or to provide any additional disclosures to reflect subsequent events, new information or future circumstances, except as required under applicable law.

About Continental Resources

Continental Resources (NYSE: CLR) is a top 10 independent oil producer in the U.S. and a leader in America’s energy renaissance. Based in Oklahoma City, Continental is the largest leaseholder and the largest producer in the nation’s premier oil field, the Bakken play of North Dakota and Montana. Continental is also the largest producer in the Anadarko Basin of Oklahoma and has newly acquired positions in the Powder River Bain of Wyoming and Permian Basin of Texas. With a focus on the exploration and production of oil, Continental has unlocked the technology and resources vital to American energy independence and our nation’s leadership in the new world oil market. In 2022, Continental will celebrate 55 years of operations. For more information, please visit www.CLR.com.


Cautionary Statement for the Purpose of the “Safe Harbor” Provisions of the Private Securities Litigation Reform Act of 1995

This press release includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements included in this press release other than statements of historical fact, including, but not limited to, forecasts or expectations regarding the proposed tender offer, the formation of a special committee of independent directors and the negotiation and consummation of any transaction in respect of the proposal are forward-looking statements. Forward-looking statements are based on current expectations and assumptions about future events and currently available information as to the outcome and timing of future events. Such statements are inherently subject to numerous business, economic, competitive, regulatory and other risks and uncertainties, most of which are difficult to predict and many of which are beyond Continental’s control. No assurance can be given that such expectations will be correct or achieved or that the assumptions are accurate or that any transaction will ultimately be consummated. The risk and uncertainties include, but are not limited to, commodity price volatility; the geographic concentration of Continental operations; financial market and economic volatility; the effects of any national or international health crisis; the inability to access needed capital; the risks and potential liabilities inherent in crude oil and natural gas drilling and production and the availability of insurance to cover any losses resulting therefrom; difficulties in estimating proved reserves and other reserves-based measures; declines in the values of our crude oil and natural gas properties resulting in impairment charges; our ability to replace proved reserves and sustain production; our ability to pay future dividends or complete share repurchases; the availability or cost of equipment and oilfield services; leasehold terms expiring on undeveloped acreage before production can be established; our ability to project future production, achieve targeted results in drilling and well operations and predict the amount and timing of development expenditures; the availability and cost of transportation, processing and refining facilities; legislative and regulatory changes adversely affecting our industry and our business, including initiatives related to hydraulic fracturing and greenhouse gas emissions; increased market and industry competition, including from alternative fuels and other energy sources; and the other risks described under Part I, Item 1A., Risk Factors and elsewhere in Continental’s Annual Report on Form 10-K for the year ended December 31, 2021, registration statements and other reports filed from time to time with the SEC, and other announcements Continental makes from time to time. Readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date on which such statement is made. Should one or more of the risks or uncertainties described in this press release occur, or should underlying assumptions prove incorrect, Continental’s actual results and plans could differ materially from those expressed in any forward-looking statements. All forward-looking statements are expressly qualified in their entirety by this cautionary statement. Except as otherwise required by applicable law, Continental undertakes no obligation to publicly correct or update any forward-looking statement whether as a result of new information, future events or circumstances after the date of this report, or otherwise.

 

Investor Contact:    Media Contact:
Rory Sabino    Kristin Thomas
Vice President, Investor Relations    Senior Vice President, Chief Communications Officer
405-234-9620    405-234-9480
[email protected]    [email protected]

Lucy Spaay

Investor Relations Analyst

405-774-5878

[email protected]


Annex A

Harold G. Hamm

Hamm Capital LLC

P.O. Box 1295

Oklahoma City, OK 73101

June 13, 2022

Board of Directors

Continental Resources, Inc.

20 N. Broadway

Oklahoma City, OK 73102

Re: Proposal to Acquire Outstanding Publicly-Held Common Stock of Continental Resources

Members of the Board:

On behalf of myself, the Harold G. Hamm Trust and certain trusts established for the benefit of my family members (collectively, the “Hamm Family”), I am pleased to submit this proposal (the “Proposal”) pursuant to which a newly formed entity on behalf of the Hamm Family would acquire for cash all of the outstanding shares of common stock (the “Common Stock”) of Continental Resources, Inc. (“Continental”), other than shares of Common Stock owned by the Hamm Family and shares of Common Stock underlying unvested equity awards under Continental’s long-term incentive plans (“Excluded Stock”), subject to the negotiation of satisfactory definitive agreements and the other matters described below.

As you are aware, the Hamm Family owns, in the aggregate, approximately 299.7 million shares of Common Stock, representing approximately 83% of the total outstanding shares of Common Stock (based on outstanding shares as reported by Continental in its Quarterly Report on Form 10-Q filed with the SEC on May 4, 2022).

Proposal

Our Proposal to acquire each outstanding share of Common Stock (other than Excluded Stock) for $70.00 in cash delivers certain and significant value and liquidity to Continental’s shareholders. In addition, the proposed consideration represents:

 

   

A 9% premium to the closing price of the Common Stock on June 13, 2022;

 

   

An 11% premium to the volume-weighted average price of the Common Stock over the last 30 trading days through June 13, 2022; and

 

   

A 21% premium to the volume-weighted average price of the Common Stock traded during 2022.

It should be noted that Continental’s Common Stock has appreciated more than 82% during the last twelve months of trading.

Structure and Closing Conditions

We expect that the Proposed Transaction would be structured as a tender offer for any and all shares of Common Stock (other than Excluded Stock) followed by a merger without a vote of the Continental shareholders in accordance with Section 1081.H of the Oklahoma General Corporation Act.

The Proposal is not subject to any due diligence and the Proposed Transaction’s definitive agreements will not contain a financing condition.

Process

We anticipate that the Board of Directors of Continental will establish and empower a special committee (the “Special Committee”) consisting solely of disinterested and independent directors, and delegate to the Special Committee the authority to evaluate and negotiate the Proposal, including, for the avoidance of doubt, the authority to reject the Proposal. We also anticipate that the Special Committee will engage independent legal and financial advisors selected by the Special Committee to advise it in connection with evaluating this Proposal.

A-1


In anticipation of such a delegation, we want to advise you that we are interested only in acquiring Continental’s Common Stock and are not interested in selling any of our Common Stock in Continental or pursuing other strategic alternatives involving Continental. If the Special Committee does not recommend the Proposed Transaction, the Hamm Family currently intends to continue as long-term shareholders of Continental.

We would welcome the opportunity to present the Proposal in more detail to the Special Committee and its advisors as soon as possible.

Advisors

We have engaged Intrepid Partners, LLC as our financial advisor and Vinson & Elkins L.L.P. as our legal advisor, and we are prepared to dedicate such resources as may be necessary to complete negotiations, execute definitive agreements and close the Proposed Transaction as promptly as practicable.

Disclosures

We expect to make appropriate amendments to the Hamm Family’s Schedule 13Ds, as required under applicable securities laws, disclosing this Proposal.

Legal Effect

The Proposal is non-binding, and no agreement, arrangement or understanding between the parties with respect to the Proposal or any other transaction (including any agreement to commence or continue negotiations) shall be created until such time as mutually satisfactory definitive agreements have been executed and delivered.

The Hamm Family is well positioned to negotiate and complete the Proposed Transaction, including obtaining any required financing, in an expeditious manner. If this Proposal is acceptable to the Special Committee, the Hamm Family is prepared to immediately negotiate definitive agreements in respect of the Proposed Transaction.

We look forward to receiving the Board’s response to this Proposal and working with you to complete a transaction that we believe is attractive to Continental’s public shareholders.

Sincerely,

/s/ Harold G. Hamm

Harold G. Hamm

A-2

Exhibit 99.2

Dear Employees,

I am writing to share some exciting news. I believe this will be incredibly beneficial to both Continental and you, our employees.

As you know, Continental started in 1967 and operated as a private company with a great deal of success for the next 40 years. In 2007, to help further capitalize the development of the Bakken, we made the decision to enter the public market. At that time, the public market rewarded companies for both growth and performance.

For many years, being in the public market made sense for Continental, and its shareholders were able to participate in the success of the company. Times have changed in the public market, particularly since the Covid pandemic. The market response has not been there for the oil and gas industry. In 2017, just five years ago, there were nearly 50 public E&P companies. Today, that number has dwindled to almost half, due to mergers, companies going out of business, or companies going private. This diminishing number of public entities is illustrative of a lack of support from the public market, and we believe there is a resulting under-appreciation of Continental.

We have consistently said that as long as we were appreciated in the market, we would remain a public company, but if our opportunities were limited by being public, we should look at alternatives.

We have determined that the opportunity today is with private companies who have the freedom to operate and aren’t limited by public markets, similar to the way that we operated approximately 15 years ago, prior to becoming a public entity. I know that we will all continue to stay focused on doing our work safely, efficiently and effectively with our unwavering commitment to producing energy responsibly.

Positioning ourselves as a private company will allow us to take maximum advantage of our greatest strength – our strong heritage as one of the leading exploration companies in the world. We can only do this with the continued capabilities and expertise of our outstanding employees. It will enhance our ability to maintain our competitive edge and will also enable us to be even more nimble in our efforts to create value through the drill bit.

Today, the Hamm Family has provided Continental’s Board of Directors a non-binding proposal to purchase all outstanding shares of Continental common stock (other than stock already owned by our family and stock underlying unvested equity awards issued under Continental’s long term incentive plans). If the transaction is consummated, Continental will once again become a private company. Our decision to make this offer is based on our belief in the future of this company and its people.

Continental’s operations will continue much as they have in the past, both while the proposed transaction is pending and following its completion and into the future.

Rest assured, the Hamm Family will work to maintain our same competitive compensation philosophy with an equally beneficial incentive program that both rewards and incentivizes you for your ingenuity, dedication and hard work. This will include salary, bonus and a long-term incentive program, as well as our generous benefits package.

Your total compensation in a privately held Continental will be substantially equivalent. We will have an annual bonus program just as we have in the past. We will preserve the economics of your currently unvested stock awards and, while we will no longer have publicly traded stock for the long-term incentive portion of your compensation, we will develop a long-term incentive program that will be its economic equivalent, or better.

Continental is a strong company built to last and our family believes being private will make it even stronger and more competitive.

On behalf of my family, thank you for all you do every day to make Continental the great company it is.

Harold

Exhibit 99.3

FROM: Mr. William Berry

TO: All CLR Employees

As you know from Harold’s email earlier today, the Hamm family has proposed a “take private” transaction for Continental. The Hamm family currently collectively owns approximately 83% of Continental’s stock, and they are offering to purchase the remainder of the outstanding common stock held by all other existing shareholders. So, what happens now?

First and foremost, it is business as usual for each of us. The family’s offer is a non-binding proposal to Continental’s Board of Directors. The Board will delegate the review and negotiation of the proposal to a special committee of independent directors. The special committee will hire its own independent financial and legal advisors, and they will carefully review, evaluate, and negotiate with the Hamm family.

The job of the special committee is to ensure that the process and ultimate outcome is fair to our public shareholders.

Second, there can be no assurance that any transaction will be approved or consummated. Rest assured, however, that Continental is not going anywhere. Only one of two things is going to happen. Either Continental will stay public, with approximately 83% ownership by the family, or Continental will be 100% owned by the family.

Continental will continue to be a top competitor in our industry. We will continue our outstanding commitment to ESG leadership and operational excellence as well as employee opportunity.

We will update you as this process progresses. In the interim, attached is a frequently asked questions (FAQ) document that is designed to answer questions you may have.

Bill


Frequently Asked Questions

June 14, 2022

General Transaction

Q. What was announced?

A. Today we announced that the board of directors of Continental Resources, Inc. (“CLR”) has received a non-binding proposal letter from Harold G. Hamm, on behalf of himself, the Harold G. Hamm Trust and certain trusts established for the benefit of Mr. Hamm’s family members (collectively, the “Hamm Family”) to purchase all of the outstanding shares of common stock of CLR, other than shares of Common Stock owned by the Hamm Family and shares of Common Stock underlying unvested equity awards issued under CLR’s long term incentive plans, at a price of $70.00 per share. If the transaction is consummated, CLR will become a private company.

Q. What is involved in proceeding with the proposed transaction?

A. The CLR Board of Directors is delegating the review and negotiation of Mr. Hamm’s proposal to a special committee of independent directors (the “Special Committee”), who will, in consultation with its own independent financial and legal advisors, carefully review and evaluate and negotiate the Hamm Family proposal. The Special Committee process is designed to advocate for and protect the interests of our minority shareholders, including our public investors. The Hamm Family has agreed not to move forward with the transaction unless the Special Committee determines the price is fair to, and in the best interest of, our public shareholders.

At this point, the board of directors of CLR has only received the non-binding proposal letter from the Hamm Family and no decisions have been made by the Special Committee with respect to CLR’s response to the proposal. There can be no assurance that any agreement will be entered into or that transaction will be approved or consummated.

Q. What does it mean when a public company goes private?

A. In a “take-private” transaction, an investor or a group of investors, in this case, the Hamm Family, acquires all of the common stock held by existing public shareholders. When the transaction closes, the company’s common stock no longer trades on a national securities exchange and the company generally ceases being a public company. If Mr. Hamm and the Special Committee are able to reach an agreement regarding Mr. Hamm’s proposal and the transaction closes, CLR will no longer be traded on the New York Stock Exchange (the “NYSE”) and the Hamm Family will be CLR’s sole shareholders.

While the transaction proposed by Mr. Hamm would result in the Hamm Family’s ownership of CLR increasing from approximately 83% to 100% of CLR’s common stock, the ownership by CLR of its assets and the conduct of its operations would continue as they have in the past. Because of the current ownership by the Hamm family, Continental is a controlled company and as such, the control of the company will not change under either scenario.

Q. Should I be doing anything differently between now and when the transaction closes?

A. No, Mr. Hamm has simply made a proposal to take CLR private. There is no assurance the transaction will occur. Moreover, even if the transaction does occur, the conduct of CLR’s operations will continue as they have in the past, both while the proposed transaction is pending and following its completion. It’s important that we all stay focused on doing our jobs safely, efficiently and effectively.

Jobs, Benefits and Other Employee Impact

Q. Will my job title and compensation stay the same if the transaction occurs?

A. The transaction is generally not expected to have any impact on the employment status, job titles and/or compensation levels of CLR’s employees. Mr. Hamm’s proposal contemplates that an employee’s total compensation following a transaction will be substantially equivalent following a transaction and that CLR would maintain a substantially similar compensation philosophy, with similar plans and programs.

Q. If a transaction occurs, what happens to the CLR common stock that I own outright?

A. Under Mr. Hamm’s proposal, any shares of CLR common stock that you have purchased and any vested stock awards, would be entitled to receive the per share consideration in the transaction. Mr. Hamm has proposed a transaction involving per share consideration of $70.00, but this price will be negotiated between Mr. Hamm and the Special Committee.

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Q. If a transaction occurs, what will happen to my outstanding, unvested equity compensation awards?

A. Because of the Hamm Family’s preexisting ownership of approximately 83% of CLR’s common stock, the transaction will not result in a change in control of CLR under the long-term incentive plans. You will continue to hold your award, as adjusted, for the remainder of your original vesting period.

Mr. Hamm’s proposal contemplates that CLR would no longer have publicly traded common stock; therefore, the transaction would require certain adjustments to the design of outstanding stock-based compensation awards, including the possible use of cash to settle awards. Analysis is still ongoing to determine the most appropriate structure for existing equity awards, but we expect that any adjustments to your outstanding equity compensation awards will preserve the economic value of that award at the time of the transaction.

Q. If a transaction occurs, will I be entitled to receive equity compensation awards in the future?

A. Because Mr. Hamm’s proposal contemplates that CLR would no longer have publicly traded common stock, the transaction would require certain adjustments to the design of future incentive awards. Analysis is still ongoing to determine the most appropriate structure for new incentive awards going forward, but we intend to design future awards so that an employee’s total compensation following a transaction will be substantially equivalent to his or her compensation prior to the transaction.

Q. Will there be headcount reductions in connection with the transaction?

A. We are not expecting any reductions in force as a result of this transaction. While CLR would cease to have public shareholders as a result of the transaction, its operations will continue in substantially the same fashion as they have in the past. The vast majority of employees will see no change in their day-to-day routine, while a small number may need to make minor adjustments in certain processes to support the needs of a private company.

Q. Will this impact the 2022 bonuses that are planned to be paid out in February of 2023? What about future bonuses?

A. No. Proposed 2022 bonuses are not expected to be impacted as a result of this transaction. Any bonus awards granted with respect to future years will continue to be structured by CLR in a manner deemed most appropriate to motivate, incentivize and retain our employees with respect to the applicable year.

Q. Will our benefits package change?

A. No. CLR is committed to maintaining a competitive compensation package and no material changes are planned to your benefits package (including the existing 401(k) program and vacation policies).

Q. Will we continue to hire?

A. We will endeavor to remain competitive with compensation and continue to hire and attract talent after going private as necessary.

Q. Can I continue to trade my CLR stock while the transaction is pending?

A. Yes. During this time, covered employees should continue to follow the established pre-clearance process and expect customary black-out periods as long as CLR is a public company. Of course, insider trading rules always apply to all employees, and nobody should trade if they are aware of material non-public information. Any questions should be directed to Rich Green (ext. 1413) or Jim Webb (ext. 1701).

What does the Future Hold?

Q. Does the Hamm Family still expect to own CLR for the long term?

A. Yes. The Hamm Family intends to own CLR for a very long time and they plan to continue to operate CLR as it has operated in the past.

Q. Will CLR continue to be headquartered in Oklahoma City once this transaction closes?

A. Yes, the corporate headquarters will remain in Oklahoma City.

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Q. Will the Hamm Family be involved in the day-to-day operations at CLR?

A. Until the closing date of a transaction, CLR will continue as a publicly traded company and its operations will be managed by its board and senior management team. To the extent members of the Hamm Family are involved in management of CLR, we expect that involvement to generally continue in accordance with past practice. CLR will operate as it has in the past pending and after the proposed transaction. The only difference is that its common stock will no longer be publicly-traded and the Hamm Family’s ownership would increase from approximately 83% to 100%.

Q. Will CLR continue to have public reporting obligations?

A. The terms of the indentures under which CLR’s outstanding debt securities were issued require CLR to continue filing annual and quarterly reports with the SEC, so SEC reporting will continue as it has in the past and the CLR employees who support these functions will still be needed to fulfill their responsibilities.    

Q. What should we tell business associates?

A. This transaction will have no impact on CLR’s business associates. If asked, you should tell them that it’s business as usual and CLR employees will continue to deliver the same exceptional customer service they have come to expect. CLR has a long-term equity partner in the Hamm Family that is committed to continued investment in CLR’s growth.

Staying Informed

Q. Where can I find updates about the potential transaction between now and the time a definitive agreement is signed?

A. Updates related to the potential transaction will be made publicly available through our filings with the SEC. These filings are available on the CLR website at www.clr.com by selecting “Investors,” then “News & SEC Information,” and then “SEC Filings.” We will let you know as often as possible.

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