OKLAHOMA CITY (Reuters) - More than $17 billion of Oklahoma oilman Harold Hamm's fortune could be subject to division with his estranged wife, according to an economic analysis presented in their divorce trial, defining the stakes in one of the biggest battles ever over a marital estate.

The analysis of Kenneth Button, an expert witness hired by Sue Ann Hamm, was laid out in court testimony and in a document provided to Reuters by Oklahoma County Judge Howard Haralson. It is one of the first pieces of financial testimony to be released from the trial, which has been conducted mostly in secrecy.

In an uncommon step for a divorce case, Haralson has barred the public from the courtroom on most days and sealed most of the evidence. He says he is trying to protect shareholders in Hamm's Continental Resources from the release of confidential business information. Through his 68 percent stake in Continental, a leading driller in North Dakota, Harold Hamm is believed to own the most oil in the ground of any American.

The document, a trial exhibit marked "confidential business information," is a 122-page report compiled by Button, a PhD economist. Haralson released the report after determining it isn't subject to the protective order he has placed in the case.

Button's report contends that up to $15 billion of the growth in Continental's market capitalization during the period he studied is "active" marital capital, or subject to division between the spouses. Button crunched data from the years between the couple's 1988 wedding and February 2014.

Since then, Continental's value has grown by nearly $4 billion more, adding to the wealth the court may divide, Button said in court last week. About $2.6 billion of that appreciation would accrue to Harold through his 68 percent stake in Continental.

All told, Button's analysis suggests that the marital capital subject to division could add up to some $17.6 billion.

If Judge Haralson accepts Button's reasoning and awards Sue Ann a significant share of the marital estate, the Hamm split could yield the largest divorce settlement ever. If Hamm has to sell Continental shares to finance a large settlement, his control of the company could be eroded.

Attorneys for Harold Hamm and for Continental didn't respond to questions for this article. Harold's witnesses will testify later in the trial, which began last week and is expected to end in October.

What caused Continental's increase in value is critical to the outcome. Under Oklahoma law, any increase in the Hamms' net worth resulting from the active efforts of either spouse during the marriage is considered part of the marital estate.

Continental's impressive growth itself isn't in dispute. According to Button's report, the Oklahoma-based driller was valued at between $10 million and $50 million when the couple wed in 1988. It is now worth around $27 billion.

Sue Ann Hamm's legal team contends that this growth resulted largely from the active leadership and astute decision-making of Harold. He is widely credited as a pioneer in developing the Bakken Shale formation of North Dakota, America's largest oil discovery in decades.

Harold's attorneys will try to show that Continental's growth resulted mostly from factors beyond his control. They signaled this strategy in their cross-examination of Button, pressing the economist to consider that external forces, such as higher oil prices and new drilling technologies, were decisive factors in Continental's success.

          

"ACTIVE" APPRECIATION

Button is trying to undercut Harold's position by comparing Continental's spectacular growth with that of rivals. The margin by which Continental's financial returns outpaced those of similar oil and gas companies should be considered Continental's "active" appreciation, the Button report says.

It compares Continental's financial returns to those of 76 other publicly traded U.S. independent drillers.

Continental and these "peer companies," the report says, faced similar risks, opportunities and market conditions - such as fluctuating oil prices, choices among technologies and drilling locations, and methods to raise and deploy capital.

Continental's return on investment was at least 44,271 percent during the Hamm marriage, Button wrote. The average return among peers - extrapolated over the same period - was a relatively modest 691 percent, the report says.

Continental's outsize returns compared to its competitors are "likely the results of difference over time in the specific operational decisions and actions of the management of these companies."

    Hamm, 68, founded Continental in 1967, two decades before his marriage to Sue Ann, 58, a former attorney at the company.

Continental has said the divorce is a private matter that hasn't affected the business and isn't expected to. At the same time, Continental attorneys have submitted hundreds of thousands of pages of documents in the trial in support of Harold. They also have repeatedly persuaded the judge to seal evidence and close the courtroom to avoid damaging Continental's interests.


(This refiled version of the story fixes date (15th) and spelling of reporter's name (Heide Brandes)).


(Reporting by Heidi Brandes in Oklahoma City and Joshua Schneyer in New York. Edited by Michael Williams)