Send this document to a
colleague

Close
This Window

NO. 07-05-0327-CV

IN THE COURT OF APPEALS

FOR THE SEVENTH DISTRICT OF TEXAS

AT AMARILLO

PANEL A

JUNE 14, 2007

_____________________

PETRO PRO, LTD., L&R ENERGY CORPORATION,
NANCY WILSON BRISCOE, JUDITH BROCK SEITZ, AND CAROLYN ROGERS,
APPELLANTS

V.

UPLAND RESOURCES, INC., KCS RESOURCES, INC., GREAT LAKES
ENERGY

PARTNERS, L.L.C., AND STEVE ZEMKOSKI, APPELLEES

_________________________________

FROM THE 31ST DISTRICT COURT OF ROBERTS COUNTY;

NO. 1893; HONORABLE STEVEN R. EMMERT, JUDGE

_______________________________

Before CAMPBELL and HANCOCK and PIRTLE, JJ.

OPINION

This appeal concerns a dispute between assignors, assignees, and
intervening royalty owners regarding the construction of two oil and gas
wellbore assignments, wherein the assignments expressly limited the
assigned interest to "rights in the wellbore" of a given well. Presenting
similar issues, Appellants, Petro Pro, Ltd. and L&R Energy
Corporation, and Intervenors, Nancy Wilson Briscoe, Judith Brock Seitz,
and Carolyn Rogers, appeal the denial of their respective motions for
summary judgment and the grant of summary judgment in favor of appellees,
Upland Resources, Inc., KCS Resources, Inc., Great Lakes Energy Partners,
L.L.C., and Steve Zemkoski. By their issues, Appellants and Intervenors
contend the trial court misconstrued the nature and scope of the assigned
interest. Appellants also appeal the denial of their motion to have funds
tendered into the court's registry. We reverse and render judgment
declaring the rights of the parties as to those issues before the trial
court.
(1)

Background Facts

Original Oil and Gas Leases

The two assignments in question pertain to rights in the wellbore of
the King "F" No. 2 gas well, located on a 704-acre pooled gas unit in
Roberts County. The material facts surrounding the well are not disputed.
In September 1992 and 1993, Upland Resources, Inc. (hereinafter
individually referred to as "Upland Resources") entered into five oil,
gas, and mineral leases involving separate tracts of land in Roberts
County. In 1993, Medallion Production Company ("Medallion") acquired the
leasehold and spud the King "F" No. 2 well on one of the leased tracts
consisting of 500 acres. The tract covered multiple gas-producing
formations, including the Brown Dolomite formation, located at depths of
approximately 3,400 to 3,600 feet, and the Cleveland formation, located
approximately 6,500 to 6,600 feet beneath the surface. The King "F" No. 2
well was completed as a gas well in the Cleveland formation and produced
gas in paying quantities. Several months after the well was completed,
Medallion pooled the 500-acre tract with 204 acres from an adjacent tract
to create an irregular shaped, 704-acre gas unit. The leasehold interest
in the 704-acre unit was subsequently acquired by KCS Medallion Resources
("KCS") and MB Operating Co., Inc. ("MB"). Eventually, the leasehold area
situated horizontally outside the 704-acre unit and vertically below 6,800
feet was released.

"Wellbore Only" Assignments

In 1998, for reasons undisclosed in the record, KCS and MB decided that
the King "F" No. 2 well was no longer economically viable. Consequently,
in November of that year, KCS and MB sold their interests in the well at
an auction of oil and gas properties. The winning bidder, L&R Energy
("L&R"), received the interests from KCS and MB via the two
assignments in controversy. The assignments were identical in that they
both conveyed the following:

All of Seller's right, title and interest in and to the oil and gas
leases described in Exhibit "A" attached hereto and made a part hereof
("Subject Leases") insofar and only insofar as said leases cover
rights in the wellbore of the King "F" No. 2 Well.

(Emphasis added). Pursuant to the express terms of the assignments,
L&R's leasehold interest became effective on December 1, 1998.

New Development Activity

Several years after the assignments, operators in the area began
drilling and completing gas wells in the shallower Brown Dolomite
formation. In May 2003, pursuant to a farmout agreement with KCS, Upland
Resources entered the pooled gas unit and completed a horizontal gas well
in the Brown Dolomite formation. The well, dubbed the Skeeterbee No. 1,
traversed within 600 feet of the King "F" No. 2 well. By June 2004, Upland
Resources had completed two more gas wells within the 704-acre pooled gas
unit, the horizontal Skeeterbee No. 2 and the vertical Skeeterbee No. 3.
Both those wells were completed in the Brown Dolomite formation.

Meanwhile, in April 2004, L&R assigned its interest in the King "F"
No. 2 well to Petro Pro Ltd. (hereinafter individually referred to as
"Petro Pro"). Concerned with Upland Resource's drilling activities, Petro
Pro sent a letter to Upland Resources and KCS requesting that both parties
clarify their respective interests in the pooled gas unit. Both parties
promptly responded with letters stating their belief that Petro Pro did
not acquire any leasehold interest outside the confines of the King "F"
No. 2 wellbore. Petro Pro replied with a letter stating claims for
trespass and conversion and demanding that Appellees vacate the leasehold
and cease production from the Skeeterbee wells.

Suit Filed

Finally, in September 2004, citing Upland Resources and KCS's refusal
to resolve the dispute, Petro Pro and L&R (hereinafter collectively
referred to as "Petro") filed the underlying suit against Upland, KCS, and
other interested parties, Great Lakes Energy Partners, L.L.C., and Steve
Zemkoski (hereinafter collectively referred to as "Upland") for trespass,
bad faith trespass, conversion, and money had and received. Petro claimed
they owned the exclusive right to produce gas from the entire 704-acre
pooled gas unit, from the surface to a depth of 6,800 feet. Petro also
sought a declaratory judgment declaring the property rights and ownership interests
acquired by the respective parties by virtue of the assignments and
an accounting of all proceeds from the sale of gas produced from the
Skeeterbee wells. Petro also filed a motion requesting that any production
revenue from the Skeeterbee wells be placed into the court's registry
until the dispute was resolved. Upland initially responded to the
allegations by filing a general denial. Upon learning of the pending
dispute between Petro and Upland, the royalty interest owners in the
704-acre pooled gas unit, Nancy Wilson Briscoe, Judith Brock Seitz, and
Carolyn Rogers (hereinafter collectively referred to as "Intervenors")
filed a plea of intervention seeking damages for the alleged breach of
implied covenants and for tortious interference with existing contracts.
Intervenors contended that Petro's lawsuit and wrongful claims of
ownership prevented Upland from fully developing the lease and protecting
the lease from drainage from adjacent wells.

Competing Motions for Summary Judgment

On February 1, 2005, Upland filed a motion for summary judgment
contending that Petro's rights were limited to the right to produce gas
from the Cleveland formation only and the right to "enhance" that
production. Upland further contended that Petro's rights were restricted
to the physical confines of the King "F" No. 2 well only, without the
right to deepen the well to other zones or horizons, or the right to
perforate the wellbore casing for the purpose of producing any other zone
or horizon lying between the surface and the presently producing section
of the Cleveland formation. Subsequently, Intervenors filed a motion for
partial summary judgment contending Petro had the right to produce from
any formation subject to governmental regulations, which limited the
horizontal extent of Petro's rights to forty acres surrounding the King
"F" No. 2 wellbore. Finally, Petro filed their own motion for summary
judgment restating their position that they were the exclusive owners of
any portion of leasehold estate that could "reasonably be reached and
produced" through the King "F" No. 2 wellbore.

The Trial Court's Judgment

Following hearings on the parties' competing motions for summary
judgment, the trial court ruled that the King "F" No. 2 wellbore
assignments were unambiguous and granted Upland Resources's motion for
summary judgment. The judgment further
stated that "[j]udgment is entered in favor of [Upland Resources]."
The court denied Petro and Intervenors' motions for summary
judgment and Petro's motion to have funds from production tendered into
the court's registry. The trial court also severed and abated Intervenors'
damage claims against Petro.

As drafted, the trial court's judgment
does not set forth a declaration of the interest and rights conveyed by
the assignments.
(2) From the four corners of the judgment, we are left to
speculate as to exactly what the trial court determined the rights of the
parties under the assignments to be. A properly drafted declaratory
judgment should terminate the uncertainty or controversy giving rise to
suit by declaring the rights of the parties as to those matters upon which
the parties joined issue. Calvert v. Employees Ret. Sys. of Tex.,
648 S.W.2d 418, 419-20 (Tex.App.-Austin 1983, writ ref'd n.r.e.).
See generally Robert W. Calvert, Declaratory Judgments in
Texas - Mandatory or Discretionary?, 14 St.Mary's L.J. 1 (1982).
Notwithstanding the fact that the parties may have drafted the judgment
and submitted it to the trial court "approved as to form," the failure of
the judgment to specifically declare those rights was error.

In a situation where all parties have moved for summary judgment and
one motion is granted and the others are denied, the appellate court
should review all parties summary judgment evidence and determine all
questions presented. Bradley v. State ex rel. White, 990 S.W.2d
245, 247 (Tex. 1999). See also Tex. R. App. P. 43.2(c). The reviewing court
should then render the judgment that the trial court should have rendered.
Bradley, 990 S.W.2d at 247. The questions presented in this case
are, what interest is conveyed by the assignments, and what are the rights
of the parties? Therefore, this Court will construe the assignments in
question and declare the interests conveyed and rights of the parties as
to those matters upon which the parties have joined issue. By this
appeal, Petro and Intervenors urge us to adopt their respective
interpretations of the wellbore assignments and contend they are entitled
to judgment as a matter of law. Upland Resources, meanwhile, maintains
that the trial court correctly construed the assignments in their favor.
As previously stated, the trial court's construction is not readily
apparent from the face of the judgment. Because a declaration of the
property rights and ownership interests of the parties is a matter of law
where the instrument is unambiguous, we will examine the assignment
language to determine the actual interest conveyed. In doing so, we begin
by determining the applicability of some established canons of contract
construction.

Applicability of Canons of Contract
Construction

The goal when construing an unambiguous agreement is to determine and
give effect to the parties' intent as expressed within the "four corners"
of the instrument. See Gulf Ins. Co. v. Burns Motors,
Inc., 22 S.W.3d 417, 423 (Tex. 2000); Luckel v. White, 819
S.W.2d 459, 461-63 (Tex. 1991). Such intent is garnered from the language
used in the writing when read as a whole. Cross Timbers Oil Co. v.
Exxon Corp., 22 S.W.3d 24, 26 (Tex.App.-Amarillo 2000, no pet.).
Stated differently, we must analyze the entire instrument to understand
and harmonize all parts of the instrument so as to give effect to all of
its provisions. Luckel, 819 S.W.2d at 462; Questa Energy
Corp. v. Vantage Point Energy, Inc., 887 S.W.2d 217, 221
(Tex.App.-Amarillo 1994, writ denied). Construction of an unambiguous
instrument is a question of law to be resolved by the court. Luckel,
819 S.W.2d at 461. We afford the words contained in the agreement
their plain, ordinary, and generally accepted meanings, unless the
instrument requires otherwise. E.g., Cross Timbers, 22 S.W.3d at
27-28; Sun Operating Ltd. Partnership v. Holt, 984 S.W.2d 277,
285 (Tex.App.-Amarillo 1998, pet. denied).

By their brief, Petro contends that the absence of express limiting
language means that Upland intended to assign their leasehold interest in
the entire 704-acre pooled gas unit, including the right to extend one or
more horizontal drainholes from the King "F" No. 2 wellbore into other
productive areas of the lease. Similarly, Petro insists that the
conveyance of "[a]ll of Seller's right, title and interest" in the leases
gives them title to all the oil, gas, and minerals beneath the leasehold
regardless of where it is located. Petro contends that this interpretation
is consistent with the various canons of construction that pertain to
conveyances of real property, namely the canon to "construe in favor of
the grantee" and the canon of "conveyance of the greatest estate," which
they claim is embodied in § 5.001(a) of the Property Code.
(3) Furthermore, Petro urges us to consider Upland's actions
with respect to other assignments, which are unrelated to the present case
but contain similar language.

At the opposite extreme, Upland contends that the assignments should be
construed in light of the facts as they existed at the time of conveyance,
thereby restricting Petro's rights to the production of gas from the
existing wellbore and the Cleveland formation only. While Intervenors
agree that operations should be confined to the existing wellbore, they
claim that Petro's rights should be construed in such a way that they are
limited, in accordance with Railroad Commission well density rules, to an
undetermined forty surface acres surrounding the wellbore. Intervenors
further contend that the assignments should be construed so as to allow
Petro the right to plug back the wellbore and recomplete the well in the
Brown Dolomite formation.

If, after application of the canons of contract construction, an
agreement is susceptible of only one reasonable meaning, the contract is
unambiguous. The construction of a written, unambiguous instrument is a
question of law for the court. See OTC Petroleum Corp. v.
Brock Exploration Corp., 835 S.W.2d 792, 794 (Tex.App.-Amarillo 1992,
writ denied). In such instance, the courts will give effect to the
objective intention of the parties as expressed or as is apparent in the
writing, since the parties generally intend every clause to have some
effect and in some measure to evidence their agreement. Id. Also,
extrinsic evidence of other assignments is irrelevant to the parties'
intentions in the present case. See Neel v. Alpar Resources,
Inc., 797 S.W.2d 361, 363-66 (Tex.App.-Amarillo 1990, no writ)
(explaining that an unambiguous instrument will be enforced as written and
without consideration of other instruments).

When construing agreements, an agreement which is worded in such a
fashion that it can be given a certain or definite legal meaning is not
ambiguous and will be enforced as written. HECI Exploration Co. v.
Neel, 982 S.W.2d 881, 888-89 (Tex. 1998). Here, none of the parties
allege that the assignments are ambiguous, and we agree that they are not.
Therefore, we restrict our analysis to the plain language of the
assignments to determine the nature and scope of the assigned interest.
See Yzaguirre v. KCS Resources, Inc., 53 S.W.3d 368, 372-73 (Tex.
2001).

Nature and Scope of the Assigned Interest

As recited above, the assignment language describes the assigned
interest as "[a]ll of Seller's right, title and interest in and to the oil
and gas leases . . . insofar and only insofar as said leases cover rights
in the wellbore of the King "F" No. 2 Well." While the parties agree that
this language unambiguously assigns leasehold rights in the King "F" No. 2
wellbore, their interpretations regarding the nature and extent of the
estate conveyed differ greatly.

An oil and gas lease conveys an interest in real property, as does the
assignment of all or a portion thereof. Cherokee Water Co. v.
Forderhause, 641 S.W.2d 522, 525 (Tex. 1982); ExxonMobil Corp. v.
Valence Operating Co., 174 S.W.3d 303 (Tex.App.-Houston
[1st Dist.] 2005, pet. denied). A lessee under an oil and gas
lease owns a determinable fee in the oil and gas in place. Cherokee
Water Co., 641 S.W.2d at 525. In this case, the estate conveyed was
part of the leasehold estate created by the underlying oil and gas leases.
Therefore, the assignments assigned to Petro a determinable fee interest
in the oil and gas in place.

Like the phrase "subject to," the
phrase "insofar and only insofar" constitutes a limitation of the grant.
See, e.g., Walker v. Foss, 930 S.W.2d 701, 707 (Tex.App.-San
Antonio 1996, no writ) (stating that the principal function of such a
limitation is protecting the grantor against a claimed breach of
warranty). It neither conveys an interest to the assignee, nor does it
reserve or retain an interest in favor of the assignor. It merely limits
the extent of the interest granted. Id. at 706-07. Consequently,
it does not serve to limit the "rights" conveyed to Petro, nor does it
reserve to Upland any exclusive rights. Therefore, the assignee, in
this case Petro, received all of the rights appurtenant to the estate
conveyed. So, what was the estate conveyed and what are the rights
appurtenant thereto?

Estate Conveyed

To settle this dispute and define the estate conveyed, we must
first determine the depth (vertical rights) and area (horizontal rights)
covered by the assignments. See Lawrence P. Terrell, Limited
Assignments-Who Gets What?, 35 Rocky Mtn. Min. L. Inst. 17, § 17.02
(1989) (explaining that careful consideration of these two elements is
essential to defining the interests transferred and retained). See
also Kurt M. Peterson, Wellbores: Shedding Light on a
Transactional Black Hole, 48 Rocky Mtn. Min. L. Inst. 13,
§13.08[3][d] (2002). This information, in turn, will allow us to
define the extent of assignees' leasehold rights in the King "F" No. 2
wellbore.

Vertical Limit of Assignment

Regarding this issue, Upland contends that the "plain, grammatical
meaning" of the words used in the assignments limits the assigned interest
to the horizon that was open in the wellbore on the date of the
assignments. In other words, Upland claims Petro's rights are strictly
limited to the Cleveland formation. But adopting this stance would be
inserting language into the assignments that does not exist. Furthermore,
it would require a determination of the facts, outside the four corners of
the assignment, to ascertain the extent of the interest transferred.
Contrary to Upland's contention, the assignments are completely devoid of
language limiting Petro's leasehold interest to the Cleveland formation.
Without such limiting language, we find no support for Upland's contention
and agree with Petro and Intervenors' contention that the assignment
language does not limit wellbore operations to a specific depth or
formation. Therefore, we hold that the vertical limit of the assignments
is defined by the depth of the wellbore as assigned.

Horizontal Limit of Assignment

Similarly, there is a lack of support for Petro's claim that they
acquired horizontal rights coextensive with the 704-acre pooled gas unit
and Intervenors' claim that Petro acquired leasehold rights in forty
surface acres surrounding the King "F" No. 2 wellbore. Just as the
assignment language does not restrict Petro's operations to a specific
vertical producing interval, it also does not expressly or impliedly
convey leasehold rights in any horizontal surface acreage. Cf.
David E. Pierce, An Analytical Approach to Drafting
Assignments, 44 Sw. L.J. 943, 955 (1990) (explaining that,
presumably, the assignee is entitled to the production allocated to the
[lease] well even though he owns none of the required leasehold acreage).

On the issue of the horizontal extent of the estate conveyed,
Intervenors cite the language in the assignments stating that the assigned
interests are "subject to . . . governmental regulations." Relying on this
"governmental regulations clause," Intervenors contend that, pursuant to
Railroad Commission Rule 38, when Petro acquired rights in the King "F"
No. 2 wellbore, they also acquired rights in the minimum amount of surface
acreage needed to obtain a plug back permit for recompletion in the Brown
Dolomite formation. See 16 Tex. Admin. Code §§ 3.5., 3.38. (2007)
(Tex. R.R. Comm'n, Application To Drill, Deepen, Reenter, or Plug Back;
Well Densities). We disagree.

As Intervenors acknowledge, the Railroad Commission is a regulatory
agency and lacks the authority to determine ownership of land or property
rights. See, e.g., Amarillo Oil Co. v. Energy-Agri Products,
Inc., 794 S.W.2d 20, 26 (Tex. 1990). The government regulations
clause does not provide for additional leasehold rights contingent upon
the assignee seeking to commence certain wellbore operations. Simply put,
there is nothing in the assignments that suggests that, because the
assigned interest is subject to governmental regulation, the nature and
scope of the interest assigned may vary. For this reason, we find
Intervenors position to be inconsistent with the plain language of the
assignments.

Because the assignments are limited to "rights in the wellbore" we must
determine what the parties intended by that term. The assignments do not
describe the King "F" No. 2 wellbore or even define the term "wellbore,"
therefore, we must turn to its generally accepted meaning. A wellbore,
sometimes called a borehole, is the hole in the ground created by the
process of drilling or boring a well. 8 Patrick H. Martin & Bruce M.
Kramer, Williams & Meyers Oil and Gas Law, Manual of Terms,
107, 1207 (9th ed. 1998). A well, meanwhile, is defined as the "orifice in
the ground made by drilling, boring or any other manner, from which any
petroleum or gas is obtained or obtainable . . . ." Id. at 1205.
When read in context with the assignment language, these definitions
indicate that Petro's leasehold rights extend horizontally only to the
area of the hole identified as the King "F" No. 2 well and, by
implication, such surface area adjacent thereto as is reasonably necessary
to operate the well.

Rights Appurtenant

Consistent with the horizontal and vertical limitations of Petro's
interest, the assignments also conveyed all rights appurtenant to the
underlying oil and gas leases. One of those rights was the right to
develop the leased premises for the purpose of "exploring, drilling,
mining, operating for and producing oil, gas and other minerals." To that
extent, Petro's interest was not limited to production of gas from the
Cleveland formation. Therefore, subject to governmental regulations, the
assignments in question granted Petro the right to rework the King "F" No.
2 well so as to produce from any formation that might possibly be reached
from the existing wellbore. This right to develop, however, does not
extend beyond the present confines of the wellbore. In other words, Petro
does not have the right to extend the present well beyond its current
depth, nor does it have the right to drill horizontally beyond the
confines of the existing wellbore.

Another one of the rights assigned was the right to produce. Subject to
the duties imposed by the lease (e.g., the duty to pay the
original lessor a royalty for oil or gas taken, the duty to pay for
damages occasioned by its operations, and the duty to restore the surface
upon abandonment of the well), Petro has the exclusive right to produce
oil and gas from the King "F" No. 2 well. Conversely, because the
assignments in question did not transfer Upland's determinable fee
interest in the oil and gas in place outside of the wellbore, Petro does
not own an interest in the oil and gas in place outside the confines of
the King "F" No. 2 well. For these reasons, completion of the Skeeterbee
wells did not constitute a trespass onto property which Petro owned. For
these same reasons, the production of gas from the Skeeterbee wells did
not constitute conversion of property belonging to Petro. Because Petro
does not have an ownership interest in the gas produced from the
Skeeterbee wells, Petro is not entitled to a portion of the proceeds or to
an accounting.

To the extent that the leases embodied other rights not exclusive to
the possession and use of the wellbore in question (e.g., the
right to extend the lease by the payment of shut-in royalties), the
assignment created a co-tenancy with the other lessees, with each party
sharing those incorporeal appurtenant rights.

The practical effect of this construction is that Petro owns the
exclusive right to produce any oil, gas, or other minerals that may be
produced from the King "F" No. 2 wellbore, consistent with the
terms and conditions of the original leases. Subject to governmental
regulations, Petro also owns the right to develop the wellbore and conduct
any operations within the wellbore that would facilitate or enhance that
development and production, including the right to produce from other
formations. Upland retained the exclusive right, subject to the terms and
conditions of the original leases and any applicable governmental
regulations, to produce any oil, gas, or other minerals that may be
extracted from the leased premises, other than through the King
"F" No. 2 wellbore. Although this construction describes a relatively
restrictive leasehold interest, it is consistent with the fact that, from
an area standpoint, a wellbore assignment is the narrowest form of oil and
gas assignment. Lawrence P. Terrell, Limited Assignments-Who Gets
What?, 35 Rocky Mtn. Min. L. Inst. 17, § 17.02 (1989).

Our learned colleague's dissenting opinion states, "Rather than
concluding the parties intended to grant Petro the right to recomplete the
well to produce gas it does not own, we would construe the
assignments' language in a manner consistent with our state's
ownership-in-place theory." (emphasis added) While the concept of
producing oil and gas that one does not own may seem unfair, it
is hardly inconsistent with the ownership-in-place theory of mineral
ownership. To the contrary, it is entirely consistent with over a hundred
years of precedent pertaining to the corollary doctrine of the "rule of
capture."
(4) The rule of capture is a rule of non-liability that
determines what remedies, if any, that an adjacent landowner has against
his neighbor for production of migratory subsurface minerals belonging to
the owner-in-place. Essentially, the rule provides that, absent malice or
willful waste, landowners have the right to produce any migratory
subsurface minerals that they can "capture" without being liable to their
neighbor, even if in doing so they deprive their neighbor of their
ownership interest in the actual minerals. See Sipriano v. Great
Spring Waters of America, Inc., 1 S.W.3d 75 (Tex. 1999) (discussing
the correlative rights of adjacent landowners to produce groundwater).
Even though the legal effect of this Court's interpretation is to allow
Petro the right to produce gas that it does not own until it captures it,
and merely because that result may seem to be inconsistent with what
reasonable people would consider fair, that interpretation does give
effect to the intent expressed within the "four corners" of the
instrument. It has long been recognized that, absent exigent
circumstances, even though the intent of the parties may seem illogical,
the law will not protect you from an improvident bargain.
(5)

Conclusion

In summary, we find that the trial
court erred in rendering its declaration of the rights of the parties. To
that extent, Intervenor's sole issue and Petro's issues one though three
are subsumed within the disposition of Petro's fourth issue, which is
sustained in part (as to the granting of summary judgment in favor of
Upland's construction of the assignments) and overruled in part (as to the
denying of Petro's Motion for Partial Summary Judgment and Intervenor's
First Amended Motion for Partial Summary Judgment in favor of their
respective construction of the assignments). Because we also find
that Petro did not have title to the oil and gas in place outside of the
King "F" No. 2 wellbore, we conclude that they would not be entitled to an
accounting of future production from the Skeeterbee wells.
(6) Because Petro would not be entitled to have funds from
current production tendered into the court's registry, Petro's fifth issue
regarding the same is also overruled.

We reverse the judgment of the trial
court and render judgment declaring that the wellbore assignments
in question transfer to the assignee an estate that extends to the
physical limits of the wellbore, together with all of the appurtenant
rights incident to the underlying lease. Accordingly, the plain language of the
assignments conveys to Petro the oil, gas and other minerals in place
within the confines of the King "F" No. 2 wellbore, together with those
rights appurtenant to the original leases as may be necessary to the
production of those minerals and to the full use and enjoyment of that
wellbore, including, but not limited to the right to produce from any
formation traversed by the wellbore. As a result, Petro did not acquire
title to the gas in place outside of the King "F" No. 2 wellbore or the
right to extend the existing wellbore into other areas of the lease. We
further hold that Upland retains their respective interest in the
remainder of the leasehold estate, and the rights appurtenant thereto.
Petro's claims of trespass, bad faith trespass, conversion, and money had
and received are dismissed and their request that monies from current
production from the Skeeterbee wells be placed into the registry of the
court is denied.

Patrick A. Pirtle

Justice

Campbell, J., concurring and dissenting.

1. Although, ultimately, we seek to declare the
ownership interests and rights of the parties, we are constrained to
declare only those interests and rights that were at issue before the
trial court. The rights and duties set forth herein should not be
construed as an exhaustive list of all of the rights and duties arising
from the contract between the parties. Any attempt to set forth all of the
rights and duties arising from the oil and gas leases at issue would be
both foolish and advisory. Judicial authority does not embrace the giving
of advisory opinions. Firemen's Ins. Co. of Newark, N.J. v.
Burch, 442 S.W.2d 331, 333 (Tex. 1968).

2. The judgment merely recites that the assignments in
question are "unambiguous" and "grant[s] Defendant's motion for summary
judgment and den[ies] Plaintiff's motion for summary judgment and
Intervenors' motion for summary judgment . . . ."

3. The canon of conveyance of the greatest estate
provides that the instrument should be construed to confer to the grantee
the largest estate that the terms of the instrument will permit. See
generally Bruce M. Kramer, The Sisyphean Task of Interpreting
Mineral Deeds and Leases: An Encyclopedia of Canons of Construction,
24 Tex. Tech L. Rev. 1, 117-24. Section 5.001(a) states that "[a]n estate
in land . . . is a fee simple unless the estate is limited by express
words or unless a lesser estate is conveyed or devised by construction or
operation of law." Tex. Prop. Code Ann. § 5.001(a) (Vernon 2004). See
also Ladd v. DuBose, 344 S.W.2d 476, 480 (Tex.App.-Amarillo 1961, no
writ), citing Waters v. Ellis, 158 Tex. 342, 312 S.W.2d 231, 234
(1958).

4. The Texas Supreme Court adopted the common-law rule
of capture in 1904 in the case of Houston & Texas Central Railway
Co. v. East, 98 Tex. 146, 81 S.W. 279 (1904).

5. High Plains Nat. Gas Co. v. Railroad Com'n of
Tex., 467 S.W.2d 532 (Tex.Civ.App.-Austin, 1971, writ ref'd
n.r.e.); Carter v. Carter, 5 Tex. 93, 1849 WL 4064 (Tex. 1849).

6. We express no opinion as to whether or not Petro
may be entitled to an accounting of past production based upon any claim
of damages which might have resulted from any tortious interference with
their right of production for the reason that no such claims have been
made.