## Facts

- A gas well (King “F” No. 2) was located within a pooled gas unit containing multiple leases and interest owners.
- KCS Medallion Resources, Inc. and MB Operating Co., Inc. assigned L & R Energy, L.P. an interest described as the sellers’ lease interests “insofar and only insofar as said leases cover rights in the wellbore of the King ‘F’ No. 2 Well.”
- Upland Resources, Inc. later drilled three additional wells in the same pooled unit near the King well and produced gas from formations at or near similar depths.
- L & R assigned its interest to Petropro, Ltd.
- Petropro (and L & R) claimed the assignment granted (1) an exclusive right to produce from the pooled unit at the King well’s depth and (2) an exclusive right to rework the King well to produce from other depths reachable through the existing wellbore.
- Petropro and L & R sued Upland (and others) for trespass, conversion, and production proceeds tied to Upland’s three wells.
- The trial court granted Upland summary judgment, rejecting Petropro’s interpretation of the assignment.

## Issues

1. Whether an assignment limited to “rights in the wellbore” of a named well conveys exclusive unit-wide rights to produce at the well’s depth, or only a narrow interest in production from that specific wellbore.
2. Whether a wellbore-only assignee has an exclusive right to rework the well to capture production from other depths reachable through the same bore, so as to exclude other unit owners’ development.
3. Whether production from separate wells in the same pooled unit can constitute trespass or conversion against a party holding only a wellbore-limited interest.

## Decision

- The court of appeals affirmed summary judgment for Upland.
- The assignment’s “insofar and only insofar” language unambiguously limited the conveyed interest to rights in the King wellbore.
- The assignee did not receive an exclusive right to produce across the unit at the King well’s depth and did not obtain exclusive development rights as to other wells or depths in the unit.
- Because Petropro’s interest was limited to the King wellbore, Upland’s drilling and production from separate wells did not invade Petropro’s property interest and did not support trespass or conversion.
- Petropro and L & R were not entitled to proceeds from Upland’s three wells.

## Legal Principles

- Unambiguous assignment language restricting the grant to “rights in the wellbore” conveys a limited wellbore interest, not a unit-wide, reservoir-wide, or depth-wide exclusive interest.
- A court will enforce express limiting terms such as “insofar and only insofar,” and will not imply broader rights absent clear grant language.
- Trespass and conversion claims require proof that the defendant invaded or exercised dominion over the plaintiff’s actual property interest; production from separate wells does not establish invasion of a wellbore-only interest when the defendant does not enter the assigned wellbore.

## Conclusion

A wellbore-only assignment, by its terms, transfers rights tied to the specified wellbore and does not confer exclusive rights to produce from the pooled unit at a particular depth or to bar other unit owners from drilling separate wells; consequently, production from other wells in the unit did not constitute trespass or conversion.


Petropro, Ltd. v. Upland Res., Inc., 279 S.W.3d 743 (Tex. App.—Amarillo 2007, pet. denied)