NOT RECOMMENDED FOR PUBLICATION

File Name: 24a0347n.06

No. 23-3684

UNITED STATES COURT OF APPEALS

FOR THE SIXTH CIRCUIT

SABRE ENERGY CORPORATION,

Plaintiff - Appellant,

v.

GULFPORT ENERGY CORPORATION; ANTERO 

RESOURCES CORPORATION,

Defendants - Appellees.

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ON APPEAL FROM THE 

UNITED STATES DISTRICT 

COURT FOR THE SOUTHERN

DISTRICT OF OHIO

OPINION

Before: SILER, COLE, and BUSH, Circuit Judges.

BUSH, J., delivered the opinion of the court in which SILER, J,. joined. COLE, J. (pp. 9–

12), delivered a separate dissenting opinion.

JOHN K. BUSH, Circuit Judge. Sabre Energy Corporation sued Defendants Gulfport 

Energy Corporation and Antero Resources Corporation for breach of contract. Sabre Energy owns 

Overriding Royalty Interests (“ORRIs”), or fractional shares, in Defendants’ shares of royalties

from their oil and gas leases. Sabre Energy contends that these ORRIs attach to Defendants’

recently developed deep horizontal wells, and so Defendants owe it royalties. Defendants maintain 

that Sabre Energy is only entitled to royalties from oil and gas produced by vertical shallow wells 

that existed at the time Sabre Energy acquired the ORRIs. The district court granted summary 

judgment for Defendants. Because Sabre Energy has no interest in the oil and gas produced from 

Defendants’ deep horizontal wells, we affirm.
No. 23-3684, Sabre Energy Corp. v. Gulfport Energy Corp., et al.

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I

A. Factual Background

In 1993, Sabre Energy obtained its ORRIs through two assignments (“Assignments”) from 

Defendants’ predecessor in interest, Transatlantic Energy Company. Each Assignment includes 

an attachment, “Exhibit A,” that lists a combined total of 25 wells and identifies the overriding 

royalty percentage, drilling permit number, and location of each well. At the bottom of each 

“Exhibit A,” a “Note” provides the following: 

THIS ASSIGNMENT OF OVERRIDING ROYALTY INTEREST PERTAINS 

TO THE AFORMENTIONED WELLS AND THE DRILLING UNITS 

ASSOCIATED THEREWITH AND DOES NOT EXTEND TO THE 

UNDRILLED ACREAGE ASSOCIATED WITH THE LEASE REFERENCED 

AND/OR POOLING AGREEMENT. 

The 25 wells listed are “vertical shallow wells” that produce oil and gas at depths of 2,500 

to 5,500 feet. Following advancements in the oil and gas industry, and almost 20 years after the 

Assignments were executed, Defendants began drilling “horizontal deep wells” to produce oil and 

gas from the Utica Shale/Point Pleasant formation. Unlike vertical shallow wells, horizontal deep 

wells require drillers to lay pipe horizontally, through which the surrounding shale can be 

hydraulically fractured and oil or natural gas can be removed. These horizontal wells are usually 

deeper than vertical wells, and the typical depth of a fracking production in the Utica Shale/Point 

Pleasant formation ranges from 5,000 to deeper than 10,000 feet. Several of Defendants’ 

horizontal wells “produce from underneath the vertical shallow wells and drilling units on which

Sabre Energy has ORRIs.”

Believing that its ORRIs granted them royalties from the oil and gas captured by not only 

the shallow vertical wells, but also any deeper horizontal wells, Sabre Energy demanded royalty 
No. 23-3684, Sabre Energy Corp. v. Gulfport Energy Corp., et al.

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payments from Defendants. Defendants refused, stating that the “assignment did not assign any 

rights to the Utica formation.”

B. Procedural Background

Sabre Energy sued, seeking unpaid royalties, a detailed accounting of Defendants’ oil and 

gas production and royalty calculations, and a declaratory judgment that the disputed wells fell 

within Sabre Energy’s ORRIs. The district court later dismissed Sabre Energy’s claim for 

accounting, finding that the Complaint did not sufficiently allege the required elements. 

Ultimately, the parties cross-moved for summary judgment, which the district court granted in 

Defendants’ favor. 

The district court held that a “drilling unit” is a concept “created by Ohio law to require 

that wells meet certain spacing requirements,” and that some of Sabre Energy’s interests were 

already depth-limited. The district court also held that “undrilled acreage,” when used in the 

context of oil and gas, encompasses subsurface as well as surface acreage. Because the 

Assignments exclude Sabre Energy’s interests from extending to undrilled acreage, its remaining 

interests could not extend to the deeper Utica Shale/Point Pleasant Formation. The district court 

concluded that, because the Assignment expressly excluded undrilled acreage from Sabre Energy’s 

ORRIs, Sabre Energy lacked an interest in Defendants’ deep horizontal wells. Sabre Energy 

timely appealed.

II

This court reviews a district court’s grant of summary judgment de novo. See Morgan v.

Trierweiler, 67 F.4th 362, 366 (6th Cir. 2023). Summary judgment must be granted if “there is no 

genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” 

Fed. R. Civ. P. 56(a). Because the parties do not dispute the material facts, this appeal is limited 
No. 23-3684, Sabre Energy Corp. v. Gulfport Energy Corp., et al.

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to the interpretation of the Assignments. We agree with the parties that Ohio law applies to this 

diversity action. See Wonderland Shopping Ctr. Venture Ltd. P’ship v. CDC Mortg. Cap., Inc., 

274 F.3d 1085, 1092 (6th Cir. 2001).

Under Ohio law, “[w]hen confronted with an issue of contract interpretation, [a court’s] 

role is to give effect to the intent of the parties.” Sunoco, Inc. (R&M) v. Toledo Edison Co., 953 

N.E.2d 285, 292 (Ohio 2011). A court should “presume” that the parties’ intent is “reflected in 

the language of the contract.” Id. 

“When the language of a written contract is clear, a court may look no further than the 

writing itself to find the intent of the parties.” Id. Yet “‘parol evidence . . . is always admissible 

to define and explain the meaning of words or phrases in a written instrument which are technical 

or where a word or phrase is used in a peculiar sense that is applicable to a particular industry or 

trade.’” Career & Tech. Ass’n v. Auburn Vocational Sch. Dist. Bd. of Educ., No. 2013–L–010,

2014 WL 1478838, at *5 (Ohio Ct. App. April 14, 2014) (quoting Mfg. Mgmt. Sys. v. Data 

Solutions, Inc., No. 11-074/76, 1987 WL 8229, at *3 (Ohio Ct. App. Mar. 20, 1987)). 

The district court did not err in concluding that the term “drilling unit” as used in the 

Assignments restricted Sabre Energy’s interest to a depth of 4,000 feet.

 Although the Assignments 

do not define that term, we read the Assignments alongside state requirements in effect at the time 

Sabre Energy acquired its interests, absent clear indications to the contrary. See also Eastwood 

Loc. Sch. Dist. Bd. of Edn. v. Eastwood Edn. Assn., 875 N.E.2d 139, 143 (Ohio 2007) (“Except 

where a contrary intent is evident, the parties to a contract are deemed to have contracted with 

reference to existing law.”). Those requirements make clear the 4,000-feet depth limit.

To explain, we note that Ohio law requires a permit for oil and gas drilling. Ohio Rev. 

Code § 1509.05. To obtain the drilling permit, a proposed well must have an adequate drilling 
No. 23-3684, Sabre Energy Corp. v. Gulfport Energy Corp., et al.

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unit, defined as the minimum acreage on which wells of certain depths can be placed. See Ohio 

Admin. Code 1501:9-1-04(C); see also Ohio Rev. Code 1509.01(G) (later codifying this 

definition).1 A drilling unit is considered adequate if there is sufficient surface acreage for the 

well’s proposed depth. Ohio Admin. Code 1501:9-1-04(C). 

When Sabre Energy acquired its interests in the wells, Ohio law provided that a well placed 

on a drilling unit smaller than 40 acres could not drill below 4,000 feet, whereas a drilling unit 

larger than 40 acres could have a proposed well deeper than 4,000 feet. Ohio Admin. Code 1501:9-

1-04(C) (effective 1983). Thus, Sabre Energy’s ORRIs in drilling units smaller than 40 acres do 

not attach to the Utica Shale/Point Pleasant formation, but the ORRIs in drilling units larger than 

40 acres do.2

The district court also did not err by concluding that the undrilled acreage exception bars 

the ORRIs from attaching to the Utica Shale/Point Pleasant formation. While it is generally true 

that an interest in oil and gas extends to the core of the Earth, it will not if the assignment of the 

interest includes limiting language. See K & D Farms, Ltd v. Enervest Operating, L.L.C., No. 

2015CA00038, 2015 WL 6507785, ¶ 29 (Ohio Ct. App. Oct. 26, 2015) (“If a granting clause does 

not contain terms limiting the depth or formation, the rights are granted to all depths.”). But see

Chance v. BP Chemicals, Inc., 670 N.E.2d 985, 991–92 (Ohio 1996) (casting doubt that rights are 

1 Sabre Energy points to Talmage v. Bradley, 377 F. Supp. 3d 799, 821 (S.D. Ohio 2019) to argue that the 

oil and gas industry uses drilling units as shorthand for surface acreage, not depth limitations. But, 

notwithstanding that Talmadge does not bind us, the assignment contracts there limited royalty interests to 

“well sites,” which the contracts themselves defined. Id. at 822. Here, however, the Assignments do not 

define the technical term “drilling units.”

2 The dissent argues that the phrase “drilling unit” does not contain any depth limitation, but only delineates 

a width and length on the surface. But, as an Ohio court recently explained in a similar case, because the 

“20 acre drill site unit contained a 4,000-foot depth limitation based on the Ohio Administrative Code” the 

language of the Assignment was “unambiguous” and did not convey rights below 4,000 feet. Hogue v. 

PP&G Oil Co., Nos. 23 MO 0021 & 23 MO 0023, 2024 WL 3634236, at ⁋ 61 (Ohio Ct. App. Aug. 1, 2024)

(internal quotation marks omitted). 
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granted to all depths). The Assignments limit Sabre Energy’s interests to the aforementioned 

“drilling units,” and expressly do not convey interests in “undrilled acreage associated with the 

lease referenced.” As the district court noted, “[d]epth is an inherent consideration in oil and gas 

leases.” This undrilled acreage exception applies not only to the surface acreage, but also 

subsurface.3

Sabre Energy argues that the phrase “undrilled acreage” is often seen in oil and gas leases, 

where a “lessee is required to release acreage that is not developed . . . pursuant to a Pugh Clause.”

A Pugh Clause protects lessors when only a small part of a large tract of leased land is being used 

for oil and gas production; the clause will sever the non-producing land and will maintain the lease 

as to the “lease acreage actually producing.” Summitcrest, Inc. v. Eric Petroleum Corp. 60 N.E.3d 

807, 815 (Ohio Ct. App. 2016). Sabre Energy contends that Pugh clauses that are “silent as to 

geological strata” only divide “surface acreage, not geological formations.” To support this 

argument, Sabre Energy primarily relies on a single case, which reverted “undrilled acreage” 

pursuant to a Pugh clause. Neuhart v. TransAtlantic Energy Corp., 121 N.E.3d 802, 813 (Ohio Ct. 

App. 2018). But Neuhart alone does not established that “undrilled acreage” is a common phrase 

in the oil and gas industry with a fixed meaning, especially given its imperfect fit here: Neuhart

does not address whether the term “undrilled acreage” applies to only surface area or both surface 

3 The dissent argues that we incorrectly attribute a third dimension to the word “acreage.” The dissent then 

argues that a two-dimensional understanding of acreage inherently extends rights to all depths, unless 

otherwise limited. These two statements, however, are in conflict. The dissent itself recognizes that acreage 

includes a third dimension unless the conveyance includes a depth limitation. But, unlike the dissent, we 

do not read “acreage” as the limiting term; instead, in the oil and gas context, acreage necessarily requires 

consideration of three-dimensional space. See K & D Farms, Ltd, 2015 WL 6507785, ¶ 29 (stating that,

because the lease contract “does not contain terms limiting the depth or formation,” the subsurface rights 

attached to the “acreage” “are granted to all depths”). 
No. 23-3684, Sabre Energy Corp. v. Gulfport Energy Corp., et al.

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and subsurface, and also interprets a Pugh clause in the context of a lease, whereas the Assignments 

lack a Pugh clause.4

Sabre Energy argues that that it should have been afforded discovery, rather than the district 

court relying on parol evidence to interpret the Assignments, because it was “the intent of the 

parties to proceed with discovery if the district court decided the ORRIs were ambiguous.” But 

courts may give technical terms their technical meaning, without determining that the term is 

ambiguous. Career & Tech. Ass’n., 2014 WL 1478838, at *5. As just explained, even if these 

terms were ambiguous, Ohio law permits courts to look to extrinsic evidence to resolve that 

ambiguity. Maverick Oil & Gas, Inc. v. Barberton City Sch. Dist. Bd. of Educ., 872 N.E.2d 322, 

328 (Ohio Ct. App. April 11, 2007). The parties jointly moved to stay discovery, explaining that 

discovery may be unnecessary because the district court’s “ruling on the issues of lease 

interpretation . . . may be dispositive of all claims . . . or lead to early resolution of the remaining 

issues.” And, by moving for summary judgment, Sabre Energy itself inherently contended that no 

genuine fact disputes existed. See Miller v. Maddox, 866 F.3d 386, 389 (6th Cir. 2017) (the moving 

party bears the initial responsibility of demonstrating that there are no “genuine issues of material 

facts, which it may accomplish by demonstrating that the nonmoving party lacks evidence to 

support an essential element of its case.” (internal quotation marks and citation omitted)). By its

own admissions, Sabre Energy knew the potential consequences of staying discovery and moving

for summary judgment.

4 Similarly, Sabre Energy’s reference to Friedrich v. Amoco Production Co.—an out-of-state intermediate 

appellate court case which held that a Pugh clause silent on geological strata only divided the lease based 

on the surface—does not alter our view, because the Assignments lack a Pugh clause. 698 S.W.2d 748 

(Tex. Ct. App. 1985).
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III

Because the Assignments’ language limits the scope of Sabre Energy’s ORRIs, and thus 

does not convey to Sabre Energy a royalty interest in Defendants’ deep horizontal wells, we affirm.
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COLE, Circuit Judge, dissenting. This case turns on whether the term “acreage” contains 

a depth limitation. Because “acreage” is a two-dimensional term that says nothing of depth, I 

would reverse the district court’s grant of summary judgment to Gulfport and Antero and grant 

summary judgment to Sabre Energy. 

Under Ohio law, an interest in oil and gas extends to the core of the Earth unless the 

granting clause specifies a depth limitation. K & D Farms, Ltd v. Enervest Operating, L.L.C., No. 

2015CA00038, 2015 WL 6507785, ¶ 29 (Ohio Ct. App. Oct. 26, 2015). Here, because the terms 

“drilling unit” and “undrilled acreage” do not limit depth, Sabre Energy’s rights extend to the 

defendants’ deep, horizontal wells.

Drilling unit. “Drilling unit” is defined in terms of “acreage” under Ohio law. Ohio Rev. 

Code 1509.01(G). Specifically,“‘[d]rilling unit’ means the minimum acreage on which one well 

may be drilled.” Id. The dictionary definition of “acreage” is “area in acres.” (Op., R. 96, PageID 

2155.) Area is two-dimensional. VOCABULARY.COM, http://vocabulary.com/dictionary (last 

visited Aug. 1, 2024). An acre is a two-dimensional unit of measurement equal to 43,460 square 

feet. Id. As a two-dimensional term, “acreage” delineates width and length, but not depth. Id.

As noted by the district court, at the time of contracting, Ohio well-spacing regulations 

generally did not allow drilling below 4,000 feet on drilling units smaller than 40 acres. (Maj. Op. 

5 (citing Ohio Admin. Code 1501:9-1-04(C) (effective 1983)).) That these regulations restricted 

the depth of drilling permitted within certain drilling units does not change a drilling unit’s 

boundaries or the meaning of “drilling unit.” As discussed above, a “drilling unit” is defined in 

acres, which are delineated by width and length on the surface. Accordingly, the term “drilling 

unit” does not contain a depth limitation. Therefore, without other language limiting the grant’s 

depth, a grant of rights by “drilling unit” extends to all depths.
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Undrilled acreage. By its terms, the grant “does not extend to the undrilled acreage” 

associated with the underlying leases and pooling agreements. (R. 1-1, PageID 13; R. 1-2, PageID 

15.) As discussed above, “acreage” is a two-dimensional term. The majority and the district court 

conclude that “undrilled acreage” unambiguously refers to subsurface space underneath the wells 

and their drilling units. (Maj. Op. 6.) This interpretation incorrectly reads a third-dimensional 

depth component into “acreage,” a two-dimensional term.

“Depth is an inherent consideration in oil and gas leases.” (Maj. Op. 6 (quoting Op., R. 

96, PageID 2155).) But this inherent consideration does not require us to imply a depth limitation 

where none is explicitly stated. Rather, this inherent consideration is why each term outlining area 

in acres at the surface must be interpreted to extend below to all depths unless otherwise 

specifically limited. See K & D Farms, Ltd, 2015 WL 6507785, ¶ 29. 

***

Essentially, Ohio law mandates that the granting clause be read as follows: “The 

assignment of overriding royalty interest pertains to the aforementioned wells and the drilling units 

associated therewith [to all depths below unless specifically limited here] and does not extend to 

the undrilled acreage [to all depths below unless specifically limited here].” See id.; (R. 1-1, 

PageId 13; R. 1-2, PageID 15). Because there are no depth-limiting terms, the unambiguous 

language here divides the rights to all depths below by delineating boundaries at the surface. 

A brief look at the plats for the associated leases and pooling agreements confirms this 

interpretation. The granting clause refers to (1) wells, (2) drilling units, and (3) undrilled acreage. 

(R. 1-1, PageId 13; R. 1-2, PageID 15.) As shown below, each plat contains (1) a well (below 

marked with a circle labeled “Well No. 2”), (2) a drilling unit (marked with dashed lines labeled 
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“unit line”), and (3) land outside the drilling units and the wells, i.e. “undrilled acreage.” (E.g., R. 

67-1, PageID 1279.)
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(Id. (the total acreage is 471 and the drilling unit’s acreage is 20, leaving approximately 451 

undrilled acres) (highlights in original).)

Here, because the clear, unambiguous language of the granting clause does not have a depth 

limitation, Sabre Energy has an interest in the defendants’ deep, horizontal wells. For the foregoing 

reasons, I respectfully dissent.