Chevron U.S.A., Inc. v. Belco Petroleum Corporation

PATRICK E. HIGGINBOTHAM, Circuit Judge:

Applying Louisiana law, the district court awarded Chevron U.S.A., Inc. over $600,000 for gas that Chevron was entitled to take from an offshore gas well under a gas balancing contract but did not take before the well went dry. The district court decided that the parties had failed to address the risk of lost production and implied a contract term to achieve an “equitable result.” Persuaded that Chevron and its sublessee, Belco Petroleum Corporation, allocated to Chevron the risk of lost production, we reverse.

I

Chevron is the lessee from the government…