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In 1991, GeoSouthern Energy Corp. [FOOTNOTE 2] and Chesapeake Operating, Inc. signed a Joint Development Agreement under whichthey would share the risks and rewards of developing various oil prospects. Under the terms of the JDA, either party couldsuggest a “horizontal prospect” for development. Should GeoSouthern select a property, Chesapeake would have the option toparticipate in developing it. The JDA stated, “GeoSouthern will advise Chesapeake in writing of such a proposal . . . .Chesapeake will notify GeoSouthern in writing whether Chesapeake will participate and the amount of such participation notless than fifteen (15) days after receipt of such notice.” [FOOTNOTE 3] Should Chesapeake opt to participate, GeoSouthern was required toassign to Chesapeake an interest in the prospect. If the prospect proved unprofitable for sixty consecutive days, GeoSouthernwas entitled to a reassignment of all rights. [FOOTNOTE 4]

Three disputes arose between GeoSouthern and Chesapeake concerning the development of properties under the JDA. First,regarding the Victoria OL No. 1 Well, Chesapeake gave notice of intent to participate nineteen days after GeoSouthernproposed the prospect. GeoSouthern refused participation on the grounds that the notice was untimely. Chesapeake arguesthat the contract provides for a response in “not less than” fifteen days, and points out that nineteen days is not less than fifteendays. GeoSouthern replies that the “not less than” language constitutes a mutual mistake, and the intent of the parties was toprovide for a response within fifteen days.

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