When a governmental body offers exploration acreage for leasing by exploration and production companies, typically in return for a licensing fee and an obligation to perform a set program. This program can include acquisition of seismic data or drilling a well. Exploration licenses are initially of limited duration (about 3-5 years) after which there might be a requirement to return half or more of the licensed acreage to the state after the licensee has selected the area in which he wants to pursue his activities. If hydrocarbons are discovered, a separate production license or production-sharing agreement is usually drawn up before development can proceed