The very first step in oil exploration is obtaining an exploration permit. An exploration permit allows oil company owners to conduct initial geological studies on specific areas of interest. The license has a lifespan of 5 to 6 years. A company that wants to carry out oil exploration or build a “wildcat well” must meet certain professional commitments, such as having enough equipment to conduct studies and surveys of the area. The company should also be able to provide “bonuses” and “cash offers” in some cases during exploration. In order to fully utilize an exploration permit, oil company owners must undergo a certain process schedule. First, owners must apply for an exploration permit from the government. Announcement of application closure may take 6 to 12 months from the day the application is opened. At closing, owners will have to wait another 3 months for their application to be approved or denied. Once the government grants permits to landowners, they can carry out initial geological, geophysical and seismic studies on the interested lands. These processes are usually carried out during the first to third year of exploration. In years four through six of exploration, owners may wish to conduct additional seismic work and possible exploration to obtain more information about the targeted area. In the event that no potential reservoir is found, or if this particular area requires further geological studies, the owners may consider renewal of exploration permits. Renewal of licenses allows owners to continue exploration for another 5 years. If a company fails to meet the obligation agreed in the license, it will pay paper fees and suffer losses if the project fails. For example, a company that has already acquired a permit to carry out exploration and production on an area could lease to another company to carry out the work. The two companies will then negotiate the share of revenue that the former company would receive if the project is successful. As royalty interest, the permit owner will receive a percentage of the gross revenues or “wellhead value” of production. For interest on net profit, the owner will receive a share of the net profit from production income. Net profit is the value obtained by deducting production-related expenses from the value of gross income. The similarities between these two interests are that the permit owner does not have to pay any costs and does not participate in any decision-making regarding the project..