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The duration of a frontier licence is split into successive
terms of six (which is further subdivided into an initial two and
then four-year period), six and 18 years. By the end of the third
year of the first term, the licensee must have relinquished 75 per
cent of the licence area. At the end of the sixth year, the licensee
must relinquish a further 50 per cent of the remaining acreage.
This equates to a total relinquishment of seven-eighths of the
original licence area by the end of the initial term. DECC may, in
exceptional circumstances, where prospectivity can be
demonstrated over more than 25 per cent of the licence area, allow,
at its discretion, a licensee to relinquish only 50 per cent of the
acreage by the end of the third year. However, the licensee would
still need to relinquish all but one-eighth of the original licence
area at the end of the initial term, and must have completed the
work programme in order to progress from the initial to the second
term
A new type of frontier licence for the areas west of
Scotland was introduced in the 26th licensing round announced in
January 2010. The new frontier licence differs from the original
frontier licence in that the first of its three terms is three years
longer. This is in recognition of the particularly challenging nature
of the geographical area where it applies and the relative scarcity
of geophysical data.
Promote licences
The duration of a promote licence is split into the same
successive periods as a traditional licence. However, the licence
will expire at the end of the second year if DECC is not satisfied
that the licensee has sufficient financial, technical and
environmental capacity to undertake the work programme. At the
end of the second year the licensee must also decide whether to
„drill or drop‟, in essence the licensee must make a firm
commitment to DECC to drill a well in order for the licence to
continue. Having committed to drilling, the licensee then has until
the end of the initial period in which to drill.

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