IVZ media thread, page-7542

It's a possibility, but I would think we would proceed without one even if one is needed to produce from MK2. There's a lot of work that needs to be done regardless of whether we produce at MK2. The revenue from the pilot project will be fairly negligible anyway and isn't worth the cash burn to delay for it imo.

Scott has stated previously that the pilot plant will serve as a long term production test. The basic idea is that you want to monitor the reservoir pressure over a long period of time to ensure it doesn't fall off at an unexpectedly high rate. The ability of the reservoir to maintain its pressure has a significant impact on the commercial viability of the field. I believe describing it as a long term production test is partly to get around the need for a production license which triggers the 20(?) year term. The government could argue that the long term test isn't needed to declare commerciality though. An example of running a long term production test prior to declaring commerciality is in the Lokichar Basin in Kenya. The partners (Tullow Oil, Africa Oil, and TotalEnergies) ran a long term (over a year long) test in which they produced and trucked a somewhat negligible amount of oil to the coast. The motivation was primarily to test the market's desirability for their grade of crude as the price/value of a barrel can vary drastically based on the oil's characteristics (in this case the oil was particularly waxy). The whole project remains pre-FID without a production license (and was recently abandoned by 2 out of 3 partners).

I might be misremembering but hasn't Scott said that the conversion to the production license is automatic once a commercial discovery is declared? I might have it mixed up with other oil explorers I've been invested in. The 11B/12B partners in South Africa had waited on their production right since 2022 so it can be a big hassle in some jurisdictions (it still hasn't been granted and 3 out of 4 partners recently relinquished their stake: TotalEnergies, CNRI, and QuatarEnergy; only minnow Africa Energy remains. There were other issues besides the production right, namely difficult deepwater ocean conditions and difficulties agreeing to a reasonable long term gas offtake agreement/price).

Regardless of whether we need to convert to a production license, per @handyhotones post, it looks like we will need other approvals anyway that might similarly hold things up. My guess is we're solely waiting on the PPSA to proceed with a JV followed by further exploration, appraisal, and testing.