According to Variety, Scot Armstrong to start work on Elf 2. Armstrong was the last scribe to do an uncredited rewrite on the original Elf, which grossed $173 million in its 2003 release.

The mini-major is believed to have an understanding with Ferrell that gives it confidence to continue with the project, though there's no deal with the thesp yet and the pic doesn't have a greenlight.

Though the studio has long hoped to tap Armstrong to write the sequel, scribe has only begun work on the script in the past month.

Elf is one of two franchises, along with Rush Hour, that New Line hopes to revive with a sequel. As with Rush Hour, which has moved toward and away from production based on negotiations with Chris Tucker, pic will depend on the assent of Ferrell, who's likely to get a payday of $20 million or more.

After the failure of Son of the Mask, New Line production prexy Toby Emmerich has said he would go forward with pricey sequels only if original stars are involved.