Tuktoyaktuk (Mar 07/05) - EnCana's logic is easy to understand: if it works once, might as well try it again.

After getting positive oil and gas exploration results last year from its N-16 well near Kugmallit Bay in the Mackenzie-Delta, the company began drilling a second well in the area in January.

Located approximately 2.5 kilometres from N-16, the new well will go to a depth of 3.5 kilometres before spring with preliminary evaluation starting in February.

A third well could even be drilled by the country's leading producer of natural gas before its two licences in the region expire in 2006.

It all depends on the hydrocarbon results, said well site geologist Gregg Little.

Even a modest find would probably lead to a new well, he added. N-16 has now moved into the testing phase.

"We're still in the beginning stages," said Lori MacLean, community relations advisor for EnCana, who couldn't comment on when production could or would begin.

If EnCana and its Mackenzie-Delta well partners, Anadarko and ConocoPhilips, feel a significant discovery has been made, they can apply to the federal government extend the licences beyond next year.

"We haven't applied for any significant discovery licences at this point," said Carolyn Moore-Robin of EnCana.

Construction and drilling equipment for the latest project, estimated to cost $25-$35 million, were barged to Mason Bay, 18 km from N-05, in October 2004.

By mid-November, road construction to the new site had begun, but the initial work started long before.

The 2000-01 drilling season was the beginning of three consecutive years of seismic testing to evaluate reserve potential in the region.

Community consultations, field, heritage, wildlife and archaeological assessments, use of laser image detector radar and bathymetry - which involves measuring water depth relative to sea level - then followed before the building of N-16 in 2004, and once again before N-05 this season.

"There's a lot of work done before you start drilling," said McLean.