Encana Finishes 2012 Ahead of Guidance and With $3.2 Billion Cash on Balance Sheet

Thu Feb 14, 2013 6:00am EST

* Reuters is not responsible for the content in this press release.


    Encana Corporation (TSX:ECA) (NYSE:ECA) finished the year ahead of 2012
guidance as the company reported annual cash flow of $3.5 billion, or
$4.80 per share, and $997 million in operating earnings, or $1.35 per
share. In the fourth quarter of 2012 the company generated cash flow of
$809 million, or $1.10 per share, and operating earnings of $296 million,
or $0.40 per share. In addition, Encana ended the year with $3.2 billion
in cash and cash equivalents, far exceeding the $2.5 billion Encana had
targeted in 2012, due in part to the company's success with signing major
agreements with subsidiaries of PetroChina Company Limited (PetroChina),
Mitsubishi Corporation (Mitsubishi) and Toyota Tsusho Corporation.

    In the fourth quarter of 2012 Encana averaged 36,200 barrels per day
(bbls/d) of liquids production and 2.9 billion cubic feet per day (Bcf/d)
of natural gas production. Average natural gas production volumes for the
full year were 3.0 Bcf/d, and average liquids production volumes were
31,000 bbls/d, meeting the company's 2012 guidance.

    "I would like to commend Encana's staff and the senior management team
for meeting or exceeding the goals the company set for itself in 2012,"
says Clayton Woitas, Encana's Interim President & CEO. "Operational
momentum built through 2012 combined with our major transaction
agreements puts Encana in a strong position starting 2013."

    "Encana has an outstanding asset portfolio in natural gas and liquids
rich plays and a proven ability to develop these assets at a low cost,"
says Woitas. "We have an extensive portfolio of emerging oil plays that
are under evaluation and a range of established plays that can be
profitable at current commodity prices, and those are the areas where we
plan to spend our time and money in 2013."

    Guidance and Capital Investment Plan for 2013

    "Our first priority for 2013 is profitability and running a business that
continues to be sustainable in the current low natural gas price
environment. Second, we intend to maintain financial strength and
flexibility and third, we are setting a target to be among the lowest
cost producers of natural gas in North America," says Woitas.

    Encana expects its oil and natural gas liquids (NGLs) production in 2013
to be between 50,000 to 60,000 bbls/d, and annualized natural gas
production is expected to remain near current levels ranging between 2.8
to 3.0 Bcf/d. Capital investment is estimated to be about $3.0 billion to
$3.2 billion, cash flow to be approximately $2.3 billion to $2.5 billion
(based on current hedging position, NYMEX price of $3.75 per thousand
cubic feet (Mcf) and $95.00 per bbl) and the company is targeting net
divestitures to be in the $500 million to $1.0 billion range.

    Encana has budgeted approximately 80 percent of its 2013 operating
capital to light oil and liquids rich natural gas plays, with the
majority of that to be invested in commercial plays such as Cutbank
Ridge, Bighorn, Peace River Arch, Piceance Basin, DJ Niobrara, and Jonah.
The remainder of that 80 percent will be invested in emerging plays such
as the Duvernay, San Juan Basin and the Tuscaloosa Marine Shale.

    "We're encouraged by the results in a number of our emerging plays and we
are proceeding with development in these areas at a measured pace," says
Woitas. "Through the year, we will assess our investments and make future
funding decisions based on successful results."

    The company is targeting to spend the balance of its operating capital,
approximately 20 percent, in dry natural gas assets with plans to invest
in plays with a low supply cost or those supported by third party
capital, making the plays profitable in the current natural gas price

    In addition to Encana's 2013 planned capital investment, the company's
joint venture partners have agreed to spend approximately $750 million in
the form of carry capital, effectively making Encana's total gross
capital investment between $3.7 billion to $3.9 billion. Carry capital is
cash that the company's joint venture partners have agreed to pay in
excess of their ownership interests as part of their commitments under
the agreements. Over the next five years Encana's total carry capital is
approximately $3.8 billion.

    "We had tremendous success last year with joint venture and other third
party agreements and we expect that joint ventures and strategic
divestitures will remain a key aspect of our strategy," adds Woitas.

    Complete company guidance for 2013 can be found at

    Update on Canadian and USA Division operations

    Canadian Division

    Key activities in the Canadian Division in 2012 included the negotiation
and signing of several major agreements. The up-front investment and
carry capital those transactions have secured for Encana will help
support high activity levels in the Division in 2013.

    Cutbank Ridge: In 2012, Encana drilled 41 net wells with excellent
results in the Cutbank Ridge play as part of its Cutbank Ridge
Partnership (CRP) with a Mitsubishi subsidiary. In 2013, the CRP plans to
invest a total of $540 million in this resource play, of which Mitsubishi
has agreed to contribute $380 million and Encana has agreed to contribute
$160 million. Overall, Encana has agreed to fund approximately 30 percent
of the development drilling program for its 60 percent partnership
interest. CRP plans to run a four rig drilling program in 2013.

    Duvernay: The Duvernay play is the focus of the joint venture agreement
signed in December 2012 between Encana and Phoenix Duvernay Gas
(Phoenix), a subsidiary of PetroChina. In 2013, gross Duvernay capital
investment is expected to be about $600 million, with about $450 million
coming from Phoenix. In this joint venture, Encana's funding commitment
over the next four years is, in effect, approximately 25 percent of the
development costs for its 50.1 percent working interest. Operationally,
Encana plans to continue to explore and delineate the play with a three
rig drilling program.

    Clearwater: In this play, Encana expects to have 27 net oil wells on
production by the end of March. The company is running four rigs in the
play, targeting light oil on Encana's fee title lands. Low well costs and
low royalty fees along with Encana's ability to accelerate development in
the area is expected to result in solid near term returns, making this
play an attractive investment for the company.

    Peace River Arch: Exploration in this liquids rich area continues with
three rigs drilling in the area. Initial results have been encouraging
and the company intends to focus on development of the Montney formation
in Alberta. This play is expected to provide approximately 2,000 bbls/d
of incremental growth in liquids production in 2013 due to the increased
capacity provided by the Gordondale sour gas deep cut plant that came on
stream in October 2012.

    Bighorn: The Bighorn play is expected to provide a significant amount of
near term growth in liquids production. Encana plans to run a four rig
program in this play in 2013.

    Deep Panuke: In January 2013, a small electrical fire occurred on the
Deep Panuke platform. There were no injuries and the fire was quickly
extinguished. After an investigation, the issue that caused the fire was
resolved and work resumed on the platform after about one week. Based
upon projections provided by the platform's operator, Single Buoy
Moorings, Encana is still expecting first gas from Deep Panuke in the
first half of this year.

    Kitimat Liquefied Natural Gas Project: On February 8, 2013, Encana
completed the sale of its 30 percent interest in the proposed Kitimat
liquefied natural gas export terminal project to Chevron Canada Limited.
Included in the sale are Encana's 30 percent interest in the associated
Pacific Trail Pipelines, approximately 32,500 acres of undeveloped land
in the Horn River Basin of northeastern British Columbia and the
assumption of Encana's processing commitments for the first phase of the
Cabin Gas Plant.

    USA Division

    The USA Division remains on track with its emerging oil and natural gas
liquids plays and plans to focus investment this year on further
development in its established plays while continuing to delineate its
most promising emerging assets.

    DJ Niobrara: With continued production success in the DJ Niobrara, Encana
is planning to increase its drilling rig program from three to five rigs
in 2013.

    Piceance Basin: The Piceance Basin remains one of the USA Division's
largest resource plays where a number of joint venture agreements benefit
Encana. In 2012 Encana drilled approximately 116 net wells, of which 110
were drilled with majority third party funding. Overall, Encana plans to
run a five drilling rig program in the play in 2013.

    Jonah: In 2012, Encana entered into a second upstream agreement in the
Jonah field. The two agreements provided third party funding for 50 of
the 59 gross wells drilled in 2012. These deals use third party capital
to cover the majority of the drilling and completion costs in exchange
for a working interest in certain lands in the Jonah field. Encana plans
to run a four to five rig program in the field in 2013.

    San Juan Basin: Encana continues to explore this emerging light oil play
and has drilled 13 gross wells to date with 11 wells completed.
Successful operational execution continues to drive well costs down. The
company is encouraged by the initial results and in 2013, Encana plans to
run a two rig program in the area.

    Mississippian Lime: On the Oklahoma side of Encana's Mississippian
acreage, the company has drilled seven gross wells and completed six.
Initial results on the Oklahoma wells are promising. In the Kansas
acreage, the well performance was lower than expected.

    Eaglebine: Through 2012 Encana ran one to two rigs in the Eaglebine play.
This year the company plans to run one rig while continuing to focus on
lowering well costs and increasing productivity.

    Tuscaloosa Marine Shale: Encana has five gross wells on production and
four being completed in the Tuscaloosa Marine Shale and plans to run a
one rig program in the first half of 2013 to continue its assessment of
the play with additional wells. The focus is on reducing well costs and
increasing productivity.

    Haynesville: Encana is resuming activity in the Haynesville play. Because
of the low supply costs in this play, Encana expects that the Haynesville
will be able to produce solid returns at current natural gas prices. The
company currently has two rigs running in the play with plans to increase
to five rigs through 2013.

    Update on Reserves (After Royalties)

    Under Canadian protocols as required under National Instrument 51-101,
Encana's proved liquids reserves increased about 80 percent to 240
million barrels (MMbbls) as a consequence of additions and revisions of
125 MMbbls. Total proved reserves as at December 31, 2012 of
approximately 13.1 trillion cubic feet equivalent (Tcfe) decreased about
8 percent year over year, due primarily to the impact of lower natural
gas prices. Encana's 2012 production replacement, excluding price
revisions, was approximately 170 percent.

    Proved undeveloped reserves (PUDs) account for approximately 47 percent
of total proved reserves and are scheduled to be converted to proved
developed reserves within the next five years.

    Average future development costs associated with PUDs decreased
approximately 18 percent to $1.60 per thousand cubic feet equivalent

2012 Proved Reserves Estimates - Canadian Protocols (After Royalties)       
Using forecast prices and costs;        Natural Gas     Liquids       Total 
 simplified table.                            (Bcf)    (MMbbls)      (Bcfe) 
December 31, 2011                            13,441       133.0      14,239 
Extensions & Discoveries                      1,107        61.3       1,475 
Technical Revisions                              85        66.4         483 
Price Related Revisions                      (1,180)       (2.6)     (1,195)
Acquisitions                                     86         0.1          86 
Divestitures                                   (832)       (6.5)       (871)
Production                                   (1,090)      (11.3)     (1,158)
December 31, 2012                            11,617       240.4      13,059 

    Under U.S. protocols prepared in accordance with the requirements of the
United States Securities and Exchange Commission (SEC), Encana's proved
natural gas reserves decreased 32 percent to approximately 8.8 Tcfe due
primarily to price related revisions of negative 4,589 Bcf. Natural gas
technical revisions were positive 1,391 Bcf. Proved liquids reserves
increased 58 percent to approximately 210 MMbbls as a consequence of
various initiatives. Overall, Encana's proved reserves as at December 31,
2012 under U.S. protocols decreased 26 percent to approximately 10.1

    Encana focuses its reserves disclosure on proved reserves based on a
forecast or business case basis. In 2010, the company expanded how it
reports on its estimates of reserves and resources and published
estimates of proved, probable and possible reserves as well as all
categories of economic contingent resources. Economic contingent
resources fall into three categories: low estimate (1C), best estimate
(2C) and high estimate (3C). The three classifications of contingent
resources have the same degree of technical certainty as the
corresponding reserves categories. In determining their economic
viability, the same commodity price assumptions are applied as estimating
proved, probable and possible reserves. Contingent resources are not yet
commercial due to contingencies such as the timing and pace of
development, or the need for additional infrastructure. The low estimate
is the most conservative category and carries with it the greatest degree
of confidence-90 percent-that these resources will be recovered.

Reserves and Resources (Tcfe, After Royalties)                              
                                               Estimated Economic Contingent
                            Estimated Reserves                      Reserves
 forecast                          3P Proved +                              
 prices and            2P Proved +  Probable +    1C Low   2C Best   3C High
 costs        1P Proved   Probable    Possible  Estimate  Estimate  Estimate
TotalAs at                                                                  
 Dec. 31 2012      13.1       20.7        24.3      25.4      45.4      69.8
TotalAs at                                                                  
 Dec. 31 2011      14.2       22.3        26.7      25.0      40.9      62.2

    Encana retained Independent Qualified Reserves Evaluators to conduct a
full evaluation of the company's reserves and economic contingent
resources. For information on reserves reporting protocols see Note 2.

    Complete year end 2012 reserves and resources can be found at
www.encana.com/investors under the section on Guidance.

    Hedging Position

    As of December 31, 2012, Encana has hedged approximately 1.5 Bcf/d of
expected 2013 natural gas production using NYMEX fixed price contracts at
an average price of $4.39 per Mcf, approximately 750 million cubic feet
per day (MMcf/d) of expected 2014 production at an average price of $4.22
per Mcf and approximately 825 MMcf/d of expected 2015 production at an
average price of $4.37 per Mcf. Additionally, Encana has hedged 9,300
bbls/d of expected 2013 oil production using a Brent fixed price contact
of $108.22 and a WTI to Brent basis contract of $9.75 achieving a WTI
equivalent hedge of $98.47 per barrel.

    Quarterly dividend of 20 cents per share declared

    Encana's Board of Directors has declared a quarterly dividend of 20 cents
per share payable on March 28, 2013 to common shareholders of record as
of March 15, 2013.

Financial Summary                                                           
(for the period ended December 31)            Q4       Q4                   
 ($ millions, except per share amounts)     2012     2011     2012     2011 
Cash flow(1)                                 809      983    3,537    4,216 
  Per share diluted                         1.10     1.33     4.80     5.72 
Operating earnings(1)                        296      232      997    1,191 
  Per share diluted                         0.40     0.31     1.35     1.62 
Earnings Reconciliation Summary                                             
Net earnings (loss)                          (80)    (476)  (2,794)       5 
After tax (addition) deduction:                                             
  Unrealized hedging gain (loss)             (72)     397   (1,002)     600 
  Impairments                               (300)  (1,105)  (3,188)  (1,687)
  Non-operating foreign exchange gain                                       
   (loss)                                    (66)      82       92      (99)
  Income tax adjustments                      62      (82)     307        - 
Operating earnings(1)                        296      232      997    1,191 
  Per share diluted                         0.40     0.31     1.35     1.62 

    1 Cash flow and operating earnings are non-GAAP measures as defined in
Note 1.

Production Summary                                                          
(for the period ended                                                       
December 31)(After                Q4      Q4                                
royalties)                      2012    2011 % delta    2012    2011 % delta
Natural gas (MMcf/d)           2,948   3,459     -15   2,981   3,333     -11
Liquids (Mbbls/d)               36.2    23.9      51    31.0    24.0      29
Natural Gas and Liquids Prices                                              
                                          Q4 2012  Q4 2011     2012     2011
Natural gas                                                                 
NYMEX ($/MMBtu)                              3.40     3.55     2.79     4.04
Encana realized natural gas                                                 
 price(1)($/Mcf)                             5.02     4.79     4.82     4.96
Oil and NGLs($/bbl)                                                         
WTI                                         88.22    94.02    94.21    95.11
Encana realized liquids price(1)            66.65    85.44    75.12    85.36

    (1) Realized prices include the impact of financial hedging.

    Conference Call Information

    Encana will host a conference call today Thursday, February 14, 2013
starting at 11:00 a.m. MT (1:00 p.m. ET). To participate, please dial
(888) 231-8191 (toll-free in North America) or (647) 427-7450
approximately 10 minutes prior to the conference call. An archived
recording of the call will be available from approximately 4:00 p.m. ET
on February 14, 2013 until midnight February 21, 2013 by dialing (855)
859-2056 or (416) 849-0833 and entering passcode 89434629. A live audio
webcast of the conference call will also be available at www.encana.com,
in the Invest in Us section under Presentations & Events. The webcast
will be archived for approximately 90 days. 

    Media are invited to participate in the call in a listen only mode. 

    The unaudited interim Condensed Consolidated Financial Statements for the
period ended December 31, 2012 are available at www.encana.com.

    Encana Corporation

    Encana is a leading North American energy producer that is focused on
growing its strong portfolio of diverse resource plays producing natural
gas, oil and natural gas liquids. By partnering with employees, community
organizations and other businesses, Encana contributes to the strength
and sustainability of the communities where it operates. Encana common
shares trade on the Toronto and New York stock exchanges under the symbol

    Important Information

    Encana reports in U.S. dollars unless otherwise noted. Production, sales
and reserves estimates are reported on an after-royalties basis, unless
otherwise noted. Per share amounts for cash flow and earnings are on a
diluted basis. The term liquids is used to represent oil, NGLs and
condensate. The term liquids rich is used to represent natural gas
streams with associated liquids volumes. Unless otherwise specified or
the context otherwise requires, reference to Encana or to the company
includes reference to subsidiaries of and partnership interests held by
Encana Corporation and its subsidiaries.

    NOTE 1: Non-GAAP measures

    This news release contains references to non-GAAP measures as follows:

--  Cash flow is a non-GAAP measure defined as cash from operating
    activities excluding net change in other assets and liabilities, net
    change in non-cash working capital and cash tax on sale of assets. 
--  Operating earnings is a non-GAAP measure defined as net earnings
    excluding non-recurring or non-cash items that management believes
    reduces the comparability of the company's financial performance between
    periods. These after-tax items may include, but are not limited to,
    unrealized hedging gains/losses, impairments, foreign exchange
    gains/losses, income taxes related to divestitures and adjustments to
    normalize the effect of income taxes calculated using the estimated
    annual effective tax rate.

    These measures have been described and presented in this news release in
order to provide shareholders and potential investors with additional
information regarding Encana's liquidity and its ability to generate
funds to finance its operations.

    NOTE 2: Reserves reporting information

    Encana's disclosure of reserves data is in accordance with Canadian
securities regulatory requirements. Encana's 2012 disclosure includes
proved and probable reserves quantities before and after royalties
employing forecast prices and costs in accordance with Canadian
protocols. Reserves disclosure employing U.S. protocols uses SEC constant
prices and costs on proved reserves on an after-royalties basis. Reserves
disclosure under both Canadian and U.S. protocols will be available in
the Annual Information Form, which the company anticipates filing later
this month. 

    For all reserves estimates highlighted in this news release, Encana has
used Henry Hub forecast prices of $3.75 per MMBtu for 2013, $4.25 per
MMBtu for 2014, $4.75 per MMBtu for 2015, $5.25 per MMBtu for 2016, $5.50
per MMBtu for 2017, then increasing to $6.27 per MMBtu by 2022 and
escalating 2 percent per year thereafter. 


    Production replacement is calculated by dividing reserves additions by
production in the same period. Reserves additions over a given period, in
this case 2012, are calculated by summing extensions and discoveries and
revisions. Reserves additions exclude acquisitions and divestitures.
Proved reserves added in 2012 included both developed and undeveloped
quantities. Additions to Encana's PUDs were consistent with Encana's
resource play focus. The company estimates that 100 percent of its PUDs
will be developed within the next five years. Many performance measures
exist; all measures have limitations and historical measures are not
necessarily indicative of future performance. 

the estimated remaining quantities of oil and natural gas and related
substances anticipated to be recoverable from known accumulations, from a
given date forward, based on: analysis of drilling, geological,
geophysical and engineering data, the use of established technology, and
specified economic conditions, which are generally accepted as being
reasonable. Proved reserves are those reserves which can be estimated
with a high degree of certainty to be recoverable. It is likely that the
actual remaining quantities recovered will exceed the estimated proved
reserves. Probable reserves are those additional reserves that are less
certain to be recovered than proved reserves. It is equally likely that
the actual remaining quantities recovered will be greater or less than
the sum of the estimated proved plus probable reserves. Possible reserves
are those additional reserves that are less certain to be recovered than
probable reserves. It is unlikely that the actual remaining quantities
recovered will exceed the sum of the estimated proved plus probable plus
possible reserves.

    The estimates of economic contingent resources contained in this news
release are based on definitions contained in the Canadian Oil and Gas
Evaluation Handbook. Contingent resources do not constitute, and should
not be confused with, reserves. Contingent resources are defined as those
quantities of petroleum estimated, on a given date, to be potentially
recoverable from known accumulations using established technology or
technology under development, but which are not currently considered to
be commercially recoverable due to one or more contingencies. Economic
contingent resources are those contingent resources that are currently
economically recoverable. In examining economic viability, the same
fiscal conditions have been applied as in the estimation of reserves.
There is a range of uncertainty of estimated recoverable volumes. A low
estimate is considered to be a conservative estimate of the quantity that
will actually be recovered. It is likely that the actual remaining
quantities recovered will exceed the low estimate, which under
probabilistic methodology reflects a 90 percent confidence level. A best
estimate is considered to be a realistic estimate of the quantity that
will actually be recovered. It is equally likely that the actual
remaining quantities recovered will be greater or less than the best
estimate, which under probabilistic methodology reflects a 50 percent
confidence level. A high estimate is considered to be an optimistic
estimate. It is unlikely that the actual remaining quantities recovered
will exceed the high estimate, which under probabilistic methodology
reflects a 10 percent confidence level.

    There is no certainty that it will be commercially viable to produce any
portion of the volumes currently classified as economic contingent
resources. The primary contingencies which currently prevent the
classification of Encana's disclosed economic contingent resources as
reserves include the lack of a reasonable expectation that all internal
and external approvals will be forthcoming and the lack of a documented
intent to develop the resources within a reasonable time frame. Other
commercial considerations that may preclude the classification of
contingent resources as reserves include factors such as legal,
environmental, political and regulatory matters or a lack of markets. 

    The estimates of various classes of reserves (proved, probable, possible)
and of contingent resources (low, best, high) in this news release
represent arithmetic sums of multiple estimates of such classes for
different properties, which statistical principles indicate may be
misleading as to volumes that may actually be recovered. Readers should
give attention to the estimates of individual classes of reserves and
contingent resources and appreciate the differing probabilities of
recovery associated with each class.

    Encana uses the term resource play. Resource play is a term used by
Encana to describe an accumulation of hydrocarbons known to exist over a
large areal expanse and/or thick vertical section, which when compared to
a conventional play, typically has a lower geological and/or commercial
development risk and lower average decline rate.

    The practice of preparing production and reserve quantities data under
Canadian disclosure requirements (National Instrument 51-101) differs
from the disclosure under U.S. protocols prepared in accordance with the
requirements of the SEC. The primary differences between the two
reporting requirements include:

a.  the Canadian standards require disclosure of proved and probable
    reserves, while the U.S. standards require disclosure of only proved
b.  the Canadian standards require the use of forecast prices in the
    estimation of reserves, while the U.S. standards require the use of 12-
    month average historical prices which are held constant; 
c.  the Canadian standards require disclosure of reserves on a gross (before
    royalties) and net (after royalties) basis, while the U.S standards
    require disclosure on a net (after royalties) basis; 
d.  the Canadian standards require disclosure of production on a gross
    (before royalties) basis, while the U.S. standards require disclosure on
    a net (after royalties) basis; 
e.  the Canadian standards require that reserves and other data be reported
    on a more granular product type basis than required by the U.S.
    standards; and 
f.  the Canadian standards require that proved undeveloped reserves be
    reviewed annually for retention or reclassification if development has
    not proceeded as previously planned, while the U.S. standards specify a
    five year limit after initial booking for the development of proved
    undeveloped reserves.

    30-day IP and short-term rates are not necessarily indicative of
long-term performance or of ultimate recovery.

    In this news release, certain oil and NGLs volumes have been converted to
cubic feet equivalent (cfe) on the basis of one barrel (bbl) to six
thousand cubic feet (Mcf). Cfe may be misleading, particularly if used in
isolation. A conversion ratio of one bbl to six Mcf is based on an energy
equivalency conversion method primarily applicable at the burner tip and
does not represent value equivalency at the well head. Given that the
value ratio based on the current price of oil as compared to natural gas
is significantly different from the energy equivalency of 6:1, utilizing
a conversion on a 6:1 basis may be misleading as an indication of value.

providing Encana shareholders and potential investors with information
regarding Encana, including management's assessment of Encana's and its
subsidiaries' future plans and operations, certain statements contained
in this news release are forward-looking statements or information within
the meaning of applicable securities legislation, collectively referred
to herein as "forward-looking statements." Forward-looking statements in
this news release include, but are not limited to: achieving the strategy
of pursuing potential joint venture and strategic divestiture
opportunities, attaining profitability and running a sustainable business
in the current low commodity price environment, maintaining capital
discipline and decreasing costs and being in a strong position in 2013;
range of plays that can be profitable at current commodity prices and
expectation to spend time and money in 2013 in those areas; maintaining
financial strength and flexibility and expectation to be among the lowest
cost producers of natural gas in North America; expected total carry
capital over the next five years; expectation for cash to bridge gap
between capital spending and forecasted cash flow; 2013 expected liquids
and natural gas production, capital investment (including by product and
plays), cash flow and net divestitures; anticipated future proceeds from
various joint venture, partnerships and other agreements entered into by
the company, including the successful implementation of and other
expected benefits to be generated from those agreements; ability to fund
future development costs associated with joint venture, partnerships and
other agreements; future developments in various resource and emerging
plays and expected number of wells to be drilled, including their timing
and location; commerciality, anticipated returns, growth and production
of various assets; anticipated date of first gas from Deep Panuke for
2013; estimated supply cost in Haynesville and Montney; estimates of
reserves and economic contingent resources, including estimates of PUDs,
future development costs associated with PUDs and expected period within
which to convert PUDs to proved developed reserves; and 2013 Corporate
Guidance and all the forecasts and assumptions contained therein.

    Readers are cautioned not to place undue reliance on forward-looking
statements, as there can be no assurance that the plans, intentions or
expectations upon which they are based will occur. By their nature,
forward-looking statements involve numerous assumptions, known and
unknown risks and uncertainties, both general and specific, that
contribute to the possibility that the predictions, forecasts,
projections and other forward-looking statements will not occur, which
may cause the company's actual performance and financial results in
future periods to differ materially from any estimates or projections of
future performance or results expressed or implied by such
forward-looking statements. These assumptions, risks and uncertainties
include, among other things: volatility of, and assumptions regarding
natural gas and liquids prices, including substantial or extended decline
of the same and their adverse effect on the company's operations and
financial condition and the value and amount of its reserves; assumptions
based upon the company's current guidance; fluctuations in currency and
interest rates; risk that the company may not conclude divestitures of
certain assets or other transactions or receive amounts contemplated
under the transaction agreements (such transactions may include
third-party capital investments, farm-outs or partnerships, which Encana
may refer to from time to time as "partnerships" or "joint ventures" and
the funds received in respect thereof which Encana may refer to from time
to time as "proceeds", "deferred purchase price" and/or "carry capital",
regardless of the legal form) as a result of various conditions not being
met; product supply and demand; market competition; risks inherent in the
company's and its subsidiaries' marketing operations, including credit
risks; imprecision of reserves estimates and estimates of recoverable
quantities of natural gas and liquids from resource plays and other
sources not currently classified as proved, probable or possible reserves
or economic contingent resources, including future net revenue estimates;
marketing margins; potential disruption or unexpected technical
difficulties in developing new facilities; unexpected cost increases or
technical difficulties in constructing or modifying processing

    Risks associated with technology; the company's ability to acquire or
find additional reserves; hedging activities resulting in realized and
unrealized losses; business interruption and casualty losses; risk of the
company not operating all of its properties and assets; counterparty
risk; risk of downgrade in credit rating and its adverse effects;
liability for indemnification obligations to third parties; variability
of dividends to be paid; its ability to generate sufficient cash flow
from operations to meet its current and future obligations; its ability
to access external sources of debt and equity capital; the timing and the
costs of well and pipeline construction; the company's ability to secure
adequate product transportation; changes in royalty, tax, environmental,
greenhouse gas, carbon, accounting and other laws or regulations or the
interpretations of such laws or regulations; political and economic
conditions in the countries in which the company operates; terrorist
threats; risks associated with existing and potential future lawsuits and
regulatory actions made against the company; risk arising from price
basis differential; risk arising from inability to enter into attractive
hedges to protect the company's capital program; and other risks and
uncertainties described from time to time in the reports and filings made
with securities regulatory authorities by Encana. Although Encana
believes that the expectations represented by such forward-looking
statements are reasonable, there can be no assurance that such
expectations will prove to be correct. Readers are cautioned that the
foregoing list of important factors is not exhaustive. In addition,
assumptions relating to such forward-looking statements generally include
Encana's current expectations and projections made in light of, and
generally consistent with, its historical experience and its perception
of historical trends, including the conversion of resources into reserves
and production as well as expectations regarding rates of advancement and
innovation, generally consistent with and informed by its past
experience, all of which are subject to the risk factors identified
elsewhere in this news release.

    Assumptions with respect to forward-looking information regarding
expanding Encana's oil and NGLs production and extraction volumes are
based on existing expansion of natural gas processing facilities in areas
where Encana operates and the continued expansion and development of oil
and NGL production from existing properties within its asset portfolio.

    Forward-looking information respecting anticipated 2013 cash flow for
Encana is based upon, among other things, achieving average production
for 2013 of between 2.8 Bcf/d and 3.0 Bcf/d of natural gas and 50,000
bbls/d to 60,000 bbls/d of liquids, commodity prices for natural gas and
liquids based on NYMEX $3.75 per Mcf and WTI of $95 per bbl, an estimated
U.S./Canadian dollar foreign exchange rate of $1.00 and a weighted
average number of outstanding shares for Encana of approximately 736

    The company has previously disclosed in its June 20, 2012 news release
the following estimates for 2013: capital investment ($4.0 billion - $5.0
billion), cash flow ($2.5 billion - $3.5 billion), net divestitures ($1.0
billion to $1.5 billion) and liquids production (60,000 bbls/d to 70,000
bbls/d). The foregoing forecasts have now been superseded by the
company's guidance for 2013 that can be found at
www.encana.com/investors. The current 2013 guidance estimate for capital
investment is lower than that estimated last June 2012 primarily due to a
moderated pace of investment and the current 2013 guidance estimates for
cash flow and liquids production are generally lower than previously
estimated primarily due to this reduced capital investment. The range for
estimated net divestitures for 2013 in the current guidance is lower than
previously estimated because of the accelerated divestitures successfully
completed by Encana in 2012.

    Furthermore, the forward-looking statements contained in this news
release are made as of the date hereof and, except as required by law,
Encana undertakes no obligation to update publicly or revise any
forward-looking statements, whether as a result of new information,
future events or otherwise. The forward-looking statements contained in
this news release are expressly qualified by this cautionary statement.

    SOURCE: Encana Corporation

Encana Corporation - Investor contact:
Ryder McRitchie
Vice-President, Corporate Communications &
Investor Relations
(403) 645-2007

Encana Corporation - Investor contact:
Lorna Klose
Manager, Investor Relations
(403) 645-6977

Encana Corporation - Media contact:
Jay Averill
Media Relations
(403) 645-4747

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