Encana Third Quarter Results Show Company is on Track to Meet

Encana Third Quarter Results Show Company is on Track to Meet Full
Year Guidance 
Solid liquids growth building momentum for 2013 
CALGARY, ALBERTA -- (Marketwire) -- 10/24/12 --  
Encana Corporation (TSX:ECA) (NYSE:ECA) reported cash flow of $913
million or $1.24 per share and $263 million in operating earnings or
$0.36 per share for the third quarter 2012. Year-to-date the company
generated cash flow of approximately $2.7 billion or $3.71 per share
and operating earnings of $701 million or $0.95 per share. 
Oil and natural gas liquids (NGLs) production volumes in the quarter
averaged over 30,000 barrels per day (bbls/d), an increase of nearly
6,000 bbls/d compared to the third quarter of 2011. The Canadian
Division volumes were higher primarily due to the extraction of
additional liquids volumes at the Musreau plant in Bighorn and a
successful drilling program in the Peace River Arch area. The USA
Division volumes were higher primarily due to drilling programs
across the company's oil and liquids-rich plays. 
"The strong quarter-over-quarter growth in our oil and NGLs volumes
is the result of a focused effort by our teams to accelerate the
development of our oil and liquids-rich plays," says Randy Eresman,
Encana President & CEO. "We expect to see this trend continue as we
progress our plans to diversify our commodity portfolio and achieve a
more balanced stream of future cash flows." 
Average natural gas production volumes were 2.9 billion cubic feet
per day (Bcf/d), down about 460 million cubic feet per day (MMcf/d)
from the same period of 2011 primarily due to voluntary capacity
reductions, divestitures and natural declines. In the Canadian
Division, declines were partially offset by successful drilling
programs in the Bighorn and Cutbank Ridge areas. In the USA Division,
declines were partially offset by a successful drilling program in
the Piceance Basin. 
During the first half of this year, when natural gas prices were at
their lowest in the last 10 years, Encana shut-in or curtailed
approximately 500 MMcf/d of production. Beginning in August, Encana
began bringing the volumes back on-line with the goal that all
shut-in and curtailed volumes would be back on-stream prior to
winter. With production volumes now largely restored, the company
re-affirms its 2012 production guidance of 3.0 Bcf/d. 
Encana recorded a $1.19 billion after-tax impairment charge against
net earnings in the third quarter resulting primarily from the impact
of the decline in 12-month average trailing natural gas prices. As a
result, reported net earnings for the third quarter were a loss of
$1.24 billion. The impairment charge is non-cash in nature, does not
affect cash flow or operating earnings and it is not indicative of
the fair market value of the company's oil and gas properties or the
future net cash flows expected to be generated from the properties. 
To date, Encana has increased its natural gas hedge position to
approximately 1.2 Bcf/d for 2013 at an average price of $4.51 per
"Our increased risk management position helps to provide additional
certainty for our cash flow generation and capital programs for
2013," adds Eresman. 
"There are a number of positive signs for Encana as we look towards
2013. In addition to growth in oil and NGLs production and the recent
recovery in natural gas prices, we are optimistic as discussions
progress on our joint venture and divestiture opportunities," says
Eresman. "Looking longer term, with a diversified commodity mix and
our proven track record as a low cost producer, we are well
positioned to achieve sustainable growth across our portfolio of
Update on Operations 
In the Canadian Division, Encana had a successful quarter with the
continued development of its liquids-rich assets. 
Clearwater - Encana has drilled 13 oil wells through the third
quarter in the area with plans in place to drill an additional 20
wells in 2012. Oil and NGLs volumes are up slightly in this area and
it is expected these plays will provide a meaningful contribution to
liquids growth over the next six months as the new wells are brought
on production. 
Duvernay - Encana has two rigs currently drilling in the area with 12
wells planned for the year. The company has rig released seven wells
(two vertical and five horizontal). Condensate yields from these
early wells are very promising. 
Peace River Arch - Encana continues to explore this liquids-rich area
with one rig currently working in the region. Encana drilled seven
wells in the quarter with a total of 20 drilled to date out of a
planned 27 for 2012. 
In the USA Division, the company is experiencing encouraging results
on its oil and liquids-rich natural gas plays.  
DJ Niobrara - With plans to drill 18 wells this year, there are
currently two wells on production and another nine wells either
completed or waiting on completions in this area. 
Eaglebine - Encana is planning to drill 12 wells in this play in 2012
and is experiencing promising early results from six operated wells
on production with some of the wells exceeding expectations. There
are two additional wells waiting on completions. 
San Juan - Encana has drilled four wells through the third quarter,
with a fifth in the process of drilling, and a total of eight wells
planned for 2012. 
Mississippian Lime - Encana is currently running a two rig drilling
program in the play and is producing from three wells. The company
has drilled seven wells to date with a total of 16 planned wells for
the year. 
Tuscaloosa Marine Shale - Progress is being made on delineating the
asset. In this area, Encana has four new operated producing wells and
two wells waiting on completions, making a total of six wells drilled
out of a planned eight in the play for 2012. In addition, the company
has four legacy acquired wells. There are two drilling rigs working
in the play with the company's focus being on reducing drilling
(All well counts are net wells) 
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 December 31, 2012 to common shareholders
of record as of December 14, 2012. 
Third Quarter Highlights 

Financial Summary                                                           
(for the period ended September 30)                            Q3        Q3 
 ($ millions, except per share amounts)                      2012      2011 
Cash flow(1)                                                  913     1,181 
  Per share diluted                                          1.24      1.60 
Operating earnings(1)                                         263       389 
  Per share diluted                                          0.36      0.53 
Earnings Reconciliation Summary                                             
Net earnings (loss)                                        (1,244)      459 
After tax (addition) deduction:                                             
  Unrealized hedging gain (loss)                             (428)      273 
ments                                              (1,193)        - 
  Non-operating foreign exchange gain (loss)                  162      (325)
  Income tax adjustments                                      (48)      122 
Operating earnings(1)                                         263       389 
  Per share diluted                                          0.36      0.53 

(1) Cash flow and operating earnings are non-GAAP measures as defined
in Note 1 on page 4. 

Production Summary                                                          
(for the period ended September 30)                       Q3      Q3        
(After royalties)                                       2012    2011% change
Natural gas (MMcf/d)                                   2,905   3,365     -14
Liquids (Mbbls/d)                                       30.3    24.4     +24
Third Quarter Natural Gas and Liquids Prices                                
                                                            Q3 2012  Q3 2011
Natural gas                                                                 
NYMEX ($/MMBtu)                                                2.81     4.20
Encana realized natural gas price(1)($/Mcf)                    4.91     5.01
Oil and NGLs($/bbl)                                                         
WTI                                                           92.20    89.54
Encana realized liquids price(1 )                             72.17    82.43

(1) Realized prices include the impact of financial hedging. 
Encana will host a conference call today Wednesday, October 24, 2012
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 October 24 until midnight October 31, 2012 by dialing (855)
859-2056 or (416) 849-0833 and entering passcode 30551401. 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 September 30, 2012 are available at www.encana.com
and will be filed on SEDAR (www.sedar.com) and EDGAR (www.sec.gov). 
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 ECA. 
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
NOTE 1: Non-GAAP measures 
This news release contains references to non-GAAP measures as

--  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. 
providing Encana Corporation ("Encana" or the "Company") 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: expected
continued trend of growing oil and NGL production in order to achieve
a diversified commodity portfolio and more balanced stream of future
cash flows; expectation for curtailed volumes to be brought back into
production prior to winter; expectation to meet 2012 Corpo
Guidance; expectation that the impairment charge is not indicative of
the fair market value of Encana's assets; expectation to make
progress on a range of joint venture and divestiture opportunities,
including the timing for completion, expected values to be generated,
level of interest on the same and the ability to meet 2012 and 2013
divestitures targets; expected benefits from joint venture
transactions; planned wells and future development for, including
potential upsides from various oil and liquids-rich assets; ability
of Company's risk management to support cash flow target for 2012 and
cash flow generation and capital programs for 2013; expected 2012
natural gas and liquids production exit rates; achieving optimization
and cost reduction across the Company's business; expectation on
future natural gas prices, 2013 natural gas production levels, rig
count trend, future coal to gas displacement and the price ratio
between oil and natural gas; and initial projected 2013 capital,
production and cash flows, including the impact on cash flows of
increases in natural gas prices. 
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 (including third-party
capital investments, farm-outs or partnerships, which Encana may
refer to from time to time as "partnerships" or "joint ventures",
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 facilities; 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 2012 cash flow for
Encana is based upon, among other things, achieving average
production for 2012 of 3.0 Bcf/d of natural gas and 30,000 bbls/d of
liquids, commodity prices for natural gas and liquids based on NYMEX
$3.25 per Mcf and WT
I 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 million.
Forward-looking information respecting anticipated 2013 cash flow for
Encana is based upon achieving average production for 2013 of between
2.9 Bcf/d and 3.1 Bcf/d of natural gas and 60,000 bbls/d to 70,000
bbls/d of liquids, commodity prices for natural gas and liquids based
on NYMEX $3.50 per Mcf and WTI of $90 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
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
SOURCE: Encana Corporation
Encana Corporation
Ryder McRitchie
Vice-President, Investor Relations
(403) 645-2007 
Encana Corporation
Lorna Klose
Manager, Investor Relations
(403) 645-6977 
Encana Corporation
Jay Averill
Media Relations
(403) 645-4747
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