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

Encana Finishes 2012 Ahead of Guidance and With $3.2 Billion Cash on Balance 
Sheet 
CALGARY, ALBERTA -- (Marketwire) -- 02/14/13 --  
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 exceedin
g 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 environment. 
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
www.encana.com/investors 
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
Par
tnership (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 as
sets. 
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
(Mcfe). 


 
----------------------------------------------------------------------------
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 Tcfe. 
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
----------------------------------------------------------------------------
Using                                                                       
 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, 201
3. 


 
----------------------------------------------------------------------------
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 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
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 adjustmen
ts 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.  
RESERVES METRICS DEFINITIONS 
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.  
ADVISORY REGARDING RESERVES & OTHER RESOURCES INFORMATION - Reserves
are 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 r
ecoverable 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
    reserves; 
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. 
ADVISORY REGARDING FORWARD-LOOKING STATEMENTS - In the interests of
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 t
herein. 
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 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 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 million. 
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 liquid
s 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
Contacts:
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