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EnCana Generates Second Quarter Cash Flow of US$2.9 Billion, or $3.85 Per Share – Up 16 Percent

July 24, 2008

CALGARY, July 24 /PRNewswire-FirstCall/ — EnCana Corporation (TSX & NYSE: ECA) achieved strong increases in cash flow and operating earnings in the second quarter of 2008 as a result of solid performance from the company’s North American portfolio of resource plays and substantial increases in commodity prices.

“Once again our strong operating results demonstrate the substantial value-creation capacity of our resource play strategy. Second quarter cash flow per share and operating earnings per share increased 16 and 9 percent respectively over last year while natural gas production is ahead of expectations. Led by the East Texas, Jonah, Bighorn and Alberta coalbed methane (CBM) resource plays, our low-risk portfolio of unconventional resources continues to deliver sustainable growth across North America. In the second quarter, the upstream business of our Integrated Oil division, in particular, benefited from significantly higher field prices,” said Randy Eresman, EnCana’s President & Chief Executive Officer.

EnCana expanding investments in North American resource portfolio

“With natural gas production growing faster than forecast and stronger than expected prices, we are raising our 2008 cash flow forecast to a range of $10 billion to $11 billion from a current level of $9.6 billion to $10 billion. Our full-year gas production forecast is also increasing to an expected average of 3.85 Bcf/d. We are directing the higher than originally forecast cash flows into growing our already strong position in the Haynesville Shale in Louisiana, where recent test wells are demonstrating very strong potential. At the same time, we are stepping up our divestiture program for the remainder of the year to offset the additional costs of expanding shale gas lands and resources,” Eresman said.

Shale plays continue to show promise

“In the second quarter we announced an expansion of our sizeable position in British Columbia’s Horn River and Louisiana’s Haynesville natural gas shale plays. At Horn River, two of our recently completed wells are producing at a very strong first-month average rate in excess of 5 million cubic feet per day (MMcf/d). At Haynesville, during a two-day test, the initial flow rate of a second horizontal well was 15 MMcf/d. These well results are exceptional and are a strong indication that the addition of these plays has the potential to accelerate the pace of our natural gas growth,” Eresman said.

Integrated Oil production growth set to ramp up

“At Foster Creek, first production from our newest expansion phase, which will add 30,000 bbls/d of gross production capacity, is expected to start ramping up in the fourth quarter 2008. The next 30,000 bbls/d phase is expected to be completed in the first quarter of 2009. Combined, these two phases are scheduled to double our gross production capacity at Foster Creek to 120,000 bbls/d. Production is forecast to begin ramping up later this year and continue through 2009. At Christina Lake, we are steaming wells in our recently completed expansion, which is expected to increase our gross production capacity to 18,000 bbls/d by the end of the year, with production ramping up through 2009,” Eresman said.

“Plans for splitting EnCana into two strong independent companies focused on distinct businesses – unconventional natural gas (GasCo) and integrated oil (IOCo) – are proceeding well and we are working towards completing the transaction early in 2009,” Eresman said.

   Second Quarter 2008 Highlights   ------------------------------   (all year-over-year comparisons are to the second quarter of 2007)    Financial     -   Cash flow increased 16 percent per share to $3.85, or $2.9 billion   -   Operating earnings were up 9 percent per share to $1.96, or       $1.5 billion   -   Net earnings were down 14 percent per share to $1.63, or       $1.2 billion, primarily due to unrealized mark-to-market losses on       risk management activities of $235 million after-tax compared to       gains of $47 million after-tax in 2007   -   Operating cash flow generated from the Integrated Oil division       totalled $527 million, comprised of $185 million from the upstream       operations, a 59 percent increase due to strong field prices, and       $342 million from the downstream business, a decrease of 22 percent       due to weaker refining margins   -   Capital investment was in line with guidance at $1.7 billion, up       about 47 percent in large part due to continued development of East       Texas and other key resource plays, as well as the expansion of the       company's upstream and downstream integrated oil capacity   -   Free cash flow decreased $206 million to $1.2 billion (free cash flow       is defined in Note 1 on page 8)   -   Realized natural gas prices were up 12 percent to $8.54 per thousand       cubic feet (Mcf) and realized liquids prices increased 99 percent to       $90.47 per barrel (bbl). These prices include the impact of financial       hedges   -   EnCana purchased approximately 200,000 common shares at an average       share price of $74.81 under the Normal Course Issuer Bid, for a total       cost of $15 million.    Operating - Upstream    -   Key resource play production was up 14 percent, with a 17 percent       increase in natural gas production and oil production down 9 percent   -   Total natural gas production increased 10 percent to 3.8 billion       cubic feet per day (Bcf/d), up 11 percent per share   -   Total oil and natural gas liquids (NGLs) production decreased 4       percent to approximately 128,000 barrels per day (bbls/d), down 3       percent per share   -   Oil production at Foster Creek and Christina Lake was down 12 percent       to approximately 24,700 bbls/d (net to EnCana) due to an extended       turnaround in the second quarter at Foster Creek. Current net       production is about 30,000 bbls/d   -   Operating and administrative costs of $1.71 per thousand cubic feet       equivalent (Mcfe) increased 46 percent from $1.17 per Mcfe one year       earlier. More than half of the increase was due to long-term       incentive costs and an appreciation of the Canadian dollar compared       to the U.S. dollar. When those items are factored out, operating and       administrative costs were in line with guidance of $1.40 per Mcfe.       The rest of the increase was due to reorganization costs, increased       activity levels and other administrative costs.    Operating - Downstream    -   Refined products averaged 464,000 bbls/d (232,000 bbls/d net to       EnCana), up 10 percent   -   Refinery crude utilization of 97 percent or 437,000 bbls/d crude       throughput (218,500 bbls/d net to EnCana), up 10 percent, from the       second quarter of 2007, due to a major turnaround and new coker       startup at the Borger refinery in June, 2007.    Guidance for total cash flow increases to a range of $10 billion to   $11 billion   

Based on the company’s strong cash flow performance to date and natural gas production and commodity price expectations for the remainder of the year, EnCana is increasing its 2008 guidance for total cash flow to a range of $10 billion to $11 billion, or between $13.30 and $14.65 per share. EnCana is also increasing its natural gas production forecast by 70 MMcf/d to 3.85 Bcf/d, or 8 percent higher than 2007 gas production. Key gas resource play production in 2008 is now expected to average 3.14 Bcf/d, up 60 MMcf/d. Production from the company’s Foster Creek and Christina Lake projects is now expected to average about 31,000 bbls/d, down about 3,000 bbls/d due to an unexpected power outage and an extended plant turnaround in the second quarter at Foster Creek. As well, the company is planning a more ambitious divestiture program. Proceeds from planned asset sales are expected to offset additional land purchases in 2008, resulting in net proceeds from acquisitions and divestitures of $500 million, which is in line with guidance. Updated guidance is posted on the company’s website http://www.encana.com/.

Managing costs through long-term drilling contracts

“As a result of higher commodity prices and increased activity, we are seeing signs of cost inflation in services and materials – particularly for steel and fuels, and we believe inflationary pressure may continue to climb the rest of the year. EnCana has largely managed to offset inflationary pressures to date through a series of long-term contracts. For example, we have been working to lock in longer-term contracts for our well fracturing services. The majority of these contracts are priced at current levels. Significant portions of our steel requirements were contracted early so that we have the benefit of those more favourable cost levels. Going forward, we will continue to pursue cost management opportunities when possible,” Eresman said.

Key resource play natural gas production up 17 percent in second quarter

Total natural gas production increased 10 percent in the second quarter to 3.8 Bcf/d, driven by a 17 percent increase in EnCana’s natural gas key resource plays to 3.15 Bcf/d. In the U.S. increases were led by East Texas at 127 percent as a result of drilling success as well as incremental volumes from the Deep Bossier acquisition. In the Canadian Foothills natural gas production was up 5 percent, with drilling success and new facilities in the key resource plays of Bighorn in west central Alberta, CBM in central Alberta and Cutbank Ridge straddling the British Columbia-Alberta boundary.

Integrated Oil benefits from higher oil prices

Integrated Oil generated $527 million in operating cash flow, down slightly from $557 million in the same quarter of 2007. The upstream business benefited from a 138 percent increase in the average heavy oil price to $93.64 per bbl at Foster Creek and Christina Lake. Operating cash flow from the downstream business was impacted by significantly weaker refining margins. Operating cash flow for the second quarter includes $172 million related to lower purchased product costs as a result of accounting for inventory based on a first-in first-out valuation which is required under Canadian generally accepted accounting principles. This inventory valuation methodology results in lower product charges to operations in a rising input cost environment. The Chicago 3-2-1 crack spread averaged $13.60 per bbl in the quarter, down 55 percent from $30.12 per bbl from the same period last year when crack spreads reached record levels as gasoline inventories were drawn down to five-year lows. The weaker refining margins were offset by the higher upstream pricing, which demonstrates the benefit of the company’s integration strategy. Second quarter oil production at Foster Creek and Christina Lake was down 12 percent to about 24,700 bbls/d (net to EnCana), primarily due to an extended scheduled turnaround at Foster Creek. Current net production is approximately 30,000 bbls/d.

   IMPORTANT NOTE: Effective January 2, 2007, EnCana established an   integrated oil business with ConocoPhillips, which resulted in EnCana   contributing its interests in Foster Creek and Christina Lake into an   upstream partnership owned 50-50 by the two companies. Production and   wells drilled from 2006 have been adjusted on a pro forma basis to   reflect the integrated oil transaction. Per share amounts for cash flow   and earnings are on a diluted basis. EnCana reports in U.S. dollars   unless otherwise noted and follows U.S. protocols, which report   production, sales and reserves on an after-royalties basis. The company's   financial statements are prepared in accordance with Canadian generally   accepted accounting principles (GAAP).     -------------------------------------------------------------------------                  Financial Summary - Total Consolidated   -------------------------------------------------------------------------   (for the six months    ended June 30)                                     6       6   ($ millions, except          Q2      Q2      %    months   months   %    per share amounts)         2008    2007   change  2008     2007  change   -------------------------------------------------------------------------   Cash flow(1)               2,889   2,549     +13   5,278   4,301     +23   Per share diluted           3.85    3.33     +16    7.02    5.56     +26   -------------------------------------------------------------------------   Operating earnings(1)      1,469   1,369      +7   2,514   2,219     +13   Per share diluted           1.96    1.79      +9    3.34    2.87     +16   -------------------------------------------------------------------------   Net earnings               1,221   1,446     -16   1,314   1,943     -32   Per share diluted           1.63    1.89     -14    1.75    2.51     -30   -------------------------------------------------------------------------           Earnings Reconciliation Summary - Total Consolidated   -------------------------------------------------------------------------   Net earnings (loss)        1,221   1,446           1,314   1,943   (Add back losses &    deduct gains)              (235)     47            (972)   (376)   Unrealized mark-to-market    hedging gain (loss),    after-tax                   (13)     (7)           (228)      4   Non-operating foreign    exchange gain (loss),    after-tax Gain (loss) on    discontinuance, after-tax     -       -               -      59   Future tax recovery due    to tax rate reductions        -      37               -      37   -------------------------------------------------------------------------   Operating earnings(1)      1,469   1,369      +7   2,514   2,219     +13     Per share diluted         1.96    1.79      +9    3.34    2.87     +16   -------------------------------------------------------------------------   (1) Cash flow and operating earnings are non-GAAP measures as defined in       Note 1 on Page 8.    -------------------------------------------------------------------------                       Production & Drilling Summary   -------------------------------------------------------------------------                            Total Consolidated   -------------------------------------------------------------------------   (for the six months                                 6       6    ended June 30)              Q2      Q2      %    months  months    %    (After royalties)          2008    2007   change  2008    2007   change   -------------------------------------------------------------------------   Natural Gas (MMcf/d)       3,841   3,506     +10   3,787   3,454     +10   -------------------------------------------------------------------------     Natural gas production      per 1,000 shares (Mcf)    466     421     +11     919     819     +12   -------------------------------------------------------------------------   Oil and NGLs (Mbbls/d)       128     133      -4     132     132       -   -------------------------------------------------------------------------     Oil and NGLs production      per 1,000 shares (Mcfe)    93      96      -3     193     188      +3   -------------------------------------------------------------------------   Total Production (MMcfe/d) 4,607   4,306      +7   4,582   4,246      +8   -------------------------------------------------------------------------     Total per 1,000 shares      (Mcfe)                    559     517      +8   1,112   1,007     +10   -------------------------------------------------------------------------   -------------------------------------------------------------------------   Net wells drilled            409     569     -28   1,552   1,833     -15   -------------------------------------------------------------------------   -------------------------------------------------------------------------                  Growth from key North American resource plays   -------------------------------------------------------------------------   Resource Play                    Daily Production                ------------------------------------------------------------                        2008                          2007             2006                ------------------------------------------------------------   (After                           Full                               Full   royalties)   YTD     Q2     Q1   Year     Q4     Q3     Q2     Q1   Year   -------------------------------------------------------------------------   Natural Gas (MMcf/d)     Jonah      613    630    595    557    612    588    523    504    464     Piceance   377    383    372    348    351    354    349    334    326     East      Texas     294    316    273    143    187    144    139    103     99     Fort      Worth     138    137    140    124    138    128    124    106    101     Greater      Sierra    211    219    205    211    221    220    219    186    213     Cutbank      Ridge(1)  275    280    271    258    283    269    248    232    189     Bighorn(1) 158    170    146    126    136    136    122    109     97     CBM        300    303    298    259    283    256    245    251    194     Shallow      Gas       713    712    715    726    727    713    729    735    739   -------------------------------------------------------------------------   Total natural    gas(1)    (MMcf/d)  3,079  3,150  3,015  2,752  2,938  2,808  2,698  2,560  2,422   -------------------------------------------------------------------------   Oil (Mbbls/d)      Foster       Creek     24     21     27     24     25     26     25     20     18      Christina       Lake       3      4      2      3      2      3      3      3      3      Pelican       Lake      23     21     24     23     24     24     23     23     24      Weyburn(2) 14     13     14     15     14     15     14     15     15   -------------------------------------------------------------------------   Total oil    (Mbbls/d)(2) 64     59     67     65     65     68     65     61     60   -------------------------------------------------------------------------   Total    (MMcfe/d)    (1),(2)   3,464  3,506  3,417  3,142  3,328  3,210  3,088  2,926  2,782   -------------------------------------------------------------------------   % change    from prior    period            +2.6   +2.7  +12.9   +3.7   +4.0   +5.5   +9.2   -------------------------------------------------------------------------   (1) Key resource play production volumes in 2007 and 2006 for Cutbank       Ridge and Bighorn were restated to include the addition of new areas       and zones that now qualify for key resource play inclusion based on       EnCana's internal criteria.   (2) Total key resource play production volumes in 2007 and 2006 were       restated in the first quarter of 2008 to include the designation of       Weyburn as an oil key resource play.            Drilling activity in key North American resource plays   -------------------------------------------------------------------------   Resource Play                  Net Wells Drilled                ------------------------------------------------------------                        2008                          2007             2006                ------------------------------------------------------------                                    Full                               Full                YTD     Q2     Q1   Year     Q4     Q3     Q2     Q1   Year   -------------------------------------------------------------------------   Natural Gas     Jonah       92     49     43    135     23     31     42     39    163     Piceance   164     81     83    286     77     72     72     65    220     East Texas  33     22     11     35      8      9     11      7     59     Fort Worth  41     20     21     75     15     17     29     14     97     Greater      Sierra     63     27     36    109     27     27     32     23    115     Cutbank      Ridge(1)   48     24     24     93     11     23     26     33    134     Bighorn(1)  48     18     30     62      6     18     10     28     58     CBM        261     10    251  1,079    330    323     18    408    729     Shallow      Gas       579     83    496  1,914    649    608    241    416  1,310   -------------------------------------------------------------------------   Total gas    wells(1)  1,329    334    995  3,788  1,146  1,128    481  1,033  2,885   -------------------------------------------------------------------------   Oil     Foster      Creek      13      1     12     23      6      8      1      8      3     Christina      Lake        -      -      -      3      -      1      2      -      1     Pelican      Lake        -      -      -      -      -      -      -      -      -     Weyburn(2)  14      5      9     37     10      9      9      9     35   -------------------------------------------------------------------------   -------------------------------------------------------------------------   Total oil    wells(2)     27      6     21     63     16     18     12     17     39   -------------------------------------------------------------------------   -------------------------------------------------------------------------   Total    (1),(2)   1,356    340  1,016  3,851  1,162  1,146    493  1,050  2,924   -------------------------------------------------------------------------   -------------------------------------------------------------------------   (1) Key resource play net wells drilled in 2007 and 2006 for Cutbank       Ridge and Bighorn were restated to include the addition of new areas       and zones that now qualify for key resource play inclusion based on       EnCana's internal criteria.   (2) Total key resource play net wells drilled in 2007 and 2006 were       restated in the first quarter of 2008 to include the designation of       Weyburn as an oil key resource play.    Natural gas shale resource play update   

EnCana announced on June 16, 2008 that it has established a leading land and resource position in the Horn River Shale in northeast British Columbia and the Haynesville Shale in Louisiana and Texas. EnCana has drilled several exploration wells that have shown strong potential to deliver commercial volumes of natural gas. At Horn River, two of EnCana’s recently completed wells are producing at a very strong first-month average rate in excess of 5 MMcf/d. In the Haynesville Shale play, EnCana has early results from its second horizontal well, which flowed at an initial two-day rate of 15 MMcf/d. In the second quarter EnCana increased its leased acreage in the Haynesville Shale play to 370,000 net acres through a series of transactions. The company also reached an agreement in July, 2008 to acquire an additional 89,000 acres of mineral rights from Indigo Minerals LLC for $457 million.

              Second quarter 2008 natural gas and oil prices   -------------------------------------------------------------------------                                                       6       6                                 Q2      Q2     %    months  months    %                               2008    2007   change  2008    2007   change   -------------------------------------------------------------------------   Natural gas ($/Mcf)   NYMEX                      10.93    7.55     +45    9.48    7.16     +32   EnCana realized gas    price(1)                   8.54    7.62     +12    8.29    7.43     +12   -------------------------------------------------------------------------   Oil and NGLs ($/bbl)   WTI                       123.80   65.02     +90  111.12   61.68     +80   Western Canadian Select    (WCS)                    102.18   45.84    +123   89.58   43.85    +104   Differential WTI/WCS       21.62   19.18     +13   21.54   17.83     +21   EnCana realized liquids    price(1)                  90.47   45.47     +99   79.77   44.02     +81   -------------------------------------------------------------------------   Chicago 3-2-1 crack    spread ($bbl)             13.60   30.12     -55   10.65   21.51     -50   -------------------------------------------------------------------------   (1) Realized prices include the impact of financial hedging.    Price risk management   

Risk management positions at June 30, 2008 are presented in Note 17 to the unaudited Interim Consolidated Financial Statements. In the second quarter of 2008, EnCana’s commodity price risk management measures resulted in realized losses of approximately $400 million after-tax, composed of a $308 million after-tax loss on gas hedges, and a $92 million after-tax loss on oil and other hedges. The realized losses in the second quarter reflect the dramatic increase in oil prices in the past year and natural gas prices over the past few months compared to the portion of EnCana’s sales that are hedged at fixed prices – a risk management strategy that is aimed at providing more certainty of cash flow to fund the company’s annual capital investment program. EnCana has hedged about 1.5 Bcf/d of expected 2008 gas production for the balance of the year at an average NYMEX equivalent price of $8.20 per Mcf. EnCana has about 23,000 bbls/d of expected 2008 oil production hedged for the balance of the year under fixed price contracts at an average West Texas Intermediate (WTI) price of $70.13 per bbl. For 2009, EnCana has 391 MMcf/d of its expected natural gas production under fixed price contracts at an average NYMEX equivalent price of $9.85 per Mcf and 341 MMcf/d under NYMEX put options at an average strike of $8.85 per Mcf.

U.S. Rockies and Canadian basis differential hedges

North American natural gas prices are impacted by volatile pricing disconnects caused primarily by transportation constraints between producing regions and consuming regions. These price discounts are called basis differentials. EnCana has hedged 100 percent of its expected U.S. Rockies basis exposure in 2008 using a combination of downstream transportation and basis hedges, including some hedges that are based on a percentage of NYMEX prices. At June 30, 2008, U.S. basis hedges, a combination of Rockies, Mid- Continent and San Juan instruments, had an effective average differential to NYMEX of $1.66 per Mcf for the rest of 2008. EnCana has also hedged about 8 percent of its expected 2008 Canadian gas production at an average AECO basis differential of 76 cents per Mcf.

   Corporate developments   ----------------------    Quarterly dividend of 40 cents per share declared   

EnCana’s Board of Directors has declared a quarterly dividend of 40 cents per share payable on September 30, 2008 to common shareholders of record as of September 15, 2008. Based on the July 23, 2008 closing share price on the New York Stock Exchange of $72.62, this represents an annualized yield of about 2.2 percent.

   Corporate reorganization to create two energy companies focused on   unconventional resources   

On May 11, 2008, EnCana announced plans to split into two highly focused energy companies – one a North American natural gas company and the other a fully integrated oil company with in-situ oil properties and refineries supplemented by reliable production from natural gas and crude oil resource plays. The proposed corporate reorganization, expected to close in early 2009, would be implemented through a Plan of Arrangement and is subject to shareholder and court approval. An information circular setting out the details of the Plan of Arrangement is expected to be mailed to EnCana shareholders in November, followed by a shareholders meeting planned for mid December. The working names of the two companies are GasCo and IOCo. GasCo will retain the name of EnCana Corporation while the permanent name of IOCo will be determined prior to the close of the transaction. For further information on the announcement see the company’s website http://www.encana.com/.

Normal Course Issuer Bid

In the second quarter of 2008, EnCana purchased for cancellation approximately 200,000 common shares at an average price of $74.81 per share under the company’s Normal Course Issuer Bid for a total cost of $15 million. As a result of the proposed corporate reorganization, the company has suspended further purchases for 2008.

   Financial strength   ------------------  

EnCana maintains a strong balance sheet, targeting a net debt-to- capitalization ratio between 30 and 40 percent and a net debt-to-adjusted- EBITDA multiple, on a trailing 12-month basis, of 1 to 2 times. At June 30, 2008, EnCana’s net debt-to-capitalization ratio was 36 percent, including mark- to-market losses on risk management instruments, which increased net debt. Excluding this mark-to-market impact, the net debt-to-capitalization ratio would have been 34 percent. EnCana’s net debt-to-adjusted-EBITDA multiple, on a trailing 12-month basis, was 1.3 times at the end of the second quarter. The company expects to be in the lower end of its managed ranges by year-end.

In the quarter, EnCana invested $1.7 billion in capital, excluding acquisitions and divestitures, on continued development of its key resource plays and expansion of the company’s downstream heavy oil processing capacity through its joint venture with ConocoPhillips.

   -------------------------------------------------------------------------                           CONFERENCE CALL TODAY                11 a.m. Mountain Time (1 p.m. Eastern Time)    EnCana Corporation will host a conference call today, Thursday, July 24,   2008, starting at 11 a.m. MT (1 p.m. ET). To participate, please dial   (866) 321-6651 (toll-free in North America) or (416) 642-5212 and quote   confirmation code 7198404 approximately 10 minutes prior to the   conference call. An archived recording of the call will be available from   approximately 3 p.m. MT on July 24 until midnight July 31, 2008 by   dialling (888) 203-1112 or (647) 436-0148 and entering access   code 7198404.    A live audio webcast of the conference call will also be available via   EnCana's website, http://www.encana.com/, under Investor Relations. The webcast   will be archived for approximately 90 days.   -------------------------------------------------------------------------     NOTE 1: Non-GAAP measures   

This news release contains references to cash flow, operating earnings, free cash flow, net debt, capitalization and adjusted earnings before interest, tax, depreciation and amortization (EBITDA).

   -   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 from continuing operations and net       change in non-cash working capital from discontinued operations.   -   Operating earnings is a non-GAAP measure that shows net earnings       excluding non-operating items such as the after-tax impacts of a       gain/loss on discontinuance, the after-tax gain/loss of unrealized       mark-to-market accounting for derivative instruments, the after-tax       gain/loss on translation of U.S. dollar denominated debt issued from       Canada and the partnership contribution receivable, the after-tax       foreign exchange gain/loss on settlement of intercompany       transactions, future income tax on foreign exchange related to U.S.       dollar intercompany debt recognized for tax purposes only, and the       effect of changes in statutory income tax rates. Management believes       that these excluded items reduce the comparability of the company's       underlying financial performance between periods. The majority of       U.S. dollar debt issued from Canada has maturity dates in excess of       five years.   -   Free cash flow is a non-GAAP measure that EnCana defines as cash flow       in excess of capital investment, excluding net acquisitions and       divestitures, and is used to determine the funds available for other       investing and/or financing activities.   -   Net debt is a non-GAAP measure defined as long-term debt plus current       liabilities less current assets. Capitalization is a non-GAAP measure       defined as net debt plus shareholders' equity. Net debt to       capitalization and net debt to adjusted EBITDA are two ratios       management uses to steward the company's overall debt position as       measures of the company's overall financial strength.   -   Adjusted EBITDA is a non-GAAP measure defined as net earnings from       continuing operations before gains or losses on divestitures, income       taxes, foreign exchange gains or losses, interest net, accretion of       asset retirement obligation, and depreciation, depletion and       amortization.   

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.

EnCana Corporation

With an enterprise value of approximately $70 billion, EnCana is a leading North American unconventional natural gas and integrated oil company. 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.

ADVISORY REGARDING RESERVES DATA AND OTHER OIL AND GAS INFORMATION – EnCana’s disclosure of reserves data and other oil and gas information is made in reliance on an exemption granted to EnCana by Canadian securities regulatory authorities which permits it to provide such disclosure in accordance with U.S. disclosure requirements. The information provided by EnCana may differ from the corresponding information prepared in accordance with Canadian disclosure standards under National Instrument 51-101 (NI 51- 101). EnCana’s reserves quantities represent net proved reserves calculated using the standards contained in Regulation S-X of the U.S. Securities and Exchange Commission. Further information about the differences between the U.S. requirements and the NI 51-101 requirements is set forth under the heading “Note Regarding Reserves Data and Other Oil and Gas Information” in EnCana’s Annual Information Form.

In this news release, certain crude 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). Also, certain natural gas volumes have been converted to barrels of oil equivalent (BOE) on the same basis. BOE and 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.

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: projections relating to future economic and operating performance (including per share growth, net debt-to- capitalization and net debt-to-adjusted-EBITDA ratios, cash flow, free cash flow, and cash flow per share); the anticipated ability to meet the company’s guidance forecasts; anticipated growth and success of various resource plays and the expected characteristics of such resource plays; the future drilling and production potential for various regions, including East Texas and the Horn River and Haynesville natural gas shale plays; projections relating to the proposed corporate reorganization transaction, including the expected timing for mailing an information circular to shareholders, holding a shareholders meeting and the potential closing date; projections of crude oil and natural gas prices, including basis differentials for various regions; anticipated expansion and production at Foster Creek and Christina Lake; projections for future crack spreads and refining margins; anticipated effects of EnCana’s market risk mitigation strategy; projections for 2008 capital expenditures and investment; projections for oil, natural gas and NGLs production in 2008 and beyond; anticipated costs and inflationary pressures; and potential divestitures, proceeds which may be generated there from and the potential use of such proceeds. 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 risks and uncertainties include, among other things: volatility of and assumptions regarding oil and gas prices; assumptions based upon the company’s current guidance; fluctuations in currency and interest rates; product supply and demand; market competition; risks inherent in the company’s marketing operations, including credit risks; imprecision of reserves estimates and estimates of recoverable quantities of oil, natural gas and liquids from resource plays and other sources not currently classified as proved reserves; the ability of the company and ConocoPhillips to successfully manage and operate the integrated North American oil business and the ability of the parties to obtain necessary regulatory approvals; refining and marketing margins; potential disruption or unexpected technical difficulties in developing new products and manufacturing processes; potential failure of new products to achieve acceptance in the market; unexpected cost increases or technical difficulties in constructing or modifying manufacturing or refining facilities; unexpected difficulties in manufacturing, transporting or refining synthetic crude oil; risks associated with technology; the company’s ability to replace and expand oil and gas reserves; 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 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; the risk of war, hostilities, civil insurrection and instability affecting countries in which the company operates and terrorist threats; risks associated with existing and potential future lawsuits and regulatory actions made against the company; 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.

Forward-looking information respecting anticipated 2008 cash flow, operating cash flow and pre-tax cash flow for EnCana, and for GasCo and IOCo pro-forma the proposed reorganization transaction, is based upon achieving average production of oil and gas for 2008 as set out above, average commodity prices for 2008 based on actual results for the second quarter of 2008, and for the balance of 2008, a WTI price of $130/bbl for oil, a NYMEX price of $11.00/Mcf for natural gas, an average U.S./Canadian dollar foreign exchange rate of $0.98, an average Chicago crack spread for 2008 of $10.00/bbl for refining margins, and an average number of outstanding shares for EnCana of approximately 750 million. Assumptions relating to forward-looking statements generally include EnCana’s current expectations and projections made by the company in light of, and generally consistent with, its historical experience and its perception of historical trends, 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 document.

Furthermore, the forward-looking statements contained in this news release are made as of the date of this news release, and, except as required by law, EnCana does not undertake any obligation to update publicly or to revise any of the included 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.

Further information on EnCana Corporation is available on the company’s website, http://www.encana.com/. For EnCana video, visit http://www.thenewsmarket.com/EnCana. Free delivery options include digital FTP transfer, Beta SP tape, Data-DVD and streaming download (Flash, QuickTime and Windows Media).

   EnCana Corporation    Interim Consolidated Financial Statements   (unaudited)   For the period ended June 30, 2008    (U.S. Dollars)      CONSOLIDATED STATEMENT OF EARNINGS (unaudited)                                        Three Months Ended  Six Months Ended                                            June 30,            June 30,   ($ millions, except per          ----------------------------------------    share amounts)                       2008      2007      2008      2007   -------------------------------------------------------------------------   REVENUES, NET OF    ROYALTIES               (Note 5) $  7,321  $  5,613  $ 12,663  $ 10,049    EXPENSES                 (Note 5)     Production and mineral      taxes                               154        57       268       149     Transportation and      selling                             326       234       646       512     Operating                            709       565     1,405     1,116     Purchased product                  2,882     1,836     5,275     3,687     Depreciation, depletion      and amortization                  1,097       899     2,132     1,742     Administrative                       225        95       381       190     Interest, net          (Note 7)      147        94       281       195     Accretion of asset      retirement obligation (Note 12)      20        15        41        29     Foreign exchange (gain)      loss, net             (Note 8)      (35)        7        60        (5)     (Gain) loss on      divestitures          (Note 6)      (17)        1       (17)      (58)   -------------------------------------------------------------------------                                        5,508     3,803    10,472     7,557   -------------------------------------------------------------------------   NET EARNINGS BEFORE INCOME TAX       1,813     1,810     2,191     2,492     Income tax expense     (Note 9)      592       364       877       549   -------------------------------------------------------------------------   NET EARNINGS                      $  1,221  $  1,446  $  1,314  $  1,943   -------------------------------------------------------------------------   -------------------------------------------------------------------------     NET EARNINGS PER    COMMON SHARE           (Note 16)      Basic                          $   1.63  $   1.91  $   1.75  $   2.54      Diluted                        $   1.63  $   1.89  $   1.75  $   2.51   -------------------------------------------------------------------------   -------------------------------------------------------------------------     CONSOLIDATED STATEMENT OF RETAINED EARNINGS (unaudited)                                                            Six Months Ended                                                                June 30,                                                        --------------------   ($ millions)                                              2008      2007   -------------------------------------------------------------------------    RETAINED EARNINGS,    BEGINNING OF YEAR                                    $ 13,082  $ 11,344   Net Earnings                                             1,314     1,943   Dividends on Common Shares                                (600)     (304)   Charges for Normal Course    Issuer Bid             (Note 13)                         (243)   (1,421)   -------------------------------------------------------------------------   RETAINED EARNINGS, END OF PERIOD                      $ 13,553  $ 11,562   -------------------------------------------------------------------------   -------------------------------------------------------------------------     CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (unaudited)                                        Three Months Ended  Six Months Ended                                            June 30,            June 30,                                    ----------------------------------------   ($ millions)                          2008      2007      2008      2007   -------------------------------------------------------------------------   NET EARNINGS                      $  1,221  $  1,446  $  1,314  $  1,943   OTHER COMPREHENSIVE INCOME,    NET OF TAX     Foreign Currency      Translation Adjustment               48       828      (352)      939   -------------------------------------------------------------------------   COMPREHENSIVE INCOME              $  1,269  $  2,274  $    962  $  2,882   -------------------------------------------------------------------------   -------------------------------------------------------------------------     CONSOLIDATED STATEMENT OF ACCUMULATED OTHER COMPREHENSIVE INCOME   (unaudited)                                                            Six Months Ended                                                                June 30,                                                        --------------------   ($ millions)                                              2008      2007   -------------------------------------------------------------------------    ACCUMULATED OTHER COMPREHENSIVE INCOME,    BEGINNING OF YEAR                                    $  3,063  $  1,375   Foreign Currency Translation Adjustment                   (352)      939   -------------------------------------------------------------------------   ACCUMULATED OTHER COMPREHENSIVE INCOME,    END OF PERIOD                                        $  2,711  $  2,314   -------------------------------------------------------------------------   -------------------------------------------------------------------------   See accompanying Notes to Consolidated Financial Statements.      CONSOLIDATED BALANCE SHEET (unaudited)                                                          As at        As at                                                       June 30, December 31,   ($ millions)                                           2008         2007   -------------------------------------------------------------------------    ASSETS     Current Assets       Cash and cash equivalents                      $    778     $    553       Accounts receivable and        accrued revenues                                 3,346        2,381       Current portion of        partnership contribution        receivable                                         305          297       Risk management     (Note 17)                       265          385       Inventories         (Note 10)                     1,422          828   -------------------------------------------------------------------------                                                         6,116        4,444       Property, Plant and        Equipment, net      (Note 5)                    37,070       35,865       Investments and Other Assets                        654          607       Partnership Contribution Receivable               2,992        3,147       Risk Management     (Note 17)                       341           18       Goodwill                                          2,821        2,893   -------------------------------------------------------------------------                            (Note 5)                 $  49,994    $  46,974   -------------------------------------------------------------------------   -------------------------------------------------------------------------     LIABILITIES AND SHAREHOLDERS' EQUITY     Current Liabilities       Accounts payable and        accrued liabilities                          $  4,888     $   3,982       Income tax payable                                 909         1,150       Current portion of        partnership contribution        payable                                           297           288       Risk management     (Note 17)                    1,617           207       Current portion of        long-term debt     (Note 11)                      491           703   -------------------------------------------------------------------------                                                        8,202         6,330     Long-Term Debt        (Note 11)                    9,878         8,840     Other Liabilities                                    450           242     Partnership Contribution      Payable                                           3,012         3,163     Risk Management       (Note 17)                       73            29     Asset Retirement      Obligation           (Note 12)                    1,402         1,458     Future Income Taxes                                6,160         6,208   -------------------------------------------------------------------------                                                       29,177        26,270   -------------------------------------------------------------------------     Shareholders' Equity       Share capital       (Note 13)                    4,553         4,479       Paid in surplus                                      -            80       Retained earnings                               13,553        13,082       Accumulated other comprehensive income           2,711         3,063   -------------------------------------------------------------------------      Total Shareholders' Equity                       20,817        20,704   -------------------------------------------------------------------------                                                     $ 49,994      $ 46,974   -------------------------------------------------------------------------   -------------------------------------------------------------------------   See accompanying Notes to Consolidated Financial Statements.      CONSOLIDATED STATEMENT OF CASH FLOWS (unaudited)                                        Three Months Ended  Six Months Ended                                            June 30,            June 30,                                    ----------------------------------------   ($ millions)                          2008      2007      2008      2007   -------------------------------------------------------------------------    OPERATING ACTIVITIES     Net earnings                    $  1,221  $  1,446  $  1,314  $  1,943     Depreciation, depletion       and amortization                 1,097       899     2,132     1,742     Future income taxes    (Note 9)      152        79        73      (111)     Unrealized (gain) loss      on risk management   (Note 17)      318       (55)    1,411       559     Unrealized foreign      exchange (gain) loss                (11)       79        65        76     Accretion of asset      retirement obligation (Note 12)      20        15        41        29    (Gain) loss on      divestitures          (Note 6)      (17)        1       (17)      (58)     Other                                109        85       259       121     Net change in other      assets and liabilities             (171)      (16)     (264)        4     Net change in non-cash      working capital                    (722)     (385)   (1,260)     (249)   -------------------------------------------------------------------------     Cash From Operating Activities     1,996     2,148     3,754     4,056   -------------------------------------------------------------------------    INVESTING ACTIVITIES     Capital expenditures   (Note 5)   (1,996)   (1,189)   (3,903)   (2,679)     Proceeds from      divestitures          (Note 6)       79       165       151       446     Net change in investments      and other                           (18)      (25)       (9)       (6)     Net change in non-cash      working capital                    (101)      (45)      191      (103)   -------------------------------------------------------------------------     Cash (Used in) Investing      Activities                       (2,036)   (1,094)   (3,570)   (2,342)   -------------------------------------------------------------------------    FINANCING ACTIVITIES     Net issuance (repayment)      of revolving long-term debt         426       (40)      367       (40)     Issuance of long-term      debt                 (Note 11)        -         -       723       434     Repayment of long-term debt         (196)        -      (196)        -     Issuance of common      shares               (Note 13)       13        77        76       153     Purchase of common      shares               (Note 13)      (15)     (713)     (326)   (1,807)     Dividends on common      shares                             (300)     (151)     (600)     (304)     Other                                  -       (14)        -        (3)   -------------------------------------------------------------------------     Cash From (Used in)      Financing Activities                (72)     (841)       44    (1,567)   -------------------------------------------------------------------------    FOREIGN EXCHANGE GAIN (LOSS) ON CASH AND CASH     EQUIVALENTS HELD IN      FOREIGN CURRENCY                      1         5        (3)        6   -------------------------------------------------------------------------    INCREASE (DECREASE) IN CASH AND    CASH EQUIVALENTS                     (111)      218       225       153   CASH AND CASH EQUIVALENTS,    BEGINNING OF PERIOD                   889       337       553       402   -------------------------------------------------------------------------   CASH AND CASH EQUIVALENTS,    END OF PERIOD                    $    778  $    555  $    778  $    555   -------------------------------------------------------------------------   -------------------------------------------------------------------------   See accompanying Notes to Consolidated Financial Statements.     Notes to Consolidated Financial Statements (unaudited)   (All amounts in $ millions unless otherwise specified)    1.  BASIS OF PRESENTATION    The interim Consolidated Financial Statements include the accounts of   EnCana Corporation and its subsidiaries ("EnCana" or the "Company"), and   are presented in accordance with Canadian generally accepted accounting   principles. EnCana's operations are in the business of exploration for,   and development, production and marketing of natural gas, crude oil and   natural gas liquids ("NGLs"), refining operations and power generation   operations.    The interim Consolidated Financial Statements have been prepared   following the same accounting policies and methods of computation as the   annual audited Consolidated Financial Statements for the year ended   December 31, 2007, except as noted below. The disclosures provided below   are incremental to those included with the annual audited Consolidated   Financial Statements. The interim Consolidated Financial Statements   should be read in conjunction with the annual audited Consolidated   Financial Statements and the notes thereto for the year ended   December 31, 2007.    2.  CHANGES IN ACCOUNTING POLICIES AND PRACTICES    As disclosed in the December 31, 2007 annual audited Consolidated   Financial Statements, on January 1, 2008, the Company adopted the   following Canadian Institute of Chartered Accountants ("CICA") Handbook   Sections:    -  "Inventories", Section 3031. The new standard replaces the previous      inventories standard and requires inventory to be valued on a      first-in, first-out or weighted average basis, which is consistent      with EnCana's former accounting policy. The new standard allows the      reversal of previous write-downs to net realizable value when there is      a subsequent increase in the value of inventories. The adoption of      this standard has had no material impact on EnCana's Consolidated      Financial Statements.    -  "Financial Instruments - Presentation", Section 3863 and "Financial      Instruments - Disclosures", Section 3862. The new disclosure standard      increases EnCana's disclosure regarding the nature and extent of the      risks associated with financial instruments and how those risks are      managed (See Note 17). The new presentation standard carries forward      the former presentation requirements.    -  "Capital Disclosures", Section 1535. The new standard requires EnCana      to disclose its objectives, policies and processes for managing its      capital structure (See Note 14).    3.  RECENT ACCOUNTING PRONOUNCEMENTS    As of January 1, 2009, EnCana will be required to adopt the CICA Handbook   Section 3064, "Goodwill and Intangible Assets", which will replace the   existing Goodwill and Intangible Assets standard. The new standard   revises the requirement for recognition, measurement, presentation and   disclosure of intangible assets. The adoption of this standard should not   have a material impact on EnCana's Consolidated Financial Statements.    In January 2006, the CICA Accounting Standards Board ("AcSB") adopted a   strategic plan for the direction of accounting standards in Canada. As   part of that plan, the AcSB confirmed in February 2008 that International   Financial Reporting Standards ("IFRS") will replace Canadian GAAP in 2011   for profit-oriented Canadian publicly accountable enterprises. As EnCana   will be required to report its results in accordance with IFRS starting   in 2011, the Company is assessing the potential impacts of this   changeover and developing its plan accordingly.    4.  PROPOSED CORPORATE REORGANIZATION    On May 11, 2008, EnCana announced its plans to split into two highly   focused energy companies - one a North American natural gas company and   the other a fully integrated oil company with in-situ oilsands properties   and refineries supplemented by reliable production from various gas and   oil resource plays. The proposed corporate reorganization, expected to   close in early January 2009, would be implemented through a court   approved Plan of Arrangement and is subject to shareholder approval. The   reorganization would result in two publicly traded entities with every   EnCana shareholder receiving one share of each entity in exchange for   each EnCana common share held. The working names of the two companies are   GasCo and IntegratedOilCo ("IOCo") respectively. GasCo will retain the   name of EnCana Corporation while the permanent name of IOCo will be   determined prior to the close of the transaction.    5.  SEGMENTED INFORMATION    As a result of the proposed corporate reorganization, EnCana has changed   its reportable segments to reflect the realigned reporting hierarchies.   The most significant change results in EnCana now presenting Canadian   Plains and Canadian Foothills as separate operating segments. These were   previously aggregated and presented in the Canada segment. Prior periods   have been restated to reflect the new presentation.    GasCo's operating segments will include EnCana's Canadian Foothills,   United States and Offshore and International segments. IOCo's operating   segments will include EnCana's Canadian Plains and Integrated Oil   segments.    The Company has defined its continuing operations into the following   segments:    -  Canadian Plains, Canadian Foothills, United States and Offshore and      International segments include the Company's exploration for, and      development and production of natural gas, crude oil and NGLs and      other related activities. The majority of the Company's operations are      located in Canada and the United States. Offshore and International      exploration is mainly focused on opportunities in Atlantic Canada, the      Middle East and Europe.    -  Integrated Oil is focused on two lines of business: the exploration      for, and development and production of bitumen in Canada using in-situ      recovery methods; and the refining of crude oil into petroleum and      chemical products located in the United States. This segment includes      EnCana's 50 percent interest in the joint venture with ConocoPhillips.    -  Market Optimization is conducted by the Midstream & Marketing      division. The Marketing groups' primary responsibility is the sale of      the Company's proprietary production. The results are included in the      Canadian Plains, Canadian Foothills, United States and Integrated Oil      segments. Correspondingly, the Marketing groups also undertake market      optimization activities which comprise third-party purchases and sales      of product that provide operational flexibility for transportation      commitments, product type, delivery points and customer      diversification. These activities are reflected in the Market      Optimization segment.    -  Corporate includes unrealized gains or losses recorded on derivative      financial instruments. Once amounts are settled, the realized gains      and losses are recorded in the operating segment to which the      derivative instrument relates.    Market Optimization markets substantially all of the Company's upstream   production to third-party customers. Transactions between business   segments are based on market values and eliminated on consolidation. The   tables in this note present financial information on an after   eliminations basis.    Results of Operations (For the three months ended June 30)                                               Canadian                        Canadian Plains       Foothills       United States   -------------------------------------------------------------------------                          2008     2007     2008     2007     2008     2007   -------------------------------------------------------------------------    Revenues, Net of    Royalties          $ 1,185  $   853  $ 1,189  $   917  $ 1,525  $ 1,128   Expenses     Production and      mineral taxes         24       18       12       13      118       26     Transportation      and selling           25       28       54       51      120       77     Operating             147      108      180      125      186      154     Purchased product       -        -        -        -        -        -     Depreciation,      depletion and      amortization         238      242      285      257      421      281   -------------------------------------------------------------------------   Segment Income    (Loss)             $   751  $   457  $   658  $   471  $   680  $   590   -------------------------------------------------------------------------   -------------------------------------------------------------------------                                               Offshore &           Market                         Integrated Oil     International      Optimization   -------------------------------------------------------------------------                          2008     2007     2008     2007     2008     2007   -------------------------------------------------------------------------    Revenues, Net of    Royalties          $ 3,104  $ 1,943  $    (1) $     1  $   647  $   722   Expenses     Production and      mineral taxes          -        -        -        -        -        -     Transportation      and selling          127       76        -        -        -        2     Operating             196      176       (1)      (1)       8       10     Purchased product   2,254    1,134        -        -      628      702     Depreciation,      depletion and      amortization          91       94       35        -        4        4   ----------------------------------------------------------------------



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