Encana and PetroChina end Cutbank Ridge joint venture negotiations

Encana Corporation (TSX, NYSE: ECA) and PetroChina International
Investment Company, a subsidiary of PetroChina Company Limited, have
ended negotiations for a proposed joint venture concerning Encana′s
Cutbank Ridge business assets after the parties were unable to achieve
substantial alignment with respect to key elements of the proposed
transaction, including the joint operating agreement.

'After close to a year of exclusive negotiations with PetroChina, we
were unable to reach alignment on the planned transaction. The
disciplined and determined process we undertook on this one initiative
in our multi-faceted and ongoing joint-venture strategy has gone a long
way to demonstrate the tremendous value that we have created at Cutbank
Ridge and it validates our plans to accelerate recognition of that
value. As such, we have determined that the best way for us to advance
our plans to unlock value from our Cutbank Ridge business assets is to
offer up a variety of joint venture opportunities for portions of the
undeveloped resources, and, separately, to examine a transaction with
respect to our midstream pipeline and processing assets in the area.
Each of these opportunities has the potential for strong long-term
growth and value generation. We have an accomplished history of
realizing significant value from our enormous resource potential through
competitive processes that secure premium joint venture partners. We
have retained RBC Capital Markets and Jefferies & Company, Inc. to
conduct this process and we look forward to discussing these very
attractive opportunities with an array of potential investors in the
upcoming months,? said Randy Eresman, Encana′s President & Chief
Executive Officer.

Horn River and Greater Sierra joint venture discussions well underway

In April 2011, Encana announced plans seeking investors in two joint
ventures on Encana assets outside Cutbank Ridge in northeast British
Columbia, one on undeveloped Horn River shale lands and one in the
company′s Greater Sierra resource play. Discussions are well underway on
these potential transactions as well as a potential divestiture of
producing assets in the northern portion of Greater Sierra. Encana
expects that these transactions, plus other divestitures and joint
venture pursuits that the company has initiated, will generate 2011
proceeds and joint venture investments of between US$1  billion and $2
billion, a level that exceeds Encana′s net divestiture target for 2011
of $500 million to $1 billion. That estimate for higher 2011 divestiture
and joint venture proceeds does not include any potential investments in
Encana′s Cutbank Ridge undeveloped resources and associated midstream
assets. To reflect this increase, Encana has updated its 2011 guidance
for net divestitures to between $1 billion and $2 billion. All other
components of Encana′s guidance remain unchanged.

Encana on track for 2011

'As we look ahead to the rest of this year, our strong operating
performance in the first half of this year and our prudent risk
management measures mean that we remain on track to achieve our 2011
production and financial guidance. We expect future natural gas prices
to reflect the forward price curve, and, over time, to return to a
long-term level of about $6  per thousand cubic feet (Mcf), which we
believe reflects the cost of adding new supply. Across Encana, we are
relentlessly focused on driving down supply costs, which this year we
expect to average about $3.70 per Mcf. Over the next three to five
years, we are targeting a supply cost of $3 per Mcf, based on 2011 cost
structures. These low cost structures, combined with our continued
emphasis on capital discipline and the high grading of our portfolio,
help us maximize margins and maintain a healthy balance sheet through
the lower end of the price cycle ? a market condition that has persisted
in North America during the past two years,? Eresman said.

Encana Corporation

Encana is a leading North American natural gas producer that is focused
on growing its strong portfolio of prolific natural gas developments,
called resource plays, in key basins from northeast British Columbia to
east Texas and Louisiana. Encana applies advanced technology and
operational innovation to reduce costs and maximize margins. The company
believes North American natural gas is an abundant, affordable and
reliable energy supply that can play a significantly expanded role in
serving the continent′s growing energy needs while enhancing
environmental performance and generating economic growth. 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 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: potential transactions involving Cutbank Ridge and midstream
and processing assets; potential transactions relating to Horn River
shale lands and Greater Sierra, including potential divestitures of
producing assets in northern portion of Greater Sierra; expectation to
generate proceeds of between US$1 billion and $2 billion from foregoing
transactions and other joint venture initiatives; company′s ability to
meet 2011 production and financial guidance targets; anticipated supply
costs, including in 2011 and in the next three to five years; and
expected long-term price of natural gas. 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: the risk that the company may
not conclude potential joint venture arrangements with others or
successfully divest particular assets; the risk that the potential
benefits of these transactions will not be realized; the risk that the
company is unable to meet the targets in its 2011 guidance; the risk
that the company is unable to maintain its 2011 cost structures;
volatility of and assumptions regarding commodity 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 and its subsidiaries′ marketing operations,
including credit risks; imprecision of reserves and resources 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;
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
replace and expand 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, 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; 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 statements with respect to anticipated
production, reserves and production growth, including over five years or
longer, are based upon numerous facts and assumptions, including a
projected capital program averaging approximately $6 billion per year
that underlies the long-range plan of Encana, which is subject to review
annually and to such revisions for factors including the outlook for
natural gas commodity prices and the expectations for capital investment
by the company achieving an average rate of approximately 2,500 net
wells per year, Encana′s current net drilling location inventory,
natural gas price expectations over the next few years, production
expectations made in light of advancements in horizontal drilling,
multi-stage well completions and multi-well pad drilling, the current
and expected productive characteristics of various existing and emerging
resource plays, Encana′s estimates of proved, probable and possible
reserves and economic contingent resources, expectations for rates of
return which may be available at various prices for natural gas and
current and expected cost trends.

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.

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, www.encana.com,
or by contacting:

Encana Corporate Communications

Investor contact:

Ryder
McRitchie

Vice-President, Investor Relations

(403) 645-2007

Lorna
Klose

Manager, Investor Relations

(403) 645-6977

Media
contact:

Alan Boras

Vice-President, Media Relations

(403)
645-4747

Carol Howes

Manager, Media Relations

(403)
645-4799