Encana agrees to sell two Cutbank Ridge natural gas processing plants for C$920 million

Encana Corporation (TSX ?& ?NYSE: ECA) has reached an agreement to sell
two natural gas processing plants servicing the Cutbank Ridge area to
Veresen Inc. (TSX: VSN) for approximately C$920 ?million. The sale
includes Encana′s 100 percent interest in its Steeprock plant in
northeast British Columbia and its Hythe plant in northwest Alberta,
along with compression and associated gathering pipelines.

'This sale agreement marks the conclusion of the major components in our
2011 divestiture program, which, upon closing of all transactions, will
result in proceeds of about US$3.5 billion. Although not all of our
announced transactions will be completed this year, the expected
proceeds will help us achieve our 2011 target range for net divestitures
of between $1 billion and $2 billion. Further, the transactions that are
expected to close after year-end will give us a solid start on our 2012
divestiture program, which will be part of our 2012 capital investment
program announcement in the first quarter. Proceeds from these non-core
asset sales are expected to supplement cash flow generation, strengthen
the company′s balance sheet and provide financial flexibility,? said
Randy Eresman, Encana′s President & Chief Executive Officer.

Redirecting strong midstream asset valuations towards growing liquids
production

'This divestiture of two Cutbank Ridge natural gas
processing plants unlocks midstream value that we can profitably
reinvest in our core business of developing natural gas and growing
liquids production. This year, we invested about $770 ?million in future
growth opportunities, primarily aimed at building a strong portfolio of
liquids-rich lands that now totals more than 2.1 ?million net acres in
Alberta, Colorado, Mississippi, Louisiana and Michigan. We are exploring
diversified geological opportunities by drilling about a dozen wells on
these highly prospective liquids-rich lands. This ambitious exploration
program will help us define and focus our organic liquids growth
potential in a variety of Canadian and U.S. basins, and it goes well
beyond our previously announced plan to grow natural gas liquids
extraction to an estimated 80,000 barrels per day in 2015 from our
established natural gas resource plays. Across our North American
resource portfolio in 2012, we will continue to focus on our highest
return projects and we plan to direct a greater portion of our capital
investment to grow our oil and natural gas liquids production,? Eresman
said.

Encana reports in U.S. dollars unless otherwise noted. Production, sales
and reserves estimates are reported on an after-royalties basis, unless
otherwise noted.

The Cutbank Ridge midstream assets include approximately 516 million
cubic feet per day (MMcf/d) of natural gas processing capacity from the
Hythe and Steeprock natural gas processing plants and approximately 370
kilometres of pipelines. The Steeprock plant is located approximately 50
kilometres south of Dawson Creek, B.C. and about 10 ?kilometres west of
the Hythe plant, located in Alberta. As part of Encana′s midstream
divestiture approach, Encana has entered into a competitive, long-term
gathering and processing fee agreement with the new owner on terms that
provide cost stability for the company′s ongoing natural gas development
in Cutbank Ridge and will help Encana efficiently deliver natural gas
and liquids to market. This midstream asset sale is subject to
regulatory approvals and normal closing conditions. It is expected to
close in the first quarter of 2012. RBC Capital Markets and Jefferies &
Company, Inc. advised Encana on this transaction.

Encana Corporation

Encana is a leading North American
natural gas producer that is focused on growing its strong portfolio of
resource plays producing natural gas and natural gas liquids in key
basins from northeast British Columbia to east Texas and Louisiana. 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: the expected proceeds of the sale of the Cutbank Ridge
natural gas processing plants and the expected closing date of that
transaction; the expected proceeds and closing dates for the sale of the
Cabin and Cutbank Ridge natural gas plants and the North Texas producing
properties; and the ability to grow the company′s oil and natural gas
liquids production, including by 2015; use of proceeds from the
divestitures; the potential success of the company′s exploration program
on liquids-rich lands; the potential benefits of a long-term gathering
and processing fee agreement and the ability of the company to achieve
its 2011 target for net divestitures. 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 successfully divest particular assets and within the expected date;
the risk that the potential benefits of these transactions will not be
realized; the risk that the required regulatory approvals may not be
obtained; the risk that the company is unable to meet the targets in its
2011 guidance; the risk that the company may not conclude potential
joint venture arrangements with others; 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; risk that target supply cost for 2011 and in the next few
years will not be met; 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. 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