Encana agrees to sell Piceance natural gas midstream assets in Colorado for US$590 million

Encana Oil & Gas (USA) Inc. (Encana USA), a subsidiary of Encana
Corporation (Encana) (TSX, NYSE: ECA), has agreed to sell a portion of
its Piceance natural gas midstream assets in Colorado to a private
midstream company for approximately US$590 million.

'Following our Fort Lupton gas plant divestiture earlier this year, this
Piceance divestiture represents our second successful step in capturing
significant unrecognized value from our midstream assets. We have a
strong track record of leading the construction of midstream facilities,
which gives us the competitive advantage of being a first mover in the
development of natural gas resource plays. Once built and operating, the
assets may be sold to premium midstream operators, freeing up capital
for Encana to redeploy investment into its core business of growing
natural gas and liquids production. As part of our midstream divestiture
approach, we enter into competitive, long-term gathering and processing
fee agreements with top-tier midstream firms ? on terms that provide
cost stability for our ongoing natural gas developments and help us
efficiently deliver natural gas and liquids to market. The market for
midstream assets in the U.S. and Canada is very competitive as midstream
investors are able to realize strong valuations that are not recognized
when the same assets are contained inside larger, more diversified
energy firms. We have additional divestiture processes underway as we
continue to entertain considerable interest from prospective purchasers
of our Cabin Gas Plant in Horn River and Cutbank Ridge midstream assets
in Canada. We look forward to completing those divestitures and
establishing long-term business relationships with industry-leading
midstream companies,? said Renee Zemljak, Encana′s Executive
Vice-President Midstream, Marketing & Fundamentals.

These Piceance basin midstream assets, built in the past decade, serve
Encana′s Mamm Creek, Orchard and South Parachute production in the area
around Rifle, Colorado, about 180 miles west of Denver. They gather and
transport about 500 million cubic feet per day (MMcf/d), and include
about 260 miles of pipeline and 90,000 horsepower of compression
facilities. The sale of the Piceance basin midstream assets is subject
to certain regulatory approvals and customary closing conditions and is
expected to close in the fourth quarter of 2011.

On track to meet or exceed $1 billion to $2 billion of net
divestitures by around year-end

'Once we have completed the
Piceance midstream asset sale, our 2011 net divestitures will stand at
about $600 million. Total divestitures proceeds of about $1 billion are
offset by about $400 million of acquisitions. Encana has initiated a
number of divestiture and joint venture processes to ensure it meets its
objective of $1 billion to $2 billion of net divestitures by around
year-end. The current highly competitive midstream environment is
resulting in significant interest in our Canadian midstream assets. Due
to the strong interest that we have received, we are optimistic that one
or more Canadian midstream divestitures will also be forthcoming by
around year-end,? said Randy Eresman, Encana′s President & Chief
Executive Officer.

In addition to these well advanced processes, Encana has previously
announced a number of producing property divestitures, including its
Barnett Shale play in North Texas, portions of the Jean Marie in
northeast British Columbia and its Carrot Creek assets in Alberta's deep
basin. Encana has also re-initiated a process to find a joint venture
partner for an interest in portions of its highly desirable Cutbank
Ridge undeveloped assets. Typically, joint ventures of this nature take
the form of an upfront cash payment and a disproportionate contribution
to the future capital program.

'Our expectation is that some or all of these transactions, should we
choose to proceed with them, will close in the months surrounding
year-end. These proceeds will strengthen the company′s balance sheet,
providing greater financial strength and flexibility going into 2012,?
Eresman said.

Corporate update

The North American oil and gas landscape
has changed significantly. Natural gas has gone from being in short
supply to being abundant, and the highly successful development
techniques that enabled the cost effective development of prolific
unconventional natural gas reservoirs are now successfully being
deployed in certain oil and liquids-rich natural gas reservoirs as well.
Natural gas prices have continued to remain low, whereas prices for oil
and natural gas liquids have improved substantially.

'During the past two years, Encana′s investments have outpaced cash flow
generation, largely as a result of our deliberate initiatives to
maintain our strong dividend and to assemble large, diversified,
low-cost resource positions in many promising oil and liquids-rich
plays, and to expand the market for North American natural gas. This has
resulted in an expansive portfolio of highly prospective natural gas
liquids and oil opportunities composed of large land positions in the
Collingwood shale in Michigan, Alberta′s Duvernay shale and the
Tuscaloosa marine shale in Mississippi and Louisiana. These
opportunities are in addition to those that pre-exist on our extensive
North American land base. We are also implementing plans to increase
natural gas liquids recovery from our current high-energy content
natural gas streams. At the same time we have also made a number of
investments and joint ventures to expand the North American market for
natural gas, which include our 30 percent interest in the Kitimat
liquefied natural gas (LNG) facility and multiple investments in
compressed natural gas (CNG) and LNG fueling station infrastructure.
While these strategic investments have temporarily impacted our balance
sheet, the divestiture and joint venture initiatives we have undertaken
should have us well inside our managed financial ranges, and provide
additional financial flexibility going into 2012,? Eresman said.

'Despite persistently low North American natural gas prices, we have
been achieving some of our best operational performance ever. We have
continued to make technological and efficiency advancements that have
lowered our overall cost structures ? initiatives that help us maintain
profitable operations even in a NYMEX natural gas price environment of
$4 per thousand cubic feet (Mcf). Significantly fortifying our capital
and operating plans is our price risk management process. Encana has
about half of its expected daily natural gas production hedged from now
through the end of 2012 at prices averaging more than $5.75 per Mcf,?
Eresman said.

Preliminary budget planning underway for 2012

Encana has
recently initiated its budget process for 2012. Although there are
clearly a number of moving parts which have the potential to strengthen
the company′s balance sheet, at this time Encana is taking a
conservative view to commodity pricing and is developing a capital
investment plan accordingly. The company′s preliminary approach for next
year is to have capital investment plus dividends be approximately equal
to its expected cash flow generation, which does not include divestiture
proceeds. If divestiture proceeds exceed the company′s planned 2011
target of $1 billion to $2 billion, additional financial flexibility
will result.

Encana has some of the lowest controllable cost structures in every
region it operates. This is a continued focus of the corporation. Within
its capital program, shareholders should expect that Encana will further
refine and optimize its resource play hub developments as the company
targets continued reductions in supply costs towards a goal of $3 per
million cubic feet equivalent (Mcfe) for all of its drier natural gas
plays. Within the 2012 budget, it is expected that many of Encana's
drier natural gas plays will see a somewhat reduced capital program,
while a growing portion of next year′s capital investment will be
directed towards the company′s extensive oil and liquids-rich
development and exploration opportunities.

'Attractive oil and natural gas liquids pricing coupled with
technological advancements that allow liquids-prone reservoirs to be
economically developed, present Encana with an opportunity to create
additional value during this period of low natural gas prices. Our
capital investments target our most economic growth opportunities. We
intend to apply our considerable expertise ? employing the same leading
technologies and operational efficiencies that have so successfully
unlocked our natural gas resource plays ? to the evaluation and
development of our liquids potential. Over the next 12 to 18 months, we
expect that our delineation initiatives on these emerging plays will
help us further define a detailed plan for growing our liquids
production over the long term,? 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.

Encana Corporation

Encana is a leading North American
natural gas producer that is focused on growing its strong portfolio of
natural gas resource plays 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 timing for closing the divestitures of the
Piceance midstream assets, Cabin Gas plant, Cutbank Ridge midstream
assets, North Texas assets, Jean Marie assets and Carrot Creek assets;
as well as various potential joint venture initiatives including Cutbank
Ridge undeveloped assets; the anticipated proceeds from divestitures and
joint venture opportunities and the company′s ability to meet its 2011
and 2012 targets; the impact of divestitures on the company′s cash flow,
including in 2012; the company′s plans for 2012 capital investment,
dividends and anticipated future supply costs; the company′s plans to
develop natural gas liquids and oil opportunities and their impact on
production; the ability of the company to maintain financial flexibility
with joint venture and divestiture proceeds; the anticipated impact of
the company′s hedging strategy; and the development of Encana′s resource
play hub strategy and its anticipated benefits thereof. 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; 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, 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 Corporation

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