Encana generates third quarter cash flow of US$1.2 billion, or $1.57 per share

Encana Corporation (TSX, NYSE: ECA) continued to deliver strong
operational performance and solid financial results in the third quarter
of 2011, growing natural gas and liquids production by 6 ?percent per
share from the third quarter of 2010. Encana generated third quarter
cash flow of US$1.2 billion, or $1.57 ?per share, and operating earnings
were $171 million, or 23 cents per share. Encana′s commodity price
hedges contributed $146 million in realized after-tax gains, or 20 cents
per share, to cash flow. Total production in the third quarter was
approximately 3.51 billion cubic feet of gas equivalent per day
(Bcfe/d), an increase of 190 million cubic feet equivalent per day
(MMcfe/d) from the same quarter of 2010.

'Encana delivered another excellent quarter in every aspect of its
operations, achieving solid cash flow and operating earnings. Our
third-quarter production growth of 6 percent per share puts us in line
to achieve our 2011 targeted growth range of 5 to 7 percent per share.
We are highly focused on core initiatives that will strengthen our
financial capacity and position us for future growth. Through the
expanded application of our resource play hub model ? highly integrated
and optimized production facilities that continually improve
efficiencies ? we continue to lower our capital and operating cost
structures. The competitive sale of select midstream assets frees up
capital for reinvestment in higher-return upstream projects. Recent
transactions include agreements to sell a portion of our Piceance
midstream assets and our interest in the Cabin Gas Plant for a total of
about $800 million, and we are well advanced in the sale process for our
midstream assets in the Cutbank Ridge area. The sales process for our
North Texas Barnett shale assets is also moving ahead,? said Randy
Eresman, Encana′s President & Chief Executive Officer.

Expanding natural gas liquids (NGLs) extraction and exploration on
liquids-rich lands across North America

Encana is taking a
comprehensive dual approach to growing liquids production ? firstly,
through extensive expansion of NGLs extraction from the company′s
liquid-rich natural gas production and, secondly, through an aggressive
grassroots exploration program targeting oil and liquids-rich natural
gas plays across Encana′s extensive North American land base.

Deep Basin extraction projects target an additional 55,000 barrels
per day (bbls/d) of NGLs by 2015

In the Deep Basin of Alberta
and British Columbia, Encana has significantly expanded its NGLs
extraction initiatives. The first step in this plan is scheduled to
start up in December with the addition of about 5,000 bbls/d of NGLs
production from expanded facilities at the Musreau natural gas
processing plant. From its existing development plays, Encana expects to
grow NGLs production by about 55,000 bbls/d by 2015, which would take
the company′s total liquids production from the current level of about
25,000 bbls/d to about 80,000 bbls/d. Beyond this, Encana is pursuing
extensive organic growth through a diverse exploration program on the
company′s liquids-prone lands across North America.

Organic growth through promising liquids and oil exploration program

Encana
is drilling about a dozen wells on five prospective liquids-rich and oil
plays from Alberta to Mississippi ? the Duvernay Shale in Alberta, the
Niobrara formation in the DJ and Piceance basins in Colorado, the
Collingwood Shale in Michigan and the Tuscaloosa Marine Shale in
Mississippi. Early well results are encouraging and ongoing exploration
drilling over the next few months will help define the scope and
potential of these promising liquids-rich and oil opportunities and
assist in determining the company′s capital investment allocation in
2012.

'The tremendous operational success we′ve achieved by applying our
extensive technical expertise in long-reach horizontal drilling and
completions in natural gas reservoirs is highly transferable to growing
production from liquids-prone reservoirs. We have a well-established
methodology for extracting value from all our production, developing
resource plays from the ground up through a low cost entry approach and
through our relentless focus on lowering our cost structures. Over the
next few years we expect to significantly increase liquids production in
our portfolio,? Eresman said.

Expanding joint ventures; Kitimat LNG project advancing

Encana
continues to attract new third-party investment to improve project
returns through the acceleration of the development of the company′s
enormous resource potential. In July, Encana expanded its Horn River
farm-out agreement with the Canadian subsidiary of Korea Gas Corporation
(KOGAS) at Kiwigana in northeast British Columbia. KOGAS agreed to
invest a further C$185 million in approximately 20,000 additional acres
of our promising Horn River lands. The original C$565 million,
three-year agreement with KOGAS has enabled Encana to accelerate its
drilling program in both the Kiwigana area of Horn River and at West
Cutbank. In the Kiwigana area, drilling of the first well pad has
concluded and, following completions work this coming winter, first
natural gas production is expected in the spring of 2012. In the Kitimat
liquefied natural gas (LNG) export project, progress continues as
Canada′s National Energy Board last week approved a licence to export
1.4 billion cubic feet per day (Bcf/d) of natural gas for 20 years. The
Kitimat LNG engineering study is expected in the new year and the
partners are discussing long-term sales agreements with Pacific Rim
customers.

Efficiency gains with long-reach Louisiana wells

At
Haynesville, drilling and completions efficiencies continue to improve
in both the company′s resource play hub development model and its
remaining lease retention program. Encana received regulatory approval
to drill additional long-reach horizontal wells in North Louisiana ? a
well-established technique that very effectively reduces supply costs
and the number of wells required to produce an equivalent volume of
natural gas. In the third quarter, Encana drilled two horizontal wells
in the Sabine area of East Texas and two in the Haynesville in
Louisiana. These wells are among the longest horizontal wells drilled in
the region, averaging a horizontal length of 7,500 feet. One of the
Haynesville wells surpassed 8,000 feet lateral length and a Sabine well
reached a record measured depth of 22,350 feet. Each well is expected to
have more than 30 completion stages ? work that is planned for the
fourth quarter of 2011.

Focusing on highest return projects and lowering costs

'Our
hedging program continues to stabilize cash flow during this period of
lower prices. We are aligning our growth rate more closely with the
company′s capacity to generate cash flow and, over the next year, we are
planning to direct an increasing portion of our investment to grow our
oil and NGLs production from several projects on our liquids-rich lands.
In all of these efforts, we focus on investing in our highest return
projects. We have also been successful in attracting premium
joint-venture partners to accelerate the value recognition of our
enormous resource potential. We balance capital investment for long-term
growth capacity within the reality of near-term market uncertainty
currently caused by the supply-demand imbalance in the North American
natural gas industry. As always, operational excellence to achieve the
lowest cost production and maximize margins is at the forefront of all
our efforts to enhance the long-term value of every Encana share,?
Eresman said.

IMPORTANT INFORMATION

Encana reports in U.S. dollars
unless otherwise noted.Production, sales and reserves estimates
are reported on an after-royalties basis, unless otherwise noted. Per
share amounts for cash flow and earnings are on a diluted basis.As
of January 1, 2011, Encana prepares its interim consolidated financial
statements and comparative information in accordance with International
Financial Reporting Standards (IFRS) 1, 'First-time Adoption of
International Financial Reporting Standards?, and with International
Accounting Standard 34, 'Interim Financial Reporting,? as issued by the
International Accounting Standards Board. Prior to 2011, Encana′s
financial statements were prepared in accordance with Canadian generally
accepted accounting principles (previous GAAP). Reconciliations between
previous GAAP and IFRS financial information can be found in the
consolidated financial statements available on the company′s website at www.encana.com.Additional supplemental information will be posted on Encana′s
website. Encana defines supply cost as the flat NYMEX natural gas price
that yields an internal rate of return of 9 percent after tax, and does
not include land costs.

Third Quarter 2011 Highlights

Financial

• 
  Cash flow per share of $1.57, or $1.2 billion
  
• 
  Operating earnings per share of 23 cents, or $171 million
  
• 
  Net earnings per share of 16 cents, or $120 million
  
• 
  Capital investment, excluding acquisitions and divestitures, of $1.2
  billion
  
• 
  Realized natural gas prices of $5.01 per thousand cubic feet (Mcf) and
  realized liquids prices of $82.43 per barrel (bbl). These prices
  include realized financial hedges
  
• 
  At the end of the quarter, debt to capitalization was 34 percent, debt
  to debt adjusted cash flow was 1.9 times and debt to adjusted EBITDA
  was 2.1 times
  
• 
  Paid dividend of 20 cents per share
  

Operating

• 
  Total production of 3.51 Bcfe/d
  
• 
  Natural gas production of 3.37 Bcf/d
  
• 
  NGLs and oil production of about 24,400 bbls/d
  
• 
  Operating and administrative costs of 84 cents per thousand cubic feet
  equivalent (Mcfe)
  

Strategic Developments

• 
  Encana Oil & Gas (USA) Inc., a subsidiary of Encana, agreed to sell a
  portion of its Piceance natural gas midstream assets in Colorado to a
  midstream company for approximately $590 million, subject to
  regulatory approvals and customary closing conditions. The sale is
  expected to close by the end of December, 2011.
  
• 
  Encana Oil & Gas (USA) Inc., a subsidiary of Encana, announced it had
  initiated a process to divest of its North Texas natural gas producing
  assets in the Fort Worth Basin located in the Barnett Shale play.
  
• 
  Encana Natural Gas Inc., a subsidiary of Encana, expanded its natural
  gas transportation infrastructure to market the alternative fuel to
  vehicles by opening a compressed natural gas (CNG) station in southern
  Alberta. Similar stations have been opened in Fort Lupton, Colorado,
  Sierra, British Columbia, Parachute, Colorado, as well as in Red River
  Parish, Louisiana.
  
• 
  Divested non-core upstream assets in North America for total proceeds
  of approximately $55 million and acquired approximately $51 million of
  upstream assets, for net divestitures of about $4 million.
  

Recent Developments

• 
  On October 14, 2011, Encana announced plans that will see NGLs
  extraction from the Resthaven natural gas processing plant increase
  from about 1,000 bbls/d to about 12,000 bbls/d. The growth is a
  result of Encana′s agreement with a midstream company, which will
  invest about C$230 million to expand the processing and liquids
  extraction capacity at Resthaven in west central Alberta.
  
• 
  On October 7, 2011, Encana announced that it has reached an agreement
  to sell its interest in the Cabin Gas Plant in the Horn River Basin of
  northeast British Columbia to Enbridge Inc. for approximately C$220
  million. The sale is subject to regulatory approvals and customary
  closing conditions and is expected to close in December 2011.
  
• 
  Canada′s National Energy Board recently approved a licence for the
  Kitimat LNG project, owned 30 percent by Encana, to export the
  equivalent of 1.4 Bcf/d of natural gas for 20 years from the planned
  terminal on Canada′s West Coast.
  

Strong natural gas production growth from key resource plays

Total
production in the third quarter of 2011 was 3.51 Bcfe/d, up about 6
percent per share from 3.32 Bcfe/d in the third quarter of 2010. Natural
gas production was also up 6 percent per share to 3.37 Bcf/d compared to
3.18 Bcf/d in the third quarter of 2010. Encana′s third quarter
production growth was led by strong increases of about 70 percent in
Haynesville, 13 percent in CBM and 16 percent in Greater Sierra, which
includes Horn River where production more than tripled to about 100
MMcfe/d.

Deep Panuke production field centre installation progresses

During
the third quarter, the production field centre (PFC) at Encana′s Deep
Panuke natural gas development offshore Nova Scotia was installed in the
field about 250 kilometres southeast of Halifax. The subsea hookup
program is expected to be completed by early November 2011 and first
natural gas production from Deep Panuke is expected by the end of the
first quarter of 2012. Initial production rates are expected to exceed
200 MMcf/d.

Encana's risk management program continues to supplement revenue and
stabilize cash flow

As a result of commodity price hedging in
the third quarter, Encana's before-tax cash flow was $216 million higher
than what the company would have generated without its hedging program.
Since 2006, Encana's commodity price hedging program has resulted in
about $7.9 billion of before-tax cash flow in excess of what would have
been generated had the company not implemented a commodity price hedging
program. Encana hedges the price on a portion of its production to
provide greater certainty to cash flow generation, which adds stability
to the funding of ongoing capital investment.

About 50 percent of natural gas production hedged for remainder of
2011 and 2012

Encana continues to manage natural gas price
risks through its commodity price hedges. As of September 30, 2011,
Encana has hedged approximately 1.8 Bcf/d, about 50 percent, of expected
October to December 2011 natural gas production, at an average NYMEX
price of $5.76 per Mcf. In addition, Encana has hedged approximately 2.0
Bcf/d of expected 2012 natural gas production at an average NYMEX price
of $5.80 per Mcf and about 500 MMcf/d of expected 2013 natural gas
production at an average price of $5.24 per Mcf.

Encana continually assesses its hedging needs and the opportunities
available prior to establishing its capital program for the upcoming
year. Risk management positions as at September 30, 2011 are presented
in Note 18 to the unaudited Interim Consolidated Financial Statements.

Corporate developments

Quarterly dividend of 20 cents per share declared

Encana′s
Board of Directors has declared a quarterly dividend of 20 cents per
share payable on December 30, 2011 to common shareholders of record as
of December 15, 2011. Based on the October 19, 2011 closing share price
on the New York Stock Exchange of $20.22, this represents an annualized
yield of about 4 percent.

Encana 2011 guidance

Encana′s corporate guidance for 2011 is
posted on the company′s website at www.encana.com.

Financial strength

Encana maintains a strong balance sheet. ?At September 30,
2011, ?approximately 88 percent of its outstanding debt was composed of
fixed-rate debt with an average remaining term of about 12 ?years. At
September 30, 2011, Encana had approximately $4.9 billion of committed
revolving bank credit facilities, of which $3.8 billion remains unused.
On October 12, 2011, Encana renewed its revolving bank credit facility
for C$4.0 billion and extended the maturity date by four years to
October 31, 2015. Encana is in the process of renewing a subsidiary
credit facility for $1.0 billion and extending ?the maturity date to
October 31, 2015. The credit facilities, which are provided by
syndicates of banks, are available for general corporate purposes.

Encana is focused on maintaining investment grade credit ratings,
capital discipline and financial flexibility. The company stewards its
financial position to a variety of metrics. At September 30, 2011, the
company′s debt to capitalization ratio was 34 percent. The company′s
debt to debt adjusted cash flow was 1.9 times and debt to adjusted
EBITDA was 2.1 times, on a trailing 12-month basis.

NOTE 1: Non-GAAP measures

This news release contains
references to non-GAAP measures as follows:

• 
  Cash flow is a non-GAAP measure defined as cash from operating
  activities excluding net change in other assets and liabilities, and
  net change in non-cash working capital. 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. Debt to debt adjusted cash flow is a non-GAAP measure
  defined as debt divided by cash flow before interest expense net of
  tax.
  
• 
  Operating earnings is a non-GAAP measure defined as net earnings
  excluding non-recurring or non-cash items that management believes
  reduces the comparability of the company's financial performance
  between periods. These after-tax items may include, but are not
  limited to, unrealized hedging gains/losses, exploration and
  evaluation expenses, impairments and impairment reversals,
  gains/losses on divestitures, foreign exchange gains/losses and the
  effect of changes in statutory income tax rates.
  
• 
  Capitalization is a non-GAAP measure defined as current and long-term
  debt plus shareholders′ equity. Debt to capitalization and debt to
  adjusted EBITDA are two ratios that management uses as measures of the
  company′s overall financial strength. EBITDA is defined as earnings
  before interest, taxes, depreciation and amortization.
  
• 
  Adjusted EBITDA is a non-GAAP measure defined as net earnings before
  gains or losses on divestitures, income taxes, foreign exchange gains
  or losses, interest, accretion of asset retirement obligation,
  depreciation, depletion and amortization, exploration and evaluation
  expenses and impairments.
  

These measures do not have standardized meaning prescribed by IFRS and
are therefore unlikely to be comparable to similar measures provided by
other issuers. 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

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 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 OIL AND GAS INFORMATION ? 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). 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: ability to sell certain midstream assets to free up capital
for reinvestment, including the planned sale in Cutbank Ridge and the
expected proceeds from the sale of Piceance midstream assets and
company′s interest in the Cabin Gas Plant and their expected closing
dates; ability to sell the North Texas property in the Barnett Shale and
a portion of Jean Marie property; expectations relating to increased
NGLs, oil and other liquids production and the expected timing thereof,
including up to 2015; ability to attract joint venture partners and
third-party investments, including for lands in the Cutbank Ridge area;
2011 target growth rate per share; expectations for the 2012 budget;
ability to negotiate long term off-take agreements for the Kitimat LNG
terminal; expectation to increase production of oil and liquids rich
natural gas; expectation to lower natural gas supply cost; expectation
for hedging program to supplement revenue and stabilize cash flow;
expected start up date for first gas at Deep Panuke, including expected
initial production rate; expected efficiencies to be generated by
resource play hub approach; potential of resource plays and proposed
developments in these plays; projections contained in 2011 guidance
(including estimates of cash flow per share, upstream operating cash
flow, natural gas and NGLs production, growth per share, capital
investment, net divestitures, and operating costs); target debt to
capitalization, debt to debt adjusted cash flow and debt to adjusted
EBITDA ratios; 2011 corporate guidance for each of the company′s key
resource plays; expectation for the renewal of and extension of the term
of Encana's subsidiary's credit facility; and ability to maintain
investment grade credit ratings, capital discipline and financial
flexibility. 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 dates; the
risk that the potential benefits of these transactions will not be
realized; the risk that the company may not conclude potential joint
venture arrangements or attract third party capital; 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. 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.

Forward-looking information respecting anticipated 2011 cash flow for
Encana is based upon achieving average production of oil and gas for
2011 of between 3.475 Bcfe/d and 3.525 Bcfe/d, commodity prices for
natural gas of NYMEX $4.50 - $5/Mcf, commodity prices for crude oil of
(WTI) ?$85 - $95 per bbl and an estimated U.S./Canadian dollar foreign
exchange rate of $0.95 - $1.05 and a weighted average number of
outstanding shares for Encana of approximately 736.3 million.

Assumptions with respect to forward-looking information regarding
expanding Encana′s NGLs production and extraction volumes are based on
existing and expected expansions of natural gas processing facilities in
areas where Encana operates and the continued expansion and development
of NGLs production from existing properties within its asset portfolio.

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:

FOR FURTHER INFORMATION:

Encana
Corporate Communications

Investor contacts:

Ryder
McRitchie

Vice-President, Investor Relations

(403) 645-2007

Lorna
Klose

Manager, Investor Relations

(403) 645-6977

Media
contacts:

Alan Boras

Vice-President, Media Relations

(403)
645-4747

Carol Howes

Manager, Media Relations

(403)
645-4799