Encana and Mitsubishi enter into partnership for development of Cutbank Ridge undeveloped lands in British Columbia

Encana Corporation (TSX, NYSE: ECA) has entered into an agreement with
Mitsubishi Corporation that will see the Japanese global integrated
business enterprise invest approximately C$2.9 billion for a 40 percent
interest in the Cutbank Ridge Partnership. The Partnership holds about
409,000 net acres of Encana′s undeveloped Montney-formation natural gas
lands in the company′s Cutbank Ridge resource play in northeast British
Columbia. Through the Cutbank Ridge Partnership, Encana and Mitsubishi
plan to create long-term shareholder value by jointly developing
production capacity to deliver abundant natural gas to markets for
decades ahead.

World-class asset, world-class partner

'This agreement
brings a world-class partner to a world-class energy asset. Cutbank
Ridge ranks among the most prolific and lowest-cost resource plays in
North America and Mitsubishi′s financial commitment recognizes the
significant value contained in a portion of our enormous resource
opportunity. This is a landmark investment by an exceptional and global
integrated business partner. The alignment we′ve already established
with Mitsubishi will greatly enhance our plans to maintain Cutbank
Ridge′s leadership position among the most cost competitive resource
plays on the continent. Despite an increased capital spending profile on
these natural gas assets resulting from this transaction, Encana plans
to more than offset the near term impact on North American natural gas
production oversupply by capital spending reductions elsewhere in its
natural gas portfolio,? said Randy Eresman, Encana′s President & Chief
Executive Officer.

'We are excited to join Encana ? a first-rate unconventional producer
that has pioneered low-cost, continuous improvement and technical
innovation across its premium portfolio of North American resource
plays. Encana′s operational merit, execution excellence and high
performance culture are an ideal match with our business approach. We
add value by leveraging organizational strength and global networks as
we seek to contribute to the enrichment of society through business
firmly rooted in principles of fairness and integrity. Mitsubishi looks
forward to tapping new natural gas supplies for the long-term
development and eventual delivery to world markets. Through this
development, we aim to contribute to economic growth and job creation in
Canada,? said Jun Yanai, Mitsubishi′s Executive Vice President, Chief
Executive Officer for Energy Business Group.

Under the agreement, Encana will own 60 percent and Mitsubishi will own
40 percent of the Cutbank Ridge Partnership. Mitsubishi will pay C$1.45
billion on closing, which is expected to occur later this month, and
Mitsubishi will invest C$1.45 billion in addition to its 40 percent of
the Partnership′s future capital investment for a commitment period,
which is expected to be about five years, thereby reducing Encana′s
capital funding commitments to 30 percent of the total expected capital
investment over that period. The assets in the Partnership include about
409,000 net acres of undeveloped Montney lands in British Columbia, plus
additional development potential in the Cadomin and Doig geological
formations. Encana will be the managing partner and operator of the
Partnership. This transaction does not include any of Encana′s current
Cutbank Ridge production of about 600 million cubic feet of natural gas
per day, processing plants, gathering systems or Encana′s Alberta
landholdings.

Continuing a decade of excellence in British Columbia natural gas
development

'Early in 2002, we began assembling our expansive
Cutbank Ridge lands along the foothills of the Canadian Rockies,
straddling the British Columbia-Alberta border. Over the last 10 years,
we have systematically and methodically explored, defined and developed
the enormous resource potential of this remarkable Canadian natural gas
asset. This transaction represents the next step towards the long-term
development and value recognition of our undeveloped Cutbank Ridge lands
in British Columbia ? a major natural gas resource capable of delivering
long-term, affordable energy supplies to domestic and export markets,?
Eresman said.

Enormous undeveloped resource potential

The Cutbank Ridge
Partnership′s lands have proved undeveloped reserves of approximately
900 billion cubic feet of natural gas equivalent. The lands contain
estimated natural gas initially in place of about 130 trillion cubic
feet. The undeveloped proved, probable and possible reserves and
economic contingent resources on the Partnership lands are outlined in
the table below. For additional information on Encana′s estimated
reserves and economic contingent resources, see Note 1 on page 3.

1 Represents year-end 2011 bookings, after royalties, using forecast
prices and costs

Under the agreement with Mitsubishi, the Partnership has established
clear corporate governance and management practices and operating
procedures. The transaction, which has received an advanced ruling
certificate from Canada′s Competition Bureau, is subject to satisfaction
of customary closing conditions, and is expected to close by the end of
February 2012.

Responsible resource development of abundant natural gas

The
Cutbank Ridge Partnership′s investment and long term growth plans are
expected to generate significant jobs, investment, vibrant economic
opportunity and new revenues for the people and the Government of
British Columbia. Consistent with its well-established operating
procedures and corporate responsibility practices, Encana, the
Partnership′s managing partner and operator, is committed to
demonstrating reliability and trustworthiness as it engages in safe,
energy-efficient, sustainable development and to advancing this
development with consideration and respect for the people, communities
and environments where the Partnership operates.

Prudent and focused investment aimed at preserving financial strength
and flexibility

'Encana plans to conserve most of the
additional financial flexibility provided by this and previously
announced transactions during this prolonged period of low natural gas
prices. Our 2012 investment plan targets a balance between our cash flow
less dividends and our expected capital investment before acquisition
and divestiture activity. Our capital spending is focused on expanding
the exploration and development of oil and liquids-rich natural gas
production while minimizing dry natural gas investments. This planned
level of capital spending will create enhanced financial flexibility and
liquidity while we target higher financial returns and maintaining our
investment grade credit ratings,? Eresman said.

Financial and Legal Advisors

RBC Capital Markets and
Jefferies & Company, Inc. are acting as financial advisors to Encana
with respect to this transaction. Burnet, Duckworth & Palmer LLP is
acting as legal advisor to Encana.

Conference call on Cutbank Ridge Partnership and year-end results
today ? Friday, February 17, 2012.

CONFERENCE CALL TODAY

9:00 a.m. Mountain Time (11:00 a.m.
Eastern Time)

Encana will host a conference call today Friday, February 17, 2012
starting at 9:00 a.m. MT (11:00 a.m. ET). To participate, please dial
(888) 231-8191 (toll-free in North America) or (647) 427-7450
approximately 10 minutes prior to the conference call. An archived
recording of the call will be available from approximately 2:00 p.m. ET
on February 17 until midnight February 24, 2012 by dialing (855)
859-2056 or (416) 849-0833 and entering passcode 24414715.

A live audio webcast of the conference call will also be available via
Encana′s website, www.encana.com,
under Investors/Presentations & events. The webcast will be archived for
approximately 90 days.

Encana Corporation

Encana is a leading North American energy
producer that is focused on growing its strong portfolio of diverse
resource plays producing natural gas, oil and natural gas liquids. 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.

Mitsubishi Corporation

Mitsubishi Corporation ('MC?) is a
global integrated business enterprise that develops and operates
businesses across virtually every industry including industrial finance,
energy, metals, machinery, chemicals, foods, and environmental business.
MC′s current activities are expanding far beyond its traditional trading
operations as its diverse business ranges from natural resources
development to investment in retail business, infrastructure, financial
products and manufacturing of industrial goods. With over 200 bases of
operations in approximately 80 countries worldwide and a network of over
500 group companies, MC employs a multinational workforce of nearly
60,000 people. The Energy Business Group′s business model extends
throughout the energy value chain, from upstream to downstream sectors.
It compasses a number of oil and gas exploration, development and
production (E&P) businesses; investment in 9 LNG liquefaction projects;
trading of crude oil, petroleum products, LNG and LPG, etc. In addition
to these activities, MC′s Energy Business Group is actively promoting
natural gas developments in Canada and Australia, and is also
constructing a MC-operated LNG project in Indonesia to be a unique and
sustainable one over the medium and long terms.

NOTE 1: Estimated Reserves and Resources

Encana reports
proved reserves based on a forecast or business case basis. The company
reports on its estimates of reserves and resources and publishes
estimates of proved, probable and possible reserves as well as all
categories of economic contingent resources. Economic contingent
resources fall into three categories: low estimate (1C), best estimate
(2C) and high estimate (3C). The three classifications of contingent
resources have the same degree of technical certainty as the
corresponding reserves categories. In determining their economic
viability, the same commodity price assumptions are applied as
estimating proved, probable and possible reserves. Contingent resources
are not yet commercial due to contingencies such as the timing and pace
of development, or the need for additional infrastructure. The low
estimate is the most conservative category and carries with it the
greatest degree of confidence ? 90 percent ? that these resources will
be recovered. Encana retains Independent Qualified Reserves Evaluators
(IQREs) to conduct a full evaluation of not only the company′s reserves,
but also its economic contingent resources.

Reserves are the estimated remaining quantities of oil and natural gas
and related substances anticipated to be recoverable from known
accumulations, from a given date forward, based on: analysis of
drilling, geological, geophysical and engineering data, the use of
established technology, and specified economic conditions, which are
generally accepted as being reasonable. Proved reserves are those
reserves which can be estimated with a high degree of certainty to be
recoverable. It is likely that the actual remaining quantities recovered
will exceed the estimated proved reserves. Probable reserves are those
additional reserves that are less certain to be recovered than proved
reserves. It is equally likely that the actual remaining quantities
recovered will be greater or less than the sum of the estimated proved
plus probable reserves. Possible reserves are those additional reserves
that are less certain to be recovered than probable reserves. It is
unlikely that the actual remaining quantities recovered will exceed the
sum of the estimated proved plus probable plus possible reserves.

The estimates of various classes of reserves (proved, probable,
possible) and of contingent resources (low, best, high) in this news
release represent arithmetic sums of multiple estimates of such classes
for different properties, which statistical principles indicate may be
misleading as to volumes that may actually be recovered. Readers should
give attention to the estimates of individual classes of reserves and
contingent resources and appreciate the differing probabilities of
recovery associated with each class.

In this news release, certain 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: completion of transaction agreements with Mitsubishi,
including potential terms, closing date, amount of investments, funding
commitment and development of otherwise undeveloped natural gas
properties, reserves and economic contingent resources associated with
the proposed partnership lands, anticipated job creation, generation of
investments and economic opportunities, and government revenue creation,
estimated natural gas initially in place, expectation for the
partnership lands to deliver long-term, affordable energy supplies for
domestic and export markets, Encana′s 2012 investment plan to balance
between forecasted cash flow less anticipated dividends before
acquisition and divestiture activity, capital spending plan to expand
exploration and development of oil and liquids-rich natural gas
production while reducing natural gas investments, including its
anticipated effect of enhancing financial flexibility and liquidity to
achieve higher returns and maintain investment grade credit ratings.

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: volatility of, and assumptions regarding
natural gas and liquids prices, including substantial or extended
decline of the same; assumptions based upon the company′s current
guidance; fluctuations in currency and interest rates; risk that the
company may not conclude divestitures of certain assets or other
transactions (including third-party capital investments, farm-outs or
partnerships, which Encana may refer to from time to time as 'joint
ventures?) as a result of various conditions not being met; product
supply and demand; market competition; risks inherent in the company′s
and its subsidiaries′ marketing operations, including credit risks;
imprecision of reserves 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, including future net revenue
estimates; 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 acquire or find additional reserves; hedging activities
resulting in realized and unrealized losses; business interruption and
casualty losses; risk of the company not operating all of its properties
and assets; counterparty risk; downgrade in credit rating and its
adverse effects; liability for indemnification obligations to third
parties; variability of dividends to be paid; 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.

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

Furthermore, the forward-looking statements contained in this news
release are made as of the date hereof and, except as required by law,
Encana undertakes no obligation to update publicly or revise any
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

Mitsubishi
Corporation

Media contact:

Shunsuke Nanami

Manager,
Press Relations Team,

Corporate Communications Dept.

+81
(3) 3210-3917

shunsuke.nanami@mitsubishicorp.com