Toyota Tsusho invests C$600 million in Encana′s coalbed methane development in southern Alberta

Encana Corporation (TSX, NYSE: ECA) has reached an agreement with Toyota
Tsusho Wheatland Inc., a subsidiary of Toyota Tsusho Corporation, that
will see the Japanese company invest approximately C$602 million to
acquire a 32.5 percent royalty interest in natural gas production from a
portion of Encana′s coalbed methane (CBM) resource play. The agreement
includes production from a total of about 5,500 existing wells and
potential future drilling locations in southern Alberta.

'This investment from a global partner recognizes the significant value
identified in Encana′s CBM lands which rank among the company′s
lowest-cost, lowest-risk assets, and signifies another step as Encana
pursues a range of opportunities to manage its portfolio and enhance the
long-term value creation of its vast inventory. Encana′s CBM resources
cover a great expanse that includes approximately 2.1 million net acres
in the Horseshoe Canyon fairway. The vast majority of this acreage is
fee lands, where Encana holds the mineral rights in perpetuity, and are
estimated to contain significant amounts of recoverable natural gas.
This relationship with Toyota Tsusho, a world-class leader, offers
strong synergies that have the potential to foster expanded business
opportunities. Further, this agreement serves as a model for other
investment opportunities and supplies capital investment to preserve the
value and efficient development of Encana′s shallow gas lands in Alberta
that have contributed long-life production for more than five decades,?
said Randy Eresman, Encana′s President & Chief Executive Officer.

Encana′s CBM assets integrate CBM and the company′s widespread shallow
gas developments, including tapping into coal seams and sands using a
combination of existing, new and recompleted wells. Under the agreement,
Toyota Tsusho paid C$100 million with the closing of the transaction
yesterday and will invest approximately C$502 million over seven years
to acquire a 32.5 percent royalty interest, before deductions, in
production from approximately 4,000 existing wells and approximately
1,500 potential future drilling locations. These wells are located in an
area covering about 480,000 net acres along the eastern edge of the
Horseshoe Canyon fairway ? an area that represents about 24 percent of
Encana′s total CBM net acreage. The existing wells on these lands are
currently producing a total of about 120 million cubic feet equivalent
per day of natural gas. The area contains approximately 480 billion
cubic feet equivalent (Bcfe) of proved plus probable reserves and 140
Bcfe of best estimate economic contingent resources as of December 31,
2011. Under the agreement, Encana will be operator and Encana and Toyota
Tsusho have established a management committee that will provide overall
supervision and direction of development operations.

Responsible resource development of abundant natural gas

Consistent
with its well-established operating procedures and corporate
responsibility practices, Encana 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 environment
where it operates.

'Our integrated CBM wells produce low-pressure, sweet natural gas that
is essentially pure methane, and as a result is a cleaner energy source,
producing the fewest emissions of any hydrocarbon ? a natural gas
resource capable of delivering long-term, affordable energy supplies to
domestic and export markets,? Eresman said.

Encana ?continues to execute on plans to advance joint-venture
opportunities

Encana continuously looks for opportunities
to ?optimize the development of its large ?inventory ?of assets and is
advancing joint ventures, farmout arrangements and partnership
opportunities to unlock value in the company′s enormous reserve and
resource ?base. Investment of third-party capital enhances financial
flexibility, improves project returns and helps to preserve the value of
Encana′s vast ?portfolio. ?In well-delineated, low-cost,
operationally-efficient assets, the company uses third-party capital to
accelerate value recognition while significantly reducing ?its capital
requirements. In ?early-life ?plays ?these
arrangements ?reduce ?Encana's ?capital risk and accelerate evaluation and
potential commercialization of ?the assets. Additionally, third-party
capital is often employed ?in more mature assets to maintain a minimal
level of activity in order to preserve capital and operational
efficiencies.

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.

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.

Toyota Tsusho Corporation

Toyota Tsusho is a general trading
company that develops business together with over 400 consolidated Group
companies in Japan and overseas around the world, via a global network
covering Japan and more than 60 other countries worldwide.

Toyota Tsusho has a divisional system made up of seven divisions, namely
the Metals Division, the Global Production Parts & Logistics Division,
the Automotive Division, the Machinery, Energy & Project Division, the
Chemicals & Electronics Division, the Produce & Foodstuffs Division, and
the Consumer Products, Services & Materials Division.

With this system, the company provides products and services in a broad
range of business domains that are essential to realize the creation of
a prosperous and fulfilling society.

ADVISORY REGARDING RESERVES - 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. 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.

The estimates of economic contingent resources contained in this news
release are based on definitions contained in the Canadian Oil and Gas
Evaluation Handbook. Contingent resources do not constitute, and should
not be confused with, reserves. Contingent resources are defined as
those quantities of petroleum estimated, on a given date, to be
potentially recoverable from known accumulations using established
technology or technology under development, but which are not currently
considered to be commercially recoverable due to one or more
contingencies. Economic contingent resources are those contingent
resources that are currently economically recoverable. In examining
economic viability, the same fiscal conditions have been applied as in
the estimation of reserves. There is a range of uncertainty of estimated
recoverable volumes. A best estimate is considered to be a realistic
estimate of the quantity that will actually be recovered. It is equally
likely that the actual remaining quantities recovered will be greater or
less than the best estimate, which under probabilistic methodology
reflects a 50 percent confidence level.

There is no certainty that it will be commercially viable to produce any
portion of the volumes currently classified as economic contingent
resources. For information regarding risks, contingencies and positive
and negative factors relating to estimates of economic contingent
resources, please see Encana′s Supplemental Disclosure Document dated
March 26, 2012 which is available on www.sedar.com.

The estimates of various classes of reserves (proved, probable) and of
contingent resources (best) in this news release for certain properties
may not reflect the same confidence level as estimates of reserves for
all properties, due to the effects of aggregation.

The estimates of various classes of reserves (proved, probable) and of
contingent resources (best) 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 Toyota Tsusho,
including potential terms, amount of subsequent investments, estimated
number of future wells and future drilling locations; estimates of
reserves and economic contingent resources associated with the CBM lands
subject of the agreement with Toyota Tsusho; expectation for the
agreement with Toyota Tsusho to foster expanded business opportunities,
and to serve as a model for other investment opportunities in Encana′s
assets, including supplying capital investment to preserve the value and
efficient development of Encana shallow gas lands; ability to advance
joint venture opportunities by attracting joint ventures, farm-out
arrangements and partnership opportunities to unlock reserve and
resource base value; and expected benefits of using third party capital
to accelerate value recognition of reserves and resource base.

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:

Carol Howes

Manager, Media Relations

(403)
645-4799