Encana: Strong liquids growth to balance sources of cash flow in 2013

Encana Corporation (TSX, NYSE: ECA) is planning to invest an additional
$600 million during the remainder of 2012 to take advantage of positive
initial results achieved in a number of oil and liquids rich natural gas
plays. In addition to the revised capital guidance, the company also
increased its expected total liquids production for the year by seven
percent to 30,000 barrels per day (bbls/d).

'We′re encouraged with the success we have realized so far this year in
our oil and liquids rich natural gas plays. Increasing our 2012 capital
investment supports our goal of developing a more diversified production
portfolio,? says Randy Eresman, Encana President & CEO. 'Our teams have
been successfully transitioning their technical and commercial expertise
from the development of natural gas plays to oil and natural gas liquids
rich plays, and through their efforts, we expect to achieve a more
balanced operating cash flow stream in 2013.?

Encana′s original 2012 plan to drill between 40 and 45 wells has been
expanded to drill between 115 and 120 wells in 10 plays primarily
focused on oil. The company is expecting to drill approximately 350 oil
and liquids rich wells in 2013.

Encana projects liquids production in 2013 to range from 60,000 bbls/d
to 70,000 bbls/d, about 40 percent of which is expected to be comprised
of oil and field condensate. This represents a two year compound annual
growth rate of approximately 65 percent, based on the midpoint of the
range. Annualized natural gas production is expected to remain near
current levels of approximately 3 billion cubic feet per day for 2012
and 2013. For 2013, capital investment is estimated to range between
$4.0 billion to $5.0 billion, cash flow to be between $2.5 billion to
$3.5 billion and net divestitures to be in the range of $1.0 billion to
$1.5 billion.

'We continue to advance a number of potential strategic divestitures and
joint venture opportunities and as demonstrated by our recent
partnership agreements with Toyota Tsusho and Mitsubishi Corporation, we
remain confident in our ability to successfully execute on these
transactions,? adds Eresman. 'With approximately $2 billion of cash
currently on the balance sheet and $3.5 billion of expected total cash
flow this year, we have significant financial flexibility to support the
execution of Encana's planned capital investments.?

Encana continues to be cautiously optimistic about a recovery in natural
gas prices towards the end of 2012 and into 2013 to levels above those
currently reflected in the NYMEX natural gas forward strip. The company
will continue to minimize natural gas investments, in an effort to
preserve the value of its vast resource base until stronger more
sustainable natural gas prices prevail.

Investor Day presentations include update on emerging liquids plays

Encana
will be hosting an Investor Day event in New York tomorrow (June 21,
2012) where the company will provide an update on the status of its oil
and liquids rich portfolio. Key highlights include:

Duvernay ? Encana now holds approximately 400,000 net acres in
this play. Three additional well tests continue to indicate encouraging
results with 50 to 60 degree API gravity field condensate yields ranging
from 120 to 200 barrels per million cubic feet (bbls/MMcf). Our most
recent well which has been tied into permanent facilities (16-5) flowed
at approximately 1,200 barrels per day of condensate and 3.5 million
cubic feet per day of 1,295 BTU per standard cubic feet rich natural gas
during its first two days on stream. Encana plans to drill a total of 10
wells in the play in 2012.

Tuscaloosa Marine Shale ? Encana has established an industry
leading land position in the Tuscaloosa Marine Shale totaling
approximately 355,000 net acres. The two most recent wells (Anderson
17H-1 and 18H-1) have horizontal lateral lengths of about 7,400 feet and
8,800 feet and produced initial 30-day production rates of 930 and 1,080
barrels of 40 degree API gravity oil per day. Encana plans to drill a
total of 12 wells in the play in 2012.

Eaglebine ? Encana plans to drill a total of 12 wells in 2012
within its approximately 115,000 net acre position in the Eaglebine
light oil play. The company has drilled four wells to date, with
horizontal lengths ranging from 4,500 feet to 6,200 feet and initial
30-day production rates ranging from 165 to 230 barrels of oil per day.

Mississippian Lime ? Encana′s land position in this play now
totals about 360,000 net acres. The company is planning to drill 15
wells in this light oil play during 2012.

Utica/Collingwood ? Encana plans to drill an additional 5
horizontal wells on its approximately 430,000 net acre land position in
this play, focusing on the liquids rich window.

San Juan ? Encana plans to drill a total of 12 wells across its
approximately 174,000 net acre position in the San Juan targeting the
oil window of the Gallup formation. The initial well (Lybrook H36) was
drilled with a lateral length of about 4,100 feet and yielded a 30-day
initial production rate of about 440 barrels of oil per day.

DJ Niobrara ? Encana plans to execute a two rig program in the
Wattenberg field of the DJ basin. The company forecasts drilling 12 oil
focused wells in this area in 2012 with a focus on optimizing lateral
spacing, orientation and well length.

Clearwater Liquids ? Encana has identified a significant
inventory of prospective oil opportunities on about 4.6 million net
acres of land in southern Alberta. Targeting numerous zones, the company
will focus on the development of 300 high-graded locations and plans to
drill 30 wells in 2012.

'We have assembled a tremendous inventory of oil and liquids rich
opportunities in addition to our existing vast natural gas resource
base. Over the last three years, we have increased our liquids prone
land position to almost 3 million net acres unlocking additional long
term value in line with our strategy,? says Eresman. 'As we accelerate
the pace of development in these plays, we will continue to apply our
well established Resource Play Hub Development model to build these
plays from the ground up in the most cost effective manner, and we
expect to continue achieving industry leading cost structures.?

Updated guidance can be found at www.encana.com.

New York Investor Day Webcast Information

Date: Thursday,
June 21, 2012

Time: 8:30 a.m. - ~12:30 p.m. ET (6:30 a.m. - ~10:30
a.m. MT)

Presentations will be webcast live and archived on Encana′s website for
approximately 90 days. Please visit www.encana.com
in the Presentations
& Events section under Invest
in Us to access the audio webcast and presentation slides. It is
recommended that users access the webcast approximately 10 minutes
before its scheduled start time. The archived webcast will be available
within 24 hours of the event.

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. The term
liquids is used to represent oil, natural gas liquids and condensate.
The term liquids rich is used to represent natural gas streams with
associated liquids volumes. Unless otherwise specified or the context
otherwise requires, reference to Encana or to the company includes
reference to subsidiaries of and partnership interests held by Encana
Corporation and its subsidiaries.

NOTE 1: Non-GAAP measure

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, net
  change in non-cash working capital and cash tax on sale of assets.
  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.
  

This measure has 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 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.

ADVISORY REGARDING OIL AND GAS INFORMATION - 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. Given that the value ratio
based on the current price of oil as compared to natural gas is
significantly different from the energy equivalency of 6:1, utilizing a
conversion on a 6:1 basis may be misleading as an indication of value.

30-day IP and short-term rates are not necessarily indicative of
long-term performance or of ultimate recovery.

ADVISORY REGARDING FORWARD-LOOKING STATEMENTS ?In the interests
of providing Encana Corporation ('Encana? or the 'Company?) 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: projected liquids production by
2012 and 2013; increase in capital investment and liquids growth to
transition to a more diversified portfolio of production and balanced
cash flow generation by 2013; estimated oil and liquids rich wells to be
drilled in 2012 and 2013; estimated CAGR in liquids production from 2011
to 2013; estimated natural gas production for 2012 and 2013; estimated
capital investments, cash flow and net divestitures for 2013; ability to
complete strategic divestitures and joint ventures and execute on
existing joint ventures; number of wells to be drilled, future plans
for, and overall potential of the Duvernay, Tuscaloosa Marine Shale,
Eaglebine, Mississippian Lime, Utica/Collingwood, San Juan, DJ Niobrara
and Clearwater Liquids plays; successful application of the resource
play hub model in oil and liquids rich plays; and projections contained
in the 2012 Corporate Guidance, including estimated cash flow for 2012.

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 and their adverse effect on the Company′s operations
and financial condition and the value and amount of its reserves;
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 'partnerships? or 'joint ventures?,
regardless of the legal form) 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; risk arising from price basis differential; risk arising from
inability to enter into attractive hedges to protect the Company′s
capital program; 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.

Forward-looking information respecting anticipated 2012 cash flow for
Encana is based upon, among other things, achieving average production
for 2012 of 3.0 Bcf/d of natural gas and 30,000 bbls/d of liquids,
commodity prices for natural gas and liquids based on NYMEX $3.25 per
Mcf and WTI of $95 per bbl, an estimated U.S./Canadian dollar foreign
exchange rate of $1.00 and a weighted average number of outstanding
shares for Encana of approximately 736 million. Forward-looking
information respecting anticipated 2013 cash flow for Encana is based
upon achieving average production for 2013 of between 2.9 Bcf/d and 3.1
Bcf/d of natural gas and 60,000 bbls/d to 70,000 bbls/d of liquids,
commodity prices for natural gas and liquids based on NYMEX $3.50 per
Mcf and WTI of $90 per bbl, an estimated U.S./Canadian dollar foreign
exchange rate of $1.00 and a weighted average number of outstanding
shares for Encana of approximately 736 million.

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:

Jay
Averill

Media Relations

(403) 645-4747