Encana agrees to sell North Texas natural gas assets for US$975 million

03.11.2011  |  Business Wire

Encana Oil & Gas (USA) Inc., a subsidiary of Encana Corporation
(TSX ?& ?NYSE: ECA), has reached an agreement to sell its North Texas
natural gas producing properties to certain partnerships managed by
EnerVest, Ltd. of Houston, Texas for approximately US$975 million.

With the completion of this divestiture, plus other non-core asset
sales, Encana expects to have net divestitures of approximately $1.7
billion by year-end, which is well within the company′s 2011 target of
between $1 billion and $2 ?billion. Proceeds from these transactions are
expected to supplement cash flow generation, strengthen the company′s
balance sheet and provide financial flexibility going into 2012.

Optimizing Encana′s resource portfolio, investing in highest return
projects, growing oil and liquids production

'The sale of this
North Texas asset in the Barnett Shale is part of Encana′s ongoing
portfolio optimization aimed at enhancing the long-term value of the
company′s vast resource potential. Since we first acquired substantive
Barnett Shale production in North Texas seven years ago, we have greatly
expanded production and assets on other earlier-life resource plays in
Texas and Louisiana. Our Texas and Haynesville key resource plays are
producing more than 750 million cubic feet per day and they offer
long-term growth opportunities in our well-established Mid-Continent
business unit. As we look to 2012, we continue to focus on our highest
return projects and we plan to direct a greater portion of our capital
investment to grow our oil and natural gas liquids production from the
more than 2 million net acres we hold on liquids-rich lands across North
America,? said Randy Eresman, Encana′s President & Chief Executive
Officer.

These North Texas assets currently produce about 125 million cubic feet
equivalent per day (MMcfe/d) and include the associated gathering
pipelines on about 50,000 net acres of land in the Fort Worth Basin.
This sale of Encana′s North Texas assets is subject to normal closing
conditions as well as regulatory approvals and is expected to close
prior to year-end with an effective date of November 1, 2011. Scotia
Waterous (USA) Inc. advised Encana on this transaction.

Joint venture and midstream divestiture initiatives continue to
progress

Encana continues to advance its competitive processes
for the establishment of a joint venture partnership on the company′s
undeveloped lands in its Cutbank Ridge resource play in British
Columbia, and the prospective sale of its Cutbank Ridge midstream assets
in British Columbia and Alberta. These corporate development initiatives
are aimed at accelerating growth and value creation from the company′s
enormous resource base and unlocking value from Encana′s midstream
assets. Encana recently completed the sale of a portion of its Piceance
Basin midstream assets for approximately $590 million.

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
resource plays producing natural gas and natural gas liquids 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 OIL AND GAS INFORMATION ? In this news
release, certain crude oil and natural gas liquids 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: expected proceeds from the sale of North Texas natural gas
assets, including the expected effective and closing dates of the
transaction; expected net divestitures by year-end and the expectation
for the same to supplement cash flow generation, strengthen the
company′s balance sheet and provide financial flexibility going into
2012; expectations relating to capital investment for 2012 and the
ability to grow the company′s oil and natural gas liquids production and
the expectation to establish a joint venture partnership on the
company′s undeveloped lands in its Cutbank Ridge resource play and to
sell its Cutbank Ridge midstream assets in British Columbia and Alberta.
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 date; the
risk that the potential benefits of these transactions will not be
realized; the risk that the company is unable to meet the targets in its
2011 guidance; 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, 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.

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: