EnCana generates second quarter cash flow of US$2.9 billion, or $3.85 per share - up 16 percent

CALGARY (Map) - Second quarter natural gas production up 10 percent to 3.8 billion cubic

feet per day

Strong outlook for gas production growth and prices triggers increase to

EnCana's 2008 forecast for cash flow and gas production

CALGARY, July 24 /PRNewswire-FirstCall/ - EnCana Corporation (TSX & NYSE: ECA) achieved strong increases in cash flow and operating earnings in the second quarter of 2008 as a result of solid performance from the company's North American portfolio of resource plays and substantial increases in commodity prices.

"Once again our strong operating results demonstrate the substantial value-creation capacity of our resource play strategy. Second quarter cash flow per share and operating earnings per share increased 16 and 9 percent respectively over last year while natural gas production is ahead of expectations. Led by the East Texas, Jonah, Bighorn and Alberta coalbed methane (CBM) resource plays, our low-risk portfolio of unconventional resources continues to deliver sustainable growth across North America. In the second quarter, the upstream business of our Integrated Oil division, in particular, benefited from significantly higher field prices," said Randy Eresman, EnCana's President & Chief Executive Officer.

EnCana expanding investments in North American resource portfolio

"With natural gas production growing faster than forecast and stronger than expected prices, we are raising our 2008 cash flow forecast to a range of $10 billion to $11 billion from a current level of $9.6 billion to $10 billion. Our full-year gas production forecast is also increasing to an expected average of 3.85 Bcf/d. We are directing the higher than originally forecast cash flows into growing our already strong position in the Haynesville Shale in Louisiana, where recent test wells are demonstrating very strong potential. At the same time, we are stepping up our divestiture program for the remainder of the year to offset the additional costs of expanding shale gas lands and resources," Eresman said.

Shale plays continue to show promise

"In the second quarter we announced an expansion of our sizeable position in British Columbia's Horn River and Louisiana's Haynesville natural gas shale plays. At Horn River, two of our recently completed wells are producing at a very strong first-month average rate in excess of 5 million cubic feet per day (MMcf/d). At Haynesville, during a two-day test, the initial flow rate of a second horizontal well was 15 MMcf/d. These well results are exceptional and are a strong indication that the addition of these plays has the potential to accelerate the pace of our natural gas growth," Eresman said.

Integrated Oil production growth set to ramp up

"At Foster Creek, first production from our newest expansion phase, which will add 30,000 bbls/d of gross production capacity, is expected to start ramping up in the fourth quarter 2008. The next 30,000 bbls/d phase is expected to be completed in the first quarter of 2009. Combined, these two phases are scheduled to double our gross production capacity at Foster Creek to 120,000 bbls/d. Production is forecast to begin ramping up later this year and continue through 2009. At Christina Lake, we are steaming wells in our recently completed expansion, which is expected to increase our gross production capacity to 18,000 bbls/d by the end of the year, with production ramping up through 2009," Eresman said.

"Plans for splitting EnCana into two strong independent companies focused on distinct businesses - unconventional natural gas (GasCo) and integrated oil (IOCo) - are proceeding well and we are working towards completing the transaction early in 2009," Eresman said.

Second Quarter 2008 Highlights

------------------------------

(all year-over-year comparisons are to the second quarter of 2007)

Financial

    -   Cash flow increased 16 percent per share to $3.85, or $2.9 billion
    -   Operating earnings were up 9 percent per share to $1.96, or
        $1.5 billion
    -   Net earnings were down 14 percent per share to $1.63, or
        $1.2 billion, primarily due to unrealized mark-to-market losses on
        risk management activities of $235 million after-tax compared to
        gains of $47 million after-tax in 2007
    -   Operating cash flow generated from the Integrated Oil division
        totalled $527 million, comprised of $185 million from the upstream
        operations, a 59 percent increase due to strong field prices, and
        $342 million from the downstream business, a decrease of 22 percent
        due to weaker refining margins
    -   Capital investment was in line with guidance at $1.7 billion, up
        about 47 percent in large part due to continued development of East
        Texas and other key resource plays, as well as the expansion of the
        company's upstream and downstream integrated oil capacity
    -   Free cash flow decreased $206 million to $1.2 billion (free cash flow
        is defined in Note 1 on page 8)
    -   Realized natural gas prices were up 12 percent to $8.54 per thousand
        cubic feet (Mcf) and realized liquids prices increased 99 percent to
        $90.47 per barrel (bbl). These prices include the impact of financial
        hedges
    -   EnCana purchased approximately 200,000 common shares at an average
        share price of $74.81 under the Normal Course Issuer Bid, for a total
        cost of $15 million.
    Operating - Upstream
    -   Key resource play production was up 14 percent, with a 17 percent
        increase in natural gas production and oil production down 9 percent
    -   Total natural gas production increased 10 percent to 3.8 billion
        cubic feet per day (Bcf/d), up 11 percent per share
    -   Total oil and natural gas liquids (NGLs) production decreased 4
        percent to approximately 128,000 barrels per day (bbls/d), down 3
        percent per share
    -   Oil production at Foster Creek and Christina Lake was down 12 percent
        to approximately 24,700 bbls/d (net to EnCana) due to an extended
        turnaround in the second quarter at Foster Creek. Current net
        production is about 30,000 bbls/d
    -   Operating and administrative costs of $1.71 per thousand cubic feet
        equivalent (Mcfe) increased 46 percent from $1.17 per Mcfe one year
        earlier. More than half of the increase was due to long-term
        incentive costs and an appreciation of the Canadian dollar compared
        to the U.S. dollar. When those items are factored out, operating and
        administrative costs were in line with guidance of $1.40 per Mcfe.
        The rest of the increase was due to reorganization costs, increased
        activity levels and other administrative costs.
    Operating - Downstream
    -   Refined products averaged 464,000 bbls/d (232,000 bbls/d net to
        EnCana), up 10 percent
    -   Refinery crude utilization of 97 percent or 437,000 bbls/d crude
        throughput (218,500 bbls/d net to EnCana), up 10 percent, from the
        second quarter of 2007, due to a major turnaround and new coker
        startup at the Borger refinery in June, 2007.

Guidance for total cash flow increases to a range of $10 billion to

$11 billion

Based on the company's strong cash flow performance to date and natural gas production and commodity price expectations for the remainder of the year, EnCana is increasing its 2008 guidance for total cash flow to a range of $10 billion to $11 billion, or between $13.30 and $14.65 per share. EnCana is also increasing its natural gas production forecast by 70 MMcf/d to 3.85 Bcf/d, or 8 percent higher than 2007 gas production. Key gas resource play production in 2008 is now expected to average 3.14 Bcf/d, up 60 MMcf/d. Production from the company's Foster Creek and Christina Lake projects is now expected to average about 31,000 bbls/d, down about 3,000 bbls/d due to an unexpected power outage and an extended plant turnaround in the second quarter at Foster Creek. As well, the company is planning a more ambitious divestiture program. Proceeds from planned asset sales are expected to offset additional land purchases in 2008, resulting in net proceeds from acquisitions and divestitures of $500 million, which is in line with guidance. Updated guidance is posted on the company's website www.encana.com.

Managing costs through long-term drilling contracts

"As a result of higher commodity prices and increased activity, we are seeing signs of cost inflation in services and materials - particularly for steel and fuels, and we believe inflationary pressure may continue to climb the rest of the year. EnCana has largely managed to offset inflationary pressures to date through a series of long-term contracts. For example, we have been working to lock in longer-term contracts for our well fracturing services. The majority of these contracts are priced at current levels. Significant portions of our steel requirements were contracted early so that we have the benefit of those more favourable cost levels. Going forward, we will continue to pursue cost management opportunities when possible," Eresman said.

Key resource play natural gas production up 17 percent in second quarter

Total natural gas production increased 10 percent in the second quarter to 3.8 Bcf/d, driven by a 17 percent increase in EnCana's natural gas key resource plays to 3.15 Bcf/d. In the U.S. increases were led by East Texas at 127 percent as a result of drilling success as well as incremental volumes from the Deep Bossier acquisition. In the Canadian Foothills natural gas production was up 5 percent, with drilling success and new facilities in the key resource plays of Bighorn in west central Alberta, CBM in central Alberta and Cutbank Ridge straddling the British Columbia-Alberta boundary.

Integrated Oil benefits from higher oil prices

Integrated Oil generated $527 million in operating cash flow, down slightly from $557 million in the same quarter of 2007. The upstream business benefited from a 138 percent increase in the average heavy oil price to $93.64 per bbl at Foster Creek and Christina Lake. Operating cash flow from the downstream business was impacted by significantly weaker refining margins. Operating cash flow for the second quarter includes $172 million related to lower purchased product costs as a result of accounting for inventory based on a first-in first-out valuation which is required under Canadian generally accepted accounting principles. This inventory valuation methodology results in lower product charges to operations in a rising input cost environment. The Chicago 3-2-1 crack spread averaged $13.60 per bbl in the quarter, down 55 percent from $30.12 per bbl from the same period last year when crack spreads reached record levels as gasoline inventories were drawn down to five-year lows. The weaker refining margins were offset by the higher upstream pricing, which demonstrates the benefit of the company's integration strategy. Second quarter oil production at Foster Creek and Christina Lake was down 12 percent to about 24,700 bbls/d (net to EnCana), primarily due to an extended scheduled turnaround at Foster Creek. Current net production is approximately 30,000 bbls/d.

IMPORTANT NOTE: Effective January 2, 2007, EnCana established an

integrated oil business with ConocoPhillips, which resulted in EnCana

contributing its interests in Foster Creek and Christina Lake into an

upstream partnership owned 50-50 by the two companies. Production and

wells drilled from 2006 have been adjusted on a pro forma basis to

reflect the integrated oil transaction. Per share amounts for cash flow

and earnings are on a diluted basis. EnCana reports in U.S. dollars

unless otherwise noted and follows U.S. protocols, which report

production, sales and reserves on an after-royalties basis. The company's

financial statements are prepared in accordance with Canadian generally

accepted accounting principles (GAAP).

    -------------------------------------------------------------------------
                   Financial Summary - Total Consolidated
    -------------------------------------------------------------------------
    (for the six months
     ended June 30)                                     6       6
    ($ millions, except          Q2      Q2      %    months   months   %
     per share amounts)         2008    2007   change  2008     2007  change
    -------------------------------------------------------------------------
    Cash flow(1)               2,889   2,549     +13   5,278   4,301     +23
    Per share diluted           3.85    3.33     +16    7.02    5.56     +26
    -------------------------------------------------------------------------
    Operating earnings(1)      1,469   1,369      +7   2,514   2,219     +13
    Per share diluted           1.96    1.79      +9    3.34    2.87     +16
    -------------------------------------------------------------------------
    Net earnings               1,221   1,446     -16   1,314   1,943     -32
    Per share diluted           1.63    1.89     -14    1.75    2.51     -30
    -------------------------------------------------------------------------
            Earnings Reconciliation Summary - Total Consolidated
    -------------------------------------------------------------------------
    Net earnings (loss)        1,221   1,446           1,314   1,943
    (Add back losses &
     deduct gains)              (235)     47            (972)   (376)
    Unrealized mark-to-market
     hedging gain (loss),
     after-tax                   (13)     (7)           (228)      4
    Non-operating foreign
     exchange gain (loss),
     after-tax Gain (loss) on
     discontinuance, after-tax     -       -               -      59
    Future tax recovery due
     to tax rate reductions        -      37               -      37
    -------------------------------------------------------------------------
    Operating earnings(1)      1,469   1,369      +7   2,514   2,219     +13
      Per share diluted         1.96    1.79      +9    3.34    2.87     +16
    -------------------------------------------------------------------------
    (1) Cash flow and operating earnings are non-GAAP measures as defined in
        Note 1 on Page 8.
    -------------------------------------------------------------------------
                        Production & Drilling Summary
    -------------------------------------------------------------------------
                             Total Consolidated
    -------------------------------------------------------------------------
    (for the six months                                 6       6
     ended June 30)              Q2      Q2      %    months  months    %
     (After royalties)          2008    2007   change  2008    2007   change
    -------------------------------------------------------------------------
    Natural Gas (MMcf/d)       3,841   3,506     +10   3,787   3,454     +10
    -------------------------------------------------------------------------
      Natural gas production
       per 1,000 shares (Mcf)    466     421     +11     919     819     +12
    -------------------------------------------------------------------------
    Oil and NGLs (Mbbls/d)       128     133      -4     132     132       -
    -------------------------------------------------------------------------
      Oil and NGLs production
       per 1,000 shares (Mcfe)    93      96      -3     193     188      +3
    -------------------------------------------------------------------------
    Total Production (MMcfe/d) 4,607   4,306      +7   4,582   4,246      +8
    -------------------------------------------------------------------------
      Total per 1,000 shares
       (Mcfe)                    559     517      +8   1,112   1,007     +10
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Net wells drilled            409     569     -28   1,552   1,833     -15
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
                Growth from key North American resource plays
    -------------------------------------------------------------------------
    Resource Play                    Daily Production
                 ------------------------------------------------------------
                         2008                          2007             2006
                 ------------------------------------------------------------
    (After                           Full                               Full
    royalties)   YTD     Q2     Q1   Year     Q4     Q3     Q2     Q1   Year
    -------------------------------------------------------------------------
    Natural Gas (MMcf/d)
      Jonah      613    630    595    557    612    588    523    504    464
      Piceance   377    383    372    348    351    354    349    334    326
      East
       Texas     294    316    273    143    187    144    139    103     99
      Fort
       Worth     138    137    140    124    138    128    124    106    101
      Greater
       Sierra    211    219    205    211    221    220    219    186    213
      Cutbank
       Ridge(1)  275    280    271    258    283    269    248    232    189
      Bighorn(1) 158    170    146    126    136    136    122    109     97
      CBM        300    303    298    259    283    256    245    251    194
      Shallow
       Gas       713    712    715    726    727    713    729    735    739
    -------------------------------------------------------------------------
    Total natural
     gas(1)
     (MMcf/d)  3,079  3,150  3,015  2,752  2,938  2,808  2,698  2,560  2,422
    -------------------------------------------------------------------------
    Oil (Mbbls/d)
       Foster
        Creek     24     21     27     24     25     26     25     20     18
       Christina
        Lake       3      4      2      3      2      3      3      3      3
       Pelican
        Lake      23     21     24     23     24     24     23     23     24
       Weyburn(2) 14     13     14     15     14     15     14     15     15
    -------------------------------------------------------------------------
    Total oil
     (Mbbls/d)(2) 64     59     67     65     65     68     65     61     60
    -------------------------------------------------------------------------
    Total
     (MMcfe/d)
     (1),(2)   3,464  3,506  3,417  3,142  3,328  3,210  3,088  2,926  2,782
    -------------------------------------------------------------------------
    % change
     from prior
     period            +2.6   +2.7  +12.9   +3.7   +4.0   +5.5   +9.2
    -------------------------------------------------------------------------
    (1) Key resource play production volumes in 2007 and 2006 for Cutbank
        Ridge and Bighorn were restated to include the addition of new areas
        and zones that now qualify for key resource play inclusion based on
        EnCana's internal criteria.
    (2) Total key resource play production volumes in 2007 and 2006 were
        restated in the first quarter of 2008 to include the designation of
        Weyburn as an oil key resource play.
           Drilling activity in key North American resource plays
    -------------------------------------------------------------------------
    Resource Play                  Net Wells Drilled
                 ------------------------------------------------------------
                         2008                          2007             2006
                 ------------------------------------------------------------
                                     Full                               Full
                 YTD     Q2     Q1   Year     Q4     Q3     Q2     Q1   Year
    -------------------------------------------------------------------------
    Natural Gas
      Jonah       92     49     43    135     23     31     42     39    163
      Piceance   164     81     83    286     77     72     72     65    220
      East Texas  33     22     11     35      8      9     11      7     59
      Fort Worth  41     20     21     75     15     17     29     14     97
      Greater
       Sierra     63     27     36    109     27     27     32     23    115
      Cutbank
       Ridge(1)   48     24     24     93     11     23     26     33    134
      Bighorn(1)  48     18     30     62      6     18     10     28     58
      CBM        261     10    251  1,079    330    323     18    408    729
      Shallow
       Gas       579     83    496  1,914    649    608    241    416  1,310
    -------------------------------------------------------------------------
    Total gas
     wells(1)  1,329    334    995  3,788  1,146  1,128    481  1,033  2,885
    -------------------------------------------------------------------------
    Oil
      Foster
       Creek      13      1     12     23      6      8      1      8      3
      Christina
       Lake        -      -      -      3      -      1      2      -      1
      Pelican
       Lake        -      -      -      -      -      -      -      -      -
      Weyburn(2)  14      5      9     37     10      9      9      9     35
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Total oil
     wells(2)     27      6     21     63     16     18     12     17     39
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Total
     (1),(2)   1,356    340  1,016  3,851  1,162  1,146    493  1,050  2,924
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (1) Key resource play net wells drilled in 2007 and 2006 for Cutbank
        Ridge and Bighorn were restated to include the addition of new areas
        and zones that now qualify for key resource play inclusion based on
        EnCana's internal criteria.
    (2) Total key resource play net wells drilled in 2007 and 2006 were
        restated in the first quarter of 2008 to include the designation of
        Weyburn as an oil key resource play.

Natural gas shale resource play update

EnCana announced on June 16, 2008 that it has established a leading land and resource position in the Horn River Shale in northeast British Columbia and the Haynesville Shale in Louisiana and Texas. EnCana has drilled several exploration wells that have shown strong potential to deliver commercial volumes of natural gas. At Horn River, two of EnCana's recently completed wells are producing at a very strong first-month average rate in excess of 5 MMcf/d. In the Haynesville Shale play, EnCana has early results from its second horizontal well, which flowed at an initial two-day rate of 15 MMcf/d. In the second quarter EnCana increased its leased acreage in the Haynesville Shale play to 370,000 net acres through a series of transactions. The company also reached an agreement in July, 2008 to acquire an additional 89,000 acres of mineral rights from Indigo Minerals LLC for $457 million.

               Second quarter 2008 natural gas and oil prices
    -------------------------------------------------------------------------
                                                        6       6
                                  Q2      Q2     %    months  months    %
                                2008    2007   change  2008    2007   change
    -------------------------------------------------------------------------
    Natural gas ($/Mcf)
    NYMEX                      10.93    7.55     +45    9.48    7.16     +32
    EnCana realized gas
     price(1)                   8.54    7.62     +12    8.29    7.43     +12
    -------------------------------------------------------------------------
    Oil and NGLs ($/bbl)
    WTI                       123.80   65.02     +90  111.12   61.68     +80
    Western Canadian Select
     (WCS)                    102.18   45.84    +123   89.58   43.85    +104
    Differential WTI/WCS       21.62   19.18     +13   21.54   17.83     +21
    EnCana realized liquids
     price(1)                  90.47   45.47     +99   79.77   44.02     +81
    -------------------------------------------------------------------------
    Chicago 3-2-1 crack
     spread ($bbl)             13.60   30.12     -55   10.65   21.51     -50
    -------------------------------------------------------------------------
    (1) Realized prices include the impact of financial hedging.

Price risk management

Risk management positions at June 30, 2008 are presented in Note 17 to the unaudited Interim Consolidated Financial Statements. In the second quarter of 2008, EnCana's commodity price risk management measures resulted in realized losses of approximately $400 million after-tax, composed of a $308 million after-tax loss on gas hedges, and a $92 million after-tax loss on oil and other hedges. The realized losses in the second quarter reflect the dramatic increase in oil prices in the past year and natural gas prices over the past few months compared to the portion of EnCana's sales that are hedged at fixed prices - a risk management strategy that is aimed at providing more certainty of cash flow to fund the company's annual capital investment program. EnCana has hedged about 1.5 Bcf/d of expected 2008 gas production for the balance of the year at an average NYMEX equivalent price of $8.20 per Mcf. EnCana has about 23,000 bbls/d of expected 2008 oil production hedged for the balance of the year under fixed price contracts at an average West Texas Intermediate (WTI) price of $70.13 per bbl. For 2009, EnCana has 391 MMcf/d of its expected natural gas production under fixed price contracts at an average NYMEX equivalent price of $9.85 per Mcf and 341 MMcf/d under NYMEX put options at an average strike of $8.85 per Mcf.

U.S. Rockies and Canadian basis differential hedges

North American natural gas prices are impacted by volatile pricing disconnects caused primarily by transportation constraints between producing regions and consuming regions. These price discounts are called basis differentials. EnCana has hedged 100 percent of its expected U.S. Rockies basis exposure in 2008 using a combination of downstream transportation and basis hedges, including some hedges that are based on a percentage of NYMEX prices. At June 30, 2008, U.S. basis hedges, a combination of Rockies, Mid- Continent and San Juan instruments, had an effective average differential to NYMEX of $1.66 per Mcf for the rest of 2008. EnCana has also hedged about 8 percent of its expected 2008 Canadian gas production at an average AECO basis differential of 76 cents per Mcf.

Corporate developments

----------------------

Quarterly dividend of 40 cents per share declared

EnCana's Board of Directors has declared a quarterly dividend of 40 cents per share payable on September 30, 2008 to common shareholders of record as of September 15, 2008. Based on the July 23, 2008 closing share price on the New York Stock Exchange of $72.62, this represents an annualized yield of about 2.2 percent.

Corporate reorganization to create two energy companies focused on

unconventional resources

On May 11, 2008, EnCana announced plans to split into two highly focused energy companies - one a North American natural gas company and the other a fully integrated oil company with in-situ oil properties and refineries supplemented by reliable production from natural gas and crude oil resource plays. The proposed corporate reorganization, expected to close in early 2009, would be implemented through a Plan of Arrangement and is subject to shareholder and court approval. An information circular setting out the details of the Plan of Arrangement is expected to be mailed to EnCana shareholders in November, followed by a shareholders meeting planned for mid December. The working names of the two companies are GasCo and IOCo. GasCo will retain the name of EnCana Corporation while the permanent name of IOCo will be determined prior to the close of the transaction. For further information on the announcement see the company's website www.encana.com.

Normal Course Issuer Bid

In the second quarter of 2008, EnCana purchased for cancellation approximately 200,000 common shares at an average price of $74.81 per share under the company's Normal Course Issuer Bid for a total cost of $15 million. As a result of the proposed corporate reorganization, the company has suspended further purchases for 2008.

Financial strength

------------------

EnCana maintains a strong balance sheet, targeting a net debt-to- capitalization ratio between 30 and 40 percent and a net debt-to-adjusted- EBITDA multiple, on a trailing 12-month basis, of 1 to 2 times. At June 30, 2008, EnCana's net debt-to-capitalization ratio was 36 percent, including mark- to-market losses on risk management instruments, which increased net debt. Excluding this mark-to-market impact, the net debt-to-capitalization ratio would have been 34 percent. EnCana's net debt-to-adjusted-EBITDA multiple, on a trailing 12-month basis, was 1.3 times at the end of the second quarter. The company expects to be in the lower end of its managed ranges by year-end.

In the quarter, EnCana invested $1.7 billion in capital, excluding acquisitions and divestitures, on continued development of its key resource plays and expansion of the company's downstream heavy oil processing capacity through its joint venture with ConocoPhillips.

    -------------------------------------------------------------------------
                            CONFERENCE CALL TODAY
                 11 a.m. Mountain Time (1 p.m. Eastern Time)
    EnCana Corporation will host a conference call today, Thursday, July 24,
    2008, starting at 11 a.m. MT (1 p.m. ET). To participate, please dial
    (866) 321-6651 (toll-free in North America) or (416) 642-5212 and quote
    confirmation code 7198404 approximately 10 minutes prior to the
    conference call. An archived recording of the call will be available from
    approximately 3 p.m. MT on July 24 until midnight July 31, 2008 by
    dialling (888) 203-1112 or (647) 436-0148 and entering access
    code 7198404.
    A live audio webcast of the conference call will also be available via
    EnCana's website, www.encana.com, under Investor Relations. The webcast
    will be archived for approximately 90 days.
    -------------------------------------------------------------------------
    NOTE 1: Non-GAAP measures
    This news release contains references to cash flow, operating earnings,
free cash flow, net debt, capitalization and adjusted earnings before
interest, tax, depreciation and amortization (EBITDA).
    -   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 from continuing operations and net
        change in non-cash working capital from discontinued operations.
    -   Operating earnings is a non-GAAP measure that shows net earnings
        excluding non-operating items such as the after-tax impacts of a
        gain/loss on discontinuance, the after-tax gain/loss of unrealized
        mark-to-market accounting for derivative instruments, the after-tax
        gain/loss on translation of U.S. dollar denominated debt issued from
        Canada and the partnership contribution receivable, the after-tax
        foreign exchange gain/loss on settlement of intercompany
        transactions, future income tax on foreign exchange related to U.S.
        dollar intercompany debt recognized for tax purposes only, and the
        effect of changes in statutory income tax rates. Management believes
        that these excluded items reduce the comparability of the company's
        underlying financial performance between periods. The majority of
        U.S. dollar debt issued from Canada has maturity dates in excess of
        five years.
    -   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.
    -   Net debt is a non-GAAP measure defined as long-term debt plus current
        liabilities less current assets. Capitalization is a non-GAAP measure
        defined as net debt plus shareholders' equity. Net debt to
        capitalization and net debt to adjusted EBITDA are two ratios
        management uses to steward the company's overall debt position as
        measures of the company's overall financial strength.
    -   Adjusted EBITDA is a non-GAAP measure defined as net earnings from
        continuing operations before gains or losses on divestitures, income
        taxes, foreign exchange gains or losses, interest net, accretion of
        asset retirement obligation, and depreciation, depletion and
        amortization.

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

With an enterprise value of approximately $70 billion, EnCana is a leading North American unconventional natural gas and integrated oil company. 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 RESERVES DATA AND OTHER OIL AND GAS INFORMATION - EnCana's disclosure of reserves data and other oil and gas information is made in reliance on an exemption granted to EnCana by Canadian securities regulatory authorities which permits it to provide such disclosure in accordance with U.S. disclosure requirements. The information provided by EnCana may differ from the corresponding information prepared in accordance with Canadian disclosure standards under National Instrument 51-101 (NI 51- 101). EnCana's reserves quantities represent net proved reserves calculated using the standards contained in Regulation S-X of the U.S. Securities and Exchange Commission. Further information about the differences between the U.S. requirements and the NI 51-101 requirements is set forth under the heading "Note Regarding Reserves Data and Other Oil and Gas Information" in EnCana's Annual Information Form.

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). Also, certain natural gas volumes have been converted to barrels of oil equivalent (BOE) on the same basis. BOE and 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: projections relating to future economic and operating performance (including per share growth, net debt-to- capitalization and net debt-to-adjusted-EBITDA ratios, cash flow, free cash flow, and cash flow per share); the anticipated ability to meet the company's guidance forecasts; anticipated growth and success of various resource plays and the expected characteristics of such resource plays; the future drilling and production potential for various regions, including East Texas and the Horn River and Haynesville natural gas shale plays; projections relating to the proposed corporate reorganization transaction, including the expected timing for mailing an information circular to shareholders, holding a shareholders meeting and the potential closing date; projections of crude oil and natural gas prices, including basis differentials for various regions; anticipated expansion and production at Foster Creek and Christina Lake; projections for future crack spreads and refining margins; anticipated effects of EnCana's market risk mitigation strategy; projections for 2008 capital expenditures and investment; projections for oil, natural gas and NGLs production in 2008 and beyond; anticipated costs and inflationary pressures; and potential divestitures, proceeds which may be generated there from and the potential use of such proceeds. 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 risks and uncertainties include, among other things: volatility of and assumptions regarding oil and gas 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 marketing operations, including credit risks; imprecision of reserves estimates and estimates of recoverable quantities of oil, natural gas and liquids from resource plays and other sources not currently classified as proved reserves; the ability of the company and ConocoPhillips to successfully manage and operate the integrated North American oil business and the ability of the parties to obtain necessary regulatory approvals; refining and marketing margins; potential disruption or unexpected technical difficulties in developing new products and manufacturing processes; potential failure of new products to achieve acceptance in the market; unexpected cost increases or technical difficulties in constructing or modifying manufacturing or refining facilities; unexpected difficulties in manufacturing, transporting or refining synthetic crude oil; risks associated with technology; the company's ability to replace and expand oil and 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 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; the risk of war, hostilities, civil insurrection and instability affecting countries in which the company operates and 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.

Forward-looking information respecting anticipated 2008 cash flow, operating cash flow and pre-tax cash flow for EnCana, and for GasCo and IOCo pro-forma the proposed reorganization transaction, is based upon achieving average production of oil and gas for 2008 as set out above, average commodity prices for 2008 based on actual results for the second quarter of 2008, and for the balance of 2008, a WTI price of $130/bbl for oil, a NYMEX price of $11.00/Mcf for natural gas, an average U.S./Canadian dollar foreign exchange rate of $0.98, an average Chicago crack spread for 2008 of $10.00/bbl for refining margins, and an average number of outstanding shares for EnCana of approximately 750 million. Assumptions relating to forward-looking statements generally include EnCana's current expectations and projections made by the company in light of, and generally consistent with, its historical experience and its perception of historical trends, 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 document.

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. For EnCana video, visit www.thenewsmarket.com/EnCana. Free delivery options include digital FTP transfer, Beta SP tape, Data-DVD and streaming download (Flash, QuickTime and Windows Media).

    EnCana Corporation
    Interim Consolidated Financial Statements
    (unaudited)
    For the period ended June 30, 2008
    (U.S. Dollars)
    CONSOLIDATED STATEMENT OF EARNINGS (unaudited)
                                        Three Months Ended  Six Months Ended
                                             June 30,            June 30,
    ($ millions, except per          ----------------------------------------
     share amounts)                       2008      2007      2008      2007
    -------------------------------------------------------------------------
    REVENUES, NET OF
     ROYALTIES               (Note 5) $  7,321  $  5,613  $ 12,663  $ 10,049
    EXPENSES                 (Note 5)
      Production and mineral
       taxes                               154        57       268       149
      Transportation and
       selling                             326       234       646       512
      Operating                            709       565     1,405     1,116
      Purchased product                  2,882     1,836     5,275     3,687
      Depreciation, depletion
       and amortization                  1,097       899     2,132     1,742
      Administrative                       225        95       381       190
      Interest, net          (Note 7)      147        94       281       195
      Accretion of asset
       retirement obligation (Note 12)      20        15        41        29
      Foreign exchange (gain)
       loss, net             (Note 8)      (35)        7        60        (5)
      (Gain) loss on
       divestitures          (Note 6)      (17)        1       (17)      (58)
    -------------------------------------------------------------------------
                                         5,508     3,803    10,472     7,557
    -------------------------------------------------------------------------
    NET EARNINGS BEFORE INCOME TAX       1,813     1,810     2,191     2,492
      Income tax expense     (Note 9)      592       364       877       549
    -------------------------------------------------------------------------
    NET EARNINGS                      $  1,221  $  1,446  $  1,314  $  1,943
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    NET EARNINGS PER
     COMMON SHARE           (Note 16)
       Basic                          $   1.63  $   1.91  $   1.75  $   2.54
       Diluted                        $   1.63  $   1.89  $   1.75  $   2.51
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    CONSOLIDATED STATEMENT OF RETAINED EARNINGS (unaudited)
                                                            Six Months Ended
                                                                 June 30,
                                                         --------------------
    ($ millions)                                              2008      2007
    -------------------------------------------------------------------------
    RETAINED EARNINGS,
     BEGINNING OF YEAR                                    $ 13,082  $ 11,344
    Net Earnings                                             1,314     1,943
    Dividends on Common Shares                                (600)     (304)
    Charges for Normal Course
     Issuer Bid             (Note 13)                         (243)   (1,421)
    -------------------------------------------------------------------------
    RETAINED EARNINGS, END OF PERIOD                      $ 13,553  $ 11,562
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (unaudited)
                                        Three Months Ended  Six Months Ended
                                             June 30,            June 30,
                                     ----------------------------------------
    ($ millions)                          2008      2007      2008      2007
    -------------------------------------------------------------------------
    NET EARNINGS                      $  1,221  $  1,446  $  1,314  $  1,943
    OTHER COMPREHENSIVE INCOME,
     NET OF TAX
      Foreign Currency
       Translation Adjustment               48       828      (352)      939
    -------------------------------------------------------------------------
    COMPREHENSIVE INCOME              $  1,269  $  2,274  $    962  $  2,882
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    CONSOLIDATED STATEMENT OF ACCUMULATED OTHER COMPREHENSIVE INCOME
    (unaudited)
                                                            Six Months Ended
                                                                 June 30,
                                                         --------------------
    ($ millions)                                              2008      2007
    -------------------------------------------------------------------------
    ACCUMULATED OTHER COMPREHENSIVE INCOME,
     BEGINNING OF YEAR                                    $  3,063  $  1,375
    Foreign Currency Translation Adjustment                   (352)      939
    -------------------------------------------------------------------------
    ACCUMULATED OTHER COMPREHENSIVE INCOME,
     END OF PERIOD                                        $  2,711  $  2,314
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    See accompanying Notes to Consolidated Financial Statements.
    CONSOLIDATED BALANCE SHEET (unaudited)
                                                          As at        As at
                                                        June 30, December 31,
    ($ millions)                                           2008         2007
    -------------------------------------------------------------------------
    ASSETS
      Current Assets
        Cash and cash equivalents                      $    778     $    553
        Accounts receivable and
         accrued revenues                                 3,346        2,381
        Current portion of
         partnership contribution
         receivable                                         305          297
        Risk management     (Note 17)                       265          385
        Inventories         (Note 10)                     1,422          828
    -------------------------------------------------------------------------
                                                          6,116        4,444
        Property, Plant and
         Equipment, net      (Note 5)                    37,070       35,865
        Investments and Other Assets                        654          607
        Partnership Contribution Receivable               2,992        3,147
        Risk Management     (Note 17)                       341           18
        Goodwill                                          2,821        2,893
    -------------------------------------------------------------------------
                             (Note 5)                 $  49,994    $  46,974
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    LIABILITIES AND SHAREHOLDERS' EQUITY
      Current Liabilities
        Accounts payable and
         accrued liabilities                          $  4,888     $   3,982
        Income tax payable                                 909         1,150
        Current portion of
         partnership contribution
         payable                                           297           288
        Risk management     (Note 17)                    1,617           207
        Current portion of
         long-term debt     (Note 11)                      491           703
    -------------------------------------------------------------------------
                                                         8,202         6,330
      Long-Term Debt        (Note 11)                    9,878         8,840
      Other Liabilities                                    450           242
      Partnership Contribution
       Payable                                           3,012         3,163
      Risk Management       (Note 17)                       73            29
      Asset Retirement
       Obligation           (Note 12)                    1,402         1,458
      Future Income Taxes                                6,160         6,208
    -------------------------------------------------------------------------
                                                        29,177        26,270
    -------------------------------------------------------------------------
      Shareholders' Equity
        Share capital       (Note 13)                    4,553         4,479
        Paid in surplus                                      -            80
        Retained earnings                               13,553        13,082
        Accumulated other comprehensive income           2,711         3,063
    -------------------------------------------------------------------------
       Total Shareholders' Equity                       20,817        20,704
    -------------------------------------------------------------------------
                                                      $ 49,994      $ 46,974
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    See accompanying Notes to Consolidated Financial Statements.
    CONSOLIDATED STATEMENT OF CASH FLOWS (unaudited)
                                        Three Months Ended  Six Months Ended
                                             June 30,            June 30,
                                     ----------------------------------------
    ($ millions)                          2008      2007      2008      2007
    -------------------------------------------------------------------------
    OPERATING ACTIVITIES
      Net earnings                    $  1,221  $  1,446  $  1,314  $  1,943
      Depreciation, depletion
        and amortization                 1,097       899     2,132     1,742
      Future income taxes    (Note 9)      152        79        73      (111)
      Unrealized (gain) loss
       on risk management   (Note 17)      318       (55)    1,411       559
      Unrealized foreign
       exchange (gain) loss                (11)       79        65        76
      Accretion of asset
       retirement obligation (Note 12)      20        15        41        29
     (Gain) loss on
       divestitures          (Note 6)      (17)        1       (17)      (58)
      Other                                109        85       259       121
      Net change in other
       assets and liabilities             (171)      (16)     (264)        4
      Net change in non-cash
       working capital                    (722)     (385)   (1,260)     (249)
    -------------------------------------------------------------------------
      Cash From Operating Activities     1,996     2,148     3,754     4,056
    -------------------------------------------------------------------------
    INVESTING ACTIVITIES
      Capital expenditures   (Note 5)   (1,996)   (1,189)   (3,903)   (2,679)
      Proceeds from
       divestitures          (Note 6)       79       165       151       446
      Net change in investments
       and other                           (18)      (25)       (9)       (6)
      Net change in non-cash
       working capital                    (101)      (45)      191      (103)
    -------------------------------------------------------------------------
      Cash (Used in) Investing
       Activities                       (2,036)   (1,094)   (3,570)   (2,342)
    -------------------------------------------------------------------------
    FINANCING ACTIVITIES
      Net issuance (repayment)
       of revolving long-term debt         426       (40)      367       (40)
      Issuance of long-term
       debt                 (Note 11)        -         -       723       434
      Repayment of long-term debt         (196)        -      (196)        -
      Issuance of common
       shares               (Note 13)       13        77        76       153
      Purchase of common
       shares               (Note 13)      (15)     (713)     (326)   (1,807)
      Dividends on common
       shares                             (300)     (151)     (600)     (304)
      Other                                  -       (14)        -        (3)
    -------------------------------------------------------------------------
      Cash From (Used in)
       Financing Activities                (72)     (841)       44    (1,567)
    -------------------------------------------------------------------------
    FOREIGN EXCHANGE GAIN (LOSS) ON CASH AND CASH
      EQUIVALENTS HELD IN
       FOREIGN CURRENCY                      1         5        (3)        6
    -------------------------------------------------------------------------
    INCREASE (DECREASE) IN CASH AND
     CASH EQUIVALENTS                     (111)      218       225       153
    CASH AND CASH EQUIVALENTS,
     BEGINNING OF PERIOD                   889       337       553       402
    -------------------------------------------------------------------------
    CASH AND CASH EQUIVALENTS,
     END OF PERIOD                    $    778  $    555  $    778  $    555
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    See accompanying Notes to Consolidated Financial Statements.
    Notes to Consolidated Financial Statements (unaudited)
    (All amounts in $ millions unless otherwise specified)
    1.  BASIS OF PRESENTATION
    The interim Consolidated Financial Statements include the accounts of
    EnCana Corporation and its subsidiaries ("EnCana" or the "Company"), and
    are presented in accordance with Canadian generally accepted accounting
    principles. EnCana's operations are in the business of exploration for,
    and development, production and marketing of natural gas, crude oil and
    natural gas liquids ("NGLs"), refining operations and power generation
    operations.
    The interim Consolidated Financial Statements have been prepared
    following the same accounting policies and methods of computation as the
    annual audited Consolidated Financial Statements for the year ended
    December 31, 2007, except as noted below. The disclosures provided below
    are incremental to those included with the annual audited Consolidated
    Financial Statements. The interim Consolidated Financial Statements
    should be read in conjunction with the annual audited Consolidated
    Financial Statements and the notes thereto for the year ended
    December 31, 2007.
    2.  CHANGES IN ACCOUNTING POLICIES AND PRACTICES
    As disclosed in the December 31, 2007 annual audited Consolidated
    Financial Statements, on January 1, 2008, the Company adopted the
    following Canadian Institute of Chartered Accountants ("CICA") Handbook
    Sections:
    -  "Inventories", Section 3031. The new standard replaces the previous
       inventories standard and requires inventory to be valued on a
       first-in, first-out or weighted average basis, which is consistent
       with EnCana's former accounting policy. The new standard allows the
       reversal of previous write-downs to net realizable value when there is
       a subsequent increase in the value of inventories. The adoption of
       this standard has had no material impact on EnCana's Consolidated
       Financial Statements.
    -  "Financial Instruments - Presentation", Section 3863 and "Financial
       Instruments - Disclosures", Section 3862. The new disclosure standard
       increases EnCana's disclosure regarding the nature and extent of the
       risks associated with financial instruments and how those risks are
       managed (See Note 17). The new presentation standard carries forward
       the former presentation requirements.
    -  "Capital Disclosures", Section 1535. The new standard requires EnCana
       to disclose its objectives, policies and processes for managing its
       capital structure (See Note 14).
    3.  RECENT ACCOUNTING PRONOUNCEMENTS
    As of January 1, 2009, EnCana will be required to adopt the CICA Handbook
    Section 3064, "Goodwill and Intangible Assets", which will replace the
    existing Goodwill and Intangible Assets standard. The new standard
    revises the requirement for recognition, measurement, presentation and
    disclosure of intangible assets. The adoption of this standard should not
    have a material impact on EnCana's Consolidated Financial Statements.
    In January 2006, the CICA Accounting Standards Board ("AcSB") adopted a
    strategic plan for the direction of accounting standards in Canada. As
    part of that plan, the AcSB confirmed in February 2008 that International
    Financial Reporting Standards ("IFRS") will replace Canadian GAAP in 2011
    for profit-oriented Canadian publicly accountable enterprises. As EnCana
    will be required to report its results in accordance with IFRS starting
    in 2011, the Company is assessing the potential impacts of this
    changeover and developing its plan accordingly.
    4.  PROPOSED CORPORATE REORGANIZATION
    On May 11, 2008, EnCana announced its plans to split into two highly
    focused energy companies - one a North American natural gas company and
    the other a fully integrated oil company with in-situ oilsands properties
    and refineries supplemented by reliable production from various gas and
    oil resource plays. The proposed corporate reorganization, expected to
    close in early January 2009, would be implemented through a court
    approved Plan of Arrangement and is subject