EnCana generates third quarter cash flow of US$2.8 billion or $3.74 per share – up 28 percent

Operating earnings up 40 percent to $1.92 per share or $1.4 billion

Total natural gas and oil production increases 6 percent

CALGARY, Oct. 23 /CNW/ - EnCana Corporation (TSX & NYSE: ECA) generated
strong increases in cash flow and operating earnings in the third quarter of
2008 as a result of solid production growth and higher commodity prices
compared to the same period in 2007. Third quarter natural gas and oil
production increased 6 percent, led by a 16 percent rise in production from
key natural gas resource plays.
"These strong financial results in the third quarter are a reflection of
the company's focus on operating excellence and capital discipline. EnCana's
prudent financial approach and low-risk business model allow us to capture the
upside during times of higher commodity prices as well as sustain us through a
volatile natural gas and oil pricing environment," said Randy Eresman,
EnCana's President & Chief Executive Officer.
"In this period of economic uncertainty, our resource play strategy
maintains a steadfast focus on low-cost production. As part of our ongoing
efforts to maintain financial resilience and flexibility, we will continue to
take steps to reduce pricing risk through our natural gas price hedging
program. The company also maintains financial strength with a conservative and
prudent approach that mitigates risks associated with borrowing. About 78
percent of EnCana's outstanding debt is comprised of long-term, fixed-rate
debt with an average remaining term of more than 14 years," Eresman said.
     EnCana increases gas price hedges
     Over the next year, EnCana has a substantial portion of expected future
production hedged at strong prices. About 80 percent of EnCana's total current
production is natural gas. For the 2009 gas year, which runs from
November 2008 through October 2009, EnCana has about 2.5 billion cubic feet
per day (Bcf/d) - about 60 percent of current production - hedged at an
average price of $9.15 per thousand cubic feet (Mcf).
     <<
Third Quarter 2008 Highlights
-----------------------------
(all year-over-year comparisons are to the third quarter of 2007)
     Financial - US$
     -   Cash flow increased 28 percent per share to $3.74, or $2.8 billion
- Operating earnings increased 40 percent per share to $1.92, or
$1.4 billion
- Net earnings increased to $3.55 billion, primarily due to after-tax
unrealized mark-to-market gains on risk management activities of
$2.0 billion in 2008 compared with losses of $69 million in 2007
- Operating cash flow from the Integrated Oil division was
$139 million, down 70 percent
- Capital investment, excluding acquisitions and divestitures, was in
line with guidance at $1.6 billion, up 1 percent over 2007
- Free cash flow increased $578 million to $1.2 billion (free cash flow
is defined in Note 1 on page 9)
- Realized natural gas prices increased 18 percent to $7.94 per Mcf and
realized oil and natural gas liquids (NGLS) prices were up 85 percent
to $90.88 per barrel (bbl). These prices include the impact of
financial hedges
- Net debt to capitalization ratio of 26 percent
- Net debt to adjusted EBITDA of 0.6 times.
     Operating - Upstream
     -   Total natural gas, oil and NGLs production increased 6 percent to
4.7 Bcfe/d
- Production from key natural gas resource plays increased 16 percent
- Total natural gas production increased 8 percent to 3.9 Bcf/d
- Total oil and NGLs production was approximately 133,600 barrels per
day (bbls/d), down about 2 percent
- Production from Foster Creek and Christina Lake increased 10 percent
to approximately 63,000 bbls/d (31,500 bbls/d net to EnCana)
- Operating and administrative costs of 79 cents per thousand cubic
feet equivalent (Mcfe) decreased 22 percent from $1.01 a year
earlier, largely due to mark-to-market accounting in the valuation of
the cost of long-term incentives.
     Operating - Downstream
     -   Refined products averaged 438,000 bbls/d (219,000 bbls/d net to
EnCana), down 10 percent
- Refinery crude utilization of 91 percent or 412,000 bbls/d crude
throughput (206,000 bbls/d net to EnCana), down 10 percent from the
third quarter of 2007 due primarily to unplanned refinery outages and
maintenance activities at Wood River
- The Wood River Coker and Refinery Expansion (CORE) project received
regulatory approvals and construction is expected to be completed
over the next three years at a cost of $3.6 billion ($1.8 billion net
to EnCana).
     Majority of net earnings year-over-year increase related to unrealized
mark-to-market accounting gains
>>
     EnCana's net earnings in the third quarter increased to $3.55 billion.
Approximately $2.0 billion of this increase was an after-tax unrealized gain
due to mark-to-market accounting for hedging contracts. This large gain in net
earnings resulted from a large decrease in commodity prices during the third
quarter. The gain essentially reversed unrealized mark-to-market losses that
were included in net earnings earlier in the year when natural gas prices were
rising. It is because of these dramatic mark-to-market accounting swings in
net earnings that EnCana focuses on operating earnings as a better measure of
quarter-over-quarter earnings performance. Operating earnings in the third
quarter, which do not include mark-to-market accounting for unrealized gains
and losses, were up about 40 percent, which reflects the stronger realized
prices - up about 31 percent - in the third quarter of 2008 compared to 2007,
plus EnCana's 6 percent increase in daily production.
     <<
Guidance for total cash flow narrowed to range of $10 billion to
$10.4 billion
>>
     Based on the company's natural gas production and commodity price
expectations for the remainder of the year, EnCana is narrowing its 2008
guidance for total cash flow to a range of $10 billion to $10.4 billion, or
between $13.30 and $13.85 per share. Operating cash flow has been revised to
between $11.9 billion and $12.7 billion. Capital investment, including
acquisitions, was ahead of expectations at the end of the third quarter mostly
due to additional unconventional natural gas land acquisitions in Haynesville
in Louisiana and Montney in British Columbia. EnCana had expected to complete
a number of divestitures in the fourth quarter to offset these acquisitions.
However, as a result of the current economic climate, some of those
transactions may not be completed prior to year end. Based on current
expectations, net acquisition and divestiture capital investment guidance has
increased $900 million. In total, capital expenditures for the year, including
acquisitions and divestitures, are expected to be about $7.4 billion, compared
to $6.5 billion provided in previous guidance. Total natural gas, oil and
NGLs production is on track to meet full-year guidance of 4.64 MMcfe/d.
Updated guidance is posted on the company's website at www.encana.com.
     <<
Production from key natural gas resource plays up 16 percent in third
quarter
>>
     Natural gas production increased 8 percent or 287 MMcf/d in the third
quarter of 2008 compared with the third quarter of 2007, largely due to a
16 percent increase in production from EnCana's key natural gas resource
plays. The application of new technology helped reduce costs for many of the
company's key resource plays, resulting in improved well performance and
continued efficiency gains. Production increases were led by a rise of
135 percent at East Texas, where production averaged about 340 MMcf/d in the
third quarter, mainly due to new wells coming on production and the doubling
of EnCana's interest in Deep Bossier in late 2007. Drilling and operational
success at Fort Worth, Piceance and Jonah also contributed to the third
quarter natural gas production increase of 24 percent in key resource plays in
the U.S. Gas production from the Canadian Foothills division key resource
plays increased 19 percent in 2008 compared with 2007. Drilling success and
new facilities in the key resource plays of Coalbed Methane (CBM), Cutbank
Ridge and Bighorn increased production by 23 percent, which was partially
offset by natural declines from conventional properties.
     Integrated Oil division getting set for production increase
     Integrated Oil generated $139 million in operating cash flow, down
70 percent from $468 million in the same quarter of 2007. Foster Creek and
Christina Lake operations contributed $183 million, a 190 percent increase due
to strong heavy oil prices. Operating cash flow includes a $96 million
operating loss from the downstream business, a decrease of 128 percent due to
weaker market crack spreads, unplanned refinery outages and hurricane-related
crude oil supply disruptions. Downstream operating cash flow includes a
decrease of $95 million due to higher purchased product costs as a result of
processing higher-priced crude during the quarter. The Chicago 3-2-1 crack
spread averaged $17.29 per bbl in the quarter, down 6 percent from $18.48 per
bbl, in the same period last year.
"Expansion activity is progressing as scheduled at our integrated oil
facilities. Foster Creek is currently producing about 56,000 bbls/d
(28,000 bbls/d net to EnCana). Steaming of the reservoir is underway as we
near completion of the next two expansion phases, which are expected to double
production capacity at Foster Creek to about 120,000 bbls/d in 2009. Christina
Lake is now producing 12,000 bbls/d (6,000 bbls/d net to EnCana) and the most
recent expansion at the facility has increased production capacity to
18,000 bbls/d," Eresman said.
     Wood River refinery expansion receives regulatory approvals
     EnCana announced on September 24, 2008 that construction of the CORE
project would begin at the Wood River refinery in Roxana, Illinois. The
project, a 50-50 venture of EnCana and the refinery operator ConocoPhillips,
is expected to increase total crude oil refining capacity by 50,000 bbls/d to
356,000 bbls/d, more than double current heavy crude refining capacity to
240,000 bbls/d as well as increase clean product yield by 10 percent to
approximately 89 percent. The CORE project is estimated to cost about
$3.6 billion ($1.8 billion net to EnCana) and is expected to be completed over
the next three years.


     Shale gas plays continue to show promise
     "In the third quarter of 2008, we strengthened our position in the
Haynesville gas resource play by acquiring 25,000 net acres, increasing our
land position to about 400,000 net acres, plus 63,000 net acres of mineral
rights. We continue to see great potential in this promising shale play,"
Eresman said. "EnCana, along with our partner, Shell Exploration & Production,
has an industry-leading land position in this area of Louisiana. We currently
have six rigs running with a focus on cost reduction and completion
optimization. We will target drilling and completing the first well in the
mid-Bossier shale in the fourth quarter. In northeast British Columbia and
northwestern Alberta, our already strong land position in the Montney play has
expanded to more than 700,000 acres. With that, EnCana has the largest
disclosed land base in this emerging unconventional gas field. And, at Horn
River in British Columbia, EnCana and partner Apache Corporation have
completed seven wells this year, with one of our most recent wells delivering
encouraging results, flowing for the first 30 days at an average of almost
8 MMcf/d."
     EnCana increases ownership in Deep Panuke
     In August 2008, EnCana acquired additional interests in one of the
licenses making up the Deep Panuke natural gas field offshore Nova Scotia.
EnCana now owns substantially all of the Deep Panuke field. The $700 million
Deep Panuke project is on budget and on schedule to begin producing first gas
in late 2010.
     Weak U.S. Rockies gas prices prompt production shut-in at Jonah


     Due to lower natural gas prices in the U.S. Rockies region, EnCana has
shut in approximately 50 MMcf/d of production (net of royalties) at the
company's Jonah key resource play in Wyoming. Although EnCana hedged
100 percent of expected production from the Rockies region, production levels
have been higher than anticipated, creating a small exposure to Rockies spot
prices. As a result, EnCana has decided to limit production at Jonah to
580 MMcf/d (net of royalties) for October. If prices improve, EnCana will
re-evaluate a return to productive capacity. Also, during September, a testing
outage of the Rockies Express Pipeline resulted in lower gas prices in the
U.S. Rockies region, prompting EnCana to shut-in approximately 60 MMcf/d
(5 MMcf/d annualized).
     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 period ended
Sept 30) 9 9
($ millions, except Q3 Q3 % months months %
per share amounts) 2008 2007 change 2008 2007 change
-------------------------------------------------------------------------
Cash flow(1) 2,809 2,218 +27 8,087 6,519 +24
Per share diluted 3.74 2.93 +28 10.75 8.49 +27
-------------------------------------------------------------------------
Operating earnings(1) 1,442 1,032 +40 3,956 3,251 +22
Per share diluted 1.92 1.37 +40 5.26 4.24 +24
-------------------------------------------------------------------------
Net earnings 3,553 934 4,867 2,877
Per share diluted 4.73 1.24 6.47 3.75
-------------------------------------------------------------------------
Capital investment 1,588 1,575 +1 5,155 4,230 +22
-------------------------------------------------------------------------
-------------------------------------------------------------------------

Earnings Reconciliation Summary - Total Consolidated
-------------------------------------------------------------------------
     Net earnings (loss)
(Add back losses &
deduct gains) 3,553 934 4,867 2,877
Unrealized mark-to-
market hedging gain
(loss), after-tax 2,043 (69) 1,071 (445)
Non-operating foreign
exchange gain (loss),
after-tax (31) (54) (259) (50)
Gain (loss) on
discontinuance,
after-tax 99 25 99 84
Future tax recovery
due to tax rate
reductions - - - 37
-------------------------------------------------------------------------
     Operating earnings(1)   1,442   1,032      +40     3,956    3,251    +22
Per share diluted 1.92 1.37 +40 5.26 4.24 +24
-------------------------------------------------------------------------
-------------------------------------------------------------------------
     (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 period ended
Sept 30) Q3 Q3 % 9 months 9 months %
(After royalties) 2008 2007 change 2008 2007 change
-------------------------------------------------------------------------
Natural Gas (MMcf/d) 3,917 3,630 +8 3,830 3,513 +9
-------------------------------------------------------------------------
Natural gas
production per 1,000
shares (Mcf) 480 445 +8 1,399 1,263 +11
-------------------------------------------------------------------------
Oil and NGLs (Mbbls/d) 134 136 -2 133 133 -
-------------------------------------------------------------------------
Oil and NGLs
production per 1,000
shares (Mcfe) 99 100 -1 291 288 +1
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Total Production
(MMcfe/d) 4,718 4,448 +6 4,627 4,314 +7
-------------------------------------------------------------------------
Total per 1,000
shares (Mcfe) 579 545 +6 1,690 1,551 +9
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Total net wells drilled 730 1,339 -45 2,282 3,171 -28
-------------------------------------------------------------------------
-------------------------------------------------------------------------

Growth from key North American resource plays
-------------------------------------------------------------------------
Daily Production
------------------------------------------------------------
Resource Play 2008 2007 2006
------------------------------------------------------------
(After Full Full
royalties) YTD Q3 Q2 Q1 Year Q4 Q3 Q2 Q1 Year
-------------------------------------------------------------------------
Natural Gas
(MMcf/d)
Jonah 613 615 630 595 557 612 588 523 504 464
Piceance 387 407 383 372 348 351 354 349 334 326
East Texas 309 339 316 273 143 187 144 139 103 99
Fort Worth 142 148 137 140 124 138 128 124 106 101
Greater
Sierra 217 228 219 205 211 221 220 219 186 213
Cutbank
Ridge(1) 291 322 280 271 258 283 269 248 232 189
Bighorn(1) 167 185 170 146 126 136 136 122 109 97
CBM 303 309 303 298 259 283 256 245 251 194
Shallow Gas 706 691 712 715 726 727 713 729 735 739
-------------------------------------------------------------------------
Total natural
gas(1)
(MMcf/d) 3,135 3,244 3,150 3,015 2,752 2,938 2,808 2,698 2,560 2,422
-------------------------------------------------------------------------
Oil (Mbbls/d)
Foster Creek 25 27 21 27 24 25 26 25 20 18
Christina
Lake 4 5 4 2 3 2 3 3 3 3
Pelican Lake 22 22 21 24 23 24 24 23 23 24
Weyburn(2) 14 14 13 14 15 14 15 14 15 15
-------------------------------------------------------------------------
Total oil
(Mbbls/d)(2) 65 68 59 67 65 65 68 65 61 60
-------------------------------------------------------------------------
Total
(MMcfe/d)
(1, 2) 3,523 3,648 3,506 3,417 3,142 3,328 3,210 3,088 2,926 2,782
-------------------------------------------------------------------------
% change from
prior period +4.1 +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 in the first quarter of 2008 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 a key oil resource play.



Drilling activity in key North American resource plays
     -------------------------------------------------------------------------
Net Wells Drilled
------------------------------------------------------------
Resource Play 2008 2007 2006
------------------------------------------------------------
Full Full
YTD Q3 Q2 Q1 Year Q4 Q3 Q2 Q1 Year
-------------------------------------------------------------------------
Natural Gas
Jonah 135 43 49 43 135 23 31 42 39 163
Piceance 258 94 81 83 286 77 72 72 65 220
East Texas 55 22 22 11 35 8 9 11 7 59
Fort Worth 62 21 20 21 75 15 17 29 14 97
Greater
Sierra 92 29 27 36 109 27 27 32 23 115
Cutbank
Ridge(1) 65 17 24 24 93 11 23 26 33 134
Bighorn(1) 59 11 18 30 62 6 18 10 28 58
CBM 339 78 10 251 1,079 330 323 18 408 729
Shallow Gas 812 233 83 496 1,914 649 608 241 416 1,310
-------------------------------------------------------------------------
Total gas
wells(1) 1,877 548 334 995 3,788 1,146 1,128 481 1,033 2,885
-------------------------------------------------------------------------
Oil
Foster
Creek 19 6 1 12 23 6 8 1 8 3
Christina
Lake - - - - 3 - 1 2 - 1
Pelican
Lake - - - - - - - - - -
Weyburn(2) 18 4 5 9 37 10 9 9 9 35
-------------------------------------------------------------------------
Total oil
wells(2) 37 10 6 21 63 16 18 12 17 39
-------------------------------------------------------------------------
Total(1),(2) 1,914 558 340 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 in the first quarter of 2008 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 a key oil resource play.


     -------------------------------------------------------------------------
Third Quarter 2008 natural gas and oil prices
-------------------------------------------------------------------------
Q3 Q3 % 9 months 9 months %
2008 2007 change 2008 2007 change
-------------------------------------------------------------------------
Natural gas ($Mcf)
NYMEX 10.24 6.16 +66 9.73 6.83 +42
EnCana Realized Gas
Price(1) 7.94 6.75 +18 8.17 7.19 +14
-------------------------------------------------------------------------
Oil and NGLs ($/bbl)
WTI 118.22 75.15 +57 113.52 66.22 +71
Western Canadian
Select (WCS) 100.22 52.71 +90 93.16 46.86 +99
Differential WTI/WCS 18.00 22.44 -20 20.36 19.36 +5
EnCana Realized
Liquids Price(1) 90.88 49.01 +85 83.49 45.71 +83
-------------------------------------------------------------------------
3-2-1 Crack Spread
($/bbl)
Chicago 17.29 18.48 -6 12.86 20.50 -37
-------------------------------------------------------------------------
     (1) Realized prices include the impact of financial hedging.
>>
     Price risk management
     Risk management positions at September 30, 2008 are presented in Note 17
to the unaudited Interim Consolidated Financial Statements. In the third
quarter of 2008, EnCana's commodity price risk management measures resulted in
realized losses of approximately $271 million after tax, comprised of a
$203 million after-tax loss on gas hedges, and a $68 million after-tax loss on
oil and other hedges. EnCana has hedged about 2.4 Bcf/d of expected 2008 gas
production for the balance of the year at an average NYMEX equivalent price of
$8.82 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 the calendar year
2009, EnCana has 1.6 Bcf/d of its expected natural gas production under fixed
price contracts at an average NYMEX equivalent price of $9.31 per Mcf and
0.5 Bcf/d under NYMEX put options at an average strike price of $9.10 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 through 2011 using a combination of downstream transportation
and basis hedges, including some hedges that are based on a percentage of
NYMEX prices and some hedges that move basis risk to alternative markets
downstream. EnCana has also hedged about 6 percent of its expected 2008
Canadian gas production at an average AECO basis differential of 72 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 December 31, 2008 to common shareholders of record as of
December 15, 2008. Based on the October 22, 2008 closing share price on the
New York Stock Exchange of $41.10, this represents an annualized yield of
about 3.9 percent.
     EnCana revises schedule for creation of Cenovus Energy Inc.
     On October 15, 2008, EnCana announced that it is revising the schedule
for its proposed split into two independent energy companies - an integrated
oil company to be named Cenovus Energy Inc. and a pure-play natural gas
company, which will retain the name EnCana Corporation. The proposed corporate
reorganization was expected to close in early January 2009. The transaction is
to be implemented through a Plan of Arrangement and is subject to shareholder
and court approvals.
"During this period of market uncertainty, we've decided it is in the
best interests of shareholders to delay the timing of the reorganization,"
said Eresman. "We continue to work towards the creation of Cenovus and will be
ready to move forward with the transaction at the appropriate time."
Work is underway on a Cenovus logo and brand as well as a new brand for
EnCana. For further information on the reorganization, see the company's
website www.encana.com.
     Normal Course Issuer Bid
     As a result of the proposed corporate split, EnCana suspended the
purchase of common shares for cancellation. EnCana has no plans to resume
purchases while the company continues to move forward with the reorganization.
     Brazil sale closes
     In September 2008, EnCana completed the sale of its interests in Brazil,
which included non-operated interests in 10 offshore exploration blocks.
EnCana received net proceeds of $164 million and recorded an after-tax gain of
approximately $99 million on the sale.
     <<
Financial strength
------------------
>>
     EnCana maintains a strong balance sheet, targeting a net debt to
capitalization ratio between 30 and 40 percent and a net debt to adjusted
EBITDA multiple, on a trailing 12-month basis, of 1 to 2 times. At
September 30, 2008, EnCana's net debt to capitalization ratio was 26 percent,
including mark-to-market gains on risk management instruments, which decreased
net debt. Excluding this mark-to-market impact to working capital, the net
debt to capitalization ratio would have been 29 percent. EnCana's net debt to
adjusted EBITDA multiple, on a trailing 12-month basis, was 0.6 times at the
end of the third quarter. The company expects to continue to be in the lower
end of its managed ranges through year-end. Upcoming debt maturities are
modest as indicated below.
     <<
---------------------------------------------------------
Long-Term Debt maturities through 2010
($ millions)
---------------------------------------------------------
Issue Currency Total
4.6% due August 15, 2009 USD $250.0
7.65% due September 15, 2010 USD $200.0
---------------------------------------------------------
>>
     In the third quarter, EnCana invested $1.6 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 venture with ConocoPhillips. Net acquisitions and divestitures for
the first nine months of 2008 were $621 million, including approximately
$600 million in divestitures and $1.1 billion in acquisitions in the U.S.,
largely due to investments in Haynesville properties.
     <<
-------------------------------------------------------------------------
CONFERENCE CALL TODAY
                  11 a.m. Mountain Time (1 p.m. Eastern Time)
     EnCana Corporation will host a conference call today, Thursday,
October 23, 2008 starting at 11:00 a.m. MT (1:00 p.m. ET). To
participate, please dial (888) 337-8259 (toll-free in North America) and
quote passcode 7433356 approximately 10 minutes prior to the conference
call. An archived recording of the call will be available from
approximately 3:00 p.m. MT on October 23 until midnight October 30, 2008
by dialling (888) 203-1112 and entering passcode 7433356.
     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 $40 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, operating
cash flow, and cash flow per share); the anticipated ability to meet the
company's guidance forecasts; the ability of the company to withstand a
volatile pricing environment; 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 proceeding with this transaction; projections of crude oil
and natural gas prices, including basis differentials for various regions;
anticipated expansion and production at Foster Creek and Christina Lake; the
potential success, capacity, cost and timing of the CORE project at Wood
River; anticipated continued suspension of purchases under EnCana's normal
course issuer bid; the potential timing, cost and success of the Deep Panuke
project; anticipated limiting of production at Jonah; 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: risks associated with the timing
and the ability to obtain any necessary approvals, waivers, consents, court
orders and other requirements necessary or desirable to permit or facilitate
the proposed transaction (including, regulatory and shareholder approvals);
the risk that any applicable conditions of the proposed transaction may not be
satisfied; 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; North American and
global market conditions including financial markets; 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, EnCana post-arrangement
(prior working name GasCo) and Cenovus pro-forma the proposed reorganization
transaction, is based upon achieving average production of oil and gas for
2008 as set out in the company's guidance, average commodity prices for 2008
based on actual results for the first three quarters of 2008, and for the
balance of 2008, a WTI price of $85/bbl for oil, a NYMEX price of $7.50/Mcf
for natural gas, an average U.S./Canadian dollar foreign exchange rate of
$0.90, an average Chicago crack spread for 2008 of $9.00/bbl for refining
margins, and an average number of outstanding shares for EnCana of
approximately 750 million. Forward-looking information respecting the
rescheduling of the proposed reorganization transaction is based upon the
assumption that financial markets will stabilize. 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.
     <<
EnCana Corporation
     Interim Consolidated Financial Statements
(unaudited)
For the period ended September 30, 2008
     (U.S. Dollars)

     Third quarter report
for the period ended September 30, 2008
     CONSOLIDATED STATEMENT OF EARNINGS (unaudited)
                                       Three Months Ended   Nine Months Ended
September 30, September 30,
($ millions, except per ---------------------------------------
share amounts) 2008 2007 2008 2007
-------------------------------------------------------------------------
REVENUES,
NET OF ROYALTIES (Note 5) $ 10,766 $ 5,596 $ 23,429 $ 15,645
     EXPENSES                 (Note 5)
Production and
mineral taxes 138 79 406 228
Transportation
and selling 360 220 1,006 732
Operating 521 530 1,926 1,646
Purchased product 3,445 2,192 8,720 5,879
Depreciation, depletion
and amortization 1,095 988 3,227 2,730
Administrative 18 73 399 263
Interest, net (Note 7) 147 102 428 297
Accretion of asset
retirement
obligation (Note 12) 20 17 61 46
Foreign exchange
(gain) loss, net (Note 8) 110 74 170 69
(Gain) loss on
divestitures (Note 6) (124) (29) (141) (87)
-------------------------------------------------------------------------
5,730 4,246 16,202 11,803
-------------------------------------------------------------------------
NET EARNINGS BEFORE
INCOME TAX 5,036 1,350 7,227 3,842
Income tax expense (Note 9) 1,483 416 2,360 965
-------------------------------------------------------------------------
NET EARNINGS $ 3,553 $ 934 $ 4,867 $ 2,877
-------------------------------------------------------------------------
-------------------------------------------------------------------------

NET EARNINGS PER
COMMON SHARE (Note 16)
Basic $ 4.74 $ 1.24 $ 6.49 $ 3.79
Diluted $ 4.73 $ 1.24 $ 6.47 $ 3.75
-------------------------------------------------------------------------
-------------------------------------------------------------------------

CONSOLIDATED STATEMENT OF RETAINED EARNINGS (unaudited)
                                                            Nine Months Ended
September 30,
-------------------
($ millions) 2008 2007
-------------------------------------------------------------------------
RETAINED EARNINGS, BEGINNING OF YEAR $ 13,082 $ 11,344
Net Earnings 4,867 2,877
Dividends on Common Shares (899) (453)
Charges for Normal Course Issuer Bid (Note 13) (243) (1,618)
-------------------------------------------------------------------------
RETAINED EARNINGS, END OF PERIOD $ 16,807 $ 12,150
-------------------------------------------------------------------------
-------------------------------------------------------------------------

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (unaudited)
                                       Three Months Ended   Nine Months Ended
September 30, September 30,
---------------------------------------
($ millions) 2008 2007 2008 2007
-------------------------------------------------------------------------


     NET EARNINGS                      $  3,553  $    934  $  4,867  $  2,877
OTHER COMPREHENSIVE INCOME,
NET OF TAX
Foreign Currency Translation
Adjustment (430) 859 (782) 1,798
-------------------------------------------------------------------------
COMPREHENSIVE INCOME $ 3,123 $ 1,793 $ 4,085 $ 4,675
-------------------------------------------------------------------------
-------------------------------------------------------------------------

CONSOLIDATED STATEMENT OF ACCUMULATED OTHER COMPREHENSIVE INCOME
(unaudited)
                                                            Nine Months Ended
September 30,
-------------------
($ millions) 2008 2007
-------------------------------------------------------------------------
     ACCUMULATED OTHER COMPREHENSIVE INCOME,
BEGINNING OF YEAR $ 3,063 $ 1,375
Foreign Currency Translation Adjustment (782) 1,798
-------------------------------------------------------------------------
ACCUMULATED OTHER COMPREHENSIVE INCOME,
END OF PERIOD $ 2,281 $ 3,173
-------------------------------------------------------------------------
-------------------------------------------------------------------------
     See accompanying Notes to Consolidated Financial Statements.

CONSOLIDATED BALANCE SHEET (unaudited)
                                                           As at        As at
September 30, December 31,
($ millions) 2008 2007
-------------------------------------------------------------------------
     ASSETS
Current Assets
Cash and cash equivalents $ 622 $ 553
Accounts receivable and accrued revenues 2,473 2,381
Current portion of partnership
contribution receivable 309 297
Risk management (Note 17) 1,578 385
Inventories (Note 10) 1,280 828
-------------------------------------------------------------------------
6,262 4,444
Property, Plant and Equipment, net (Note 5) 37,374 35,865
Investments and Other Assets 758 607
Partnership Contribution Receivable 2,914 3,147
Risk Management (Note 17) 459 18
Goodwill 2,729 2,893
-------------------------------------------------------------------------
(Note 5) $ 50,496 $ 46,974
-------------------------------------------------------------------------
-------------------------------------------------------------------------
     LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Accounts payable and accrued liabilities $ 4,027 $ 3,982
Income tax payable 569 1,150
Current portion of partnership
contribution payable 301 288
Risk management (Note 17) 74 207
Current portion of long-term debt (Note 11) 250 703
-------------------------------------------------------------------------
5,221 6,330
Long-Term Debt (Note 11) 9,407 8,840
Other Liabilities 511 242
Partnership Contribution Payable 2,936 3,163
Risk Management (Note 17) - 29
Asset Retirement Obligation (Note 12) 1,374 1,458
Future Income Taxes 7,404 6,208
-------------------------------------------------------------------------
26,853 26,270
-------------------------------------------------------------------------
Shareholders' Equity
Share capital (Note 13) 4,555 4,479
Paid in surplus - 80
Retained earnings 16,807 13,082
Accumulated other comprehensive income 2,281 3,063
-------------------------------------------------------------------------
Total Shareholders' Equity 23,643 20,704
-------------------------------------------------------------------------
$ 50,496 $ 46,974
-------------------------------------------------------------------------
-------------------------------------------------------------------------
     See accompanying Notes to Consolidated Financial Statements.

CONSOLIDATED STATEMENT OF CASH FLOWS (unaudited)
                                       Three Months Ended   Nine Months Ended
September 30, September 30,
---------------------------------------
($ millions) 2008 2007 2008 2007
-------------------------------------------------------------------------
     OPERATING ACTIVITIES
       Net earnings                    $  3,553  $    934  $  4,867  $  2,877
Depreciation, depletion
and amortization 1,095 988 3,227 2,730
Future income taxes (Note 9) 1,418 102 1,491 (9)
Cash tax on sale
of assets (Note 9) 25 - 25 -
Unrealized (gain) loss
on risk management (Note 17) (3,050) 107 (1,639) 666
Unrealized foreign
exchange (gain) loss 84 17 149 93
Accretion of asset
retirement obligation (Note 12) 20 17 61 46
(Gain) loss on
divestitures (Note 6) (124) (29) (141) (87)
Other (212) 82 47 203
Net change in other
assets and liabilities (19) 1 (283) 5
Net change in non-cash
working capital 268 (39) (992) (288)
-------------------------------------------------------------------------
Cash From Operating Activities 3,058 2,180 6,812 6,236
-------------------------------------------------------------------------
     INVESTING ACTIVITIES
Capital expenditures (Note 5) (2,466) (1,650) (6,369) (4,329)
Proceeds from
divestitures (Note 6) 442 59 593 505
Cash tax on sale
of assets (Note 9) (25) - (25) -
Net change in
investments and other (157) 32 (166) 26
Net change in non-cash
working capital (120) 69 71 (34)
-------------------------------------------------------------------------
Cash (Used in) Investing
Activities (2,326) (1,490) (5,896) (3,832)
-------------------------------------------------------------------------
     FINANCING ACTIVITIES
Net issuance (repayment)
of revolving long-term debt (116) (871) 251 (909)
Issuance of
long-term debt (Note 11) - 492 723 924
Repayment of
long-term debt (468) - (664) -
Issuance of
common shares (Note 13) 2 5 78 158
Purchase of
common shares (Note 13) - (218) (326) (2,025)
Dividends on common
shares (299) (149) (899) (453)
Other - 2 - (1)
-------------------------------------------------------------------------
Cash (Used in)
Financing Activities (881) (739) (837) (2,306)
-------------------------------------------------------------------------
     FOREIGN EXCHANGE GAIN (LOSS) ON
CASH AND CASH EQUIVALENTS HELD
IN FOREIGN CURRENCY (7) 9 (10) 15
-------------------------------------------------------------------------
     INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS (156) (40) 69 113
CASH AND CASH EQUIVALENTS,
BEGINNING OF PERIOD 778 555 553 402
-------------------------------------------------------------------------
CASH AND CASH EQUIVALENTS,
END OF PERIOD $ 622 $ 515 $ 622 $ 515
-------------------------------------------------------------------------
-------------------------------------------------------------------------
     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 independent
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 various gas and oil resource
plays. The proposed corporate reorganization (the "Arrangement") was
expected to close in early January 2009.
     Subsequent to September 30, 2008, EnCana announced the proposed
Arrangement will be delayed until the global debt and equity markets
regain stability. The proposed Arrangement is expected to be implemented
through a court approved Plan of Arrangement and is subject to
shareholder approval. The reorganization would result in two publicly
traded entities with the names of Cenovus Energy Inc. ("Cenovus") (prior
working name "IOCo") and EnCana Corporation (prior working name "GasCo").
Each EnCana shareholder would receive one share of each entity in
exchange for each EnCana Common Share held.
     5. SEGMENTED INFORMATION
     As a result of the proposed Arrangement, EnCana has changed its
reportable segments to reflect the realigned reporting hierarchies. The
most significant change results in EnCana now presenting Canadian Plains
and Canadian Foothills as separate operating segments. These were
previously aggregated and presented in the Canada segment. Prior periods
have been restated to reflect the new presentation.
     The Company has defined its continuing operations into the following
segments:
     -  Canadian Plains, Canadian Foothills, United States and Offshore and
International segments include the Company's exploration for, and
development and production of natural gas, crude oil and NGLs and
other related activities. The majority of the Company's operations are
located in Canada and the United States. The Offshore and
International segment is mainly focused on opportunities in Atlantic
Canada and Europe.
     -  Integrated Oil is focused on two lines of business: the exploration
for, and development and production of bitumen in Canada using in-situ
recovery methods; and the refining of crude oil into petroleum and
chemical products located in the United States. This segment includes
EnCana's 50 percent interest in the joint venture with ConocoPhillips.
     -  Market Optimization is conducted by the Midstream & Marketing
division. The Marketing groups' primary responsibility is the sale of
the Company's proprietary production. The results are included in the
Canadian Plains, Canadian Foothills, United States and Integrated Oil
segments. Correspondingly, the Marketing groups also undertake market
optimization activities which comprise third-party purchases and sales
of product that provide operational flexibility for transportation
commitments, product type, delivery points and customer
diversification. These activities are reflected in the Market
Optimization segment.
     -  Corporate includes unrealized gains or losses recorded on derivative
financial instruments. Once amounts are settled, the realized gains
and losses are recorded in the operating segment to which the
derivative instrument relates.
     Market Optimization markets substantially all of the Company's upstream
production to third-party customers. Transactions between business
segments are based on market values and eliminated on consolidation. The
tables in this note present financial information on an after
eliminations basis.
     Results of Operations (For the three months ended September 30)
                                   Canadian       Canadian
Plains Foothills United States
-------------------------------------------------------------------------
2008 2007 2008 2007 2008 2007
-------------------------------------------------------------------------


     Revenues,
Net of Royalties $1,139 $ 824 $1,168 $ 881 $1,477 $1,103
Expenses
Production and
mineral taxes 27 17 14 10 97 52
Transportation
and selling 32 26 57 51 132 77
Operating 96 103 120 129 127 140
Purchased product - - - - - -
Depreciation, depletion
and amortization 231 253 293 280 435 305
-------------------------------------------------------------------------
Segment Income (Loss) $ 753 $ 425 $ 684 $ 411 $ 686 $ 529
-------------------------------------------------------------------------
-------------------------------------------------------------------------
                                 Integrated       Offshore &       Market
Oil International Optimization
-------------------------------------------------------------------------
2008 2007 2008 2007 2008 2007
-------------------------------------------------------------------------
     Revenues,
Net of Royalties $3,085 $2,265 $ - $ 1 $ 840 $ 629
Expenses
Production and
mineral taxes - - - - - -
Transportation
and selling 139 66 - - - -
Operating 173 147 (6) - 8 11
Purchased product 2,634 1,584 - - 811 608
Depreciation, depletion
and amortization 104 97 5 24 4 4
-------------------------------------------------------------------------
Segment Income (Loss) $ 35 $ 371 $ 1 $ (23) $ 17 $ 6
-------------------------------------------------------------------------
                                               Corporate       Consolidated
-------------------------------------------------------------------------
2008 2007 2008 2007
-------------------------------------------------------------------------
     Revenues, Net of
Royalties $ 3,057 $ (107) $10,766 $ 5,596
Expenses
Production and
mineral taxes - - 138 79
Transportation
and selling - - 360 220
Operating 3 - 521 530
Purchased product - - 3,445 2,192
Depreciation, depletion
and amortization 23 25 1,095 988
-------------------------------------------------------------------------
Segment Income (Loss) $ 3,031 $ (132) 5,207 1,587
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Administrative 18 73
Interest, net 147 102
Accretion of asset retirement obligation 20 17
Foreign exchange (gain) loss, net 110 74
(Gain) loss on divestitures (124) (29)
-------------------------------------------------------------------------
171 237
-------------------------------------------------------------------------
Net Earnings Before Income Tax 5,036 1,350
Income tax expense 1,483 416
-------------------------------------------------------------------------
Net Earnings $ 3,553 $ 934
-------------------------------------------------------------------------
-------------------------------------------------------------------------
     Results of Operations (For the three months ended September 30)
     Geographic and Product Information
                                          Canadian Plains
-------------------------------------------------------------------------
Gas Oil & NGLs Other Total
-------------------------------------------------------------------------
2008 2007 2008 2007 2008 2007 2008 2007
-------------------------------------------------------------------------
     Revenues, Net
of Royalties $ 576 $ 498 $ 559 $ 323 $ 4 $ 3 $1,139 $ 824
Expenses
Production
and mineral
taxes 14 11 13 6 - - 27 17
Transportation
and selling 18 18 14 8 - - 32 26
Operating 44 49 51 53 1 1 96 103
-------------------------------------------------------------------------
Operating Cash
Flow $ 500 $ 420 $ 481 $ 256 $ 3 $ 2 $ 984 $ 678
-------------------------------------------------------------------------
-------------------------------------------------------------------------
                                         Canadian Foothills
-------------------------------------------------------------------------
Gas Oil & NGLs Other Total
-------------------------------------------------------------------------
2008 2007 2008 2007 2008 2007 2008 2007
-------------------------------------------------------------------------


     Revenues, Net
of Royalties $ 982 $ 765 $ 172 $ 100 $ 14 $ 16 $1,168 $ 881
Expenses
Production
and mineral
taxes 12 9 2 1 - - 14 10
Transportation
and selling 54 48 3 3 - - 57 51
Operating 108 114 7 9 5 6 120 129
-------------------------------------------------------------------------
Operating Cash
Flow $ 808 $ 594 $ 160 $ 87 $ 9 $ 10 $ 977 $ 691
-------------------------------------------------------------------------
-------------------------------------------------------------------------
                                            United States
-------------------------------------------------------------------------
Gas Oil & NGLs Other Total
-------------------------------------------------------------------------
2008 2007 2008 2007 2008 2007 2008 2007
-------------------------------------------------------------------------


     Revenues, Net
of Royalties $1,263 $ 934 $ 124 $ 86 $ 90 $ 83 $1,477 $1,103
Expenses
Production
and mineral
taxes 86 49 11 3 - - 97 52
Transportation
and selling 132 77 - - - - 132 77
Operating 59 68 - - 68 72 127 140
-------------------------------------------------------------------------
Operating Cash
Flow $ 986 $ 740 $ 113 $ 83 $ 22 $ 11 $1,121 $ 834
-------------------------------------------------------------------------
-------------------------------------------------------------------------
                                           Integrated Oil
-------------------------------------------------------------------------
Downstream
Oil Refining Other (x) Total
-------------------------------------------------------------------------
2008 2007 2008 2007 2008 2007 2008 2007
-------------------------------------------------------------------------


     Revenues, Net
of Royalties $ 362 $ 160 $2,699 $2,049 $ 24 $ 56 $3,085 $2,265
Expenses
Production
and mineral
taxes - - - - - - - -
Transportation
and selling 137 62 - - 2 4 139 66
Operating 42 35 116 98 15 14 173 147
Purchased
product - - 2,679 1,607 (45) (23) 2,634 1,584
-------------------------------------------------------------------------
Operating
Cash Flow $ 183 $ 63 $ (96) $ 344 $ 52 $ 61 $ 139 $ 468
-------------------------------------------------------------------------
-------------------------------------------------------------------------
     (x) Includes exploration and production of natural gas and bitumen from
the Athabasca and Senlac properties.

Results of Operations (For the nine months ended September 30)
                                                  Canadian
Canadian Plains Foothills United States
-------------------------------------------------------------------------
2008 2007 2008 2007 2008 2007
-------------------------------------------------------------------------
     Revenues, Net of
Royalties $3,383 $2,524 $3,432 $2,662 $4,356 $3,194
Expenses
Production
and mineral
taxes 64 52 30 34 311 142
Transportation
and selling 84 84 167 149 367 220
Operating 385 312 478 383 482 441
Purchased product - - - - - -
Depreciation,
depletion and
amortization 714 725 853 773 1,253 851
-------------------------------------------------------------------------
Segment Income (Loss) $2,136 $1,351 $1,904 $1,323 $1,943 $1,540
-------------------------------------------------------------------------
-------------------------------------------------------------------------

Integrated Offshore & Market
Oil International Optimization
-------------------------------------------------------------------------
2008 2007 2008 2007 2008 2007
-------------------------------------------------------------------------
     Revenues, Net of
Royalties $8,512 $5,831 $ 1 $ - $2,112 $2,107
Expenses
Production
and mineral
taxes 1 - - - - -
Transportation
and selling 388 269 - - - 10
Operating 565 488 (5) 2 27 28
Purchased product 6,674 3,837 - - 2,046 2,042
Depreciation,
depletion and
amortization 288 281 40 25 12 11
-------------------------------------------------------------------------
Segment Income (Loss) $ 596 $ 956 $ (34) $ (27) $ 27 $ 16
-------------------------------------------------------------------------
-------------------------------------------------------------------------
                                               Corporate       Consolidated
-------------------------------------------------------------------------
2008 2007 2008 2007
-------------------------------------------------------------------------
     Revenues, Net of Royalties            $ 1,633  $  (673) $23,429  $15,645
Expenses
Production and mineral taxes - - 406 228
Transportation and selling - - 1,006 732
Operating (6) (8) 1,926 1,646
Purchased product - - 8,720 5,879
Depreciation, depletion and
amortization 67 64 3,227 2,730
-------------------------------------------------------------------------
Segment Income (Loss) $ 1,572 $ (729) 8,144 4,430
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Administrative 399 263
Interest, net 428 297
Accretion of asset retirement
obligation 61 46
Foreign exchange (gain) loss, net 170 69
(Gain) loss on divestitures (141) (87)
-------------------------------------------------------------------------
917 588
-------------------------------------------------------------------------
Net Earnings Before Income Tax 7,227 3,842
Income tax expense 2,360 965
-------------------------------------------------------------------------
Net Earnings $ 4,867 $2,877
-------------------------------------------------------------------------
-------------------------------------------------------------------------

Geographic and Product Information
                                          Canadian Plains
-------------------------------------------------------------------------
Gas Oil & NGLs Other Total
-------------------------------------------------------------------------
2008 2007 2008 2007 2008 2007 2008 2007
-------------------------------------------------------------------------
     Revenues, Net
of Royalties $1,795 $1,619 $1,580 $ 896 $ 8 $ 9 $3,383 $2,524
Expenses
Production and
mineral taxes 32 31 32 21 - - 64 52
Transportation
and selling 55 61 29 23 - - 84 84
Operating 191 156 191 153 3 3 385 312
-------------------------------------------------------------------------
Operating Cash
Flow $1,517 $1,371 $1,328 $ 699 $ 5 $ 6 $2,850 $2,076
-------------------------------------------------------------------------
-------------------------------------------------------------------------

Canadian Foothills
-------------------------------------------------------------------------
Gas Oil & NGLs Other Total
-------------------------------------------------------------------------
2008 2007 2008 2007 2008 2007 2008 2007
-------------------------------------------------------------------------


     Revenues, Net
of Royalties $2,891 $2,352 $ 494 $ 268 $ 47 $ 42 $3,432 $2,662
Expenses
Production and
mineral taxes 26 32 4 2 - - 30 34
Transportation
and selling 158 142 9 7 - - 167 149
Operating 432 345 30 23 16 15 478 383
-------------------------------------------------------------------------
Operating Cash
Flow $2,275 $1,833 $ 451 $ 236 $ 31 $ 27 $2,757 $2,096
-------------------------------------------------------------------------
-------------------------------------------------------------------------

United States
-------------------------------------------------------------------------
Gas Oil & NGLs Other Total
-------------------------------------------------------------------------
2008 2007 2008 2007 2008 2007 2008 2007
-------------------------------------------------------------------------


     Revenues, Net
of Royalties $3,754 $2,754 $ 353 $ 210 $ 249 $ 230 $4,356 $3,194
Expenses
Production and
mineral taxes 280 127 31 15 - - 311 142
Transportation
and selling 367 220 - - - - 367 220
Operating 266 228 - - 216 213 482 441
-------------------------------------------------------------------------
Operating Cash
Flow $2,841 $2,179 $ 322 $ 195 $ 33 $ 17 $3,196 $2,391
-------------------------------------------------------------------------
-------------------------------------------------------------------------
                                           Integrated Oil
-------------------------------------------------------------------------
Downstream
Oil Refining Other (x) Total
-------------------------------------------------------------------------
2008 2007 2008 2007 2008 2007 2008 2007
-------------------------------------------------------------------------


     Revenues, Net
of Royalties $ 898 $ 552 $7,514 $5,109 $ 100 $ 170 $8,512 $5,831
Expenses
Production and
mineral taxes - - - - 1 - 1 -
Transportation
and selling 380 258 - - 8 11 388 269
Operating 133 123 375 317 57 48 565 488
Purchased
product - - 6,800 3,898 (126) (61) 6,674 3,837
-------------------------------------------------------------------------
Operating Cash
Flow $ 385 $ 171 $ 339 $ 894 $ 160 $ 172 $ 884 $1,237
-------------------------------------------------------------------------
-------------------------------------------------------------------------
     (x) Includes exploration and production of natural gas and bitumen from
the Athabasca and Senlac properties.
     The following tables represent EnCana and Cenovus' operating information,
post-Arrangement (See Note 4), giving effect to the realigned reporting
hierarchies described previously in this note, excluding their respective
share of the Market Optimization and Corporate segments.


     EnCana's operating segments, post-Arrangement, will include Canadian
Foothills, United States and Offshore and International. Cenovus'
operating segments, post-Arrangement, will include Canadian Plains and
Integrated Oil.
     Results of Operations  (For the three months ended September 30)
     Operating Information

                                              EnCana
-------------------------------------------------------------------------
Canadian United Offshore &
Foothills States International Total
-------------------------------------------------------------------------
2008 2007 2008 2007 2008 2007 2008 2007
-------------------------------------------------------------------------


     Revenues, Net
of Royalties $1,168 $ 881 $1,477 $1,103 $ - $ 1 $2,645 $1,985
Expenses
Production and
mineral taxes 14 10 97 52 - - 111 62
Transportation
and selling 57 51 132 77 - - 189 128
Operating 120 129 127 140 (6) - 241 269
-------------------------------------------------------------------------
Operating Cash
Flow $ 977 $ 691 $1,121 $ 834 $ 6 $ 1 $2,104 $1,526
-------------------------------------------------------------------------
-------------------------------------------------------------------------
                                              Cenovus
-------------------------------------------------------------------------
Canadian Integrated
Plains Oil Total
-------------------------------------------------------------------------
2008 2007 2008 2007 2008 2007
-------------------------------------------------------------------------


     Revenues, Net
of Royalties $1,139 $ 824 $3,085 $2,265 $4,224 $3,089
Expenses
Production and
mineral taxes 27 17 - - 27 17
Transportation and selling 32 26 139 66 171 92
Operating 96 103 173 147 269 250
Purchased product - - 2,634 1,584 2,634 1,584
-------------------------------------------------------------------------
Operating Cash Flow $ 984 $ 678 $ 139 $ 468 $1,123 $1,146
-------------------------------------------------------------------------
-------------------------------------------------------------------------
     Results of Operations  (For the nine months ended September 30)
     Operating Information
     -------------------------------------------------------------------------
EnCana
-------------------------------------------------------------------------
Canadian United Offshore &
Foothills States International Total
-------------------------------------------------------------------------
2008 2007 2008 2007 2008 2007 2008 2007
-------------------------------------------------------------------------
     Revenues, Net
of Royalties $3,432 $2,662 $4,356 $3,194 $ 1 $ - $7,789 $5,856
Expenses
Production and
mineral taxes 30 34 311 142 - - 341 176
Transportation
and selling 167 149 367 220 - - 534 369
Operating 478 383 482 441 (5) 2 955 826
-------------------------------------------------------------------------
Operating Cash
Flow $2,757 $2,096 $3,196 $2,391 $ 6 $ (2) $5,959 $4,485
-------------------------------------------------------------------------
-------------------------------------------------------------------------
                                             Cenovus
-------------------------------------------------------------------------
Canadian Integrated
Plains Oil Total
-------------------------------------------------------------------------
2008 2007 2008 2007 2008 2007
-------------------------------------------------------------------------


     Revenues, Net
of Royalties $3,383 $2,524 $8,512 $5,831 $11,895 $8,355
Expenses
Production and
mineral taxes 64 52 1 - 65 52
Transportation and selling 84 84 388 269 472 353
Operating 385 312 565 488 950 800
Purchased product - - 6,674 3,837 6,674 3,837
-------------------------------------------------------------------------
Operating Cash Flow $2,850 $2,076 $ 884 $1,237 $3,734 $3,313
-------------------------------------------------------------------------
-------------------------------------------------------------------------

Capital Expenditures
                                      Three Months Ended   Nine Months Ended
September 30, September 30,
-------------------------------------------------------------------------
2008 2007 2008 2007
-------------------------------------------------------------------------


     Capital
Canadian Plains $ 173 $ 218 $ 593 $ 558
Canadian Foothills 458 727 1,795 1,779
United States 621 452 1,800 1,313
Integrated Oil 275 154 804 424
Offshore & International 12 13 65 75
Market Optimization 4 2 11 5
Corporate 45 9 87 76
-------------------------------------------------------------------------
1,588 1,575 5,155 4,230
-------------------------------------------------------------------------
     Acquisition Capital
Canadian Foothills 7 60 99 67
United States 850 15 1,094 18
Integrated Oil - - - 14
Offshore & International 21 - 21 -
-------------------------------------------------------------------------
878 75 1,214 99
-------------------------------------------------------------------------
Total $ 2,466 $ 1,650 $ 6,369 $ 4,329
-------------------------------------------------------------------------
-------------------------------------------------------------------------

On September 25, 2008, EnCana acquired certain land and property in
Louisiana for approximately $101 million before closing adjustments. The
purchase was facilitated by an unrelated party, Brown Haynesville
Leasehold LLC ("Brown Haynesville"), which holds the majority of the
assets in trust for the Company in anticipation of a qualifying like kind
exchange for U.S. tax purposes.
     On July 23, 2008, EnCana acquired certain land and mineral interests in
Louisiana for approximately $457 million before closing adjustments. The
purchase was facilitated by an unrelated party, Brown Southwest Minerals
LLC ("Brown Southwest"), which holds the majority of the assets in trust
for the Company in anticipation of a qualifying like kind exchange for
U.S. tax purposes.
     Pursuant to the agreements with Brown Haynesville and Brown Southwest,
EnCana operates the properties, receives all the revenue and pays all of
the expenses associated with the properties. The arrangements with Brown
Haynesville and Brown Southwest will be completed on March 24, 2009 and
January 19, 2009 respectively and the assets will be transferred to
EnCana at that time. EnCana has determined that each relationship with
Brown Haynesville and Brown Southwest represents an interest in a
Variable Interest Entity ("VIE") and that EnCana is the primary
beneficiary of the VIE. EnCana has consolidated Brown Haynesville and
Brown Southwest from the dates of acquisition.
     On November 20, 2007, EnCana acquired certain natural gas and land
interests in Texas for approximately $2.55 billion before closing
adjustments. The purchase was facilitated by an unrelated party, Brown
Kilgore Properties LLC ("Brown Kilgore"), which held the majority of the
assets in trust for the Company in anticipation of a qualifying like kind
exchange for U.S. tax purposes. The relationship with Brown Kilgore
represented an interest in a VIE from November 20, 2007 to May 18, 2008.
During this period, EnCana was the primary beneficiary of the VIE and
consolidated Brown Kilgore. On May 18, 2008, when the arrangement with
Brown Kilgore was completed, the assets were transferred to EnCana.
     Property, Plant and Equipment and Total Assets by Segment
                                       Property, Plant
and Equipment Total Assets
------------------------------------------
As at As at
------------------------------------------
September December September December
30, 2008 31, 2007 30, 2008 31, 2007
-------------------------------------------------------------------------
Canadian Plains $ 6,355 $ 6,967 $ 7,933 $ 8,626
Canadian Foothills 10,216 10,127 12,142 12,184
United States 13,394 11,879 14,535 12,948
Integrated Oil 5,573 5,164 10,609 10,122
Offshore & International 1,096 1,104 1,268 1,135
Market Optimization 159 171 677 478
Corporate 581 453 3,332 1,481
-------------------------------------------------------------------------
Total $ 37,374 $ 35,865 $ 50,496 $ 46,974
-------------------------------------------------------------------------
-------------------------------------------------------------------------
     On February 9, 2007, EnCana announced that it had completed the next
phase in the development of The Bow office project with the sale of
project assets and has entered into a 25 year lease agreement with a
third party developer. As at September 30, 2008, Corporate Property,
Plant and Equipment and Total Assets includes EnCana's accrual to date of
$248 million ($147 million at December 31, 2007) related to this office
project as an asset under construction.


     On January 4, 2008, EnCana signed the contract for the design and
construction of the Production Field Centre ("PFC") for the Deep Panuke
project. As at September 30, 2008, Offshore and International Property,
Plant, and Equipment and Total Assets includes EnCana's accrual to date
of $128 million related to this offshore facility as an asset under
construction.
     Corresponding liabilities for these projects are included in Other
Liabilities in the Consolidated Balance Sheet. There is no effect on the
Company's net earnings or cash flows related to the capitalization of The
Bow office project or the Deep Panuke PFC.
     6. DIVESTITURES
     Total year-to-date proceeds received on sale of assets and investments
were $593 million (2007 - $505 million) as described below:
     Canadian Plains, Canadian Foothills and United States
     In 2008, the Company completed the divestiture of mature conventional oil
and natural gas assets for proceeds of $39 million (2007 - nil) in
Canadian Plains, $218 million (2007 - $55 million) in Canadian Foothills,
and $123 million (2007 - $11 million) in the United States.
     Offshore and International
     In September 2008, the Company completed the sale of its interests in
Brazil for net proceeds of $164 million resulting in a gain on sale of
$124 million. After recording income tax of $25 million, EnCana recorded
an after-tax gain of $99 million.
     In August 2007, the Company closed the sale of its Australia assets for
proceeds of $31 million resulting in a gain on sale of $30 million. After
recording income tax of $5 million, EnCana recorded an after-tax gain of
$25 million.
     In May 2007, the Company completed the sale of its assets in the
Mackenzie Delta and Beaufort Sea for proceeds of $159 million, which were
credited to property, plant and equipment.
     In January 2007, the Company completed the sale of its interests in Chad,
properties that were in the pre-production stage, for proceeds of
$208 million which resulted in a gain on sale of $59 million.


     Corporate
     In February 2007, the Company sold The Bow office project assets for
proceeds of approximately $57 million, representing its investment at the
date of sale. Refer to Note 5 for further discussion of The Bow office
project assets.
     7. INTEREST, NET

                                     Three Months Ended    Nine Months Ended
September 30, September 30,
------------------------------------------
2008 2007 2008 2007
-------------------------------------------------------------------------
     Interest Expense
- Long-Term Debt $ 142 $ 113 $ 426 $ 331
Interest Expense
- Other(x) 56 72 166 178
Interest Income(x) (51) (83) (164) (212)
-------------------------------------------------------------------------
$ 147 $ 102 $ 428 $ 297
-------------------------------------------------------------------------
-------------------------------------------------------------------------
     (x) Interest Expense - Other and Interest Income are primarily due to the
Partnership Contribution Payable and Receivable, respectively.
     8. FOREIGN EXCHANGE (GAIN) LOSS, NET
                                     Three Months Ended    Nine Months Ended
September 30, September 30,
------------------------------------------
2008 2007 2008 2007
-------------------------------------------------------------------------
     Unrealized Foreign Exchange
(Gain) Loss on:
Translation of U.S. dollar
debt issued from Canada $ 205 $ (278) $ 370 $ (608)
Translation of U.S. dollar
partnership contribution
receivable issued from Canada (119) 252 (218) 595
Other Foreign Exchange
(Gain) Loss 24 100 18 82
-------------------------------------------------------------------------
$ 110 $ 74 $ 170 $ 69
-------------------------------------------------------------------------
-------------------------------------------------------------------------
     9. INCOME TAXES
     The provision for income taxes is as follows:
                                     Three Months Ended    Nine Months Ended
September 30, September 30,
------------------------------------------
2008 2007 2008 2007
-------------------------------------------------------------------------
     Current
Canada $ 40 $ 142 $ 446 $ 485
United States - 172 385 484
Other Countries 25 - 38 5
-------------------------------------------------------------------------
Total Current Tax 65 314 869 974
-------------------------------------------------------------------------


     Future                              1,418       102      1,491        (9)
-------------------------------------------------------------------------
$ 1,483 $ 416 $ 2,360 $ 965
-------------------------------------------------------------------------
-------------------------------------------------------------------------
     Included in current tax for 2008 is $25 million related to the sale of
assets in Brazil (2007 - nil).
     The following table reconciles income taxes calculated at the Canadian
statutory rate with the actual income taxes:
                                     Three Months Ended    Nine Months Ended
September 30, September 30,
------------------------------------------
2008 2007 2008 2007
-------------------------------------------------------------------------
     Net Earnings Before Income Tax   $  5,036  $  1,350  $   7,227  $  3,842
Canadian Statutory Rate 29.7% 32.3% 29.7% 32.3%
-------------------------------------------------------------------------
Expected Income Tax 1,494 436 2,144 1,241
     Effect on Taxes Resulting from:
Statutory and other rate
differences 119 12 197 36
Effect of tax rate changes(x) - - - (37)
Effect of legislative changes - - - (231)
Non-taxable downstream
partnership income (3) (21) (10) (40)
International financing (74) (16) (233) (45)
Foreign exchange (gains)
losses not included in net
earnings (39) - 141 -
Non-taxable capital (gains)
losses 19 (32) 30 (44)
Other (33) 37 91 85
-------------------------------------------------------------------------
$ 1,483 $ 416 $ 2,360 $ 965
-------------------------------------------------------------------------
Effective Tax Rate 29.4% 30.8% 32.7% 25.1%
-------------------------------------------------------------------------
-------------------------------------------------------------------------
(x) The Canadian federal government, during the second quarter of 2007,
enacted income tax rate changes.
     10. INVENTORIES
As at As at
September 30, December 31,
2008 2007
-------------------------------------------------------------------------
Product
Canadian Plains $ 1 $ -
United States 3 2
Integrated Oil 978 646
Market Optimization 294 180
Parts and Supplies 4 -
-------------------------------------------------------------------------
$ 1,280 $ 828
-------------------------------------------------------------------------
-------------------------------------------------------------------------

11. LONG-TERM DEBT
As at As at
September 30, December 31,
2008 2007
-------------------------------------------------------------------------
Canadian Dollar Denominated Debt
Revolving credit and term loan borrowings $ 1,576 $ 1,506
Unsecured notes 1,179 1,138
-------------------------------------------------------------------------
2,755 2,644
-------------------------------------------------------------------------
     U.S. Dollar Denominated Debt
Revolving credit and term loan borrowings 574 495
Unsecured notes 6,350 6,421
-------------------------------------------------------------------------
6,924 6,916
-------------------------------------------------------------------------
     Increase in Value of Debt Acquired(x)                    57           66
Debt Discounts and Financing Costs (79) (83)
Current Portion of Long-Term Debt (250) (703)
-------------------------------------------------------------------------
$ 9,407 $ 8,840
-------------------------------------------------------------------------
-------------------------------------------------------------------------
(x) Certain of the notes and debentures of EnCana were acquired in
business combinations and were accounted for at their fair value at
the dates of acquisition. The difference between the fair value and
the principal amount of the debt is being amortized over the
remaining life of the outstanding debt acquired, approximately
20 years.
     On January 18, 2008, EnCana completed a public offering in Canada of
senior unsecured medium term notes in the aggregate principal amount of
C$750 million. The notes have a coupon rate of 5.80 percent and mature on
January 18, 2018.
     12. ASSET RETIREMENT OBLIGATION
     The following table presents the reconciliation of the beginning and
ending aggregate carrying amount of the obligation associated with the
retirement of oil and gas assets and refining facilities:
                                                           As at        As at
September 30, December 31,
2008 2007
-------------------------------------------------------------------------
Asset Retirement Obligation, Beginning of Year $ 1,458 $ 1,051
Liabilities Incurred 42 89
Liabilities Settled (96) (100)
Liabilities Divested (6) -
Change in Estimated Future Cash Flows (5) 184
Accretion Expense 61 64
Other (80) 170
-------------------------------------------------------------------------
Asset Retirement Obligation, End of Period $ 1,374 $ 1,458
-------------------------------------------------------------------------
-------------------------------------------------------------------------
     13. SHARE CAPITAL
                                               September 30,      December 31,
2008 2007
----------------------------------
(millions) Number Amount Number Amount
-------------------------------------------------------------------------
Common Shares Outstanding, Beginning
of Year 750.2 $ 4,479 777.9 $ 4,587
Common Shares Issued under Option
Plans 2.9 78 8.3 176
Stock-Based Compensation - 11 - 17
Common Shares Purchased (2.8) (13) (36.0) (301)
-------------------------------------------------------------------------
Common Shares Outstanding, End of
Period 750.3 $ 4,555 750.2 $ 4,479
-------------------------------------------------------------------------
-------------------------------------------------------------------------
     Normal Course Issuer Bid
     To September 30, 2008, the Company purchased 4.8 million Common Shares
for total consideration of approximately $326 million. Of the amount
paid, $29 million was charged to Share capital and $297 million was
charged to Retained earnings. Included in the Common Shares Purchased in
2008 are 2.0 million Common Shares distributed (2007 - 2.9 million),
valued at $16 million (2007 - $24 million), from the EnCana Employee
Benefit Plan Trust that vested under EnCana's Performance Share Unit Plan
(See Note 15). For these Common Shares distributed, there was a
$54 million adjustment to Retained earnings (2007 - $82 million) with a
reduction to Paid in surplus of $70 million (2007 - $106 million).
     EnCana has received regulatory approval each year under Canadian
securities laws to purchase Common Shares under six consecutive Normal
Course Issuer Bids ("Bids"). EnCana is entitled to purchase, for
cancellation, up to approximately 75.1 million Common Shares under the
renewed Bid which commenced on November 13, 2007 and terminates on
November 12, 2008.
     Stock Options

     EnCana has stock-based compensation plans that allow employees to
purchase Common Shares of the Company. Option exercise prices
approximate the market price for the Common Shares on the date the
options were issued. Options granted under the plans are generally fully
exercisable after three years and expire five years after the date
granted. Options granted under predecessor and/or related company
replacement plans expire up to 10 years from the date the options were
granted.
     The following tables summarize the information about options to purchase
Common Shares that do not have Tandem Share Appreciation Rights ("TSARs")
attached to them at September 30, 2008. Information related to TSARs is
included in Note 15.
                                                                     Weighted
Stock Average
Options Exercise
(millions) Price (C$)
-------------------------------------------------------------------------
Outstanding, Beginning of Year 3.4 21.82
Exercised (2.8) 23.68
-------------------------------------------------------------------------
Outstanding, End of Period 0.6 12.40
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Exercisable, End of Period 0.6 12.40
-------------------------------------------------------------------------
-------------------------------------------------------------------------

Outstanding Options Exercisable Options
----------------------------------------------------------
Weighted
Average
Number of Remaining Weighted Number of Weighted
Range of Options Contractual Average Options Average
Exercise Outstanding Life Exercise Outstanding Exercise
Price (C$) (millions) (years) Price (C$) (millions) Price (C$)
-------------------------------------------------------------------------
11.00 to 21.99 0.5 1.1 11.62 0.5 11.62
22.00 to 25.99 0.1 0.2 24.19 0.1 24.19
-------------------------------------------------------------------------
0.6 1.1 12.40 0.6 12.40
-------------------------------------------------------------------------
-------------------------------------------------------------------------
At December 31, 2007, the balance in Paid in surplus related to stock-
based compensation programs.
     14. CAPITAL STRUCTURE
     The Company's capital structure is comprised of Shareholders' Equity plus
Long-Term Debt. The Company's objectives when managing its capital
structure are to:
     i)  maintain financial flexibility so as to preserve EnCana's access to
capital markets and its ability to meet its financial obligations;
and
ii) finance internally generated growth as well as potential
acquisitions.
     The Company monitors its capital structure and short-term financing
requirements using non-GAAP financial metrics consisting of Net Debt to
Capitalization and Net Debt to Adjusted Earnings Before Interest, Taxes,
Depreciation and Amortization ("EBITDA"). These metrics are used to
steward the Company's overall debt position as measures of the Company's
overall financial strength.
     EnCana targets a Net Debt to Capitalization ratio of between 30 and 40
percent that is calculated as follows:
                                                               As at
--------------------------
September 30, December 31,
2008 2007
-------------------------------------------------------------------------
Long-Term Debt, excluding current portion $ 9,407 $ 8,840
Less: Working capital 1,041 (1,886)
-------------------------------------------------------------------------
Net Debt 8,366 10,726
Total Shareholders' Equity 23,643 20,704
-------------------------------------------------------------------------
Total Capitalization $ 32,009 $ 31,430
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Net Debt to Capitalization ratio 26% 34%
-------------------------------------------------------------------------
-------------------------------------------------------------------------
     EnCana's Net Debt to Capitalization ratio decreased to 26 percent from 34
percent at December 31, 2007 primarily due to unrealized mark-to-market
gains on risk management instruments which decreased Net Debt. Excluding
this impact to working capital, the Net Debt to Capitalization ratio
would have been 29 percent at September 30, 2008 and would have remained
unchanged at 34 percent at December 31, 2007.
     EnCana targets a Net Debt to Adjusted EBITDA of 1.0 to 2.0 times. At
September 30, 2008, the Net Debt to Adjusted EBITDA was 0.6x (December
31, 2007 - 1.2x) calculated on a trailing twelve-month basis as follows:
                                                               As at
--------------------------
September 30, December 31,
2008 2007
-------------------------------------------------------------------------
Net Debt $ 8,366 $ 10,726
-------------------------------------------------------------------------
Net Earnings from Continuing Operations $ 5,874 $ 3,884
Add (deduct):
Interest, net 559 428
Income tax expense 2,332 937
Depreciation, depletion and amortization 4,313 3,816
Accretion of asset retirement obligation 79 64
Foreign exchange (gain) loss, net (63) (164)
(Gain) loss on divestitures (119) (65)
-------------------------------------------------------------------------
Adjusted EBITDA $ 12,975 $ 8,900
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Net Debt to Adjusted EBITDA 0.6x 1.2x
-------------------------------------------------------------------------
-------------------------------------------------------------------------
     EnCana manages its capital structure and makes adjustments according to
market conditions to maintain flexibility while achieving the objectives
stated above. To manage the capital structure, the Company may adjust
capital spending, adjust dividends paid to shareholders, purchase shares
for cancellation pursuant to normal course issuer bids, issue new shares,
issue new debt or repay existing debt.
     The Company's capital management objectives, evaluation measures,
definitions and targets have remained unchanged over the periods
presented. EnCana is subject to certain financial covenants in its
credit facility agreements and is in compliance with all financial
covenants.
     15.  COMPENSATION PLANS
     The tables below outline certain information related to EnCana's
compensation plans at September 30, 2008. Additional information is
contained in Note 17 of the Company's annual audited Consolidated
Financial Statements for the year ended December 31, 2007.
     A)  Pensions

     The following table summarizes the net benefit plan expense:
                                         Three Months Ended  Nine Months Ended
September 30, September 30,
-----------------------------------
2008 2007 2008 2007
-------------------------------------------------------------------------
Current Service Cost $ 4 $ 3 $ 12 $ 11
Interest Cost 5 5 16 14
Expected Return on Plan Assets (4) (5) (14) (14)
Expected Actuarial Loss on Accrued
Benefit Obligation 1 1 3 3
Expected Amortization of Past Service
Costs - - 1 1
Amortization of Transitional
Obligation - - (1) (1)
Expense for Defined Contribution Plan 10 9 30 25
-------------------------------------------------------------------------
Net Benefit Plan Expense $ 16 $ 13 $ 47 $ 39
-------------------------------------------------------------------------
-------------------------------------------------------------------------
     For the period ended September 30, 2008, contributions of $8 million
have been made to the defined benefit pension plans (2007 - $8 million).
     B) Tandem Share Appreciation Rights ("TSARs")
     The following table summarizes the information about TSARs at September
30, 2008:


                                                                     Weighted
Average
Outstanding Exercise
TSARs Price
-------------------------------------------------------------------------
Canadian Dollar Denominated (C$)
Outstanding, Beginning of Year 18,854,141 48.44
Granted 4,257,572 70.67
Exercised - SARs (3,003,715) 43.85
Exercised - Options (70,286) 42.53
Forfeited (466,309) 54.57
-------------------------------------------------------------------------
Outstanding, End of Period 19,571,403 53.85
-------------------------------------------------------------------------
Exercisable, End of Period 8,422,211 46.01
-------------------------------------------------------------------------
-------------------------------------------------------------------------
     For the period ended September 30, 2008, EnCana recorded compensation
costs of $68 million related to the outstanding TSARs (2007 - $140
million).
     C) Performance Tandem Share Appreciation Rights ("Performance TSARs")
     The following table summarizes the information about Performance TSARs at
September 30, 2008:
                                                                     Weighted
Average
Outstanding Exercise
TSARs Price
-------------------------------------------------------------------------
Canadian Dollar Denominated (C$)
Outstanding, Beginning of Year 6,930,925 56.09
Granted 7,058,538 69.40
Exercised - SARs (279,378) 56.09
Exercised - Options (4,613) 56.09
Forfeited (601,046) 59.10
-------------------------------------------------------------------------
Outstanding, End of Period 13,104,426 63.12
-------------------------------------------------------------------------
Exercisable, End of Period 1,476,150 56.09
-------------------------------------------------------------------------
-------------------------------------------------------------------------
     For the period ended September 30, 2008, EnCana recorded compensation
costs of $42 million related to the outstanding Performance TSARs (2007 -
$9 million).
     D) Share Appreciation Rights ("SARs")
     In 2008, EnCana granted SARs to certain employees which entitles the
employee to receive a cash payment equal to the excess of the market
price of EnCana's Common Shares at the time of exercise over the grant
price. SARs are exercisable at 30 percent of the number granted after
one year, an additional 30 percent of the number granted after two years
and are fully exercisable after three years and expire five years after
the grant date.
     The following table summarizes the information about SARs at September
30, 2008:
                                                                     Weighted
Average
Outstanding Exercise
SARs Price
-------------------------------------------------------------------------
Canadian Dollar Denominated (C$)
Outstanding, Beginning of Year - -
Granted 1,260,315 72.85
Forfeited (21,725) 69.40
-------------------------------------------------------------------------
Outstanding, End of Period 1,238,590 72.91
-------------------------------------------------------------------------
Exercisable, End of Period - -
-------------------------------------------------------------------------
-------------------------------------------------------------------------
     For the period ended September 30, 2008, EnCana has not recorded any
compensation costs related to the outstanding SARs (2007 - nil).
     E) Performance Share Appreciation Rights ("Performance SARs")
     In 2008, EnCana granted Performance SARs to certain employees which
entitles the employee to receive a cash payment equal to the excess of
the market price of EnCana's Common Shares at the time of exercise over
the grant price. Performance SARs vest and expire under the same terms
and service conditions as SARs and are also subject to EnCana attaining
prescribed performance relative to pre-determined key measures.
Performance SARs that do not vest when eligible are forfeited.
     The following table summarizes the information about Performance SARs at
September 30, 2008:
                                                                     Weighted
Average
Outstanding Exercise
SARs Price
-------------------------------------------------------------------------
Canadian Dollar Denominated (C$)
Outstanding, Beginning of Year - -
Granted 1,677,030 69.40
Forfeited (43,450) 69.40
-------------------------------------------------------------------------
Outstanding, End of Period 1,633,580 69.40
-------------------------------------------------------------------------
Exercisable, End of Period - -
-------------------------------------------------------------------------
-------------------------------------------------------------------------
     For the period ended September 30, 2008, EnCana has not recorded any
compensation costs related to the outstanding Performance SARs (2007 -
nil).
     F) Deferred Share Units ("DSUs")
     The following table summarizes the information about DSUs at September
30, 2008:
                                                                  Outstanding
DSUs
-------------------------------------------------------------------------
Canadian Dollar Denominated (C$)
Outstanding, Beginning of Year 589,174
Granted, Directors 83,344
Redeemed (34,008)
Units, in Lieu of Dividends 10,254
-------------------------------------------------------------------------
Outstanding, End of Period 648,764
-------------------------------------------------------------------------
-------------------------------------------------------------------------
     For the period ended September 30, 2008, EnCana recorded compensation
costs of $7 million related to the outstanding DSUs (2007 - $10 million).
     G) Performance Share Units ("PSUs")
     The following table summarizes the information about PSUs at September
30, 2008:


                                                     Outstanding      Average
PSUs Share Price
-------------------------------------------------------------------------
     Canadian Dollar Denominated (C$)
Outstanding, Beginning of Year 1,685,036 38.79
Granted 408,686 70.77
Distributed (2,042,541) 45.34
Forfeited (51,181) 38.32
-------------------------------------------------------------------------
Outstanding, End of Period - -
-------------------------------------------------------------------------
-------------------------------------------------------------------------
     For the period ended September 30, 2008, EnCana recorded compensation
costs of $1 million related to the outstanding PSUs (2007 - $18 million).
     16. PER SHARE AMOUNTS
     The following table summarizes the Common Shares used in calculating Net
Earnings per Common Share:


                              Three Months Ended            Nine Months Ended
-----------------------------------------------------------
March 31, June 30, September 30, September 30,
-----------------------------------------------------------
(millions) 2008 2008 2008 2007 2008 2007
-------------------------------------------------------------------------
Weighted Average
Common Shares
Outstanding -
Basic 749.5 750.2 750.3 750.4 750.0 759.1
Effect of
Dilutive
Securities 3.5 1.1 1.0 5.5 2.0 8.4
-------------------------------------------------------------------------
Weighted Average
Common Shares
Outstanding -
Diluted 753.0 751.3 751.3 755.9 752.0 767.5
-------------------------------------------------------------------------
-------------------------------------------------------------------------

17. FINANCIAL INSTRUMENTS AND RISK MANAGEMENT
     EnCana's financial assets and liabilities are comprised of cash and cash
equivalents, accounts receivable and accrued revenues, accounts payable
and accrued liabilities, the partnership contribution receivable and
payable, risk management assets and liabilities, and long-term debt. Risk
management assets and liabilities arise from the use of derivative
financial instruments. Fair values of financial assets and liabilities,
summarized information related to risk management positions, and
discussion of risks associated with financial assets and liabilities are
presented as follows.
     A) Fair Value of Financial Assets and Liabilities
     The fair values of cash and cash equivalents, accounts receivable and
accrued revenues, and accounts payable and accrued liabilities
approximate their carrying amount due to the short-term maturity of those
instruments.
     Risk management assets and liabilities are recorded at their estimated
fair value based on the mark-to-market method of accounting, using quoted
market prices or, in their absence, third-party market indications and
forecasts. Long-term debt is carried at amortized cost using the
effective interest method of amortization. The estimated fair values of
long-term borrowings have been determined based on market information
where available, or by discounting future payments of interest and
principal at estimated interest rates expected to be available to the
Company at period end.
     The fair values of the partnership contribution receivable and
partnership contribution payable approximate their carrying amount due to
the specific nature of these instruments in relation to the creation of
the integrated oil joint venture. Further information about these notes
is disclosed in Note 10 to the Company's annual audited Consolidated
Financial Statements.
     The fair value of financial assets and liabilities were as follows:

                                              As at               As at
September 30, 2008 December 31, 2007
----------------------------------------
Carrying Fair Carrying Fair
Amount Value Amount Value
-------------------------------------------------------------------------
Financial Assets
Held-for-Trading:
Cash and cash equivalents $ 622 $ 622 $ 553 $ 553
Risk management assets(x) 2,037 2,037 403 403
Loans and Receivables:
Accounts receivable and
accrued revenues 2,473 2,473 2,381 2,381
Partnership contribution
receivable(x) 3,223 3,223 3,444 3,444
Financial Liabilities
Held-for-Trading:
Risk management liabilities(x) $ 74 $ 74 $ 236 $ 236
Other Financial Liabilities:
Accounts payable and accrued
liabilities 4,027 4,027 3,982 3,982
Long-term debt(x) 9,657 8,891 9,543 9,763
Partnership contribution
payable(x) 3,237 3,237 3,451 3,451
-------------------------------------------------------------------------
-------------------------------------------------------------------------
(x) Including current portion.

B) Risk Management Assets and Liabilities
     Net Risk Management Position
As at As at
September 30, December 31,
2008 2007
-------------------------------------------------------------------------
Risk Management
Current asset $ 1,578 $ 385
Long-term asset 459 18
-------------------------------------------------------------------------
2,037 403
-------------------------------------------------------------------------
     Risk Management
Current liability 74 207
Long-term liability - 29
-------------------------------------------------------------------------
74 236
-------------------------------------------------------------------------
Net Risk Management Asset (Liability) $ 1,963 $ 167
-------------------------------------------------------------------------
-------------------------------------------------------------------------

Summary of Unrealized Risk Management Positions
                      As at September 30, 2008       As at December 31, 2007
--------------------------------------------------------
Risk Management Risk Management
--------------------------------------------------------
Asset Liability Net Asset Liability Net
-------------------------------------------------------------------------
Commodity
Prices
Natural gas $1,990 $ - $1,990 $ 375 $ 29 $ 346
Crude oil 24 74 (50) 6 205 (199)
Power 23 - 23 19 - 19
Interest Rates - - - 2 - 2
Credit - - - 1 2 (1)
-------------------------------------------------------------------------
Total Fair
Value $2,037 $ 74 $1,963 $ 403 $ 236 $ 167
-------------------------------------------------------------------------
-------------------------------------------------------------------------

Net Fair Value Methodologies Used to Calculate Unrealized Risk Management
Positions
                                                           As at        As at
September 30, December 31,
2008 2007
-------------------------------------------------------------------------
Prices actively quoted $ 916 $ 105
Prices sourced from observable data or market
corroboration 1,047 62
-------------------------------------------------------------------------
Total Fair Value $ 1,963 $ 167
-------------------------------------------------------------------------
-------------------------------------------------------------------------
     Prices actively quoted refers to the fair value of contracts valued using
quoted prices in an active market. Prices sourced from observable data or
market corroboration refers to the fair value of contracts valued in part
using active quotes and in part using observable, market-corroborated
data.

Net Fair Value of Commodity Price Positions at September 30, 2008


                            Notional                    Average   Fair Market
Volumes Term Price Value
-------------------------------------------------------------------------
Natural Gas Sales
Contracts
Fixed Price Contracts
       NYMEX Fixed
Price 1,948 MMcf/d 2008 8.86 US$/Mcf $ 230
NYMEX Fixed
Price 1,618 MMcf/d 2009 9.31 US$/Mcf 732
NYMEX Fixed
Price 27 MMcf/d 2010 9.25 US$/Mcf 2
     Purchased Options
       AECO Call         (10) MMcf/d       2008     9.54 C$/Mcf             -
NYMEX Call (578) MMcf/d 2008 11.50 US$/Mcf (30)
NYMEX Call (150) MMcf/d 2009 11.67 US$/Mcf (14)
NYMEX Put 411 MMcf/d 2008 9.10 US$/Mcf 49
NYMEX Put 516 MMcf/d 2009 9.10 US$/Mcf 231


     Basis Contracts
       Canada             135 MMcf/d       2008  (0.72) US$/Mcf             7
United States 1,393 MMcf/d 2008 (0.85) US$/Mcf 188
Canada and
United States(x) 2009-2013 435
-------------------------------------------------------------------------
                                                                        1,830
Other Financial Positions(xx) 2
-------------------------------------------------------------------------
Total Unrealized Gain on Financial Contracts 1,832
Paid Premiums on Unexpired Options 158
-------------------------------------------------------------------------
Natural Gas Fair Value Position $ 1,990
-------------------------------------------------------------------------
-------------------------------------------------------------------------
(x) EnCana has entered into swaps to protect against widening natural
gas price differentials between production areas, including Canada,
the U.S. Rockies and Texas, and various sales points. These basis
swaps are priced using both fixed prices and basis prices determined
as a percentage of NYMEX.
(xx)Other financial positions are part of the ongoing operations of the
Company's proprietary production and transportation commitment
management.

Notional Average Fair Market
Volumes Term Price Value
-------------------------------------------------------------------------
Crude Oil Contracts
Fixed Price
Contracts
WTI NYMEX Fixed
Price 23,000 bbls/d 2008 70.13 US$/bbl $ (64)
Other Financial
Positions(xx) 14
-------------------------------------------------------------------------
Crude Oil Fair Value Position $ (50)
-------------------------------------------------------------------------
-------------------------------------------------------------------------

Power Purchase Contracts
Power Fair Value Position $ 23
-------------------------------------------------------------------------
-------------------------------------------------------------------------
(xx)Other financial positions are part of the ongoing operations of the
Company's proprietary production management and its share of
downstream refining positions.



Net Earnings Impact of Realized and Unrealized Gains (Losses) on Risk
Management Positions
                                                  Realized Gain (Loss)
-----------------------------------
Three Months Ended Nine Months Ended
September 30, September 30,
-----------------------------------
2008 2007 2008 2007
-------------------------------------------------------------------------
Revenues, Net of Royalties $ (389) $ 496 $ (955) $ 1,193
Operating Expenses and Other (2) 3 (2) 4
-------------------------------------------------------------------------
Gain (Loss) on Risk Management $ (391) $ 499 $ (957) $ 1,197
-------------------------------------------------------------------------
-------------------------------------------------------------------------

Unrealized Gain (Loss)
-----------------------------------
Three Months Ended Nine Months Ended
September 30, September 30,
-----------------------------------
2008 2007 2008 2007
-------------------------------------------------------------------------


     Revenues, Net of Royalties            $ 3,057  $  (107) $ 1,633  $  (673)
Operating Expenses and Other (7) - 6 7
-------------------------------------------------------------------------
Gain (Loss) on Risk Management $ 3,050 $ (107) $ 1,639 $ (666)
-------------------------------------------------------------------------
-------------------------------------------------------------------------

Reconciliation of Unrealized Risk Management Positions from January 1 to
September 30, 2008
                                                  2008                2007
--------------------------------------
Total Total
Fair Market Unrealized Unrealized
Value Gain (Loss Gain (Loss)
-------------------------------------------------------------------------
Fair Value of Contracts, Beginning
of Year $ 167
Change in Fair Value of Contracts
in Place at Beginning of Year and
Contracts Entered into During the
Period 682 $ 682 $ 520
Fair Value of Contracts in Place at
Transition that Expired During the
Period - - 11
Foreign Exchange Loss on Canadian
Dollar Contracts (1) - -
Fair Value of Contracts Realized
During the Period 957 957 (1,197)
-------------------------------------------------------------------------
Fair Value of Contracts
Outstanding $ 1,805 $ 1,639 $ (666)
Paid Premiums on Unexpired Options 158
-------------------------------------------------------------------------
Fair Value of Contracts and Premiums
Paid, End of Period $ 1,963
-------------------------------------------------------------------------
-------------------------------------------------------------------------

Commodity Price Sensitivities
     The following table summarizes the sensitivity of the fair value of the
Company's risk management positions to fluctuations in commodity prices,
with all other variables held constant. When assessing the potential
impact of these commodity price changes, the Company believes 10%
volatility is a reasonable measure. Fluctuations in commodity prices
could have resulted in unrealized gains (losses) impacting net earnings
as at September 30, 2008 as follows:
                                                       Favorable  Unfavorable
10% Change 10% Change
-------------------------------------------------------------------------
Natural gas price $ 664 $ (638)
Crude oil price 21 (21)
Power price 7 (7)
-------------------------------------------------------------------------
-------------------------------------------------------------------------
     C) Risks Associated with Financial Assets and Liabilities
     The Company is exposed to financial risks arising from its financial
assets and liabilities. The financial risks include market risk relating
to commodity prices, interest rates and foreign exchange rates, credit
risk and liquidity risk.
     Market Risk

     Market risk, the risk that the fair value or future cash flows of
financial assets or liabilities will fluctuate due to movements in market
prices, is comprised of the following:
     -   Commodity Price Risk
         As a means of mitigating exposure to commodity price risk volatility,
the Company has entered into various financial derivative agreements.
The use of these derivative instruments is governed under formal
policies and is subject to limits established by the Board of
Directors. The Company's policy is to not use derivative financial
instruments for speculative purposes.
         Natural Gas - To partially mitigate the natural gas commodity price
risk, the Company enters into option contracts and swaps, which fix
the NYMEX prices. To help protect against widening natural gas price
differentials in various production areas, EnCana has entered into
swaps to manage the price differentials between these production
areas and various sales points.
         Crude Oil - The Company has partially mitigated its exposure to the
WTI NYMEX price with fixed price swaps.
         Power - The Company has in place two Canadian dollar denominated
derivative contracts, which commenced January 1, 2007 for a period of
11 years, to manage its electricity consumption costs.
     -   Interest Rate Risk
         The Company partially mitigates its exposure to interest rate changes
by maintaining a mix of both fixed and floating rate debt.
         At September 30, 2008, the increase or decrease in net earnings for
each one percent change in interest rates on floating rate debt
amounts to $15 million.
     -   Foreign Exchange Risk
         As EnCana operates primarily in North America, fluctuations in the
exchange rate between the U.S./Canadian dollar can have a significant
effect on the Company's reported results. EnCana's functional
currency is Canadian dollars, however, the Company reports its
results in U.S. dollars as most of its revenue is closely tied to the
U.S. dollar and to facilitate a more direct comparison to other North
American oil and gas companies. As the effects of foreign exchange
fluctuations are embedded in the Company's results, the total effect
of foreign exchange fluctuations are not separately identifiable.
         To mitigate the exposure to the fluctuating U.S./Canadian exchange
rate, EnCana maintains a mix of both U.S. dollar and Canadian dollar
debt.
         As disclosed in Note 8, EnCana's foreign exchange (gain) loss is
primarily comprised of unrealized foreign exchange gains and losses
on the translation of U.S. dollar debt issued from Canada and the
translation of U.S. dollar partnership contribution receivable issued
from Canada. At September 30, 2008, EnCana had $5,350 million in U.S.
dollar debt issued from Canada ($5,421 million at December 31, 2007)
and $3,223 million related to the U.S. dollar partnership
contribution receivable ($3,444 million at December 31, 2007). A
$0.01 change in the U.S. to Canadian dollar exchange rate would have
resulted in a $20 million change in foreign exchange (gain) loss at
September 30, 2008.
     Credit Risk
     Credit risk is the risk that the counterparty to a financial asset will
default resulting in the Company incurring a financial loss. This credit
exposure is mitigated through the use of Board-approved credit policies
governing the Company's credit portfolio and with credit practices that
limit transactions according to counterparties' credit quality. All
foreign currency agreements are with major financial institutions in
Canada and the United States or with counterparties having investment
grade credit ratings. A substantial portion of the Company's accounts
receivable are with customers in the oil and gas industry and are subject
to normal industry credit risks.
     At September 30, 2008, EnCana had three counterparties whose net
settlement position individually account for more than 10 percent of the
fair value of the outstanding in-the-money net financial instrument
contracts by counterparty. The maximum credit risk exposure associated
with accounts receivable and accrued revenues, risk management assets and
the partnership contribution receivable is the total carrying value.
     Liquidity Risk

     Liquidity risk is the risk the Company will encounter difficulties in
meeting its financial liability obligations. The Company manages its
liquidity risk through cash and debt management. As disclosed in Note 14,
EnCana targets a Net Debt to Capitalization ratio between 30 and 40
percent and a Net Debt to Adjusted EBITDA of 1.0 to 2.0 times to steward
the Company's overall debt position.
     In managing liquidity risk, the Company has access to a wide range of
funding at competitive rates through commercial paper, capital markets
and banks. As at September 30, 2008, EnCana had available unused
committed bank credit facilities in the amount of $2.7 billion and unused
capacity under shelf prospectuses, the availability of which is dependent
on market conditions, for up to $5.2 billion. The Company believes it has
sufficient funding through the use of these facilities to meet
foreseeable borrowing requirements.
     EnCana maintains investment grade credit ratings on its senior unsecured
debt. On May 12, 2008, following the announcement of the proposed
Arrangement (See Note 4), Standard & Poor's Ratings Service assigned a
rating of A- and placed the Company on "CreditWatch with Negative
Implications", DBRS Limited assigned a rating of A(low) and placed the
Company "Under Review with Developing Implications", and Moody's
Investors Service has assigned a rating of Baa2 and changed the outlook
to "Stable" from "Positive".
     The timing of cash outflows relating to financial liabilities are
outlined in the table below:
                                            2-3       4-5    beyond
1 year years years 5 years Total
-------------------------------------------------------------------------
Accounts payable and
accrued liabilities $ 4,027 $ - $ - $ - $ 4,027
Risk management
liabilities 74 - - - 74
Long-term debt(x) 250 200 3,122 6,107 9,679
Partnership contribution
payable(x) 301 660 743 1,533 3,237
-------------------------------------------------------------------------
-------------------------------------------------------------------------
(x) Principal, including current portion.
     Included in EnCana's total long-term debt obligations of $9,679 million
at September 30, 2008 are $2,150 million in obligations related to
Bankers' Acceptances, Commercial Paper and LIBOR loans. These amounts are
fully supported and Management expects that they will continue to be
supported by revolving credit and term loan facilities that have no
repayment requirements within the next year. The revolving credit and
term loan facilities are fully revolving for a period of up to five
years. Based on the current maturity dates of the credit facilities,
these amounts are included in cash outflows for the period disclosed as
4 - 5 years.
     18. CONTINGENCIES
     Legal Proceedings
     The Company is involved in various legal claims associated with the
normal course of operations. The Company believes it has made adequate
provision for such legal claims.


     Discontinued Merchant Energy Operations
     During the period between 2003 and 2005, EnCana and its indirect wholly
owned U.S. marketing subsidiary, WD Energy Services Inc. ("WD"), along
with other energy companies, were named as defendants in several
lawsuits, some of which were class action lawsuits, relating to sales of
natural gas from 1999 to 2002. The lawsuits allege that the defendants
engaged in a conspiracy with unnamed competitors in the natural gas
markets in California in violation of U.S. and California anti-trust and
unfair competition laws.
     Without admitting any liability in the lawsuits, WD agreed to settle all
of the class action lawsuits in both state and federal court for payment
of $20.5 million and $2.4 million, respectively. Also, as previously
disclosed, without admitting any liability whatsoever, WD concluded
settlements with the U.S. Commodity Futures Trading Commission ("CFTC")
for $20 million and of a previously disclosed consolidated class action
lawsuit in the United States District Court in New York for $8.2 million.
Also, without admitting any liability whatsoever, WD concluded settlement
negotiations with a group of individual plaintiffs. It was agreed that WD
would settle these claims for $23 million. Execution of the Settlement
Agreement is pending.
     The remaining lawsuit was commenced by E. & J. Gallo Winery ("Gallo").
The Gallo lawsuit claims damages in excess of $30 million. California law
allows for the possibility that the amount of damages assessed could be
tripled.
     The Company and WD intend to vigorously defend against this outstanding
claim; however, the Company cannot predict the outcome of these
proceedings or any future proceedings against the Company, whether these
proceedings would lead to monetary damages which could have a material
adverse effect on the Company's financial position, or whether there will
be other proceedings arising out of these allegations.
     19.  RECLASSIFICATION
     Certain information provided for prior periods has been reclassified to
conform to the presentation adopted in 2008.
>>

For further information:
EnCana Corporate Communications
Investor contact:
Paul Gagne
Vice-President, Investor Relations
(403) 645-4737

Ryder McRitchie
Manager, Investor Relations
(403) 645-2007

Susan Grey
Manager, Investor Relations
(403) 645-4751

Media contact:
Alan Boras
Manager, Media Relations
(403) 645-4747
investor.relations@encana.com

ECA stock price

TSX $15.12 Can 0.200

NYSE $11.85 USD 0.160

As of 2017-11-17 16:02. Minimum 15 minute delay