EnCana plans disposition of two major crude oil pipeline systems

Calgary, Alberta July 9, 2002 - EnCana Corporation (TSX, NYSE: ECA) is seeking potential buyers for its indirect 70-percent interest in the Cold Lake Pipeline System and its indirect 100-percent interest in the Express Pipeline System. These crude oil transportation pipelines serve Canada's growing oil sands production area and supply Canadian crude to the U.S. Rocky Mountain and Midwest regions.

"After a strategic review of EnCana's assets, we have determined that we do not need to own these pipeline systems to assure ourselves of sufficient transportation capacity to meet EnCana's requirements," said Bill Oliver, President of EnCana's Midstream & Marketing division. "And given our rich portfolio of upstream growth opportunities, we look forward to re-deploying capital into core exploration and production initiatives that are more consistent with our strategic direction.

"EnCana has been a driving force in developing this oil transportation infrastructure for Canada and we believe it is an opportune time for us to conduct a formal assessment of the market's interest in the assets," Oliver said. "These are high-quality pipeline systems that have solid capacity commitments and exceptional expansion opportunities. They are strategically positioned to carry rapidly growing production from Canada's oil sands regions to the Padd II and Padd IV refining markets in the U.S."

The 297-mile Cold Lake Pipeline System consists of two legs. The west leg between Cold Lake and Edmonton, Alberta consists of a 24-inch blend pipeline and a 12-inch diluent pipeline. The 24-inch line has a delivery capacity of up to 235,000 barrels per day of blended bitumen to Edmonton and the 12-inch line moves condensate from Edmonton to the Cold Lake area. The south leg is a 24-inch line with a delivery capacity of up to 200,000 barrels per day of blended oil from Cold Lake to Hardisty, Alberta, where it connects with Express and another interprovincial pipeline carrier.

The 1,717-mile Express Pipeline System consists of two major pipelines: Express and Platte. The 24-inch Express pipeline runs 785 miles from Alberta's oil transportation hub at Hardisty to Casper, Wyoming. It delivers up to 172,000 barrels per day of Canadian crude to the U.S. Rocky Mountain states of Montana, Wyoming and Utah. The 20-inch Platte Pipeline, 932 miles in length, has a delivery capacity of up to 150,000 barrels per day of oil from Casper to Wood River, Illinois, serving refineries in Colorado, Kansas and Illinois. The Express pipeline, from Hardisty to Casper, can be expanded to 280,000 barrels per day with comparatively modest investment in pumping stations.

In 2001, the Cold Lake and Express assets generated approximately $140 million of EBITDA (earnings before interest, taxes, depreciation and amortization). Net book value of the capital assets on December 31, 2001, in the Alberta Energy Company Ltd. financial statements, was approximately $1.3 billion. The assets are held through Alberta Energy Company Ltd., an indirect wholly owned subsidiary of EnCana.

EnCana has retained Scotia Capital and Morgan Stanley to advise the company on strategic alternatives. Requests for information about the Cold Lake and Express pipelines should be directed to one of the Scotia Capital or Morgan Stanley representatives below.

Scotia Capital
700, 2nd Street S.W.
Suite 2000
Calgary, AB T2P 2W1
Facsimile: (403) 213-7773

David Holm Managing Director
(403) 213-7327
david_holm@scotiacapital.com

Morgan Stanley
3700, 181 Bay Street
Toronto, ON M5J 2T3
Facsimile: (416) 943-8444

Daniel D. Barclay
Executive Director
(416) 943-8418
daniel.barclay@morganstanley.com

 
David Potter
Managing Director
(403) 298-4066
david_potter@scotiacapital.com
J. Michael Hafner
Executive Director
(212) 761-8451
michael.hafner@morganstanley.com

EnCana is the largest North American based independent oil and gas company, with an enterprise value of approximately C$30 billion. It is North America's largest independent natural gas producer and gas storage operator. Ninety percent of the company's assets are in four key North American growth platforms: Western Canada, offshore Canada's East Coast, the U.S. Rocky Mountains and the Gulf of Mexico. EnCana is the largest producer and landholder in Western Canada and is a key player in Canada's emerging offshore East Coast basins. In the U.S., EnCana is one of the largest gas explorers and producers in the Rocky Mountain states and has a strong position in the deepwater Gulf of Mexico. The company has two key high-potential international growth platforms: Ecuador, where EnCana is the largest private sector oil producer, and the U.K. central North Sea, where EnCana is the operator of a very large oil discovery. The company also conducts high upside potential new venture exploration in other parts of the world. EnCana is driven to be the industry's best-in-class benchmark in production cost, per-share growth and value creation for shareholders. EnCana common shares trade on the Toronto and New York stock exchanges under the symbol ECA.

Advisory

This news release contains forward-looking statements within the meaning of the United States Private Securities Litigation Reform Act of 1995. Forward-looking statements in this news release include, but are not limited to: the potential sale of the interests in the Express and Cold Lake pipeline systems; growing production from Canada's oil sands regions; and the re-deployment of capital into core exploration and production initiatives.

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. 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. Some of the risks and other factors which could cause results to differ materially from those expressed in the forward-looking statements contained in this document include, but are not limited to: general economic, business and market conditions; volatility of oil, natural gas and liquids prices; fluctuations in currency and interest rates, product supply and demand; competition; risks inherent in foreign operations, including political and economic risk; imprecision of reserve estimates; the ability to replace or expand reserves; the ability to either generate sufficient cash flow to meet current and future obligations or to obtain external debt or equity financing; the ability to enter into or renew leases; the timing and costs of pipeline and gas storage facility construction and expansion; the ability to make capital investments and the amounts thereof; imprecision in estimating future production capacity, and the timing, costs and levels of production and drilling; the results of exploration, development and drilling; the ability to secure adequate product transportation; changes in regulations; uncertainty in amounts and timing of royalty payments; imprecision in estimating product sales; and such other risks and uncertainties described from time to time in reports and filings with securities regulatory authorities by EnCana and its indirect wholly owned subsidiary, Alberta Energy Company Ltd.

For further information please contact EnCana Corporation::

Investor Contact:
Sheila McIntosh
Senior Vice-President, Investor Relations
(403) 290-2194
investor.relations@EnCana.com
Media Contact:
Alan Boras
Manager, Media Relations
(403) 266-8300

ECA stock price

TSX $15.12 Can 0

NYSE $11.85 USD 0.160

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