EnCana's second quarter cash flow exceeds US$1.5 billion, or $1.76 per share – up 45 percent

Natural gas sales increase 6 percent to 3.2 billion cubic feet per day

CALGARY, July 28 /CNW/ - EnCana Corporation's (TSX & NYSE: ECA) second
quarter 2005 total cash flow per share increased 45 percent to US$1.76 per
share diluted, or $1.57 billion, compared to the second quarter of 2004. Total
operating earnings per share increased 78 percent to 73 cents per share
diluted, or $655 million, compared to the second quarter of 2004. Cash flow
and operating earnings increased due to higher sales, stronger natural gas and
liquids prices and improved netbacks related to asset portfolio upgrading.
EnCana's total second quarter net earnings per share increased 248 percent to
94 cents per share diluted, or $839 million, which includes an unrealized
mark-to-market after-tax gain of $222 million due to changes in the value of
commodity hedging positions at quarter-end compared to the previous quarter
and an unrealized foreign exchange loss on translation of Canadian issued U.S.
dollar debt of $38 million. Total second quarter revenues net of royalties
were $3.82 billion. NOTE: All prior-period share and per-share references have
been adjusted to reflect the two-for-one common share split which occurred in
May 2005.
Second quarter sales of natural gas, oil and natural gas liquids (NGLs)
from total operations were 4.59 billion cubic feet of gas equivalent (Bcfe)
per day, down 1 percent from the same period in 2004. Total natural gas sales
increased 6 percent to 3.2 billion cubic feet per day. Oil and NGLs sales were
230,300 barrels per day, down 15 percent mainly due to divestitures of
conventional oil properties in Canada and the U.K. North Sea.
"EnCana continues to achieve strong operating and financial performance.
Production and profitability from our portfolio of long-life North American
resource plays continue to distinguish the EnCana story. Second quarter
production from our 10 key resource plays increased 16 percent compared to the
same period one year earlier. We closed the $2.1 billion sale of our Gulf of
Mexico assets, divested of additional mature conventional production in
Western Canada and announced plans to divest of our natural gas storage and
natural gas liquids businesses -- strategic initiatives that continue to
sharpen our focus on North American resource plays -- assets where we can
apply our competitive advantage in pursuit of strong, profitable growth and
returns. In the first half of 2005, we have redeployed about $1.3 billion of
divestiture proceeds to buy EnCana shares under our Normal Course Issuer Bid,
reducing the shares outstanding by close to 4 percent. Each share now
represents a higher proportion of the company's more focused asset base, which
includes the upside opportunity in our Unbooked Resource Potential," said Gwyn
Morgan, EnCana President & Chief Executive Officer.

First half cash flow up 45 percent per share
First half total cash flow per share increased 45 percent to $3.31 per
share diluted, or $2.99 billion, compared to the first half of 2004. Total
first half operating earnings per share increased 57 percent to $1.41 per
share diluted, or $1.27 billion, compared to the first half of 2004. EnCana's
total first half net earnings per share increased 52 percent to 88 cents per
share diluted, or $794 million, which includes an unrealized mark-to-market
after-tax loss of $419 million due to changes in the value of commodity
hedging positions at June 30, 2005 and an unrealized foreign exchange loss on
translation of Canadian issued U.S. dollar debt of $53 million.
First half sales of natural gas, oil and NGLs from total operations were
4.56 Bcfe per day, up 2 percent from the same period in 2004. Total natural
gas sales increased 11 percent to 3.18 billion cubic feet per day. Total oil
and NGLs sales were 230,000 barrels per day, down 14 percent mainly due to
divestitures of conventional oil properties in Canada and the U.K. North Sea.

IMPORTANT NOTE: EnCana reports in U.S. dollars and follows U.S.
protocols, which report sales and reserves on an after-royalties basis.
All dollar figures are U.S. dollars unless otherwise noted. EnCana is
treating its Ecuador operations as discontinued because EnCana plans to
sell its Ecuador assets. Total results, which include results from
Ecuador, are reported in the company's financial statements included in
this news release and in supplementary documents posted on its Web site -
www.encana.com.

All references in the remaining text of this news release are on a
continuing operations basis.

Continuing operations: Cash flow up 48 percent;
Operating earnings up 72 percent
Second quarter 2005 cash flow from continuing operations increased
48 percent to $1.51 billion compared to the same period in 2004. Second
quarter cash flow from continuing operations includes cash taxes of
$83 million. Operating earnings from continuing operations increased
72 percent to $623 million compared to the second quarter of 2004. EnCana's
second quarter net earnings from continuing operations increased 197 percent
to $786 million, which included $201 million in after-tax unrealized
mark-to-market gains as a result of changes in the value of commodity hedging
positions at quarter-end compared to the previous quarter and an after-tax
unrealized loss of $38 million due to translation of U.S. dollar denominated
debt issued in Canada.

Sales from continuing operations up 3 percent, natural gas sales
up 7 percent
Second quarter sales of natural gas, oil and NGLs from continuing
operations were 4.16 Bcfe per day, up 3 percent from the second quarter of
2004. Second quarter natural gas sales from continuing operations rose
7 percent to 3.21 billion cubic feet per day compared with the second quarter
of 2004. Oil and NGLs sales from continuing operations were 157,100 barrels
per day, down 8 percent from the second quarter one year earlier due primarily
to the divestiture of conventional oil properties.

Capital and operating costs impacted by inflation and a
depreciating U.S. dollar
Operating costs from continuing operations in the second quarter of 2005
were 66 cents per thousand cubic feet of gas equivalent (Mcfe), which is
slightly higher than the company's full year forecast range due mainly to
industry inflation, the impact of a depreciating U.S. dollar and weather
delays in the timing of planned production additions. While EnCana expects
full year operating costs to be near the higher end of its guidance of 55 to
60 cents per Mcfe, the company continues to be amongst the lowest cost
operators in the industry. EnCana drilled 1,017 net wells during the second
quarter. Second quarter core capital investment was $1.4 billion. The company
previously stated that supply and service cost increases have been higher than
expected, and with the impacts of the depreciating U.S. dollar, full-year core
upstream capital is now expected to be between $5.1 billion and $5.4 billion,
up $600 million of which $100 million relates to the depreciating U.S. dollar.
The company's corporate guidance has been updated on www.encana.com.
"EnCana's costs are about 10 percent higher than we had forecasted when
we established our budgets last fall. While some cost increases are due to
execution delays caused by weather, they are primarily driven by higher
service sector pricing, higher steel pricing and the overall shortage of
completion services -- all three directly related to the robust commodity
price environment we are currently benefiting from. In our effort to
continually find ways to manage costs, we have reached a number of long-term
arrangements with established drilling companies to supply 27 additional rigs,
many built new to fit EnCana's purpose and utilizing the latest technology.
These will expand the industry's overall fleet and should help EnCana mitigate
the inflationary impact of high industry activity levels by reducing drilling
days on its large suite of North American resource plays," said Randy Eresman,
EnCana's Chief Operating Officer.
"Employing fit-for-purpose rigs under long-term contracts is one example
of how we have adapted to higher input costs through optimizing the components
of the manufacturing line. Although costs are higher, so are commodity futures
prices. Future strip prices for natural gas and oil are about 30 percent
higher than were forecast at this time in 2004, resulting in stronger returns
for all of EnCana's development projects," Eresman said.

First half operating earnings from continuing operations up 38 percent
First half 2005 operating earnings increased 38 percent to $1.14 billion
compared to the first half of 2004. First half 2005 cash flow from continuing
operations increased 47 percent to $2.82 billion compared to the first half of
2004. EnCana's first half net earnings from continuing operations were up
12 percent to $661 million, which includes two non-cash items: an after-tax
unrealized mark-to-market hedge loss of $427 million and an after-tax
unrealized mark-to-market loss on foreign exchange on US$ denominated debt
issued in Canada of $53 million. First half 2005 revenues net of royalties
were $6.24 billion. EnCana drilled 2,370 net wells in the first half, close to
half of the company's 2005 forecast of between 5,000 and 5,500 net wells.

2005 gas production build delayed
Given the shorter than usual winter operating season, wet spring
conditions in many operating areas, and shortages of industry services, EnCana
experienced delays in bringing wells on stream. About 150 million cubic feet
per day of additional gas production is available from wells that will be tied
in as soon as services become available. The company expects fourth quarter
production to build strongly to exit the year between 3.6 billion and
3.7 billion cubic feet per day. The annualized impact of these delays is
expected to result in total 2005 natural gas production to be towards the
lower end of the 2005 guidance range. Oil and liquids sales, which were not as
affected by the weather, are expected to be at the midpoint of the guidance
range.

North American natural gas prices remain strong in the
second quarter of 2005
The average second quarter benchmark NYMEX index gas price was $6.73 per
thousand cubic feet, up 12 percent from $5.99 per thousand cubic feet in the
second quarter of 2004. EnCana's North American realized natural gas prices
averaged $6.25 per thousand cubic feet, up 17 percent from an average of
$5.34 per thousand cubic feet in the second quarter of 2004. Natural gas
prices have continued to increase due primarily to high world oil prices,
continued strength in the economy and a lack of growth in domestic natural gas
production.

Second quarter world oil prices remain strong;
Canadian heavy oil price differentials widen
Oil and NGLs continued to trade at strong prices during the second
quarter of 2005 due to strong global demand and concern over lack of spare
production capacity. During the second quarter of 2005, the average benchmark
West Texas Intermediate (WTI) crude oil price was $53.22 per barrel, up
39 percent from the second quarter 2004 average of $38.28 per barrel. The
substantially higher level of WTI, combined with limited worldwide upgrading
capacity for heavy crude oils, resulted in a significant widening of
light/heavy crude oil price differentials. In the second quarter, the WTI/Bow
River differential increased 83 percent to $20.17 per barrel compared to the
same 2004 period. In the second quarter, EnCana's average realized oil and
NGLs price was $31.80 per barrel, up 16 percent; including hedging it was
$26.92 per barrel, up 29 percent compared to the same period in 2004.

Price risk management
EnCana's price risk mitigation strategy is intended to provide downside
protection delivering greater certainty of cash flows and returns on its
investments. Detailed risk management positions at June 30, 2005 are presented
in Note 12 to the unaudited second quarter consolidated financial statements.
In the second quarter of 2005, EnCana's financial price risk management
measures resulted in after-tax realized losses of approximately $71 million,
comprised of a $47 million loss on oil hedges, a $26 million loss on gas
hedges and a $2 million gain on other hedges. A review of the company's
hedging strategy in 2004 resulted in more frequent use of price hedging
instruments which provide downside protection, but do not limit upside in a
rising price environment.
As of June 30, 2005, about 74 percent of 2005 forecast gas sales is
exposed to price upside, while about 60 percent has downside price protection.
For oil, at current price levels, about 98 percent of 2005 forecast oil sales
is exposed to price upside, while about 32 percent has downside protection.
Overall, on a Mcfe basis, at current price levels about 82 percent of EnCana's
forecast 2005 sales are exposed to market price upside. Beyond 2005, fixed
price hedges are in place for approximately 808 million cubic feet per day of
forecast 2006 gas production, 13,700 barrels per day of forecast 2006 oil
production and 29 million cubic feet per day of forecast 2007 gas production.

<<

EnCana Continuing Operations Highlights
---------------------------------------
US$ and U.S. protocols
----------------------
-------------------------------------------------------------------------
Financial Highlights
(as at and for the
period ended 6 6
June 30) Q2 Q2 % months months %
($ millions) 2005 2004 change 2005 2004 change
-------------------------------------------------------------------------
Revenues,
net of
royalties 3,581 2,552 + 40 6,242 5,282 +18

Pre-tax cash flow 1,595 1,204 + 32 3,128 2,325 + 35

Less:
Cash tax 83 183 - 55 308 408 - 25

Cash flow 1,512 1,021 + 48 2,820 1,917 + 47

Net
acquisitions &
divestitures (1,789)(x) 2,234 - 180 (1,830)(x) 1,935 - 195

Core capital 1,426 1,030 + 38 2,933 2,287 + 28

Net capital
investment (363) 3,264 - 111 1,103 4,222 - 74

Net earnings 786 265 + 197 661 591 + 12

Add (Deduct):
Unrealized
mark-to-market
hedging (gain)
loss, after-tax (201) 72 - 379 427 285 + 50

Unrealized
foreign exchange
loss on transl-
ation of U.S.
dollar debt
issued in Canada,
after-tax 38 25 + 52 53 57 - 7

Future tax (recovery)
due to tax rate
change - - n/a - (109) n/a

Operating earnings 623 362 + 72 1,141 824 + 38
-------------------------------------------------------------------------
(x) Includes proceeds from Gulf of Mexico sale of $2.1 billion, minus tax
of $591 million

EnCana financial results in U.S. dollars and operating results according
to U.S. protocols

EnCana reports in U.S. dollars and according to U.S. protocols in order
to facilitate a more direct comparison to other North American upstream oil
and natural gas exploration and development companies. Reserves and production
are reported on an after-royalty basis.

-------------------------------------------------------------------------
Operating Highlights
(for the period
ended June 30) 6 6
(After Q2 Q2 % months months %
royalties) 2005 2004 change 2005 2004 change
-------------------------------------------------------------------------
North America
Natural
Gas (MMcf/d)
Production 3,212 3,001 + 7 3,166 2,843 + 11
Inventory
withdrawal - - n/a 13 - n/a
-------------------------------------------------------------------------
Natural gas
sales (MMcf/d) 3,212 3,001 + 7 3,179 2,843 + 12
-------------------------------------------------------------------------
North America
Oil and NGLs
(bbls/d) 157,108 170,687 - 8 157,145 168,283 - 7
-------------------------------------------------------------------------
Total sales
(MMcfe/d) 4,155 4,025 + 3 4,122 3,853 + 7
-------------------------------------------------------------------------

Key resource play production growth up about 16 percent across EnCana's
portfolio

Development capital continues to be focused on turning EnCana's Unbooked
Resource Potential into production and reserves. Second quarter gas and oil
production from key North American resource plays has increased approximately
16 percent since the second quarter of 2004. Gas production growth is driven
mainly by the Piceance basin in Colorado, the impact of the Tom Brown, Inc.
acquisition, shallow gas and coalbed methane (CBM) on legacy Suffield and
Palliser Blocks in Alberta, Cutbank Ridge in northeast British Columbia and
the acquisition of the Fort Worth property. Oil production grew at Pelican
Lake in northeast Alberta while Foster Creek production decreased temporarily
in the second quarter due to scheduled maintenance and work required to
prepare for a 30,000 barrel per day facility expansion, of which 10,000
barrels per day is planned to come on production late in the fourth quarter of
2005.

Growth from key North American resource plays

-------------------------------------------------------------------------
Daily Production
------------------------------------------------------------
Resource Play 2005 2004 2003
------------------------------------------------------------
(After Full Full
royalties) YTD Q2 Q1 Year Q4 Q3 Q2 Q1 Year
-------------------------------------------------------------------------
Natural Gas
(MMcf/d)
Jonah 424 416 431 389 404 373 387 394 374
Piceance 300 302 300 261 291 282 251 218 151
East Texas 83 85 82 50 83 81 36 - -
Fort Worth 62 63 61 27 34 31 23 21 7
Greater
Sierra 213 228 195 230 211 244 247 216 143
Cutbank
Ridge 68 80 56 40 50 45 41 22 3
CBM 41 46 36 17 27 19 11 10 4
Shallow Gas 629 633 625 592 629 595 590 554 507
-------------------------------------------------------------------------
Oil (Mbbls/d)
Foster
Creek 27 24 30 29 28 29 30 28 22
Pelican Lake 24 27 21 19 23 22 15 15 16
-------------------------------------------------------------------------
Total
(MMcfe/d) 2,128 2,161 2,094 1,892 2,034 1,976 1,858 1,696 1,416
-------------------------------------------------------------------------
% change
from prior
year's
quarter 16.3 23.5
-------------------------------------------------------------------------
% change
from prior
period 3.2 2.9 33.6 2.9 6.4 9.6 7.1
-------------------------------------------------------------------------


Drilling activity in key North American resource play

-------------------------------------------------------------------------
Net Wells Drilled
------------------------------------------------------------
2005 2004 2003
------------------------------------------------------------
Resource Full Full
Play YTD Q2 Q1 Year Q4 Q3 Q2 Q1 Year
-------------------------------------------------------------------------
Natural Gas
Jonah 58 30 28 70 21 17 21 11 59
Piceance 142 65 77 250 47 66 66 71 284
East Texas 43 22 21 50 23 20 7 - -
Fort Worth 21 12 9 36 8 10 10 8 5
Greater
Sierra 106 47 59 187 18 13 21 135 199
Cutbank
Ridge 61 38 23 50 17 12 4 17 20
CBM 486 202 284 760 234 347 98 81 267
Shallow Gas 638 365 273 1,552 222 384 416 530 2,366
-------------------------------------------------------------------------
Oil
Foster Creek 12 2 10 11 7 - - 4 8
Pelican Lake 53 34 19 92 - 33 30 29 134
-------------------------------------------------------------------------
Total net
wells 1,620 817 803 3,058 597 902 673 886 3,342
-------------------------------------------------------------------------

Corporate developments
----------------------

Quarterly dividend of 7.5 cents per share declared

EnCana's board of directors has declared a quarterly dividend of
7.5 cents per share which is payable on September 30, 2005 to common
shareholders of record as of September 15, 2005.

Normal Course Issuer Bid purchases

In the first half of 2005, EnCana has purchased for cancellation
approximately 44.7 million of its shares at an average price of $32.86 per
share under its current Normal Course Issuer Bid (Bid), which commenced
October 29, 2004. Under the Bid, which was amended in February 2005 to allow
for the purchase of up to 10 percent of EnCana's public float, the company has
purchased about 8.5 percent of the public float since October 2004. Share
option exercises during the same period resulted in the issue of approximately
1.5 percent of the public float. The company had approximately 860.2 million
shares outstanding at June 30, 2005.

-------------------------------------------------------------------------
First
six Full
Changes in Share Capital months Year %
(millions of shares) 2005 2004 change
-------------------------------------------------------------------------
Common shares outstanding,
beginning of period 900.6 921.2 - 2.2
-------------------------------------------------------------------------
Shares issued under option plan 9.8 19.4
-------------------------------------------------------------------------
Shares purchased under Normal Course
Issuer Bid (44.7) (40.0)
-------------------------------------------------------------------------
Subtotal 865.7 900.6 - 3.9
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Shares purchased for Performance Share
Unit plan (5.5) -
-------------------------------------------------------------------------
Common shares outstanding, end of period 860.2 900.6
-------------------------------------------------------------------------
-------------------------------------------------------------------------

Two-for-one share split

On April 27, 2005, EnCana's shareholders approved the split of EnCana's
outstanding common shares on a two-for-one basis. The common shares began
trading on a sub-divided basis on the Toronto Stock Exchange on May 10, 2005
and on the New York Stock Exchange on May 23, 2005.


Financial strength
------------------

EnCana maintains a strong balance sheet. At June 30, 2005 the company's
net debt-to-capitalization ratio was 36:64. Completion of planned asset
divestitures is expected to further reduce debt levels. Proceeds of these
proposed divestitures are also expected to be directed to purchase the
company's shares under its Normal Course Issuer Bid and debt repayment.
EnCana's net debt-to-EBITDA multiple, on a trailing 12-month basis, was
1.3 times. In the second quarter of 2005, EnCana invested $1,426 million of
core capital. Acquisitions and divestitures resulted in net proceeds of $1,789
million, after deducting $591 million of tax on sale of Gulf of Mexico assets.
Overall, divestiture proceeds were $363 million in excess of core capital
investment during the second quarter.

-------------------------------------------------------------------------
CONFERENCE CALL TODAY
11 a.m. Mountain Time (1 p.m. Eastern Time)

EnCana Corporation will host a conference call today, Thursday, July 28,
2005 starting at 11:00 a.m., Mountain Time (1 p.m. Eastern Time), to
discuss EnCana's second quarter 2005 financial and operating results.

To participate, please dial (913) 981-4915 approximately 10 minutes prior
to the conference call. An archived recording of the call will be
available from approximately 3 p.m. MT on July 28 until midnight
August 3, 2005 by dialing (888) 203-1112 or (719) 457-0820 and entering
access code 7545271.

A live audio Web cast of the conference call will also be available via
EnCana's Web site, www.encana.com, under Investor Relations. The Web cast
will be archived for approximately 90 days.

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

EnCana Corporation
With an enterprise value of approximately US$44 billion, EnCana is one of
North America's leading natural gas producers, is among the largest holders of
gas and oil resource lands onshore North America and is a technical and cost
leader in the in-situ recovery of oilsands bitumen. EnCana delivers
predictable, reliable, profitable growth from its portfolio of long-life
resource plays situated in Canada and the United States. Contained in
unconventional reservoirs, resource plays are large contiguous accumulations
of hydrocarbons, located in thick or areally extensive deposits, that
typically have low geological and commercial development risk, low average
decline rates and very long producing lives. The application of technology to
unlock the huge resource potential of these plays typically results in
continuous increases in production and reserves and decreases in costs over
multiple decades of resource play life. EnCana common shares trade on the
Toronto and New York stock exchanges under the symbol ECA.

NOTE 1: Non-GAAP measures
This news release contains references to cash flow, pre-tax cash flow,
cash flow from continuing operations, operating earnings from continuing
operations, total operating earnings and EBITDA. Total operating earnings is a
non-GAAP measure that shows net earnings excluding non-operating items such as
the after-tax impacts of a gain on the sale of discontinued operations, 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 in Canada and the effect of the reduction in income tax rates.
Management believes these items reduce the comparability of the company's
underlying financial performance between periods. The majority of the
unrealized gains/losses that relate to U.S. dollar debt issued in Canada are
for debt with maturity dates in excess of five years. EBIDTA is a non-GAAP
measure that shows net earnings from continuing operations before gain on
disposition, income taxes, foreign exchange gains or losses, interest net,
accretion of asset retirement obligation and depletion, depreciation 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.

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 necessarily 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 within the meaning of the
"safe harbour" provisions of the United States Private Securities Litigation
Reform Act of 1995. Forward-looking statements in this news release include,
but are not limited to: future economic and operating performance; anticipated
growth and success of resource plays and the expected characteristics of
resource plays; the planned sale of interests in Ecuador, the midstream NGLs
business unit and the natural gas storage business and the timing of such
potential transactions; the expected proceeds from planned divestitures and
the use of proceeds from divestitures for share purchases under the company's
Normal Course Issuer Bid program and debt repayment; projections with respect
to the company's unbooked resource potential and projected production growth
over the next five years; expected debt levels and debt to capitalization
ratios; anticipated effect of EnCana's market risk mitigation strategy and
EnCana's ability to participate in commodity price upside; anticipated
purchases pursuant to the Normal Course Issuer Bid; anticipated production in
2005 and beyond; anticipated drilling; the capacity of the company's SAGD
expansion project and the timing thereof; potential capital expenditures and
investment and the impact of inflation; potential oil, natural gas and NGLs
sales in 2005 and beyond; anticipated ability to meet production, operating
cost, cash tax and sales guidance targets; anticipated costs and the ability
to mitigate against drilling costs increases; anticipated commodity prices;
projections relating to project returns from EnCana's North American resource
plays and potential risks associated with drilling and references to potential
exploration. Readers are cautioned not to place undue reliance on
forward-looking statements, as there can be no assurance that the plans,
intentions or expectations upon which they are based will occur. By their
nature, forward-looking statements involve numerous assumptions, known and
unknown risks and uncertainties, both general and specific, that contribute to
the possibility that the predictions, forecasts, projections and other
forward-looking statements will not occur, which may cause the company's
actual performance and financial results in future periods to differ
materially from any estimates or projections of future performance or results
expressed or implied by such forward-looking statements. These risks and
uncertainties include, among other things: volatility of oil and gas prices;
fluctuations in currency and interest rates; product supply and demand; market
competition; risks inherent in the company's marketing operations, including
credit risks; imprecision of reserves estimates and estimates of recoverable
quantities of oil, natural gas and liquids from resource plays and other
sources not currently classified as proved reserves; the 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 environmental and other
regulations or the interpretations of such regulations; political and economic
conditions in the countries in which the company operates, including Ecuador;
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.
Furthermore, the forward-looking statements contained in this news
release are made as of the date of this news release, and EnCana does not
undertake any obligation to update publicly or to revise any of the included
forward-looking statements, whether as a result of new information, future
events or otherwise. The forward-looking statements contained in this news
release are expressly qualified by this cautionary statement.
Further information on EnCana Corporation is available on the company's
Web site, www.encana.com.


Interim Consolidated Financial Statements
(unaudited)
For the period ended June 30, 2005

EnCana Corporation

U.S. DOLLARS



CONSOLIDATED STATEMENT OF EARNINGS (unaudited)

Three Months Ended Six Months Ended
June 30, June 30,
($ millions, except -------------------------------------------------
per share amounts) 2005 2004 2005 2004
-------------------------------------------------------------------------

REVENUES, NET OF
ROYALTIES
Upstream (Note 2) $ 2,227 $ 1,763 $ 4,333 $ 3,392
Midstream &
Market
Optimiza-
tion (Note 2) 1,039 898 2,566 2,317
Corporate
- Unrealized
gain (loss)
on risk
management (Note 2) 315 (109) (657) (429)
- Other (Note 2) - - - 2
-------------------------------------------------------------------------
3,581 2,552 6,242 5,282

EXPENSES (Note 2)
Production
and mineral
taxes 97 83 184 137
Transportation
and selling 131 137 267 272
Operating 373 303 745 620
Purchased
product 933 822 2,296 2,109
Depreciation,
depletion and
amortization 675 630 1,361 1,156
Administrative 66 44 127 93
Interest, net 101 99 201 178
Accretion
of asset
retirement
obligation (Note 8) 9 3 18 9
Foreign
exchange
loss (Note 5) 119 18 150 77
Stock-based
compensation 4 4 8 9
Gain on
divesti-
tures (Note 4) - (1) - (35)
-------------------------------------------------------------------------
2,508 2,142 5,357 4,625
-------------------------------------------------------------------------
NET EARNINGS
BEFORE INCOME
TAX 1,073 410 885 657
Income tax
expense (Note 6) 287 145 224 66
-------------------------------------------------------------------------
NET EARNINGS
FROM
CONTINUING
OPERATIONS 786 265 661 591
NET EARNINGS
(LOSS) FROM
DISCONTINUED
OPERATIONS (Note 3) 53 (15) 133 (51)
-------------------------------------------------------------------------
NET EARNINGS $ 839 $ 250 $ 794 $ 540
-------------------------------------------------------------------------

NET EARNINGS
FROM
CONTINUING
OPERATIONS
PER COMMON
SHARE (Note 11)
Basic $ 0.90 $ 0.29 $ 0.75 $ 0.64
Diluted $ 0.88 $ 0.28 $ 0.73 $ 0.63
-------------------------------------------------------------------------

NET EARNINGS
PER COMMON
SHARE (Note 11)
Basic $ 0.96 $ 0.27 $ 0.90 $ 0.59
Diluted $ 0.94 $ 0.27 $ 0.88 $ 0.58
-------------------------------------------------------------------------



CONSOLIDATED STATEMENT OF RETAINED EARNINGS (unaudited)

Six Months Ended
June 30,
-----------------------
($ millions) 2005 2004
-------------------------------------------------------------------------

RETAINED EARNINGS, BEGINNING OF YEAR $ 7,935 $ 5,276
Net Earnings 794 540
Dividends on Common Shares (110) (92)
Charges for Normal Course Issuer Bid (Note 9) (1,124) (126)
Charges for Shares Repurchased and Held (Note 9) (147) -
-------------------------------------------------------------------------
RETAINED EARNINGS, END OF PERIOD $ 7,348 $ 5,598
-------------------------------------------------------------------------

See accompanying Notes to Consolidated Financial Statements.



CONSOLIDATED BALANCE SHEET (unaudited)

As at As at
June 30, December 31,
($ millions) 2005 2004
-------------------------------------------------------------------------

ASSETS
Current Assets
Cash and cash equivalents $ 325 $ 602
Accounts receivable and accrued
revenues 2,140 1,898
Risk management (Note 12) 160 336
Inventories 424 513
Assets of discontinued operations (Note 3) 165 156
-------------------------------------------------------------------------
3,214 3,505
Property, Plant and Equipment, net (Note 2) 22,051 23,140
Investments and Other Assets 379 334
Risk Management (Note 12) 106 87
Assets of Discontinued Operations (Note 3) 1,735 1,623
Goodwill 2,488 2,524
-------------------------------------------------------------------------
(Note 2) $ 29,973 $ 31,213
-------------------------------------------------------------------------

LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Accounts payable and accrued
liabilities $ 1,884 $ 1,879
Income tax payable 779 359
Risk management (Note 12) 690 241
Liabilities of discontinued
operations (Note 3) 321 280
Current portion of long-term debt (Note 7) 309 188
-------------------------------------------------------------------------
3,983 2,947
Long-Term Debt (Note 7) 6,851 7,742
Other Liabilities 86 118
Risk Management (Note 12) 269 192
Asset Retirement Obligation (Note 8) 640 611
Liabilities of Discontinued
Operations (Note 3) 144 102
Future Income Taxes 4,459 5,193
-------------------------------------------------------------------------
16,432 16,905
-------------------------------------------------------------------------
Shareholders' Equity
Share capital (Note 9) 5,102 5,299
Share options, net - 10
Paid in surplus 90 28
Retained earnings 7,348 7,935
Foreign currency translation
adjustment 1,001 1,036
-------------------------------------------------------------------------
13,541 14,308
-------------------------------------------------------------------------
$ 29,973 $ 31,213
-------------------------------------------------------------------------

See accompanying Notes to Consolidated Financial Statements.



CONSOLIDATED STATEMENT OF CASH FLOWS (unaudited)

Three Months Ended Six Months Ended
June 30, June 30,
($ millions) 2005 2004 2005 2004
-------------------------------------------------------------------------

OPERATING ACTIVITIES
Net earnings
from
continuing
operations $ 786 $ 265 $ 661 $ 591
Depreciation,
depletion and
amortization 675 630 1,361 1,156
Future income
taxes (Note 6) (387) (38) (675) (342)
Cash tax on
sale of
assets (Note 4) 591 - 591 -
Unrealized
(gain) loss
on risk
management (Note 12) (314) 109 655 426
Unrealized
foreign
exchange
loss 105 32 123 71
Accretion
of asset
retirement
obligation (Note 8) 9 3 18 9
Gain on
divesti-
tures (Note 4) - (1) - (35)
Other 47 21 86 41
-------------------------------------------------------------------------
Cash flow
from
continuing
operations 1,512 1,021 2,820 1,917
Cash flow
from
discontinued
operations 60 110 165 209
-------------------------------------------------------------------------
Cash flow 1,572 1,131 2,985 2,126
Net change
in other
assets and
liabilities (16) (41) (14) (46)
Net change
in non-cash
working
capital
from
continuing
operations (682) (254) (116) (15)
Net change
in non-cash
working
capital
from
discontinued
operations (2) 17 (57) 170
-------------------------------------------------------------------------
872 853 2,798 2,235
-------------------------------------------------------------------------

INVESTING
ACTIVITIES
Business
combination
with Tom
Brown, Inc. - (2,335) - (2,335)
Capital
expendi-
tures (Note 2) (1,452) (1,035) (2,971) (2,306)
Proceeds on
disposal
of assets (Note 4) 2,406 110 2,459 463
Cash tax on
sale of
assets (Note 4) (591) - (591) -
Net change in
investments
and other (27) (28) (8) (17)
Net change
in non-cash
working
capital
from
continuing
operations 293 (173) 448 (112)
Discontinued
operations (50) (126) (107) (378)
-------------------------------------------------------------------------
579 (3,587) (770) (4,685)
-------------------------------------------------------------------------

FINANCING
ACTIVITIES
Net repayment
of revolving
long-term
debt (682) 455 (715) 447
Issuance of
long-term
debt - 2,761 - 2,761
Repayment of
long-term
debt - (454) (1) (549)
Issuance of
common
shares (Note 9) 83 43 184 154
Purchase of
common
shares (Note 9) (902) (12) (1,662) (230)
Dividends
on common
shares (66) (46) (110) (92)
Other (1) (4) (3) (5)
-------------------------------------------------------------------------
(1,568) 2,743 (2,307) 2,486
-------------------------------------------------------------------------

DEDUCT:
FOREIGN
EXCHANGE
GAIN ON CASH
AND CASH
EQUIVALENTS
HELD IN
FOREIGN
CURRENCY (1) - (2) -
-------------------------------------------------------------------------

(DECREASE)
INCREASE IN
CASH AND CASH
EQUIVALENTS (116) 9 (277) 36
CASH AND CASH
EQUIVALENTS,
BEGINNING
OF PERIOD 441 140 602 113
-------------------------------------------------------------------------
CASH AND CASH
EQUIVALENTS,
END OF PERIOD $ 325 $ 149 $ 325 $ 149
-------------------------------------------------------------------------

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. The Company is in the business of exploration for, and
production and marketing of, natural gas, crude oil and natural gas
liquids, as well as natural gas storage, natural gas liquids processing
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, 2004. 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, 2004.

2. SEGMENTED INFORMATION

The Company has defined its continuing operations into the following
segments:

- Upstream includes the Company's exploration for, and development and
production of, natural gas, crude oil and natural gas liquids and
other related activities. The majority of the Company's Upstream
operations are located in Canada and the United States. Frontier and
international new venture exploration is mainly focused on
opportunities in Africa, South America, the Middle East and
Greenland.

- Midstream & Market Optimization is conducted by the Midstream &
Marketing division. Midstream includes natural gas storage, natural
gas liquids processing and power generation. The Marketing groups'
primary responsibility is the sale of the Company's proprietary
production. The results are included in the Upstream segment.
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
Midstream & Market Optimization segment.

- Corporate includes unrealized gains or losses recorded on derivative
instruments. Once amounts are settled, the realized gains and losses
are recorded in the operating segment to which the derivative
instrument relates.

Midstream & Market Optimization purchases substantially all of the
Company's North American Upstream production. 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.

Operations that have been discontinued are disclosed in Note 3.

Results of Continuing Operations (For the three months ended June 30)

Midstream & Market
Upstream Optimization
-------------------------------------------------
2005 2004 2005 2004
-------------------------------------------------------------------------
Revenues, Net of
Royalties $ 2,227 $ 1,763 $ 1,039 $ 898
Expenses
Production and
mineral taxes 97 83 - -
Transportation
and selling 126 129 5 8
Operating 296 237 76 69
Purchased product - - 933 822
Depreciation,
depletion and
amortization 648 571 9 45
-------------------------------------------------------------------------
Segment Income $ 1,060 $ 743 $ 16 $ (46)
-------------------------------------------------------------------------


Corporate(x) Consolidated
-------------------------------------------------
2005 2004 2005 2004
-------------------------------------------------------------------------

Revenues, Net of
Royalties $ 315 $ (109) $ 3,581 $ 2,552
Expenses
Production and
mineral taxes - - 97 83
Transportation and
selling - - 131 137
Operating 1 (3) 373 303
Purchased product - - 933 822
Depreciation,
depletion and
amortization 18 14 675 630
-------------------------------------------------------------------------
Segment Income $ 296 $ (120) 1,372 577
-------------------------------------------------------------------------
Administrative 66 44
Interest, net 101 99
Accretion of asset
retirement obligation 9 3
Foreign exchange loss 119 18
Stock-based compensation 4 4
Gain on divestitures - (1)
-------------------------------------------------------------------------
299 167
-------------------------------------------------------------------------
Net Earnings Before
Income Tax 1,073 410
Income tax expense 287 145
-------------------------------------------------------------------------
Net Earnings From
Continuing Operations $ 786 $ 265
-------------------------------------------------------------------------

(x) For the three months ended June 30, the unrealized gain (loss) on
risk management is recorded in the Consolidated Statement of Earnings
as follows (see also Note 12):

2005 2004
-------------------------------------------------------------------------

Revenues, Net of Royalites - Corporate $ 315 $ (109)
Operating Expenses and Other - Corporate 1 (1)
-------------------------------------------------------------------------
Total Unrealized Gain (Loss) on Risk Management
- Continuing Operations $ 314 $ (108)
-------------------------------------------------------------------------


Results of Continuing Operations (For the three months ended June 30)

Upstream Canada United States
-------------------------------------------------
2005 2004 2005 2004
-------------------------------------------------------------------------

Revenues, Net of
Royalties $ 1,514 $ 1,266 $ 655 $ 443
Expenses
Production and
mineral taxes 29 18 68 65
Transportation and
selling 85 84 41 45
Operating 200 161 48 28
Depreciation,
depletion and
amortization 469 435 171 117
-------------------------------------------------------------------------
Segment Income $ 731 $ 568 $ 327 $ 188
-------------------------------------------------------------------------



Other Total Upstream
-------------------------------------------------
2005 2004 2005 2004
-------------------------------------------------------------------------

Revenues, Net of
Royalties $ 58 $ 54 $ 2,227 $ 1,763
Expenses
Production and
mineral taxes - - 97 83
Transportation and
selling - - 126 129
Operating 48 48 296 237
Depreciation,
depletion and
amortization 8 19 648 571
-------------------------------------------------------------------------
Segment Income $ 2 $ (13) $ 1,060 $ 743
-------------------------------------------------------------------------



Total Midstream
Midstream & Market Market & Market
Optimization Midstream Optimization Optimization
-----------------------------------------------------
2005 2004 2005 2004 2005 2004
-------------------------------------------------------------------------

Revenues $ 169 $ 172 $ 870 $ 726 $ 1,039 $ 898
Expenses
Transportation and
selling - - 5 8 5 8
Operating 64 56 12 13 76 69
Purchased product 87 118 846 704 933 822
Depreciation,
depletion and
amortization 9 43 - 2 9 45
-------------------------------------------------------------------------
Segment Income $ 9 $ (45) $ 7 $ (1) $ 16 $ (46)
-------------------------------------------------------------------------


Upstream Geographic and Product Information (Continuing Operations)
(For the three months ended June 30)


Produced Gas Produced Gas
-----------------------------------------------------
Canada United States Total
-----------------------------------------------------
2005 2004 2005 2004 2005 2004
-------------------------------------------------------------------------

Revenues, Net of
Royalties $ 1,184 $ 981 $ 601 $ 406 $ 1,785 $ 1,387
Expenses
Production and
mineral taxes 21 13 62 60 83 73
Transportation and
selling 71 69 41 45 112 114
Operating 122 97 48 28 170 125
-------------------------------------------------------------------------
Operating Cash Flow $ 970 $ 802 $ 450 $ 273 $ 1,420 $ 1,075
-------------------------------------------------------------------------



Oil & NGLs Oil & NGLs
-----------------------------------------------------
Canada United States Total
-----------------------------------------------------
2005 2004 2005 2004 2005 2004
-------------------------------------------------------------------------

Revenues, Net of
Royalties $ 330 $ 285 $ 54 $ 37 $ 384 $ 322
Expenses
Production and
mineral taxes 8 5 6 5 14 10
Transportation
and selling 14 15 - - 14 15
Operating 78 64 - - 78 64
-------------------------------------------------------------------------
Operating Cash Flow $ 230 $ 201 $ 48 $ 32 $ 278 $ 233
-------------------------------------------------------------------------


Other & Total
Upstream Other Total Upstream
-------------------------------------------------
2005 2004 2005 2004
-------------------------------------------------------------------------

Revenues, Net of
Royalties $ 58 $ 54 $ 2,227 $ 1,763
Expenses
Production and
mineral taxes - - 97 83
Transportation and
selling - - 126 129
Operating 48 48 296 237
-------------------------------------------------------------------------
Operating Cash Flow $ 10 $ 6 $ 1,708 $ 1,314
-------------------------------------------------------------------------


Results of Continuing Operations (For the six months ended June 30)

Midstream & Market
Upstream Optimization
-------------------------------------------------
2005 2004 2005 2004
-------------------------------------------------------------------------

Revenues, Net of
Royalties $ 4,333 $ 3,392 $ 2,566 $ 2,317
Expenses
Production and
mineral taxes 184 137 - -
Transportation and
selling 257 256 10 16
Operating 588 478 159 147
Purchased product - - 2,296 2,109
Depreciation,
depletion and
amortization 1,308 1,074 18 52
-------------------------------------------------------------------------
Segment Income $ 1,996 $ 1,447 $ 83 $ (7)
-------------------------------------------------------------------------



Corporate(x) Consolidated
-------------------------------------------------
2005 2004 2005 2004
-------------------------------------------------------------------------

Revenues, Net of
Royalties $ (657) $ (427) $ 6,242 $ 5,282
Expenses
Production and
mineral taxes - - 184 137
Transportation and
selling - - 267 272
Operating (2) (5) 745 620
Purchased product - - 2,296 2,109
Depreciation,
depletion and
amortization 35 30 1,361 1,156
-------------------------------------------------------------------------
Segment Income $ (690) $ (452) 1,389 988
-------------------------------------------------------------------------
Administrative 127 93
Interest, net 201 178
Accretion of asset
retirement obligation 18 9
Foreign exchange loss 150 77
Stock-based compensation 8 9
Gain on divestitures - (35)
-------------------------------------------------------------------------
504 331
-------------------------------------------------------------------------
Net Earnings Before Income Tax 885 657
Income tax expense 224 66
-------------------------------------------------------------------------
Net Earnings From Continuing Operations $ 661 $ 591
-------------------------------------------------------------------------

(x) For the six months ended June 30, the unrealized loss on risk
management is recorded in the Consolidated Statement of Earnings as
follows (see also Note 12):

2005 2004
-------------------------------------------------------------------------

Revenues, Net of Royalites - Corporate $ (657) $ (429)
Operating Expenses and Other - Corporate (2) (4)
-------------------------------------------------------------------------
Total Unrealized Loss on Risk Management
- Continuing Operations $ (655) $ (425)
-------------------------------------------------------------------------


Results of Continuing Operations (For the six months ended June 30)


Upstream Canada United States
-------------------------------------------------
2005 2004 2005 2004
-------------------------------------------------------------------------

Revenues, Net of
Royalties $ 2,940 $ 2,487 $ 1,274 $ 801
Expenses
Production and
mineral taxes 51 38 133 99
Transportation and
selling 172 186 85 70
Operating 392 335 92 48
Depreciation,
depletion and
amortization 931 851 359 199
-------------------------------------------------------------------------
Segment Income $ 1,394 $ 1,077 $ 605 $ 385
-------------------------------------------------------------------------



Other Total Upstream
-------------------------------------------------
2005 2004 2005 2004
-------------------------------------------------------------------------

Revenues, Net of
Royalties $ 119 $ 104 $ 4,333 $ 3,392
Expenses
Production and
mineral taxes - - 184 137
Transportation and
selling - - 257 256
Operating 104 95 588 478
Depreciation,
depletion and
amortization 18 24 1,308 1,074
-------------------------------------------------------------------------
Segment Income $ (3) $ (15) $ 1,996 $ 1,447
-------------------------------------------------------------------------


Midstream & Market Total Midstream
Optimization Market & Market
Midstream Optimization Optimization
-----------------------------------------------------
2005 2004 2005 2004 2005 2004
-------------------------------------------------------------------------

Revenues $ 735 $ 723 $ 1,831 $ 1,594 $ 2,566 $ 2,317
Expenses
Transportation
and selling - - 10 16 10 16
Operating 137 127 22 20 159 147
Purchased product 515 567 1,781 1,542 2,296 2,109
Depreciation,
depletion and
amortization 18 50 - 2 18 52
-------------------------------------------------------------------------
Segment Income $ 65 $ (21) $ 18 $ 14 $ 83 $ (7)
-------------------------------------------------------------------------

Upstream Geographic and Product Information (Continuing Operations)
(For the six months ended June 30)


Produced Gas Produced Gas
-----------------------------------------------------
Canada United States Total
2005 2004 2005 2004 2005 2004
-------------------------------------------------------------------------

Revenues, Net of
Royalties $ 2,317 $ 1,917 $ 1,165 $ 736 $ 3,482 $ 2,653
Expenses
Production and
mineral taxes 37 28 121 91 158 119
Transportation and
selling 141 150 85 70 226 220
Operating 243 198 92 48 335 246
-------------------------------------------------------------------------
Operating Cash Flow $ 1,896 $ 1,541 $ 867 $ 527 $ 2,763 $ 2,068
-------------------------------------------------------------------------


Oil & NGLs Oil & NGLs
-----------------------------------------------------
Canada United States Total
-----------------------------------------------------
2005 2004 2005 2004 2005 2004
-------------------------------------------------------------------------

Revenues, Net of
Royalties $ 623 $ 570 $ 109 $ 65 $ 732 $ 635
Expenses
Production and
mineral taxes 14 10 12 8 26 18
Transportation and
selling 31 36 - - 31 36
Operating 149 137 - - 149 137
-------------------------------------------------------------------------
Operating Cash Flow $ 429 $ 387 $ 97 $ 57 $ 526 $ 444
-------------------------------------------------------------------------


Other & Total Upstream Other Total Upstream
-------------------------------------------------
2005 2004 2005 2004
-------------------------------------------------------------------------

Revenues, Net of
Royalties $ 119 $ 104 $ 4,333 $ 3,392
Expenses
Production and
mineral taxes - - 184 137
Transportation and
selling - - 257 256
Operating 104 95 588 478
-------------------------------------------------------------------------
Operating Cash Flow $ 15 $ 9 $ 3,304 $ 2,521
-------------------------------------------------------------------------


Capital Expenditures (Continuing Operations)

Three Months Ended Six Months Ended
June 30, June 30,
--------------------------------------------------
2005 2004 2005 2004
-------------------------------------------------------------------------

Upstream
Canada $ 850 $ 675 $ 1,894 $ 1,703
United States 481 316 893 526
Other Countries 16 19 29 34
-------------------------------------------------------------------------
1,347 1,010 2,816 2,263
Midstream & Market
Optimization 96 16 140 25
Corporate 9 9 15 18
-------------------------------------------------------------------------
Total $ 1,452 $ 1,035 $ 2,971 $ 2,306
-------------------------------------------------------------------------
-------------------------------------------------------------------------


Property, Plant and Equipment and Total Assets

Property, Plant
and Equipment Total Assets
--------------------------------------------------
As at As at
--------------------------------------------------
June 30, December 31, June 30, December 31,
2005 2004 2005 2004
-------------------------------------------------------------------------

Upstream $ 20,918 $ 22,097 $ 25,395 $ 26,118
Midstream & Market
Optimization 914 804 1,732 1,904
Corporate 219 239 946 1,412
Assets of
Discontinued
Operations (Note 3) 1,900 1,779
-------------------------------------------------------------------------
Total $ 22,051 $ 23,140 $ 29,973 $ 31,213
-------------------------------------------------------------------------
-------------------------------------------------------------------------

3. DISCONTINUED OPERATIONS

At December 31, 2004, EnCana decided to divest of its Ecuador operations
and such operations have been accounted for as discontinued operations.
EnCana's Ecuador operations include the 100 percent working interest in
the Tarapoa Block, majority operating interest in Blocks 14, 17 and
Shiripuno, the non-operated economic interest in Block 15 and the
36.3 percent indirect equity investment in Oleoducto de Crudos Pesados
(OCP) Ltd. ("OCP"), which is the owner of a crude oil pipeline in Ecuador
that ships crude oil from the producing areas of Ecuador to an export
marine terminal. The Company is a shipper on the OCP Pipeline and pays
commercial rates for tariffs. The majority of the Company's crude oil
produced in Ecuador is sold to a single marketing company. Payments are
secured by letters of credit from a major financial institution which has
a high quality investment grade credit rating.

On December 1, 2004, the Company completed the sale of its 100 percent
interest in EnCana (U.K.) Limited for net cash consideration of
approximately $2.1 billion. EnCana's U.K. operations included crude oil
and natural gas interests in the U.K. central North Sea including the
Buzzard, Scott and Telford oil fields, as well as other satellite
discoveries and exploration licenses. A gain on sale of approximately
$1.4 billion was recorded. Accordingly, these operations have been
accounted for as discontinued operations.

Consolidated Statement of Earnings

The following table presents the effect of the discontinued operations in
the Consolidated Statement of Earnings:


For the three months ended June 30
------------------------------------------------
Ecuador United Kingdom Total
------------------------------------------------
2005 2004 2005 2004 2005 2004
-------------------------------------------------------------------------

Revenues, Net
of Royalties $ 241 $ 111 $ - $ 55 $ 241 $ 166
-------------------------------------------------------------------------

Expenses
Production and
mineral taxes 30 13 - - 30 13
Transportation and
selling 16 14 - 11 16 25
Operating 34 29 - 14 34 43
Depreciation, depletion
and amortization - 69 - 34 - 103
Interest, net - (1) - (2) - (3)
Accretion of asset
retirement obligation 1 1 - 1 1 2
Foreign exchange
loss (gain) 1 - (3) 3 (2) 3
-------------------------------------------------------------------------
82 125 (3) 61 79 186
-------------------------------------------------------------------------
Net Earnings (Loss)
Before Income Tax 159 (14) 3 (6) 162 (20)
Income tax expense
(recovery) 108 (1) 1 (4) 109 (5)
-------------------------------------------------------------------------
Net Earnings (Loss) From
Discontinued Operations $ 51 $ (13) $ 2 $ (2) $ 53 $ (15)
-------------------------------------------------------------------------
-------------------------------------------------------------------------


For the six months ended June 30
------------------------------------------------
Ecuador United Kingdom Total
------------------------------------------------
2005 2004 2005 2004 2005 2004
-------------------------------------------------------------------------

Revenues, Net
of Royalties(x) $ 432 $ 190 $ - $ 96 $ 432 $ 286
-------------------------------------------------------------------------

Expenses
Production and mineral
taxes 52 24 - - 52 24
Transportation and
selling 31 33 - 19 31 52
Operating 62 59 - 20 62 79
Depreciation, depletion
and amortization - 134 - 67 - 201
Interest, net - (1) - (2) - (3)
Accretion of asset
retirement obligation 1 1 - 2 1 3
Foreign exchange
loss (gain) 1 - (3) 2 (2) 2
-------------------------------------------------------------------------
147 250 (3) 108 144 358
-------------------------------------------------------------------------
Net Earnings (Loss)
Before Income Tax 285 (60) 3 (12) 288 (72)
Income tax expense
(recovery) 154 (16) 1 (5) 155 (21)
-------------------------------------------------------------------------
Net Earnings (Loss) From
Discontinued Operations $ 131 $ (44) $ 2 $ (7) $ 133 $ (51)
-------------------------------------------------------------------------
-------------------------------------------------------------------------
(x) Revenues, net of royalties in Ecuador include $55 million of realized
losses (2004 - $100 million) and $11 million of unrealized gains
(2004 - $84 million of losses) related to derivative financial
instruments.

Consolidated Balance Sheet

The impact of the discontinued operations in the Consolidated Balance
Sheet is as follows:


As at
---------------------------------------------------------
June 30, 2005 December 31, 2004
---------------------------------------------------------
United United
Ecuador Kingdom Total Ecuador Kingdom Syncrude Total
-------------------------------------------------------------------------
Assets
Cash and cash
equivalents $ 4 $ 6 $ 10 $ 2 $ 12 $ - $ 14
Accounts
receivable and
accrued revenues 132 - 132 111 13 - 124
Risk management - - - 3 - - 3
Inventories 23 - 23 15 - - 15
-------------------------------------------------------------------------
159 6 165 131 25 - 156
Property, plant
and equipment,
net 1,391 - 1,391 1,295 - - 1,295
Investments and
other assets 344 - 344 328 - - 328
-------------------------------------------------------------------------
$1,894 $ 6 $1,900 $1,754 $ 25 $ - $1,779
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Liabilities
Accounts payable
and accrued
liabilities $ 103 $ 28 $ 131 $ 61 $ 32 $ 3 $ 96
Income tax
payable 127 1 128 101 - - 101
Risk management 61 - 61 72 - - 72
-------------------------------------------------------------------------
291 29 320 234 32 3 269
Asset retirement
obligation 23 - 23 22 - - 22
Future income
taxes 121 1 122 80 11 - 91
-------------------------------------------------------------------------
435 30 465 336 43 3 382
-------------------------------------------------------------------------
Net Assets of
Discontinued
Operations $1,459 $ (24) $1,435 $1,418 $ (18) $ (3) $1,397
-------------------------------------------------------------------------
-------------------------------------------------------------------------

Contingencies

In Ecuador, a subsidiary of EnCana has a 40 percent non-operated economic
interest in relation to Block 15 pursuant to a contract with a subsidiary
of Occidental Petroleum Corporation. In its 2004 filings with Securities
regulatory authorities, Occidental Petroleum Corporation indicated that
its subsidiary had received formal notification from Petroecuador, the
state oil company of Ecuador, initiating proceedings to determine if the
subsidiary had violated the Hydrocarbons Law and its Participation
Contract for Block 15 with Petroecuador and whether such violations
constitute grounds for terminating the Participation Contract.

In its filings, Occidental Petroleum Corporation indicated that it
believes it has complied with all material obligations under the
Participation Contract and that any termination of the Participation
Contract by Ecuador based upon these stated allegations would be
unfounded and would constitute an unlawful expropriation under
international treaties.

In addition to the above, the Company continues to proceed with its
arbitration related to value-added tax ("VAT") owed to the Company and
has been in discussions related to certain income tax matters related to
interest deductibility and other matters in Ecuador.

4. DIVESTITURES

Total proceeds received on sale of assets and investments was
$2,459 million (2004 - $463 million) as described below:

Upstream
In 2005, the Company has completed the disposition of mature conventional
oil and natural gas assets for proceeds of $408 million (2004 -
$419 million).

In May, the Company completed the sale of its Gulf of Mexico assets for
approximately $2.1 billion resulting in net proceeds of approximately
$1.5 billion after deducting $591 million in tax plus other adjustments.
In accordance with full cost accounting for oil and gas activities,
proceeds were credited to property, plant and equipment.

Other
In March 2004, the Company sold its equity investment in a well servicing
company for approximately $44 million, recording a pre-tax gain of
$34 million.

5. FOREIGN EXCHANGE LOSS

Three Months Ended Six Months Ended
June 30, June 30,
----------------------------------------------------
2005 2004 2005 2004
-------------------------------------------------------------------------

Unrealized Foreign
Exchange Loss on
Translation of U.S.
Dollar Debt Issued
in Canada $ 47 $ 32 $ 65 $ 71
Other Foreign Exchange
Losses (Gains) 72 (14) 85 6
-------------------------------------------------------------------------
$ 119 $ 18 $ 150 $ 77
-------------------------------------------------------------------------
-------------------------------------------------------------------------

6. INCOME TAXES

The provision for income taxes is as follows:

Three Months Ended Six Months Ended
June 30, June 30,
----------------------------------------------------
2005 2004 2005 2004
-------------------------------------------------------------------------

Current
Canada $ 124 $ 180 $ 310 $ 402
United States 559 7 591 15
Other (9) (4) (2) (9)
-------------------------------------------------------------------------
Total Current Tax 674 183 899 408
-------------------------------------------------------------------------

Future (387) (38) (675) (233)
Future Tax Rate
Reductions - - - (109)
-------------------------------------------------------------------------
Total Future Tax (387) (38) (675) (342)
-------------------------------------------------------------------------
$ 287 $ 145 $ 224 $ 66
-------------------------------------------------------------------------
-------------------------------------------------------------------------

The following table reconciles income taxes calculated at the Canadian
statutory rate with the actual income taxes:

Three Months Ended Six Months Ended
June 30, June 30,
----------------------------------------------------
2005 2004 2005 2004
-------------------------------------------------------------------------

Net Earnings Before
Income Tax $ 1,073 $ 410 $ 885 $ 657
Canadian Statutory
Rate 37.9% 39.1% 37.9% 39.1%
-------------------------------------------------------------------------
Expected Income Tax 406 160 335 257

Effect on Taxes
Resulting from:
Non-deductible
Canadian crown
payments 44 51 86 103
Canadian resource
allowance (42) (63) (90) (123)
Canadian resource
allowance on
unrealized risk
management (gains)
losses (5) 2 13 19
Statutory and other
rate differences (69) (17) (84) (30)
Effect of tax rate
changes - - - (109)
Non-taxable capital
losses 11 7 16 14
Previously unrecognized
capital losses - 2 - 15
Tax basis retained
on dispositions (68) (23) (68) (103)
Large corporations tax - 3 4 7
Other 10 23 12 16
-------------------------------------------------------------------------
$ 287 $ 145 $ 224 $ 66
-------------------------------------------------------------------------
Effective Tax Rate 26.7% 35.4% 25.3% 10.0%
-------------------------------------------------------------------------
-------------------------------------------------------------------------

7. LONG-TERM DEBT
As at As at
June 30, December 31,
2005 2004
-------------------------------------------------------------------------

Canadian Dollar Denominated Debt
Revolving credit and term loan borrowings $ 1,172 $ 1,515
Unsecured notes 1,285 1,309
-------------------------------------------------------------------------
2,457 2,824
-------------------------------------------------------------------------

U.S. Dollar Denominated Debt
Revolving credit and term loan borrowings - 399
Unsecured notes and debentures 4,640 4,641
-------------------------------------------------------------------------
4,640 5,040
-------------------------------------------------------------------------

Increase in Value of Debt Acquired(x) 63 66
Current Portion of Long-Term Debt (309) (188)
-------------------------------------------------------------------------
$ 6,851 $ 7,742
-------------------------------------------------------------------------
-------------------------------------------------------------------------

(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
22 years.

On June 17, 2005, EnCana announced its intention to seek the necessary
approvals to redeem three series of unsecured notes with a total face
value of C$200 million. Accordingly, these unsecured notes have been
recorded in current portion of long-term debt.

8. 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 properties:

As at As at
June 30, December 31,
2005 2004
-------------------------------------------------------------------------

Asset Retirement Obligation, Beginning of Year $ 611 $ 383
Liabilities Incurred 48 98
Liabilities Settled (10) (16)
Liabilities Disposed (22) (35)
Change in Estimated Future Cash Flows 6 124
Accretion Expense 18 22
Other (11) 35
-------------------------------------------------------------------------
Asset Retirement Obligation, End of Period $ 640 $ 611
-------------------------------------------------------------------------
-------------------------------------------------------------------------

9. SHARE CAPITAL

June 30, 2005 December 31, 2004
----------------------------------------------------
(millions) Number Amount Number Amount
-------------------------------------------------------------------------

Common Shares
Outstanding,
Beginning of Year 900.6 $ 5,299 921.2 $ 5,305
Shares Issued under
Option Plans 9.8 184 19.4 281
Shares Repurchased (50.2) (381) (40.0) (287)
-------------------------------------------------------------------------
Common Shares
Outstanding,
End of Period 860.2 $ 5,102 900.6 $ 5,299
-------------------------------------------------------------------------
-------------------------------------------------------------------------

Information related to common shares and stock options has been restated
to reflect the effect of the common share split approved in April 2005.

Normal Course Issuer Bid
To June 30, 2005, the Company purchased 50,211,198 Common Shares for
total consideration of approximately $1,662 million. Of the amount paid,
$381 million was charged to Share capital, $10 million was charged to
Paid in surplus and $1,271 million was charged to Retained earnings.
Included in the above are 5.5 million Common Shares which have been
repurchased by a wholly owned Trust and are held for issuance upon
vesting of units under EnCana's Performance Share Unit plan (see
Note 10).

On October 26, 2004, the Company received regulatory approval for a new
Normal Course Issuer Bid commencing October 29, 2004. Under this bid, the
Company may purchase for cancellation up to 46,229,000 of its Common
Shares, representing five percent of the approximately 924.58 million
Common Shares outstanding as of the filing of the bid on October 22,
2004. On February 4, 2005, the Company received regulatory approval for
an amendment to the Normal Course Issuer Bid which increases the number
of shares available for purchase from five percent of the issued and
outstanding Common Shares to ten percent of the public float of Common
Shares (a total of approximately 92.2 million Common Shares). The current
Normal Course Issuer Bid expires on October 28, 2005.

Stock Options
The Company has stock-based compensation plans that allow employees and
directors 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 grant date.
Options granted under predecessor and/or related company replacement
plans expire up to ten 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
("TSAR's") attached to them at June 30, 2005. Information related to
TSAR's is included in Note 10.

Weighted
Stock Average
Options Exercise
(millions) Price (C$)
-------------------------------------------------------------------------

Outstanding, Beginning of Year 36.2 23.15
Exercised (9.8) 22.65
Forfeited (0.3) 19.94
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Outstanding, End of Period 26.1 23.37
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Exercisable, End of Period 20.9 23.23
-------------------------------------------------------------------------
-------------------------------------------------------------------------


Outstanding Options Exercisable Options
--------------------------------------------------------------
Weighted
Number of Average Weighted Number of Weighted
Range of Options Remaining Average Options Average
Exercise Outstanding Contractual Exercise Outstanding Exercise
Price (millions) Life (years) Price (C$) (millions) Price (C$)
-------------------------------------------------------------------------

10.00 to 12.49 0.8 3.8 11.43 0.8 11.43
12.50 to 14.99 0.4 1.6 13.10 0.4 13.10
15.00 to 21.99 0.6 1.4 20.08 0.5 19.89
22.00 to 26.50 24.3 2.1 24.00 19.2 24.02
-------------------------------------------------------------------------
26.1 2.1 23.37 20.9 23.23
-------------------------------------------------------------------------
-------------------------------------------------------------------------

EnCana has recorded stock-based compensation expense in the Consolidated
Statement of Earnings for stock options granted to employees and
directors in 2003 using the fair-value method. Stock options granted in
2004 and 2005 have an associated Tandem Share Appreciation Right
attached. Compensation expense has not been recorded in the Consolidated
Statement of Earnings related to stock options granted prior to 2003. If
the Company had applied the fair-value method to options granted prior to
2003, pro forma Net Earnings and Net Earnings per Common Share for the
three months ended June 30, 2005 would be unchanged (three months ended
2004 - $241 million; $0.26 per common share - basic; $0.26 per common
share - diluted). Pro forma Net Earnings and Net Earnings per Common
Share for the six months ended June 30, 2005 would be unchanged (2004 -
$522 million; $0.57 per common share - basic; $0.56 per common share
diluted).

10. COMPENSATION PLANS

The tables below outline certain information related to EnCana's
compensation plans at June 30, 2005. Additional information is contained
in Note 16 of the Company's annual audited Consolidated Financial
Statements for the year ended December 31, 2004.

A) Pensions

The following table summarizes the net benefit plan expense:

Three Months Ended Six Months Ended
June 30, June 30,
----------------------------------------------------
2005 2004 2005 2004
-------------------------------------------------------------------------

Current Service Cost $ 2 $ 1 $ 4 $ 3
Interest Cost 3 3 6 6
Expected Return on
Plan Assets (3) (3) (6) (6)
Amortization of Net
Actuarial Loss - 2 1 3
Amortization of
Transitional
Obligation 1 (1) - (2)
Amortization of Past
Service Cost - 1 1 1
Expense for Defined
Contribution Plan 5 4 10 7
-------------------------------------------------------------------------
Net Benefit Plan
Expense $ 8 $ 7 $ 16 $ 12
-------------------------------------------------------------------------
-------------------------------------------------------------------------

EnCana previously disclosed in its annual audited Consolidated Financial
Statements for the year ended December 31, 2004 that it expected to
contribute $6 million to its defined benefit pension plans in 2005. The
Company now anticipates that it will contribute $8 million to the defined
benefit pension plans in 2005. At June 30, 2005, contributions of
$4 million have been made.

B) Share Appreciation Rights ("SAR's")

The following table summarizes the information about SAR's at June 30,
2005:

Weighted
Average
Outstanding Exercise
SAR's Price
-------------------------------------------------------------------------

Canadian Dollar Denominated (C$)
Outstanding, Beginning of Year 930,510 18.31
Exercised (593,558) 15.55
Forfeited (1,530) 23.14
-------------------------------------------------------------------------
Outstanding, End of Period 335,422 23.15
-------------------------------------------------------------------------
Exercisable, End of Period 335,422 23.15
-------------------------------------------------------------------------
-------------------------------------------------------------------------

U.S. Dollar Denominated (US$)
Outstanding, Beginning of Year 771,860 14.40
Exercised (258,774) 14.30
-------------------------------------------------------------------------
Outstanding, End of Period 513,086 14.45
-------------------------------------------------------------------------
Exercisable, End of Period 513,086 14.45
-------------------------------------------------------------------------
-------------------------------------------------------------------------

To June 30, EnCana recorded compensation costs of $10 million related to
the outstanding SAR's (2004 - $3 million).

C) Tandem Share Appreciation Rights ("TSAR's")

The following table summarizes the information about Tandem SAR's at
June 30, 2005:

Weighted
Average
Outstanding Exercise
TSAR's Price
-------------------------------------------------------------------------

Canadian Dollar Denominated (C$)
Outstanding, Beginning of Year 1,735,000 27.77
Granted 6,876,612 38.56
Exercised (112,730) 27.13
Forfeited (149,500) 29.68
-------------------------------------------------------------------------
Outstanding, End of Period 8,349,382 36.61
-------------------------------------------------------------------------
Exercisable, End of Period 272,810 27.27
-------------------------------------------------------------------------
-------------------------------------------------------------------------

To June 30, EnCana recorded compensation costs of $31 million related to
the outstanding TSAR's (2004 - nil).

D) Deferred Share Units ("DSU's")

The following table summarizes the information about DSU's at June 30,
2005:

Weighted
Average
Outstanding Exercise
DSU's Price
-------------------------------------------------------------------------

Canadian Dollar Denominated (C$)
Outstanding, Beginning of Year 750,612 24.81
Granted, Directors 77,552 43.14
Units, in Lieu of Dividends 2,717 46.01
-------------------------------------------------------------------------
Outstanding, End of Period 830,881 26.59
-------------------------------------------------------------------------
Exercisable, End of Period 830,881 26.59
-------------------------------------------------------------------------
-------------------------------------------------------------------------

To June 30, EnCana recorded compensation costs of $13 million related to
the outstanding DSU's (2004 - $5 million).

E) Performance Share Units ("PSU's")

The following table summarizes the information about PSU's at June 30,
2005:

Weighted
Average
Outstanding Grant
PSU's Price
-------------------------------------------------------------------------

Canadian Dollar Denominated (C$)
Outstanding, Beginning of Year 3,294,206 26.71
Granted 1,715,873 38.21
Forfeited (166,293) 30.45
-------------------------------------------------------------------------
Outstanding, End of Period 4,843,786 30.65
-------------------------------------------------------------------------
Exercisable, End of Period - -
-------------------------------------------------------------------------
-------------------------------------------------------------------------

U.S. Dollar Denominated (US$)
Outstanding, Beginning of Year 449,230 20.56
Granted 387,924 30.95
Forfeited (29,018) 26.80
-------------------------------------------------------------------------
Outstanding, End of Period 808,136 25.32
-------------------------------------------------------------------------
Exercisable, End of Period - -
-------------------------------------------------------------------------
-------------------------------------------------------------------------

To June 30, EnCana recorded compensation costs of $33 million related to
the outstanding PSU's (2004 - $10 million).

At June 30, 2005, EnCana has approximately 5.5 million Common Shares held
in trust for issuance upon vesting of the PSU's.

11. PER SHARE AMOUNTS

The following table summarizes the Common Shares used in calculating Net
Earnings per Common Share:

Three Months Ended Six Months Ended
-------------------------------------------------------
March 31, June 30, June 30,
-------------------------------------------------------
(millions) 2005 2005 2004 2005 2004
-------------------------------------------------------------------------

Weighted Average
Common Shares
Outstanding
- Basic 891.8 872.0 920.6 881.8 921.2
Effect of Dilutive
Securities 17.2 19.9 10.4 18.9 12.4
-------------------------------------------------------------------------
Weighted Average
Common Shares
Outstanding
- Diluted 909.0 891.9 931.0 900.7 933.6
-------------------------------------------------------------------------
-------------------------------------------------------------------------

The amounts above have been restated to reflect the effect of the common
share split approved in April 2005.

12. FINANCIAL INSTRUMENTS AND RISK MANAGEMENT

As a means of managing commodity price volatility, EnCana entered into
various financial instrument agreements and physical contracts. The
following information presents all positions for financial instruments.

Realized and Unrealized (Loss) Gain on Risk Management Activities

The following table summarizes the gains and losses on risk management
activities:

Realized Unrealized
-----------------------------------------------------
Q1 Q2 YTD Q1 Q2 YTD
-------------------------------------------------------------------------

Revenues, Net of
Royalites $ (20) $ (114) $ (134) $ (972) $ 315 $ (657)
Operating Expenses
and Other 5 5 $ 10 3 (1) $ 2
-------------------------------------------------------------------------
Total (Loss) Gain on
Risk Management -
Continuing Operations (15) (109) (124) (969) 314 (655)
(Loss) Gain on Risk
Management -
Discontinued
Operations (23) (32) (55) (20) 31 11
-------------------------------------------------------------------------
$ (38) $ (141) $ (179) $ (989) $ 345 $ (644)
-------------------------------------------------------------------------
-------------------------------------------------------------------------

Amounts Recognized on Transition

As discussed in Note 2 to the annual audited Consolidated Financial
Statements for the year ended December 31, 2004, on January 1, 2004, the
fair value of all outstanding financial instruments that were not
considered accounting hedges was recorded in the Consolidated Balance
Sheet with an offsetting net deferred loss amount (the "transition
amount"). The transition amount is recognized into net earnings over the
life of the related contracts. Changes in fair value after that time are
recorded in the Consolidated Balance Sheet with an associated unrealized
gain or loss recorded in net earnings. The estimated fair value of all
derivative instruments is based on quoted market prices or, in their
absence, third party market indications and forecasts.

At June 30, 2005, a net unrealized gain remains to be recognized over the
next four years as follows:
Unrealized
Gain (Loss)
-------------------------------------------------------------------------

2005
Three months ended September 30, 2005 $ 9
Three months ended December 31, 2005 9
-------------------------------------------------------------------------
Total remaining to be recognized in 2005 $ 18
-------------------------------------------------------------------------
-------------------------------------------------------------------------

2006 $ 24
2007 15
2008 1
-------------------------------------------------------------------------
Total to be recognized in 2006 through to 2008 $ 40
-------------------------------------------------------------------------
-------------------------------------------------------------------------

-------------------------------------------------------------------------
Total to be recognized $ 58
-------------------------------------------------------------------------
-------------------------------------------------------------------------

Total to be recognized - Continuing Operations $ 59
Total to be recognized - Discontinued Operations (1)
-------------------------------------------------------------------------
$ 58
-------------------------------------------------------------------------
-------------------------------------------------------------------------

Fair Value of Outstanding Risk Management Positions

The following table presents a reconciliation of the change in the
unrealized amounts from January 1, 2005 to June 30, 2005:

Total
Transition Fair Market Unrealized
Amounts Value Gain (Loss)
-------------------------------------------------------------------------

Fair Value of Contracts,
Beginning of Year $ (72) $ (189)
Change in Fair Value of Contracts
in Place at Beginning of Year - (678) $ (678)
Fair Value of Contracts in Place at
Transition Realized in 2005 14 (14) -
Fair Value of Contracts Entered
into Since Beginning of Year - 34 34
-------------------------------------------------------------------------
Fair Value of Contracts
Outstanding $ (58) $ (847) $ (644)
-------------------------------------------------------------------------

Unamortized Premiums Paid on
Collars and Options 93
-------------------------------------------------------------------------
Fair Value of Contracts Outstanding
and Premiums Paid, End of Period $ (754)
-------------------------------------------------------------------------
-------------------------------------------------------------------------

Amounts Allocated to Continuing
Operations $ (59) $ (693) $ (655)
Amounts Allocated to Discontinued
Operations 1 (61) 11
-------------------------------------------------------------------------
$ (58) $ (754) $ (644)
-------------------------------------------------------------------------
-------------------------------------------------------------------------

At June 30, 2005, the net deferred amounts recognized on transition and
the risk management amounts are recorded in the Consolidated Balance
Sheet as follows:
As at
June 30,
2005
-------------------------------------------------------------------------

Remaining Deferred Amounts Recognized on Transition
Accounts receivable and accrued revenues $ 2
Investments and other assets 1

Accounts payable and accrued liabilities 32
Other liabilities 30
-------------------------------------------------------------------------
Net Deferred Gain - Continuing Operations $ 59
Net Deferred Loss - Discontinued Operations (1)
-------------------------------------------------------------------------
$ 58
-------------------------------------------------------------------------
-------------------------------------------------------------------------

Risk Management
Current asset $ 160
Long-term asset 106

Current liability 690
Long-term liability 269
-------------------------------------------------------------------------
Net Risk Management Liability - Continuing Operations $ (693)
Net Risk Management Liability - Discontinued Operations (61)
-------------------------------------------------------------------------
$ (754)
-------------------------------------------------------------------------
-------------------------------------------------------------------------

A summary of all unrealized estimated fair value financial positions is
as follows:
As at
June 30,
2005
-------------------------------------------------------------------------

Commodity Price Risk
Natural gas $ (489)
Crude oil (225)
Power 3
Interest Rate Risk 18
-------------------------------------------------------------------------
Total Fair Value Positions - Continuing Operations $ (693)
Total Fair Value Positions - Discontinued Operations (61)
-------------------------------------------------------------------------
$ (754)
-------------------------------------------------------------------------
-------------------------------------------------------------------------

Information with respect to power and interest rate risk contracts in
place at December 31, 2004 is disclosed in Note 17 to the Company's
annual audited Consolidated Financial Statements. No significant new
contracts have been entered into as at June 30, 2005.

Natural Gas

At June 30, 2005, the Company's gas risk management activities from
financial contracts had an unrealized loss of $546 million and a fair
market value position of $(489) million. The contracts were as follows:

Notional Fair
Volumes Market
(MMcf/d) Term Average Price Value
-------------------------------------------------------------------------

Sales Contracts
Fixed Price Contracts
NYMEX Fixed Price 770 2005 6.74 US$/Mcf $ (71)
Colorado Interstate
Gas (CIG) 114 2005 4.87 US$/Mcf (32)
Other 110 2005 5.21 US$/Mcf (33)

NYMEX Fixed Price 525 2006 5.66 US$/Mcf (429)
Colorado Interstate
Gas (CIG) 100 2006 4.44 US$/Mcf (92)
Houston Ship Channel
(HSC) 90 2006 5.08 US$/Mcf (84)
Rockies 35 2006 4.45 US$/Mcf (33)
Other 46 2006 4.69 US$/Mcf (43)

Collars and Other Options
Purchased NYMEX Put
Options 1,059 2005 5.64 US$/Mcf (33)
NYMEX 3-Way Call
Spread 180 2005 5.00/6.69/
7.69 US$/Mcf (19)

Purchased NYMEX Put
Options 243 2006 5.18 US$/Mcf (17)

Basis Contracts
Fixed NYMEX to
AECO Basis 883 2005 (0.66) US$/Mcf 52
Fixed NYMEX to
Rockies Basis 257 2005 (0.48) US$/Mcf 18
Other 469 2005 (0.50) US$/Mcf 11

Fixed NYMEX to
AECO Basis 703 2006 (0.65) US$/Mcf 61
Fixed NYMEX to
Rockies Basis 324 2006 (0.58) US$/Mcf 27
Fixed NYMEX to
CIG Basis 301 2006 (0.83) US$/Mcf 9
Other 182 2006 (0.36) US$/Mcf 8

Fixed Rockies to
CIG Basis 12 2007 (0.10) US$/Mcf -
Fixed NYMEX to
AECO Basis 355 2007-2008 (0.66) US$/Mcf 41
Fixed NYMEX to
Rockies Basis 350 2007-2008 (0.64) US$/Mcf 58
Fixed NYMEX to
CIG Basis 157 2007-2009 (0.75) US$/Mcf 38

Purchase Contracts
Fixed Price Contracts
Waha Purchase 27 2005 5.90 US$/Mcf 5
Waha Purchase 23 2006 5.32 US$/Mcf 17

Basis Contracts
Fixed NYMEX to Ventura 32 2005 (0.44) US$/Mcf -

-------------------------------------------------------------------------
(541)
Other Financial Positions(x) (5)
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Total Unrealized Loss on
Financial Contracts (546)
Unamortized Premiums
Paid on Options 57
-------------------------------------------------------------------------
Total Fair Value Positions $ (489)
-------------------------------------------------------------------------
-------------------------------------------------------------------------
(x) Other financial positions are part of the ongoing operations of the
Company's proprietary production management and gas storage
optimization activities.

Crude Oil

At June 30, 2005, the Company's oil risk management activities from
financial contracts had an unrealized loss of $322 million and a fair
market value position of $(286) million. The contracts were as follows:

Notional Fair
Volumes Average Price Market
(bbl/d) Term (US$/bbl) Value
-------------------------------------------------------------------------

Fixed WTI NYMEX Price 41,000 2005 28.41 $ (224)
Costless 3-Way 20.00/25.00/
Put Spread 9,000 2005 28.78 (48)
Unwind WTI NYMEX
Fixed Price (7,200) 2005 42.70 21
Purchased WTI NYMEX
Call Options (38,000) 2005 49.76 59
Purchased WTI NYMEX
Put Options 35,000 2005 40.00 (12)

Fixed WTI NYMEX Price 15,000 2006 34.56 (128)
Unwind WTI NYMEX
Fixed Price (1,300) 2006 52.75 3
Purchased WTI NYMEX
Call Options (12,000) 2006 60.00 13
Purchased WTI NYMEX
Put Options 22,000 2006 27.36 (7)
-------------------------------------------------------------------------
(323)
Other Financial
Positions(x) 1
-------------------------------------------------------------------------
Total Unrealized Loss
on Financial Contracts (322)
Unamortized Premiums
Paid on Options 36
-------------------------------------------------------------------------
Total Fair Value
Positions $ (286)
-------------------------------------------------------------------------
-------------------------------------------------------------------------

Total Fair Value Positions - Continuing Operations $ (225)
Total Fair Value Positions - Discontinued Operations (61)
-------------------------------------------------------------------------
$ (286)
-------------------------------------------------------------------------
-------------------------------------------------------------------------
(x) Other financial positions are part of the ongoing operations of the
Company's proprietary production management.

13. RECLASSIFICATION

Certain information provided for prior periods has been reclassified to
conform to the presentation adopted in 2005.

Further information on EnCana Corporation is available on the company's Web site, www.encana.com, or by contacting:

For further information:

Investor contact:
EnCana Corporate Development
Sheila McIntosh
Vice-President, Investor Relations
403-645-2194

Susan Grey
Analyst, Investor Relations
403-645-4751

Media contact:
Almas Kassam
Analyst, Investor Relations
403-645-4716

ECA stock price

TSX $14.27 Can 0

NYSE $11.11 USD 0

As of 2017-12-15 16:03. Minimum 15 minute delay