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



    Second quarter natural gas production up 10 percent to 3.8 billion cubic
    feet per day

    Strong outlook for gas production growth and prices triggers increase to

    EnCana's 2008 forecast for cash flow and gas production

    CALGARY, July 24 /CNW/ - EnCana Corporation (TSX & NYSE:   ECA) achieved
strong increases in cash flow and operating earnings in the second quarter of
2008 as a result of solid performance from the company's North American
portfolio of resource plays and substantial increases in commodity prices.
    "Once again our strong operating results demonstrate the substantial
value-creation capacity of our resource play strategy. Second quarter cash
flow per share and operating earnings per share increased 16 and 9 percent
respectively over last year while natural gas production is ahead of
expectations. Led by the East Texas, Jonah, Bighorn and Alberta coalbed
methane (CBM) resource plays, our low-risk portfolio of unconventional
resources continues to deliver sustainable growth across North America. In the
second quarter, the upstream business of our Integrated Oil division, in
particular, benefited from significantly higher field prices," said Randy
Eresman, EnCana's President & Chief Executive Officer.

    EnCana expanding investments in North American resource portfolio

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

    Shale plays continue to show promise

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

    Integrated Oil production growth set to ramp up

    "At Foster Creek, first production from our newest expansion phase, which
will add 30,000 bbls/d of gross production capacity, is expected to start
ramping up in the fourth quarter 2008. The next 30,000 bbls/d phase is
expected to be completed in the first quarter of 2009. Combined, these two
phases are scheduled to double our gross production capacity at Foster Creek
to 120,000 bbls/d. Production is forecast to begin ramping up later this year
and continue through 2009. At Christina Lake, we are steaming wells in our
recently completed expansion, which is expected to increase our gross
production capacity to 18,000 bbls/d by the end of the year, with production
ramping up through 2009," Eresman said.
    "Plans for splitting EnCana into two strong independent companies focused
on distinct businesses - unconventional natural gas (GasCo) and integrated oil
(IOCo) - are proceeding well and we are working towards completing the
transaction early in 2009," Eresman said.

    Second Quarter 2008 Highlights
    ------------------------------
    (all year-over-year comparisons are to the second quarter of 2007)

    Financial

    
    -   Cash flow increased 16 percent per share to $3.85, or $2.9 billion
    -   Operating earnings were up 9 percent per share to $1.96, or
        $1.5 billion
    -   Net earnings were down 14 percent per share to $1.63, or
        $1.2 billion, primarily due to unrealized mark-to-market losses on
        risk management activities of $235 million after-tax compared to
        gains of $47 million after-tax in 2007
    -   Operating cash flow generated from the Integrated Oil division
        totalled $527 million, comprised of $185 million from the upstream
        operations, a 59 percent increase due to strong field prices, and
        $342 million from the downstream business, a decrease of 22 percent
        due to weaker refining margins
    -   Capital investment was in line with guidance at $1.7 billion, up
        about 47 percent in large part due to continued development of East
        Texas and other key resource plays, as well as the expansion of the
        company's upstream and downstream integrated oil capacity
    -   Free cash flow decreased $206 million to $1.2 billion (free cash flow
        is defined in Note 1 on page 8)
    -   Realized natural gas prices were up 12 percent to $8.54 per thousand
        cubic feet (Mcf) and realized liquids prices increased 99 percent to
        $90.47 per barrel (bbl). These prices include the impact of financial
        hedges
    -   EnCana purchased approximately 200,000 common shares at an average
        share price of $74.81 under the Normal Course Issuer Bid, for a total
        cost of $15 million.

    Operating - Upstream

    -   Key resource play production was up 14 percent, with a 17 percent
        increase in natural gas production and oil production down 9 percent
    -   Total natural gas production increased 10 percent to 3.8 billion
        cubic feet per day (Bcf/d), up 11 percent per share
    -   Total oil and natural gas liquids (NGLs) production decreased 4
        percent to approximately 128,000 barrels per day (bbls/d), down 3
        percent per share
    -   Oil production at Foster Creek and Christina Lake was down 12 percent
        to approximately 24,700 bbls/d (net to EnCana) due to an extended
        turnaround in the second quarter at Foster Creek. Current net
        production is about 30,000 bbls/d
    -   Operating and administrative costs of $1.71 per thousand cubic feet
        equivalent (Mcfe) increased 46 percent from $1.17 per Mcfe one year
        earlier. More than half of the increase was due to long-term
        incentive costs and an appreciation of the Canadian dollar compared
        to the U.S. dollar. When those items are factored out, operating and
        administrative costs were in line with guidance of $1.40 per Mcfe.
        The rest of the increase was due to reorganization costs, increased
        activity levels and other administrative costs.

    Operating - Downstream

    -   Refined products averaged 464,000 bbls/d (232,000 bbls/d net to
        EnCana), up 10 percent
    -   Refinery crude utilization of 97 percent or 437,000 bbls/d crude
        throughput (218,500 bbls/d net to EnCana), up 10 percent, from the
        second quarter of 2007, due to a major turnaround and new coker
        startup at the Borger refinery in June, 2007.
    

    Guidance for total cash flow increases to a range of $10 billion to
    $11 billion

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


    Managing costs through long-term drilling contracts

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

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

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

    Integrated Oil benefits from higher oil prices

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

    IMPORTANT NOTE: Effective January 2, 2007, EnCana established an
    integrated oil business with ConocoPhillips, which resulted in EnCana
    contributing its interests in Foster Creek and Christina Lake into an
    upstream partnership owned 50-50 by the two companies. Production and
    wells drilled from 2006 have been adjusted on a pro forma basis to
    reflect the integrated oil transaction. Per share amounts for cash flow
    and earnings are on a diluted basis. EnCana reports in U.S. dollars
    unless otherwise noted and follows U.S. protocols, which report
    production, sales and reserves on an after-royalties basis. The company's
    financial statements are prepared in accordance with Canadian generally
    accepted accounting principles (GAAP).

    
    -------------------------------------------------------------------------
                   Financial Summary - Total Consolidated
    -------------------------------------------------------------------------
    (for the six months
     ended June 30)                                     6       6
    ($ millions, except          Q2      Q2      %    months   months   %
     per share amounts)         2008    2007   change  2008     2007  change
    -------------------------------------------------------------------------
    Cash flow(1)               2,889   2,549     +13   5,278   4,301     +23
    Per share diluted           3.85    3.33     +16    7.02    5.56     +26
    -------------------------------------------------------------------------
    Operating earnings(1)      1,469   1,369      +7   2,514   2,219     +13
    Per share diluted           1.96    1.79      +9    3.34    2.87     +16
    -------------------------------------------------------------------------
    Net earnings               1,221   1,446     -16   1,314   1,943     -32
    Per share diluted           1.63    1.89     -14    1.75    2.51     -30
    -------------------------------------------------------------------------
            Earnings Reconciliation Summary - Total Consolidated
    -------------------------------------------------------------------------
    Net earnings (loss)        1,221   1,446           1,314   1,943
    (Add back losses &
     deduct gains)              (235)     47            (972)   (376)
    Unrealized mark-to-market
     hedging gain (loss),
     after-tax                   (13)     (7)           (228)      4
    Non-operating foreign
     exchange gain (loss),
     after-tax Gain (loss) on
     discontinuance, after-tax     -       -               -      59
    Future tax recovery due
     to tax rate reductions        -      37               -      37
    -------------------------------------------------------------------------
    Operating earnings(1)      1,469   1,369      +7   2,514   2,219     +13
      Per share diluted         1.96    1.79      +9    3.34    2.87     +16
    -------------------------------------------------------------------------
    (1) Cash flow and operating earnings are non-GAAP measures as defined in
        Note 1 on Page 8.

    -------------------------------------------------------------------------
                        Production & Drilling Summary
    -------------------------------------------------------------------------
                             Total Consolidated
    -------------------------------------------------------------------------
    (for the six months                                 6       6
     ended June 30)              Q2      Q2      %    months  months    %
     (After royalties)          2008    2007   change  2008    2007   change
    -------------------------------------------------------------------------
    Natural Gas (MMcf/d)       3,841   3,506     +10   3,787   3,454     +10
    -------------------------------------------------------------------------
      Natural gas production
       per 1,000 shares (Mcf)    466     421     +11     919     819     +12
    -------------------------------------------------------------------------
    Oil and NGLs (Mbbls/d)       128     133      -4     132     132       -
    -------------------------------------------------------------------------
      Oil and NGLs production
       per 1,000 shares (Mcfe)    93      96      -3     193     188      +3
    -------------------------------------------------------------------------
    Total Production (MMcfe/d) 4,607   4,306      +7   4,582   4,246      +8
    -------------------------------------------------------------------------
      Total per 1,000 shares
       (Mcfe)                    559     517      +8   1,112   1,007     +10
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Net wells drilled            409     569     -28   1,552   1,833     -15
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------



                Growth from key North American resource plays
    -------------------------------------------------------------------------
    Resource Play                    Daily Production
                 ------------------------------------------------------------
                         2008                          2007             2006
                 ------------------------------------------------------------
    (After                           Full                               Full
    royalties)   YTD     Q2     Q1   Year     Q4     Q3     Q2     Q1   Year
    -------------------------------------------------------------------------
    Natural Gas (MMcf/d)
      Jonah      613    630    595    557    612    588    523    504    464
      Piceance   377    383    372    348    351    354    349    334    326
      East
       Texas     294    316    273    143    187    144    139    103     99
      Fort
       Worth     138    137    140    124    138    128    124    106    101
      Greater
       Sierra    211    219    205    211    221    220    219    186    213
      Cutbank
       Ridge(1)  275    280    271    258    283    269    248    232    189
      Bighorn(1) 158    170    146    126    136    136    122    109     97
      CBM        300    303    298    259    283    256    245    251    194
      Shallow
       Gas       713    712    715    726    727    713    729    735    739
    -------------------------------------------------------------------------
    Total natural
     gas(1)
     (MMcf/d)  3,079  3,150  3,015  2,752  2,938  2,808  2,698  2,560  2,422
    -------------------------------------------------------------------------
    Oil (Mbbls/d)
       Foster
        Creek     24     21     27     24     25     26     25     20     18
       Christina
        Lake       3      4      2      3      2      3      3      3      3
       Pelican
        Lake      23     21     24     23     24     24     23     23     24
       Weyburn(2) 14     13     14     15     14     15     14     15     15
    -------------------------------------------------------------------------
    Total oil
     (Mbbls/d)(2) 64     59     67     65     65     68     65     61     60
    -------------------------------------------------------------------------
    Total
     (MMcfe/d)
     (1),(2)   3,464  3,506  3,417  3,142  3,328  3,210  3,088  2,926  2,782
    -------------------------------------------------------------------------
    % change
     from prior
     period            +2.6   +2.7  +12.9   +3.7   +4.0   +5.5   +9.2
    -------------------------------------------------------------------------
    (1) Key resource play production volumes in 2007 and 2006 for Cutbank
        Ridge and Bighorn were restated to include the addition of new areas
        and zones that now qualify for key resource play inclusion based on
        EnCana's internal criteria.
    (2) Total key resource play production volumes in 2007 and 2006 were
        restated in the first quarter of 2008 to include the designation of
        Weyburn as an oil key resource play.


           Drilling activity in key North American resource plays
    -------------------------------------------------------------------------
    Resource Play                  Net Wells Drilled
                 ------------------------------------------------------------
                         2008                          2007             2006
                 ------------------------------------------------------------
                                     Full                               Full
                 YTD     Q2     Q1   Year     Q4     Q3     Q2     Q1   Year
    -------------------------------------------------------------------------
    Natural Gas
      Jonah       92     49     43    135     23     31     42     39    163
      Piceance   164     81     83    286     77     72     72     65    220
      East Texas  33     22     11     35      8      9     11      7     59
      Fort Worth  41     20     21     75     15     17     29     14     97
      Greater
       Sierra     63     27     36    109     27     27     32     23    115
      Cutbank
       Ridge(1)   48     24     24     93     11     23     26     33    134
      Bighorn(1)  48     18     30     62      6     18     10     28     58
      CBM        261     10    251  1,079    330    323     18    408    729
      Shallow
       Gas       579     83    496  1,914    649    608    241    416  1,310
    -------------------------------------------------------------------------
    Total gas
     wells(1)  1,329    334    995  3,788  1,146  1,128    481  1,033  2,885
    -------------------------------------------------------------------------
    Oil
      Foster
       Creek      13      1     12     23      6      8      1      8      3
      Christina
       Lake        -      -      -      3      -      1      2      -      1
      Pelican
       Lake        -      -      -      -      -      -      -      -      -
      Weyburn(2)  14      5      9     37     10      9      9      9     35
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Total oil
     wells(2)     27      6     21     63     16     18     12     17     39
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Total
     (1),(2)   1,356    340  1,016  3,851  1,162  1,146    493  1,050  2,924
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (1) Key resource play net wells drilled in 2007 and 2006 for Cutbank
        Ridge and Bighorn were restated to include the addition of new areas
        and zones that now qualify for key resource play inclusion based on
        EnCana's internal criteria.
    (2) Total key resource play net wells drilled in 2007 and 2006 were
        restated in the first quarter of 2008 to include the designation of
        Weyburn as an oil key resource play.
    

    Natural gas shale resource play update

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

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

    Price risk management

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

    U.S. Rockies and Canadian basis differential hedges

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

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

    Quarterly dividend of 40 cents per share declared

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

    Corporate reorganization to create two energy companies focused on
    unconventional resources

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

    Normal Course Issuer Bid

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

    Financial strength
    ------------------
    EnCana maintains a strong balance sheet, targeting a net debt-to-
capitalization ratio between 30 and 40 percent and a net debt-to-adjusted-
EBITDA multiple, on a trailing 12-month basis, of 1 to 2 times. At June 30,
2008, EnCana's net debt-to-capitalization ratio was 36 percent, including
mark- to-market losses on risk management instruments, which increased net
debt. Excluding this mark-to-market impact, the net debt-to-capitalization
ratio would have been 34 percent. EnCana's net debt-to-adjusted-EBITDA
multiple, on a trailing 12-month basis, was 1.3 times at the end of the second
quarter. The company expects to be in the lower end of its managed ranges by
year-end.
    In the quarter, EnCana invested $1.7 billion in capital, excluding
acquisitions and divestitures, on continued development of its key resource
plays and expansion of the company's downstream heavy oil processing capacity
through its joint venture with ConocoPhillips.

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

    EnCana Corporation will host a conference call today, Thursday, July 24,
    2008, starting at 11 a.m. MT (1 p.m. ET). To participate, please dial
    (866) 321-6651 (toll-free in North America) or (416) 642-5212 and quote
    confirmation code 7198404 approximately 10 minutes prior to the
    conference call. An archived recording of the call will be available from
    approximately 3 p.m. MT on July 24 until midnight July 31, 2008 by
    dialling (888) 203-1112 or (647) 436-0148 and entering access
    code 7198404.

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


    NOTE 1: Non-GAAP measures

    This news release contains references to cash flow, operating earnings,
free cash flow, net debt, capitalization and adjusted earnings before
interest, tax, depreciation and amortization (EBITDA).

    -   Cash flow is a non-GAAP measure defined as cash from operating
        activities excluding net change in other assets and liabilities, net
        change in non-cash working capital from continuing operations and net
        change in non-cash working capital from discontinued operations.
    -   Operating earnings is a non-GAAP measure that shows net earnings
        excluding non-operating items such as the after-tax impacts of a
        gain/loss on discontinuance, the after-tax gain/loss of unrealized
        mark-to-market accounting for derivative instruments, the after-tax
        gain/loss on translation of U.S. dollar denominated debt issued from
        Canada and the partnership contribution receivable, the after-tax
        foreign exchange gain/loss on settlement of intercompany
        transactions, future income tax on foreign exchange related to U.S.
        dollar intercompany debt recognized for tax purposes only, and the
        effect of changes in statutory income tax rates. Management believes
        that these excluded items reduce the comparability of the company's
        underlying financial performance between periods. The majority of
        U.S. dollar debt issued from Canada has maturity dates in excess of
        five years.
    -   Free cash flow is a non-GAAP measure that EnCana defines as cash flow
        in excess of capital investment, excluding net acquisitions and
        divestitures, and is used to determine the funds available for other
        investing and/or financing activities.
    -   Net debt is a non-GAAP measure defined as long-term debt plus current
        liabilities less current assets. Capitalization is a non-GAAP measure
        defined as net debt plus shareholders' equity. Net debt to
        capitalization and net debt to adjusted EBITDA are two ratios
        management uses to steward the company's overall debt position as
        measures of the company's overall financial strength.
    -   Adjusted EBITDA is a non-GAAP measure defined as net earnings from
        continuing operations before gains or losses on divestitures, income
        taxes, foreign exchange gains or losses, interest net, accretion of
        asset retirement obligation, and depreciation, depletion and
        amortization.
    

    These measures have been described and presented in this news release in
order to provide shareholders and potential investors with additional
information regarding EnCana's liquidity and its ability to generate funds to
finance its operations.

    EnCana Corporation

    With an enterprise value of approximately $70 billion, EnCana is a
leading North American unconventional natural gas and integrated oil company.
By partnering with employees, community organizations and other businesses,
EnCana contributes to the strength and sustainability of the communities where
it operates. EnCana common shares trade on the Toronto and New York stock
exchanges under the symbol ECA.

    ADVISORY REGARDING RESERVES DATA AND OTHER OIL AND GAS INFORMATION -
EnCana's disclosure of reserves data and other oil and gas information is made
in reliance on an exemption granted to EnCana by Canadian securities
regulatory authorities which permits it to provide such disclosure in
accordance with U.S. disclosure requirements. The information provided by
EnCana may differ from the corresponding information prepared in accordance
with Canadian disclosure standards under National Instrument 51-101 (NI 51-
101). EnCana's reserves quantities represent net proved reserves calculated
using the standards contained in Regulation S-X of the U.S. Securities and
Exchange Commission. Further information about the differences between the
U.S. requirements and the NI 51-101 requirements is set forth under the
heading "Note Regarding Reserves Data and Other Oil and Gas Information" in
EnCana's Annual Information Form.
    In this news release, certain crude oil and NGLs volumes have been
converted to cubic feet equivalent (cfe) on the basis of one barrel (bbl) to
six thousand cubic feet (Mcf). Also, certain natural gas volumes have been
converted to barrels of oil equivalent (BOE) on the same basis. BOE and cfe
may be misleading, particularly if used in isolation. A conversion ratio of
one bbl to six Mcf is based on an energy equivalency conversion method
primarily applicable at the burner tip and does not represent value
equivalency at the well head.

    ADVISORY REGARDING FORWARD-LOOKING STATEMENTS - In the interests of
providing EnCana shareholders and potential investors with information
regarding EnCana, including management's assessment of EnCana's and its
subsidiaries' future plans and operations, certain statements contained in
this news release are forward-looking statements or information within the
meaning of applicable securities legislation, collectively referred to herein
as "forward-looking statements." Forward-looking statements in this news
release include, but are not limited to: projections relating to future
economic and operating performance (including per share growth, net debt-to-
capitalization and net debt-to-adjusted-EBITDA ratios, cash flow, free cash
flow, and cash flow per share); the anticipated ability to meet the company's
guidance forecasts; anticipated growth and success of various resource plays
and the expected characteristics of such resource plays; the future drilling
and production potential for various regions, including East Texas and the
Horn River and Haynesville natural gas shale plays; projections relating to
the proposed corporate reorganization transaction, including the expected
timing for mailing an information circular to shareholders, holding a
shareholders meeting and the potential closing date; projections of crude oil
and natural gas prices, including basis differentials for various regions;
anticipated expansion and production at Foster Creek and Christina Lake;
projections for future crack spreads and refining margins; anticipated effects
of EnCana's market risk mitigation strategy; projections for 2008 capital
expenditures and investment; projections for oil, natural gas and NGLs
production in 2008 and beyond; anticipated costs and inflationary pressures;
and potential divestitures, proceeds which may be generated there from and the
potential use of such proceeds. Readers are cautioned not to place undue
reliance on forward-looking statements, as there can be no assurance that the
plans, intentions or expectations upon which they are based will occur. By
their nature, forward- looking statements involve numerous assumptions, known
and unknown risks and uncertainties, both general and specific, that
contribute to the possibility that the predictions, forecasts, projections and
other forward-looking statements will not occur, which may cause the company's
actual performance and financial results in future periods to differ
materially from any estimates or projections of future performance or results
expressed or implied by such forward-looking statements. These risks and
uncertainties include, among other things: volatility of and assumptions
regarding oil and gas prices; assumptions based upon the company's current
guidance; fluctuations in currency and interest rates; product supply and
demand; market competition; risks inherent in the company's marketing
operations, including credit risks; imprecision of reserves estimates and
estimates of recoverable quantities of oil, natural gas and liquids from
resource plays and other sources not currently classified as proved reserves;
the ability of the company and ConocoPhillips to successfully manage and
operate the integrated North American oil business and the ability of the
parties to obtain necessary regulatory approvals; refining and marketing
margins; potential disruption or unexpected technical difficulties in
developing new products and manufacturing processes; potential failure of new
products to achieve acceptance in the market; unexpected cost increases or
technical difficulties in constructing or modifying manufacturing or refining
facilities; unexpected difficulties in manufacturing, transporting or refining
synthetic crude oil; risks associated with technology; the company's ability
to replace and expand oil and gas reserves; its ability to generate sufficient
cash flow from operations to meet its current and future obligations; its
ability to access external sources of debt and equity capital; the timing and
the costs of well and pipeline construction; the company's ability to secure
adequate product transportation; changes in royalty, tax, environmental and
other laws or regulations or the interpretations of such laws or regulations;
political and economic conditions in the countries in which the company
operates; the risk of war, hostilities, civil insurrection and instability
affecting countries in which the company operates and terrorist threats; risks
associated with existing and potential future lawsuits and regulatory actions
made against the company; and other risks and uncertainties described from
time to time in the reports and filings made with securities regulatory
authorities by EnCana. Although EnCana believes that the expectations
represented by such forward-looking statements are reasonable, there can be no
assurance that such expectations will prove to be correct. Readers are
cautioned that the foregoing list of important factors is not exhaustive.
    Forward-looking information respecting anticipated 2008 cash flow,
operating cash flow and pre-tax cash flow for EnCana, and for GasCo and IOCo
pro-forma the proposed reorganization transaction, is based upon achieving
average production of oil and gas for 2008 as set out above, average commodity
prices for 2008 based on actual results for the second quarter of 2008, and
for the balance of 2008, a WTI price of $130/bbl for oil, a NYMEX price of
$11.00/Mcf for natural gas, an average U.S./Canadian dollar foreign exchange
rate of $0.98, an average Chicago crack spread for 2008 of $10.00/bbl for
refining margins, and an average number of outstanding shares for EnCana of
approximately 750 million. Assumptions relating to forward-looking statements
generally include EnCana's current expectations and projections made by the
company in light of, and generally consistent with, its historical experience
and its perception of historical trends, as well as expectations regarding
rates of advancement and innovation, generally consistent with and informed by
its past experience, all of which are subject to the risk factors identified
elsewhere in this document.
    Furthermore, the forward-looking statements contained in this news
release are made as of the date of this news release, and, except as required
by law, EnCana does not undertake any obligation to update publicly or to
revise any of the included forward-looking statements, whether as a result of
new information, future events or otherwise. The forward-looking statements
contained in this news release are expressly qualified by this cautionary
statement.
    Further information on EnCana Corporation is available on the company's
website, www.encana.com. For EnCana video, visit www.thenewsmarket.com/EnCana.
Free delivery options include digital FTP transfer, Beta SP tape, Data-DVD and
streaming download (Flash, QuickTime and Windows Media).


    
    EnCana Corporation

    Interim Consolidated Financial Statements
    (unaudited)
    For the period ended June 30, 2008

    (U.S. Dollars)



    CONSOLIDATED STATEMENT OF EARNINGS (unaudited)

                                        Three Months Ended  Six Months Ended
                                             June 30,            June 30,
    ($ millions, except per          ----------------------------------------
     share amounts)                       2008      2007      2008      2007
    -------------------------------------------------------------------------
    REVENUES, NET OF
     ROYALTIES               (Note 5) $  7,321  $  5,613  $ 12,663  $ 10,049

    EXPENSES                 (Note 5)
      Production and mineral
       taxes                               154        57       268       149
      Transportation and
       selling                             326       234       646       512
      Operating                            709       565     1,405     1,116
      Purchased product                  2,882     1,836     5,275     3,687
      Depreciation, depletion
       and amortization                  1,097       899     2,132     1,742
      Administrative                       225        95       381       190
      Interest, net          (Note 7)      147        94       281       195
      Accretion of asset
       retirement obligation (Note 12)      20        15        41        29
      Foreign exchange (gain)
       loss, net             (Note 8)      (35)        7        60        (5)
      (Gain) loss on
       divestitures          (Note 6)      (17)        1       (17)      (58)
    -------------------------------------------------------------------------
                                         5,508     3,803    10,472     7,557
    -------------------------------------------------------------------------
    NET EARNINGS BEFORE INCOME TAX       1,813     1,810     2,191     2,492
      Income tax expense     (Note 9)      592       364       877       549
    -------------------------------------------------------------------------
    NET EARNINGS                      $  1,221  $  1,446  $  1,314  $  1,943
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    NET EARNINGS PER
     COMMON SHARE           (Note 16)
       Basic                          $   1.63  $   1.91  $   1.75  $   2.54
       Diluted                        $   1.63  $   1.89  $   1.75  $   2.51
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    CONSOLIDATED STATEMENT OF RETAINED EARNINGS (unaudited)

                                                            Six Months Ended
                                                                 June 30,
                                                         --------------------
    ($ millions)                                              2008      2007
    -------------------------------------------------------------------------

    RETAINED EARNINGS,
     BEGINNING OF YEAR                                    $ 13,082  $ 11,344
    Net Earnings                                             1,314     1,943
    Dividends on Common Shares                                (600)     (304)
    Charges for Normal Course
     Issuer Bid             (Note 13)                         (243)   (1,421)
    -------------------------------------------------------------------------
    RETAINED EARNINGS, END OF PERIOD                      $ 13,553  $ 11,562
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (unaudited)

                                        Three Months Ended  Six Months Ended
                                             June 30,            June 30,
                                     ----------------------------------------
    ($ millions)                          2008      2007      2008      2007
    -------------------------------------------------------------------------
    NET EARNINGS                      $  1,221  $  1,446  $  1,314  $  1,943
    OTHER COMPREHENSIVE INCOME,
     NET OF TAX
      Foreign Currency
       Translation Adjustment               48       828      (352)      939
    -------------------------------------------------------------------------
    COMPREHENSIVE INCOME              $  1,269  $  2,274  $    962  $  2,882
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    CONSOLIDATED STATEMENT OF ACCUMULATED OTHER COMPREHENSIVE INCOME
    (unaudited)

                                                            Six Months Ended
                                                                 June 30,
                                                         --------------------
    ($ millions)                                              2008      2007
    -------------------------------------------------------------------------

    ACCUMULATED OTHER COMPREHENSIVE INCOME,
     BEGINNING OF YEAR                                    $  3,063  $  1,375
    Foreign Currency Translation Adjustment                   (352)      939
    -------------------------------------------------------------------------
    ACCUMULATED OTHER COMPREHENSIVE INCOME,
     END OF PERIOD                                        $  2,711  $  2,314
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    See accompanying Notes to Consolidated Financial Statements.



    CONSOLIDATED BALANCE SHEET (unaudited)

                                                          As at        As at
                                                        June 30, December 31,
    ($ millions)                                           2008         2007
    -------------------------------------------------------------------------

    ASSETS
      Current Assets
        Cash and cash equivalents                      $    778     $    553
        Accounts receivable and
         accrued revenues                                 3,346        2,381
        Current portion of
         partnership contribution
         receivable                                         305          297
        Risk management     (Note 17)                       265          385
        Inventories         (Note 10)                     1,422          828
    -------------------------------------------------------------------------
                                                          6,116        4,444
        Property, Plant and
         Equipment, net      (Note 5)                    37,070       35,865
        Investments and Other Assets                        654          607
        Partnership Contribution Receivable               2,992        3,147
        Risk Management     (Note 17)                       341           18
        Goodwill                                          2,821        2,893
    -------------------------------------------------------------------------
                             (Note 5)                 $  49,994    $  46,974
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    LIABILITIES AND SHAREHOLDERS' EQUITY
      Current Liabilities
        Accounts payable and
         accrued liabilities                          $  4,888     $   3,982
        Income tax payable                                 909         1,150
        Current portion of
         partnership contribution
         payable                                           297           288
        Risk management     (Note 17)                    1,617           207
        Current portion of
         long-term debt     (Note 11)                      491           703
    -------------------------------------------------------------------------
                                                         8,202         6,330
      Long-Term Debt        (Note 11)                    9,878         8,840
      Other Liabilities                                    450           242
      Partnership Contribution
       Payable                                           3,012         3,163
      Risk Management       (Note 17)                       73            29
      Asset Retirement
       Obligation           (Note 12)                    1,402         1,458
      Future Income Taxes                                6,160         6,208
    -------------------------------------------------------------------------
                                                        29,177        26,270
    -------------------------------------------------------------------------
      Shareholders' Equity
        Share capital       (Note 13)                    4,553         4,479
        Paid in surplus                                      -            80
        Retained earnings                               13,553        13,082
        Accumulated other comprehensive income           2,711         3,063
    -------------------------------------------------------------------------
       Total Shareholders' Equity                       20,817        20,704
    -------------------------------------------------------------------------
                                                      $ 49,994      $ 46,974
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    See accompanying Notes to Consolidated Financial Statements.



    CONSOLIDATED STATEMENT OF CASH FLOWS (unaudited)

                                        Three Months Ended  Six Months Ended
                                             June 30,            June 30,
                                     ----------------------------------------
    ($ millions)                          2008      2007      2008      2007
    -------------------------------------------------------------------------

    OPERATING ACTIVITIES
      Net earnings                    $  1,221  $  1,446  $  1,314  $  1,943
      Depreciation, depletion
        and amortization                 1,097       899     2,132     1,742
      Future income taxes    (Note 9)      152        79        73      (111)
      Unrealized (gain) loss
       on risk management   (Note 17)      318       (55)    1,411       559
      Unrealized foreign
       exchange (gain) loss                (11)       79        65        76
      Accretion of asset
       retirement obligation (Note 12)      20        15        41        29
     (Gain) loss on
       divestitures          (Note 6)      (17)        1       (17)      (58)
      Other                                109        85       259       121
      Net change in other
       assets and liabilities             (171)      (16)     (264)        4
      Net change in non-cash
       working capital                    (722)     (385)   (1,260)     (249)
    -------------------------------------------------------------------------
      Cash From Operating Activities     1,996     2,148     3,754     4,056
    -------------------------------------------------------------------------

    INVESTING ACTIVITIES
      Capital expenditures   (Note 5)   (1,996)   (1,189)   (3,903)   (2,679)
      Proceeds from
       divestitures          (Note 6)       79       165       151       446
      Net change in investments
       and other                           (18)      (25)       (9)       (6)
      Net change in non-cash
       working capital                    (101)      (45)      191      (103)
    -------------------------------------------------------------------------
      Cash (Used in) Investing
       Activities                       (2,036)   (1,094)   (3,570)   (2,342)
    -------------------------------------------------------------------------

    FINANCING ACTIVITIES
      Net issuance (repayment)
       of revolving long-term debt         426       (40)      367       (40)
      Issuance of long-term
       debt                 (Note 11)        -         -       723       434
      Repayment of long-term debt         (196)        -      (196)        -
      Issuance of common
       shares               (Note 13)       13        77        76       153
      Purchase of common
       shares               (Note 13)      (15)     (713)     (326)   (1,807)
      Dividends on common
       shares                             (300)     (151)     (600)     (304)
      Other                                  -       (14)        -        (3)
    -------------------------------------------------------------------------
      Cash From (Used in)
       Financing Activities                (72)     (841)       44    (1,567)
    -------------------------------------------------------------------------

    FOREIGN EXCHANGE GAIN (LOSS) ON CASH AND CASH
      EQUIVALENTS HELD IN
       FOREIGN CURRENCY                      1         5        (3)        6
    -------------------------------------------------------------------------

    INCREASE (DECREASE) IN CASH AND
     CASH EQUIVALENTS                     (111)      218       225       153
    CASH AND CASH EQUIVALENTS,
     BEGINNING OF PERIOD                   889       337       553       402
    -------------------------------------------------------------------------
    CASH AND CASH EQUIVALENTS,
     END OF PERIOD                    $    778  $    555  $    778  $    555
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    See accompanying Notes to Consolidated Financial Statements.


    Notes to Consolidated Financial Statements (unaudited)
    (All amounts in $ millions unless otherwise specified)

    1.  BASIS OF PRESENTATION

    The interim Consolidated Financial Statements include the accounts of
    EnCana Corporation and its subsidiaries ("EnCana" or the "Company"), and
    are presented in accordance with Canadian generally accepted accounting
    principles. EnCana's operations are in the business of exploration for,
    and development, production and marketing of natural gas, crude oil and
    natural gas liquids ("NGLs"), refining operations and power generation
    operations.

    The interim Consolidated Financial Statements have been prepared
    following the same accounting policies and methods of computation as the
    annual audited Consolidated Financial Statements for the year ended
    December 31, 2007, except as noted below. The disclosures provided below
    are incremental to those included with the annual audited Consolidated
    Financial Statements. The interim Consolidated Financial Statements
    should be read in conjunction with the annual audited Consolidated
    Financial Statements and the notes thereto for the year ended
    December 31, 2007.

    2.  CHANGES IN ACCOUNTING POLICIES AND PRACTICES

    As disclosed in the December 31, 2007 annual audited Consolidated
    Financial Statements, on January 1, 2008, the Company adopted the
    following Canadian Institute of Chartered Accountants ("CICA") Handbook
    Sections:

    -  "Inventories", Section 3031. The new standard replaces the previous
       inventories standard and requires inventory to be valued on a
       first-in, first-out or weighted average basis, which is consistent
       with EnCana's former accounting policy. The new standard allows the
       reversal of previous write-downs to net realizable value when there is
       a subsequent increase in the value of inventories. The adoption of
       this standard has had no material impact on EnCana's Consolidated
       Financial Statements.

    -  "Financial Instruments - Presentation", Section 3863 and "Financial
       Instruments - Disclosures", Section 3862. The new disclosure standard
       increases EnCana's disclosure regarding the nature and extent of the
       risks associated with financial instruments and how those risks are
       managed (See Note 17). The new presentation standard carries forward
       the former presentation requirements.

    -  "Capital Disclosures", Section 1535. The new standard requires EnCana
       to disclose its objectives, policies and processes for managing its
       capital structure (See Note 14).

    3.  RECENT ACCOUNTING PRONOUNCEMENTS

    As of January 1, 2009, EnCana will be required to adopt the CICA Handbook
    Section 3064, "Goodwill and Intangible Assets", which will replace the
    existing Goodwill and Intangible Assets standard. The new standard
    revises the requirement for recognition, measurement, presentation and
    disclosure of intangible assets. The adoption of this standard should not
    have a material impact on EnCana's Consolidated Financial Statements.

    In January 2006, the CICA Accounting Standards Board ("AcSB") adopted a
    strategic plan for the direction of accounting standards in Canada. As
    part of that plan, the AcSB confirmed in February 2008 that International
    Financial Reporting Standards ("IFRS") will replace Canadian GAAP in 2011
    for profit-oriented Canadian publicly accountable enterprises. As EnCana
    will be required to report its results in accordance with IFRS starting
    in 2011, the Company is assessing the potential impacts of this
    changeover and developing its plan accordingly.

    4.  PROPOSED CORPORATE REORGANIZATION

    On May 11, 2008, EnCana announced its plans to split into two highly
    focused energy companies - one a North American natural gas company and
    the other a fully integrated oil company with in-situ oilsands properties
    and refineries supplemented by reliable production from various gas and
    oil resource plays. The proposed corporate reorganization, expected to
    close in early January 2009, would be implemented through a court
    approved Plan of Arrangement and is subject to shareholder approval. The
    reorganization would result in two publicly traded entities with every
    EnCana shareholder receiving one share of each entity in exchange for
    each EnCana common share held. The working names of the two companies are
    GasCo and IntegratedOilCo ("IOCo") respectively. GasCo will retain the
    name of EnCana Corporation while the permanent name of IOCo will be
    determined prior to the close of the transaction.

    5.  SEGMENTED INFORMATION

    As a result of the proposed corporate reorganization, EnCana has changed
    its reportable segments to reflect the realigned reporting hierarchies.
    The most significant change results in EnCana now presenting Canadian
    Plains and Canadian Foothills as separate operating segments. These were
    previously aggregated and presented in the Canada segment. Prior periods
    have been restated to reflect the new presentation.

    GasCo's operating segments will include EnCana's Canadian Foothills,
    United States and Offshore and International segments. IOCo's operating
    segments will include EnCana's Canadian Plains and Integrated Oil
    segments.

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

    -  Canadian Plains, Canadian Foothills, United States and Offshore and
       International segments include the Company's exploration for, and
       development and production of natural gas, crude oil and NGLs and
       other related activities. The majority of the Company's operations are
       located in Canada and the United States. Offshore and International
       exploration is mainly focused on opportunities in Atlantic Canada, the
       Middle East and Europe.

    -  Integrated Oil is focused on two lines of business: the exploration
       for, and development and production of bitumen in Canada using in-situ
       recovery methods; and the refining of crude oil into petroleum and
       chemical products located in the United States. This segment includes
       EnCana's 50 percent interest in the joint venture with ConocoPhillips.

    -  Market Optimization is conducted by the Midstream & Marketing
       division. The Marketing groups' primary responsibility is the sale of
       the Company's proprietary production. The results are included in the
       Canadian Plains, Canadian Foothills, United States and Integrated Oil
       segments. Correspondingly, the Marketing groups also undertake market
       optimization activities which comprise third-party purchases and sales
       of product that provide operational flexibility for transportation
       commitments, product type, delivery points and customer
       diversification. These activities are reflected in the Market
       Optimization segment.

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

    Market Optimization markets substantially all of the Company's upstream
    production to third-party customers. Transactions between business
    segments are based on market values and eliminated on consolidation. The
    tables in this note present financial information on an after
    eliminations basis.

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

                                               Canadian
                         Canadian Plains       Foothills       United States
    -------------------------------------------------------------------------
                           2008     2007     2008     2007     2008     2007
    -------------------------------------------------------------------------

    Revenues, Net of
     Royalties          $ 1,185  $   853  $ 1,189  $   917  $ 1,525  $ 1,128
    Expenses
      Production and
       mineral taxes         24       18       12       13      118       26
      Transportation
       and selling           25       28       54       51      120       77
      Operating             147      108      180      125      186      154
      Purchased product       -        -        -        -        -        -
      Depreciation,
       depletion and
       amortization         238      242      285      257      421      281
    -------------------------------------------------------------------------
    Segment Income
     (Loss)             $   751  $   457  $   658  $   471  $   680  $   590
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


                                              Offshore &           Market
                          Integrated Oil     International      Optimization
    -------------------------------------------------------------------------
                           2008     2007     2008     2007     2008     2007
    -------------------------------------------------------------------------

    Revenues, Net of
     Royalties          $ 3,104  $ 1,943  $    (1) $     1  $   647  $   722
    Expenses
      Production and
       mineral taxes          -        -        -        -        -        -
      Transportation
       and selling          127       76        -        -        -        2
      Operating             196      176       (1)      (1)       8       10
      Purchased product   2,254    1,134        -        -      628      702
      Depreciation,
       depletion and
       amortization          91       94       35        -        4        4
    -------------------------------------------------------------------------
    Segment Income
     (Loss)             $   436  $   463  $   (35) $     2  $     7  $     4
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


                                               Corporate        Consolidated
    -------------------------------------------------------------------------
                                             2008     2007     2008     2007
    -------------------------------------------------------------------------

    Revenues, Net of Royalties            $  (328) $    49  $ 7,321  $ 5,613
    Expenses
      Production and mineral taxes              -        -      154       57
      Transportation and selling                -        -      326      234
      Operating                                (7)      (7)     709      565
      Purchased product                         -        -    2,882    1,836
      Depreciation, depletion and
       amortization                            23       21    1,097      899
    -------------------------------------------------------------------------
    Segment Income (Loss)                 $  (344) $    35    2,153    2,022
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
      Administrative                                            225       95
      Interest, net                                             147       94
      Accretion of asset retirement obligation                   20       15
      Foreign exchange (gain) loss, net                         (35)       7
      (Gain) loss on divestitures                               (17)       1
    -------------------------------------------------------------------------
                                                                340      212
    -------------------------------------------------------------------------
    Net Earnings Before Income Tax                            1,813    1,810
      Income tax expense                                        592      364
    -------------------------------------------------------------------------
    Net Earnings                                            $ 1,221  $ 1,446
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


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

    Geographic and Product Information
                                                    Canadian Plains
    -------------------------------------------------------------------------
                                                  Gas           Oil & NGLs
    -------------------------------------------------------------------------
                                             2008     2007     2008     2007
    -------------------------------------------------------------------------

    Revenues, Net of Royalties            $   629  $   563  $   554  $   286
    Expenses
      Production and mineral taxes             13       10       11        8
      Transportation and selling               18       21        7        7
      Operating                                74       55       72       52
    -------------------------------------------------------------------------
    Operating Cash Flow                   $   524  $   477  $   464  $   219
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


                                                    Canadian Plains
    -------------------------------------------------------------------------
                                                 Other             Total
    -------------------------------------------------------------------------
                                             2008     2007     2008     2007
    -------------------------------------------------------------------------

    Revenues, Net of Royalties            $     2  $     4  $ 1,185  $   853
    Expenses
      Production and mineral taxes              -        -       24       18
      Transportation and selling                -        -       25       28
      Operating                                 1        1      147      108
    -------------------------------------------------------------------------
    Operating Cash Flow                   $     1  $     3  $   989  $   699
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------



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

    Revenues, Net of Royalties            $ 1,000  $   816  $   174  $    88
    Expenses
      Production and mineral taxes             11       12        1        1
      Transportation and selling               51       49        3        2
      Operating                               163      114       12        7
    -------------------------------------------------------------------------
    Operating Cash Flow                   $   775  $   641  $   158  $    78
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


                                                   Canadian Foothills
    -------------------------------------------------------------------------
                                                 Other             Total
    -------------------------------------------------------------------------
                                             2008     2007     2008     2007
    -------------------------------------------------------------------------

    Revenues, Net of Royalties            $    15  $    13  $ 1,189  $   917
    Expenses
      Production and mineral taxes              -        -       12       13
      Transportation and selling                -        -       54       51
      Operating                                 5        4      180      125
    -------------------------------------------------------------------------
    Operating Cash Flow                   $    10  $     9  $   943  $   728
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------



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

    Revenues, Net of Royalties            $ 1,308  $   989  $   130  $    70
    Expenses
      Production and mineral taxes            107       20       11        6
      Transportation and selling              120       77        -        -
      Operating                               106       85        -        -
    -------------------------------------------------------------------------
    Operating Cash Flow                   $   975  $   807  $   119  $    64
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


                                                     United States
    -------------------------------------------------------------------------
                                                 Other             Total
    -------------------------------------------------------------------------
                                             2008     2007     2008     2007
    -------------------------------------------------------------------------

    Revenues, Net of Royalties            $    87  $    69  $ 1,525  $ 1,128
    Expenses
      Production and mineral taxes              -        -      118       26
      Transportation and selling                -        -      120       77
      Operating                                80       69      186      154
    -------------------------------------------------------------------------
    Operating Cash Flow                   $     7  $     -  $ 1,101  $   871
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------



                                                     Integrated Oil
    -------------------------------------------------------------------------
                                                                Downstream
                                                  Oil            Refining
    -------------------------------------------------------------------------
                                             2008     2007     2008     2007
    -------------------------------------------------------------------------

    Revenues, Net of Royalties            $   298  $   172  $ 2,769  $ 1,717
    Expenses
      Production and mineral taxes              -        -        -        -
      Transportation and selling              123       72        -        -
      Operating                                50       39      127      119
      Purchased product                         -        -    2,300    1,157
    -------------------------------------------------------------------------
    Operating Cash Flow                   $   125  $    61  $   342  $   441
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


                                                     Integrated Oil
    -------------------------------------------------------------------------
                                                Other(*)           Total
    -------------------------------------------------------------------------
                                             2008     2007     2008     2007
    -------------------------------------------------------------------------

    Revenues, Net of Royalties            $    37  $    54  $ 3,104  $ 1,943
    Expenses
      Production and mineral taxes              -        -        -        -
      Transportation and selling                4        4      127       76
      Operating                                19       18      196      176
      Purchased product                       (46)     (23)   2,254    1,134
    -------------------------------------------------------------------------
    Operating Cash Flow                   $    60  $    55  $   527  $   557
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    (*) Includes exploration and production of natural gas and bitumen for
        the Athabasca and Senlac properties.


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

    Company Operating Information(*)
                                                         GasCo
    -------------------------------------------------------------------------
                                               Canadian
                                               Foothills       United States
    -------------------------------------------------------------------------
                                             2008     2007     2008     2007
    -------------------------------------------------------------------------

    Revenues, Net of Royalties            $ 1,189  $   917  $ 1,525  $ 1,128
    Expenses
      Production and mineral taxes             12       13      118       26
      Transportation and selling               54       51      120       77
      Operating                               180      125      186      154
    -------------------------------------------------------------------------
    Operating Cash Flow                   $   943  $   728  $ 1,101  $   871
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


                                                         GasCo
    -------------------------------------------------------------------------
                                              Offshore &
                                             International         Total
    -------------------------------------------------------------------------
                                             2008     2007     2008     2007
    -------------------------------------------------------------------------

    Revenues, Net of Royalties            $    (1) $     1  $ 2,713  $ 2,046
    Expenses
      Production and mineral taxes              -        -      130       39
      Transportation and selling                -        -      174      128
      Operating                                (1)      (1)     365      278
    -------------------------------------------------------------------------
    Operating Cash Flow                   $     -  $     2  $ 2,044  $ 1,601
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------



                                                 IOCo
    -------------------------------------------------------------------------
                         Canadian Plains           Integrated Oil     Total
    -------------------------------------------------------------------------
                         2008     2007     2008     2007     2008     2007
    -------------------------------------------------------------------------

    Revenues, Net of
     Royalties          $ 1,185  $   853  $ 3,104  $ 1,943  $ 4,289  $ 2,796
    Expenses
      Production and
       mineral taxes         24       18        -        -       24       18
      Transportation
       and selling           25       28      127       76      152      104
      Operating             147      108      196      176      343      284
      Purchased product       -        -    2,254    1,134    2,254    1,134
    -------------------------------------------------------------------------
    Operating Cash Flow $   989  $   699  $   527  $   557  $ 1,516  $ 1,256
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    (*) GasCo and IOCo company operating information excluding their
        respective share of the Market Optimization and Corporate segments.


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

                                               Canadian
                         Canadian Plains       Foothills       United States
    -------------------------------------------------------------------------
                           2008     2007     2008     2007     2008     2007
    -------------------------------------------------------------------------

    Revenues, Net of
     Royalties          $ 2,244  $ 1,700  $ 2,264  $ 1,781  $ 2,879  $ 2,091
    Expenses
      Production and
       mineral taxes         37       35       16       24      214       90
      Transportation
       and selling           52       58      110       98      235      143
      Operating             289      209      358      254      355      301
      Purchased product       -        -        -        -        -        -
      Depreciation,
       depletion and
       amortization         483      472      560      493      818      546
    -------------------------------------------------------------------------
    Segment Income
     (Loss)             $ 1,383  $   926  $ 1,220  $   912  $ 1,257  $ 1,011
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


                                              Offshore &           Market
                          Integrated Oil     International      Optimization
    -------------------------------------------------------------------------
                           2008     2007     2008     2007     2008     2007
    -------------------------------------------------------------------------

    Revenues, Net of
     Royalties          $ 5,427  $ 3,566  $     1  $    (1) $ 1,272  $ 1,478
    Expenses
      Production and
       mineral taxes          1        -        -        -        -        -
      Transportation
       and selling          249      203        -        -        -       10
      Operating             392      341        1        2       19       17
      Purchased product   4,040    2,253        -        -    1,235    1,434
      Depreciation,
       depletion and
       amortization         184      184       35        1        8        7
    -------------------------------------------------------------------------
    Segment Income
     (Loss)             $   561  $   585  $   (35) $    (4) $    10  $    10
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


                                               Corporate        Consolidated
    -------------------------------------------------------------------------
                                             2008     2007     2008     2007
    -------------------------------------------------------------------------

    Revenues, Net of Royalties            $(1,424) $  (566) $12,663  $10,049
    Expenses
      Production and mineral taxes              -        -      268      149
      Transportation and selling                -        -      646      512
      Operating                                (9)      (8)   1,405    1,116
      Purchased product                         -        -    5,275    3,687
      Depreciation, depletion and
       amortization                            44       39    2,132    1,742
    -------------------------------------------------------------------------
    Segment Income (Loss)                 $(1,459) $  (597)   2,937    2,843
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
      Administrative                                            381      190
      Interest, net                                             281      195
      Accretion of asset retirement
       obligation                                                41       29
      Foreign exchange (gain) loss, net                          60       (5)
      (Gain) loss on divestitures                               (17)     (58)
    -------------------------------------------------------------------------
                                                                746      351
    -------------------------------------------------------------------------
    Net Earnings Before Income Tax                            2,191    2,492
      Income tax expense                                        877      549
    -------------------------------------------------------------------------
    Net Earnings                                            $ 1,314  $ 1,943
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


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

    Geographic and Product Information
                                                    Canadian Plains
    -------------------------------------------------------------------------
                                                  Gas           Oil & NGLs
    -------------------------------------------------------------------------
                                             2008     2007     2008     2007
    -------------------------------------------------------------------------

    Revenues, Net of Royalties            $ 1,219  $ 1,121  $ 1,021  $   573
    Expenses
      Production and mineral taxes             18       20       19       15
      Transportation and selling               37       43       15       15
      Operating                               147      107      140      100
    -------------------------------------------------------------------------
    Operating Cash Flow                   $ 1,017  $   951  $   847  $   443
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


                                                    Canadian Plains
    -------------------------------------------------------------------------
                                                 Other             Total
    -------------------------------------------------------------------------
                                             2008     2007     2008     2007
    -------------------------------------------------------------------------

    Revenues, Net of Royalties            $     4  $     6  $ 2,244  $ 1,700
    Expenses
      Production and mineral taxes              -        -       37       35
      Transportation and selling                -        -       52       58
      Operating                                 2        2      289      209
    -------------------------------------------------------------------------
    Operating Cash Flow                   $     2  $     4  $ 1,866  $ 1,398
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------



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

    Revenues, Net of Royalties            $ 1,909  $ 1,587  $   322  $   168
    Expenses
      Production and mineral taxes             14       23        2        1
      Transportation and selling              104       94        6        4
      Operating                               324      231       23       14
    -------------------------------------------------------------------------
    Operating Cash Flow                   $ 1,467  $ 1,239  $   291  $   149
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


                                                    Canadian Foothills
    -------------------------------------------------------------------------
                                                 Other             Total
    -------------------------------------------------------------------------
                                             2008     2007     2008     2007
    -------------------------------------------------------------------------

    Revenues, Net of Royalties            $    33  $    26  $ 2,264  $ 1,781
    Expenses
      Production and mineral taxes              -        -       16       24
      Transportation and selling                -        -      110       98
      Operating                                11        9      358      254
    -------------------------------------------------------------------------
    Operating Cash Flow                   $    22  $    17  $ 1,780  $ 1,405
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------



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

    Revenues, Net of Royalties            $ 2,491  $ 1,820  $   229  $   124
    Expenses
      Production and mineral taxes            194       78       20       12
      Transportation and selling              235      143        -        -
      Operating                               207      160        -        -
    -------------------------------------------------------------------------
    Operating Cash Flow                   $ 1,855  $ 1,439  $   209  $   112
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


                                                     United States
    -------------------------------------------------------------------------
                                                 Other             Total
    -------------------------------------------------------------------------
                                             2008     2007     2008     2007
    -------------------------------------------------------------------------

    Revenues, Net of Royalties            $   159  $   147  $ 2,879  $ 2,091
    Expenses
      Production and mineral taxes              -        -      214       90
      Transportation and selling                -        -      235      143
      Operating                               148      141      355      301
    -------------------------------------------------------------------------
    Operating Cash Flow                   $    11  $     6  $ 2,075  $ 1,557
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------



                                                     Integrated Oil
    -------------------------------------------------------------------------
                                                                Downstream
                                                  Oil            Refining
    -------------------------------------------------------------------------
                                             2008     2007     2008     2007
    -------------------------------------------------------------------------

    Revenues, Net of Royalties            $   536  $   392  $ 4,815  $ 3,060
    Expenses
      Production and mineral taxes              -        -        -        -
      Transportation and selling              243      196        -        -
      Operating                                91       88      259      219
      Purchased product                         -        -    4,121    2,291
    -------------------------------------------------------------------------
    Operating Cash Flow                   $   202  $   108  $   435  $   550
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    -------------------------------------------------------------------------
                                                Other(*)           Total
    -------------------------------------------------------------------------
                                             2008     2007     2008     2007
    -------------------------------------------------------------------------

    Revenues, Net of Royalties            $    76  $   114  $ 5,427  $ 3,566
    Expenses
      Production and mineral taxes              1        -        1        -
      Transportation and selling                6        7      249      203
      Operating                                42       34      392      341
      Purchased product                       (81)     (38)   4,040    2,253
    -------------------------------------------------------------------------
    Operating Cash Flow                   $   108  $   111  $   745  $   769
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    (*) Includes exploration and production of natural gas and bitumen for
        the Athabasca and Senlac properties.



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

    Company Operating Information(*)
                                                         GasCo
    -------------------------------------------------------------------------
                                        Canadian Foothills     United States
    -------------------------------------------------------------------------
                                             2008     2007     2008     2007
    -------------------------------------------------------------------------

    Revenues, Net of Royalties            $ 2,264  $ 1,781  $ 2,879  $ 2,091
    Expenses
      Production and mineral taxes             16       24      214       90
      Transportation and selling              110       98      235      143
      Operating                               358      254      355      301
    -------------------------------------------------------------------------
    Operating Cash Flow                   $ 1,780  $ 1,405  $ 2,075  $ 1,557
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


                                                         GasCo
    -------------------------------------------------------------------------
                                              Offshore &
                                             International         Total
    -------------------------------------------------------------------------
                                             2008     2007     2008     2007
    -------------------------------------------------------------------------

    Revenues, Net of Royalties            $     1  $    (1) $ 5,144  $ 3,871
    Expenses
      Production and mineral taxes              -        -      230      114
      Transportation and selling                -        -      345      241
      Operating                                 1        2      714      557
    -------------------------------------------------------------------------
    Operating Cash Flow                   $     -  $    (3) $ 3,855  $ 2,959
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------



                                               IOCo
    -------------------------------------------------------------------------
                         Canadian Plains           Integrated Oil     Total
    -------------------------------------------------------------------------
                           2008     2007     2008     2007     2008     2007
    -------------------------------------------------------------------------

    Revenues, Net of
     Royalties          $ 2,244  $ 1,700  $ 5,427  $ 3,566  $ 7,671  $ 5,266
    Expenses
      Production and
       mineral taxes         37       35        1        -       38       35
      Transportation
       and selling           52       58      249      203      301      261
      Operating             289      209      392      341      681      550
      Purchased product       -        -    4,040    2,253    4,040    2,253
    -------------------------------------------------------------------------
    Operating Cash Flow $ 1,866  $ 1,398  $   745  $   769  $ 2,611  $ 2,167
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    (*) GasCo and IOCo company operating information excluding their
        respective share of the Market Optimization and Corporate segments.


    Capital Expenditures
                                      Three Months Ended    Six Months Ended
                                             June 30,            June 30,
                                      ---------------------------------------
                                          2008      2007      2008      2007
    -------------------------------------------------------------------------

    Capital
      Canadian Plains                 $    158  $    156  $    420  $    340
      Canadian Foothills                   570       404     1,337     1,052
      United States                        660       422     1,179       861
      Integrated Oil                       266       126       529       270
      Offshore & International              28        44        53        62
      Market Optimization                    5         2         7         3
      Corporate                             31        18        42        67
    -------------------------------------------------------------------------
                                         1,718     1,172     3,567     2,655
    -------------------------------------------------------------------------

    Acquisition Capital
      Canadian Foothills                    20         -        92         7
      United States                        258         3       244         3
      Integrated Oil                         -        14         -        14
    -------------------------------------------------------------------------
                                           278        17       336        24
    -------------------------------------------------------------------------
    Total                             $  1,996  $  1,189  $  3,903  $  2,679
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    On November 20, 2007, EnCana acquired certain natural gas and land
    interests in Texas for approximately $2.55 billion before closing
    adjustments. The purchase was facilitated by an unrelated party, Brown
    Kilgore Properties LLC ("Brown Kilgore"), which held the majority of the
    assets in trust for the Company in anticipation of a qualifying like kind
    exchange for U.S. tax purposes. The relationship with Brown Kilgore
    represented an interest in a Variable Interest Entity ("VIE") from
    November 20, 2007 to May 18, 2008. During this period, EnCana was the
    primary beneficiary of the VIE and consolidated Brown Kilgore. On May 18,
    2008, when the arrangement with Brown Kilgore was completed, the assets
    were transferred to EnCana.

    Property, Plant and Equipment and Total Assets by Segment

                                        Property, Plant
                                         and Equipment       Total Assets
                                      ---------------------------------------
                                            As at               As at
                                      ---------------------------------------
                                       June 30, December   June 30, December
                                          2008  31, 2007      2008  31, 2007
    -------------------------------------------------------------------------

    Canadian Plains                   $  6,675  $  6,967  $  8,413  $  8,626
    Canadian Foothills                  10,611    10,127    12,757    12,184
    United States                       12,385    11,879    13,831    12,948
    Integrated Oil                       5,462     5,164    10,976    10,122
    Offshore & International             1,229     1,104     1,331     1,135
    Market Optimization                    165       171       656       478
    Corporate                              543       453     2,030     1,481
    -------------------------------------------------------------------------
    Total                             $ 37,070  $ 35,865  $ 49,994  $ 46,974
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    On February 9, 2007, EnCana announced that it had completed the next
    phase in the development of The Bow office project with the sale of
    project assets and has entered into a 25 year lease agreement with a
    third party developer. As at June 30, 2008, Corporate Property, Plant and
    Equipment and Total Assets includes EnCana's accrual to date of
    $232 million ($147 million at December 31, 2007) related to this office
    project as an asset under construction.

    On January 4, 2008, EnCana signed the contract for the design and
    construction of the Production Field Centre ("PFC") for the Deep Panuke
    project. As at June 30, 2008, Offshore and International Property, Plant,
    and Equipment and Total Assets includes EnCana's accrual to date of
    $91 million related to this offshore facility as an asset under
    construction.

    Corresponding liabilities for these projects are included in Other
    Liabilities in the Consolidated Balance Sheet. There is no effect on the
    Company's net earnings or cash flows related to the capitalization of The
    Bow office project or the Deep Panuke PFC.

    6.  DIVESTITURES

    Total year-to-date proceeds received on sale of assets and investments
    were $151 million (2007 - $446 million) as described below:

    Canadian Plains, Canadian Foothills and United States

    In 2008, the Company completed the divestiture of mature conventional oil
    and natural gas assets for proceeds of $31 million (2007 - nil) in
    Canadian Plains, $70 million (2007 - $12 million) in Canadian Foothills,
    and $95 million (2007 - $11 million) in the United States.

    Offshore and International

    In May 2007, the Company completed the sale of its assets in the
    Mackenzie Delta and Beaufort Sea for proceeds of $159 million, which were
    credited to property, plant and equipment.

    In January 2007, the Company completed the sale of its interests in Chad,
    properties that were in the pre-production stage, for proceeds of
    $207 million which resulted in a gain on sale of $59 million.

    Corporate

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

    7.  INTEREST, NET

                                      Three Months Ended    Six Months Ended
                                             June 30,            June 30,
                                      ---------------------------------------
                                          2008      2007      2008      2007
    -------------------------------------------------------------------------

    Interest Expense - Long-Term Debt $    144  $    118  $    284  $    218
    Interest Expense - Other(*)             56        43       110       106
    Interest Income(*)                     (53)      (67)     (113)     (129)
    -------------------------------------------------------------------------
                                      $    147  $     94  $    281  $    195
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    (*) Interest Expense - Other and Interest Income are primarily due to the
        Partnership Contribution Payable and Receivable, respectively.

    8.  FOREIGN EXCHANGE (GAIN) LOSS, NET

                                      Three Months Ended    Six Months Ended
                                             June 30,            June 30,
                                      ---------------------------------------
                                          2008      2007      2008      2007
    -------------------------------------------------------------------------

    Unrealized Foreign Exchange
     (Gain) Loss on:
      Translation of U.S. dollar debt
       issued from Canada             $    (52) $   (289) $    165  $   (330)
      Translation of U.S. dollar
       partnership contribution
       receivable issued from Canada        44       305       (99)      343
    Other Foreign Exchange (Gain) Loss     (27)       (9)       (6)      (18)
    -------------------------------------------------------------------------
                                      $    (35) $      7  $     60  $     (5)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    9.  INCOME TAXES

    The provision for income taxes is as follows:

                                      Three Months Ended    Six Months Ended
                                             June 30,            June 30,
                                      ---------------------------------------
                                          2008      2007      2008      2007
    -------------------------------------------------------------------------

    Current
      Canada                          $    172  $     61  $    406  $    343
      United States                        256       220       385       312
      Other Countries                       12         4        13         5
    -------------------------------------------------------------------------
    Total Current Tax                      440       285       804       660
    -------------------------------------------------------------------------

    Future                                 152        79        73      (111)
    -------------------------------------------------------------------------
                                      $    592  $    364  $    877  $    549
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    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,
                                      ---------------------------------------
                                          2008      2007      2008      2007
    -------------------------------------------------------------------------

    Net Earnings Before Income Tax    $  1,813  $  1,810  $  2,191  $  2,492
    Canadian Statutory Rate              29.7%     32.3%     29.7%     32.3%
    -------------------------------------------------------------------------
    Expected Income Tax                    538       585       650       805

    Effect on Taxes Resulting from:
      Statutory and other rate
       differences                          75        19        78        24
      Effect of tax rate changes(*)          -       (37)        -       (37)
      Effect of legislative changes          -      (231)        -      (231)
      Non-taxable downstream
       partnership income                   (8)      (13)       (7)      (19)
      International financing              (79)      (14)     (159)      (29)
      Foreign exchange gains not
       included in net earnings             24         -       180         -
      Non-taxable capital (gains)
       losses                               (4)        8        11       (12)
      Other                                 46        47       124        48
    -------------------------------------------------------------------------
                                      $    592  $    364  $    877  $    549
    -------------------------------------------------------------------------
    Effective Tax Rate                   32.7%     20.1%     40.0%     22.0%
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    (*) The Canadian federal government, during the second quarter of 2007,
        enacted income tax rate changes.

    10. INVENTORIES

                                                             As at     As at
                                                           June 30, December
                                                              2008  31, 2007
    -------------------------------------------------------------------------

    Product
      Canadian Plains                                     $      1  $      -
      United States                                              -         2
      Integrated Oil                                         1,092       646
      Market Optimization                                      327       180
    Parts and Supplies                                           2         -
    -------------------------------------------------------------------------
                                                          $  1,422  $    828
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    11. LONG-TERM DEBT                                    As at        As at
                                                        June 30, December 31,
                                                           2008         2007
    -------------------------------------------------------------------------

    Canadian Dollar Denominated Debt
      Revolving credit and term loan borrowings      $    1,673   $    1,506
      Unsecured notes                                     1,718        1,138
    -------------------------------------------------------------------------
                                                          3,391        2,644
    -------------------------------------------------------------------------

    U.S. Dollar Denominated Debt
      Revolving credit and term loan borrowings             650          495
      Unsecured notes                                     6,350        6,421
    -------------------------------------------------------------------------
                                                          7,000        6,916
    -------------------------------------------------------------------------

    Increase in Value of Debt Acquired(*)                    61           66
    Debt Discounts and Financing Costs                      (83)         (83)
    Current Portion of Long-Term Debt                      (491)        (703)
    -------------------------------------------------------------------------
                                                     $    9,878   $    8,840
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (*) Certain of the notes and debentures of EnCana were acquired in
    business combinations and were accounted for at their fair value at the
    dates of acquisition. The difference between the fair value and the
    principal amount of the debt is being amortized over the remaining life
    of the outstanding debt acquired, approximately 20 years.

    On January 18, 2008, EnCana completed a public offering in Canada of
    senior unsecured medium term notes in the aggregate principal amount of
    C$750 million. The notes have a coupon rate of 5.80 percent and mature on
    January 18, 2018.


    12. ASSET RETIREMENT OBLIGATION

    The following table presents the reconciliation of the beginning and
    ending aggregate carrying amount of the obligation associated with the
    retirement of oil and gas assets and refining facilities:

                                                          As at        As at
                                                        June 30, December 31,
                                                           2008         2007
    -------------------------------------------------------------------------
    Asset Retirement Obligation, Beginning of Year   $    1,458   $    1,051
    Liabilities Incurred                                     26           89
    Liabilities Settled                                     (80)        (100)
    Liabilities Divested                                     (3)           -
    Change in Estimated Future Cash Flows                    (5)         184
    Accretion Expense                                        41           64
    Other                                                   (35)         170
    -------------------------------------------------------------------------
    Asset Retirement Obligation, End of Period       $    1,402   $    1,458
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    13. SHARE CAPITAL
                                         June 30, 2008     December 31, 2007
                                    -----------------------------------------
    (millions)                       Number     Amount     Number     Amount
    -------------------------------------------------------------------------

    Common Shares Outstanding,
     Beginning of Year                750.2    $ 4,479      777.9    $ 4,587
    Common Shares Issued under
     Option Plans                       2.8         76        8.3        176
    Stock-Based Compensation              -         11          -         17
    Common Shares Purchased            (2.8)       (13)     (36.0)      (301)
    -------------------------------------------------------------------------
    Common Shares Outstanding,
     End of Period                    750.2    $ 4,553      750.2    $ 4,479
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Normal Course Issuer Bid

    To June 30, 2008, the Company purchased 4.8 million Common Shares for
    total consideration of approximately $326 million. Of the amount paid,
    $29 million was charged to Share capital and $297 million was charged to
    Retained earnings. Included in the Common Shares Purchased in 2008 are
    2.0 million Common Shares distributed (2007 - 2.9 million), valued at
    $16 million (2007 - $24 million), from the EnCana Employee Benefit Plan
    Trust that vested under EnCana's Performance Share Unit Plan (See Note
    15). For these Common Shares distributed, there was a $54 million
    adjustment to Retained earnings (2007 - $82 million) with a reduction to
    Paid in surplus of $70 million (2007 - $106 million).

    EnCana has received regulatory approval each year under Canadian
    securities laws to purchase Common Shares under six consecutive Normal
    Course Issuer Bids ("Bids"). EnCana is entitled to purchase, for
    cancellation, up to approximately 75.1 million Common Shares under the
    renewed Bid which commenced on November 13, 2007 and terminates on
    November 12, 2008.

    Stock Options

    EnCana has stock-based compensation plans that allow employees to
    purchase Common Shares of the Company. Option exercise prices approximate
    the market price for the Common Shares on the date the options were
    issued. Options granted under the plans are generally fully exercisable
    after three years and expire five years after the date granted. Options
    granted under predecessor and/or related company replacement plans expire
    up to 10 years from the date the options were granted.

    The following tables summarize the information about options to purchase
    Common Shares that do not have Tandem Share Appreciation Rights ("TSARs")
    attached to them at June 30, 2008. Information related to TSARs is
    included in Note 15.

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

    Outstanding, Beginning of Year                          3.4        21.82
    Exercised                                              (2.8)       23.66
    -------------------------------------------------------------------------
    Outstanding, End of Period                              0.6        13.25
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Exercisable, End of Period                              0.6        13.25
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


                             Outstanding Options         Exercisable Options
    -------------------------------------------------------------------------
                                   Weighted
                                    Average   Weighted  Number of   Weighted
                       Number of  Remaining    Average    Options    Average
    Range of             Options    Contrac-  Exercise        Out-  Exercise
    Exercise         Outstanding  tual Life      Price   standing      Price
    Price (C$)         (millions)    (years)       (C$) (millions)       (C$)
    -------------------------------------------------------------------------

    11.00 to 21.99           0.5        1.4      11.62        0.5      11.62
    22.00 to 25.99           0.1        0.3      24.62        0.1      24.62
    -------------------------------------------------------------------------
                             0.6        1.3      13.25        0.6      13.25
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    At December 31, 2007, the balance in Paid in surplus related to
    stock-based compensation programs.


    14. CAPITAL STRUCTURE

    The Company's capital structure is comprised of Shareholders' Equity plus
    Long-Term Debt. The Company's objectives when managing its capital
    structure are to:

      i)  maintain financial flexibility so as to preserve EnCana's access to
          capital markets and its ability to meet its financial obligations;
          and

     ii)  finance internally generated growth as well as potential
          acquisitions.

    The Company monitors its capital structure and short-term financing
    requirements using non-GAAP financial metrics consisting of Net Debt to
    Capitalization and Net Debt to Adjusted Earnings Before Interest, Taxes,
    Depreciation and Amortization ("EBITDA"). The metrics are used to steward
    the Company's overall debt position as measures of the Company's overall
    financial strength.

    EnCana targets a Net Debt to Capitalization ratio of between 30 and 40
    percent that is calculated as follows:

                                                    -------------------------
                                                              As at
                                                    -------------------------
                                                        June 30, December 31,
                                                           2008         2007
    -------------------------------------------------------------------------

    Long-Term Debt, excluding current portion        $    9,878   $    8,840
    Less: Working capital                                (2,086)      (1,886)
    -------------------------------------------------------------------------
    Net Debt                                             11,964       10,726
    Total Shareholders' Equity                           20,817       20,704
    -------------------------------------------------------------------------
    Total Capitalization                             $   32,781   $   31,430
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Net Debt to Capitalization ratio                        36%          34%
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    EnCana's Net Debt to Capitalization ratio increased to 36 percent from
    34 percent at December 31, 2007 primarily due to unrealized mark-to-
    market losses on risk management instruments which increased Net Debt.
    Excluding this impact, the Net Debt to Capitalization ratio would have
    been 34 percent at June 30, 2008 and would have remained unchanged at
    34 percent at December 31, 2007.

    EnCana targets a Net Debt to Adjusted EBITDA of 1.0 to 2.0 times. At
    June 30, 2008, the Net Debt to Adjusted EBITDA was 1.3x (December 31,
    2007 - 1.2x) calculated on a trailing twelve-month basis as follows:

                                                    -------------------------
                                                             As at
                                                    -------------------------
                                                        June 30, December 31,
                                                           2008         2007
    -------------------------------------------------------------------------

    Net Debt                                         $   11,964   $   10,726
    -------------------------------------------------------------------------

    Net Earnings from Continuing Operations          $    3,255   $    3,884
    Add (deduct):
      Interest, net                                         514          428
      Income tax expense                                  1,265          937
      Depreciation, depletion and amortization            4,206        3,816
      Accretion of asset retirement obligation               76           64
      Foreign exchange (gain) loss, net                     (99)        (164)
      (Gain) loss on divestitures                           (24)         (65)
    -------------------------------------------------------------------------
    Adjusted EBITDA                                  $    9,193   $    8,900
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Net Debt to Adjusted EBITDA                            1.3x         1.2x
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    EnCana manages its capital structure and makes adjustments according to
    market conditions to maintain flexibility while achieving the objectives
    stated above. To manage the capital structure, the Company may adjust
    capital spending, adjust dividends paid to shareholders, purchase shares
    for cancellation pursuant to normal course issuer bids, issue new shares,
    issue new debt or repay existing debt.

    The Company's capital management objectives, evaluation measures,
    definitions and targets have remained unchanged over the periods
    presented. EnCana is subject to certain financial covenants in its credit
    facility agreements and is in compliance with all financial covenants.

    15. COMPENSATION PLANS

    The tables below outline certain information related to EnCana's
    compensation plans at June 30, 2008. Additional information is contained
    in Note 17 of the Company's annual audited Consolidated Financial
    Statements for the year ended December 31, 2007.

    A) Pensions

    The following table summarizes the net benefit plan expense:

                                     Three Months Ended     Six Months Ended
                                           June 30,              June 30,
                                  -------------------------------------------
                                       2008       2007       2008       2007
    -------------------------------------------------------------------------

    Current Service Cost          $       4  $       4  $       8  $       8
    Interest Cost                         6          5         11          9
    Expected Return on Plan
     Assets                              (5)        (5)       (10)        (9)
    Expected Actuarial Loss on
     Accrued Benefit Obligation           1          1          2          2
    Expected Amortization of
     Past Service Costs                   -          1          1          1
    Amortization of Transitional
     Obligation                           -         (1)        (1)        (1)
    Expense for Defined
     Contribution Plan                   10          9         20         16
    -------------------------------------------------------------------------
    Net Benefit Plan Expense      $      16  $      14  $      31  $      26
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    For the period ended June 30, 2008, contributions of $7 million have been
    made to the defined benefit pension plans (2007 - $4 million).

    B) Tandem Share Appreciation Rights ("TSARs")

    The following table summarizes the information about TSARs at June 30,
    2008:

                                                                    Weighted
                                                                     Average
                                                    Outstanding     Exercise
                                                          TSARs        Price
    -------------------------------------------------------------------------

    Canadian Dollar Denominated (C$)
    Outstanding, Beginning of Year                   18,854,141        48.44
    Granted                                           3,998,422        70.26
    Exercised - SARs                                 (2,845,548)       43.72
    Exercised - Options                                 (46,810)       42.41
    Forfeited                                          (288,175)       52.59
    -------------------------------------------------------------------------
    Outstanding, End of Period                       19,672,030        53.51
    -------------------------------------------------------------------------
    Exercisable, End of Period                        8,317,809        45.57
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    For the period ended June 30, 2008, EnCana recorded compensation costs of
    $340 million related to the outstanding TSARs (2007 - $157 million).

    C) Performance Tandem Share Appreciation Rights ("Performance TSARs")

    The following table summarizes the information about Performance TSARs at
    June 30, 2008:

                                                                    Weighted
                                                                     Average
                                                    Outstanding     Exercise
                                                          TSARs        Price
    -------------------------------------------------------------------------

    Canadian Dollar Denominated (C$)
    Outstanding, Beginning of Year                    6,930,925        56.09
    Granted                                           7,058,538        69.40
    Exercised - SARs                                   (259,466)       56.09
    Exercised - Options                                  (3,669)       56.09
    Forfeited                                          (454,914)       57.94
    -------------------------------------------------------------------------
    Outstanding, End of Period                       13,271,414        63.11
    -------------------------------------------------------------------------
    Exercisable, End of Period                        1,497,135        56.09
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    For the period ended June 30, 2008, EnCana recorded compensation costs of
    $126 million related to the outstanding Performance TSARs (2007 -
    $9 million).

    D) Share Appreciation Rights ("SARs")

    In 2008, EnCana granted SARs to certain employees which entitles the
    employee to receive a cash payment equal to the excess of the market
    price of EnCana's Common Shares at the time of exercise over the grant
    price. SARs are exercisable at 30 percent of the number granted after one
    year, an additional 30 percent of the number granted after two years and
    are fully exercisable after three years and expire five years after the
    grant date.

    The following table summarizes the information about SARs at June 30,
    2008:

                                                                    Weighted
                                                                     Average
                                                    Outstanding     Exercise
                                                           SARs        Price
    -------------------------------------------------------------------------
    Canadian Dollar Denominated (C$)

    Outstanding, Beginning of Year                            -            -
    Granted                                             951,065        71.71
    Forfeited                                           (17,250)       69.40
    -------------------------------------------------------------------------
    Outstanding, End of Period                          933,815        71.75
    -------------------------------------------------------------------------
    Exercisable, End of Period                                -            -
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    For the period ended June 30, 2008, EnCana recorded compensation costs of
    $5 million related to the outstanding SARs (2007 - nil).

    E) Performance Share Appreciation Rights ("Performance SARs")

    In 2008, EnCana granted Performance SARs to certain employees which
    entitles the employee to receive a cash payment equal to the excess of
    the market price of EnCana's Common Shares at the time of exercise over
    the grant price. Performance SARs vest and expire under the same terms
    and service conditions as SARs and are also subject to EnCana attaining
    prescribed performance relative to pre-determined key measures.
    Performance SARs that do not vest when eligible are forfeited.

    The following table summarizes the information about Performance SARs at
    June 30, 2008:

                                                                    Weighted
                                                                     Average
                                                    Outstanding     Exercise
                                                           SARs        Price
    -------------------------------------------------------------------------
    Canadian Dollar Denominated (C$)

    Outstanding, Beginning of Year                            -            -
    Granted                                           1,677,030        69.40
    Forfeited                                           (34,500)       69.40
    -------------------------------------------------------------------------
    Outstanding, End of Period                        1,642,530        69.40
    -------------------------------------------------------------------------
    Exercisable, End of Period                                -            -
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    For the period ended June 30, 2008, EnCana recorded compensation costs of
    $4 million related to the outstanding Performance SARs (2007 - nil).

    F) Deferred Share Units ("DSUs")

    The following table summarizes the information about DSUs at June 30,
    2008:

                                                                     Average
                                                    Outstanding        Share
                                                           DSUs        Price
    -------------------------------------------------------------------------
    Canadian Dollar Denominated (C$)

    Outstanding, Beginning of Year                      589,174        33.78
    Granted, Directors                                   82,218        67.92
    Exercised                                           (34,008)       91.00
    Units, in Lieu of Dividends                           6,208        85.17
    -------------------------------------------------------------------------
    Outstanding, End of Period                          643,592        35.61
    -------------------------------------------------------------------------
    Exercisable, End of Period                          643,592        35.61
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    For the period ended June 30, 2008, EnCana recorded compensation costs of
    $23 million related to the outstanding DSUs (2007 - $11 million).

    G) Performance Share Units ("PSUs")

    The following table summarizes the information about PSUs at June 30,
    2008:

                                                                     Average
                                                    Outstanding        Share
                                                           PSUs        Price
    -------------------------------------------------------------------------
    Canadian Dollar Denominated (C$)

    Outstanding, Beginning of Year                    1,685,036        38.79
    Granted                                             408,686        70.77
    Distributed                                      (2,042,541)       45.34
    Forfeited                                           (51,181)       38.32
    -------------------------------------------------------------------------
    Outstanding, End of Period                                -            -
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    For the period ended June 30, 2008, EnCana recorded compensation costs of
    $1 million related to the outstanding PSUs (2007 - $15 million).

    16. 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)              2008       2008       2007       2008       2007
    -------------------------------------------------------------------------
    Weighted Average
     Common Shares
     Outstanding - Basic   749.5      750.2      758.5      749.8      763.5
    Effect of Dilutive
     Securities              3.5        1.1        6.7        2.5        9.7
    -------------------------------------------------------------------------
    Weighted Average
     Common Shares
     Outstanding -
     Diluted               753.0      751.3      765.2      752.3      773.2
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    17. FINANCIAL INSTRUMENTS AND RISK MANAGEMENT

    EnCana's financial assets and liabilities are comprised of cash and cash
    equivalents, accounts receivable and accrued revenues, accounts payable
    and accrued liabilities, the partnership contribution receivable and
    payable, risk management assets and liabilities, and long-term debt. Risk
    management assets and liabilities arise from the use of derivative
    financial instruments. Fair values of financial assets and liabilities,
    summarized information related to risk management positions, and
    discussion of risks associated with financial assets and liabilities are
    presented as follows.

    A) Fair Value of Financial Assets and Liabilities

    The fair values of cash and cash equivalents, accounts receivable and
    accrued revenues, and accounts payable and accrued liabilities
    approximate their carrying amount due to the short-term maturity of those
    instruments.

    Risk management assets and liabilities are recorded at their estimated
    fair value based on the mark-to-market method of accounting, using quoted
    market prices or, in their absence, third-party market indications and
    forecasts. Long-term debt is carried at amortized cost using the
    effective interest method of amortization. The estimated fair values of
    long-term borrowings have been determined based on market information
    where available, or by discounting future payments of interest and
    principal at estimated interest rates expected to be available to the
    Company at period end.

    The fair values of the partnership contribution receivable and
    partnership contribution payable approximate their carrying amount due to
    the specific nature of these instruments in relation to the creation of
    the integrated oil joint venture. Further information about these notes
    is disclosed in Note 10 to the Company's annual audited Consolidated
    Financial Statements.

    The fair value of financial assets and liabilities were as follows:


                                             As at               As at
                                         June 30, 2008     December 31, 2007
                                      ---------------------------------------
                                       Carrying     Fair   Carrying     Fair
                                        Amount     Value    Amount     Value
    -------------------------------------------------------------------------
    Financial Assets
      Held-for-Trading:
        Cash and cash equivalents      $   778   $   778   $   553   $   553
        Risk management assets(*)          606       606       403       403
      Loans and Receivables:
        Accounts receivable and
         accrued revenues                3,346     3,346     2,381     2,381
        Partnership contribution
         receivable(*)                   3,297     3,297     3,444     3,444
    Financial Liabilities
      Held-for-Trading:
        Risk management liabilities(*) $ 1,690   $ 1,690   $   236   $   236
      Other Financial Liabilities:
        Accounts payable and accrued
         liabilities                     4,888     4,888     3,982     3,982
        Long-term debt(*)               10,369    10,461     9,543     9,763
        Partnership contribution
         payable(*)                      3,309     3,309     3,451     3,451
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (*) Including current portion.


    B) Risk Management Assets and Liabilities

    Net Risk Management Position                          As at        As at
                                                        June 30, December 31,
                                                           2008         2007
    -------------------------------------------------------------------------

    Risk Management
      Current asset                                  $      265   $      385
      Long-term asset                                       341           18
    -------------------------------------------------------------------------
                                                            606          403
    -------------------------------------------------------------------------

    Risk Management
      Current liability                                   1,617          207
      Long-term liability                                    73           29
    -------------------------------------------------------------------------
                                                          1,690          236
    -------------------------------------------------------------------------
    Net Risk Management Asset (Liability)            $   (1,084)  $      167
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Summary of Unrealized Risk Management Positions


                           As at June 30, 2008      As at December 31, 2007
                       ------------------------------------------------------
                              Risk Management            Risk Management
                       ------------------------------------------------------
                         Asset  Liability    Net    Asset  Liability    Net
    -------------------------------------------------------------------------
    Commodity Prices
      Natural gas       $   566  $ 1,381  $  (815) $   375  $    29  $   346
      Crude oil               5      309     (304)       6      205     (199)
      Power                  35        -       35       19        -       19
    Interest Rates            -        -        -        2        -        2
    Credit                    -        -        -        1        2       (1)
    -------------------------------------------------------------------------
    Total Fair Value    $   606  $ 1,690  $(1,084) $   403  $   236  $   167
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Net Fair Value Methodologies Used to Calculate Unrealized Risk Management
    Positions

                                                          As at        As at
                                                        June 30, December 31,
                                                           2008         2007
    -------------------------------------------------------------------------

    Prices actively quoted                           $   (1,476)  $      148
    Prices sourced from observable data or
     market corroboration                                   392           19
    -------------------------------------------------------------------------
    Total Fair Value                                 $   (1,084)  $      167
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Prices actively quoted refers to the fair value of contracts valued using
    quoted prices in an active market. Prices sourced from observable data or
    market corroboration refers to the fair value of contracts valued in part
    using active quotes and in part using observable, market-corroborated
    data.


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

                            Notional                             Fair Market
                             Volumes     Term    Average Price         Value
    -------------------------------------------------------------------------
    Natural Gas
     Sales Contracts

    Fixed Price Contracts
      NYMEX Fixed Price   1,494 MMcf/d   2008     8.20 US$/Mcf     $  (1,419)
      NYMEX Fixed Price     391 MMcf/d   2009     9.85 US$/Mcf          (364)

    Options
      Purchased AECO
       Call Options         (6) MMcf/d   2008     10.85 C$/Mcf             1
      Purchased NYMEX
       Call Options       (851) MMcf/d   2008    11.55 US$/Mcf           223
      Purchased NYMEX
       Put Options          136 MMcf/d   2008     8.85 US$/Mcf            (9)
      Purchased NYMEX
       Put Options          341 MMcf/d   2009     8.85 US$/Mcf           (18)

    Basis Contracts
      Canada                175 MMcf/d   2008   (0.76) US$/Mcf            27
      United States       1,058 MMcf/d   2008   (1.66) US$/Mcf           240
      Canada and
       United States(*)                2009-2011                         377
    -------------------------------------------------------------------------
                                                                        (942)
    Other Financial
     Positions(xx)                                                       (33)
    -------------------------------------------------------------------------
    Total Unrealized Loss
     on Financial Contracts                                             (975)
    Paid Premiums on
     Unexpired Options                                                   160
    -------------------------------------------------------------------------
    Natural Gas Fair Value Position                                $    (815)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (*) EnCana has entered into swaps to protect against widening natural gas
    price differentials between production areas, including Canada, the U.S.
    Rockies and Texas, and various sales points. These basis swaps are priced
    using both fixed prices and basis prices determined as a percentage of
    NYMEX.

    (xx) Other financial positions are part of the ongoing operations of the
    Company's proprietary production and transportation commitment
    management.


                            Notional                             Fair Market
                             Volumes     Term    Average Price         Value
    -------------------------------------------------------------------------
    Crude Oil Sales
     Contracts

    Fixed Price Contracts
      WTI NYMEX Fixed
       Price             23,000 bbls/d   2008    70.13 US$/bbl     $    (297)
    Other Financial
     Positions(xx)                                                        (7)
    -------------------------------------------------------------------------
    Crude Oil Fair
     Value Position                                                $    (304)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Power Purchase Contracts
    Power Fair Value Position                                      $      35
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (xx) Other financial positions are part of the ongoing operations of the
    Company's proprietary production management.


    Net Earnings Impact of Realized and Unrealized Gains (Losses) on Risk
    Management Positions

                                                Realized Gain (Loss)
                                      ---------------------------------------
                                       Three Months Ended   Six Months Ended
                                             June 30,            June 30,
                                      ---------------------------------------
                                          2008      2007      2008      2007
    -------------------------------------------------------------------------

    Revenues, Net of Royalties         $  (586)  $   382   $  (566)  $   697
    Operating Expenses and Other            (2)        -         -         1
    -------------------------------------------------------------------------
    Gain (Loss) on Risk Management     $  (588)  $   382   $  (566)  $   698
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

                                               Unrealized Gain (Loss)
                                      ---------------------------------------
                                       Three Months Ended   Six Months Ended
                                             June 30,            June 30,
                                      ---------------------------------------
                                          2008      2007      2008      2007
    -------------------------------------------------------------------------

    Revenues, Net of Royalties         $  (328)  $    49   $(1,424)  $  (566)
    Operating Expenses and Other            10         6        13         7
    -------------------------------------------------------------------------
    Gain (Loss) on Risk Management     $  (318)  $    55   $(1,411)  $  (559)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    Reconciliation of Unrealized Risk Management Positions from January 1 to
    June 30, 2008

                                                 2008                   2007
                                       --------------------------------------
                                                          Total        Total
                                       Fair Market   Unrealized   Unrealized
                                             Value   Gain (Loss)  Gain (Loss)
    -------------------------------------------------------------------------

    Fair Value of Contracts,
     Beginning of Year                  $      167
    Change in Fair Value of Contracts
     in Place at Beginning of Year
     and Contracts Entered into
     During the Period                      (1,977)  $   (1,977)  $      132
    Fair Value of Contracts in Place
     at Transition that Expired During
     the Period                                  -            -            7
    Fair Value of Contracts Realized
     During the Period                         566          566         (698)
    -------------------------------------------------------------------------
    Fair Value of Contracts Outstanding $   (1,244)  $   (1,411)  $     (559)
    Paid Premiums on Unexpired Options         160
    -------------------------------------------------------------------------
    Fair Value of Contracts and
     Premiums Paid, End of Period       $   (1,084)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Commodity Price Sensitivities

    The following table summarizes the sensitivity of the fair value of the
    Company's risk management positions to fluctuations in commodity prices,
    with all other variables held constant. When assessing the potential
    impact of these commodity price changes, the Company believes 10%
    volatility is a reasonable measure. Fluctuations in commodity prices
    could have resulted in unrealized gains (losses) impacting net earnings
    as at June 30, 2008 as follows:

                                                      Favorable  Unfavorable
                                                     10% Change   10% Change
    -------------------------------------------------------------------------

    Natural gas price                                $      347   $     (303)
    Crude oil price                                          60          (60)
    Power price                                               4           (4)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    C) Risks Associated with Financial Assets and Liabilities

    The Company is exposed to financial risks arising from its financial
    assets and liabilities. The financial risks include market risk relating
    to commodity prices, interest rates and foreign exchange rates, credit
    risk and liquidity risk.

    Market Risk

    Market risk, the risk that the fair value or future cash flows of
    financial assets or liabilities will fluctuate due to movements in market
    prices, is comprised of the following:

    -   Commodity Price Risk

        As a means of mitigating exposure to commodity price risk volatility,
        the Company has entered into various derivative agreements. The use
        of derivative instruments is governed under formal policies and is
        subject to limits established by the Board of Directors. The
        Company's policy is to not use derivative financial instruments for
        speculative purposes.

        Natural Gas - To partially mitigate the natural gas commodity price
        risk, the Company enters into option contracts and swaps, which fix
        the NYMEX prices. To help protect against widening natural gas price
        differentials in various production areas, EnCana has entered into
        swaps to manage the price differentials between these production
        areas and various sales points.

        Crude Oil - The Company has partially mitigated its exposure to the
        WTI NYMEX price with fixed price swaps.

        Power - The Company has in place two Canadian dollar denominated
        derivative contracts, which commenced January 1, 2007 for a period of
        11 years, to manage its electricity consumption costs.

    -   Interest Rate Risk

        The Company partially mitigates its exposure to interest rate changes
        by maintaining a mix of both fixed and floating rate debt.

        At June 30, 2008, the increase or decrease in net earnings for each
        one percent change in interest rates on floating rate debt amounts to
        $16 million.

        Foreign Exchange Risk

        As EnCana operates primarily in North America, fluctuations in the
        exchange rate between the U.S./Canadian dollar can have a significant
        effect on the Company's reported results. EnCana's functional
        currency is Canadian dollars, however, the Company reports its
        results in U.S. dollars as most of its revenue is closely tied to the
        U.S. dollar and to facilitate a more direct comparison to other North
        American oil and gas companies. As the effects of foreign exchange
        fluctuations are embedded in the Company's results, the total effect
        of foreign exchange fluctuations are not separately identifiable.

        To mitigate the exposure to the fluctuating U.S./Canadian exchange
        rate, EnCana maintains a mix of both U.S. dollar and Canadian dollar
        debt.

        As disclosed in Note 8, EnCana's foreign exchange (gain) loss is
        primarily comprised of unrealized foreign exchange gains and losses
        on the translation of U.S. dollar debt issued from Canada and the
        translation of U.S. dollar partnership contribution receivable issued
        from Canada. At June 30, 2008, EnCana had $5,350 million in U.S.
        dollar debt issued from Canada ($5,421 million at December 31, 2007)
        and $3,297 million related to the U.S. dollar partnership
        contribution receivable ($3,444 million at December 31, 2007). A
        $0.01 change in the U.S. to Canadian dollar exchange rate would have
        resulted in a $21 million change in foreign exchange (gain) loss at
        June 30, 2008.

        Credit Risk

        Credit risk is the risk that the counterparty to a financial asset
        will default resulting in the Company incurring a financial loss.
        This credit exposure is mitigated through the use of Board-approved
        credit policies governing the Company's credit portfolio and with
        credit practices that limit transactions according to counterparties'
        credit quality. All foreign currency agreements are with major
        financial institutions in Canada and the United States or with
        counterparties having investment grade credit ratings. A substantial
        portion of the Company's accounts receivable are with customers in
        the oil and gas industry and are subject to normal industry credit
        risks.

        At June 30, 2008, EnCana had three counterparties whose net
        settlement position individually account for more than 10 percent of
        the fair value of the outstanding in-the-money net financial
        instrument contracts by counterparty. The maximum credit risk
        exposure associated with accounts receivable and accrued revenues,
        risk management assets and the partnership contribution receivable is
        the total carrying value.

        Liquidity Risk

        Liquidity risk is the risk the Company will encounter difficulties in
        meeting its financial liability obligations. The Company manages its
        liquidity risk through cash and debt management. As disclosed in
        Note 14, EnCana targets a Net Debt to Capitalization ratio between 30
        and 40 percent and a Net Debt to Adjusted EBITDA of 1.0 to 2.0 times
        to steward the Company's overall debt position.

        In managing liquidity risk, the Company has access to a wide range of
        funding at competitive rates through commercial paper, capital
        markets and banks. As at June 30, 2008, EnCana had available unused
        committed bank credit facilities in the amount of $2.7 billion and
        unused capacity under shelf prospectuses, the availability of which
        is dependent on market conditions, for up to $7.2 billion. Of this
        unused shelf capacity, $2 billion expired on July 9, 2008. The
        Company believes it has sufficient funding through the use of these
        facilities to meet foreseeable borrowing requirements.

        EnCana maintains investment grade credit ratings on its senior
        unsecured debt. On May 12, 2008, following the proposed corporate
        reorganization (See Note 4), Standard & Poor's Ratings Service
        assigned a rating of A- and placed the Company on "CreditWatch with
        Negative Implications", DBRS Limited assigned a rating of A(low) and
        placed the Company "Under Review with Developing Implications", and
        Moody's Investors Service has assigned a rating of Baa2 and changed
        the outlook to "Stable" from "Positive".

        The timing of cash outflows relating to financial liabilities are
        outlined in the table below:

                                              2 -      4 -   beyond
                                  1 year  3 years  5 years  5 years    Total
    -------------------------------------------------------------------------

    Accounts payable and accrued
     liabilities                 $ 4,888  $     -  $     -  $     -  $ 4,888
    Risk management liabilities    1,617       73        -        -    1,690
    Long-term debt(*)                491      450    3,314    6,136   10,391
    Partnership contribution
     payable(*)                      297      649      732    1,631    3,309
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (*) Principal, including current portion.


        Included in EnCana's total long-term debt obligations of
        $10,391 million at June 30, 2008 are $2,323 million in obligations
        related to Bankers' Acceptances, Commercial Paper and LIBOR loans.
        These amounts are fully supported and Management expects that they
        will continue to be supported by revolving credit and term loan
        facilities that have no repayment requirements within the next year.

    18. CONTINGENCIES

    Legal Proceedings

    The Company is involved in various legal claims associated with the
    normal course of operations. The Company believes it has made adequate
    provision for such legal claims.

    Discontinued Merchant Energy Operations

    During the period between 2003 and 2005, EnCana and its indirect wholly
    owned U.S. marketing subsidiary, WD Energy Services Inc. ("WD"), along
    with other energy companies, were named as defendants in several
    lawsuits, some of which were class action lawsuits, relating to sales of
    natural gas from 1999 to 2002. The lawsuits allege that the defendants
    engaged in a conspiracy with unnamed competitors in the natural gas
    markets in California in violation of U.S. and California anti-trust and
    unfair competition laws.

    Without admitting any liability in the lawsuits, WD agreed to settle all
    of the class action lawsuits in both state and federal court for payment
    of $20.5 million and $2.4 million, respectively. Also, as previously
    disclosed, without admitting any liability whatsoever, WD concluded
    settlements with the U.S. Commodity Futures Trading Commission ("CFTC")
    for $20 million and of a previously disclosed consolidated class action
    lawsuit in the United States District Court in New York for $8.2 million.
    Also, without admitting any liability whatsoever, WD concluded settlement
    negotiations with a group of individual plaintiffs. It was agreed that WD
    would settle these claims for $23 million. Execution of the Settlement
    Agreement is pending.

    The remaining lawsuit was commenced by E. & J. Gallo Winery ("Gallo").
    The Gallo lawsuit claims damages in excess of $30 million. California law
    allows for the possibility that the amount of damages assessed could be
    tripled.

    The Company and WD intend to vigorously defend against this outstanding
    claim; however, the Company cannot predict the outcome of these
    proceedings or any future proceedings against the Company, whether these
    proceedings would lead to monetary damages which could have a material
    adverse effect on the Company's financial position, or whether there will
    be other proceedings arising out of these allegations.

    19. RECLASSIFICATION

    Certain information provided for prior periods has been reclassified to
    conform to the presentation adopted in 2008.
    




For further information:

For further information: Investor contact: EnCana Corporate
Communications, Paul Gagne, Vice-President, Investor Relations, (403)
645-4737; Ryder McRitchie, Manager, Investor Relations, (403) 645-2007; Susan
Grey, Manager, Investor Relations, (403) 645-4751; Media contact: Alan Boras,
Manager, Media Relations, (403) 645-4747

Organization Profile

Encana Corporation

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