EnCana generates third quarter cash flow of US$2.2 billion, or $2.93 per share - up 27 percent



    Net earnings per share down 25 percent to $1.24, or $934 million

    Natural gas production increases 8 percent to 3.6 billion cubic
    feet per day

    CALGARY, Oct. 25 /CNW/ - EnCana Corporation (TSX & NYSE:   ECA) continued
to generate solid cash flow during the third quarter of 2007 due to strong
natural gas production growth and favourable gas price hedges that offset
weaker gas prices, plus solid performance from the downstream segment of the
company's integrated oilsands business.
    "This strong performance is the result of the actions we have taken over
the last several years to establish EnCana as a leading producer of
unconventional natural gas and integrated in-situ oilsands, a company with a
unique, low-risk, sustainable growth profile. Our financial and operating
performance is on track for 2007, which is evidence that our resource play
model is working extremely well. Natural gas production is up 16 percent per
share, led by production from our key gas resource plays: Cutbank Ridge in
northeast British Columbia, East Texas, Bighorn in west-central Alberta and
Jonah in Wyoming. As well, we continue to expand our integrated oilsands
business and capture value from strong refining margins in our downstream
operations," said Randy Eresman, EnCana's President & Chief Executive Officer.

    IMPORTANT NOTE: 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).

    Third Quarter 2007 Highlights
    -----------------------------
    (all comparisons are to the third quarter of 2006)

    
    Financial - US$

        -  Cash flow per share diluted increased 27 percent to $2.93, or
           $2.2 billion
        -  Operating earnings per share diluted down 3 percent to $1.27, or
           $961 million, which is lower compared to the same quarter of 2006
           in part due to a $255 million after-tax gain on the sale of a
           Brazil asset in the third quarter of 2006
        -  Net earnings per share diluted down 25 percent to $1.24, or
           $934 million
        -  Realized gains of $323 million, after tax, from commodity price
           risk management measures
        -  Integrated oilsands downstream business generated $344 million of
           pre-tax cash flow from U.S. refineries
        -  Capital investment up 7 percent to $1.58 billion
        -  Generated $643 million of free cash flow (as defined in Note 1 on
           page 7)
        -  Purchased approximately 3.5 million EnCana shares at an average
           price of $61.60 under the Normal Course Issuer Bid, completing the
           company's planned purchase of 5 percent of shares in 2007

    Operating - Upstream

        -  Natural gas production increased 8 percent to 3.63 billion cubic
           feet per day (Bcf/d), up 16 percent per share
        -  Oil and natural gas liquids (NGLs) production up 1 percent on a
           pro forma basis to about 136,000 barrels per day (bbls/d), up
           9 percent per share (see note 1, Production & Drilling
           Summary, page 3)
        -  Total natural gas and liquids production increased 7 percent on a
           pro forma basis to 4.45 billion cubic feet of gas equivalent per
           day (Bcfe/d), up 15 percent per share
        -  Key natural gas resource play production up 15 percent
        -  Oilsands production grew 33 percent to about 57,000 bbls/d (about
           29,000 bbls/d net to EnCana) at Foster Creek and Christina Lake
        -  Operating and administrative costs of $1.01 per thousand cubic
           feet equivalent (Mcfe)

    Operating - Downstream

        -  Refined products production averaged 484,000 bbls/d
           (242,000 bbls/d net to EnCana)
        -  Began processing Canadian bitumen blend through the Borger
           refinery in July, a major milestone for the refinery
        -  Refinery crude utilization of 102 percent was higher than the
           second quarter of 2007 due to the resumption of normal operations
           at the Borger refinery after the installation and start-up of the
           new coker in late June. Year-to-date utilization of 95 percent, or
           430,000 bbls/d crude throughput (215,000 bbls/d net to EnCana),
           continues to exceed expectations due to record throughput at the
           Wood River refinery.
    

    Natural gas production on track with 2007 forecast

    Natural gas production in the third quarter rose steadily with strong
year-over-year increases in a number of key resource plays - 47 percent in
Cutbank Ridge, 36 percent in East Texas, 32 percent in Bighorn, 29 percent in
Jonah and 22 percent in coalbed methane (CBM). Gas production to date in 2007
has averaged about 3.5 Bcf/d, in line with full-year guidance of 3.46 Bcf/d.
Current production is about 3.6 Bcf/d. The company is on track to modestly
exceed its full-year natural gas production guidance. EnCana expects it will
likely achieve closer to 4 percent growth in gas production as opposed to its
original 3 percent growth forecast.

    Integrated oilsands business solid performance continues

    The financial performance of EnCana's emerging integrated oilsands
business continues to be strong. Regional and local market factors have an
impact on refining crack spreads. EnCana's two refineries are located in
markets influenced by U.S. Mid-continent and Chicago 3-2-1 crack spreads which
have been strong relative to U.S. Gulf Coast and NYMEX crack spreads. Third
quarter pre-tax cash flow from the integrated oilsands business was
$411 million, composed of $344 million from downstream and $67 million from
upstream. During the first nine months of 2007, the integrated oilsands
business delivered more than $1 billion of pre-tax cash flow, about 14 percent
of EnCana's total pre-tax cash flow.
    "The financial and operating performance of our integrated oilsands
business continues to validate our market integration initiatives," Eresman
said. "The downstream performance also reflects the strength of
ConocoPhillips' management and operating teams and their commitment and
contribution to the success of this business venture."

    Deep Panuke gas project off Nova Scotia moves ahead

    EnCana's Board of Directors has sanctioned the development of the
company's Deep Panuke natural gas project located about 175 kilometres
offshore Nova Scotia. The $700 million project (about $550 million net to
EnCana) is expected to start production in 2010 and is expected to deliver
between 200 million and 300 million cubic feet of natural gas per day to
markets in Canada and the northeast United States.
    "Over the past five years, EnCana employees, the Government of Nova
Scotia, federal and provincial regulators and the Atlantic energy community
have worked diligently to achieve this important milestone. We are excited to
move ahead with the development of the Deep Panuke discovery," Eresman said.

    
    -------------------------------------------------------------------------
                   Financial Summary - Total Consolidated
    -------------------------------------------------------------------------
    (for the period ended
     Sept 30)                                           9       9
    ($ millions, except per      Q3     Q3       %    months  months     %
     share amounts)             2007   2006   change   2007    2006   change
    -------------------------------------------------------------------------
    Cash flow(1)               2,218  1,894     + 17   6,519   5,400    + 21
      Per share diluted         2.93   2.30     + 27    8.49    6.39    + 33
    -------------------------------------------------------------------------
    Operating earnings(1)        961  1,078     - 11   3,195   2,596    + 23
      Per share diluted         1.27   1.31      - 3    4.16    3.07    + 36
    -------------------------------------------------------------------------
    Net earnings                 934  1,358     - 31   2,877   4,989    - 42
      Per share diluted         1.24   1.65     - 25    3.75    5.90    - 36
    -------------------------------------------------------------------------
    Capital investment         1,575  1,474      + 7   4,230   5,052    - 16
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
             Earnings Reconciliation Summary - Total Consolidated
    -------------------------------------------------------------------------
    Net earnings from
     continuing operations       934  1,343     - 30   2,877   4,408    - 35
    Net earnings from
     discontinued operations       -     15      n/a       -     581     n/a
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Net earnings (loss)
    (Add back losses &
     deduct gains)               934  1,358     - 31   2,877   4,989    - 42

    Unrealized mark-to-market
     hedging gain (loss),
     after-tax                   (69)   285      n/a    (445)  1,275     n/a

    Unrealized foreign
     exchange gain (loss)
     on translation of
     U.S. dollar Notes issued
     from Canada, after-tax       17     (3)     n/a       6     128     n/a

    Future tax recovery due
     to Canada and Alberta
     tax rate reductions           -      -      n/a      37     457     n/a

    Gain (loss) on
     discontinuance,
     after-tax                    25     (2)     n/a      84     533     n/a
    -------------------------------------------------------------------------
    Operating earnings(1)        961  1,078     - 11   3,195   2,596    + 23
      Per share diluted         1.27   1.31      - 3    4.16    3.07    + 36
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (1)  Cash flow and operating earnings are non-GAAP measures as defined in
         Note 1 on page 7.


    -------------------------------------------------------------------------
                        Production & Drilling Summary
    -------------------------------------------------------------------------
                             Total Consolidated
    -------------------------------------------------------------------------
    (for the period ended
     Sept 30)                                           9        9
    (After royalties)            Q3     Q3        %   months   months    %
                                2007   2006(1) change  2007    2006(1) change
    -------------------------------------------------------------------------
    Natural gas
     (MMcf/d)                  3,630  3,359      + 8   3,513   3,354     + 5
    -------------------------------------------------------------------------
      Natural gas production
       per 1,000 shares (Mcf)    445    382     + 16   1,263   1,100    + 15
    -------------------------------------------------------------------------
    Oil and NGLs (Mbbls/d)       136    135      + 1     133     153    - 13
    -------------------------------------------------------------------------
      Oil and NGLs production
        per 1,000 shares (Mcfe)  100     92      + 9     288     302     - 5
    -------------------------------------------------------------------------
    Total Production (MMcfe/d) 4,448  4,170      + 7   4,314   4,275     + 1
    -------------------------------------------------------------------------
      Total per 1,000 shares
       (Mcfe)                    545    474     + 15   1,551   1,402     + 11
    -------------------------------------------------------------------------
    Net wells drilled          1,339  1,001     + 34   3,171   2,841     + 12
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (1)  2006 information has been adjusted on a pro forma basis to reflect
         the integrated oilsands transaction; the nine months of 2006
         includes production from EnCana's Ecuador assets, which were sold in
         the first quarter 2006.
    -------------------------------------------------------------------------
    

    Key natural gas resource play production up 15 percent from past year

    Third quarter 2007 natural gas production from key resource plays
increased 15 percent to 2.78 Bcf/d compared to 2.41 Bcf/d in the third quarter
of 2006. This increased production was driven mainly by double-digit
production increases in six of the company's nine gas resource plays, led by
Cutbank Ridge in northeast British Columbia, East Texas, Bighorn in
west-central Alberta, Jonah in Wyoming, the Barnett Shale play in the Fort
Worth basin, and CBM in central and southern Alberta. The growth in Cutbank
Ridge is the result of continued production growth from the Cadomin zone,
along with an increasing contribution from the Montney and Doig formations.
The increase in Jonah, EnCana's second largest resource play, can be
attributed to improved response from frac stimulations and increased
availability of capacity on regional pipelines due to system expansion and
added compression on the gas gathering system.
    Oilsands production from Foster Creek and Christina Lake was up 33
percent to about 57,000 bbls/d (about 29,000 bbls/d net to EnCana). Overall,
third quarter gas and oil resource play production increased 15 percent in the
past year, on a pro forma basis.

    
                Growth from key North American resource plays
    -------------------------------------------------------------------------
                                    Daily Production
                 ------------------------------------------------------------
    Resource Play         2007                          2006            2005
                 ------------------------------------------------------------
    (After                                Full                          Full
     royalties)    YTD   Q3    Q2    Q1   Year   Q4    Q3    Q2    Q1   Year
    -------------------------------------------------------------------------
    Natural gas
     (MMcf/d)
      Jonah        539   588   523   504   464   487   455   450   461   435
      Piceance     346   354   349   334   326   335   331   324   316   307
      East Texas   129   144   139   103    99    95   106    93    99    90
      Fort Worth   119   128   124   106   101    99   104   108    93    70
      Greater
       Sierra      208   220   219   186   213   212   209   224   208   219
      Cutbank
       Ridge       227   245   226   210   170   199   167   173   140    92
      Bighorn      116   128   115   104    91    99    97    95    72    55
      CBM (1)      251   256   245   251   194   211   209   179   177   112
      Shallow
       Gas(2)      725   713   729   735   739   737   734   730   756   765
    -------------------------------------------------------------------------
    Total
     natural gas
     (MMcf/d)    2,660 2,776 2,669 2,533 2,397 2,474 2,412 2,376 2,322 2,145
    -------------------------------------------------------------------------
    Oil (Mbbls/d)
      Foster
       Creek(3)     24    26    25    20    18    21    19    16    18    14
      Christina
       Lake(3)       3     3     3     3     3     3     3     3     3     3
      Pelican
       Lake(4)      23    24    23    23    24    20    23    22    29    26
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Total oil
     (Mbbls/d)      50    53    51    46    45    44    45    41    50    43
    -------------------------------------------------------------------------
    Total
     (MMcfe/d)   2,959 3,090 2,972 2,811 2,667 2,736 2,680 2,624 2,624 2,403
    -------------------------------------------------------------------------
    % change
     from Q3
     2006                 15
    -------------------------------------------------------------------------
    % change
     from prior
     period              4.0   5.7   2.7    11   2.1   2.1     -  -2.9
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (1) CBM volumes were restated in 2006 to account for commingled volumes
        from the coal and sand intervals based upon regulatory approval.
    (2) Shallow Gas volumes were restated in the first quarter 2007 to report
        commingled volumes from multiple zones within the same geographic
        area based upon regulatory approval.
    (3) Foster Creek and Christina Lake volumes in 2006 and 2005 were
        restated in the first quarter 2007 on a pro forma basis to reflect
        the integrated oilsands transaction.
    (4) Pelican Lake reached royalty payout in April 2006.



           Drilling activity in key North American resource plays
    -------------------------------------------------------------------------
                                    Net Wells Drilled
                  -----------------------------------------------------------
    Resource Play         2007                          2006            2005
                  -----------------------------------------------------------
                                          Full                          Full
                   YTD   Q3    Q2    Q1   Year   Q4    Q3    Q2    Q1   Year
    -------------------------------------------------------------------------
    Natural gas
      Jonah        112    31    42    39   163    41    48    48    26   104
      Piceance     209    72    72    65   220    50    48    59    63   266
      East Texas    27     9    11     7    59    11    12    17    19    84
      Fort Worth    60    17    29    14    97    19    22    27    29    59
      Greater
       Sierra       82    27    32    23   115     5    16    34    60   164
      Cutbank
       Ridge        70    18    25    27   116    19    35    36    26   135
      Bighorn       52    15     9    28    52     7     7    18    20    51
      CBM (1)      749   323    18   408   729   157   156    35   381 1,245
      Shallow
       Gas(2)    1,265   608   241   416 1,310   389   475   217   229 1,389
    -------------------------------------------------------------------------
    Total gas
     wells       2,626 1,120   479 1,027 2,861   698   819   491   853 3,497
    -------------------------------------------------------------------------
    Oil
      Foster
       Creek(3)     17     8     1     8     3     -     -     -     3    20
      Christina
       Lake(3)       3     1     2     -     1     -     -     -     1     -
      Pelican
       Lake          -     -     -     -     -     -     -     -     -    52
    -------------------------------------------------------------------------
    Total oil
     wells          20     9     3     8     4     -     -     -     4    72
    -------------------------------------------------------------------------
    Total        2,646 1,129   482 1,035 2,865   698   819   491   857 3,569
    -------------------------------------------------------------------------
    (1) CBM net wells drilled were restated in 2006 to account for commingled
        volumes from the coal and sand intervals based upon regulatory
        approval.
    (2) Shallow Gas net wells drilled were restated in the first quarter 2007
        as a result of reporting commingled volumes from multiple zones
        within the same geographic area based upon regulatory approval.
    (3) Foster Creek and Christina Lake net wells drilled in 2006 and 2005
        were restated in the first quarter 2007 on a pro forma basis to
        reflect the integrated oilsands transaction.


    -------------------------------------------------------------------------
                Third quarter 2007 natural gas and oil prices
    -------------------------------------------------------------------------
                              Q3      Q3      %     9 months 9 months   %
                             2007    2006   change    2007     2006   change
    -------------------------------------------------------------------------
    Natural gas
    ($/Mcf, realized prices
     include hedging)
    NYMEX                    6.16    6.58      - 6      6.83     7.45    - 8
    EnCana Realized Gas
     Price                   6.75    6.57      + 3      7.19     6.74    + 7
    -------------------------------------------------------------------------
    Oil and NGLs
    ($/bbl, realized prices
     include hedging)
    WTI                     75.15   70.54      + 7     66.22    68.26    - 3
    Western Canadian
     Select (WCS)           52.71   51.71      + 2     46.86    46.55    + 1
    Differential WTI/WCS    22.44   18.83     + 19     19.36    21.71   - 11
    EnCana Realized Liquids
     Price                  49.01   46.92      + 4     45.71    42.03    + 9
    -------------------------------------------------------------------------
    3-2-1 Crack Spread
     ($/bbl)
    U.S. Gulf Coast         11.74   11.00      + 7     15.36    12.18   + 26
    U.S. Mid-Continent      20.92   17.75     + 18     22.34    15.72   + 42
    Chicago                 18.48   15.29     + 21     20.50    14.67   + 40
    -------------------------------------------------------------------------
    

    Price risk management

    Risk management positions at September 30, 2007 are presented in Note 19
to the unaudited Interim Consolidated Financial Statements. In the third
quarter of 2007, EnCana's commodity price risk management measures resulted in
realized gains of approximately $323 million after-tax, composed of a
$364 million gain on gas hedges and a $41 million loss on oil and other
hedges.

    About 1.1 Bcf/d of 2008 gas production hedged at $8.30 per Mcf

    EnCana currently has fixed price contracts on about 1.1 Bcf/d of expected
2008 gas production, at a NYMEX equivalent price of about $8.30 per Mcf. For
the fourth quarter of 2007, EnCana has about 1.8 Bcf/d of gas production with
downside price protection, composed of 1.6 Bcf/d under fixed price contracts
at an average NYMEX equivalent price of $8.77 per Mcf and 240 MMcf/d with put
options at a NYMEX equivalent strike price of $6.00 per Mcf. EnCana has hedged
23,000 bbls/d of expected 2008 oil production at a price of WTI $70.13 per
bbl. EnCana also has about 126,000 bbls/d of 2007 oil production with downside
price protection, composed of 34,500 bbls/d under fixed price contracts at an
average West Texas Intermediate (WTI) price of $64.40 per bbl, plus put
options on 91,500 bbls/d at an average strike price of WTI $55.34 per bbl.
This price hedging strategy helps reduce uncertainty in cash flow during
periods of commodity price volatility.

    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. EnCana's production gives rise to exposure to
these price discounts, also known as basis differentials. For the remainder of
2007 EnCana has hedged 100 percent of its expected U.S. Rockies basis exposure
using a combination of downstream transportation and basis hedges. The basis
hedges have an effective annual average differential of NYMEX less 67 cents
per Mcf. During the third quarter of 2007 the U.S. Rockies-NYMEX natural gas
price differential averaged $3.22 per Mcf. For 2008, EnCana has hedged 100
percent of its expected U.S. Rockies basis exposure using a combination of
downstream transportation and basis hedges, including some hedges that are
based on a percentage of NYMEX prices. At the end of the third quarter, the
basis hedges had an effective annual average differential of NYMEX less $1.01
per Mcf. In Canada for 2007, EnCana has hedged 33 percent of its expected AECO
basis exposure at 72 cents per Mcf. EnCana has an additional 31 percent of
expected Canadian basis exposure subject to transport and aggregator
contracts. In the third quarter of 2007, the AECO basis differential averaged
84 cents per Mcf. In Canada for 2008, EnCana has hedged 8 percent of its
expected production at an average AECO basis differential of 78 cents per Mcf.
During the third quarter of 2007, EnCana's basis hedging resulted in a
realized gain before tax of about $255 million.

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

    Alberta Royalty Review

    The Government of Alberta is in the midst of a comprehensive review of
the province's oil and natural gas royalty structure. Until detailed and
specific information of any royalty changes is outlined publicly and
thoroughly evaluated by the company, EnCana is unable to comment on how
potential changes may impact the company's operations.

    Columbia River Basin

    EnCana has concluded its exploration program in the Columbia River Basin
in Washington state after drilling three wells, Anderville Farms Inc. No. 1,
Anderson 11-5, and Brown 7-24. Each well indicated the presence of natural
gas. Although commercial flow rates were not established in these wells, there
remains potential for large natural gas accumulations in the basin, which has
only been partially tested. Exxel Energy Corp. took over operatorship and
ownership of the Brown well in late September and is planning to conduct
additional completion testing on the well. Because this is a non-core play for
EnCana, the company anticipates that any future activities on EnCana's acreage
position will likely be funded by third-party capital under farm-in or similar
arrangements. As a result, EnCana has no immediate plans for additional
drilling.

    Quarterly dividend of 20 cents per share approved

    EnCana's board of directors has approved a quarterly dividend of 20 cents
per share, which is payable on December 31, 2007 to common shareholders of
record as of December 14, 2007.

    Normal Course Issuer Bid

    In the past 12 months under its Normal Course Issuer Bid, EnCana
purchased 63.4 million common shares, representing approximately 7.9 percent
of the company's outstanding shares on November 1, 2006, at an average price
of approximately US$51.54 per common share.

    Financial strength
    ------------------
    EnCana maintains a strong balance sheet, targeting a net
debt-to-capitalization ratio between 30 and 40 percent. At September 30, 2007,
the company's net debt-to-capitalization ratio was 27:73. At the end of the
third quarter EnCana's net debt-to-adjusted-EBITDA multiple, on a trailing
12-month basis, was 0.8 times. The company expects its net
debt-to-capitalization ratio to remain at the lower end of the targeted range.
    In the third quarter of 2007, EnCana invested $1,575 million in capital.
Net acquisitions were $16 million, resulting in net capital investment in
continuing operations of $1,591 million.

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

        EnCana Corporation will host a conference call today, Thursday,
    October 25, 2007 starting at 11:00 a.m. MT (1:00 p.m. ET). To
    participate, please dial (866) 215-9524 (toll-free in North America) or
    (416) 915-9619 approximately 10 minutes prior to the conference call. An
    archived recording of the call will be available from approximately
    3:00 p.m. MT on October 25 until midnight October 29, 2007 by dialing
    (888) 203-1112 or (719) 457-0820 and entering access code 6834269.

        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, pre-tax cash flow,
operating earnings and free cash flow.

    
    -  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, all
       of which are defined on the Consolidated Statement of Cash Flows.
    -  Pre-tax cash flow is calculated as cash flow before cash taxes.
    -  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 Notes issued from
       Canada and the partnership contribution receivable and the effect of
       the reduction in income tax rates. Management believes that these
       excluded items reduce the comparability of the company's underlying
       financial performance between periods. The majority of the unrealized
       gains/losses that relate to U.S. dollar denominated Notes issued from
       Canada are for debt with maturity dates in excess of five years.
    -  Free cash flow is a non-GAAP measure that EnCana defines as cash flow
       in excess of total capital investment and is used to determine the
       funds available for other investing and/or financing activities.
    

    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 US$55 billion, EnCana is a
leading North American unconventional natural gas and integrated oilsands
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: future economic and operating
performance (including per share growth, net debt-to-capitalization ratio,
sustainable growth and returns, cash flow, cash flow per share and increases
in net asset value); anticipated ability to meet the company's guidance
forecasts; anticipated life of proved reserves; anticipated growth and success
of resource plays and the expected characteristics of resource plays; the
anticipated production, timing thereof, and expenditures associated with the
Deep Panuke Project; anticipated potential of and third party capital for the
Columbia River Basin; planned expansion of in-situ oilsands production;
anticipated crude oil and natural gas prices, including basis differentials
for various regions; the expected impact of proposed Rockies Express Pipeline
on Rockies basis differentials; anticipated expansion and production at Foster
Creek and Christina Lake; anticipated increased capacity for the Borger and
Wood River refineries; anticipated integrated oilsands cash flow; projections
for future crack spreads and anticipated refining profits; anticipated
drilling inventory; expected proportion of total production and cash flows
contributed by natural gas; anticipated success of EnCana's market risk
mitigation strategy and EnCana's ability to reduce uncertainty in cash flow
during periods of commodity price volatility and provide downside price
protection; anticipated purchases pursuant to the Normal Course Issuer Bid and
the source of funding therefor; potential demand for natural gas; anticipated
bitumen production in 2007 and beyond; anticipated drilling; potential capital
expenditures and investment; potential oil, natural gas and NGLs production in
2007 and beyond; anticipated costs and inflationary pressures; potential risks
associated with drilling and references to potential exploration. Readers are
cautioned not to place undue reliance on forward-looking statements, as there
can be no assurance that the plans, intentions or expectations upon which they
are based will occur. By their nature, forward-looking statements involve
numerous assumptions, known and unknown risks and uncertainties, both general
and specific, that contribute to the possibility that the predictions,
forecasts, projections and other forward-looking statements will not occur,
which may cause the company's actual performance and financial results in
future periods to differ materially from any estimates or projections of
future performance or results expressed or implied by such forward-looking
statements. These risks and uncertainties include, among other things:
volatility of 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 heavy 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.
    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.


    
    Third quarter report
    for the period ended September 30, 2007

    CONSOLIDATED STATEMENT OF EARNINGS (unaudited)

                                      Three Months Ended   Nine Months Ended
                                          September 30,       September 30,
    ($ millions, except per           ---------------------------------------
    share amounts)                        2007      2006      2007      2006
    -------------------------------------------------------------------------

    REVENUES, NET OF ROYALTIES (Note 6)
      Upstream                        $  2,883  $  2,622  $  8,597  $  7,817
      Integrated Oilsands                2,191       248     5,614       713
      Market Optimization                  629       731     2,107     2,272
      Corporate - Unrealized gain
       (loss) on risk management          (107)      428      (673)    1,921
    -------------------------------------------------------------------------
                                         5,596     4,029    15,645    12,723

    EXPENSES                   (Note 6)
      Production and mineral taxes          79        79       228       269
      Transportation and selling           220       271       732       795
      Operating                            530       420     1,646     1,227
      Purchased product                  2,192       677     5,879     2,160
      Depreciation, depletion
       and amortization                    988       791     2,730     2,346
      Administrative                        73        54       263       187
      Interest, net            (Note 9)    102        83       297       254
      Accretion of asset
       retirement obligation  (Note 15)     17        13        46        37
      Foreign exchange
       (gain) loss, net       (Note 10)     74         -        69      (158)
      (Gain) loss on
       divestitures            (Note 8)    (29)     (304)      (87)     (321)
    -------------------------------------------------------------------------
                                         4,246     2,084    11,803     6,796
    -------------------------------------------------------------------------
    NET EARNINGS BEFORE INCOME TAX       1,350     1,945     3,842     5,927
      Income tax expense      (Note 11)    416       602       965     1,519
    -------------------------------------------------------------------------
    NET EARNINGS FROM
     CONTINUING OPERATIONS                 934     1,343     2,877     4,408
    NET EARNINGS FROM
     DISCONTINUED OPERATIONS   (Note 7)      -        15         -       581
    -------------------------------------------------------------------------
    NET EARNINGS                      $    934  $  1,358  $  2,877  $  4,989
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    NET EARNINGS FROM CONTINUING
     OPERATIONS PER COMMON
     SHARE                    (Note 18)
      Basic                           $   1.24  $   1.66  $   3.79  $   5.32
      Diluted                         $   1.24  $   1.63  $   3.75  $   5.21
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    NET EARNINGS PER COMMON
     SHARE                    (Note 18)
      Basic                           $   1.24  $   1.68  $   3.79  $   6.02
      Diluted                         $   1.24  $   1.65  $   3.75  $   5.90
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    See accompanying Notes to Consolidated Financial Statements.


    CONSOLIDATED STATEMENT OF RETAINED EARNINGS  (unaudited)

                                                           Nine Months Ended
                                                              September 30,
                                                          -------------------
    ($ millions)                                              2007      2006
    -------------------------------------------------------------------------

    RETAINED EARNINGS, BEGINNING OF YEAR                  $ 11,344  $  9,481
    Net Earnings                                             2,877     4,989
    Dividends on Common Shares                                (453)     (226)
    Charges for Normal Course Issuer Bid      (Note 16)     (1,618)   (2,450)
    -------------------------------------------------------------------------
    RETAINED EARNINGS, END OF PERIOD                      $ 12,150  $ 11,794
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (unaudited)

                                      Three Months Ended   Nine Months Ended
                                          September 30,       September 30,
                                      ---------------------------------------
    ($ millions)                          2007      2006      2007      2006
    -------------------------------------------------------------------------

    NET EARNINGS                      $    934  $  1,358  $  2,877  $  4,989
    OTHER COMPREHENSIVE INCOME,
     NET OF TAX
    Foreign Currency Translation
     Adjustment                            859        (7)    1,798       531
    -------------------------------------------------------------------------
    COMPREHENSIVE INCOME              $  1,793  $  1,351  $  4,675  $  5,520
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    CONSOLIDATED STATEMENT OF ACCUMULATED OTHER COMPREHENSIVE INCOME
     (unaudited)

                                                           Nine Months Ended
                                                              September 30,
                                                          -------------------
    ($ millions)                                              2007      2006
    -------------------------------------------------------------------------

    ACCUMULATED OTHER COMPREHENSIVE INCOME,
     BEGINNING OF YEAR                                    $  1,375  $  1,262
    Foreign Currency Translation Adjustment                  1,798       531
    -------------------------------------------------------------------------
    ACCUMULATED OTHER COMPREHENSIVE INCOME,
     END OF PERIOD                                        $  3,173  $  1,793
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    As at September 30, 2007, the accumulated other comprehensive income
    consists of foreign currency translation adjustments of $3,173 million
    (December 31, 2006 - $1,375 million; September 30, 2006 -
    $1,793 million).

    See accompanying Notes to Consolidated Financial Statements.


    CONSOLIDATED BALANCE SHEET  (unaudited)

                                                          As at        As at
                                                   September 30, December 31,
    ($ millions)                                           2007         2006
    -------------------------------------------------------------------------

    ASSETS
      Current Assets
        Cash and cash equivalents                     $     515    $     402
        Accounts receivable and accrued revenues          2,146        1,721
        Current portion of partnership
         contribution receivable        (Note 5, 12)        293            -
        Risk management                    (Note 19)        820        1,403
        Inventories                        (Note 13)        775          176
    -------------------------------------------------------------------------
                                                          4,549        3,702
      Property, Plant and Equipment, net    (Note 6)     32,156       28,213
      Investments and Other Assets                          604          533
      Partnership Contribution
       Receivable                       (Note 5, 12)      3,223            -
      Risk Management                      (Note 19)         57          133
      Goodwill                                            2,873        2,525
    -------------------------------------------------------------------------
                                            (Note 6)  $  43,462    $  35,106
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    LIABILITIES AND SHAREHOLDERS' EQUITY
      Current Liabilities
        Accounts payable and accrued liabilities      $   3,717    $   2,494
        Income tax payable                                  687          926
        Current portion of partnership
         contribution payable           (Note 5, 12)        284            -
        Risk management                    (Note 19)         98           14
        Current portion of long-term debt  (Note 14)      1,000          257
    -------------------------------------------------------------------------
                                                          5,786        3,691
      Long-Term Debt                       (Note 14)      6,246        6,577
      Other Liabilities                                     205           79
      Partnership Contribution Payable  (Note 5, 12)      3,236            -
      Risk Management                      (Note 19)         12            2
      Asset Retirement Obligation          (Note 15)      1,272        1,051
      Future Income Taxes                                 6,865        6,240
    -------------------------------------------------------------------------
                                                         23,622       17,640
    -------------------------------------------------------------------------
      Shareholders' Equity
        Share capital                      (Note 16)      4,457        4,587
        Paid in surplus                                      60          160
        Retained earnings                                12,150       11,344
        Accumulated other comprehensive income            3,173        1,375
    -------------------------------------------------------------------------
      Total Shareholders' Equity                         19,840       17,466
    -------------------------------------------------------------------------
                                                      $  43,462    $  35,106
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    See accompanying Notes to Consolidated Financial Statements.


    CONSOLIDATED STATEMENT OF CASH FLOWS (unaudited)

                                      Three Months Ended   Nine Months Ended
                                          September 30,       September 30,
                                      ---------------------------------------
    ($ millions)                          2007      2006      2007      2006
    -------------------------------------------------------------------------

    OPERATING ACTIVITIES
      Net earnings from
       continuing operations          $    934  $  1,343  $  2,877  $  4,408
      Depreciation, depletion
       and amortization                    988       791     2,730     2,346
      Future income taxes     (Note 11)    102       401        (9)      690
      Cash tax on sale
       of assets               (Note 8)      -        49         -        49
      Unrealized (gain) loss
       on risk management     (Note 19)    107      (428)      666    (1,919)
      Unrealized foreign
       exchange (gain) loss                 83         4       142       (79)
      Accretion of asset
       retirement obligation  (Note 15)     17        13        46        37
      (Gain) loss on
       divestitures            (Note 8)    (29)     (304)      (87)     (321)
      Other                                 16        14       154        90
      Cash flow from
       discontinued operations               -        11         -        99
      Net change in other
       assets and liabilities                1        21         5        48
      Net change in non-cash
       working capital from
       continuing operations               (19)     (247)     (247)    3,305
      Net change in non-cash
       working capital from
       discontinued operations               -       (13)        -    (2,476)
    -------------------------------------------------------------------------
      Cash From Operating Activities     2,200     1,655     6,277     6,277
    -------------------------------------------------------------------------

    INVESTING ACTIVITIES
      Capital expenditures     (Note 6) (1,650)   (1,486)   (4,329)   (5,350)
      Proceeds on disposal
       of assets               (Note 8)     59       377       505       634
      Cash tax on sale
       of assets               (Note 8)      -       (49)        -       (49)
      Net change in
       investments and other                32       (56)       26       (38)
      Net change in non-cash
       working capital from
       continuing operations                69       (18)      (34)     (169)
      Discontinued operations                -         -         -     2,377
    -------------------------------------------------------------------------
      Cash (Used in) Investing
       Activities                       (1,490)   (1,232)   (3,832)   (2,595)
    -------------------------------------------------------------------------

    FINANCING ACTIVITIES
      Net issuance (repayment)
       of revolving long-term debt        (871)      470      (909)     (512)
      Issuance of
       long-term debt         (Note 14)    492         -       924         -
      Repayment of
       long-term debt                        -       (73)        -       (73)
      Issuance of
       common shares          (Note 16)      5        39       158       140
      Purchase of
       common shares          (Note 16)   (218)     (900)   (2,025)   (2,973)
      Dividends on common
       shares                             (149)      (80)     (453)     (226)
      Other                                  2         2        (1)       (9)
    -------------------------------------------------------------------------
      Cash (Used in)
       Financing Activities               (739)     (542)   (2,306)   (3,653)
    -------------------------------------------------------------------------

    DEDUCT: FOREIGN EXCHANGE LOSS
     ON CASH AND CASH EQUIVALENTS
     HELD IN FOREIGN CURRENCY               11         -        26         -
    -------------------------------------------------------------------------

    INCREASE (DECREASE) IN CASH
     AND CASH EQUIVALENTS                  (40)     (119)      113        29
    CASH AND CASH EQUIVALENTS,
     BEGINNING OF PERIOD                   555       253       402       105
    -------------------------------------------------------------------------
    CASH AND CASH EQUIVALENTS,
     END OF PERIOD                    $    515  $    134  $    515  $    134
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    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 continuing operations are in the business of
    exploration for, and production and marketing of natural gas, crude oil
    and natural gas liquids, 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, 2006, 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, 2006.

    2.  CHANGES IN ACCOUNTING POLICIES AND PRACTICES

    As disclosed in the December 31, 2006 annual audited Consolidated
    Financial Statements, on January 1, 2007, the Company adopted the
    Canadian Institute of Chartered Accountants ("CICA") Handbook Section
    1530 "Comprehensive Income", Section 3251 "Equity", Section 3855
    "Financial Instruments - Recognition and Measurement", and Section 3865
    "Hedges". As required by the new standards, prior periods have not been
    restated, except to reclassify the foreign currency translation
    adjustment balance as described under Comprehensive Income.

    The adoption of these standards has had no material impact on the
    Company's net earnings or cash flows. The other effects of the
    implementation of the new standards are discussed below.

    Comprehensive Income

    The new standards introduce comprehensive income, which consists of net
    earnings and other comprehensive income ("OCI"). The Company's
    Consolidated Financial Statements now include a Statement of
    Comprehensive Income, which includes the components of comprehensive
    income. For EnCana, OCI is currently comprised of the changes in the
    foreign currency translation adjustment balance.

    The cumulative changes in OCI are included in accumulated other
    comprehensive income ("AOCI"), which is presented as a new category
    within shareholders' equity in the Consolidated Balance Sheet. The
    accumulated foreign currency translation adjustment, formerly presented
    as a separate category within shareholders' equity, is now included in
    AOCI. The Company's Consolidated Financial Statements now include a
    Statement of Accumulated Other Comprehensive Income, which provides the
    continuity of the AOCI balance.

    The adoption of comprehensive income has been made in accordance with the
    applicable transitional provisions. Accordingly, the September 30, 2007
    period end accumulated foreign currency translation adjustment balance of
    $3,173 million has been reclassified to AOCI (December 31, 2006 -
    $1,375 million; September 30, 2006 - $1,793 million). In addition, the
    change in the accumulated foreign currency translation adjustment balance
    for the three months and nine months ended September 30, 2007 of
    $859 million and $1,798 million, respectively, is now included in OCI in
    the Statement of Comprehensive Income (three months and nine months ended
    September 30, 2006 - $(7) million and $531 million, respectively).

    Financial Instruments

    The financial instruments standard establishes the recognition and
    measurement criteria for financial assets, financial liabilities and
    derivatives. All financial instruments are required to be measured at
    fair value on initial recognition of the instrument, except for certain
    related party transactions. Measurement in subsequent periods depends on
    whether the financial instrument has been classified as "held-for-
    trading", "available-for-sale", "held-to-maturity", "loans and
    receivables", or "other financial liabilities" as defined by the
    standard.

    Financial assets and financial liabilities "held-for-trading" are
    measured at fair value with changes in those fair values recognized in
    net earnings. Financial assets "available-for-sale" are measured at fair
    value, with changes in those fair values recognized in OCI. Financial
    assets "held-to-maturity", "loans and receivables" and "other financial
    liabilities" are measured at amortized cost using the effective interest
    method of amortization. The methods used by the Company in determining
    fair value of financial instruments are unchanged as a result of
    implementing the new standard.

    Cash and cash equivalents are designated as "held-for-trading" and are
    measured at carrying value, which approximates fair value due to the
    short-term nature of these instruments. Accounts receivable and accrued
    revenues and the partnership contribution receivable are designated as
    "loans and receivables". Accounts payable and accrued liabilities, the
    partnership contribution payable and long-term debt are designated as
    "other financial liabilities".

    The adoption of the financial instruments standard has been made in
    accordance with its transitional provisions. Accordingly, at January 1,
    2007, $52 million of other assets were reclassified to long-term debt to
    reflect the adopted policy of capitalizing long-term debt transaction
    costs, premiums and discounts within long-term debt. The costs
    capitalized within long-term debt will be amortized using the effective
    interest method. Previously, the Company deferred these costs within
    other assets and amortized them straight-line over the life of the
    related long-term debt. The adoption of the effective interest method of
    amortization had no effect on opening retained earnings.

    Risk management assets and liabilities are derivative financial
    instruments classified as "held-for-trading" unless designated for hedge
    accounting. Additional information on the Company's accounting treatment
    of derivative financial instruments is contained in Note 1 of the
    Company's annual audited Consolidated Financial Statements for the year
    ended December 31, 2006.

    3. UPDATE TO ACCOUNTING POLICIES AND PRACTICES

    As a result of the new joint venture with ConocoPhillips, EnCana has
    updated the following significant accounting policies and practices to
    incorporate the refining business (see Note 5):

    Revenue Recognition

    Revenues associated with the sales of EnCana's natural gas, crude oil,
    NGLs and petroleum and chemical products are recognized when title passes
    from the Company to its customer. Natural gas and crude oil produced and
    sold by EnCana below or above its working interest share in the related
    resource properties results in production underliftings or overliftings.
    Underliftings are recorded as inventory and overliftings are recorded as
    deferred revenue. Realized gains and losses from the Company's natural
    gas and crude oil commodity price risk management activities are recorded
    in revenue when the product is sold.

    Market optimization revenues and purchased product are recorded on a
    gross basis when EnCana takes title to product and has risks and rewards
    of ownership. Purchases and sales of inventory with the same counterparty
    that are entered into in contemplation of each other are recorded on a
    net basis. Revenues associated with the services provided where EnCana
    acts as agent are recorded as the services are provided. Revenues
    associated with the sale of natural gas storage services are recognized
    when the services are provided. Sales of electric power are recognized
    when power is provided to the customer.

    Unrealized gains and losses from the Company's natural gas and crude oil
    commodity price risk management activities are recorded as revenue based
    on the related mark-to-market calculations at the end of the respective
    period.

    Inventory

    Product inventories, including petroleum and chemical products, are
    valued at the lower of average cost and net realizable value on a first-
    in, first-out basis. Materials and supplies are valued at cost.

    Property, Plant and Equipment

    Upstream

    EnCana accounts for natural gas and crude oil properties in accordance
    with the Canadian Institute of Chartered Accountants' guideline on full
    cost accounting in the oil and gas industry. Under this method, all
    costs, including internal costs and asset retirement costs, directly
    associated with the acquisition of, exploration for, and the development
    of natural gas and crude oil reserves, are capitalized on a country-by-
    country cost centre basis.

    Costs accumulated within each cost centre are depreciated, depleted and
    amortized using the unit-of-production method based on estimated proved
    reserves determined using estimated future prices and costs. For purposes
    of this calculation, oil is converted to gas on an energy equivalent
    basis. Capitalized costs subject to depletion include estimated future
    costs to be incurred in developing proved reserves. Proceeds from the
    divestiture of properties are normally deducted from the full cost pool
    without recognition of gain or loss unless that deduction would result in
    a change to the rate of depreciation, depletion and amortization of 20
    percent or greater, in which case a gain or loss is recorded. Costs of
    major development projects and costs of acquiring and evaluating
    significant unproved properties are excluded, on a cost centre basis,
    from the costs subject to depletion until it is determined whether or not
    proved reserves are attributable to the properties, or impairment has
    occurred. Costs that have been impaired are included in the costs subject
    to depreciation, depletion and amortization.

    An impairment loss is recognized in net earnings when the carrying amount
    of a cost centre is not recoverable and the carrying amount of the cost
    centre exceeds its fair value. The carrying amount of the cost centre is
    not recoverable if the carrying amount exceeds the sum of the
    undiscounted cash flows from proved reserves. If the sum of the cash
    flows is less than the carrying amount, the impairment loss is limited to
    the amount by which the carrying amount exceeds the sum of:

    
    i. the fair value of proved and probable reserves; and
    ii. the costs of unproved properties that have been subject to a separate
        impairment test.
    

    Downstream Refining

    Refining facilities are carried at cost, including asset retirement
    costs, and depreciated on a straight-line basis over the estimated
    service lives of the assets, which are approximately 25 years.

    Midstream Facilities

    Midstream facilities, including natural gas storage facilities, natural
    gas liquids extraction plant facilities and power generation facilities,
    are carried at cost and depreciated on a straight-line basis over the
    estimated service lives of the assets, which range from 20 to 25 years.
    Capital assets related to pipelines are carried at cost and depreciated
    or amortized using the straight-line method over their economic lives,
    which range from 20 to 35 years.

    Corporate

    Costs associated with office furniture, fixtures, leasehold improvements,
    information technology and aircraft are carried at cost and depreciated
    on a straight-line basis over the estimated service lives of the assets,
    which range from 3 to 25 years. Assets under construction are not subject
    to depreciation. Land is carried at cost.

    Asset Retirement Obligation

    The fair value of estimated asset retirement obligations is recognized in
    the Consolidated Balance Sheet when identified and a reasonable estimate
    of fair value can be made.

    Asset retirement obligations include those legal obligations where the
    Company will be required to retire tangible long-lived assets such as
    producing well sites, offshore production platforms, natural gas
    processing plants, and refining facilities. These obligations also
    include items for which the Company has made promissory estoppel. The
    asset retirement cost, equal to the initially estimated fair value of the
    asset retirement obligation, is capitalized as part of the cost of the
    related long-lived asset. Changes in the estimated obligation resulting
    from revisions to estimated timing or amount of undiscounted cash flows
    are recognized as a change in the asset retirement obligation and the
    related asset retirement cost.

    Asset retirement costs for natural gas and crude oil assets are amortized
    using the unit-of-production method. Asset retirement costs for refining
    facilities are amortized on a straight-line basis over the useful life of
    the related asset. Amortization of asset retirement costs are included in
    depreciation, depletion and amortization in the Consolidated Statement of
    Earnings. Increases in the asset retirement obligation resulting from the
    passage of time are recorded as accretion of asset retirement obligation
    in the Consolidated Statement of Earnings.

    Actual expenditures incurred are charged against the accumulated
    obligation.

    4. RECENT ACCOUNTING PRONOUNCEMENT

    As of January 1, 2008, EnCana is required to adopt the CICA Section 3031
    "Inventories", which will replace the existing inventories standard. The
    new standard requires inventory to be valued on a first-in, first-out or
    weighted average basis. As EnCana's inventory accounting policies are
    consistent with these requirements, the application of this standard will
    not have a material impact on the Consolidated Financial Statements.

    5. JOINT VENTURE WITH CONOCOPHILLIPS

    On January 2, 2007, EnCana became a 50 percent partner in an integrated,
    North American heavy oil business with ConocoPhillips which consists of
    an upstream and a downstream entity. The upstream entity includes
    contributed assets from EnCana, primarily the Foster Creek and Christina
    Lake oil sands properties, with a fair value of $7.5 billion and a note
    receivable from ConocoPhillips of an equal amount. For the downstream
    entity, ConocoPhillips contributed its Wood River and Borger refineries,
    located in Illinois and Texas respectively, for a fair value of
    $7.5 billion and EnCana contributed a note payable of $7.5 billion.
    Further information about these notes is included in Note 12.

    In accordance with Canadian generally accepted accounting principles,
    these entities have been accounted for using the proportionate
    consolidation method with the results of operations shown in a separate
    business segment, Integrated Oilsands.

    6. SEGMENTED INFORMATION

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

    
    -  Canada, United States and Other includes the Company's upstream
       exploration for, and development and production of natural gas, crude
       oil and natural gas liquids and other related activities. The majority
       of the Company's upstream operations are located in Canada and the
       United States. Offshore and international exploration is mainly
       focused on opportunities in Atlantic Canada, the Middle East and
       France.

    -  Integrated Oilsands is focused on two lines of business: the
       exploration for, and development and production of heavy oil from oil
       sands 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 represents 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
       Canada, United States and Integrated Oilsands 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.

    Operations that have been discontinued are disclosed in Note 7.


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

                                                  Upstream
                             ------------------------------------------------
                                  Canada       United States       Other
    -------------------------------------------------------------------------
                               2007     2006    2007    2006    2007    2006
    -------------------------------------------------------------------------

    Revenues,
     Net of Royalties        $1,760   $1,745  $1,020  $  811  $  103  $   66
    Expenses
      Production and
       mineral taxes             27       27      52      52       -       -
      Transportation
       and selling               81       77      77      64       -       -
      Operating                 238      218      68      64      79      57
      Purchased product           -        -       -       -       -       -
      Depreciation, depletion
       and amortization         558      505     299     222      30       6
    -------------------------------------------------------------------------
    Segment Income (Loss)    $  856   $  918  $  524  $  409  $   (6) $    3
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


                                   Total         Integrated        Market
                                 Upstream         Oilsands      Optimization
    -------------------------------------------------------------------------
                               2007     2006    2007    2006    2007    2006
    -------------------------------------------------------------------------

    Revenues, Net of
     Royalties               $2,883   $2,622  $2,191  $  248  $  629  $  731
    Expenses
      Production and
       mineral taxes             79       79       -       -       -       -
      Transportation
       and selling              158      141      62     126       -       4
      Operating                 385      339     134      62      11      18
      Purchased product           -        -   1,584       -     608     677
      Depreciation, depletion
       and amortization         887      733      72      37       4       3
    -------------------------------------------------------------------------
    Segment Income (Loss)    $1,374   $1,330  $  339  $   23  $    6  $   29
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


                                                 Corporate      Consolidated
    -------------------------------------------------------------------------
                                                2007    2006    2007    2006
    -------------------------------------------------------------------------

    Revenues, Net of Royalties                $ (107) $  428  $5,596  $4,029
    Expenses
      Production and mineral taxes                 -       -      79      79
      Transportation and selling                   -       -     220     271
      Operating                                    -       1     530     420
      Purchased product                            -       -   2,192     677
      Depreciation, depletion
       and amortization                           25      18     988     791
    -------------------------------------------------------------------------
    Segment Income (Loss)                     $ (132) $  409   1,587   1,791
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
      Administrative                                              73      54
      Interest, net                                              102      83
      Accretion of asset retirement obligation                    17      13
      Foreign exchange (gain) loss, net                           74       -
      (Gain) loss on divestitures                                (29)   (304)
    -------------------------------------------------------------------------
                                                                 237    (154)
    -------------------------------------------------------------------------
    Net Earnings Before Income Tax                             1,350   1,945
      Income tax expense                                         416     602
    -------------------------------------------------------------------------
    Net Earnings From Continuing Operations                   $  934  $1,343
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


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

    Geographic and Product Information (Continuing Operations)

                                               Produced Gas
    -------------------------------------------------------------------------
                                   Canada      United States       Total
    -------------------------------------------------------------------------
                                2007    2006    2007    2006    2007    2006
    -------------------------------------------------------------------------

    Revenues, Net
     of Royalties             $1,327  $1,302  $  934  $  735  $2,261  $2,037
    Expenses
      Production and
       mineral taxes              20      18      49      47      69      65
      Transportation
       and selling                70      74      77      64     147     138
      Operating                  173     157      68      64     241     221
    -------------------------------------------------------------------------
    Operating Cash Flow       $1,064  $1,053  $  740  $  560  $1,804  $1,613
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


                                                 Oil & NGLs
    -------------------------------------------------------------------------
                                   Canada      United States       Total
    -------------------------------------------------------------------------
                                2007    2006    2007    2006    2007    2006
    -------------------------------------------------------------------------

    Revenues, Net
     of Royalties             $  433  $  443  $   86  $   76  $  519  $  519
    Expenses
      Production and
       mineral taxes               7       9       3       5      10      14
      Transportation
       and selling                11       3       -       -      11       3
      Operating                   65      61       -       -      65      61
    -------------------------------------------------------------------------
    Operating Cash Flow       $  350  $  370  $   83  $   71  $  433  $  441
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


                                            Integrated Oilsands
    -------------------------------------------------------------------------
                                                 Downstream
                                    Oil           Refining         Other
    -------------------------------------------------------------------------
                                2007    2006    2007    2006    2007    2006
    -------------------------------------------------------------------------

    Revenues,
     Net of Royalties         $  160  $  239  $2,049  $    -  $  (18) $    9
    Expenses
      Transportation
       and selling                62     126       -       -       -       -
      Operating                   35      56      98       -       1       6
      Purchased product            -       -   1,607       -     (23)      -
    -------------------------------------------------------------------------
    Operating Cash Flow       $   63  $   57  $  344  $    -  $    4  $    3
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


                                                                Integrated
                                                                 Oilsands
    -------------------------------------------------------------------------
                                                                   Total
    -------------------------------------------------------------------------
                                                                2007    2006
    -------------------------------------------------------------------------

    Revenues, Net of Royalties                                $2,191  $  248
    Expenses
      Transportation and selling                                  62     126
      Operating                                                  134      62
      Purchased product                                        1,584       -
    -------------------------------------------------------------------------
    Operating Cash Flow                                       $  411  $   60
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    Results of Continuing Operations (For the nine months ended September 30)

                                                  Upstream
                              -----------------------------------------------
                                   Canada      United States       Other
    -------------------------------------------------------------------------
                                2007    2006    2007    2006    2007    2006
    -------------------------------------------------------------------------

    Revenues,
     Net of Royalties         $5,352  $5,252  $2,964  $2,356  $  281  $  209
    Expenses
      Production and
       mineral taxes              86      96     142     173       -       -
      Transportation
       and selling               244     223     220     182       -       -
      Operating                  718     639     228     207     233     174
      Purchased product            -       -       -       -       -       -
      Depreciation, depletion
       and amortization        1,572   1,495     834     648      42      25
    -------------------------------------------------------------------------
    Segment Income (Loss)     $2,732  $2,799  $1,540  $1,146  $    6  $   10
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


                                    Total        Integrated        Market
                                  Upstream        Oilsands      Optimization
    -------------------------------------------------------------------------
                                2007    2006    2007    2006    2007    2006
    -------------------------------------------------------------------------

    Revenues, Net
     of Royalties             $8,597  $7,817  $5,614  $  713  $2,107  $2,272
    Expenses
      Production and
       mineral taxes             228     269       -       -       -       -
      Transportation
       and selling               464     405     258     373      10      17
      Operating                1,179   1,020     447     157      28      49
      Purchased product            -       -   3,837       -   2,042   2,160
      Depreciation, depletion
       and amortization        2,448   2,168     207     114      11       8
    -------------------------------------------------------------------------
    Segment Income (Loss)     $4,278  $3,955  $  865  $   69  $   16  $   38
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


                                                 Corporate      Consolidated
    -------------------------------------------------------------------------
                                                2007    2006    2007    2006
    -------------------------------------------------------------------------

    Revenues, Net of Royalties                $ (673) $1,921 $15,645 $12,723
    Expenses
      Production and mineral taxes                 -       -     228     269
      Transportation and selling                   -       -     732     795
      Operating                                   (8)      1   1,646   1,227
      Purchased product                            -       -   5,879   2,160
      Depreciation, depletion
       and amortization                           64      56   2,730   2,346
    -------------------------------------------------------------------------
    Segment Income (Loss)                     $ (729) $1,864   4,430   5,926
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
      Administrative                                             263     187
      Interest, net                                              297     254
      Accretion of asset retirement obligation                    46      37
      Foreign exchange (gain) loss, net                           69    (158)
      (Gain) loss on divestitures                                (87)   (321)
    -------------------------------------------------------------------------
                                                                 588      (1)
    -------------------------------------------------------------------------
    Net Earnings Before Income Tax                             3,842   5,927
      Income tax expense                                         965   1,519
    -------------------------------------------------------------------------
    Net Earnings From Continuing Operations                   $2,877  $4,408
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    Results of Continuing Operations (For the nine months ended September 30)

    Geographic and Product Information (Continuing Operations)

                                               Produced Gas
    -------------------------------------------------------------------------
                                   Canada      United States       Total
    -------------------------------------------------------------------------
                                2007    2006    2007    2006    2007    2006
    -------------------------------------------------------------------------

    Revenues, Net
     of Royalties             $4,161  $4,039  $2,754  $2,148  $6,915  $6,187
    Expenses
      Production and
       mineral taxes              62      69     127     159     189     228
      Transportation
       and selling               213     212     220     182     433     394
      Operating                  530     463     228     207     758     670
    -------------------------------------------------------------------------
    Operating Cash Flow       $3,356  $3,295  $2,179  $1,600  $5,535  $4,895
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


                                                 Oil & NGLs
    -------------------------------------------------------------------------
                                   Canada      United States       Total
    -------------------------------------------------------------------------
                                2007    2006    2007    2006    2007    2006
    -------------------------------------------------------------------------

    Revenues, Net of
     Royalties                $1,191  $1,213  $  210  $  208  $1,401  $1,421
    Expenses
      Production and
       mineral taxes              24      27      15      14      39      41
      Transportation
       and selling                31      11       -       -      31      11
      Operating                  188     176       -       -     188     176
    -------------------------------------------------------------------------
    Operating Cash Flow       $  948  $  999  $  195  $  194  $1,143  $1,193
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


                                            Integrated Oilsands
    -------------------------------------------------------------------------
                                                 Downstream
                                    Oil           Refining         Other
    -------------------------------------------------------------------------
                                2007    2006    2007    2006    2007    2006
    -------------------------------------------------------------------------

    Revenues, Net of
     Royalties                $  552  $  693  $5,109  $    -  $  (47) $   20
    Expenses
      Transportation
       and selling               258     373       -       -       -       -
      Operating                  123     138     317       -       7      19
      Purchased product            -       -   3,898       -     (61)      -
    -------------------------------------------------------------------------
    Operating Cash Flow       $  171  $  182  $  894  $    -  $    7  $    1
    -------------------------------------------------------------------------


                                                                 Integrated
                                                                  Oilsands
    -------------------------------------------------------------------------
                                                                    Total
    -------------------------------------------------------------------------
                                                                2007    2006
    -------------------------------------------------------------------------

    Revenues, Net of Royalties                                $5,614  $  713
    Expenses
      Transportation and selling                                 258     373
      Operating                                                  447     157
      Purchased product                                        3,837       -
    -------------------------------------------------------------------------
    Operating Cash Flow                                       $1,072  $  183
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    Capital Expenditures (Continuing Operations)


                                      Three Months Ended   Nine Months Ended
                                          September 30,       September 30,
                                   ------------------------------------------
                                          2007      2006      2007      2006
    -------------------------------------------------------------------------
    Capital
      Canada                          $    962  $    777  $  2,424  $  2,684
      United States                        452       576     1,313     1,746
      Other                                  3        12        40        51
      Integrated Oilsands                  147        87       372       482
      Market Optimization                    2         2         5        40
      Corporate                              9        20        76        49
    -------------------------------------------------------------------------
                                         1,575     1,474     4,230     5,052
    -------------------------------------------------------------------------

    Acquisition Capital
      Canada                                60         1        67         9
      United States                         15        11        18       268
      Integrated Oilsands                    -         -        14        21
    -------------------------------------------------------------------------
                                            75        12        99       298
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    Total                             $  1,650  $  1,486  $  4,329  $  5,350
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    Property, Plant and Equipment and Total Assets

                              Property, Plant and Equipment    Total Assets
                           --------------------------------------------------
                                             As at               As at
                           --------------------------------------------------
                                     September  December September  December
                                            30,       31,       30,       31,
                                          2007      2006      2007      2006
    -------------------------------------------------------------------------

    Canada                            $ 17,943  $ 17,702  $ 19,120  $ 19,060
    United States                        8,960     8,494     9,387     9,036
    Other                                  144       263       168       300
    Integrated Oilsands                  4,566     1,322     9,481     1,379
    Market Optimization                    174       154       597       468
    Corporate                              369       278     4,709     4,863
    -------------------------------------------------------------------------
    Total                            $  32,156  $ 28,213  $ 43,462  $ 35,106
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    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. Corporate Property, Plant and Equipment and Total
    Assets includes EnCana's accrual to date of $101 million related to this
    office project as an asset under construction. A corresponding liability
    is 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.

    7. DISCONTINUED OPERATIONS

    All of the sales of discontinued operations were completed as of
    December 31, 2006.

    Midstream

    During 2006, EnCana completed, in two separate transactions with a single
    purchaser, the sale of its natural gas storage operations in Canada and
    the United States. Total proceeds received were approximately
    $1.5 billion and an after-tax gain on sale of $829 million was recorded.

    Ecuador

    On February 28, 2006, EnCana completed the sale of its Ecuador operations
    for proceeds of $1.4 billion before indemnifications. A loss of
    $279 million, including the impact of indemnifications, was recorded.

    Amounts recorded as depreciation, depletion and amortization in 2006
    represent provisions which were recorded against the net book value of
    the Ecuador operations to recognize Management's best estimate of the
    difference between the selling price and the underlying accounting value
    of the related investments, as required by Canadian generally accepted
    accounting principles.


    Consolidated Statement of Earnings

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

                               For the three months ended September 30,
                     --------------------------------------------------------
                          Ecuador   United Kingdom   Midstream      Total
                     --------------------------------------------------------
                       2007   2006   2007   2006   2007   2006   2007   2006
    -------------------------------------------------------------------------
    Revenues, Net
     of Royalties     $   -  $   -   $  -   $  -   $  -   $ 14   $  -  $  14
    -------------------------------------------------------------------------
    Expenses
      Production
       and mineral
       taxes              -      -      -      -      -      -      -      -
      Transportation
       and selling        -      -      -      -      -      -      -      -
      Operating           -      -      -      -      -      -      -      -
      Purchased product   -      -      -      -      -      -      -      -
      Depreciation,
       depletion and
       amortization       -      -      -      -      -      -      -      -
      Interest, net       -      -      -      -      -      -      -      -
      Foreign exchange
       (gain) loss, net   -      -      -      -      -     (4)     -     (4)
      (Gain) loss on
       discontinuance     -      -      -      -      -      2      -      2
    -------------------------------------------------------------------------
                          -      -      -      -      -     (2)     -     (2)
    -------------------------------------------------------------------------
    Net Earnings (Loss)
     Before Income Tax    -      -      -      -      -     16      -     16
      Income tax expense  -      -      -     (7)     -      8      -      1
    -------------------------------------------------------------------------
    Net Earnings (Loss)
     From Discontinued
     Operations       $   -  $   -   $  -   $  7   $  -   $  8   $  -  $  15
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


                              For the nine months ended September 30,
                     --------------------------------------------------------
                          Ecuador   United Kingdom   Midstream      Total
                     --------------------------------------------------------
                       2007   2006   2007   2006   2007   2006   2007   2006
    -------------------------------------------------------------------------

    Revenues, Net
     of Royalties(*)  $   - $ 200    $  -   $  -   $  -   $ 477  $  -  $ 677
    -------------------------------------------------------------------------

    Expenses
      Production and
       mineral taxes      -    23       -      -      -       -     -     23
      Transportation
       and selling        -    10       -      -      -      -      -     10
      Operating           -    25       -      -      -      29     -     54
      Purchased
       product            -     -       -      -      -     354     -    354
      Depreciation,
       depletion and
       amortization       -    84       -      -      -       -     -     84
      Interest, net       -    (2)      -      -      -       -     -     (2)
      Foreign
       exchange (gain)
       loss, net          -     1       -      -      -       5     -      6
      (Gain) loss
       on discontinuance  -   279       -      -      -    (766)    -   (487)
    -------------------------------------------------------------------------
                          -   420       -      -      -    (378)    -     42
    -------------------------------------------------------------------------
    Net Earnings (Loss)
     Before Income Tax    -  (220)      -      -      -     855     -    635
      Income tax
       expense            -    59       -     (5)     -       -     -     54
    -------------------------------------------------------------------------
    Net Earnings
     (Loss) From
      Discontinued
      Operations      $   - $(279)   $  -   $  5   $  -   $ 855  $ -   $ 581
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    (*) Revenues, net of royalties in Ecuador for 2006 include realized
        losses of $1 million related to derivative financial instruments.


    Contingencies

    EnCana agreed to indemnify the purchaser of its Ecuador interests against
    losses that may arise in certain circumstances which are defined in the
    share sale agreements. The obligation to indemnify will arise should
    losses exceed amounts specified in the sale agreements and is limited to
    maximum amounts which are set forth in the share sale agreements.

    During the second quarter of 2006, the Government of Ecuador seized the
    Block 15 assets, in relation to which EnCana previously held a 40 percent
    economic interest, from the operator which is an event requiring
    indemnification under the terms of EnCana's sale agreement with the
    purchaser. The purchaser requested payment and EnCana paid the maximum
    amount in the third quarter of 2006, calculated in accordance with the
    terms of the agreements, of approximately $265 million. EnCana does not
    expect that any further significant indemnification payments relating to
    any other business matters addressed in the share sale agreements will be
    required to be made to the purchaser.

    8.  DIVESTITURES

    Total year-to-date proceeds received on sale of assets and investments
    were $505 million (2006 - $634 million) as described below:

    Canada and United States

    In 2007, the Company has completed the divestiture of mature conventional
    oil and natural gas assets for proceeds of $66 million (2006 -
    $23 million).

    Other

    In August 2007, the Company closed the sale of its Australia assets for
    proceeds of $31 million resulting in a gain on sale of $30 million. After
    recording income tax of $5 million, EnCana recorded an after-tax gain of
    $25 million.

    In May 2007, the Company completed the sale of certain assets in the
    Mackenzie Delta and Beaufort Sea for proceeds of $159 million.

    In January 2007, the Company completed the sale of its interests in Chad,
    properties that are considered to be in the pre-production stage, for
    proceeds of $208 million which resulted in a gain on sale of $59 million.

    In August 2006, the Company completed the sale of its 50 percent interest
    in the Chinook heavy oil discovery offshore Brazil for approximately
    $367 million which resulted in a gain on sale of $304 million. After
    recording income tax of $49 million, EnCana recorded an after-tax gain of
    $255 million.

    Market Optimization

    In February 2006, the Company sold its investment in Entrega Gas Pipeline
    LLC for approximately $244 million which resulted in a gain on sale of
    $17 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 6 for further discussion of The Bow office
    project assets.

    9.  INTEREST, NET

                                       Three Months Ended   Nine Months Ended
                                           September 30,       September 30,
                                    -----------------------------------------
                                          2007      2006      2007      2006
    -------------------------------------------------------------------------

    Interest Expense
     - Long-Term Debt                   $  113  $     88  $    331  $    269
    Interest Expense
     - Other(*)                             72         9       178        19
    Interest Income(*)                     (83)      (14)     (212)      (34)
    -------------------------------------------------------------------------
                                        $  102  $     83  $    297  $    254
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (*) In 2007, Interest Expense - Other and Interest Income are primarily
        due to the Partnership Contribution Payable and Receivable,
        respectively. See Note 12.

    10.  FOREIGN EXCHANGE (GAIN) LOSS, NET

                                      Three Months Ended   Nine Months Ended
                                           September 30,       September 30,
                                    -----------------------------------------
                                          2007      2006      2007      2006
    -------------------------------------------------------------------------
    Unrealized Foreign
     Exchange (Gain)
     Loss on:
      Translation of U.S.
      dollar debt
      issued from Canada              $   (278) $      4  $   (608) $   (155)
      Translation of U.S.
       dollar partnership
       contribution receivable
       issued from Canada                  252         -       595         -
    Other Foreign Exchange
     (Gain) Loss                           100        (4)       82        (3)
    -------------------------------------------------------------------------
                                      $     74  $      -  $     69  $   (158)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    11. INCOME TAXES

    The provision for income taxes is as follows:

                                      Three Months Ended   Nine Months Ended
                                          September 30,       September 30,
                                 --------------------------------------------
                                          2007      2006      2007      2006
    -------------------------------------------------------------------------
    Current
      Canada                          $    142  $    105  $    485  $    694
      United States                        172        51       484        87
      Other Countries                        -        45         5        48
    -------------------------------------------------------------------------
    Total Current Tax                      314       201       974       829
    -------------------------------------------------------------------------

    Future                                 102       401        (9)      690
    -------------------------------------------------------------------------
                                      $    416  $    602  $    965  $  1,519
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

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

                                      Three Months Ended   Nine Months Ended
                                          September 30,       September 30,
                                 --------------------------------------------
                                          2007      2006      2007      2006
    -------------------------------------------------------------------------

    Net Earnings Before
     Income Tax                       $  1,350  $  1,945  $  3,842  $  5,927
    Canadian Statutory Rate              32.3%     34.7%     32.3%     34.7%
    -------------------------------------------------------------------------
    Expected Income Tax                    436       674     1,241     2,055

    Effect on Taxes Resulting from:
      Non-deductible Canadian Crown
       payments                              -        23         -        75
      Canadian resource allowance            -         -         -       (18)
      Statutory and other rate
       differences                          12       (63)       36       (80)
      Effect of tax rate changes             -         -       (37)     (457)
      Effect of legislative changes          -         -      (231)        -
      Non-taxable downstream
       partnership income                  (21)        -       (40)        -
      Non-taxable capital (gains)
       losses                              (32)        3       (44)      (30)
      Other                                 21       (35)       40       (26)
    -------------------------------------------------------------------------
                                      $    416  $    602  $    965  $  1,519
    -------------------------------------------------------------------------
    Effective Tax Rate                   30.8%     31.0%     25.1%     25.6%
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    12. PARTNERSHIP CONTRIBUTION RECEIVABLE/PAYABLE

    Partnership Contribution Receivable

    On January 2, 2007, upon the creation of the integrated oilsands joint
    venture, ConocoPhillips entered into a subscription agreement for a
    50 percent interest in FCCL Oil Sands Partnership, the upstream entity,
    in exchange for a promissory note of $7.5 billion. The note bears
    interest at a rate of 5.3 percent per annum. Equal payments of principal
    and interest are payable quarterly, with final payment due January 2,
    2017. The current and long-term partnership contribution receivable shown
    in the Consolidated Balance Sheet represent EnCana's 50 percent share of
    this promissory note, net of payments to date.

    Partnership Contribution Payable

    On January 2, 2007, upon the creation of the integrated oilsands joint
    venture, EnCana issued a promissory note to WRB Refining LLC, the
    downstream entity, in the amount of $7.5 billion in exchange for a
    50 percent interest. The note bears interest at a rate of 6.0 percent per
    annum. Equal payments of principal and interest are payable quarterly,
    with final payment due January 2, 2017. The current and long-term
    partnership contribution payable amounts shown in the Consolidated
    Balance Sheet represent EnCana's 50 percent share of this promissory
    note, net of payments to date.

    13. INVENTORIES

                                                          As at        As at
                                                   September 30, December 31,
                                                           2007         2006
    -------------------------------------------------------------------------

    Product
      Canada                                          $       1    $      42
      United States                                           1            -
      Integrated Oilsands                                   633            8
      Market Optimization                                   140          126
    -------------------------------------------------------------------------
                                                      $     775    $     176
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    14. LONG-TERM DEBT

                                                          As at        As at
                                                   September 30, December 31,
                                                           2007         2006
    -------------------------------------------------------------------------

    Canadian Dollar Denominated Debt
      Revolving credit and term loan borrowings       $     897    $   1,456
      Unsecured notes                                     1,431          793
    -------------------------------------------------------------------------
                                                          2,328        2,249
    -------------------------------------------------------------------------

    U.S. Dollar Denominated Debt
      Revolving credit and term loan borrowings               -          104
      Unsecured notes                                     4,921        4,421
    -------------------------------------------------------------------------
                                                          4,921        4,525
    -------------------------------------------------------------------------

    Increase in Value of Debt Acquired(*)                    66           60
    Debt Discounts and Financing Costs                      (69)           -
    Current Portion of Long-Term Debt                    (1,000)        (257)
    -------------------------------------------------------------------------
                                                     $    6,246    $   6,577
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (*) 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 21
        years.


    On March 12, 2007, EnCana completed a public offering in Canada of senior
    unsecured medium term notes in the aggregate principal amount of
    C$500 million. The notes have a coupon rate of 4.3 percent and mature on
    March 12, 2012.

    On August 13, 2007, EnCana completed a public offering in the United
    States of senior unsecured notes in the aggregate principal amount of US
    $500 million. The notes have a coupon rate of 6.625 percent and mature on
    August 15, 2037.

    15. ASSET RETIREMENT OBLIGATION

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


                                                          As at        As at
                                                   September 30, December 31,
                                                           2007         2006
    -------------------------------------------------------------------------

    Asset Retirement Obligation, Beginning
     of Year                                         $    1,051    $     816
    Liabilities Incurred                                     61           68
    Liabilities Settled                                     (48)         (51)
    Change in Estimated Future Cash Flows                     4          172
    Accretion Expense                                        46           50
    Other                                                   158           (4)
    -------------------------------------------------------------------------
    Asset Retirement Obligation, End of Period       $    1,272    $   1,051
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    16. SHARE CAPITAL

                                            September 30,     December 31,
                                                2007              2006
                                     ----------------------------------------
    (millions)                            Number    Amount  Number    Amount
    -------------------------------------------------------------------------

    Common Shares Outstanding,
     Beginning of Year                     777.9   $ 4,587   854.9   $ 5,131
    Common Shares Issued under
     Option Plans                            7.6       158     8.6       179
    Stock-based Compensation                   -        13       -        11
    Common Shares Purchased                (36.0)     (301)  (85.6)     (734)
    -------------------------------------------------------------------------
    Common Shares Outstanding,
     End of Period                         749.5   $ 4,457   777.9   $ 4,587
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Normal Course Issuer Bid

    To September 30, 2007, the Company purchased 38.9 million Common Shares
    for total consideration of approximately $2,025 million. Of the amount
    paid, $325 million was charged to Share capital and $1,700 million was
    charged to Retained earnings. Included in the Common Shares Purchased in
    2007 are 2.9 million Common Shares distributed, valued at $24 million,
    from the EnCana Employee Benefit Plan Trust that vested under EnCana's
    Performance Share Unit Plan (see Note 17). For these Common Shares
    distributed, there was an $82 million adjustment to Retained earnings
    with a reduction to Paid in surplus of $106 million.

    EnCana has received regulatory approval each year under Canadian
    securities laws to purchase Common Shares under five consecutive Normal
    Course Issuer Bids ("Bids"). EnCana is entitled to purchase, for
    cancellation, up to approximately 80.2 million Common Shares under the
    renewed Bid which commenced on November 6, 2006 and terminates on
    November 5, 2007.

    Stock Options

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

    The following tables summarize the information about options to purchase
    Common Shares that do not have Tandem Share Appreciation Rights ("TSARs")
    attached to them at September 30, 2007. Information related to TSARs is
    included in Note 17.

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

    Outstanding, Beginning of Year                         11.8        23.17
    Exercised                                              (7.6)       23.75
    Forfeited                                              (0.1)       22.90
    -------------------------------------------------------------------------
    Outstanding, End of Period                              4.1        22.12
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Exercisable, End of Period                              4.1        22.12
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


                                Outstanding Options      Exercisable Options
                      -------------------------------------------------------
                                     Weighted
                                      Average Weighted              Weighted
                       Number of    Remaining  Average   Number of   Average
           Range of      Options  Contractual Exercise     Options  Exercise
     Exercise Price  Outstanding         Life    Price Outstanding     Price
                (C$)   (millions)      (years)     (C$)  (millions)      (C$)
    -------------------------------------------------------------------------
    11.00 to 16.99           0.6           2.1    11.58         0.6    11.58
    17.00 to 23.49           0.1           1.0    22.86         0.1    22.86
    23.50 to 23.99           3.1           0.6    23.89         3.1    23.89
    24.00 to 24.99           0.2           0.8    24.51         0.2    24.51
    25.00 to 25.99           0.1           1.0    25.61         0.1    25.61
    -------------------------------------------------------------------------
                             4.1           0.8    22.12         4.1    22.12
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    

    At September 30, 2007, the balance in Paid in surplus relates to stock-
    based compensation programs.

    17. COMPENSATION PLANS

    The tables below outline certain information related to EnCana's
    compensation plans at September 30, 2007. Additional information is
    contained in Note 15 of the Company's annual audited Consolidated
    Financial Statements for the year ended December 31, 2006.

    A)  Pensions

    The following table summarizes the net benefit plan expense:

    
                                      Three Months Ended   Nine Months Ended
                                          September 30,       September 30,
                                      ---------------------------------------
                                          2007      2006      2007      2006
    -------------------------------------------------------------------------

    Current Service Cost              $      3  $      3  $     11  $     10
    Interest Cost                            5         5        14        13
    Expected Return on Plan Assets          (5)       (4)      (14)      (12)
    Expected Actuarial Loss on
     Accrued Benefit Obligation              1         1         3         4
    Expected Amortization of Past
     Service Costs                           -         -         1         1
    Amortization of Transitional
     Obligation                              -         -        (1)       (1)
    Expense for Defined Contribution
     Plan                                    9         9         25       20
    -------------------------------------------------------------------------
    Net Benefit Plan Expense          $     13  $     14   $     39 $     35
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    

    For the period ended September 30, 2007, contributions of $8 million have
    been made to the defined benefit pension plans (2006 - $9 million).

    B) Share Appreciation Rights ("SARs")

    The following table summarizes the information about SARs at
    September 30, 2007:

    
                                                                    Weighted
                                                   	                 Average
                                                     Outstanding    Exercise
                                                           SARs        Price
    -------------------------------------------------------------------------

    U.S. Dollar Denominated (US$)
    Outstanding, Beginning of Year                        2,088        14.21
    Exercised                                            (2,088)       14.21
    -------------------------------------------------------------------------
    Outstanding, End of Period                                -            -
    -------------------------------------------------------------------------
    Exercisable, End of Period                                -            -
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    

    For the period ended September 30, 2007, EnCana has not recorded any
    compensation costs related to the outstanding SARs (2006 - reduction of
    $1 million).

    C) Tandem Share Appreciation Rights ("TSARs")

    The following table summarizes the information about TSARs at
    September 30, 2007:

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

    Canadian Dollar Denominated (C$)
    Outstanding, Beginning of Year                   17,276,191        44.99
    Granted                                           4,592,238        56.19
    Exercised - SARs                                 (1,704,867)       40.93
    Exercised - Options                                 (12,020)       35.15
    Forfeited                                        (1,060,528)       50.52
    -------------------------------------------------------------------------
    Outstanding, End of Period                       19,091,014        50.28
    -------------------------------------------------------------------------
    Exercisable, End of Period                        5,401,965        42.90
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    

    For the period ended September 30, 2007, EnCana recorded compensation
    costs of $140 million related to the outstanding TSARs (2006 -
    $28 million).

    D) Performance-based Tandem Share Appreciation Rights
    ("Performance TSARs")

    In 2007, under the terms of the existing Employee Stock Option Plan,
    EnCana granted Performance TSARs under which the employee has the right
    to receive a cash payment equal to the excess of the market price of
    EnCana Common Shares at the time of exercise over the grant price.
    Performance TSARs vest and expire under the same terms and service
    conditions as the underlying option, and vesting is subject to the
    Company attaining prescribed performance as measured by the annual
    recycle ratio. Performance TSARs vest proportionately for a recycle ratio
    of greater than one; the maximum number of Performance TSARs vest if the
    recycle ratio is three or greater.

    The following table summarizes the information about Performance TSARs at
    September 30, 2007:

    
                                                                    Weighted
                                                                     Average
                                                    Outstanding     Exercise
                                                          TSARs        Price
    -------------------------------------------------------------------------
    Canadian Dollar Denominated (C$)
    Outstanding, Beginning of Year                            -            -
    Granted                                           7,275,575        56.09
    Forfeited                                          (327,350)       56.09
    -------------------------------------------------------------------------
    Outstanding, End of Period                        6,948,225        56.09
    -------------------------------------------------------------------------
    Exercisable, End of Period                                -            -
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    

    For the period ended September 30, 2007, EnCana recorded compensation
    costs of $9 million related to the outstanding Performance TSARs
    (2006 - nil).

    E) Deferred Share Units ("DSUs")

    The following table summarizes the information about DSUs at
    September 30, 2007:

    
                                                    Outstanding      Average
                                                           DSUs  Share Price
    -------------------------------------------------------------------------

    Canadian Dollar Denominated (C$)
    Outstanding, Beginning of Year                      866,577        29.56
    Granted, Directors                                   77,932        56.85
    Exercised                                          (334,615)       29.56
    Units, in Lieu of Dividends                           7,616        61.20
    -------------------------------------------------------------------------
    Outstanding, End of Period                          617,510        33.39
    -------------------------------------------------------------------------
    Exercisable, End of Period                          617,510        33.39
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    
    For the period ended September 30, 2007, EnCana recorded compensation
    costs of $10 million related to the outstanding DSUs (2006 - $3 million).

    F) Performance Share Units ("PSUs")

    The following table summarizes the information about PSUs at
    September 30, 2007:

    
                                                    Outstanding      Average
                                                           PSUs  Share Price
    -------------------------------------------------------------------------
    Canadian Dollar Denominated (C$)
    Outstanding, Beginning of Year                    4,766,329        27.48
    Granted                                              18,060        60.90
    Distributed                                      (2,937,491)       24.05
    Forfeited                                          (160,557)       33.93
    -------------------------------------------------------------------------
    Outstanding, End of Period                        1,686,341        33.19
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    

    For the period ended September 30, 2007, EnCana recorded compensation
    costs of $18 million related to the outstanding PSUs (2006 -
    $14 million).

    At September 30, 2007, EnCana has approximately 2.6 million Common Shares
    held in trust for issuance upon vesting of the PSUs (2006 - 5.5 million).

    18. PER SHARE AMOUNTS

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

    
                                                                    Nine
                                     Three Months Ended         Months Ended
    -------------------------------------------------------------------------
                               March    June
                                  31,     30,   September 30,   September 30,
    (millions)                  2007    2007    2007    2006    2007    2006
    -------------------------------------------------------------------------
    Weighted Average Common
     Shares Outstanding -
      Basic                    768.4   758.5   750.4   809.7   759.1   829.1
    Effect of Dilutive
     Securities                 11.2     6.7     5.5    14.6     8.4    16.5
    -------------------------------------------------------------------------
    Weighted Average Common
     Shares Outstanding -
      Diluted                  779.6   765.2   755.9   824.3   767.5   845.6
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    

    19.  FINANCIAL INSTRUMENTS AND RISK MANAGEMENT

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

    Realized and Unrealized Gain (Loss) on Risk Management Activities

    The following tables summarize the gains and losses on risk management
    activities:

    
                                                Realized Gain (Loss)
                                 --------------------------------------------
                                      Three Months Ended   Nine Months Ended
                                          September 30,       September 30,
                                 --------------------------------------------
                                          2007      2006      2007      2006
    -------------------------------------------------------------------------

    Revenues, Net of Royalties        $    496  $    199  $  1,193  $    153
    Operating Expenses and Other             3         1         4         4
    -------------------------------------------------------------------------
    Gain (Loss) on Risk Management -
     Continuing Operations                 499       200     1,197       157
    Gain (Loss) on Risk Management -
      Discontinued Operations                -         -         -         4
    -------------------------------------------------------------------------
                                      $    499  $    200  $  1,197  $    161
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

                                               Unrealized Gain (Loss)
                                 --------------------------------------------
                                      Three Months Ended   Nine Months Ended
                                          September 30,       September 30,
                                 --------------------------------------------
                                          2007      2006      2007      2006
    -------------------------------------------------------------------------
    Revenues, Net of Royalties        $   (107) $    428  $   (673) $  1,921
    Operating Expenses and Other             -         -         7        (2)
    -------------------------------------------------------------------------
    Gain (Loss) on Risk Management -
     Continuing Operations                (107)      428      (666)    1,919
    Gain (Loss) on Risk Management -
     Discontinued Operations                 -         5         -        27
    -------------------------------------------------------------------------
                                      $   (107) $    433  $   (666) $  1,946
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    

    Fair Value of Outstanding Risk Management Positions

    The following table presents a reconciliation of the change in the
    unrealized amounts from January 1, 2007 to September 30, 2007:

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

    Fair Value of Contracts, Beginning of Year       $    1,416    $       -
    Change in Fair Value of Contracts in Place
     at Beginning of Year and Contracts Entered
     into During 2007                                       520          520
    Fair Value of Contracts in Place at Transition
     that Expired During 2007                                 -           11
    Foreign exchange gains on Canadian dollar
     Contracts                                                2            -
    Fair Value of Contracts Realized During 2007         (1,197)      (1,197)
    -------------------------------------------------------------------------
    Fair Value of Contracts Outstanding              $      741    $    (666)
    Paid Premiums on Unexpired Options                       26
    -------------------------------------------------------------------------
    Fair Value of Contracts and Premiums Paid,
     End of Period                                   $      767
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    

    At September 30, 2007, the risk management amounts are recorded in the
    Consolidated Balance Sheet as follows:

    
                                                                       As at
                                                          September 30, 2007
    -------------------------------------------------------------------------

    Risk Management
      Current asset                                                $     820
      Long-term asset                                                     57
      Current liability                                                   98
      Long-term liability                                                 12
    -------------------------------------------------------------------------
    Net Risk Management Asset                                      $     767
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    A summary of all unrealized estimated fair value financial positions is
    as follows:

                                                                       As at
                                                          September 30, 2007
    -------------------------------------------------------------------------
    Commodity Price Risk
      Natural gas                                                  $     846
      Crude oil                                                         (103)
      Power                                                               22
    Credit Derivatives                                                    (1)
    Interest Rate Risk                                                     3
    -------------------------------------------------------------------------
    Total Fair Value Positions                                     $     767
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    

    Information with respect to credit derivatives and interest rate risk
    contracts in place at December 31, 2006 is disclosed in Note 16 to the
    Company's annual audited Consolidated Financial Statements.

    Natural Gas

    At September 30, 2007, the Company's gas risk management activities from
    financial contracts had an unrealized gain of $841 million and a fair
    market value position of $846 million. The contracts were as follows:

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

    Sales Contracts
    Fixed Price Contracts
      NYMEX Fixed Price      1,608        2007     8.80 US$/Mcf    $     262
      NYMEX Fixed Price        765        2008     8.49 US$/Mcf          177

    Options
      Purchased NYMEX Put
       Options                 240        2007     6.00 US$/Mcf           (4)

    Basis Contracts
      Canada                   727        2007    (0.71) US$/Mcf          21
      United States            879        2007    (0.71) US$/Mcf         256

      Canada                   191        2008    (0.78) US$/Mcf          15
      United States            849        2008    (1.03) US$/Mcf         100

      United States             20        2009    (0.71) US$/Mcf           5
      Canada                    41   2010-2011    (0.41) US$/Mcf           6
    -------------------------------------------------------------------------
                                                                         838
    Other Financial
     Positions (*)                                                         3
    -------------------------------------------------------------------------
    Total Unrealized Gain
     on Financial Contracts                                              841
    Paid Premiums on
     Unexpired Options                                                     5
    -------------------------------------------------------------------------
    Total Fair Value
     Positions                                                     $     846
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (*) Other financial positions are part of the ongoing operations of the
        Company's proprietary production management.
    

    Crude Oil

    At September 30, 2007, the Company's oil risk management activities from
    financial contracts had an unrealized loss of $124 million and a fair
    market value position of $(103) million. The contracts were as follows:

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

    Sales Contracts
    Fixed Price Contracts
      WTI NYMEX Fixed Price  34,500       2007    64.40 US$/bbl    $     (50)
      WTI NYMEX Fixed Price  23,000       2008    70.13 US$/bbl          (51)

    Options
      Purchased WTI NYMEX
       Put Options           91,500       2007    55.34 US$/bbl          (20)
    -------------------------------------------------------------------------
                                                                        (121)
    Other Financial
     Positions (*)                                                        (3)
    -------------------------------------------------------------------------
    Total Unrealized Loss
     on Financial Contracts                                             (124)
    Paid Premiums on
     Unexpired Options                                                    21
    -------------------------------------------------------------------------
    Total Fair Value
     Positions                                                     $    (103)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (*) Other financial positions are part of the ongoing operations of the
        Company's proprietary production management.
    

    Power

    The Company has in place two derivative contracts, commencing
    January 1, 2007 for a period of 11 years, to manage its electricity
    consumption costs. At September 30, 2007, these contracts had an
    unrealized gain of $22 million.

    20. 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.

    The Bow Office Project

    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. Cost of design changes to the building requested
    by EnCana and leasehold improvements will be the responsibility of the
    Company. The development of The Bow office project remains conditional
    upon receipt of certain approvals and conditions being met, failing which
    the transaction could be unwound and EnCana would be required to
    reimburse the third party developer for the majority of the costs
    incurred and to assume the outstanding commitments of the project.

    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.

    The remaining lawsuits were commenced by individual plaintiffs, one of
    which is E. & J. Gallo Winery ("Gallo"). The Gallo lawsuit claims damages
    in excess of $30 million. The other remaining lawsuits do not specify the
    precise amount of damages claimed. California law allows for the
    possibility that the amount of damages assessed could be tripled.

    The Company and WD intend to vigorously defend against the outstanding
    claims; 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.

    21. RECLASSIFICATION

    Certain information provided for prior periods has been reclassified to
    conform to the presentation adopted in 2007.





For further information:

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

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