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



    
     Operating earnings up 40 percent to $1.92 per share or $1.4 billion
           Total natural gas and oil production increases 6 percent
    

    CALGARY, Oct. 23 /CNW/ - EnCana Corporation (TSX & NYSE:   ECA) generated
strong increases in cash flow and operating earnings in the third quarter of
2008 as a result of solid production growth and higher commodity prices
compared to the same period in 2007. Third quarter natural gas and oil
production increased 6 percent, led by a 16 percent rise in production from
key natural gas resource plays.
    "These strong financial results in the third quarter are a reflection of
the company's focus on operating excellence and capital discipline. EnCana's
prudent financial approach and low-risk business model allow us to capture the
upside during times of higher commodity prices as well as sustain us through a
volatile natural gas and oil pricing environment," said Randy Eresman,
EnCana's President & Chief Executive Officer.
    "In this period of economic uncertainty, our resource play strategy
maintains a steadfast focus on low-cost production. As part of our ongoing
efforts to maintain financial resilience and flexibility, we will continue to
take steps to reduce pricing risk through our natural gas price hedging
program. The company also maintains financial strength with a conservative and
prudent approach that mitigates risks associated with borrowing. About 78
percent of EnCana's outstanding debt is comprised of long-term, fixed-rate
debt with an average remaining term of more than 14 years," Eresman said.

    EnCana increases gas price hedges

    Over the next year, EnCana has a substantial portion of expected future
production hedged at strong prices. About 80 percent of EnCana's total current
production is natural gas. For the 2009 gas year, which runs from
November 2008 through October 2009, EnCana has about 2.5 billion cubic feet
per day (Bcf/d) - about 60 percent of current production - hedged at an
average price of $9.15 per thousand cubic feet (Mcf).

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

    Financial - US$

    -   Cash flow increased 28 percent per share to $3.74, or $2.8 billion
    -   Operating earnings increased 40 percent per share to $1.92, or
        $1.4 billion
    -   Net earnings increased to $3.55 billion, primarily due to after-tax
        unrealized mark-to-market gains on risk management activities of
        $2.0 billion in 2008 compared with losses of $69 million in 2007
    -   Operating cash flow from the Integrated Oil division was
        $139 million, down 70 percent
    -   Capital investment, excluding acquisitions and divestitures, was in
        line with guidance at $1.6 billion, up 1 percent over 2007
    -   Free cash flow increased $578 million to $1.2 billion (free cash flow
        is defined in Note 1 on page 9)
    -   Realized natural gas prices increased 18 percent to $7.94 per Mcf and
        realized oil and natural gas liquids (NGLS) prices were up 85 percent
        to $90.88 per barrel (bbl). These prices include the impact of
        financial hedges
    -   Net debt to capitalization ratio of 26 percent
    -   Net debt to adjusted EBITDA of 0.6 times.

    Operating - Upstream

    -   Total natural gas, oil and NGLs production increased 6 percent to
        4.7 Bcfe/d
    -   Production from key natural gas resource plays increased 16 percent
    -   Total natural gas production increased 8 percent to 3.9 Bcf/d
    -   Total oil and NGLs production was approximately 133,600 barrels per
        day (bbls/d), down about 2 percent
    -   Production from Foster Creek and Christina Lake increased 10 percent
        to approximately 63,000 bbls/d (31,500 bbls/d net to EnCana)
    -   Operating and administrative costs of 79 cents per thousand cubic
        feet equivalent (Mcfe) decreased 22 percent from $1.01 a year
        earlier, largely due to mark-to-market accounting in the valuation of
        the cost of long-term incentives.

    Operating - Downstream

    -   Refined products averaged 438,000 bbls/d (219,000 bbls/d net to
        EnCana), down 10 percent
    -   Refinery crude utilization of 91 percent or 412,000 bbls/d crude
        throughput (206,000 bbls/d net to EnCana), down 10 percent from the
        third quarter of 2007 due primarily to unplanned refinery outages and
        maintenance activities at Wood River
    -   The Wood River Coker and Refinery Expansion (CORE) project received
        regulatory approvals and construction is expected to be completed
        over the next three years at a cost of $3.6 billion ($1.8 billion net
        to EnCana).

    Majority of net earnings year-over-year increase related to unrealized
    mark-to-market accounting gains
    

    EnCana's net earnings in the third quarter increased to $3.55 billion.
Approximately $2.0 billion of this increase was an after-tax unrealized gain
due to mark-to-market accounting for hedging contracts. This large gain in net
earnings resulted from a large decrease in commodity prices during the third
quarter. The gain essentially reversed unrealized mark-to-market losses that
were included in net earnings earlier in the year when natural gas prices were
rising. It is because of these dramatic mark-to-market accounting swings in
net earnings that EnCana focuses on operating earnings as a better measure of
quarter-over-quarter earnings performance. Operating earnings in the third
quarter, which do not include mark-to-market accounting for unrealized gains
and losses, were up about 40 percent, which reflects the stronger realized
prices - up about 31 percent - in the third quarter of 2008 compared to 2007,
plus EnCana's 6 percent increase in daily production.

    
    Guidance for total cash flow narrowed to range of $10 billion to
    $10.4 billion
    

    Based on the company's natural gas production and commodity price
expectations for the remainder of the year, EnCana is narrowing its 2008
guidance for total cash flow to a range of $10 billion to $10.4 billion, or
between $13.30 and $13.85 per share. Operating cash flow has been revised to
between $11.9 billion and $12.7 billion. Capital investment, including
acquisitions, was ahead of expectations at the end of the third quarter mostly
due to additional unconventional natural gas land acquisitions in Haynesville
in Louisiana and Montney in British Columbia. EnCana had expected to complete
a number of divestitures in the fourth quarter to offset these acquisitions.
However, as a result of the current economic climate, some of those
transactions may not be completed prior to year end. Based on current
expectations, net acquisition and divestiture capital investment guidance has
increased $900 million. In total, capital expenditures for the year, including
acquisitions and divestitures, are expected to be about $7.4 billion, compared
to $6.5 billion provided in previous guidance. Total natural gas, oil and NGLs
production is on track to meet full-year guidance of 4.64 MMcfe/d. Updated
guidance is posted on the company's website at www.encana.com.

    
    Production from key natural gas resource plays up 16 percent in third
    quarter
    

    Natural gas production increased 8 percent or 287 MMcf/d in the third
quarter of 2008 compared with the third quarter of 2007, largely due to a
16 percent increase in production from EnCana's key natural gas resource
plays. The application of new technology helped reduce costs for many of the
company's key resource plays, resulting in improved well performance and
continued efficiency gains. Production increases were led by a rise of
135 percent at East Texas, where production averaged about 340 MMcf/d in the
third quarter, mainly due to new wells coming on production and the doubling
of EnCana's interest in Deep Bossier in late 2007. Drilling and operational
success at Fort Worth, Piceance and Jonah also contributed to the third
quarter natural gas production increase of 24 percent in key resource plays in
the U.S. Gas production from the Canadian Foothills division key resource
plays increased 19 percent in 2008 compared with 2007. Drilling success and
new facilities in the key resource plays of Coalbed Methane (CBM), Cutbank
Ridge and Bighorn increased production by 23 percent, which was partially
offset by natural declines from conventional properties.

    Integrated Oil division getting set for production increase

    Integrated Oil generated $139 million in operating cash flow, down
70 percent from $468 million in the same quarter of 2007. Foster Creek and
Christina Lake operations contributed $183 million, a 190 percent increase due
to strong heavy oil prices. Operating cash flow includes a $96 million
operating loss from the downstream business, a decrease of 128 percent due to
weaker market crack spreads, unplanned refinery outages and hurricane-related
crude oil supply disruptions. Downstream operating cash flow includes a
decrease of $95 million due to higher purchased product costs as a result of
processing higher-priced crude during the quarter. The Chicago 3-2-1 crack
spread averaged $17.29 per bbl in the quarter, down 6 percent from $18.48 per
bbl, in the same period last year.
    "Expansion activity is progressing as scheduled at our integrated oil
facilities. Foster Creek is currently producing about 56,000 bbls/d
(28,000 bbls/d net to EnCana). Steaming of the reservoir is underway as we
near completion of the next two expansion phases, which are expected to double
production capacity at Foster Creek to about 120,000 bbls/d in 2009. Christina
Lake is now producing 12,000 bbls/d (6,000 bbls/d net to EnCana) and the most
recent expansion at the facility has increased production capacity to
18,000 bbls/d," Eresman said.

    Wood River refinery expansion receives regulatory approvals

    EnCana announced on September 24, 2008 that construction of the CORE
project would begin at the Wood River refinery in Roxana, Illinois. The
project, a 50-50 venture of EnCana and the refinery operator ConocoPhillips,
is expected to increase total crude oil refining capacity by 50,000 bbls/d to
356,000 bbls/d, more than double current heavy crude refining capacity to
240,000 bbls/d as well as increase clean product yield by 10 percent to
approximately 89 percent. The CORE project is estimated to cost about
$3.6 billion ($1.8 billion net to EnCana) and is expected to be completed over
the next three years.

    Shale gas plays continue to show promise

    "In the third quarter of 2008, we strengthened our position in the
Haynesville gas resource play by acquiring 25,000 net acres, increasing our
land position to about 400,000 net acres, plus 63,000 net acres of mineral
rights. We continue to see great potential in this promising shale play,"
Eresman said. "EnCana, along with our partner, Shell Exploration & Production,
has an industry-leading land position in this area of Louisiana. We currently
have six rigs running with a focus on cost reduction and completion
optimization. We will target drilling and completing the first well in the
mid-Bossier shale in the fourth quarter. In northeast British Columbia and
northwestern Alberta, our already strong land position in the Montney play has
expanded to more than 700,000 acres. With that, EnCana has the largest
disclosed land base in this emerging unconventional gas field. And, at Horn
River in British Columbia, EnCana and partner Apache Corporation have
completed seven wells this year, with one of our most recent wells delivering
encouraging results, flowing for the first 30 days at an average of almost
8 MMcf/d."

    EnCana increases ownership in Deep Panuke

    In August 2008, EnCana acquired additional interests in one of the
licenses making up the Deep Panuke natural gas field offshore Nova Scotia.
EnCana now owns substantially all of the Deep Panuke field. The $700 million
Deep Panuke project is on budget and on schedule to begin producing first gas
in late 2010.

    Weak U.S. Rockies gas prices prompt production shut-in at Jonah

    Due to lower natural gas prices in the U.S. Rockies region, EnCana has
shut in approximately 50 MMcf/d of production (net of royalties) at the
company's Jonah key resource play in Wyoming. Although EnCana hedged
100 percent of expected production from the Rockies region, production levels
have been higher than anticipated, creating a small exposure to Rockies spot
prices. As a result, EnCana has decided to limit production at Jonah to
580 MMcf/d (net of royalties) for October. If prices improve, EnCana will
re-evaluate a return to productive capacity. Also, during September, a testing
outage of the Rockies Express Pipeline resulted in lower gas prices in the
U.S. Rockies region, prompting EnCana to shut-in approximately 60 MMcf/d
(5 MMcf/d annualized).

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

    
    -------------------------------------------------------------------------
                   Financial Summary - Total Consolidated
    -------------------------------------------------------------------------
    (for the period ended
     Sept 30)                                            9        9
    ($ millions, except       Q3      Q3       %       months   months   %
     per share amounts)      2008    2007    change     2008     2007  change
    -------------------------------------------------------------------------
    Cash flow(1)            2,809   2,218      +27     8,087    6,519    +24
      Per share diluted      3.74    2.93      +28     10.75     8.49    +27
    -------------------------------------------------------------------------
    Operating earnings(1)   1,442   1,032      +40     3,956    3,251    +22
      Per share diluted      1.92    1.37      +40      5.26     4.24    +24
    -------------------------------------------------------------------------
    Net earnings            3,553     934              4,867    2,877
      Per share diluted      4.73    1.24               6.47     3.75
    -------------------------------------------------------------------------
    Capital investment      1,588   1,575       +1     5,155    4,230    +22
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


             Earnings Reconciliation Summary - Total Consolidated
    -------------------------------------------------------------------------

    Net earnings (loss)
    (Add back losses &
     deduct gains)          3,553     934              4,867    2,877
    Unrealized mark-to-
     market hedging gain
     (loss), after-tax      2,043     (69)             1,071     (445)
    Non-operating foreign
     exchange gain (loss),
     after-tax                (31)    (54)              (259)     (50)
    Gain (loss) on
     discontinuance,
     after-tax                 99      25                 99       84
    Future tax recovery
     due to tax rate
     reductions                 -       -                  -       37
    -------------------------------------------------------------------------

    Operating earnings(1)   1,442   1,032      +40     3,956    3,251    +22
    Per share diluted        1.92    1.37      +40      5.26     4.24    +24
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    (1) Cash flow and operating earnings are non-GAAP measures as defined in
        Note 1 on page 8.


    -------------------------------------------------------------------------
                        Production & Drilling Summary
    -------------------------------------------------------------------------
                             Total Consolidated
    -------------------------------------------------------------------------
    (for the period ended
     Sept 30)                 Q3      Q3       %     9 months 9 months   %
    (After royalties)        2008    2007    change      2008     2007 change
    -------------------------------------------------------------------------
    Natural Gas (MMcf/d)    3,917   3,630       +8     3,830    3,513     +9
    -------------------------------------------------------------------------
      Natural gas
       production per 1,000
       shares (Mcf)           480     445       +8     1,399    1,263    +11
    -------------------------------------------------------------------------
    Oil and NGLs (Mbbls/d)    134     136       -2       133      133      -
    -------------------------------------------------------------------------
      Oil and NGLs
       production per 1,000
       shares (Mcfe)           99     100       -1       291      288     +1
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Total Production
     (MMcfe/d)              4,718   4,448       +6     4,627    4,314     +7
    -------------------------------------------------------------------------
      Total per 1,000
       shares (Mcfe)          579     545       +6     1,690    1,551     +9
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Total net wells drilled   730   1,339      -45     2,282    3,171    -28
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


                Growth from key North American resource plays
    -------------------------------------------------------------------------
                                          Daily Production
                 ------------------------------------------------------------
    Resource Play           2008                       2007             2006
                 ------------------------------------------------------------
    (After                                Full                          Full
     royalties)    YTD    Q3    Q2    Q1  Year    Q4    Q3    Q2    Q1  Year
    -------------------------------------------------------------------------
    Natural Gas
     (MMcf/d)
      Jonah        613   615   630   595   557   612   588   523   504   464
      Piceance     387   407   383   372   348   351   354   349   334   326
      East Texas   309   339   316   273   143   187   144   139   103    99
      Fort Worth   142   148   137   140   124   138   128   124   106   101
      Greater
       Sierra      217   228   219   205   211   221   220   219   186   213
      Cutbank
       Ridge(1)    291   322   280   271   258   283   269   248   232   189
      Bighorn(1)   167   185   170   146   126   136   136   122   109    97
      CBM          303   309   303   298   259   283   256   245   251   194
      Shallow Gas  706   691   712   715   726   727   713   729   735   739
    -------------------------------------------------------------------------
    Total natural
     gas(1)
     (MMcf/d)    3,135 3,244 3,150 3,015 2,752 2,938 2,808 2,698 2,560 2,422
    -------------------------------------------------------------------------
    Oil (Mbbls/d)
      Foster Creek  25    27    21    27    24    25    26    25    20    18
      Christina
       Lake          4     5     4     2     3     2     3     3     3     3
      Pelican Lake  22    22    21    24    23    24    24    23    23    24
      Weyburn(2)    14    14    13    14    15    14    15    14    15    15
    -------------------------------------------------------------------------
    Total oil
     (Mbbls/d)(2)   65    68    59    67    65    65    68    65    61    60
    -------------------------------------------------------------------------
    Total
     (MMcfe/d)
     (1, 2)      3,523 3,648 3,506 3,417 3,142 3,328 3,210 3,088 2,926 2,782
    -------------------------------------------------------------------------
    % change from
     prior period       +4.1  +2.6  +2.7 +12.9  +3.7  +4.0  +5.5  +9.2
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    (1) Key resource play production volumes in 2007 and 2006 for Cutbank
        Ridge and Bighorn were restated in the first quarter of 2008 to
        include the addition of new areas and zones that now qualify for key
        resource play inclusion based on EnCana's internal criteria.
    (2) Total key resource play production volumes in 2007 and 2006 were
        restated in the first quarter of 2008 to include the designation of
        Weyburn as a key oil resource play.


           Drilling activity in key North American resource plays

    -------------------------------------------------------------------------
                                    Net Wells Drilled
                 ------------------------------------------------------------
    Resource Play         2008                          2007            2006
                 ------------------------------------------------------------
                                          Full                          Full
                   YTD    Q3    Q2    Q1  Year    Q4    Q3    Q2    Q1  Year
    -------------------------------------------------------------------------
    Natural Gas
      Jonah        135    43    49    43   135    23    31    42    39   163
      Piceance     258    94    81    83   286    77    72    72    65   220
      East Texas    55    22    22    11    35     8     9    11     7    59
      Fort Worth    62    21    20    21    75    15    17    29    14    97
      Greater
       Sierra       92    29    27    36   109    27    27    32    23   115
      Cutbank
       Ridge(1)     65    17    24    24    93    11    23    26    33   134
      Bighorn(1)    59    11    18    30    62     6    18    10    28    58
      CBM          339    78    10   251 1,079   330   323    18   408   729
      Shallow Gas  812   233    83   496 1,914   649   608   241   416 1,310
    -------------------------------------------------------------------------
    Total gas
     wells(1)    1,877   548   334   995 3,788 1,146 1,128   481 1,033 2,885
    -------------------------------------------------------------------------
    Oil
      Foster
       Creek        19     6     1    12    23     6     8     1     8     3
      Christina
       Lake          -     -     -     -     3     -     1     2     -     1
      Pelican
       Lake          -     -     -     -     -     -     -     -     -     -
      Weyburn(2)    18     4     5     9    37    10     9     9     9    35
    -------------------------------------------------------------------------
    Total oil
     wells(2)       37    10     6    21    63    16    18    12    17    39
    -------------------------------------------------------------------------
    Total(1),(2) 1,914   558   340 1,016 3,851 1,162 1,146   493 1,050 2,924
    -------------------------------------------------------------------------

    (1) Key resource play net wells drilled in 2007 and 2006 for Cutbank
        Ridge and Bighorn were restated in the first quarter of 2008 to
        include the addition of new areas and zones that now qualify for key
        resource play inclusion based on EnCana's internal criteria.
    (2) Total key resource play net wells drilled in 2007 and 2006 were
        restated in the first quarter of 2008 to include the designation of
        Weyburn as a key oil resource play.

    -------------------------------------------------------------------------
                Third Quarter 2008 natural gas and oil prices
    -------------------------------------------------------------------------
                              Q3      Q3        %   9 months 9 months     %
                             2008    2007    change     2008     2007  change
    -------------------------------------------------------------------------
    Natural gas ($Mcf)
    NYMEX                   10.24    6.16      +66      9.73     6.83    +42
    EnCana Realized Gas
     Price(1)                7.94    6.75      +18      8.17     7.19    +14
    -------------------------------------------------------------------------
    Oil and NGLs ($/bbl)
    WTI                    118.22   75.15      +57    113.52    66.22    +71
    Western Canadian
     Select (WCS)          100.22   52.71      +90     93.16    46.86    +99
    Differential WTI/WCS    18.00   22.44      -20     20.36    19.36     +5
    EnCana Realized
     Liquids Price(1)       90.88   49.01      +85     83.49    45.71    +83
    -------------------------------------------------------------------------
    3-2-1 Crack Spread
     ($/bbl)
    Chicago                 17.29   18.48       -6     12.86    20.50    -37
    -------------------------------------------------------------------------

    (1) Realized prices include the impact of financial hedging.
    

    Price risk management

    Risk management positions at September 30, 2008 are presented in Note 17
to the unaudited Interim Consolidated Financial Statements. In the third
quarter of 2008, EnCana's commodity price risk management measures resulted in
realized losses of approximately $271 million after tax, comprised of a
$203 million after-tax loss on gas hedges, and a $68 million after-tax loss on
oil and other hedges. EnCana has hedged about 2.4 Bcf/d of expected 2008 gas
production for the balance of the year at an average NYMEX equivalent price of
$8.82 per Mcf. EnCana has about 23,000 bbls/d of expected 2008 oil production
hedged for the balance of the year under fixed price contracts at an average
West Texas Intermediate (WTI) price of $70.13 per bbl. For the calendar year
2009, EnCana has 1.6 Bcf/d of its expected natural gas production under fixed
price contracts at an average NYMEX equivalent price of $9.31 per Mcf and
0.5 Bcf/d under NYMEX put options at an average strike price of $9.10 per Mcf.

    U.S. Rockies and Canadian basis differential hedges

    North American natural gas prices are impacted by volatile pricing
disconnects caused primarily by transportation constraints between producing
regions and consuming regions. These price discounts are called basis
differentials. EnCana has hedged 100 percent of its expected U.S. Rockies
basis exposure through 2011 using a combination of downstream transportation
and basis hedges, including some hedges that are based on a percentage of
NYMEX prices and some hedges that move basis risk to alternative markets
downstream. EnCana has also hedged about 6 percent of its expected 2008
Canadian gas production at an average AECO basis differential of 72 cents per
Mcf.

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

    Quarterly dividend of 40 cents per share declared
    

    EnCana's Board of Directors has declared a quarterly dividend of 40 cents
per share payable on December 31, 2008 to common shareholders of record as of
December 15, 2008. Based on the October 22, 2008 closing share price on the
New York Stock Exchange of $41.10, this represents an annualized yield of
about 3.9 percent.

    EnCana revises schedule for creation of Cenovus Energy Inc.

    On October 15, 2008, EnCana announced that it is revising the schedule
for its proposed split into two independent energy companies - an integrated
oil company to be named Cenovus Energy Inc. and a pure-play natural gas
company, which will retain the name EnCana Corporation. The proposed corporate
reorganization was expected to close in early January 2009. The transaction is
to be implemented through a Plan of Arrangement and is subject to shareholder
and court approvals.
    "During this period of market uncertainty, we've decided it is in the
best interests of shareholders to delay the timing of the reorganization,"
said Eresman. "We continue to work towards the creation of Cenovus and will be
ready to move forward with the transaction at the appropriate time."
    Work is underway on a Cenovus logo and brand as well as a new brand for
EnCana. For further information on the reorganization, see the company's
website www.encana.com.

    Normal Course Issuer Bid

    As a result of the proposed corporate split, EnCana suspended the
purchase of common shares for cancellation. EnCana has no plans to resume
purchases while the company continues to move forward with the reorganization.

    Brazil sale closes

    In September 2008, EnCana completed the sale of its interests in Brazil,
which included non-operated interests in 10 offshore exploration blocks.
EnCana received net proceeds of $164 million and recorded an after-tax gain of
approximately $99 million on the sale.

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

    EnCana maintains a strong balance sheet, targeting a net debt to
capitalization ratio between 30 and 40 percent and a net debt to adjusted
EBITDA multiple, on a trailing 12-month basis, of 1 to 2 times. At
September 30, 2008, EnCana's net debt to capitalization ratio was 26 percent,
including mark-to-market gains on risk management instruments, which decreased
net debt. Excluding this mark-to-market impact to working capital, the net
debt to capitalization ratio would have been 29 percent. EnCana's net debt to
adjusted EBITDA multiple, on a trailing 12-month basis, was 0.6 times at the
end of the third quarter. The company expects to continue to be in the lower
end of its managed ranges through year-end. Upcoming debt maturities are
modest as indicated below.

    
           ---------------------------------------------------------
                   Long-Term Debt maturities through 2010
                                                        ($ millions)
           ---------------------------------------------------------
                 Issue                        Currency      Total
            4.6% due August 15, 2009            USD         $250.0
           7.65% due September 15, 2010         USD         $200.0
           ---------------------------------------------------------
    

    In the third quarter, EnCana invested $1.6 billion in capital, excluding
acquisitions and divestitures, on continued development of its key resource
plays and expansion of the company's downstream heavy oil processing capacity
through its venture with ConocoPhillips. Net acquisitions and divestitures for
the first nine months of 2008 were $621 million, including approximately
$600 million in divestitures and $1.1 billion in acquisitions in the U.S.,
largely due to investments in Haynesville properties.

    
    -------------------------------------------------------------------------
                            CONFERENCE CALL TODAY

                 11 a.m. Mountain Time (1 p.m. Eastern Time)

    EnCana Corporation will host a conference call today, Thursday,
    October 23, 2008 starting at 11:00 a.m. MT (1:00 p.m. ET). To
    participate, please dial (888) 337-8259 (toll-free in North America) and
    quote passcode 7433356 approximately 10 minutes prior to the conference
    call. An archived recording of the call will be available from
    approximately 3:00 p.m. MT on October 23 until midnight October 30, 2008
    by dialling (888) 203-1112 and entering passcode 7433356.

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

    NOTE 1: Non-GAAP measures

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

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

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

    EnCana Corporation

    With an enterprise value of approximately $40 billion, EnCana is a
leading North American unconventional natural gas and integrated oil company.
By partnering with employees, community organizations and other businesses,
EnCana contributes to the strength and sustainability of the communities where
it operates. EnCana common shares trade on the Toronto and New York stock
exchanges under the symbol ECA.

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

    ADVISORY REGARDING FORWARD-LOOKING STATEMENTS - In the interests of
providing EnCana shareholders and potential investors with information
regarding EnCana, including management's assessment of EnCana's and its
subsidiaries' future plans and operations, certain statements contained in
this news release are forward-looking statements or information within the
meaning of applicable securities legislation, collectively referred to herein
as "forward-looking statements." Forward-looking statements in this news
release include, but are not limited to: projections relating to future
economic and operating performance (including per share growth, net debt to
capitalization and net debt to adjusted EBITDA ratios, cash flow, operating
cash flow, and cash flow per share); the anticipated ability to meet the
company's guidance forecasts; the ability of the company to withstand a
volatile pricing environment; anticipated growth and success of various
resource plays and the expected characteristics of such resource plays; the
future drilling and production potential for various regions, including East
Texas and the Horn River and Haynesville natural gas shale plays; projections
relating to the proposed corporate reorganization transaction, including the
expected timing for proceeding with this transaction; projections of crude oil
and natural gas prices, including basis differentials for various regions;
anticipated expansion and production at Foster Creek and Christina Lake; the
potential success, capacity, cost and timing of the CORE project at Wood
River; anticipated continued suspension of purchases under EnCana's normal
course issuer bid; the potential timing, cost and success of the Deep Panuke
project; anticipated limiting of production at Jonah; projections for future
crack spreads and refining margins; anticipated effects of EnCana's market
risk mitigation strategy; projections for 2008 capital expenditures and
investment; projections for oil, natural gas and NGLs production in 2008 and
beyond; anticipated costs and inflationary pressures; and potential
divestitures, proceeds which may be generated there from and the potential use
of such proceeds.
    Readers are cautioned not to place undue reliance on forward-looking
statements, as there can be no assurance that the plans, intentions or
expectations upon which they are based will occur. By their nature,
forward-looking statements involve numerous assumptions, known and unknown
risks and uncertainties, both general and specific, that contribute to the
possibility that the predictions, forecasts, projections and other
forward-looking statements will not occur, which may cause the company's
actual performance and financial results in future periods to differ
materially from any estimates or projections of future performance or results
expressed or implied by such forward-looking statements. These risks and
uncertainties include, among other things: risks associated with the timing
and the ability to obtain any necessary approvals, waivers, consents, court
orders and other requirements necessary or desirable to permit or facilitate
the proposed transaction (including, regulatory and shareholder approvals);
the risk that any applicable conditions of the proposed transaction may not be
satisfied; volatility of and assumptions regarding oil and gas prices;
assumptions based upon the company's current guidance; fluctuations in
currency and interest rates; product supply and demand; North American and
global market conditions including financial markets; market competition;
risks inherent in the company's marketing operations, including credit risks;
imprecision of reserves estimates and estimates of recoverable quantities of
oil, natural gas and liquids from resource plays and other sources not
currently classified as proved reserves; the ability of the company and
ConocoPhillips to successfully manage and operate the integrated North
American oil business and the ability of the parties to obtain necessary
regulatory approvals; refining and marketing margins; potential disruption or
unexpected technical difficulties in developing new products and manufacturing
processes; potential failure of new products to achieve acceptance in the
market; unexpected cost increases or technical difficulties in constructing or
modifying manufacturing or refining facilities; unexpected difficulties in
manufacturing, transporting or refining synthetic crude oil; risks associated
with technology; the company's ability to replace and expand oil and gas
reserves; its ability to generate sufficient cash flow from operations to meet
its current and future obligations; its ability to access external sources of
debt and equity capital; the timing and the costs of well and pipeline
construction; the company's ability to secure adequate product transportation;
changes in royalty, tax, environmental and other laws or regulations or the
interpretations of such laws or regulations; political and economic conditions
in the countries in which the company operates; the risk of war, hostilities,
civil insurrection and instability affecting countries in which the company
operates and terrorist threats; risks associated with existing and potential
future lawsuits and regulatory actions made against the company; and other
risks and uncertainties described from time to time in the reports and filings
made with securities regulatory authorities by EnCana. Although EnCana
believes that the expectations represented by such forward-looking statements
are reasonable, there can be no assurance that such expectations will prove to
be correct. Readers are cautioned that the foregoing list of important factors
is not exhaustive.
    Forward-looking information respecting anticipated 2008 cash flow,
operating cash flow and pre-tax cash flow for EnCana, EnCana post-arrangement
(prior working name GasCo) and Cenovus pro-forma the proposed reorganization
transaction, is based upon achieving average production of oil and gas for
2008 as set out in the company's guidance, average commodity prices for 2008
based on actual results for the first three quarters of 2008, and for the
balance of 2008, a WTI price of $85/bbl for oil, a NYMEX price of $7.50/Mcf
for natural gas, an average U.S./Canadian dollar foreign exchange rate of
$0.90, an average Chicago crack spread for 2008 of $9.00/bbl for refining
margins, and an average number of outstanding shares for EnCana of
approximately 750 million. Forward-looking information respecting the
rescheduling of the proposed reorganization transaction is based upon the
assumption that financial markets will stabilize. Assumptions relating to
forward-looking statements generally include EnCana's current expectations and
projections made by the company in light of, and generally consistent with,
its historical experience and its perception of historical trends, as well as
expectations regarding rates of advancement and innovation, generally
consistent with and informed by its past experience, all of which are subject
to the risk factors identified elsewhere in this document.
    Furthermore, the forward-looking statements contained in this news
release are made as of the date of this news release, and, except as required
by law, EnCana does not undertake any obligation to update publicly or to
revise any of the included forward-looking statements, whether as a result of
new information, future events or otherwise. The forward-looking statements
contained in this news release are expressly qualified by this cautionary
statement.



    
    EnCana Corporation

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

    (U.S. Dollars)



    Third quarter report
    for the period ended September 30, 2008

    CONSOLIDATED STATEMENT OF EARNINGS (unaudited)

                                      Three Months Ended   Nine Months Ended
                                            September 30,       September 30,
    ($ millions, except per           ---------------------------------------
     share amounts)                       2008      2007      2008      2007
    -------------------------------------------------------------------------
    REVENUES,
     NET OF ROYALTIES        (Note 5) $ 10,766  $  5,596  $ 23,429  $ 15,645

    EXPENSES                 (Note 5)
      Production and
       mineral taxes                       138        79       406       228
      Transportation
       and selling                         360       220     1,006       732
      Operating                            521       530     1,926     1,646
      Purchased product                  3,445     2,192     8,720     5,879
      Depreciation, depletion
       and amortization                  1,095       988     3,227     2,730
      Administrative                        18        73       399       263
      Interest, net          (Note 7)      147       102       428       297
      Accretion of asset
       retirement
       obligation           (Note 12)       20        17        61        46
      Foreign exchange
       (gain) loss, net      (Note 8)      110        74       170        69
      (Gain) loss on
        divestitures         (Note 6)     (124)      (29)     (141)      (87)
    -------------------------------------------------------------------------
                                         5,730     4,246    16,202    11,803
    -------------------------------------------------------------------------
    NET EARNINGS BEFORE
     INCOME TAX                          5,036     1,350     7,227     3,842
      Income tax expense     (Note 9)    1,483       416     2,360       965
    -------------------------------------------------------------------------
    NET EARNINGS                      $  3,553  $    934  $  4,867  $  2,877
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


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


    CONSOLIDATED STATEMENT OF RETAINED EARNINGS (unaudited)

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


    CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (unaudited)

                                      Three Months Ended   Nine Months Ended
                                          September 30,       September 30,
                                      ---------------------------------------
    ($ millions)                          2008      2007      2008      2007
    -------------------------------------------------------------------------

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


    CONSOLIDATED STATEMENT OF ACCUMULATED OTHER COMPREHENSIVE INCOME
     (unaudited)

                                                           Nine Months Ended
                                                              September 30,
                                                          -------------------
    ($ millions)                                              2008      2007
    -------------------------------------------------------------------------

    ACCUMULATED OTHER COMPREHENSIVE INCOME,
     BEGINNING OF YEAR                                    $  3,063  $  1,375
    Foreign Currency Translation Adjustment                   (782)    1,798
    -------------------------------------------------------------------------
    ACCUMULATED OTHER COMPREHENSIVE INCOME,
     END OF PERIOD                                        $  2,281  $  3,173
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    See accompanying Notes to Consolidated Financial Statements.


    CONSOLIDATED BALANCE SHEET  (unaudited)

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

    ASSETS
      Current Assets
        Cash and cash equivalents                     $     622    $     553
        Accounts receivable and accrued revenues          2,473        2,381
        Current portion of partnership
         contribution receivable                            309          297
        Risk management                     (Note 17)     1,578          385
        Inventories                         (Note 10)     1,280          828
    -------------------------------------------------------------------------
                                                          6,262        4,444
      Property, Plant and Equipment, net     (Note 5)    37,374       35,865
      Investments and Other Assets                          758          607
      Partnership Contribution Receivable                 2,914        3,147
      Risk Management                       (Note 17)       459           18
      Goodwill                                            2,729        2,893
    -------------------------------------------------------------------------
                                             (Note 5) $  50,496    $  46,974
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    LIABILITIES AND SHAREHOLDERS' EQUITY
      Current Liabilities
        Accounts payable and accrued liabilities      $   4,027    $   3,982
        Income tax payable                                  569        1,150
        Current portion of partnership
         contribution payable                               301          288
        Risk management                     (Note 17)        74          207
        Current portion of long-term debt   (Note 11)       250          703
    -------------------------------------------------------------------------
                                                          5,221        6,330
      Long-Term Debt                        (Note 11)     9,407        8,840
      Other Liabilities                                     511          242
      Partnership Contribution Payable                    2,936        3,163
      Risk Management                       (Note 17)         -           29
      Asset Retirement Obligation           (Note 12)     1,374        1,458
      Future Income Taxes                                 7,404        6,208
    -------------------------------------------------------------------------
                                                         26,853       26,270
    -------------------------------------------------------------------------
      Shareholders' Equity
        Share capital                       (Note 13)     4,555        4,479
        Paid in surplus                                       -           80
        Retained earnings                                16,807       13,082
        Accumulated other comprehensive income            2,281        3,063
    -------------------------------------------------------------------------
      Total Shareholders' Equity                         23,643       20,704
    -------------------------------------------------------------------------
                                                      $  50,496    $  46,974
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    See accompanying Notes to Consolidated Financial Statements.


    CONSOLIDATED STATEMENT OF CASH FLOWS (unaudited)

                                      Three Months Ended   Nine Months Ended
                                          September 30,       September 30,
                                      ---------------------------------------
    ($ millions)                          2008      2007      2008      2007
    -------------------------------------------------------------------------

    OPERATING ACTIVITIES

      Net earnings                    $  3,553  $    934  $  4,867  $  2,877
      Depreciation, depletion
       and amortization                  1,095       988     3,227     2,730
      Future income taxes      (Note 9)  1,418       102     1,491        (9)
      Cash tax on sale
       of assets               (Note 9)     25         -        25         -
      Unrealized (gain) loss
       on risk management     (Note 17) (3,050)      107    (1,639)      666
      Unrealized foreign
       exchange (gain) loss                 84        17       149        93
      Accretion of asset
       retirement obligation  (Note 12)     20        17        61        46
      (Gain) loss on
       divestitures            (Note 6)   (124)      (29)     (141)      (87)
      Other                               (212)       82        47       203
      Net change in other
       assets and liabilities              (19)        1      (283)        5
      Net change in non-cash
       working capital                     268       (39)     (992)     (288)
    -------------------------------------------------------------------------
      Cash From Operating Activities     3,058     2,180     6,812     6,236
    -------------------------------------------------------------------------

    INVESTING ACTIVITIES
      Capital expenditures     (Note 5) (2,466)   (1,650)   (6,369)   (4,329)
      Proceeds from
       divestitures            (Note 6)    442        59       593       505
      Cash tax on sale
       of assets               (Note 9)    (25)        -       (25)        -
      Net change in
       investments and other              (157)       32      (166)       26
      Net change in non-cash
       working capital                    (120)       69        71       (34)
    -------------------------------------------------------------------------
      Cash (Used in) Investing
       Activities                       (2,326)   (1,490)   (5,896)   (3,832)
    -------------------------------------------------------------------------

    FINANCING ACTIVITIES
      Net issuance (repayment)
       of revolving long-term debt        (116)     (871)      251      (909)
      Issuance of
       long-term debt         (Note 11)      -       492       723       924
      Repayment of
       long-term debt                     (468)        -      (664)        -
      Issuance of
       common shares          (Note 13)      2         5        78       158
      Purchase of
       common shares          (Note 13)      -      (218)     (326)   (2,025)
      Dividends on common
       shares                             (299)     (149)     (899)     (453)
      Other                                  -         2         -        (1)
    -------------------------------------------------------------------------
      Cash (Used in)
       Financing Activities               (881)     (739)     (837)   (2,306)
    -------------------------------------------------------------------------

    FOREIGN EXCHANGE GAIN (LOSS) ON
     CASH AND CASH EQUIVALENTS HELD
     IN FOREIGN CURRENCY                    (7)        9       (10)       15
    -------------------------------------------------------------------------

    INCREASE (DECREASE) IN CASH AND
     CASH EQUIVALENTS                     (156)      (40)       69       113
    CASH AND CASH EQUIVALENTS,
     BEGINNING OF PERIOD                   778       555       553       402
    -------------------------------------------------------------------------
    CASH AND CASH EQUIVALENTS,
     END OF PERIOD                    $    622  $    515  $    622  $    515
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    See accompanying Notes to Consolidated Financial Statements.


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

    1. BASIS OF PRESENTATION

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

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

    2. CHANGES IN ACCOUNTING POLICIES AND PRACTICES

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

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

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

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

    3. RECENT ACCOUNTING PRONOUNCEMENTS

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

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

    4. PROPOSED CORPORATE REORGANIZATION

    On May 11, 2008, EnCana announced its plans to split into two independent
    energy companies - one a North American natural gas company and the other
    a fully integrated oil company with in-situ oil properties and refineries
    supplemented by reliable production from various gas and oil resource
    plays. The proposed corporate reorganization (the "Arrangement") was
    expected to close in early January 2009.

    Subsequent to September 30, 2008, EnCana announced the proposed
    Arrangement will be delayed until the global debt and equity markets
    regain stability. The proposed Arrangement is expected to be implemented
    through a court approved Plan of Arrangement and is subject to
    shareholder approval. The reorganization would result in two publicly
    traded entities with the names of Cenovus Energy Inc. ("Cenovus") (prior
    working name "IOCo") and EnCana Corporation (prior working name "GasCo").
    Each EnCana shareholder would receive one share of each entity in
    exchange for each EnCana Common Share held.

    5. SEGMENTED INFORMATION

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

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

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

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

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

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

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

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

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

    Revenues,
     Net of Royalties         $1,139  $  824  $1,168  $  881  $1,477  $1,103
    Expenses
      Production and
       mineral taxes              27      17      14      10      97      52
      Transportation
       and selling                32      26      57      51     132      77
      Operating                   96     103     120     129     127     140
      Purchased product            -       -       -       -       -       -
      Depreciation, depletion
       and amortization          231     253     293     280     435     305
    -------------------------------------------------------------------------
    Segment Income (Loss)     $  753  $  425  $  684  $  411  $  686  $  529
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

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

    Revenues,
     Net of Royalties         $3,085  $2,265  $    -  $    1  $  840  $  629
    Expenses
      Production and
       mineral taxes               -       -       -       -       -       -
      Transportation
       and selling               139      66       -       -       -       -
      Operating                  173     147      (6)      -       8      11
      Purchased product        2,634   1,584       -       -     811     608
      Depreciation, depletion
       and amortization          104      97       5      24       4       4
    -------------------------------------------------------------------------
    Segment Income (Loss)     $   35  $  371  $    1  $  (23) $   17  $    6
    -------------------------------------------------------------------------

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

    Revenues, Net of
     Royalties                            $ 3,057  $  (107) $10,766  $ 5,596
    Expenses
      Production and
       mineral taxes                            -        -      138       79
      Transportation
       and selling                              -        -      360      220
      Operating                                 3        -      521      530
      Purchased product                         -        -    3,445    2,192
      Depreciation, depletion
       and amortization                        23       25    1,095      988
    -------------------------------------------------------------------------
    Segment Income (Loss)                 $ 3,031  $  (132)   5,207    1,587
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
      Administrative                                             18       73
      Interest, net                                             147      102
      Accretion of asset retirement obligation                   20       17
      Foreign exchange (gain) loss, net                         110       74
      (Gain) loss on divestitures                              (124)     (29)
    -------------------------------------------------------------------------
                                                                171      237
    -------------------------------------------------------------------------
    Net Earnings Before Income Tax                            5,036    1,350
      Income tax expense                                      1,483      416
    -------------------------------------------------------------------------
    Net Earnings                                            $ 3,553  $   934
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

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

    Geographic and Product Information

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

    Revenues, Net
     of Royalties    $  576 $  498 $  559 $  323 $    4 $    3 $1,139 $  824
    Expenses
      Production
       and mineral
       taxes             14     11     13      6      -      -     27     17
      Transportation
       and selling       18     18     14      8      -      -     32     26
      Operating          44     49     51     53      1      1     96    103
    -------------------------------------------------------------------------
    Operating Cash
     Flow            $  500 $  420 $  481 $  256 $    3 $    2 $  984 $  678
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

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

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

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

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

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

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

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


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

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

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


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

    Revenues, Net of
     Royalties                $8,512  $5,831  $    1  $    -  $2,112  $2,107
    Expenses
      Production
       and mineral
       taxes                       1       -       -       -       -       -
      Transportation
       and selling               388     269       -       -       -      10
      Operating                  565     488      (5)      2      27      28
      Purchased product        6,674   3,837       -       -   2,046   2,042
      Depreciation,
       depletion and
       amortization              288     281      40      25      12      11
    -------------------------------------------------------------------------
    Segment Income (Loss)     $  596  $  956  $  (34) $  (27) $   27  $   16
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

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

    Revenues, Net of Royalties            $ 1,633  $  (673) $23,429  $15,645
    Expenses
      Production and mineral taxes              -        -      406      228
      Transportation and selling                -        -    1,006      732
      Operating                                (6)      (8)   1,926    1,646
      Purchased product                         -        -    8,720    5,879
      Depreciation, depletion and
       amortization                            67       64    3,227    2,730
    -------------------------------------------------------------------------
    Segment Income (Loss)                 $ 1,572  $  (729)   8,144    4,430
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
      Administrative                                            399      263
      Interest, net                                             428      297
      Accretion of asset retirement
       obligation                                                61       46
      Foreign exchange (gain) loss, net                         170       69
      (Gain) loss on divestitures                              (141)     (87)
    -------------------------------------------------------------------------
                                                                917      588
    -------------------------------------------------------------------------
    Net Earnings Before Income Tax                            7,227    3,842
      Income tax expense                                      2,360      965
    -------------------------------------------------------------------------
    Net Earnings                                            $ 4,867   $2,877
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    Geographic and Product Information

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

    Revenues, Net
     of Royalties    $1,795 $1,619 $1,580 $  896 $    8 $    9 $3,383 $2,524
    Expenses
      Production and
       mineral taxes     32     31     32     21      -      -     64     52
      Transportation
       and selling       55     61     29     23      -      -     84     84
      Operating         191    156    191    153      3      3    385    312
    -------------------------------------------------------------------------
    Operating Cash
     Flow            $1,517 $1,371 $1,328  $ 699 $    5 $    6 $2,850 $2,076
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


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

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


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

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

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

    Revenues, Net
     of Royalties    $  898 $  552 $7,514 $5,109 $  100 $  170 $8,512 $5,831
    Expenses
      Production and
       mineral taxes      -      -      -      -      1      -      1      -
      Transportation
       and selling      380    258      -      -      8     11    388    269
      Operating         133    123    375    317     57     48    565    488
      Purchased
       product            -      -  6,800  3,898   (126)   (61) 6,674  3,837
    -------------------------------------------------------------------------
    Operating Cash
     Flow            $  385 $  171 $  339 $  894 $  160 $  172 $  884 $1,237
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

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

    The following tables represent EnCana and Cenovus' operating information,
    post-Arrangement (See Note 4), giving effect to the realigned reporting
    hierarchies described previously in this note, excluding their respective
    share of the Market Optimization and Corporate segments.

    EnCana's operating segments, post-Arrangement, will include Canadian
    Foothills, United States and Offshore and International. Cenovus'
    operating segments, post-Arrangement, will include Canadian Plains and
    Integrated Oil.

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

    Operating Information

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

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

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

    Revenues, Net
     of Royalties                  $1,139 $  824 $3,085 $2,265 $4,224 $3,089
    Expenses
      Production and
       mineral taxes                   27     17      -      -     27     17
      Transportation and selling       32     26    139     66    171     92
      Operating                        96    103    173    147    269    250
      Purchased product                 -      -  2,634  1,584  2,634  1,584
    -------------------------------------------------------------------------
    Operating Cash Flow            $  984 $  678 $  139 $  468 $1,123 $1,146
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

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

    Operating Information

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

    Revenues, Net
     of Royalties    $3,432 $2,662 $4,356 $3,194 $    1 $    - $7,789 $5,856
    Expenses
      Production and
       mineral taxes     30     34    311    142      -      -    341    176
      Transportation
       and selling      167    149    367    220      -      -    534    369
      Operating         478    383    482    441     (5)     2    955    826
    -------------------------------------------------------------------------
    Operating Cash
     Flow            $2,757 $2,096 $3,196 $2,391 $    6 $  (2) $5,959 $4,485
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

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

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


    Capital Expenditures

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

    Capital
      Canadian Plains                 $    173  $    218  $    593  $    558
      Canadian Foothills                   458       727     1,795     1,779
      United States                        621       452     1,800     1,313
      Integrated Oil                       275       154       804       424
      Offshore & International              12        13        65        75
      Market Optimization                    4         2        11         5
      Corporate                             45         9        87        76
    -------------------------------------------------------------------------
                                         1,588     1,575     5,155     4,230
    -------------------------------------------------------------------------

    Acquisition Capital
      Canadian Foothills                     7        60        99        67
      United States                        850        15     1,094        18
      Integrated Oil                         -         -         -        14
      Offshore & International              21         -        21         -
    -------------------------------------------------------------------------
                                           878        75     1,214        99
    -------------------------------------------------------------------------
    Total                             $  2,466  $  1,650  $  6,369  $  4,329
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    On September 25, 2008, EnCana acquired certain land and property in
    Louisiana for approximately $101 million before closing adjustments. The
    purchase was facilitated by an unrelated party, Brown Haynesville
    Leasehold LLC ("Brown Haynesville"), which holds the majority of the
    assets in trust for the Company in anticipation of a qualifying like kind
    exchange for U.S. tax purposes.

    On July 23, 2008, EnCana acquired certain land and mineral interests in
    Louisiana for approximately $457 million before closing adjustments. The
    purchase was facilitated by an unrelated party, Brown Southwest Minerals
    LLC ("Brown Southwest"), which holds the majority of the assets in trust
    for the Company in anticipation of a qualifying like kind exchange for
    U.S. tax purposes.

    Pursuant to the agreements with Brown Haynesville and Brown Southwest,
    EnCana operates the properties, receives all the revenue and pays all of
    the expenses associated with the properties. The arrangements with Brown
    Haynesville and Brown Southwest will be completed on March 24, 2009 and
    January 19, 2009 respectively and the assets will be transferred to
    EnCana at that time. EnCana has determined that each relationship with
    Brown Haynesville and Brown Southwest represents an interest in a
    Variable Interest Entity ("VIE") and that EnCana is the primary
    beneficiary of the VIE. EnCana has consolidated Brown Haynesville and
    Brown Southwest from the dates of acquisition.

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

    Property, Plant and Equipment and Total Assets by Segment

                                      Property, Plant
                                       and Equipment        Total Assets
                                   ------------------------------------------
                                           As at                As at
                                   ------------------------------------------
                                    September  December  September  December
                                     30, 2008  31, 2007   30, 2008  31, 2007
    -------------------------------------------------------------------------
    Canadian Plains                  $  6,355  $  6,967   $  7,933  $  8,626
    Canadian Foothills                 10,216    10,127     12,142    12,184
    United States                      13,394    11,879     14,535    12,948
    Integrated Oil                      5,573     5,164     10,609    10,122
    Offshore & International            1,096     1,104      1,268     1,135
    Market Optimization                   159       171        677       478
    Corporate                             581       453      3,332     1,481
    -------------------------------------------------------------------------
    Total                            $ 37,374  $ 35,865   $ 50,496  $ 46,974
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    On February 9, 2007, EnCana announced that it had completed the next
    phase in the development of The Bow office project with the sale of
    project assets and has entered into a 25 year lease agreement with a
    third party developer. As at September 30, 2008, Corporate Property,
    Plant and Equipment and Total Assets includes EnCana's accrual to date of
    $248 million ($147 million at December 31, 2007) related to this office
    project as an asset under construction.

    On January 4, 2008, EnCana signed the contract for the design and
    construction of the Production Field Centre ("PFC") for the Deep Panuke
    project. As at September 30, 2008, Offshore and International Property,
    Plant, and Equipment and Total Assets includes EnCana's accrual to date
    of $128 million related to this offshore facility as an asset under
    construction.

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

    6. DIVESTITURES

    Total year-to-date proceeds received on sale of assets and investments
    were $593 million (2007 - $505 million) as described below:

    Canadian Plains, Canadian Foothills and United States

    In 2008, the Company completed the divestiture of mature conventional oil
    and natural gas assets for proceeds of $39 million (2007 - nil) in
    Canadian Plains, $218 million (2007 - $55 million) in Canadian Foothills,
    and $123 million (2007 - $11 million) in the United States.

    Offshore and International

    In September 2008, the Company completed the sale of its interests in
    Brazil for net proceeds of $164 million resulting in a gain on sale of
    $124 million. After recording income tax of $25 million, EnCana recorded
    an after-tax gain of $99 million.

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

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

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

    Corporate

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

    7. INTEREST, NET

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

    Interest Expense
     - Long-Term Debt                $    142  $    113   $    426  $    331
    Interest Expense
     - Other(*)                            56        72        166       178
    Interest Income(*)                    (51)      (83)      (164)     (212)
    -------------------------------------------------------------------------
                                     $    147  $    102   $    428  $    297
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

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

    8. FOREIGN EXCHANGE (GAIN) LOSS, NET

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

    Unrealized Foreign Exchange
     (Gain) Loss on:
      Translation of U.S. dollar
       debt issued from Canada       $    205  $   (278)  $    370  $   (608)
      Translation of U.S. dollar
       partnership contribution
       receivable issued from Canada     (119)      252       (218)      595
    Other Foreign Exchange
     (Gain) Loss                           24       100         18        82
    -------------------------------------------------------------------------
                                     $    110  $     74  $     170  $     69
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    9. INCOME TAXES

    The provision for income taxes is as follows:

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

    Current
      Canada                         $     40  $    142  $     446  $    485
      United States                         -       172        385       484
      Other Countries                      25         -         38         5
    -------------------------------------------------------------------------
    Total Current Tax                      65       314        869       974
    -------------------------------------------------------------------------

    Future                              1,418       102      1,491        (9)
    -------------------------------------------------------------------------
                                     $  1,483  $    416  $   2,360  $    965
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Included in current tax for 2008 is $25 million related to the sale of
    assets in Brazil (2007 - nil).

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

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

    Net Earnings Before Income Tax   $  5,036  $  1,350  $   7,227  $  3,842
    Canadian Statutory Rate             29.7%     32.3%      29.7%     32.3%
    -------------------------------------------------------------------------
    Expected Income Tax                 1,494       436      2,144     1,241

    Effect on Taxes Resulting from:
      Statutory and other rate
       differences                        119        12        197        36
      Effect of tax rate changes(*)         -         -          -       (37)
      Effect of legislative changes         -         -          -      (231)
      Non-taxable downstream
       partnership income                  (3)      (21)       (10)      (40)
      International financing             (74)      (16)      (233)      (45)
      Foreign exchange (gains)
       losses not included in net
       earnings                           (39)        -        141         -
      Non-taxable capital (gains)
       losses                              19       (32)        30       (44)
      Other                               (33)       37         91        85
    -------------------------------------------------------------------------
                                      $ 1,483  $    416  $   2,360  $    965
    -------------------------------------------------------------------------
    Effective Tax Rate                  29.4%     30.8%      32.7%     25.1%
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (*) The Canadian federal government, during the second quarter of 2007,
        enacted income tax rate changes.

    10. INVENTORIES
                                                          As at        As at
                                                   September 30, December 31,
                                                           2008         2007
    -------------------------------------------------------------------------
    Product
      Canadian Plains                               $         1  $         -
      United States                                           3            2
      Integrated Oil                                        978          646
      Market Optimization                                   294          180
    Parts and Supplies                                        4            -
    -------------------------------------------------------------------------
                                                    $     1,280  $       828
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    11.  LONG-TERM DEBT
                                                          As at        As at
                                                   September 30, December 31,
                                                           2008         2007
    -------------------------------------------------------------------------
    Canadian Dollar Denominated Debt
      Revolving credit and term loan borrowings     $     1,576  $     1,506
      Unsecured notes                                     1,179        1,138
    -------------------------------------------------------------------------
                                                          2,755        2,644
    -------------------------------------------------------------------------

    U.S. Dollar Denominated Debt
      Revolving credit and term loan borrowings             574          495
      Unsecured notes                                     6,350        6,421
    -------------------------------------------------------------------------
                                                          6,924        6,916
    -------------------------------------------------------------------------

    Increase in Value of Debt Acquired(*)                    57           66
    Debt Discounts and Financing Costs                      (79)         (83)
    Current Portion of Long-Term Debt                      (250)        (703)
    -------------------------------------------------------------------------
                                                    $     9,407  $     8,840
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (*) Certain of the notes and debentures of EnCana were acquired in
        business combinations and were accounted for at their fair value at
        the dates of acquisition. The difference between the fair value and
        the principal amount of the debt is being amortized over the
        remaining life of the outstanding debt acquired, approximately
        20 years.

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

    12. ASSET RETIREMENT OBLIGATION

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

                                                          As at        As at
                                                   September 30, December 31,
                                                           2008         2007
    -------------------------------------------------------------------------
    Asset Retirement Obligation, Beginning of Year  $     1,458  $     1,051
    Liabilities Incurred                                     42           89
    Liabilities Settled                                     (96)        (100)
    Liabilities Divested                                     (6)           -
    Change in Estimated Future Cash Flows                    (5)         184
    Accretion Expense                                        61           64
    Other                                                   (80)         170
    -------------------------------------------------------------------------
    Asset Retirement Obligation, End of Period      $     1,374  $     1,458
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    13. SHARE CAPITAL

                                              September 30,      December 31,
                                                      2008              2007
                                           ----------------------------------
    (millions)                             Number   Amount   Number   Amount
    -------------------------------------------------------------------------
    Common Shares Outstanding, Beginning
     of Year                                750.2  $ 4,479    777.9  $ 4,587
    Common Shares Issued under Option
     Plans                                    2.9       78      8.3      176
    Stock-Based Compensation                    -       11        -       17
    Common Shares Purchased                  (2.8)     (13)   (36.0)    (301)
    -------------------------------------------------------------------------
    Common Shares Outstanding, End of
     Period                                 750.3  $ 4,555    750.2  $ 4,479
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Normal Course Issuer Bid

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

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

    Stock Options

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

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

                                                                    Weighted
                                                          Stock      Average
                                                        Options     Exercise
                                                      (millions)   Price (C$)
    -------------------------------------------------------------------------
    Outstanding, Beginning of Year                          3.4        21.82
    Exercised                                              (2.8)       23.68
    -------------------------------------------------------------------------
    Outstanding, End of Period                              0.6        12.40
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Exercisable, End of Period                              0.6        12.40
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


                           Outstanding Options          Exercisable Options
                   ----------------------------------------------------------
                                Weighted
                                 Average
                   Number of   Remaining    Weighted   Number of    Weighted
    Range of         Options Contractual     Average     Options     Average
     Exercise    Outstanding        Life    Exercise Outstanding    Exercise
     Price (C$)    (millions)     (years)  Price (C$)  (millions)  Price (C$)
    -------------------------------------------------------------------------
    11.00 to 21.99       0.5         1.1       11.62         0.5       11.62
    22.00 to 25.99       0.1         0.2       24.19         0.1       24.19
    -------------------------------------------------------------------------
                         0.6         1.1       12.40         0.6       12.40
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    At December 31, 2007, the balance in Paid in surplus related to stock-
    based compensation programs.

    14. CAPITAL STRUCTURE

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

    i)  maintain financial flexibility so as to preserve EnCana's access to
        capital markets and its ability to meet its financial obligations;
        and
    ii) finance internally generated growth as well as potential
        acquisitions.

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

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

                                                              As at
                                                   --------------------------
                                                  September 30,  December 31,
                                                          2008          2007
    -------------------------------------------------------------------------
    Long-Term Debt, excluding current portion      $     9,407   $     8,840
    Less: Working capital                                1,041        (1,886)
    -------------------------------------------------------------------------
    Net Debt                                             8,366        10,726
    Total Shareholders' Equity                          23,643        20,704
    -------------------------------------------------------------------------
    Total Capitalization                           $    32,009   $    31,430
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Net Debt to Capitalization ratio                        26%           34%
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    EnCana's Net Debt to Capitalization ratio decreased to 26 percent from 34
    percent at December 31, 2007 primarily due to unrealized mark-to-market
    gains on risk management instruments which decreased Net Debt. Excluding
    this impact to working capital, the Net Debt to Capitalization ratio
    would have been 29 percent at September 30, 2008 and would have remained
    unchanged at 34 percent at December 31, 2007.

    EnCana targets a Net Debt to Adjusted EBITDA of 1.0 to 2.0 times. At
    September 30, 2008, the Net Debt to Adjusted EBITDA was 0.6x (December
    31, 2007 - 1.2x) calculated on a trailing twelve-month basis as follows:

                                                              As at
                                                   --------------------------
                                                  September 30,  December 31,
                                                          2008          2007
    -------------------------------------------------------------------------
    Net Debt                                       $     8,366   $    10,726
    -------------------------------------------------------------------------
    Net Earnings from Continuing Operations        $     5,874   $     3,884
    Add (deduct):
      Interest, net                                        559           428
      Income tax expense                                 2,332           937
      Depreciation, depletion and amortization           4,313         3,816
      Accretion of asset retirement obligation              79            64
      Foreign exchange (gain) loss, net                    (63)         (164)
      (Gain) loss on divestitures                         (119)          (65)
    -------------------------------------------------------------------------
    Adjusted EBITDA                                $    12,975   $     8,900
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Net Debt to Adjusted EBITDA                            0.6x          1.2x
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

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

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

    15.  COMPENSATION PLANS

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

    A)  Pensions

    The following table summarizes the net benefit plan expense:

                                        Three Months Ended  Nine Months Ended
                                              September 30,     September 30,
                                          -----------------------------------
                                             2008     2007     2008     2007
    -------------------------------------------------------------------------
    Current Service Cost                  $     4  $     3  $    12  $    11
    Interest Cost                               5        5       16       14
    Expected Return on Plan Assets             (4)      (5)     (14)     (14)
    Expected Actuarial Loss on Accrued
     Benefit Obligation                         1        1        3        3
    Expected Amortization of Past Service
     Costs                                      -        -        1        1
    Amortization of Transitional
     Obligation                                 -        -       (1)      (1)
    Expense for Defined Contribution Plan      10        9       30       25
    -------------------------------------------------------------------------
    Net Benefit Plan Expense              $    16  $    13  $    47  $    39
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    For the period ended September 30, 2008, contributions of $8 million
    have been made to the defined benefit pension plans (2007 - $8 million).

    B) Tandem Share Appreciation Rights ("TSARs")

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

                                                                    Weighted
                                                                     Average
                                                    Outstanding     Exercise
                                                          TSARs        Price
    -------------------------------------------------------------------------
    Canadian Dollar Denominated (C$)
    Outstanding, Beginning of Year                   18,854,141        48.44
    Granted                                           4,257,572        70.67
    Exercised - SARs                                 (3,003,715)       43.85
    Exercised - Options                                 (70,286)       42.53
    Forfeited                                          (466,309)       54.57
    -------------------------------------------------------------------------
    Outstanding, End of Period                       19,571,403        53.85
    -------------------------------------------------------------------------
    Exercisable, End of Period                        8,422,211        46.01
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    For the period ended September 30, 2008, EnCana recorded compensation
    costs of $68 million related to the outstanding TSARs (2007 - $140
    million).

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

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

                                                                    Weighted
                                                                     Average
                                                    Outstanding     Exercise
                                                          TSARs        Price
    -------------------------------------------------------------------------
    Canadian Dollar Denominated (C$)
    Outstanding, Beginning of Year                    6,930,925        56.09
    Granted                                           7,058,538        69.40
    Exercised - SARs                                   (279,378)       56.09
    Exercised - Options                                  (4,613)       56.09
    Forfeited                                          (601,046)       59.10
    -------------------------------------------------------------------------
    Outstanding, End of Period                       13,104,426        63.12
    -------------------------------------------------------------------------
    Exercisable, End of Period                        1,476,150        56.09
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    For the period ended September 30, 2008, EnCana recorded compensation
    costs of $42 million related to the outstanding Performance TSARs (2007 -
    $9 million).

    D) Share Appreciation Rights ("SARs")

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

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

                                                                    Weighted
                                                                     Average
                                                    Outstanding     Exercise
                                                           SARs        Price
    -------------------------------------------------------------------------
    Canadian Dollar Denominated (C$)
    Outstanding, Beginning of Year                            -            -
    Granted                                           1,260,315        72.85
    Forfeited                                           (21,725)       69.40
    -------------------------------------------------------------------------
    Outstanding, End of Period                        1,238,590        72.91
    -------------------------------------------------------------------------
    Exercisable, End of Period                                -            -
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    For the period ended September 30, 2008, EnCana has not recorded any
    compensation costs related to the outstanding SARs (2007 - nil).

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

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

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

                                                                    Weighted
                                                                     Average
                                                    Outstanding     Exercise
                                                           SARs        Price
    -------------------------------------------------------------------------
    Canadian Dollar Denominated (C$)
    Outstanding, Beginning of Year                            -            -
    Granted                                           1,677,030        69.40
    Forfeited                                           (43,450)       69.40
    -------------------------------------------------------------------------
    Outstanding, End of Period                        1,633,580        69.40
    -------------------------------------------------------------------------
    Exercisable, End of Period                                -            -
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    For the period ended September 30, 2008, EnCana has not recorded any
    compensation costs related to the outstanding Performance SARs (2007 -
    nil).

    F) Deferred Share Units ("DSUs")

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

                                                                 Outstanding
                                                                        DSUs
    -------------------------------------------------------------------------
    Canadian Dollar Denominated (C$)
    Outstanding, Beginning of Year                                   589,174
    Granted, Directors                                                83,344
    Redeemed                                                         (34,008)
    Units, in Lieu of Dividends                                       10,254
    -------------------------------------------------------------------------
    Outstanding, End of Period                                       648,764
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    For the period ended September 30, 2008, EnCana recorded compensation
    costs of $7 million related to the outstanding DSUs (2007 - $10 million).

    G) Performance Share Units ("PSUs")

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

                                                    Outstanding      Average
                                                           PSUs  Share Price
    -------------------------------------------------------------------------

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

    For the period ended September 30, 2008, EnCana recorded compensation
    costs of $1 million related to the outstanding PSUs (2007 - $18 million).

    16. PER SHARE AMOUNTS

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

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


    17. FINANCIAL INSTRUMENTS AND RISK MANAGEMENT

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

    A) Fair Value of Financial Assets and Liabilities

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

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

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

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

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


    B) Risk Management Assets and Liabilities

    Net Risk Management Position
                                                          As at        As at
                                                   September 30, December 31,
                                                           2008         2007
    -------------------------------------------------------------------------
    Risk Management
       Current asset                               $      1,578  $       385
       Long-term asset                                      459           18
    -------------------------------------------------------------------------
                                                          2,037          403
    -------------------------------------------------------------------------

    Risk Management
       Current liability                                     74          207
       Long-term liability                                    -           29
    -------------------------------------------------------------------------
                                                             74          236
    -------------------------------------------------------------------------
    Net Risk Management Asset (Liability)          $      1,963  $       167
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    Summary of Unrealized Risk Management Positions

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


    Net Fair Value Methodologies Used to Calculate Unrealized Risk Management
    Positions

                                                          As at        As at
                                                   September 30, December 31,
                                                           2008         2007
    -------------------------------------------------------------------------
    Prices actively quoted                         $        916  $       105
    Prices sourced from observable data or market
     corroboration                                        1,047           62
    -------------------------------------------------------------------------
    Total Fair Value                               $      1,963  $       167
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

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


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

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

      NYMEX Fixed
       Price           1,948 MMcf/d       2008    8.86 US$/Mcf     $     230
      NYMEX Fixed
       Price           1,618 MMcf/d       2009    9.31 US$/Mcf           732
      NYMEX Fixed
       Price              27 MMcf/d       2010    9.25 US$/Mcf             2

    Purchased Options

      AECO Call         (10) MMcf/d       2008     9.54 C$/Mcf             -
      NYMEX Call       (578) MMcf/d       2008   11.50 US$/Mcf           (30)
      NYMEX Call       (150) MMcf/d       2009   11.67 US$/Mcf           (14)
      NYMEX Put          411 MMcf/d       2008    9.10 US$/Mcf            49
      NYMEX Put          516 MMcf/d       2009    9.10 US$/Mcf           231

    Basis Contracts

      Canada             135 MMcf/d       2008  (0.72) US$/Mcf             7
      United States    1,393 MMcf/d       2008  (0.85) US$/Mcf           188
      Canada and
       United States(*)              2009-2013                           435
    -------------------------------------------------------------------------

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


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


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


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

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


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

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


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

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


    Commodity Price Sensitivities

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

                                                      Favorable  Unfavorable
                                                     10% Change   10% Change
    -------------------------------------------------------------------------
    Natural gas price                              $        664  $      (638)
    Crude oil price                                          21          (21)
    Power price                                               7           (7)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    C) Risks Associated with Financial Assets and Liabilities

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

    Market Risk

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

    -   Commodity Price Risk

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

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

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

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

    -   Interest Rate Risk

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

        At September 30, 2008, the increase or decrease in net earnings for
        each one percent change in interest rates on floating rate debt
        amounts to $15 million.

    -   Foreign Exchange Risk

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

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

        As disclosed in Note 8, EnCana's foreign exchange (gain) loss is
        primarily comprised of unrealized foreign exchange gains and losses
        on the translation of U.S. dollar debt issued from Canada and the
        translation of U.S. dollar partnership contribution receivable issued
        from Canada. At September 30, 2008, EnCana had $5,350 million in U.S.
        dollar debt issued from Canada ($5,421 million at December 31, 2007)
        and $3,223 million related to the U.S. dollar partnership
        contribution receivable ($3,444 million at December 31, 2007). A
        $0.01 change in the U.S. to Canadian dollar exchange rate would have
        resulted in a $20 million change in foreign exchange (gain) loss at
        September 30, 2008.

    Credit Risk

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

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

    Liquidity Risk

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

    In managing liquidity risk, the Company has access to a wide range of
    funding at competitive rates through commercial paper, capital markets
    and banks. As at September 30, 2008, EnCana had available unused
    committed bank credit facilities in the amount of $2.7 billion and unused
    capacity under shelf prospectuses, the availability of which is dependent
    on market conditions, for up to $5.2 billion. The Company believes it has
    sufficient funding through the use of these facilities to meet
    foreseeable borrowing requirements.

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

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

                                           2-3       4-5    beyond
                              1 year     years     years   5 years     Total
    -------------------------------------------------------------------------
    Accounts payable and
     accrued liabilities     $ 4,027   $     -   $     -   $     -   $ 4,027
    Risk management
     liabilities                  74         -         -         -        74
    Long-term debt(*)            250       200     3,122     6,107     9,679
    Partnership contribution
     payable(*)                  301       660       743     1,533     3,237
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (*) Principal, including current portion.

    Included in EnCana's total long-term debt obligations of $9,679 million
    at September 30, 2008 are $2,150 million in obligations related to
    Bankers' Acceptances, Commercial Paper and LIBOR loans. These amounts are
    fully supported and Management expects that they will continue to be
    supported by revolving credit and term loan facilities that have no
    repayment requirements within the next year. The revolving credit and
    term loan facilities are fully revolving for a period of up to five
    years. Based on the current maturity dates of the credit facilities,
    these amounts are included in cash outflows for the period disclosed as
    4 - 5 years.

    18. CONTINGENCIES

    Legal Proceedings

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

    Discontinued Merchant Energy Operations

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

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

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

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

    19.  RECLASSIFICATION

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





For further information:

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

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