EnCana extends risk management measures by hedging about 35 percent of natural gas production in 2010 gas year

    CALGARY, June 15 /CNW/ - EnCana Corporation (TSX & NYSE:   ECA) has
extended its risk management program for 2010 by establishing fixed price
hedges on about 35 percent of the company's expected natural gas production -
about 1.39 billion cubic feet per day - at an average price of US$6.21 per
thousand cubic feet (Mcf) for the 2010 gas year, which runs from November 1,
2009 to October 31, 2010.
    "Our gas price hedging program has served us well in the first five
months of 2009, generating close to $2 billion in cash flow above what market
prices would have delivered. This strong cash flow has underpinned our 2009
capital investment during the global economic downturn. Our hedging program
increases certainty in cash flow and helps ensure that we meet our capital
investment and dividend requirements. It also brings greater certainty to the
economics of our projects. At an average price of $6 per Mcf, EnCana expects
to earn an after-tax rate of return on gas projects in excess of 20 percent,"
said Randy Eresman, EnCana's President & Chief Executive Officer.

    Natural gas prices remain weak

    "North American natural gas markets remain oversupplied due to two
factors, the emergence of large new supplies from unconventional plays
followed by a major economic downturn in the past year that has cut demand.
These events have driven prices to levels well below what it costs to add new
supplies - levels that we believe are unsustainable. In recent months,
drilling has slowed and over time we expect that production will decline,
bringing the market back into balance. However, it is difficult to predict
when that will occur and what price will emerge," Eresman said.

    About two thirds of current gas production hedged above $9 per Mcf

    EnCana's financial position is strong and the company's debt ratios
remain below our targeted ranges. EnCana has hedged about two-thirds of
expected natural gas production, about 2.6 billion cubic feet per day, through
October of this year at an average NYMEX equivalent price of $9.13 per
thousand cubic feet (Mcf), which is more than two times the current spot
price. EnCana continually assesses its hedging needs and the opportunities
available prior to establishing its capital program for the upcoming year.

    Multi-dimensional risk management

    EnCana's hedging program is just one component of the company's
multi-dimensional approach to risk management. At the heart of the company's
risk management program is its diversified and extensive portfolio of North
American resource plays across many of the continent's top hydrocarbon basins.
The diversity of this portfolio allows EnCana to allocate or redistribute
capital among projects if local factors arise that influence returns on
individual key resource plays. Secondly, EnCana's manufacturing approach to
resource play development is focused on capital efficiency and on being one of
the lowest cost producers in all key resource plays, an approach that helps
the company deliver strong relative returns in a wide range of economic
scenarios. As well, EnCana is focused on generating significant free cash flow
at all times during the economic cycle, particularly during periods such as
the current economic downturn. The company's operational and financial success
reinforces the sustainable nature of EnCana's resource play business model.

    EnCana Corporation

    With an enterprise value of approximately $50 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.

providing EnCana shareholders and potential investors with information
regarding EnCana, including management's assessment of EnCana's and its
subsidiaries' future plans and operations, certain statements contained in
this news release are forward-looking statements or information within the
meaning of applicable securities legislation, collectively referred to herein
as "forward-looking statements." Forward-looking statements in this news
release include, but are not limited to: future economic and operating
performance (including per share growth, debt ratios, sustainable growth and
returns, cash flow, cash flow per share and free cash flow); anticipated
ability to meet the company's guidance forecasts; anticipated revenues; the
ability to meet capital and dividend requirements; after-tax rate of return on
gas projects; anticipated growth and success of resource plays and the
expected characteristics of resource plays; the ability to generate free cash
flow in the current economic downturn; potential dividends; anticipated
success of EnCana's price risk management strategy; potential demand for
natural gas; anticipated drilling; potential capital expenditures and
investment; potential natural gas production in 2009 and beyond; anticipated
costs; and references to potential exploration. Readers are cautioned not to
place undue reliance on forward-looking statements, as there can be no
assurance that the plans, intentions or expectations upon which they are based
will occur. By their nature, forward-looking statements involve numerous
assumptions, known and unknown risks and uncertainties, both general and
specific, that contribute to the possibility that the predictions, forecasts,
projections and other forward-looking statements will not occur, which may
cause the company's actual performance and financial results in future periods
to differ materially from any estimates or projections of future performance
or results expressed or implied by such forward-looking statements. These
assumptions, risks and uncertainties include, among other things: volatility
of and assumptions regarding oil and gas prices; assumptions based upon the
company's current guidance; fluctuations in currency and interest rates;
product supply and demand; market competition; risks inherent in the company's
marketing operations, including credit risks; imprecision of reserves
estimates and estimates of recoverable quantities of oil, natural gas and
liquids from resource plays and other sources not currently classified as
proved reserves; the ability of the company and ConocoPhillips to successfully
manage and operate the integrated North American oil business and the ability
of the parties to obtain necessary regulatory approvals; refining and
marketing margins; potential disruption or unexpected technical difficulties
in developing new products and manufacturing processes; potential failure of
new products to achieve acceptance in the market; unexpected cost increases or
technical difficulties in constructing or modifying manufacturing or refining
facilities; unexpected difficulties in manufacturing, transporting or refining
synthetic crude oil; risks associated with technology; the company's ability
to replace and expand oil and gas reserves; its ability to generate sufficient
cash flow from operations to meet its current and future obligations; its
ability to access external sources of debt and equity capital; the timing and
the costs of well and pipeline construction; the company's ability to secure
adequate product transportation; changes in royalty, tax, environmental and
other laws or regulations or the interpretations of such laws or regulations;
political and economic conditions in the countries in which the company
operates; the risk of war, hostilities, civil insurrection and instability
affecting countries in which the company operates and terrorist threats; risks
associated with existing and potential future lawsuits and regulatory actions
made against the company; and other risks and uncertainties described from
time to time in the reports and filings made with securities regulatory
authorities by EnCana. Although EnCana believes that the expectations
represented by such forward-looking statements are reasonable, there can be no
assurance that such expectations will prove to be correct. Readers are
cautioned that the foregoing list of important factors is not exhaustive.
    Forward-looking information respecting anticipated 2009 cash flow for
EnCana is based upon achieving average production of oil and gas for 2009 of
approximately 4.6 Bcfe/d, average commodity prices for 2009 based on a WTI
price of $55 - $75/bbl for oil, a NYMEX price of $5.50 - $7.50/Mcf for natural
gas, an average U.S./Canadian dollar foreign exchange rate of $0.75 - $0.85,
an average Chicago 3-2-1 crack spread for 2009 of $5 - $10/bbl for refining
margins, and an average number of outstanding shares for EnCana of
approximately 750 million. Assumptions relating to forward-looking statements
generally include EnCana's current expectations and projections made by the
company in light of, and generally consistent with, its historical experience
and its perception of historical trends, as well as expectations regarding
rates of advancement and innovation, generally consistent with and informed by
its past experience, all of which are subject to the risk factors identified
elsewhere in this news release.
    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

For further information:

For further information: on EnCana Corporation is available on the
company's website, www.encana.com, or by contacting: Investor contact: EnCana
Corporate Communications, Paul Gagne, Vice-President, Investor Relations,
(403) 645-4737; Ryder McRitchie, Manager, Investor Relations, (403) 645-2007;
Susan Grey, Manager, Investor Relations, (403) 645-4751; Media contact: Alan
Boras, Manager, Media Relations, (403) 645-4747

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