EnCana plans to cut about $1 billion from 2008 Alberta investments if royalty panel report adopted in full

    EnCana seeking a solution that balances more royalty revenue with
    maintaining a competitive investment climate

    CALGARY, Sept. 28 /CNW/ - EnCana Corporation (TSX, NYSE:   ECA) has
conducted an evaluation of recommendations contained in the Alberta Royalty
Review Panel Report. If adopted in full, the royalty changes will negatively
impact EnCana's future investments and operations in Alberta and will have a
widespread impact on economic activity across the province.
    If the proposed recommendations are adopted, EnCana plans to cut its 2008
capital investment in Alberta by about $1 billion, or 30 to 40 percent of the
$2.5 billion to $3 billion the company has planned for Alberta-based activity.
Most of the reductions would be to EnCana's natural gas activity in areas
where the proposed royalty scheme makes those activities uneconomic or
uncompetitive in its portfolio. The company plans to reallocate capital to
investments outside Alberta.
    "If the Royalty Panel's recommendations are adopted in full, many of
Alberta's new and emerging resource plays will simply not be economically
viable. These new plays would have formed the foundation for the future of
Alberta's natural gas production. Even without that future gas production
growth, under the recommended changes EnCana's royalties on Crown lands would
effectively double, assuming current gas prices. We will have no choice but to
slow down our Alberta-based activity and move investments to other areas in
Canada and the U.S. that are more economically attractive. As a further
consequence, Alberta natural gas production will continue to fall," said Randy
Eresman, EnCana's President and Chief Executive Officer.
    "We do not want this to happen. This does not need to happen. The
consequences would be far reaching. We are open to changes to Alberta's
royalties - changes that reflect the economic realities of volatile commodity
prices, higher costs and the appropriate risks and rewards of long-term
capital investments. A royalty system can be developed that achieves Alberta's
objectives without so severely damaging the province's future," Eresman said.
    The proposed changes will have immediate and long-term impacts on working
Albertans. The magnitude of the expected capital reductions is the tip of the
iceberg. In the short term, these changes would mean extensive job losses
across the industry. There will be fewer wells drilled, completed, pipelined,
operated and serviced. There will be fewer hotel bookings, vehicle purchases,
landowner lease payments, restaurant meals and lower property taxes in the
areas where EnCana operates, and that is just about every corner of Alberta,
from the smallest towns to the biggest cities. More importantly and over the
long term, well-paying, permanent jobs will not materialize across Alberta.
    "We would greatly regret seeing these job opportunities evaporate. We are
Albertans. We care about the people of Alberta and we hope we won't have to
make these choices," Eresman stressed.

    EnCana will continue to thrive

    "As North America's largest natural gas producer, we have built an
extensive and diverse portfolio of investment opportunities with the
flexibility to strategically deploy capital. With a land base of approximately
27 million net acres onshore North America, our depth of inventory means that
EnCana will continue to thrive. We will allocate capital across our portfolio
in a disciplined and efficient manner. Most importantly, we have developed the
expertise and technology required to unlock maximum value from our resource
base. Our current projects and emerging opportunities in British Columbia,
Saskatchewan, Colorado, Wyoming and Texas offer continued growth potential and
strong returns for our shareholders.
    "Our province faces a great future, but only if we solve the economic
challenges together, in a spirit of co-operation and collaboration. We are
confident that innovative, creative and pragmatic solutions can be found. That
is our Alberta history. That is our Alberta tradition. We have found those
solutions in the past and we believe we can do it again. We look forward to
the opportunity," Eresman said.

    EnCana Corporation

    With an enterprise value of approximately US$50 billion, EnCana is a
leading North American unconventional natural gas and integrated oilsands
company. By partnering with employees, community organizations and other
businesses, EnCana contributes to the strength and sustainability of the
communities where it operates. EnCana common shares trade on the Toronto and
New York stock exchanges under the symbol ECA.

providing EnCana shareholders and potential investors with information
regarding EnCana, including management's assessment of EnCana's and its
subsidiaries' future plans and operations, certain statements contained in
this news release are forward-looking statements within the meaning of the
"safe harbour" provisions of the United States Private Securities Litigation
Reform Act of 1995 or "forward-looking information" within the meaning of
applicable Canadian securities legislation. Forward-looking statements or
information in this news release include, but are not limited to: the adoption
of the Alberta Royalty Review Panel Report by the Alberta government; the
company's plans to significantly cut its 2008 capital investment in Alberta if
the Report is adopted in full; plans and the ability to reallocate capital
outside of Alberta; the anticipated impact of the Report recommendations on
the company; anticipated continued growth potential outside of Alberta;
anticipated strong returns for shareholders; and future economic and operating
performance. Readers are cautioned not to place undue reliance on forward-
looking statements or information, 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 or information 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 or information 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 or information. These risks and uncertainties include, among other
things: volatility of and assumptions regarding oil and gas prices;
assumptions based upon the company's current guidance; fluctuations in
currency and interest rates; product supply and demand; market competition;
risks inherent in the company's marketing operations, including credit risks;
imprecision of reserves estimates and estimates of recoverable quantities of
oil, natural gas and liquids from resource plays and other sources not
currently classified as proved reserves; changes in environmental and other
regulations or the interpretations of such regulations; 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 or information are reasonable, there can be no assurance
that such expectations will prove to be correct. Readers are cautioned that
the foregoing list of important factors is not exhaustive. Furthermore, the
forward-looking statements or information 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 or
information contained in this news release are expressly qualified by this
cautionary statement.

For further information:

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

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