EnCana revises schedule for creation of Cenovus Energy due to financial markets uncertainty

    CALGARY, Oct. 15 /CNW/ - EnCana Corporation (TSX, NYSE:   ECA) is revising
the original schedule for its proposed split into two independent energy
companies focused on unconventional resources - an integrated oil company to
be named Cenovus Energy Inc. and a pure-play natural gas company, which will
retain the name EnCana Corporation.
    Given the uncertainty and volatility in the global financial markets,
EnCana is choosing to delay the timing of a shareholder vote, originally
planned for December, until clear signs of stabilization return to financial
    "We remain committed to creating Cenovus and we are continuing to work on
reorganizing our company's structure so that we are ready to move forward with
the transaction at the appropriate time," said Randy Eresman, EnCana's
President & Chief Executive Officer.
    "The underlying reasons for creating the integrated oil company Cenovus,
and establishing EnCana as a pure-play natural gas company, are still valid.
However, there is currently too much uncertainty in the global debt and equity
markets to proceed with external approvals at this time. We cannot predict
when the appropriate financial and market conditions will return, but EnCana
will be prepared to advance the proposed transaction when it determines that
the market conditions are appropriate," Eresman said.
    "Despite the current financial market turmoil, EnCana remains financially
and operationally strong. Our balance sheet remains very sound. Through this
period of uncertainty, EnCana will act in a conservative, prudent manner that
is consistent with the company's tradition of continuing to pursue strong
financial returns while managing risk and maintaining financial strength and
flexibility," Eresman said.

    Price risk managed with substantial 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
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 -
about 60 percent of current production - hedged at an average price of
US$9.15 per thousand cubic feet.

    Cash flow and production on track, strong balance sheet maintained

    EnCana's cash flow and natural gas and oil production are in line with
2008 guidance. This will be reflected in the company's third quarter financial
and operating results scheduled to be published October 23, 2008. EnCana
targets 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. Both measures are expected to be at the lower end of the target range.
EnCana employs a conservative capital structure. About 78 percent of
outstanding debt is fixed-rate debt with maturities between 2009 and 2038.
Upcoming debt maturities of $250 million in August 2009 and $200 million in
September 2010 are modest relative to EnCana's financial capacity and cash
flow. EnCana has committed bank credit facilities of approximately
$4.8 billion, of which $2.7 billion was available at September 30th.
    "We are working on our 2009 budget plans, taking a measured approach that
is appropriate for current economic conditions. In addition to adhering to our
long-standing practice of maintaining capital discipline, we will be even more
focused on capital preservation in these uncertain times. Within our portfolio
of development opportunities, we have significant flexibility and turn-down
capacity to promptly adapt to rapidly changing market conditions, particularly
during periods of uncertainty such as those that appear to be on the
shorter-term horizon. Over the longer term, the North American and global
demand for energy is expected to continue to rise. We have built our company
and assembled premium unconventional resource assets to deliver sustainable,
low-cost supply for many years ahead. Consistent with the sound financial and
management principles that have guided EnCana's success to date, we will
continue to act in the best interests of shareholders in enhancing long-term
value. At this time, that means we are continuing to plan and work towards the
creation of Cenovus, but are deferring its full creation until the market
conditions are appropriate," Eresman said.

    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.

    EnCana Corporation

    With an enterprise value of approximately US$45 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 and the proposed transaction described above in this news
release, including management's assessment of future plans and operations
relating to the future integrated oil company (Cenovus) and the pure-play
natural gas company (GasCo), EnCana has included in this news release certain
statements and information that are forward-looking statements or information
within the meaning of applicable securities legislation, and which are
collectively referred to herein as "forward-looking statements." The
forward-looking statements in this news release include, but are not limited
to, statements with respect to: the proposed split transaction and the timing
thereof, including the timing of a shareholder vote in respect of such
transaction; the anticipated benefits of the transaction; future North
American and global market conditions and the impact on EnCana and the
proposed transaction; projections for crude oil and natural gas production in
2008 and beyond; anticipated commodity prices and demand for crude oil and
natural gas; 2008 guidance expectations, including cash flow; projections for
net debt-to-capitalization ratios and net debt-to-adjusted-EBITDA multiples;
the ability to adapt to rapidly changing market conditions; and the ability to
deliver sustainable low-cost supply into the future.
    Readers are cautioned not to place undue reliance on forward-looking
statements, as there can be no assurance that the future circumstances,
outcomes or results anticipated in or implied by such forward-looking
statements will occur or that plans, intentions or expectations upon which the
forward-looking statements 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 circumstances, events or outcomes anticipated or implied by
forward-looking statements will not occur, which may cause the actual
performance and financial results in future periods to differ materially from
the performance or results anticipated or implied by any 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 contained in or relevant to the
company's current corporate 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 marketing
operations (including credit risks); imprecision of reserves estimates and
estimates of recoverable quantities of oil, bitumen, natural gas and liquids
from resource plays and other sources not currently classified as proved
reserves; the ability to successfully manage and operate the integrated North
American oilsands business with ConocoPhillips; 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 and the application
thereof to the business of GasCo and Cenovus; the ability to replace and
expand oil and gas reserves; the ability to generate sufficient cash flow from
operations to meet current and future obligations; the ability to access
external sources of debt and equity capital; the timing and the costs of well
and pipeline construction; the ability to secure adequate product
transportation; changes in royalty, tax, environmental and other laws or
regulations or the interpretations of such laws or regulations; applicable
political and economic conditions; the risk of war, hostilities, civil
insurrection, political instability and terrorist threats; risks associated
with existing and potential future lawsuits and regulatory actions; 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.
    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
    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: Further information on EnCana Corporation is
available on the company's website, www.encana.com, or by contacting: EnCana
Corporate Communications, Investor contact: 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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