Encana generates second quarter cash flow of US$1.2 billion, or $1.65 per share

Daily natural gas production per share grows 12 percent

CALGARY, Alberta--(BUSINESS WIRE)-- Encana Corporation (TSX, NYSE: ECA) delivered strong operating performance and solid financial results in the second quarter of 2010. Cash flow was $1.2 billion, or $1.65 per share, and operating earnings were $81 million, or 11 cents per share. Encana’s favourable commodity price hedges contributed $263 million in realized after-tax gains, or 36 cents per share, to cash flow. Total production in the second quarter was approximately 3.3 billion cubic feet of gas equivalent per day (Bcfe/d). Second quarter natural gas production per share increased 12 percent compared to the second quarter of 2009 on a pro forma basis.

Strong operating performance boosts 2010 production forecast, capital investment increased by $500 million
Encana continued to deliver strong operating performance in the second quarter, with current daily production already higher than the company’s full-year 2010 average daily production guidance. Given the strong performance of key resource plays this year, Encana has increased its 2010 production guidance by 65 million cubic feet of gas equivalent per day (MMcfe/d) to 3.365 Bcfe/d. To accelerate long-term growth projects and build productive capacity of the company’s vast North American natural gas portfolio for 2011, Encana is increasing capital investment by $500 million to approximately $5 billion in 2010.

Optimization through gas factories holds additional promise for cost improvement, 2010 operating costs trimmed
“Our production is ahead of target and we are gaining ground on costs through continual optimization programs that help us pursue our cornerstone goal of being the industry’s lowest-cost producer. To date, 2010 operating costs are tracking about 17 percent below guidance and as a result we have lowered our operating cost guidance by 10 cents to 80 cents per thousand cubic feet of gas equivalent. As we look ahead, we expect to see substantial additional cost savings through expanded use of multi-well gas factories and as we continue to extend the reach of our horizontal wells,” said Randy Eresman, Encana’s President & Chief Executive Officer.

Haynesville joins key resource plays; Encana captures Michigan shale lands, pursues joint venture with CNPC
In recognition of its very strong production growth and huge resource potential, Encana’s Haynesville shale play has been added to the company’s list of key resource plays. During the second quarter, Encana also expanded its shale portfolio capturing a significant land position in Michigan’s Collingwood shale play and the company is progressing joint-venture negotiations with China National Petroleum Corporation (CNPC), an initiative that holds significant promise for sizable investment in Canada that would help accelerate growth from the company’s enormous natural gas resource base.

First half financial performance strong
In the first half of 2010, Encana generated cash flow of $2.4 billion, or $3.22 per share, and operating earnings of $499 million, or 67 cents per share. Net earnings were $972 million, or $1.31 per share.

Second quarter net earnings impacted by unrealized foreign exchange and hedging
Second quarter net earnings, a $505 million loss, illustrate how net earnings can be impacted by unrealized hedging gains or losses and unrealized foreign exchange gains or losses on long-term debt. Second quarter net earnings include unrealized after-tax losses on commodity hedging and non-operating foreign exchange of $340 million and $246 million, respectively. Encana’s first quarter 2010 net earnings were $1.48 billion, nearly $2 billion higher than the second quarter. The decrease in quarter-over-quarter earnings was largely driven by a change in unrealized hedging; in the first quarter of 2010, Encana recorded an after-tax gain of $912 million compared to a $340 million after-tax loss in the second quarter.

“We are reporting a loss in second quarter net earnings as a consequence of mark-to-market accounting despite the fact that our price hedges, covering about 60 percent of our production, were almost 50 percent higher than benchmark natural gas prices, and our natural gas production is about 10 percent more than one year ago. That’s why we believe cash flow and operating earnings are a far better measure of Encana’s financial performance,” Eresman said.

Encana continues to manage natural gas price risks with an attractive hedge position on about 55 percent of forecast production for the remainder of 2010. Second quarter operating earnings were down due largely to lower realized gas prices compared to the second quarter of 2009 on a pro forma basis – a year when Encana had very attractive hedges at a price above $9 per thousand cubic feet (Mcf) on about two-thirds of the company’s natural gas production.

IMPORTANT NOTE: Pro forma results defined
On November 30, 2009, Encana completed a major corporate reorganization – a split transaction that resulted in the company’s transition into a pure-play natural gas company and the spin-off of its Integrated Oil and Canadian Plains assets into Cenovus Energy Inc., an independent, publicly-traded energy company. To provide more useful comparative information, financial and operating results in this news release highlight Encana’s 2009 and 2008 results on a pro forma basis, which reflect the company as if the split transaction had been completed prior to those periods. In this pro forma comparative presentation, the results associated with the assets and operations transferred to Cenovus are eliminated from Encana’s consolidated results, and adjustments specific to the split transaction are reflected. Encana’s actual financial results for the comparative 2009 period are included in Encana’s Interim Consolidated Financial Statements. Additional financial information that reconciles the 2009 consolidated and pro forma financial information is included in this news release at the end of the financial statements.

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).

Second Quarter 2010 Highlights

<td class="bwcellpaddingleft0 bwverticalaligntop bwtextalignleft" id="t6366533_40_4_19600"> Capital investment, excluding acquisitions and divestitures, of $1.1 billion

Financial
•		Cash flow of $1.2 billion, or $1.65 per share
•		Operating earnings of $81 million, or 11 cents per share
•		Net earnings, a loss of $505 million, or 68 cents per share
•
•		Free cash flow of $118 million (Free cash flow is defined in Note 1 on page 7)
•		Total production realized average price of $5.74 per thousand cubic feet equivalent (Mcfe), realized natural gas price of $5.50 per Mcf and realized liquids price of $67.05 per barrel (bbl). These prices include realized financial hedges
•		At the end of the quarter, debt to capitalization was 32 percent and debt to adjusted EBITDA was 1.6 times
•		Paid dividend of 20 cents per share
Operating
•		Total production was 3.3 Bcfe/d
•		Natural gas production was 3.2 billion cubic feet per day (Bcf/d)
•		Natural gas liquids (NGLs) and oil production of about 24,000 barrels per day (bbls/d)
•		Operating and administrative costs of $1.11 per Mcfe
Strategic developments
•		Signed a memorandum of understanding with CNPC that outlines a framework to negotiate a potential joint-venture investment in the development of certain lands in Encana’s natural gas plays in British Columbia
•		Announced accumulation of significant land position of about 250,000 net acres of land in the Collingwood shale play in Michigan
•		Drilled exploration well into Encana’s new Brent Miller field in Texas that showed promising results, flowing at 32 million cubic feet per day (MMcf/d)
•		Divested non-core natural gas and oil assets in North America for approximately $208 million.

Financial Summary
(for the period ended June 30) ($ millions, except per share amounts)			Q2 2010		Q2 20091		6 months 2010		6 months 20091
Cash flow2			1,217		1,430		2,390		2,817
Per share diluted			1.65		1.90		3.22		3.75
Operating earnings2			81		472		499		1,016
Per share diluted			0.11		0.63		0.67		1.35
Earnings Reconciliation Summary
Net earnings (loss)			(505)		92		972		569
Deduct (Add back):
Unrealized hedging gain (loss), after tax			(340)		(570)		572		(532)
Non-operating foreign exchange gain (loss), after tax			(246)		190		(99)		85
Operating earnings2			81		472		499		1,016
Per share diluted			0.11		0.63		0.67		1.35
1 Q2 and 6 months 2009 represent pro forma results.
2 Cash flow and operating earnings are non-GAAP measures as defined in Note 1 on Page 7.

Production & Drilling Summary
(for the period ended June 30) (After royalties)			Q2 2010		Q2 20091		% ?		6 months 2010		6 months 20091		% ?
Natural gas (MMcf/d)			3,202		2,924		+ 10		3,162		2,975	+ 6
Natural gas production per 1,000 shares (Mcf/d)			4.34		3.89		+ 12		4.26		3.96		+ 8
NGLs and Oil (Mbbls/d)			24		29		- 17		24		29		- 17
NGLs and Oil production per 1,000 shares (Mcfe/d)			0.19		0.24		- 21		0.19		0.24		- 21
Total production (MMcfe/d)			3,344		3,100		+ 8		3,304		3,151		+ 5
Total production per 1,000 shares (Mcfe/d)			4.53		4.13		+ 10		4.45		4.20		+ 6
Total net wells drilled			151		151				599		634
1 Q2 and 6 months 2009 represent pro forma volumes and drilling.

Second quarter natural gas production up 12 percent per share
Total production in the second quarter of 2010 was 3.3 Bcfe/d, up about 10 percent per share from 3.1 Bcfe/d in the second quarter of 2009, on a pro forma basis. Stronger production was primarily due to successful drilling in U.S. key resource plays, and was partially offset by lower volumes of about 150 MMcf/d due to divestitures. Natural gas production was 3.2 Bcf/d compared to 2.9 Bcf/d in the second quarter of 2009, on a pro forma basis. USA Division second quarter production increased 17 percent to 1.9 Bcfe/d, led by very strong growth in the Haynesville shale, where production averaged about 269 MMcfe/d, up from 54 MMcfe/d in the second quarter of 2009. Piceance production grew close to 29 percent to average about 470 MMcfe/d. Canadian Division production averaged about 1.4 Bcfe/d in the second quarter, down about 3 percent largely as a result of divestitures. Production growth remained steady in Cutbank Ridge, Bighorn and the Greater Sierra resource play, which includes the Horn River shale play, where production averaged about 24 MMcfe/d in the second quarter.

Canadian Division capital investment in the second quarter was $490 million, focused mainly on continuing steady growth from across the division. USA Division capital investment was $596 million, with about half directed to land retention drilling that is already delivering strong growth from the Haynesville shale.

Fast-growing Haynesville shale play joins Encana’s key resource play list
“In the Haynesville shale, we’ve had some very exciting results to date, where production is expected to average 325 MMcfe/d this year, and exit the year at about 500 MMcfe/d. With such strong performance, Haynesville has been added to our list of key resource plays – projects that deliver close to 90 percent of the company’s production. Our 2010 program is focused on drilling to retain land and we have plenty of opportunities to capture future efficiencies by optimizing our surface and drilling operations. This year, we have one gas factory pilot planned that will see eight wells drilled from a single pad. With careful and continual optimization, we believe that when we are operating in full gas factory mode, we can achieve substantial reductions in our drilling, completion, tie-in and operating costs,” Eresman said.

New Brent Miller field in Texas shows promise
“During the second quarter, we drilled a promising well in the new Brent Miller field, a sizable Texas extension of the Haynesville and Mid-Bossier trends. Our well initially flowed at 25 MMcf/d, but when a second wing valve was added, production from the 14,500-foot well increased to 32 MMcf/d. This is a very promising well in this new play where we have about 45,000 net acres across the heart of very prospective lands,” Eresman said.

Encana establishes strong land position in Michigan’s Collingwood shale
Over the past two years, Encana has assembled a significant land position in a promising new natural gas shale play in Michigan. Encana has acquired about 250,000 net acres of land in the Collingwood shale play. The company's first exploration well delivered encouraging test results, flowing during a 30-day initial production test at about 2.5 MMcf/d, including natural gas liquids constituents and condensate. With further drilling, Encana hopes to demonstrate stronger gas rates as the company optimizes well completion practices and proves up liquids-rich potential in some parts of the play.

Production from key North American resource plays
			Average Daily Production (MMcfe/d)
			2010							20091											20081
Key Resource Play			YTD		Q2		Q1			Full Year		Q4		Q3		Q2		Q1			Full Year
USA Division
Jonah			585		574		595			601		596		549		607		656			635
Piceance			476		470		482			373		389		341		365		397			400
East Texas			403		369		437			324		281		306		304		409			335
Haynesville			232		269		194			71		122		83		54		25			10
Fort Worth			133		123		142			139		126		137		141		152			145
Canadian Division
Greater Sierra			232		247		218			204		182		194		222		221			226
Cutbank Ridge			354		388		319			314		257		326		344		326			300
Bighorn			225		252		197			175		158		171		202		172			189
CBM			313		311		315			316		306		318		330		309			304
Total key resource plays			2,953		3,003		2,899			2,517		2,417		2,425		2,569		2,667			2,544
Other production2			351		341		366			486		414		458		531		536			588
Total production			3,304		3,344		3,265			3,003		2,831		2,883		3,100		3,203			3,132
1 2009 and 2008 represent pro forma results, restated on a MMcfe/d basis.
2 Other – includes natural gas and liquids production outside of key resource plays.

Drilling activity in key North American resource plays
			Net Wells Drilled
			2010							20091											20081
Key Resource Play			YTD		Q2		Q1			Full Year		Q4		Q3		Q2		Q1			Full Year
USA Division
Jonah			59		31		28			108		23		20		30		35			175
Piceance			62		29		33			129		16		25		35		53			328
East Texas			6		3		3			38		8		4		11		15			78
Haynesville			41	</td>	21		20			49		18		11		11		9			16
Fort Worth			16		9		7			26		3		1		6		16			83
Canadian Division
Greater Sierra			30		14		16			57		15		17		10		15			106
Cutbank Ridge			33		18		15			71		15		18		18		20			82
Bighorn			25		10		15			69		17		17		14		21			64
CBM			295		-		295			490		174		37		1		278			698
Totalkey resource plays			567		135		432			1,037		289		150		136		462			1,630
Other wells2			32		16		16			52		5		11		15		21			185
Total wells drilled			599		151		448			1,089		294		161		151		483			1,815
1 2009 and 2008 represent pro forma results.
2 Other – includes wells outside of key resource plays.

Second quarter Natural gas and Oil prices
			Q2 2010		Q2 20091		6 months 2010		6 months 20091
Natural gas
NYMEX ($/MMBtu)			4.09		3.50		4.69		4.19
Encana realized gas price2 ($/Mcf)			5.50		7.02		5.81		7.12
NGLs and Oil ($/bbl)
WTI			77.99		59.79		78.39		51.68
Encana realized liquids price2			67.05		46.42		67.06		39.69
1 Q2 and 6 months 2009 Encana realized prices represent pro forma results.
2 Realized prices include the impact of financial hedging.

Solid operating results in a low price environment
Encana focuses on operating earnings as a better measure of quarter-over-quarter earnings performance because it excludes the variability associated with unrealized hedging gains/losses and non-operating foreign exchange gains/losses. Second quarter operating earnings were $81 million in 2010 compared to $472 million in the same period last year, which is down largely due to a quarter-over-quarter decrease in average realized prices from $7.05 to $5.74 per Mcfe. In the second quarter of 2010, realized after-tax hedging gains were $263 million, down from $686 million in the second quarter of 2009, on a pro forma basis. Also impacting second quarter operating earnings was a $128 million increase in depletion compared to the same quarter last year due to increased production and higher foreign exchange rates.

About 55 percent of natural gas production hedged for remainder of 2010
Encana has hedged approximately 1.9 Bcf/d, about 55 percent of expected 2010 natural gas production, at an average NYMEX price of $6.05 per Mcf as of June 30, 2010. In addition, Encana has hedged approximately 1.2 Bcf/d of expected 2011 natural gas production at an average price of about $6.33 per Mcf and approximately 1.0 Bcf/d of expected 2012 natural gas production at an average price of $6.46 per Mcf. This price hedging strategy helps increase certainty in cash flow to assist Encana’s ability to meet its anticipated capital requirements and projected dividends. Encana continually assesses its hedging needs and the opportunities available prior to establishing its capital program for the upcoming year. Risk management positions at June 30, 2010 are presented in Note 14 to the unaudited Interim Consolidated Financial Statements.

Corporate developments

Quarterly dividend of 20 cents per share declared
Encana’s Board of Directors has declared a quarterly dividend of 20 cents per share payable on September 30, 2010 to common shareholders of record as of September 15, 2010. Based on the July 20, 2010 closing share price on the New York Stock Exchange of $32.91, this represents an annualized yield of about 2.4 percent.

Guidance updated
Encana has increased its 2010 guidance for total production by 65 MMcfe/d to 3.365 Bcfe/d. Encana has also increased its capital investment guidance by $500 million, taking 2010 capital investment from $4.5 billion to $5.0 billion, and has reduced operating cost guidance by 10 cents to 80 cents per Mcfe. Encana has provided 2010 guidance for a weighted average number of outstanding shares of approximately 740 million. Total cash flow guidance is unchanged. Based on Encana’s guidance in 2010 of 740 million shares, the range of cash flow per share has been increased by 10 cents to between $5.95 and $6.50. Encana has also lowered its natural gas price expectation for the remainder of the year to NYMEX $5.00 per Mcf, from $5.75 per Mcf. Updated guidance and key resource play information, which includes the addition of Haynesville to Encana’s list of key resource plays, is posted on the company’s website at www.encana.com.

Encana and CNPC look to jointly develop Canadian unconventional natural gas
On June 24, 2010 Encana and CNPC signed a memorandum of understanding that outlines a framework for the two companies to negotiate a potential joint-venture investment in the development of certain lands in Encana's natural gas plays in Horn River, Greater Sierra (Jean Marie formation) and Cutbank Ridge (Montney formation) in northeast British Columbia. Under a potential joint venture, Encana would be the operator of all developments, meaning it would drill and complete the wells, build the processing facilities and pipelines and conduct all field work for the joint venture. CNPC would invest capital to earn an interest in the assets and gain an advanced understanding of unconventional natural gas development through an ongoing sharing of technical knowledge. The companies expect that it will take several months to negotiate a potential joint venture, which would be subject to typical conditions precedent, including the negotiation of acceptable terms and conditions, receipt of the Encana Board of Directors’ approval of the final terms of the proposed joint venture and receipt of any necessary regulatory approvals.

Normal Course Issuer Bid
In the second quarter of 2010, Encana purchased for cancellation approximately 5.5 million common shares at an average share price of $32.54 under the company’s current Normal Course Issuer Bid for a total cost of approximately $179 million. In the first half of 2010, Encana has purchased for cancellation about 15.4 million common shares at an average share price of $32.42 for a total cost of about $499 million.

Financial strength

Encana has a strong balance sheet, with 100 percent of its outstanding debt composed of long-term, fixed-rate debt with an average remaining term of approximately 13 years. The company has upcoming debt maturities of $200 million in September 2010 and $500 million in 2011. At June 30, 2010, Encana had $4.8 billion in unused committed credit facilities. With Encana’s bank facilities undrawn and $1.5 billion of cash and cash equivalents on the balance sheet at the end of the quarter, the company’s liquidity position is extremely strong. Encana is focused on maintaining investment grade credit ratings, capital discipline and financial flexibility. Encana targets a debt to capitalization ratio of less than 40 percent and a debt to adjusted EBITDA ratio of less than 2.0 times. At June 30, 2010, the company’s debt to capitalization ratio was 32 percent and debt to adjusted EBITDA was 1.6 times, on a trailing 12-month basis, using 2009 pro forma results.

In the second quarter of 2010, Encana invested $1.1 billion in capital, excluding acquisitions and divestitures, with a focus on continued development of the company’s key resource plays. Encana invested about $124 million in acquisitions in the second quarter and divested about $208 million of non-core properties.

	CONFERENCE CALL TODAY
	11:00 a.m. Mountain Time (1:00 p.m. Eastern Time)
	Encana will host a conference call today Wednesday, July 21, 2010 starting at 11:00 a.m. MT (1:00 p.m. ET). To participate, please dial (888) 231-8191 (toll-free in North America) or (647) 427-7450 approximately 10 minutes prior to the conference call. An archived recording of the call will be available from approximately 2:00 p.m. MT on July 21 until midnight July 28, 2010 by dialling (800) 642-1687 or (416) 849-0833 and entering passcode 59169776 followed by the pound (#) sign.
	A live audio webcast of the conference call will also be available via Encana’s website, www.encana.com, under Investors/Presentations & events. The webcast will be archived for approximately 90 days.

NOTE 1: Non-GAAP measures
This news release contains references to non-GAAP measures as follows:
•		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, which are defined on the Consolidated Statement of Cash Flows, in this news release and Encana’s interim consolidated financial statements.
•		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.
•		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 recognized for tax purposes only related to U.S. dollar intercompany debt 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 the U.S. dollar debt issued from Canada has maturity dates in excess of five years.
•		Capitalization is a non-GAAP measure defined as debt plus shareholders’ equity. Debt to capitalization and debt to adjusted EBITDA are two ratios that management uses as measures of the company’s overall financial strength to steward the company’s overall debt position.
•		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
Encana is a leading North American natural gas producer that is focused on growing its strong portfolio of prolific shale and other unconventional natural gas developments, called resource plays, in key basins from northeast British Columbia to east Texas and Louisiana. A pure-play natural gas company, Encana applies advanced technology and operational innovation to reduce costs and maximize margins. The company believes North American natural gas is an abundant, affordable and reliable energy supply that can play a significantly expanded role in serving the continent’s growing energy needs while enhancing environmental performance and generating economic growth. 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 certain of such disclosure in accordance with the relevant legal requirements of the U.S. Securities and Exchange Commission (SEC). Some of 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). 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. On March 16, 2010 Encana issued a news release disclosing revised estimates of proved, probable and possible reserves in accordance with the applicable SEC definitions, together with low, best and high estimate economic contingent resources based upon definitions contained in the Canadian Oil and Gas Evaluation Handbook. For further information concerning these reserves and economic contingent resources, including the number of potential drilling locations in respect thereof, please refer to Encana’s news release dated March 16, 2010 available at www.encana.com and www.sedar.com.

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). 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 contained in the company’s guidance forecasts and the anticipated ability to meet the company’s guidance forecasts; projected increase in 2010 production guidance and estimated additional capital investment for 2010; expected costs savings through expansion of multi-well gas factories and extension of the reach of horizontal wells; potential of new play in Michigan; the potential completion of a joint venture transaction with China National Petroleum Corporation (CNPC), including the potential terms, timing for completion, and possible effects on operations of the same; potential dividends; anticipated success of Encana’s price risk management strategy; potential of exploration well into Brent Miller field in Texas, including expected increase in production in the Haynesville shale; future share buybacks; and projected financial metrics, including maintaining investment grade credit ratings, target debt to capitalization ratio and debt to adjusted EBITDA ratio; projected strategy of not shutting-in or curtailing volumes for 2010 given current forward curve; projected continued decrease in supply costs; and estimated number of years of inventory of drilling locations at current pace of development. 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: the risk that the company may not conclude potential joint venture arrangements with CNPC or others; volatility of and assumptions regarding commodity 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 and its subsidiaries’ marketing operations, including credit risks; imprecision of reserves and resources estimates and estimates of recoverable quantities of natural gas and liquids from resource plays and other sources not currently classified as proved, probable or possible reserves or economic contingent resources; marketing margins; potential disruption or unexpected technical difficulties in developing new facilities; unexpected cost increases or technical difficulties in constructing or modifying processing facilities; risks associated with technology; the company’s ability to replace and expand 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, greenhouse gas, carbon, accounting 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; 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 statements with respect to anticipated production, reserves and production growth, including over the next five years, are based upon numerous facts and assumptions which are discussed in further detail in this news release, including a projected capital program averaging approximately $6 billion per year from 2011 to 2014, achieving an average rate of approximately 2,500 net wells per year from 2011 to 2014, Encana’s current net drilling location inventory, natural gas price expectations over the next few years, production expectations made in light of advancements in horizontal drilling, multi-stage fracture stimulation and multi-well pad drilling, the current and expected productive characteristics of various existing and emerging resource plays, Encana’s estimates of proved, probable and possible reserves and economic contingent resources, expectations for rates of return which may be available at various prices for natural gas and current and expected cost trends. In addition, assumptions relating to such forward-looking statements generally include Encana’s current expectations and projections made in light of, and generally consistent with, its historical experience and its perception of historical trends, including the conversion of resources into reserves and production 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.

Forward-looking information respecting anticipated 2010 cash flow for Encana is based upon achieving average production of oil and gas for 2010 of approximately 3.365 Bcfe/d, commodity prices for natural gas of NYMEX $5.00/Mcf, crude oil (WTI) $75 for commodity prices and an estimated U.S./Canadian dollar foreign exchange rate of $0.94 and a weighted average number of outstanding shares for Encana of approximately 740 million.

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.

Further information on Encana Corporation is available on the company’s website, www.encana.com.

<td class="bwcellpaddingleft0 bwwhitespacenowrap bwcellpaddingright0 bwverticalaligntop bwtextalignleft bwsinglebottomborder" colspan="19" id="t6366533_1_1_10935"> Consolidated Statement of Earnings (unaudited)

				Three Months Ended								Six Months Ended
				June 30,								June 30,
($ millions, except per share amounts)				2010				2009				2010				2009
Revenues, Net of Royalties		(Note 3)		$	1,469			$	2,449			$	5,014			$	6,131
Expenses		(Note 3)
Production and mineral taxes					52				32				121				93
Transportation and selling					214				321				425				614
Operating					246				400				506				835
Purchased product					160				338				371				798
Depreciation, depletion and amortization					814				934				1,614				1,866
Administrative					107				114				189				193
Interest, net		(Note 6)			131				83				261				141
Accretion of asset retirement obligation		(Note 10)			11				18				23				35
Foreign exchange (gain) loss, net		(Note 7)			266				(61	)			122				(3	)
(Gain) loss on divestitures					1				3				-				2
					2,002				2,182				3,632				4,574
Net Earnings (Loss) Before Income Tax					(533	)			267				1,382				1,557
Income tax expense (recovery)		(Note 8)			(28	)			56				410				355
Net Earnings (Loss) From Continuing Operations					(505	)			211				972				1,202
Net Earnings (Loss) From Discontinued Operations		(Note 4)			-				28				-				(1	)
Net Earnings (Loss)				$	(505	)		$	239			$	972			$	1,201
Net Earnings (Loss) From Continuing Operations per Common Share		(Note 12)
Basic				$	(0.68	)		$	0.28			$	1.31			$	1.60
Diluted				$	(0.68	)		$	0.28			$	1.31			$	1.60
Net Earnings (Loss) per Common Share		(Note 12)
Basic				$	(0.68	)		$	0.32			$	1.31			$	1.60
Diluted				$	(0.68	)		$	0.32			$	1.31			$	1.60
Consolidated Statement of Comprehensive Income (unaudited)
				Three Months Ended								Six Months Ended
				June 30,								June 30,
($ millions)				2010				2009				2010				2009
Net Earnings (Loss)				$	(505	)		$	239			$	972			$	1,201
Other Comprehensive Income (Loss), Net of Tax
Foreign Currency Translation Adjustment					(177	)			916				(18	)			645
Comprehensive Income (Loss)				$	(682	)		$	1,155			$	954			$	1,846
See accompanying Notes to Consolidated Financial Statements.

Consolidated Balance Sheet (unaudited)
						As at			As at
						June 30,			December 31,
($ millions)						2010			2009
Assets
Current Assets
Cash and cash equivalents					$	1,481		$	4,275
Accounts receivable and accrued revenues						1,157			1,180
Risk management			(Note 14)			725			328
Income tax receivable						318			-
Inventories						3			12
						3,684			5,795
Property, Plant and Equipment, net			(Note 3)			26,510			26,173
Investments and Other Assets						376			164
Risk Management			(Note 14)			469			32
Goodwill						1,648			1,663
			(Note 3)		$	32,687		$	33,827
Liabilities and Shareholders' Equity
Current Liabilities
Accounts payable and accrued liabilities					$	2,001		$	2,143
Income tax payable						-			1,776
Risk management			(Note 14)			96			126
Current portion of long-term debt			(Note 9)			200			200
						2,297			4,245
Long-Term Debt			(Note 9)			7,553			7,568
Other Liabilities			(Note 3)			1,400			1,185
Risk Management			(Note 14)			16			42
Asset Retirement Obligation			(Note 10)			768			787
Future Income Taxes </td>						3,873			3,386
						15,907			17,213
Shareholders' Equity
Share capital			(Note 12)			2,319			2,360
Paid in surplus			(Note 12)			-			6
Retained earnings						13,724			13,493
Accumulated other comprehensive income						737			755
Total Shareholders' Equity						16,780			16,614
					$	32,687		$	33,827
See accompanying Notes to Consolidated Financial Statements.

Consolidated Statement of Shareholders' Equity (unaudited)
					Six Months Ended
					June 30,
($ millions)					2010				2009
Share Capital
Balance, Beginning of Year					$	2,360			$	4,557
Common Shares Issued under Option Plans			(Note 12)			5				2
Common Shares Issued from PSU Trust			(Note 12)			-				19
Stock-Based Compensation			(Note 12)			2				1
Common Shares Purchased			(Note 12)			(48	)			-
Balance, End of Period					$	2,319			$	4,579
Paid in Surplus
Balance, Beginning of Year					$	6			$	-
Common Shares Issued from PSU Trust						-				6
Common Shares Purchased			(Note 12)			(6	)			-
Balance, End of Period					$	-			$	6
Retained Earnings
Balance, Beginning of Year					$	13,493			$	17,584
Net Earnings						972				1,201
Dividends on Common Shares						(296	)			(601	)
Charges for Normal Course Issuer Bid			(Note 12)			(445	)			-
Balance, End of Period					$	13,724			$	18,184
Accumulated Other Comprehensive Income
Balance, Beginning of Year					$	755			$	833
Foreign Currency Translation Adjustment						(18	)			645
Balance, End of Period					$	737			$	1,478
Total Shareholders' Equity					$	16,780			$	24,247
See accompanying Notes to Consolidated Financial Statements.

Consolidated Statement of Cash Flows (unaudited)
				Three Months Ended								Six Months Ended
				June 30,								June 30,
($ millions)				2010				2009				2010				2009
Operating Activities
Net earnings (loss) from continuing operations				$	(505	)		$	211			$	972			$	1,202
Depreciation, depletion and amortization					814				934				1,614				1,866
Future income taxes		(Note 8)			76				(272	)			502				(212	)
Unrealized (gain) loss on risk management		(Note 14)			511				1,118				(852	)			1,007
Unrealized foreign exchange (gain) loss					242				(69	)			73				(49	)
Accretion of asset retirement obligation		(Note 10)			11				18				23				35
(Gain) loss on divestitures					1				3				-				2
Other					67				94				58				131
Cash flow from discontinued operations					-				116				-				115
Net change in other assets and liabilities					(38	)			11				(69	)			26
Net change in non-cash working capital from continuing operations					(286	)			(383	)			(2,200	)			(835	)
Net change in non-cash working capital from discontinued operations					-				180				-				464
Cash From (Used in) Operating Activities					893				1,961				121				3,752
Investing Activities
Capital expenditures		(Note 3)			(1,223	)			(913	)			(2,271	)			(2,437	)
Proceeds from divestitures		(Note 5)			208				20				354				53
Corporate acquisition					-				(24	)			-				(24	)
Net change in investments and other					(94	)			79				(217	)			155
Net change in non-cash working capital from continuing operations					36				(181	)			21				(267	)
Discontinued operations					-				(298	)			-				(581	)
Cash From (Used in) Investing Activities					(1,073	)			(1,317	)			(2,113	)			(3,101	)
Financing Activities
Net issuance (repayment) of revolving long-term debt					-				(1,170	)			-				(665	)
Issuance of long-term debt					-				496				-				496
Issuance of common shares		(Note 12)			1				19				5				21
Purchase of common shares		(Note 12)			(179	)			-				(499	)			-
Dividends on common shares					(147	)			(301	)			(296	)			(601	)
Cash From (Used in) Financing Activities					(325	)			(956	)			(790	)			(749	)
Foreign Exchange Gain (Loss) on Cash and Cash
Equivalents Held in Foreign Currency					(8	)			9				(12	)			5
Increase (Decrease) in Cash and Cash Equivalents					(513	)			(303	)			(2,794	)			(93	)
Cash and Cash Equivalents, Beginning of Period					1,994				564				4,275				354
Cash and Cash Equivalents, End of Period				$	1,481			$	261			$	1,481			$	261
Cash (Bank Overdraft), End of Period				$	(26	)		$	(5	)		$	(26	)		$	(5	)
Cash Equivalents, End of Period					1,507				266				1,507				266
Cash and Cash Equivalents, End of Period				$	1,481			$	261			$	1,481			$	261
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 ("GAAP"). Encana's operations are in the business of the exploration for, the development of, and the production and marketing of natural gas and crude oil and natural gas liquids ("NGLs").
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, 2009, except as noted below. The disclosures provided below are incremental to those included with the annual audited Consolidated Financial Statements. Certain information and disclosures normally required to be included in the notes to the annual audited Consolidated Financial Statements have been condensed or have been disclosed on an annual basis only. Accordingly, 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, 2009.
On November 30, 2009, Encana completed a corporate reorganization (the "Split Transaction") to split into two independent publicly traded energy companies - Encana Corporation, a natural gas company, and Cenovus Energy Inc. ("Cenovus"), an integrated oil company.
Encana's 2009 comparative results in the Consolidated Statement of Earnings and Consolidated Statement of Cash Flows include Cenovus's upstream operations prior to the November 30, 2009 Split Transaction in continuing operations, while the U.S. Downstream Refining results are reported as discontinued operations.
2. Changes in Accounting Policies and Practices
On January 1, 2010, Encana adopted the following Canadian Institute of Chartered Accountants ("CICA") Handbook sections:
• "Business Combinations", Section 1582, which replaces the previous business combinations standard. The standard requires assets and   liabilities acquired in a business combination, contingent consideration and certain acquired contingencies to be measured at their fair   values as of the date of acquisition. In addition, acquisition-related and restructuring costs are to be recognized separately from the   business combination and included in the statement of earnings. The adoption of this standard will impact the accounting treatment of   future business combinations entered into after January 1, 2010.
• "Consolidated Financial Statements", Section 1601, which, together with Section 1602 below, replace the former consolidated financial   statements standard. Section 1601 establishes the requirements for the preparation of consolidated financial statements. The adoption   of this standard had no material impact on Encana's Consolidated Financial Statements.
• "Non-controlling Interests", Section 1602, which establishes the accounting for a non-controlling interest in a subsidiary in   consolidated financial statements subsequent to a business combination. The standard requires a non-controlling interest in   a subsidiary to be classified as a separate component of equity. In addition, net earnings and components of other comprehensive   income are attributed to both the parent and non-controlling interest. The adoption of this standard has had no material impact on   Encana's Consolidated Financial Statements.
The above CICA Handbook sections are converged with International Financial Reporting Standards ("IFRS"). Encana will be required to report its results in accordance with IFRS beginning in 2011. The Company is currently assessing the impact of the convergence of Canadian GAAP with IFRS on Encana's financial results of operations, financial position and disclosures.

3. Segmented Information

The Company's operating and reportable segments are as follows:

• Canada includes the Company’s exploration for, and development and production of natural gas, crude oil and NGLs and other related   activities within the Canadian cost centre.

• USA includes the Company’s exploration for, and development and production of natural gas, NGLs and other related activities within   the United States cost centre.

• Market Optimization is primarily responsible for the sale of the Company's proprietary production. These results are included in the   Canada and USA segments. Market optimization activities include 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 and Other mainly 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 sells substantially all of the Company's upstream production to third-party customers. Transactions between segments are based on market values and eliminated on consolidation. The tables in this note present financial information on an after eliminations basis.

In conjunction with the Split Transaction, the assets formerly included in Encana’s Canadian Plains Division and Integrated Oil Division were transferred to Cenovus. As a result, the former Canadian Foothills Division is reported as the Canadian Division and the Canadian Plains Division and Integrated Oil - Canada are now presented as Canada – Other. Prior periods have been restated to reflect this presentation.

Encana has a decentralized decision-making and reporting structure. Accordingly, the Company reports its divisional results as follows:

• Canadian Division, formerly the Canadian Foothills Division, which includes natural gas development and production assets located in   British Columbia and Alberta, as well as the Deep Panuke natural gas project offshore Nova Scotia. Four key resource plays are located in   the Division: (i) Greater Sierra in northeast British Columbia, including Horn River; (ii) Cutbank Ridge on the Alberta and British Columbia   border, including Montney; (iii) Bighorn in west central Alberta; and (iv) Coalbed Methane in southern Alberta.

• USA Division, which includes the natural gas development and production assets located in the U.S. Five key resource plays are located in   the Division: (i) Jonah in southwest Wyoming; (ii) Piceance in northwest Colorado; (iii) East Texas in Texas; (iv) Haynesville in Louisiana   and Texas; and (v) Fort Worth in Texas.

• Canada- Other includes the combined results from the former Canadian Plains Division and Integrated Oil - Canada.

Operations that have been discontinued are disclosed in Note 4.

Results of Operations (For the three months ended June 30)
Segment and Geographic Information
		Canada							USA								Market Optimization
		2010			2009				2010				2009				2010				2009
Revenues, Net of Royalties		$	724		$	2,070			$	1,078			$	1,126			$	170			$	366
Expenses
Production and mineral taxes			4			17				48				15				-				-
Transportation and selling			48			196				166				125				-				-
Operating			129			291				121				99				5				7
Purchased product			-			(18	)			-				-				160				356
			543			1,584				743				887				5				3
Depreciation, depletion and amortization			313			523				482				379				3				4
Segment Income (Loss)		$	230		$	1,061			$	261			$	508			$	2			$	(1	)
									Corporate & Other								Consolidated
									2010				2009				2010				2009
Revenues, Net of Royalties									$	(503	)		$	(1,113	)		$	1,469			$	2,449
Expenses
Production and mineral taxes										-				-				52				32
Transportation and selling										-				-				214				321
Operating										(9	)			3				246				400
Purchased product										-				-				160				338
										(494	)			(1,116	)			797				1,358
Depreciation, depletion and amortization										16				28				814				934
Segment Income (Loss)									$	(510</b>	)		$	(1,144	)			(17	)			424
Administrative																		107				114
Interest, net																		131				83
Accretion of asset retirement obligation																		11				18
Foreign exchange (gain) loss, net																		266				(61	)
(Gain) loss on divestitures																		1				3
																		516				157
Net Earnings (Loss) Before Income Tax																		(533	)			267
Income tax expense (recovery)																		(28	)			56
Net Earnings (Loss) from Continuing Operations																	$	(505	)		$	211

<td>

Results of Operations (For the three months ended June 30)
Product and Divisional Information
		Canada Segment
								Canadian Division						Canada - Other							Total
								2010			2009			2010			2009				2010			2009
Revenues, Net of Royalties								$	724		$	907		$	-		$	1,163			$	724		$	2,070
Expenses
Production and mineral taxes									4			6			-			11				4			17
Transportation and selling									48			38			-			158				48			196
Operating									129			133			-			158				129			291
Purchased product									-			-			-			(18	)			-			(18	)
Operating Cash Flow								$	543		$	730		$	-		$	854			$	543		$	1,584
		Canadian Division *
		Gas						Oil & NGLs						Other							Total
		2010			2009			2010			2009			2010			2009				2010			2009
										</td>
Revenues, Net of Royalties		$	627		$	823		$	79		$	74		$	18		$	10			$	724		$	907
Expenses
Production and mineral taxes			3			5			1			1			-			-				4			6
Transportation and selling		47			37			1			1			-			-				48			38
Operating			123			124			2			6			4			3				129			133
Operating Cash Flow		$	454		$	657		$	75		$	66		$	14		$	7			$	543		$	730
		USA Division
		Gas						Oil & NGLs						Other							Total
		2010			2009			2010			2009			2010			2009				2010			2009
Revenues, Net of Royalties		$	983		$	1,044		$	65		$	50		$	30		$	32			$	1,078		$	1,126
Expenses
Production and mineral taxes			42			11			6			4			-			-				48			15
Transportation and selling			166			125			-			-			-			-				166			125
Operating			106			77			-			-			15			22				121			99
Operating Cash Flow		$	669		$	831		$	59		$	46		$	15		$	10			$	743		$	887
		Canada - Other **
		Gas						Oil & NGLs						Other							Total
		2010			2009			2010			2009			2010			2009				2010			2009
Revenues, Net of Royalties		$	-		$	475		$	-		$	618		$	-		$	70			$	-		$	1,163
Expenses
Production and mineral taxes			-			5			-			6			-			-				-			11
Transportation and selling			-			10			-			143			-			5				-			158
Operating			-			51			-			93			-			14				-			158
Purchased product			-			-			-			-			-			(18	)			-			(18	)
Operating Cash Flow		$	-		$	409		$	-		$	376		$	-		$	69			$	-		$	854
* Formerly known as the Canadian Foothills Division.
** Includes the operations formerly known as the Canadian Plains Division and Integrated Oil - Canada.

<td class="bwcellpaddingleft0 bwwhitespacenowrap bwcellpaddingright0 bwverticalalignbottom bwtextalignright" id="t6366533_9_11_8852">-

<td class="bwsinglebottomborder">  

Results of Operations (For the six months ended June 30)
Segment and Geographic Information
		Canada							USA								Market Optimization
		2010			2009				2010				2009				2010			2009
Revenues, Net of Royalties		$	1,444		$	3,953			$	2,286			$	2,300			$	398		$	858
Expenses
Production and mineral taxes			5			32				116				61				-			-
Transportation and selling			93			366				332				248						-
Operating			268			577				230				214				14			15
Purchased product			-			(31	)			-				-				371			829
			1,078			3,009				1,608				1,777				13			14
Depreciation, depletion and amortization			600			1,007				976				795				6			9
Segment Income (Loss)		$	478		$	2,002			$	632			$	982			$	7		$	5
									Corporate & Other								Consolidated
									2010				2009				2010			2009
Revenues, Net of Royalties									$	886			$	(980	)		$	5,014		$	6,131
Expenses
Production and mineral taxes										-				-				121			93
Transportation and selling				</td>						-				-				425			614
Operating										(6	)			29				506			835
Purchased product										-				-				371			798
										892				(1,009	)			3,591			3,791
Depreciation, depletion and amortization										32				55				1,614			1,866
Segment Income (Loss)									$	860			$	(1,064	)			1,977			1,925
Administrative																		189			193
Interest, net																		261			141
Accretion of asset retirement obligation																		23			35
Foreign exchange (gain) loss, net																		122			(3	)
(Gain) loss on divestitures																		-			2
																		595			368
Net Earnings Before Income Tax																		1,382			1,557
Income tax expense																	410			355
Net Earnings from Continuing Operations																	$	972		$	1,202

Results of Operations (For the six months ended June 30)
Product and Divisional Information
		Canada Segment
								Canadian Division						Canada - Other							Total
								2010			2009			2010			2009				2010			2009
Revenues, Net of Royalties								$	1,444		$	1,822		$	-		$	2,131			$	1,444		$	3,953
Expenses
Production and mineral taxes									5			11			-			21				5			32
Transportation and selling									93			75			-			291				93			366
Operating									268			263			-			314				268			577
Purchased product									-			-			-			(31	)			-			(31	)
Operating Cash Flow								$	1,078		$	1,473		$	-		$	1,536			$	1,078		$	3,009
		Canadian Division *
	Gas							Oil & NGLs						Other							Total
		2010			2009			2010			2009			2010			2009				2010			2009
Revenues, Net of Royalties		$	1,256		$	1,671		$	160		$	131		$	28		$	20			$	1,444		$	1,822
Expenses
Production and mineral taxes			4			9			1			2			-			-				5			11
Transportation and selling			92			71			1			4			-			-				93			75
Operating			253			244			8			12			7			7				268			263
Operating Cash Flow		$	907		$	1,347		$	150		$	113		$	21		$	13			$	1,078		$	1,473
		USA Division
		Gas						Oil & NGLs						Other							Total
		2010			2009			2010			2009			2010			2009				2010			2009
Revenues, Net of Royalties		$	2,095		$	2,162		$	126		$	79		$	65		$	59			$	2,286		$	2,300
Expenses
Production and mineral taxes			104			54			12			7			-			-				116			61
Transportation and selling			332			248			-			-			-			-				332			248
Operating			190			159			-			-			40			55				230			214
Operating Cash Flow		$	1,469		$	1,701		$	114		$	72		$	25		$	4			$	1,608		$	1,777
		Canada - Other **
		Gas						Oil & NGLs						Other							Total
		2010			2009			2010			2009			2010			2009				2010			2009
Revenues, Net of Royalties		$	-		$	996		$	-		$	1,033		$	-		$	102			$	-		$	2,131
Expenses														</td>
Production and mineral taxes			-			8			-			13			-			-				-			21
Transportation and selling			-			21			-			260			-			10				-			291
Operating			-			102			-			184			-			28				-			314
Purchased product	</td>		-			-			-			-			-			(31	)			-			(31	)
Operating Cash Flow		$	-		$	865		$	-		$	576		$	-		$	95			$	-		$	1,536
* Formerly known as the Canadian Foothills Division.
** Includes the operations formerly known as the Canadian Plains Division and Integrated Oil - Canada.

Capital Expenditures (Continuing Operations)
		Three Months Ended						Six Months Ended
		June 30,						June 30,
		2010			2009			2010			2009
Capital
Canadian Division		$	490		$	325		$	1,033		$	862
Canada - Other			-			190			-			508
Canada			490			515			1,033			1,370
USA			596			374			1,068			948
Market Optimization			1			-			1			(3	)
Corporate & Other			12			14			17			33
			1,099			903			2,119			2,348
Acquisition Capital
Canada			46			2			59			75
USA			78			8			93			14
			124			10			152			89
Total		$	1,223		$	913		$	2,271		$	2,437
Property, Plant and Equipment and Total Assets by Segment
		Property, Plant and Equipment						Total Assets
		As at						As at
		June 30,			December 31,			June 30,			December 31,
		2010			2009			2010			2009
Canada		$	11,542		$	11,162		$	13,102		$	12,748
USA			13,750			13,929			15,124			14,962
Market Optimization			118			124			168			303
Corporate & Other			1,100			958			4,293			5,814
Total		$	26,510		$	26,173		$	32,687		$	33,827
In January 2008, Encana signed the contract for the design and construction of the Production Field Centre ("PFC") for the Deep Panuke project. As at June 30, 2010, Canada Property, Plant, and Equipment and Total Assets includes Encana's accrual to date of $495 million ($427 million at December 31, 2009) related to this offshore facility as an asset under construction.
In February 2007, Encana announced that it had entered into a 25 year lease agreement with a third party developer for The Bow office project. As at June 30, 2010, Corporate and Other Property, Plant and Equipment and Total Assets includes Encana's accrual to date of $797 million ($649 million at December 31, 2009) related to this office project 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.

4. Discontinued Operations
As a result of the Split Transaction on November 30, 2009, Encana transferred its Downstream Refining operations to Cenovus. These operations have been accounted for as discontinued operations.
Consolidated Statement of Earnings
The following table presents the effect of discontinued operations in the Consolidated Statement of Earnings:
		Three Months Ended								Six Months Ended
		June 30,								June 30,
		2010				2009				2010				2009
Revenues, Net of Royalties		$	-			$	1,313			$	-			$	2,239
Expenses
Operating			-				112				-				230
Purchased product			-				1,047				-				1,796
Depreciation, depletion and amortization			-				46				-				97
Administrative			-				6				-				12
Interest, net			-				46				-				92
Accretion of asset retirement obligation			-				1				-				1
Foreign exchange (gain) loss, net			-				1				-				1
(Gain) loss on divestitures			-				-				-				-
			-				1,259				-				2,229
Net Earnings (Loss) Before Income Tax			-				54				-				10
Income tax expense			-				26				-				11
Net Earnings (Loss) From Discontinued Operations		$	-			$	28			$	-			$	(1	)
Net Earnings (Loss) From Discontinued Operations
per Common Share
Basic		$	-			$	0.04			$	-			$	-
Diluted		$	-			$	0.04			$	-			$	-
5. Acquisitions and Divestitures
Acquisitions
On May 5, 2009, the Company acquired the common shares of Kerogen Resources Canada, ULC for net cash consideration of $24 million. The acquisition included $37 million of property, plant and equipment and the assumption of $6 million of current liabilities and $7 million of future income taxes. The operations are included in the Canadian Division.
Divestitures
Total year-to-date proceeds received on the sale of assets were $354 million (2009 - $53 million). The significant items are described below:
Canada and USA
In 2010, the Company completed the divestiture of non-core oil and natural gas assets for proceeds of $29 million (2009 - $44 million) in the Canadian Division and $325 million (2009 - $4 million) in the USA Division.
6. Interest, Net
		Three Months Ended								Six Months Ended
		June 30,								June 30,
		2010				2009				2010				2009
Interest Expense - Long-Term Debt		$	122			$	123			$	242			$	241
Interest Expense - Other			11				4				23				(3	)
Interest Income *			(2	)			(44	)			(4	)			(97	)
		$	131			$	83			$	261			$	141
* In 2009, Interest Income is primarily due to the Partnership Contribution Receivable which was transferred to Cenovus under the Split Transaction on November 30, 2009.

7. Foreign Exchange (Gain) Loss, Net
		Three Months Ended								Six Months Ended
		June 30,								June 30,
		2010				2009				2010				2009
Unrealized Foreign Exchange (Gain) Loss on:
Translation of U.S. dollar debt issued from Canada		$	245			$	(439	)		$	74			$	(289	)
Translation of U.S. dollar partnership contribution receivable
issued from Canada *			-				247				-				160
Other Foreign Exchange (Gain) Loss on:
Monetary revaluations and settlements			21				131				48				126
		$	266			$	(61	)		$	122			$	(3	)
* The Partnership Contribution Receivable was transferred to Cenovus under the Split Transaction on November 30, 2009.
8. Income Taxes
The provision (recovery) for income taxes is as follows:
		Three Months Ended								Six Months Ended
		June 30,								June 30,
		2010				2009				2010				2009
Current
Canada		$	(112	)		$	268			$	(102	)		$	440
United States			6				53				7				121
Other Countries			2				7				3				6
Total Current Tax			(104	)			328				(92	)			567
Future			76				(272	)			502				(212	)
		$	(28	)		$	56			$	410			$	355
9. Long-Term Debt
											As at				As at
											June 30,				December 31,
											2010				2009
Canadian Dollar Denominated Debt
Unsecured notes										$	1,179			$	1,194
U.S. Dollar Denominated Debt
Unsecured notes											6,600				6,600
Increase in Value of Debt Acquired											49				52
Debt Discounts and Financing Costs											(75	)			(78	)
Current Portion of Long-Term Debt											(200	)			(200	)
										$	7,553			$	7,568

10. 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:
			As at				As at
			June 30,				December 31,
			2010				2009
Asset Retirement Obligation, Beginning of Year		$	787			$	1,230
Liabilities Incurred			19				21
Liabilities Settled			(10	)			(52	)
Liabilities Divested			(45	)			(26	)
Liabilities Transferred to Cenovus			-				(692	)
Change in Estimated Future Cash Outflows			1				74
Accretion Expense			23				71
Foreign Currency Translation			(7	)			161
Asset Retirement Obligation, End of Period		$	768			$	787
11. Capital Structure
The Company's capital structure consists of Shareholders' Equity plus Debt, defined as Long-term Debt including the current portion. The Company's objectives when managing its capital structure are to:
i)  maintain financial flexibility 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 Debt to Capitalization and Debt to Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization ("Adjusted EBITDA"). These metrics are measures of the Company's overall financial strength and are used to steward the Company's overall debt position.
Encana targets a Debt to Capitalization ratio of less than 40 percent. At June 30, 2010, Encana's Debt to Capitalization ratio was 32 percent (December 31, 2009 - 32 percent) calculated as follows:
		As at
		June 30,				December 31,
		2010				2009
Debt		$	7,753			$	7,768
Shareholders' Equity			16,780				16,614
Capitalization		$	24,533			$	24,382
Debt to Capitalization Ratio			32	%			32	%

<td>

Encana targets a Debt to Adjusted EBITDA of less than 2.0 times. At June 30, 2010, Debt to Adjusted EBITDA was 1.3x (December 31, 2009 - 1.3x) calculated on a trailing 12-month basis as follows:
									As at
									June 30,				December 31,
									2010				2009
Debt									$	7,753			$	7,768
Net Earnings from Continuing Operations									$	1,600			$	1,830
Add (deduct):
Interest, net										525				405
Income tax expense										164				109
Depreciation, depletion and amortization										3,452				3,704
Accretion of asset retirement obligation										59				71
Foreign exchange (gain) loss, net									103				(22	)
(Gain) loss on divestitures										-				2
Adjusted EBITDA									$	5,903			$	6,099
Debt to Adjusted EBITDA										1.3x				1.3x
Encana has a long-standing practice of maintaining capital discipline, managing its capital structure and adjusting its capital structure 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.
12. Share Capital
		June 30, 2010							December 31, 2009
(millions)		Number			Amount				Number				Amount
Common Shares Outstanding, Beginning of Year		751.3			$	2,360				750.4			$	4,557
Common Shares Issued under Option Plans		0.3				5				0.4				5
Common Shares Issued from PSU Trust		-				-				0.5				19
Stock-Based Compensation		-				2				-				1
Common Shares Purchased		(15.4	)			(48	)			-				-
Common Shares Cancelled		-				-				(751.3	)			(4,582	)
New Encana Common Shares Issued		-				-				751.3				2,360
Encana Special Shares Issued		-				-				751.3				2,222
Encana Special Shares Cancelled		-				-				(751.3	)			(2,222	)
Common Shares Outstanding, End of Period		736.2			$	2,319				751.3			$	2,360
Normal Course Issuer Bid
Encana has received regulatory approval each year under Canadian securities laws to purchase Common Shares under eight consecutive Normal Course Issuer Bids ("NCIB"). Encana is entitled to purchase, for cancellation, up to 37.5 million Common Shares under the renewed NCIB which commenced on December 14, 2009 and terminates on December 13, 2010. To June 30, 2010, the Company purchased 15.4 million Common Shares for total consideration of approximately $499 million. Of the amount paid, $6 million was charged to Paid in surplus, $48 million was charged to Share capital and $445 million was charged to Retained earnings. During 2009, there were no purchases under the current or prior NCIB.

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 granted. 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.
As at June 30, 2010, Encana had 20,520 stock options (2009 - 351,740) outstanding and exercisable with a weighted average exercise price of C$7.54 per stock option (2009 - C$11.79). The weighted average remaining contractual life of the stock options is 0.2 years. These stock options do not have Tandem Share Appreciation Rights ("TSARs") attached.
Encana Share Units Held by Cenovus Employees
As part of the Split Transaction on November 30, 2009, each holder of Encana share units disposed of their right in exchange for the grant of new Encana share units and Cenovus share units. The terms and conditions of the new share units are similar to the terms and conditions of the original share units. Additional information is contained in Note 17 of the Company's annual audited Consolidated Financial Statements for the year ended December 31, 2009.
Refer to Note 13 for information regarding share units held by Encana employees.
With respect to the Encana share units held by Cenovus employees and the Cenovus share units held by Encana employees, both Encana and Cenovus have agreed to reimburse each other for share units exercised for cash by their respective employees. Accordingly, for Encana share units held by Cenovus employees, Encana has recorded a payable to Cenovus employees and a receivable due from Cenovus. The payable to Cenovus employees and the receivable due from Cenovus is based on the fair value of the Encana share units determined using the Black-Scholes-Merton model (See Note 14). There is no material impact on Encana's net earnings for these share units held by Cenovus employees. No further Encana share units will be granted to Cenovus employees.
As Cenovus employees may exercise Encana TSARs and Encana Performance TSARs in exchange for Encana Common Shares, the following table is provided as at June 30, 2010:
Canadian Dollar Denominated (C$)						Number of Encana Share Units (millions)		Weighted Average Exercise Price
Encana TSARs held by Cenovus Employees
Outstanding, June 30, 2010						7.1		30.41
Exercisable, June 30, 2010						4.9		29.65
Encana Performance TSARs held by Cenovus Employees
Outstanding, June 30, 2010						7.3		31.62
Exercisable, June 30, 2010						3.7		31.77
Per Share Amounts
The following table summarizes the Common Shares used in calculating Net Earnings per Common Share:
		Three Months Ended				Six Months Ended
		June 30,				June 30,
(millions)		2010		2009		2010		2009
Weighted Average Common Shares Outstanding - Basic		737.6		751.0		743.1		750.8
Effect of Dilutive Securities		-		0.4		0.1		0.6
Weighted Average Common Shares Outstanding - Diluted		737.6		751.4		743.2		751.4

13. Compensation Plans
The following tables outline certain information related to Encana's compensation plans at June 30, 2010.
As part of the Split Transaction on November 30, 2009, each holder of Encana share units disposed of their right in exchange for the grant of new Encana share units and Cenovus share units. The terms and conditions of the new share units are similar to the terms and conditions of the original share units. Share units include TSARs, Performance TSARs, Share Appreciation Rights ("SARs") and Performance SARs. Additional information is contained in Note 19 of the Company's annual audited Consolidated Financial Statements for the year ended December 31, 2009.
Refer to Note 12 for information regarding new Encana share units held by Cenovus employees.
A) Tandem Share Appreciation Rights
The following table summarizes information related to the Encana and Cenovus TSARs held by Encana employees at June 30, 2010:
				Encana TSARs					Cenovus TSARs
Canadian Dollar Denominated (C$)				Outstanding			Weighted Average Exercise Price		Outstanding			Weighted Average Exercise Price
Outstanding, Beginning of Year				12,473,214			28.85		12,482,694			26.08
Granted				4,243,060			32.90		-			-
Exercised - SARs				(1,859,555	)		23.24		(1,820,079	)		20.79
Exercised - Options				(94,434	)		20.73		(101,591	)		19.17
Forfeited				(164,278	)		32.82		(182,431	)		29.40
Outstanding, End of Period				14,598,007			30.75		10,378,593			27.01
Exercisable, End of Period				7,847,957			29.11		7,881,964			26.33
For the period ended June 30, 2010, Encana recorded a reduction of compensation costs of $11 million related to the Encana TSARs and no compensation costs related to the Cenovus TSARs (2009 - compensation costs of $32 million related to the outstanding TSARs prior to the November 30, 2009 Split Transaction).
B) Performance Tandem Share Appreciation Rights
The following table summarizes information related to the Encana and Cenovus Performance TSARs held by Encana employees at June 30, 2010:
				Encana Performance TSARs					Cenovus Performance TSARs
Canadian Dollar Denominated (C$)				Outstanding			Weighted Average Exercise Price		Outstanding			Weighted Average Exercise Price
Outstanding, Beginning of Year				10,461,901			31.42		10,462,643			28.42
Exercised - SARs				(212,155	)		29.37		(214,794	)		26.53
Exercised - Options				(171	)		29.04		(171	)		26.27
Forfeited				(965,503	)		31.41		(975,648	)		28.39
Outstanding, End of Period				9,284,072			31.46		9,272,030			28.46
Exercisable, End of Period				5,069,831			31.43		5,056,893			28.44
For the period ended June 30, 2010, Encana recorded a reduction of compensation costs of $3 million related to the Encana Performance TSARs and compensation costs of $2 million related to the Cenovus Performance TSARs (2009 - compensation costs of $14 million related to the outstanding Performance TSARs prior to the November 30, 2009 Split Transaction).

C) Share Appreciation Rights
Beginning in January 2010, U.S. dollar denominated SARs were granted to eligible employees. The terms and conditions are similar to the Canadian dollar denominated SARs.
The following table summarizes information related to the Encana and Cenovus SARs held by Encana employees at June 30, 2010:
				Encana SARs					Cenovus SARs
Canadian Dollar Denominated (C$)				Outstanding			Weighted Average Exercise Price		Outstanding			Weighted Average Exercise Price
Outstanding, Beginning of Year				2,343,485			33.75		2,323,960			30.55
Exercised				(23,146	)		29.02		(22,214	)		26.25
Forfeited				(46,906	)		32.45		(46,830	)		29.36
Outstanding, End of Period				2,273,433			33.82		2,254,916			30.62
Exercisable, End of Period				926,683			35.15		927,691			31.78
									Encana SARs
U.S. Dollar Denominated (US$)									Outstanding			Weighted Average Exercise Price
Outstanding, Beginning of Year									-			-
Granted									4,282,840			30.99
Outstanding, End of Period									4,282,840			30.99
Exercisable, End of Period									-			-
For the period ended June 30, 2010, Encana recorded no compensation costs related to the Encana SARs and no compensation costs related to the Cenovus SARs (2009 - compensation costs of $1 million related to the outstanding SARs prior to the November 30, 2009 Split Transaction).
D) Performance Share Appreciation Rights
The following table summarizes information related to the Encana and Cenovus Performance SARs held by Encana employees at June 30, 2010:
				Encana Performance SARs					Cenovus Performance SARs
Canadian Dollar Denominated (C$)				Outstanding			Weighted Average Exercise Price		Outstanding			Weighted Average Exercise Price
Outstanding, Beginning of Year				3,471,998			32.00		3,471,998			28.94
Exercised				(34,286	)		29.04		(31,876	)		26.27
Forfeited				(301,702	)		32.21		(301,644	)		29.14
Outstanding, End of Period				3,136,010			32.01		3,138,478			28.95
Exercisable, End of Period				1,105,088			<b>33.39		1,107,618			30.19
For the period ended June 30, 2010, Encana recorded no compensation costs related to the Encana Performance SARs and no compensation costs related to the Cenovus Performance SARs (2009 - compensation costs of $1 million related to the outstanding Performance SARs prior to the November 30, 2009 Split Transaction).

E) Performance Share Units ("PSUs")
In February 2010, PSUs were granted to eligible employees which entitle the employee to receive, upon vesting, a cash payment equal to the value of one Common Share of Encana for each PSU held, depending upon the terms of the amended PSU plan. PSUs vest three years from the date of grant, provided the employee remains actively employed with Encana on the vesting date.
The ultimate value of the PSUs will depend upon Encana's performance measured over the three year period. Each year, Encana's performance will be assessed by the Board of Directors (the "Board") to determine whether the performance criteria have been met. Based on this assessment, up to a maximum of two times the original PSU grant may be awarded. The respective proportion of the original PSU grant for each year will be valued, based on an average share price, and the notional cash value deposited to a PSU account, with payout deferred to the final vesting date.
The following table summarizes information related to the PSUs at June 30, 2010:
Canadian Dollar Denominated		Outstanding PSUs
Outstanding, Beginning of Year		-
Granted		880,735
Units, in Lieu of Dividends		11,229
Forfeited		(14,481)
Outstanding, End of Period		877,483
U.S. Dollar Denominated		Outstanding PSUs
Outstanding, Beginning of Year		-
Granted		810,910
Units, in Lieu of Dividends		10,460
Forfeited		(20,376)
Outstanding, End of Period		800,994
For the period ended June 30, 2010, Encana recorded compensation costs of $8 million related to the outstanding PSUs (2009 - nil).
F) Deferred Share Units ("DSUs")
The following table summarizes information related to the DSUs at June 30, 2010:
Canadian Dollar Denominated		Outstanding DSUs
Outstanding, Beginning of Year		672,147
Granted		102,091
Converted from HPR awards		21,732
Units, in Lieu of Dividends		10,110
Outstanding, End of Period		806,080
For the period ended June 30, 2010, Encana recorded compensation costs of $2 million related to the outstanding DSUs (2009 - $5 million).
G) Pensions
Encana's net benefit plan expense for the six months ended June 30, 2010 was $30 million (2009 - $38 million) and for the three months ended June 30, 2010 was $15 million (2009 - $19 million). Encana's contribution to the defined benefit pension plans for the six months ended June 30, 2010 was $6 million (2009 - $3 million).

14. Financial Instruments and Risk Management
Encana's financial assets and liabilities include cash and cash equivalents, accounts receivable and accrued revenues, investments and other assets, accounts payable and accrued liabilities, 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 except for the amounts associated with new share units issued as part of the November 30, 2009 Split Transaction as discussed in Notes 12 and 13.
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.
The fair value of investments and other assets approximate their carrying amount due to the nature of the instruments held.
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 value of financial assets and liabilities were as follows:
		As at						As at
		June 30, 2010						December 31, 2009
		Carrying Amount			Fair Value			Carrying Amount			Fair Value
Financial Assets
Held-for-Trading:
Cash and cash equivalents		$	1,481		$	1,481		$	4,275		$	4,275
Accounts receivable and accrued revenues (1)			68			68			75			75
Risk management assets (2)			1,194			1,194			360			360
Investments and other assets			218			218			-			-
Loans and Receivables:
Accounts receivable and accrued revenues			1,089			1,089			1,105			1,105
Financial Liabilities
Held-for-Trading:
Accounts payable and accrued liabilities (3, 4)		$	136		$	136		$	155		$	155
Risk management liabilities (2)			112			112			168			168
Other Financial Liabilities:
Accounts payable and accrued liabilities			1,865			1,865			1,988			1,988
Long-term debt (2)			7,753			8,667			7,768			8,527
(1) Represents amounts due from Cenovus for Encana share units held by Cenovus employees (See Note 12).
(2) Including current portion.
(3) Includes amounts due to Cenovus employees for Encana share units held (See Note 12).
(4) Includes amounts due to Cenovus for Cenovus share units held by Encana employees (See Notes 12 and 13).

B) Risk Management Assets and Liabilities
Net Risk Management Position															As at			As at
															June 30,			December 31,
															2010			2009
Risk Management
Current asset															$	725		$	328
Long-term asset																469			32
																1,194			360
Risk Management
Current liability																96			126
Long-term liability																16			42
																112			168
Net Risk Management Asset															$	1,082		$	192
Summary of Unrealized Risk Management Positions
		As at June 30, 2010										As at December 31, 2009
		Risk Management										Risk Management
		Asset			Liability			Net				Asset			Liability			Net
Commodity Prices
Natural gas		$	1,192		$	105		$	1,087			$	298		$	88		$	210
Crude oil			2			2			-				62			72			(10	)
Power			-			5			(5	)			-			8			(8	)
Total Fair Value		$	1,194		$	112		$	1,082			$	360		$	168		$	192
Net Fair Value Methodologies Used to Calculate Unrealized Risk Management Positions
The total net fair value of Encana's unrealized risk management positions is $1,082 million as at June 30, 2010 ($192 million as at December 31, 2009) and has been calculated using both quoted prices in active markets and observable market-corroborated data.
Net Fair Value of Commodity Price Positions at June 30, 2010
		Notional Volumes						Term				Average Price						Fair Value
Natural Gas Contracts
Fixed Price Contracts
NYMEX Fixed Price		1,863 MMcf/d						2010				6.05 US$/Mcf						$	438
NYMEX Fixed Price		1,158 MMcf/d						2011				6.33 US$/Mcf							411
NYMEX Fixed Price		1,040 MMcf/d						2012				6.46 US$/Mcf							293
Basis Contracts *
Canada								2010											(1	)
United States								2010											(4	)
Canada and United States								2011-2013											(49	)
																			1,088
Other Financial Positions **																			(1	)
Natural Gas Fair Value Position																		$	1,087
* 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.
** Other financial positions are part of the ongoing operations of the Company's proprietary production management.

<td class="bwsinglebottomborder">  

		Notional Volumes			Term			Average Price		Fair Value
Crude Oil Contracts
Fixed Price Contracts
WTI NYMEX Fixed Price		5,400 bbls/d			2010				76.99 US$/bbl								$	-
Crude Oil Fair Value Position																	$	-
																	Fair Value
Power Purchase Contracts
Power Fair Value Position																	$	(5	)
Earnings Impact of Realized and Unrealized Gains (Losses) on Risk Management Positions
					Realized Gain (Loss)								Realized Gain (Loss)
					Three Months Ended								Six Months Ended
					June 30,								June 30,
					2010				2009				2010				2009
Revenues, Net of Royalties					$	389			$	1,345			$	577			$	2,414
Operating Expenses and Other						1				(5	)			(1	)			(29	)
Gain (Loss) on Risk Management					$	390			$	1,340			$	576			$	2,385
					Unrealized Gain (Loss)								Unrealized Gain (Loss)
					Three Months Ended								Six Months Ended
					June 30,								June 30,
					2010				2009				2010				2009
Revenues, Net of Royalties					$	(518	)		$	(1,114	)		$	849			$	(981	)
Operating Expenses and Other						7			(4	)			3				(26	)
Gain (Loss) on Risk Management					$	(511	)		$	(1,118	)		$	852			$	(1,007	)
Reconciliation of Unrealized Risk Management Positions from January 1 to June 30, 2010
									2010								2009
									Fair Value				Total Unrealized Gain (Loss)				Total Unrealized Gain (Loss)
Fair Value of Contracts, Beginning of Year									$	192
Change in Fair Value of Contracts in Place at Beginning of Year
and Contracts Entered into During the Period										1,428			$	1,428			$	1,378
Settlement of Contracts Transferred to Cenovus										38				-				-
Fair Value of Contracts Realized During the Period										(576	)			(576	)			(2,385	)
Fair Value of Contracts, End of Period									$	1,082			$	852			$	(1,007	)
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. The Company has used a 10 percent variability to assess the potential impact of commodity price changes. Fluctuations in commodity prices could have resulted in unrealized gains (losses) impacting pre-tax net earnings as at June 30, 2010 as follows:
													10% Price Increase				10% Price Decrease
Natural gas price													$	(612	)		$	612
Crude oil price														(8	)			8
Power price														6				(6	)

C) Risks Associated with Financial Assets and Liabilities

The Company is exposed to financial risks arising from its financial assets and liabilities. Financial risks include market risks (such as commodity prices, foreign exchange and interest rates), credit risk and liquidity risk. The fair value or future cash flows of financial assets or liabilities may fluctuate due to movement in market prices and the exposure to credit and liquidity risks.

Commodity Price Risk

Commodity price risk arises from the effect that fluctuations of future commodity prices may have on the fair value or future cash flows of financial assets and liabilities. To partially mitigate exposure to commodity price risk, the Company has entered into various financial derivative instruments. The use of these derivative instruments is governed under formal policies and is subject to limits established by the Board. 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 has entered into 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 commodity price risk on crude oil with swaps which fix WTI NYMEX prices.

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.

Credit Risk

Credit risk arises from the potential that the Company may incur a loss if a counterparty to a financial instrument fails to meet its obligation in accordance with agreed terms.  This credit risk 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.  At June 30, 2010, cash equivalents include high-grade, short-term securities, placed primarily with Governments and financial institutions with strong investment grade ratings.  Any foreign currency agreements entered into 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.   As at June 30, 2010, approximately 96 percent (93 percent at December 31, 2009) of Encana's accounts receivable and financial derivative credit exposures are with investment grade counterparties.

At June 30, 2010, Encana had four counterparties (2009 - 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 and risk management assets is the total carrying value.

Liquidity Risk

Liquidity risk is the risk the Company will encounter difficulties in meeting a demand to fund its financial liabilities as they come due. The Company manages its liquidity risk through cash and debt management. As disclosed in Note 11, Encana targets a Debt to Capitalization ratio of less than 40 percent and a Debt to Adjusted EBITDA of less than 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 June 30, 2010, Encana had available unused committed bank credit facilities in the amount of $4.8 billion and unused capacity under shelf prospectuses, the availability of which is dependent on market conditions, in the amount of $5.9 billion. The Company believes it has sufficient funding through the use of these facilities to meet foreseeable borrowing requirements.

Encana maintains investment grade ratings on its senior unsecured debt. As at June 30, 2010, Standard & Poor's Ratings Services has assigned a rating of "BBB+" , Moody's Investors Service has assigned a rating of "Baa2", and DBRS Limited has assigned a rating of "A (low)". Each ratings service has assigned a "Stable" outlook. These credit ratings have remained unchanged since December 31, 2009.
The timing of cash outflows relating to financial liabilities are outlined in the table below:
		Less Than 1 Year			1 - 3 Years			4 - 5 Years			Thereafter			Total
Accounts Payable and Accrued Liabilities		$	2,001		$	-		$	-		$	-		$	2,001
Risk Management Liabilities			96			16			-			-			112
Long-Term Debt *			676			1,841			2,240			9,757			14,514
* Principal and interest, including current portion.
Encana's total long-term debt obligations were $14.5 billion at June 30, 2010. Further information on Long-Term Debt is contained in Note 9.
Foreign Exchange Risk
Foreign exchange risk arises from changes in foreign exchange rates that may affect the fair value or future cash flows of the Company’s financial assets or liabilities. 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. At June 30, 2010, Encana had $5.6 billion in U.S. dollar debt issued from Canada ($5.6 billion at December 31, 2009) subject to foreign exchange exposure.
Encana's foreign exchange (gain) loss primarily includes foreign exchange gains and losses on U.S. dollar cash and short-term investments held in Canada, unrealized foreign exchange gains and losses on the translation of U.S. dollar debt issued from Canada, unrealized foreign exchange gains and losses on the translation of U.S. dollar denominated risk management assets and liabilities held in Canada and, in the prior year, foreign exchange gains and losses on the translation of the U.S. dollar partnership contribution receivable issued from Canada. A $0.01 change in the U.S. to Canadian dollar exchange rate would have resulted in a $44 million change in foreign exchange (gain) loss at June 30, 2010 (2009 - $15 million).
Interest Rate Risk
Interest rate risk arises from changes in market interest rates that may affect the fair value or future cash flows from the Company’s financial assets or liabilities. Typically, the Company partially mitigates its exposure to interest rate changes by maintaining a mix of both fixed and floating rate debt.
At June 30, 2010, the Company had no floating rate debt. Therefore, the increase or decrease in net earnings for each one percent change in interest rates on floating rate debt was nil (2009 - $7 million).

15. 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.

16. Reclassification

Certain information provided for prior periods has been reclassified to conform to the presentation adopted in 2010.

Supplemental Financial Information
The following financial information presents selected consolidated financial and operating information related to the ongoing operations of Encana Corporation ("Encana") for the three and six months ended June 30, 2010 compared to historical pro forma financial and operating information for the three and six months ended June 30, 2009. The pro forma comparative information excludes the results of operations from assets transferred to Cenovus Energy Inc. on November 30, 2009; See Note 3 to the December 31, 2009 Annual Consolidated Financial Statements.
The financial and operating information for the three and six months ended June 30, 2010 can be found in Encana's Interim Consolidated Financial Statements for the period ended June 30, 2010. The pro forma financial and operating information for the six months ended June 30, 2009 can be found in Appendix J to the Company's Information Circular Relating to an Arrangement Involving Cenovus Energy Inc. dated October 20, 2009 and on the following page.
Consolidated Statement of Earnings (unaudited)
		Three Months Ended								Six Months Ended
		June 30,								June 30,
($ millions, except per share amounts)		2010					Pro Forma 2009			2010					Pro Forma 2009
Revenues, Net of Royalties		$	1,469			$	1,333			$	5,014			$	3,779
Expenses
Production and mineral taxes			52				21				121				72
Transportation and selling			214				163				425			323
Operating			246				236				506				496
Purchased product			160				159				371				456
Depreciation, depletion and amortization			814				686				1,614				1,395
Administrative			107				87				189				150
Interest, net			131				80				261				148
Accretion of asset retirement obligation			11			10				23				18
Foreign exchange (gain) loss, net			266				(179	)			122				(80	)
(Gain) loss on divestitures			1				3				-				2
			2,002				1,266				3,632				2,980
Net Earnings (Loss) Before Income Tax			(533	)			67				1,382				799
Income tax expense (recovery)			(28	)			(25	)			410				230
Net Earnings (Loss)		$	(505	)		$	92			$	972			$	569
Net Earnings (Loss) per Common Share
Basic		$	(0.68	)		$	0.12			$	1.31			$	0.76
Diluted		$	(0.68	)		$	0.12			$	1.31			$	0.76
Consolidated Statement of Cash from Operating Activities (unaudited)
		Three Months Ended								Six Months Ended
		June 30,								June 30,
($ millions)		2010					Pro Forma 2009			2010					Pro Forma 2009
Operating Activities
Net earnings (loss)		$	(505	)		$	92			$	972			$	569
Depreciation, depletion and amortization			814				686				1,614				1,395
Future income taxes			76				(108	)			502				28
Unrealized (gain) loss on risk management		</td>	511				868				(852	)			825
Unrealized foreign exchange (gain) loss			242				(198	)			73				(133	)
Accretion of asset retirement obligation			11				10				23				18
(Gain) loss on divestitures			1				3				-				2
Other			67				77				58				113
Net change in other assets and liabilities			(38	)			13				(69	)			30
Net change in non-cash working capital from continuing operations			(286	)			(322	)			(2,200	)			(282	)
Cash From Operating Activities		$	893			$	1,121			$	121			$	2,565

<td>

The following Pro Forma Information presents selected historical pro forma financial and operating information related to the ongoing operations of Encana. The information excludes the results of operations from assets transferred to Cenovus Energy Inc. on November 30, 2009; See Note 3 to the December 31, 2009 Annual Consolidated Financial Statements.
For background on the pro forma information please refer to Note 1 - Basis of Presentation in the Notes to Encana Pro Forma Consolidated Statements of Earnings and Cash from Operating Activities.
Pro Forma Consolidated Statement of Earnings (unaudited)
For the six months ended June 30, 2009
						Deduct				Add/(Deduct)
		Encana				Cenovus				Pro Forma				Encana
($ millions, except per share amounts)		Consolidated				Carve-out				Adjustments			Note 2	Pro Forma
Revenues, Net of Royalties		$	6,131			$	2,352			$				$	3,779
Expenses
Production and mineral taxes			93				21								72
Transportation and selling			614				291								323
Operating			835				339								496
Purchased product			798				342								456
Depreciation, depletion and amortization			1,866				536				65		(A)		1,395
Administrative			193				66 </td>				25		(B)		150
											(2	)	(C)
Interest, net			141				(7	)							148
Accretion of asset retirement obligation			35				17								18
Foreign exchange (gain) loss, net			(3	)			77								(80	)
(Gain) loss on divestitures			2				-								2
Net Earnings Before Income Tax			1,557 </td>				670				(88	)			799
Income tax expense			355				108				(17	)	(D i,ii,iii,iv)		230
Net Earnings from Continuing Operations			1,202				562				(71	)			569
Net Earnings (Loss) from Discontinued Operations			(1	)			(1	)			-				-
Net Earnings		$	1,201			$	561			$	(71	)		$	569
Net Earnings from Continuing Operations per Common Share													(E)
Basic		$	1.60											$	0.76
Diluted		$	1.60											$	0.76
Net Earnings per Common Share													(E)
Basic		$	1.60										$	0.76
Diluted		$	1.60											$	0.76
Pro Forma Consolidated Statement of Cash from Operating Activities (unaudited)
For the six months ended June 30, 2009
						Deduct				Add/(Deduct)
		Encana				Cenovus				Pro Forma				Encana
($ millions)		Consolidated				Carve-out				Adjustments			Note 2	Pro Forma
Operating Activities
Net earnings from continuing operations		$	1,202			$	562			$	(71	)		$	569
Depreciation, depletion and amortization			1,866				536				65		(A)		1,395
Future income taxes			(212	)			(108	)			132		(D i,ii,iii,iv)		28
Unrealized (gain) loss on risk management			1,007				182								825
Unrealized foreign exchange (gain) loss			(49	)			84								(133	)
Accretion of asset retirement obligation			35				17								18
(Gain) loss on divestitures			2				-								2
Other			131				18								113
Cash flow from discontinued operations			115				115								-
Net change in other assets and liabilities			26				(4	)							30
Net change in non-cash working capital from continuing operations			(835	)			(553	)							(282	)
Net change in non-cash working capital from discontinued operations			464				464								-
Cash From Operating Activities		$	3,752			$	1,313			$	126			$	2,565

Notes to Pro Forma Consolidated Statements of Earnings and

Cash from Operating Activities (unaudited)

1. Basis of Presentation

On November 30, 2009, Encana completed a corporate reorganization (the “Split Transaction”) involving the division of Encana into two independent publicly traded energy companies – Encana and Cenovus Energy Inc. The unaudited Pro Forma Consolidated Statement of Earnings and Pro Forma Consolidated Statement of Cash from Operating Activities have been prepared for information purposes and assumes the Split Transaction occurred on January 1, 2008. Pro forma adjustments are detailed in Note 2.

The unaudited Pro Forma Consolidated Statement of Earnings and Pro Forma Consolidated Statement of Cash from Operating Activities are expressed in United States dollars and have been prepared for information purposes using information contained in the following:

a)  Encana's audited Consolidated Financial Statements for the year ended December 31, 2009.

b)  Cenovus Energy unaudited Carve-out Consolidated Financial Statements for the 11 months ended November 30, 2009. The Cenovus       unaudited Carve-out Consolidated Financial Statements were derived from the accounting records of Encana on a carve-out basis.

In the opinion of Management of Encana, the unaudited Pro Forma Consolidated Financial Statements include all the adjustments necessary for fair presentation in accordance with Canadian generally accepted accounting principles.

The unaudited Pro Forma Statement of Earnings and Pro Forma Consolidated Statement of Cash from Operating Activities are for illustrative purposes only and may not be indicative of the results that actually would have occurred if the Split Transaction had been in effect on the dates indicated or of the results that may be obtained in the future. In addition to the pro forma adjustments to the historical carve-out financial statements, various other factors will have an effect on the results of operations.

2. Pro Forma Assumptions and Adjustments

The following adjustments reflect expected changes to Encana’s historical results which would arise from the Split Transaction.

A. Reflects the expected difference in depreciation, depletion and amortization expense arising from a change in the depletion rate    calculated for Encana’s Canadian cost centre.

B. Increases administrative expense for additional compensation costs arising from the separation of compensation plans and the estimated    increase in the number of employees required to operate Encana as a separate entity, after removing those costs associated with    Cenovus’s employees.

C. Reduces administrative expense to remove Encana’s share of the transaction costs incurred related to the Split Transaction.

D. Pro forma adjustments to income tax expense,

i. adjustments for the tax effect of items A, B and C above;

ii. adjustments for the effect of the loss of tax deferrals resulting from the wind up of Encana’s Canadian upstream oil and gas     partnership;

iii. acceleration of the intangible drilling costs deduction in the U.S. as a result of a change in the status of Encana being considered      an independent producer; and

iv. remove tax benefits solely resulting from the Split Transaction.

E. The Pro Forma Net Earnings per Common Share is calculated using the same weighted average number of pre-Arrangement Encana Corporation    Common Shares outstanding as at June 30, 2009.

	(millions)			For the period ended June 30, 2009
	Weighted Average Common Shares Outstanding - Basic			750.8
	Effects of Stock Options and Other Dilutive Securities			0.6
	Weighted Average Common Shares Outstanding - Diluted			751.4

Supplemental Financial Information (unaudited)
Pro Forma Reconciliations
($ millions, except per share amounts)			2009
			Year		Q4		Q3		Q2		Q1
Cash Flow (1)
Encana Corporation, Consolidated			6,779		603		2,079		2,153		1,944
Less: Cenovus Carve-out (2)			2,232		(15)		841		811		595
Add/(Deduct) Pro Forma adjustments			474		312		36		88		38
Encana Pro Forma			5,021		930		1,274		1,430		1,387
Per share amounts
Encana Corporation, Consolidated	- Basic		9.03		0.80		2.77		2.87		2.59
	- Diluted		9.02		0.80		2.77		2.87		2.59
Encana Pro Forma	- Basic		6.69		1.24		1.70		1.90		1.85
	- Diluted		6.68		1.24		1.70		1.90		1.85
Net Earnings
Encana Corporation, Consolidated			1,862		636		25	239		962
Less: Cenovus Carve-out (2)			609		(15)		63		149		412
Add/(Deduct) Pro Forma adjustments			(504)		(418)		(15)		2		(73)
Encana Pro Forma			749		233		(53)		92		477
Per share amounts
Encana Corporation, Consolidated	- Basic		2.48		0.85		0.03		0.32		1.28
	- Diluted		2.48		0.85		0.03		0.32		1.28
Encana Pro Forma	- Basic		1.00		0.31		(0.07)		0.12		0.64
	- Diluted		1.00		0.31		(0.07)		0.12		0.63
Operating Earnings (3)
Encana Corporation, Consolidated			3,495		855		775		917		948
Less: Cenovus Carve-out (2)			1,224		64		382		447		331
Add/(Deduct) Pro Forma adjustments			(504)		(418)		(15)		2		(73)
Encana Pro Forma			1,767		373		378		472		544
Per share amounts
Encana Corporation, Consolidated	- Diluted		4.65		1.14	1.03		1.22		1.26
Encana Pro Forma	- Diluted		2.35		0.50		0.50		0.63		0.72
(1) 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, which are defined on the Consolidated Statement of Cash Flows and the Pro    Forma Consolidated Statement of Cash from Operating Activities.
(2) Cenovus Energy was spun-off on November 30, 2009. As a result, carve-out information for the fourth quarter is for the    two months ended November 30, 2009 and the 2009 Year information is for the 11 months ended November 30, 2009.
(3) Operating Earnings is a non-GAAP measure defined as Net Earnings excluding the after-tax gain/loss on    discontinuance, after-tax effect of unrealized hedging gains/losses on derivative instruments, after-tax gains/losses on    translation of U.S. dollar denominated debt issued from Canada, after-tax foreign exchange gains/losses on settlement    of intercompany transactions, future income tax on foreign exchange recognized for tax purposes only related to U.S. dollar    intercompany debt and the effect of changes in statutory income tax rates.

FOR FURTHER INFORMATION:
Encana Corporate Communications
Investor contacts:
Ryder McRitchie
Vice-President, Investor Relations
(403) 645-2007
Lorna Klose
Manager, Investor Relations
(403) 645-6977
Media contacts:
Alan Boras
Vice-President, Media Relations
(403) 645-4747
Carol Howes
Advisor, Media Relations
(403) 645-4799

Source: Encana Corporation