OREANDA-NEWS.  July 31, 2012. Encana Corporation (TSX: ECA) (NYSE: ECA) reported cash flow of USD 794 million or USD 1.08 per share and USD 198 million in operating earnings or USD 0.27 per share for the second quarter 2012. Year-to-date the company generated cash flow of approximately USD 1.8 billion or USD 2.47 per share and operating earnings of USD 438 million or USD 0.59 per share, reported the press-centre of Encana.

The company's commodity price hedging program contributed to a realized natural gas price of USD 4.79 per thousand cubic feet (Mcf) during the quarter, keeping Encana's cash flow on track with the company's Guidance for the year. Downward pressure continued on natural gas prices in the quarter which averaged USD 2.22 per million British thermal units (MMBtu) NYMEX, down over USD 2.00 from the same period in 2011.

"We will continue to advance our strategic shift towards achieving a diversified portfolio of production and a more balanced stream of future cash flows by accelerating our development of oil and liquids rich natural gas plays and creating value by investing in our highest return projects," says Randy Eresman, Encana President & CEO. "We are taking a low risk approach to increasing our production of oil and liquids as we focus on the extraction of more natural gas liquids from existing streams using third party facilities and accelerating the development of new plays targeting light oil."

During the quarter Encana increased its 2012 Guidance for total liquids production by seven percent to 30,000 barrels per day (bbls/d) and announced it is planning to invest an additional \\$600 million during the second half of the year to take advantage of positive initial results achieved in a number of light oil and liquids rich natural gas plays. With the increased investment, Encana projects average daily liquids production in 2013 to range from 60,000 bbls/d to 70,000 bbls/d, about 40 percent of which is expected to be comprised of light oil and field condensate.

"The increased 2012 investment and our initial projections for 2013 capital in the range of USD 4.0 billion to USD 5.0 billion are a reflection of the tremendous operational success we've had on our oil and liquids rich plays and the confidence we have in our ability to execute divestitures and joint ventures," adds Eresman. "We will be disciplined in our approach and only spend the projected 2013 capital when we have secured proceeds through cash flow or completed divestitures and joint ventures. It remains a priority for us to maintain balance sheet strength and investment grade credit-ratings."

Encana opened data rooms during the quarter for three investment opportunities with respect to its Alberta Duvernay asset, a group of U.S. liquids rich plays and an approximately ten percent interest in the Cutbank Ridge Partnership. Technical presentations on these assets are underway and there has been strong interest from potential partners.