OREANDA-NEWS. Encana reported strong results from a transformative 2014 in which the company restructured its organization, transformed its portfolio and delivered solid operational results. The company delivered on all of its strategic targets and achieved enduring efficiency improvements throughout the business.

"The transformation of Encana occurred at a pace that exceeded even our own expectations and our accomplishments in 2014 shouldn't be overshadowed by today's low commodity price environment," said

Doug Suttles, Encana President & CEO. "We resized the company, focused our capital investment on our most strategic assets and enhanced operational performance. Consistent with our strategy to grow higher margin production, we successfully transitioned to a more liquids-weighted portfolio which helped to deliver a marked increase in year-over-year cash flow."

Encana's strategic focus on growing value was evident in the first year of its new strategy through the 14 percent increase in year-over-year cash flow to approximately \\$2.9 billion, or \\$3.96 per share. This cash flow growth was delivered within the context of approximately seven percent lower total production and substantially similar oil and gas prices compared to 2013. The company met its 2014 production targets while spending approximately eight percent less capital than indicated in the mid-year Guidance. Full-year operating earnings of around \\$1.0 billion, or \\$1.35 per share, were up 25 percent from last year. Net earnings attributable to common shareholders were approximately \\$3.4 billion or \\$4.58 per share.

For the fourth quarter of 2014, Encana reported cash flow of approximately \\$377 million, or \\$0.51 per share, and operating earnings of \\$35 million, or \\$0.05 per share, compared with cash flow of \\$677 million or \\$0.91 per share and operating earnings of \\$226 million or \\$0.31 per share in the fourth quarter of 2013. The year-over-year decline in cash flow was largely due to higher current taxes and one-time outlays associated with the completion of the acquisition of Athlon Energy Inc. ("Athlon"), including the early repayment of Athlon's long-term debt. Upstream operating cash flow, excluding realized hedging, totaled \\$694 million in the fourth quarter of 2014 compared with \\$728 million a year earlier. Propelled by successful drilling programs and strong production results from the Eagle Ford and Permian, the two strategic assets acquired in 2014, Encana averaged fourth quarter liquids volumes of 106,400 bbls/d, reflecting a 61 percent year-over-year increase.

To maintain a solid balance sheet and help strengthen liquidity through a low price environment, Encana is reducing its previously announced 2015 capital investment by approximately \\$700 million to between \\$2.0 billion and \\$2.2 billion. The company's 2015 capital program is now based on assumptions of \\$50 per barrel (bbl) WTI oil prices and NYMEX natural gas prices of \\$3 per million British thermal units (MMBtu). Encana expects total 2015 cash flow of between \\$1.4 billion and \\$1.6 billion. The company intends to fully fund its 2015 capital program and dividend with anticipated cash flow combined with net proceeds of around \\$800 million from the previously announced divestitures of certain Clearwater assets and Montney midstream infrastructure.

"We're responding decisively and prudently to the current low commodity price environment," said Suttles. "We will continue to execute our strategy at a pace that makes sense and continue our relentless efforts to realize enduring efficiencies in all aspects of our business. Our priority is to maintain our solid balance sheet and financial flexibility while preserving the long-term value of our portfolio by investing in our most strategic assets."

Operating highlights

More than 80 percent of Encana's 2015 capital investment will be focused on the company's four most strategic assets, all of which are expected to deliver substantial growth.

Permian Basin: Upon closing its acquisition of Athlon in the fourth quarter of 2014, Encana successfully integrated the Athlon team and maintained uninterrupted operations through the transition. By year-end, the company had drilled seven net horizontal and 21 net vertical wells and reduced well tie-in times from 15 to five days. Encana exited 2014 with an oil production rate of 18,000 bbls/d and total production of 31,000 barrels of oil equivalent per day (BOE/d). Encana now plans to invest approximately \\$700 million to run four to six horizontal rigs and four to six vertical rigs in 2015. The company anticipates drilling around 55 net horizontal wells and 110 net vertical wells. Projected volumes are expected to average at least 45,000 BOE/d in 2015.

Eagle Ford: Encana closed the acquisition of its Eagle Ford acreage during the second quarter of 2014. In its first full quarter of operations, the company achieved a nine percent reduction in drilling costs through optimization of well design and reduced cycle times. Fourth-quarter production in the play was approximately 36,000 bbls/d of liquids and 35 million cubic feet per day (MMcf/d) of natural gas. Encana drilled 35 net wells in the play in 2014 and plans to drill approximately 60 net wells in 2015. The company now plans to invest approximately \\$550 million to run two to three rigs in 2015. Total production in 2015 is expected to grow to over 50,000 BOE/d.

Montney: Annualized liquids production increased by 87 percent from 2013 to approximately 19,000 bbls/d, while annual natural gas production was approximately 514 MMcf/d. Fourth-quarter production was 24,600 bbls/d of liquids and 570 MMcf/d of natural gas. During the fourth quarter, Encana announced an agreement to sell midstream infrastructure in northeastern British Columbia to Veresen Midstream Limited Partnership. The transaction, expected to close in the first quarter of 2015, helps Encana to unlock value from midstream assets while ensuring reliable takeaway capacity in the Montney under an innovative fee-for-service arrangement. Encana drilled 79 net wells in the play in 2014 and plans to drill around 25 net wells in 2015 while running approximately three rigs. The company now expects a net investment of approximately \\$245 million. The Cutbank Ridge Partnership expects to invest an additional \\$325 million, representing a total gross investment of \\$570 million. Expected net production for 2015 is approximately 124,000 BOE/d.

Duvernay: The Duvernay team continued to reduce drilling and completion costs in 2014. Encana achieved an average cost of \\$12.4 million per well on the 4-4 pad, which is 17 percent lower than the 2014 target of \\$15 million and 50 percent lower than the 2013 average. Annualized liquids production grew more than 200 percent in 2014 to approximately 2,100 bbls/d. During the fourth quarter, Encana and its joint venture participant signed a long-term rich gas premium agreement with Aux Sable Canada LP to increase market takeaway capacity in the play. Encana drilled 24 net wells in the Duvernay last year. The company now plans to run two to three rigs in 2015 and drill around 15 net wells. Encana now expects a net investment of approximately \\$230 million. An additional \\$660 million of joint venture capital is expected to be invested in the play, representing a gross investment of \\$890 million. Expected net production for 2015 is approximately 10,000 BOE/d.

Encana updates its risk management program As of February 24, 2015, Encana has hedged approximately 1,044 MMcf/d of expected February to December 2015 natural gas production using NYMEX fixed price contracts at an average price of \\$4.29 per thousand cubic feet (Mcf). In addition, Encana has hedged approximately 55,000 bbls/d of expected February to December 2015 oil production using WTI fixed price contracts at an average price of \\$62.18 per bbl and approximately 1,200 bbls/d of expected 2016 oil production at an average price of \\$92.35 per bbl. The company's hedging program helps sustain cash flow and operating netbacks during periods of lower prices.

Dividend declared On February 25, 2015, the Board declared a dividend of \\$0.07 per share payable on March 31, 2015 to common shareholders of record as of March 13, 2015.

For the dividend payable on March 31, 2015, Encana's Board of Directors has determined that all common shares distributed to participating shareholders pursuant to the company's dividend reinvestment plan (DRIP) will be issued from Encana's treasury at a two percent discount to the average market price of the common shares (as defined in the DRIP). Previously, common shares distributed to participating shareholders pursuant to the DRIP were issued from Encana's treasury without a discount to the average market price. Any future dividends of common shares distributed to shareholders participating in the DRIP will be issued from Encana's treasury with a two percent discount to the average market price unless otherwise announced by Encana by way of news release.