OREANDA-NEWS.  Encana Corporation (Encana) (TSX: ECA) (NYSE: ECA) announced today that its wholly-owned subsidiary, Encana Oil & Gas (USA) Inc., has reached an agreement to sell its Haynesville natural gas assets, located in northern Louisiana, to GEP Haynesville, LLC (GeoSouthern), a joint venture formed by GeoSouthern Haynesville, LP and funds managed by GSO Capital Partners LP.

Total cash consideration to Encana under the transaction is US\\$850 million. In addition, through the transfer of current and future obligations, Encana will reduce its gathering and midstream commitments, which will be substantially complete through 2020, by approximately US\\$480 million on an undiscounted basis. Further, Encana will transport and market GeoSouthern's Haynesville production on a fee for service basis for the next five years.

Encana will use the total cash consideration to reduce its net debt, further strengthening its balance sheet.

Consistent with its strategy, Encana remains focused on growing high margin production. Over 80 percent of 2015 capital will be invested in the company's four most strategic assets in the Permian, Eagle Ford, Duvernay and Montney. During the first half of 2015, Encana'sHaynesville assets produced an average 217 mmcf/d, contributed approximately 9 percent to companywide production and less than 2.5 percent to Encana's first half operating cash flow, excluding hedges.

"This is another step in advancing our strategy. By further focusing our portfolio, we are making Encana more efficient as we proceed through the second half of 2015 and into 2016," said

Doug Suttles, Encana President & CEO. "This transaction delivers significant proceeds that we'll use to strengthen our balance sheet. In addition, it eliminates our midstream commitments in the Haynesville and captures ongoing revenue upside through a gas marketing arrangement. I'd like to congratulate GeoSouthern on securing a high-quality natural gas asset along with a talented, safety-conscious field staff."

Encana'sHaynesville natural gas assets include approximately 112,000 net acres of leasehold, plus additional fee mineral lands. Collectively, they represent Encana's total position in northern Louisiana. Encana operates approximately 300 wells in the area. Estimated year-end 2014 proved reserves were 720 billion cubic feet equivalent (Bcfe) of natural gas.

The sale of Encana'sHaynesville assets is subject to satisfaction of normal closing conditions, as well as regulatory approvals and post-closing adjustments, and is expected to close in the fourth quarter of 2015 with an effective date of January 1, 2015.

Jefferies LLC, Credit Suisse and Gordon Arata McCollam Duplantis & Eagan, LLC advised Encana on the transaction. GeoSouthern was advised by Kirkland & Ellis and Thompson & Knight.

Encana Corporation

Encana is a leading North American energy producer that is focused on developing its strong portfolio of resource plays, held directly and indirectly through its subsidiaries, producing natural gas, oil and natural gas liquids (NGLs). 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.