Borealis In-Situ Project. Public Disclosure September 2007

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1 Borealis In-Situ Project Public Disclosure September Borealis In-Situ PDD September 2007

2 Table of contents Summary Profi le of EnCana Guiding principles Project location Project overview Project technology Project facilities The schedule The people The environment Stakeholder consultation Contact information Future oriented information 2

3 Summary As a result of its partnership with ConocoPhillips in January of this year, EnCana has an integrated North American heavy oil business with ownership in the entire value chain from the oilsands reservoir to wholesale products production from a refi nery. EnCana has a proven track record in developing steam-assisted gravity drainage (SAGD) projects and is one of the largest holders of oilsands lands with a 50 percent working interest in two producing SAGD resource plays, Foster Creek and Christina Lake in Alberta; and a 100 percent interest in the Senlac SAGD project in Saskatchewan. Foster Creek has consistently been among the best SAGD projects in the industry, and it, along with the company s Christina Lake project, has a steam to oil ratio among the lowest of all SAGD projects in North America. Additionally, the Senlac project was one of the early proving grounds in the development of EnCana s SAGD technology and has recently completed 10 years of operations. EnCana is proposing a fourth thermal project called Borealis, where it has been conducting exploration activities since Phase one of Borealis is located in the northern portion of the western Canadian oilsands area. This document outlines the scope of the Borealis In-Situ Project and is the fi rst step in acquiring regulatory approval for the project. In-situ refers to the in-place recovery of deeply buried petroleum in semisolid or solid (bitumen) natural deposits. EnCana invites public feedback at any time in the process and believes in the importance of community input on its proposed or existing activities through public consultation in accordance with industry and regulatory guidelines, and through its own efforts to engage with nearby residents, landowners, aboriginal communities and other key stakeholders. EnCana is proposing a fourth thermal project called Borealis, where it has been conducting exploration activities since Borealis In-Situ PDD September 2007

By changing the way we extract the oil replacing

re-engineering our well pads and redesigning our

surface footprint of our SAGD pads by 25 percent

4 By changing the way we extract the oil replacing natural gas pumps with electric ones and through re-engineering our well pads and redesigning our surface facilities, we have reduced the average surface footprint of our SAGD pads by 25 percent since Corporate Responsibility Report Executive Summary 4

5 Profile of EnCana EnCana is a North American industry leader in unconventional natural gas and integrated oilsands development. Headquartered in Calgary, it has 12 key resource plays (nine gas and three oil), all of which stem from a 26 million net acre onshore land base. While natural gas represents more than 80 percent of EnCana s current production, heavy oil is expected to grow from about 50,000 to 400,000 barrels per day and bitumen refi ning capacity from about 50,000 to 275,000 barrels per day by the year The company has been active in oilsands since 1997, when the Senlac project and the pilot phase of Foster Creek began. EnCana looks for continuous improvements throughout its operations, utilizing the bestavailable processes to ensure it achieves the lightest environmental footprint. The company commits to ensuring the health, safety and welfare of its employees and contractors, visitors to our worksites, and communities who may be affected by our activities. EnCana contributes to the strength and sustainability of the communities where it operates by partnering with employees, community organizations and other businesses. 5 Borealis In-Situ PDD September 2007

6 We are committed to an area for a long period of time. Given this, it is important we work with stakeholders so that we can address concerns and continue to operate with their support. 6

Guiding principles EnCana s guiding principles are based on its Corporate Constitution, its Business Conduct & Ethics Practice and its Corporate Responsibility Policy.

7 Guiding principles EnCana s guiding principles are based on its Corporate Constitution, its Business Conduct & Ethics Practice and its Corporate Responsibility Policy. EnCana s Corporate Constitution defi nes the company s values and expectations of its workforce. EnCana s Business Conduct & Ethics Practice helps staff identify and manage their day-to-day work in an ethical manner. EnCana s Corporate Responsibility Policy commits the company to conducting its business in a manner that is fi scally, environmentally and socially responsible. EnCana follows the principles of consultation, communication and capacity building as it strives to make a positive difference in the communities where it operates. 7 Borealis In-Situ PDD September 2007

8 Project location EnCana has been conducting exploration activities on the proposed Phase one of the proposed Borealis In-Situ Project is located in Townships 93 (northern portion) and 94, Range 3, W4M in the northern portion of the western Canadian oilsands area, approximately km northeast of Fort McMurray. EnCana holds a 100 percent interest in the proposed project area which is approximately 36 sections (9,300 hectares). site since 2000 and has a proven track record in developing SAGD projects Wood Buffalo National Park Birch River Mikisew Lake Claire Cree First Nation Fort Chipewyan Lake Athabasca Athabasca Chipewyan First Nation R05W4 R03W4 FireBag River T Royal Municipality of Wood Buffalo Birch Mountains Wildland Bitumount Fort Fort McKay Mackay First Nation Mildred Lake Athabasca River Fort McMurray Suncor Firebag In-situ Project Steepbank R 63 Firebag River iver Gregoire Lake Marguerite River Wildland Clearwater River 955 P Steepbank River Proposed Project Area Telephone Lake Marguerite River Wildland T094 Fort McMurray #468 Gordon First Nation Lake Anzac Lac La Loche Scale in Kilometers T North Wabasca Lake Christina Lake Thermal Project Chard 881 Conklin Cheecham Christina River Chipewyan Prairie First Nation Winefred Lake ALBERTA SASKATCHEWAN Borealis Lease Area Proposed Project Area EnCana Other Development Area Expressway / Highway Railway First Nation Reserve Municipality Boundary National Park Provincial Park Calling Lake Foster Creek Thermal Project Wildland Park Military Range Athabasca 858 Lac La Biche Lac La Biche Cold Lake Air Weapons Range/ Primrose Primrose Lake Range Lake Scale in Kilometers 663 DATE:August30,2007 PROJECTION: UTM 12 NAD

Project overview The preliminary development plan for Borealis will incorporate multi-well production pads and horizontal wells, with centralized steam generation, bitumen treating and produced water

9 Project overview The preliminary development plan for Borealis will incorporate multi-well production pads and horizontal wells, with centralized steam generation, bitumen treating and produced water recycling facilities. Phase one of the Borealis project will be capable of producing 35,000 barrels per day over 25 years. The current estimate of recoverable reserves for the initial project development area is over 300 million barrels of bitumen. The project will include displacement of a layer of water in contact with the bitumen prior to initiating SAGD operations. The development plan also includes the need for roads, a pipeline to supply fuel gas, an electrical power line, a diluted bitumen sales pipeline, and a diluent supply pipeline. Applications for any future development will be fi led and communicated separately. The design and construction of the Borealis In-Situ Project is expected to require 2.5 million person-hours and is expected to create 90 full-time jobs once it moves to operations in EnCana s proposed Borealis In-Situ Project will be slightly smaller in size than EnCana s current operations at Foster Creek pictured above. 9 Borealis In-Situ PDD September 2007

10 EnCana utilizes SAGD technology in its in-situ oilsands developments, which is a thermal recovery process using paired horizontal wells. Project technology The fi rst of the two horizontal wells the bitumen producer well is placed near the bottom of the reservoir. Steam is injected into the second horizontal well, which is placed approximately fi ve metres above and parallel to the producer well. The steam heats the bitumen which enables gravity to assist it to drain into the producer well below, which then (combined with condensed water from the steam) comes through the producer wellbore to the surface. The proposed bitumen recovery process at Borealis is unique due to the presence of a water zone on top of the bitumen within the McMurray Formation. In order to both protect this water resource and allow for effective bitumen recovery, it will be necessary to displace the water prior to commencing steaming activities. EnCana plans to displace the top water by injecting air into the top water zone, so the water is not affected by SAGD operations. 10

Project facilities The horizontal well pairs described on the previous page are drilled from a single well pad. Multiple well pairs will be drilled from the same well pad.

11 Project facilities The horizontal well pairs described on the previous page are drilled from a single well pad. Multiple well pairs will be drilled from the same well pad. The well pads are connected via piping to the main plant. The piping brings steam from the plant to the well pads for injection into the reservoir and also delivers the bitumen and water mixture produced from the well pairs back to the commercial plant for processing. At the commercial plant the bitumen, water and gas are separated. Any gas produced is used as fuel for steam generation. The water is softened to be reused for steam generation. The bitumen is diluted with a diluent and then pumped through the oil export pipeline. The plant is designed to re-use the produced water for steam generation. It is expected that approximately fi ve percent of the water required for steam generation will be sourced from groundwater. In addition to this makeup water, water is required for personnel use and plant utilities. The combined water usage sourced from groundwater is expected to be 700 m 3 /day. The people Approximately 2.5 million person-hours will be required for drilling and construction of the Borealis project. During the drilling and construction period the workforce is estimated to peak at over 500 personnel, while in operations a staffi ng level of 90 personnel is expected. Wherever possible, EnCana strives to procure services and supplies from qualifi ed local service providers and is committed to working with small teams to ensure quality of service, safety and continuous work. Because the water processed through the plant is cleaned and softened and sent back to the steam generators, over 90 percent of the water used at the facility will be reused or recycled. 11 Borealis In-Situ PDD September 2007

12 The schedule Pending regulatory approvals and market conditions As part of the regulatory process for the proposed Borealis In-Situ Project, EnCana will: prepare an Environmental Impact Assessment based on the fi nal Terms of Reference (TOR) submit the Environmental Impact Assessment to Alberta Environment and Alberta Energy Utilities Board as part of its SAGD Scheme Application consult with the public, record any concerns or suggestions, and communicate how these concerns have been addressed Borealis 35,000 bbl/d Preliminary Commercial Project Schedule Public Consultation Environmental Assessment Prepare & Submit SAGD Application Regulatory Review All Weather Road Construction Air Injection/Water Diversion SAGD Detailed Engineering SAGD Field Construction Steam Injection Oil Production subject to Company approval 12

13 The environment EnCana is committed to oilsands extraction which minimizes environmental impact (air, land, water). EnCana s existing oilsands projects, Christina Lake and Foster Creek, enjoy industry leading low steam oil ratios. A low steam oil ratio results in reduced natural gas consumption, less air emissions, a reduction in surface equipment (smaller surface footprint), and lower volume of water use. To reduce overall land disturbance associated with the Borealis project and to support responsible development of Alberta s resource, EnCana has drawn upon its experiences and learnings from its Christina Lake and Foster Creek projects in the development of its plans for this project. In addition, EnCana is committed to working with area stakeholders (forestry, oil and gas companies, municipality, trappers, etc.) to determine the most appropriate access to the project area in an effort to minimize surface disturbance. Existing roads and cleared sites will be used wherever possible, and constraints mapping was used to avoid disturbing environmentally sensitive areas. Development plans for the project will also include: incorporation of land disturbance minimization initiatives such as: horizontal wells, multiwell pads and centralized facilities low impact seismic lines a fi ve-year reforestation plan a waste disposal plan for drilling waste water management practices that encourage protection and conservation a progressive reclamation plan The results of the ongoing baseline environmental studies that EnCana conducts in the Borealis area will be included in the Environmental Impact Assessment. The Assessment will provide information on the environmental resources and the impacts of the construction, operation and reclamation of the project. Borealis Area 13 Borealis In-Situ PDD September 2007

Stakeholder consultation EnCana believes in building opportunities and understanding for its communities and stakeholders. The three guiding principles it follows to achieve that are: Building trust.

EnCana does not work in isolation of stakeholders, but strives to fi nd collaborative resolution of issues.

September 2007 Notice for the Proposed Terms of Reference for the Environmental Impact Assessment (EIA) Community open houses Notice for the Joint Alberta Environment and Alberta Energy and Utilities

14 Stakeholder consultation EnCana believes in building opportunities and understanding for its communities and stakeholders. The three guiding principles it follows to achieve that are: Building trust. EnCana believes transparency is vital, as is open and honest dialogue with stakeholders. Dialogue and consultation. EnCana expects the free expression of ideas and seeks common ground. Collaboration. EnCana does not work in isolation of stakeholders, but strives to fi nd collaborative resolution of issues. Project activity Formal opportunity for stakeholder input Proposed timing Project disclosure/announcement EnCana informs stakeholders and regulators about preliminary development plans for Borealis. September 2007 Notice for the Proposed Terms of Reference for the Environmental Impact Assessment (EIA) Community open houses Notice for the Joint Alberta Environment and Alberta Energy and Utilities Board Regulatory Application Project updates Provide written input to Alberta Environment and to EnCana on the Proposed Terms of Reference developed for the EIA. Typical notice period is 45 days. Attend and provide feedback at EnCana s formal presentation to area stakeholders on development plans for the Borealis project. File a written submission on EnCana s application. Minimum notice period is 30 days. Provide feedback at any future community open house(s) held as the project progresses, or at area stakeholder presentations. EnCana will continue to follow-up on stakeholder input. September 2007 September to November 2007 January/February 2008 ongoing 14

15 Contact information For more information or to provide comments about EnCana s Borealis Project, please contact: Jennifer Pendura Stakeholder Relations borealis.project@encana.com Phone: (403) (Calgary) 1 (888) (long-distance) Future oriented information In the interest of providing EnCana Corporation ( EnCana or the Company ) shareholders and potential investors with information regarding the Company and its subsidiaries, including management s assessment of the Company s future plans and operations, certain statements and graphs throughout this document contain forwardlooking statements within the meaning of the United States Private Securities Litigation Reform Act of 1995 or forward-looking information within the meaning of applicable Canadian securities legislation. Forward-looking statements or information in this document include, but are not limited to, statements and graphs (collectively statements ) with respect to: EnCana s projected heavy oil production and refi ning capacity through 2015, projections and estimates relating to the proposed Borealis project, including estimates of production (both per day and in the aggregate) and projected producing life, projections of the workforce required for construction and operation, estimates of water source, usage, and recycling, and the projected development plans and timing for the Borealis project. You are cautioned not to place undue reliance on forward-looking information, as there can be no assurance that the plans, intentions or expectations upon which it is based will occur. By its nature, forward-looking information involves numerous assumptions, known and unknown risks and uncertainties, both general and specifi c, that contribute to the possibility that the predictions, forecasts, projections and other forward-looking statements will not occur. Although the Company 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. Some of the risks and other factors which could cause results to differ materially from those expressed in the forward-looking statements contained in this document include, but are not limited to: volatility of and assumptions regarding crude oil and natural gas prices, assumptions based upon the Company s current guidance, fl uctuations in currency and interest rates, product supply and demand, market competition, risks inherent in the Company s North American and foreign oil and gas and midstream operations, risks inherent in the Company s marketing operations, including credit risks, imprecision of reserves estimates and estimates of recoverable quantities of oil, bitumen, natural gas and liquids from resource plays and other sources not currently classifi ed as proved reserves, the ability of the Company and ConocoPhillips to successfully manage and operate the North American integrated heavy oil business and the ability of the parties to obtain necessary regulatory approvals, refi ning and marketing margins, potential disruption or unexpected technical diffi culties in developing new products and manufacturing processes, potential failure of new products to achieve acceptance in the market, unexpected cost increases or technical diffi culties in constructing or modifying manufacturing or refi ning facilities, unexpected diffi culties in manufacturing, transporting or refi ning synthetic crude oil, risks associated with technology, the Company s ability to replace and expand oil and gas reserves, the Company s ability to either generate suffi cient cash fl ow from operations to meet its current and future obligations or obtain external sources of debt and equity capital, general economic and business conditions, the Company s ability to enter into or renew leases, the timing and costs of well and pipeline construction, the Company s ability to make capital investments and the amounts of capital investments, imprecision in estimating the timing, costs and levels of production and drilling, the results of exploration and development drilling, imprecision in estimates of future production capacity, the Company s ability to secure adequate product transportation, uncertainty in the amounts and timing of royalty payments, imprecision in estimates of product sales, changes in environmental and other regulations or the interpretations of such regulations, political and economic conditions in the countries in which the Company operates, the risk of war, hostilities, civil insurrection and instability affecting countries in which the Company operates and terrorist threats, risks associated with existing and potential future lawsuits and regulatory actions brought against the Company, and such other risks and uncertainties described from time to time in the Company s reports and fi lings with the Canadian securities authorities and the United States Securities and Exchange Commission. Accordingly, the Company cautions that events or circumstances could cause actual results to differ materially from those predicted. Statements relating to reserves or resources or resource potential are deemed to be forward-looking statements, as they involve the implied assessment, based on certain estimates and assumptions that the resources and reserves and resource potential described exist in the quantities predicted or estimated, and can be profi tably produced in the future. You are cautioned that the foregoing list of important factors is not exhaustive. You are further cautioned not to place undue reliance on forward-looking statements contained in this document, which are made as of the date hereof, and, except as required by law, the Company undertakes no obligation to update publicly or revise any forward-looking information, whether as a result of new information, future events or otherwise. The forward-looking statements contained in this document are expressly qualifi ed by this cautionary statement. 15 Borealis In-Situ PDD September 2007

16 September

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