EnCana's Proved Reserves Grow 12% to 2.4 Billion BOEs

Encana International & Offshore
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Encana Onshore North America
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EnCana continued its strong reserves and sales growth in 2003, adding 482 million barrels of oil equivalent (BOE) of proved reserves, net of royalties. The company achieved 203 percent production replacement, essentially all of which was the result of its successful 5,600 net well drilling program and positive revisions. Daily oil, natural gas and natural gas liquids sales increased by more than 9 percent to about 650,200 BOE, after royalties, from pro forma 2002 sales. All of EnCana's proved reserves are based on reports prepared by independent qualified reserves evaluators.

"During EnCana's second year of operations, we have increased the intrinsic value of each share. Achieving production replacement of more than two times resulted in reserves growth exceeding production growth - a very healthy outcome. This was achieved at a finding, development and acquisition cost of US$8.75 per BOE. Adding 1.7 trillion cubic feet of North American gas entirely through the drill bit is the clearest possible demonstration of the growth potential of our huge resource play assets," said Gwyn Morgan, EnCana's President & Chief Executive Officer.

IMPORTANT NOTE: EnCana's 2003 year-end reserves and operating results follow U.S. protocols, which report reserves and sales on an after-royalties basis. Canadian protocols report sales and reserves on a before-royalties basis. See note 1 herein. All 2003 financial information contained in this news release is in U.S. dollars and is based on preliminary, unaudited financial results. All references to production, sales and financial information for full year 2002 in this news release for EnCana are presented on a pro forma basis as if the merger of PanCanadian Energy Corporation ("PanCanadian" or "PCE") and Alberta Energy Company Ltd. ("AEC") had occurred at the beginning of 2002. All results exclude EnCana's former interest in Syncrude which was sold in 2003 and is treated as a discontinued operation.

EnCana reserves grow 12 percent in 2003
EnCana's proved reserves increased from 2.11 billion to 2.36 billion BOE, a 12 percent increase over year-end 2002. The company added 478 million BOE of proved reserves through the drill bit, 55 million BOE by acquisition and divested of 51 million BOE for total net additions of 482 million BOE before production. These net reserves additions were split 1.7 trillion cubic feet of natural gas reserves and 204 million barrels of crude oil and natural gas liquids. These additions represent 203 percent of production of 237 million BOE in 2003. Reserves at year-end were 8.4 trillion cubic feet of natural gas and 957 million barrels of crude oil and natural gas liquids. The company's proved reserve life index remained at 10 years.

Entire reserves base fully evaluated externally
EnCana has a reserves committee of independent board members which reviews the qualifications and appointment of the independent qualified reserve evaluators. The committee also reviews the procedures for providing information to the evaluators. All booked reserves are based upon annual evaluations by the independent qualified reserve evaluators. The evaluations are conducted from the fundamental geological and engineering data. EnCana believes this is the most stringent standard of reserves governance available to the industry, and that it goes well beyond external reviews or audits of reserves.

"At EnCana's inception two years ago, we decided to adopt one of the predecessor company's practices and have the entire reserve base of the merged company externally evaluated. This resulted in some downward revisions that were previously disclosed in our year-end 2002 reserves report, but also placed us on a very solid base going forward," Morgan said.

EnCana's 2003 reserves growth was concentrated primarily in North America, which contains about 90 percent of the company's reserves and production. Approximately 60 percent of the reserves additions were North America natural gas. Major areas of reserves growth were in the Jonah and Mamm Creek gas fields in the U.S. Rockies, the Greater Sierra and Cutbank Ridge properties in northeast British Columbia and in coalbed methane lands and oilsands in eastern Alberta. Consistent with its practice of not booking proved reserves until commercial development is proceeding, the company has not booked any proved reserves from its discoveries in the Gulf of Mexico or off the East Coast of Canada.

Proved undeveloped reserves represent 39 percent of total proved reserves. This level of proved undeveloped reserves is consistent with EnCana's resource play focus and production growth outlook. The undeveloped gas reserves are concentrated primarily in the U.S. Rockies and northeast B.C. resource plays, and can be developed with in-fill or step-out drilling. The undeveloped oil reserves are primarily at Foster Creek in Alberta and Buzzard in the U.K. central North Sea. The company plans to develop about 80 percent of its entire inventory of proved undeveloped reserves over the next three years. Future capital associated with proved undeveloped reserves is estimated at approximately US$5.55 per BOE, the sum of which would equate to about one year of EnCana's typical capital program.

Finding, development and acquisition capital
Capital expenditures associated with the finding, development and acquisition of reserves in 2003 were about $4,650 million. Midstream and marketing capital was about $275 million and corporate capital was about $110 million. Another $285 million was invested primarily in leased equipment purchases and a U.S. gas gathering system expansion, resulting in total capital investment of approximately $5,320 million. EnCana also had proceeds from divestitures totaling about $2,285 million, which includes $385 million of debt assumption by a purchaser, resulting in net cash proceeds of $1,900 million. EnCana's total 2003 net capital was about $3,035 million. During 2003, the average exchange rate was US$0.716 to one Canadian dollar, which is a 12 percent increase from the average 2002 rate of US$0.637 to one Canadian dollar. As a result of the conversion from Canadian to U.S. dollars, approximately US$350 million was added to EnCana's U.S. dollar finding, development and acquisition capital compared to the previous year. Excluding this estimated appreciation in the Canadian dollar, EnCana's 2003 finding, development and acquisition costs would be lower by about US$0.65 per BOE and result in a marginal increase from the 2002 cost of about US$7.95 per BOE.

2003 oil and natural gas sales up more than 9 percent, after royalties
In 2003, EnCana's oil and natural gas sales averaged 650,200 BOE per day, up more than 9 percent from 594,300 BOE per day in 2002 pro forma, excluding Syncrude. This is within EnCana's 2003 sales guidance of between 610,000 and 655,000 BOE per day. Natural gas sales averaged 2.57 billion cubic feet per day, up approximately 8 percent, while oil and natural gas liquids sales averaged 222,500 barrels per day, up about 13 percent. EnCana drilled 5,632 net wells in 2003, comprised of 5,016 development wells and 616 exploration wells.

Sales increases led by U.S. Rockies, Ecuador and SAGD production
Strong natural gas sales increases came from the U.S. Rockies, up nearly 50 percent to average 588 million cubic feet per day. Canadian heavy oil sales averaged 87,900 barrels per day, a 26 percent increase due primarily to the expansion of the company's oilsands production at Foster Creek. Ecuador sales also rose 27 percent to average 46,500 barrels per day. With the new OCP Pipeline now fully operational, current Ecuador sales are about 73,000 barrels of oil per day, more than double the rate one year ago.

Fourth quarter 2003 sales up 13 percent from 2002, after royalties
In the fourth quarter of 2003, EnCana's oil and natural gas sales averaged 713,900 BOE per day, up 13 percent from 632,700 BOE per day in the fourth quarter of 2002. Natural gas sales averaged 2.68 billion cubic feet per day. Gas production was up 9 percent after adjusting for higher levels of withdrawal from storage in the fourth quarter of 2002. Oil and natural gas liquids sales in the fourth quarter of 2003 averaged 266,900 barrels per day, up 32 percent from the same 2002 period. EnCana drilled 1,517 net wells in the fourth quarter of 2003, comprised of 1,306 development wells and 211 exploration wells.

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