EnCana Sells First Shipment of Oil from the New OCP Pipeline

EnCana has sold its first tanker load of Ecuador oil that was shipped on the country's new OCP Pipeline. The oil tanker Fidelity, with a cargo of 705,000 barrels of Napo crude oil, was set to depart today from the Balao loading terminal on the Pacific coast of Ecuador with its cargo headed for markets in the United States.

"This inaugural oil shipment marks a new era of oil production for EnCana and Ecuador," said Gwyn Morgan, EnCana's President & Chief Executive Officer. "With the start up of OCP and the unlocking of the Oriente Basin, EnCana is producing more than 90,000 barrels of oil a day, well on our way to a target of 100,000 barrels per day in 2004." The US$1.4 billion OCP Pipeline, with a design capacity of 450,000 barrels per day, is in the final stages of commissioning. The pipeline is financed 75 percent with non-recourse project debt. EnCana has a 36 percent equity interest in OCP and holds a shipping commitment of 108,000 barrels per day on the pipeline. This major Ecuadorian infrastructure project stretches more than 500 kilometers from the Oriente Basin of Ecuador, across South America's Andes Mountains, to the Pacific coast. The OCP is expected to be fully operational this fall, shipping more than 220,000 barrels per day by year-end and increasing volumes as field productive capacity increases in the years ahead. Ecuador's oil production growth has been constrained until now as the country's only other export pipeline was operating at capacity.

EnCana is producing approximately 60,000 barrels per day from its anchor field in the Tarapoa Block, near the city of Lago Agrio, about 180 kilometers east of Quito, Ecuador's capital. An additional 27,000 barrels per day is being produced from its non-operated Block 15. Development and exploration work is in the early stages on three additional blocks acquired earlier this year, where production is more than 5,000 barrels per day, bringing the company's total Ecuador production to about 92,000 barrels of oil per day. EnCana, which expects to ship another 1 million barrels later this month, plans to market its increased volumes to refiners along the U.S. Pacific coast and Gulf of Mexico.