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New York, NY April 20, 2004 Brian Ferguson Executive Vice-President, Corporate Development Delivering Growth & Returns IPAA Oil & Gas Investment Symposium.

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Presentation on theme: "New York, NY April 20, 2004 Brian Ferguson Executive Vice-President, Corporate Development Delivering Growth & Returns IPAA Oil & Gas Investment Symposium."— Presentation transcript:

1 New York, NY April 20, 2004 Brian Ferguson Executive Vice-President, Corporate Development Delivering Growth & Returns IPAA Oil & Gas Investment Symposium

2 In the interest of providing EnCana Corporation (“EnCana” or the “Company”) shareholders and potential investors with information regarding the Company, including management’s assessment of the Company’s future plans and operations, certain statements and graphs throughout this presentation contain “forward-looking statements” within the meaning of the United States Private Securities Litigation Reform Act of 1995. Forward-looking statements in this presentation include, but are not limited to, statements and graphs (collectively “statements”) with respect to: future economic performance (including projections of CAGR); the projected percentage of the Company’s production from resource plays by 2007; projected production lifespan and decline characteristics applicable to resource play properties and the scalability of resource plays; the projected size of the Company’s unbooked visible resource holdings; projected growth (including production and return on capital employed); production (oil, natural gas and liquids) estimates for various regions and projects for 2004 and beyond; projected decline rates through 2015; projected growth of Canadian and US assets over the next several years; projected future production capacity of the Foster Creek and Christina Lake projects; projected exploration areas for 2004 including New Ventures areas; the anticipated impact of the Company’s risk mitigation activities for 2004-2005; projections relating to the Company’s debt to capitalization ratio; projections relating to production and sales growth from the Company’s various projects and initiatives, including: Suffield, SAGD for 2004 and beyond, the UK for 2004-2007 and Ecuador for 2004 and beyond; estimated total sales of oil, liquids and natural gas 2004; anticipated drilling activity in various regions for 2004 and beyond; and the expected rates of return from certain capital expenditure projects. 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 specific, 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 presentation include, but are not limited to: volatility of crude oil and natural gas prices, fluctuations 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, natural gas and liquids from resource plays and other sources not currently classified as proved or probable reserves, the Company’s ability to replace and expand oil and gas reserves, the Company’s ability to either generate sufficient cash flow 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, political and economic conditions in the countries in which the Company operates including Ecuador; 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 filings 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 profitably 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 presentation, which are made as of the date hereof, and 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 presentation are expressly qualified by this cautionary statement. Gas to oil conversion ratio 6:1 throughout. Sales forecasts reflect the mid-point of current public guidance on an after royalties basis. Current Corporate Guidance assumes a U.S. dollar exchange rate of $0.73 for every Canadian dollar. Future Oriented Information

3 Note Regarding Oil and Gas Disclosure EnCana's disclosure of reserves data and other oil and gas information is made in reliance on an exemption granted to EnCana by Canadian securities regulatory authorities which permits it to provide such disclosure in accordance with U.S. disclosure requirements. The information provided by EnCana may differ from the corresponding information prepared in accordance with Canadian disclosure standards under National Instrument 51-101 (NI 51-101). The reserves quantities disclosed in this presentation represent net proved reserves calculated using the standards contained in Regulation S-X of the U.S. Securities and Exchange Commission. Further information about the differences between the U.S. requirements and the NI 51-101 requirements is set forth under the heading "Note Regarding Reserves Data and Other Oil and Gas Information" in EnCana's Annual Information Form. In this presentation, certain natural gas volumes have been converted to barrels of oil equivalent (BOEs) on the basis of six thousand cubic feet (mcf) to one barrel (bbl). BOEs may be misleading, particularly if used in isolation. A BOE conversion ratio of six mcf to one bbl is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent equivalency at the well head.

4 To Deliver Growth & Returns Our Commitment to Investors Reserves Production $ ROCE NAV

5 EnCana’s Cornerstones

6 Strategic Focus North American Resource Play Leadership - Natural gas - In-situ oilsands Focused International Program - U.K. / Ecuador oil - New ventures exploration upside

7 Quality Assets Concentrated, Controlled, Low Cost, Long Life Onshore North America: _____________ 17 million net undeveloped acres Low geologic risk Identified production and reserves growth on existing land Gas Resource Plays Oil Resource Plays EnCana Corporation Land

8 Current Forecast 2007 60% 40% 80% 20% Resource Plays Conventional Plays Quality Assets North American Resource Plays Divestments may accelerate the pace…. Resource play – an accumulation of hydrocarbons known to exist over a large areal expanse and/or thick vertical section, which when compared to a conventional play, typically has a lower geological and/or commercial development risk and lower average decline rate.

9 Low Country Risk Profile North America Dominated Portfolio Sales Volumes (1) (1) After royalties on a BOE basis, excludes Syncrude Proved Reserves (1) 2003 Year-end 2003 2003 Net wells drilled : 5,632

10 Low Reserve Risk Profile Independently Evaluated Reserves 100% of reserves externally evaluated annually 203% production replacement FD&A costs of $8.75 in 2003 Huge, unbooked visible resource holdings MMBOE Note: Reserves as at December 31, 2003; Reserve additions are net of dispositions

11 Source: Ross Smith Energy Group Ltd. US$/BOE 2003 Upstream Operating plus G&A Costs Margin Advantage

12 IRR* > 15% New Exploration / Oilsands > 20% Exploitation PIR** = NPV/Cost PIR @ 9%>0.3 PIR @ 0%>1.0 Supply Cost*** < US $3.25/MMBtu Nymex < US $22.00/bbl WTI *Thresholds: (Fully Risked, After Tax, using EnCana’s price deck) ** PIR - Profit / Investment ratio = net present value divided by discounted capital *** The flat Nymex or WTI price required for each project to generate returns in excess of the corporation’s cost of capital taking into consideration location, oil and gas quality and the company’s hedging strategy. Investment Discipline Growing ROCE and NAV RISK ADJUSTED FULL CYCLE RETURN CRITERIA

13 A&D Discipline Continuously improving our asset base Sales Sold higher cost, lower return assets: - Syncrude (~32,000 bbls/d) - Petrovera (~20,000 bbls/d - Other E&P (~18,000 BOE/d) Announced planned divestitures of Western Canada conventional assets (40,000 – 60,000 BOE/d) Acquisitions Made 4 tuck-in acquisitions in areas with competitive advantages: - Jonah (acquired from Williams - Piceance Basin (acquired from El Paso) - Ecuador (acquired from Vintage) - Scott/Telford (acquired from Amerada Hess and Shell) Announced offer to acquire Tom Brown, Inc. EnCana’s Asset Base Since April 2002…

14 Negotiated friendly transaction Cash tender offer of US$48.00 per share Approved by Tom Brown and EnCana BOD EnCana entitled to break fee with right to match any competing offer Approvals: Hart-Scott-Rodino and >50% acceptance of tender by shareholders Close prior to June 1, 2004 Offer to Acquire Tom Brown, Inc. Summary of Transaction Terms

15 Tom Brown Operations Map Piceance 36 MMcfe/d East Texas 77 MMcfe/d Permian 53 MMcfe/d Wind River 51 MMcfe/d Western Canada 23 MMcfe/d EnCana Operations Tom Brown Operations Paradox 62 MMcfe/d Green River 23 MMcfe/d

16 Financial Strength Strong Balance Sheet  Debt to Capitalization of 34% at year end 2003  Debt to EBITDA of 1.3x at year end 2003 Investment Grade Credit Ratings  A- (S&P), Baa1 (Moody’s), A (low) DBRS 5% Share Buyback in 2003 Increased Dividend Consistent Price Hedging Program Fully Funded Pensions

17 Financial Strength 2003 Free Upstream Operating Cash Flow Free Cash Flow from Continuing Operations $2.5 Billion 2003 Upstream cash flow = US$4.4 billion

18 A Company Built on a Resource Play Foundation Land Base Control Huge, Unconventional Resource In Place Technology Unlocks the Resource Continuous Cost Reduction Corporate Culture Competencies Resource Plays

19 North American Natural Gas Record Production After 28 Years Suffield, Canada MMcf/d 250 200 150 100 0 50 1975 1980 1985 1990 1995 2000 2003 Resource Play Note: Data shown on a before royalties basis

20 The Resource Play Difference Decline Rates That Decrease

21 Resource Play Management System Discipline through the Life Cycle 1. Focused Exploration - You find what you look for 2. Crack the Technical Nut 3. Control the Land and Infrastructure 4. Risk Mitigation - Engage External Stakeholders 5. Large Scale, Repeatable Manufacturing Style Developments 6. Lookback and Learnings; Continuous Improvement

22 North American Natural Gas Growth Leadership Bcf/d Pro Forma CAGR 10% * range * 3 year CAGR based on mid-point of 2004F guidance range

23 Canadian Gas Production Western Canada lands include: - Medicine Hat Shallow gas - NE B.C. - CBM New capital going mainly to lower decline resource plays MMcf/d Pro Forma

24 USA Gas Resource Plays Leveraging Tight Gas Core Competency 1.5 million net undeveloped acres (USA onshore) Deep, tight gas resource plays Approximately 3.1 Tcfe of booked proved reserves (after royalties) Pro forma MMcf/d CAGR 33% * range * 2 year CAGR based on mid-point of 2004F guidance range

25 Growing Oil and NGLs Production Visible Growth Mbbls/d * Data shown excludes Syncrude; 3 year CAGR based on mid-point of 2004F guidance range Pro Forma CAGR 10% * range

26 Heavy Oil Resource Plays Applying Technology Mbbls/d Pro Forma SAGD unlocks resources at: - Foster Creek - Christina Lake Waterflood increases recovery factor at: - Pelican Lake CAGR 28% * * 2 year CAGR based on mid-point of 2004F guidance range

27 Ecuador New Oil Pipeline on Stream Approximately 1.0 million net undeveloped acres Largest private producer in Ecuador Recently completed OCP Pipeline facilitates significant growth Pro forma Mbbls/d range

28 UK Central North Sea Buzzard Start-up in Late 2006 Increased working interest and assumed operatorship at Scott and Telford Buzzard anticipated start- up Q4, 2006 Buzzard plateau production expected to be 75,000 bbls/d, net to EnCana MBOE/d range

29 Exploration Upstream Division Atlantic Canada UK North Sea Gulf of Mexico Brazil Chad Middle East Mackenzie Delta W. Canada Rockies Ecuador

30 Upstream Core Capital 2004 Breakdown By Type 58% 35% 7% Land & Seismic Drilling & Completions Facilities By Risk 63% 14% 10% Gas Exploitation Oil Exploitation Core Area Exploration Core Capital: US$3.7 – 4.0 Billion * Percentages based on mid guidance capital and are before the Tom Brown acquisition 12% Long-term Projects New Ventures Exploration 1-2% Assuming $0.73 Canada/US exchange rate

31 Financial and Operating Results On Track Earnings Per Share* +98% US$2.87/share* Cash Flow Per Share BOE/d Sales +68% US$9.30/share +9% 650,200 BOE/d $ $ * Earnings have been adjusted to remove foreign exchange and tax rate gains Note: Per share and sales % change based on 2003 vs 2002 pro forma; Reserves as at December 31, 2003 Proved Reserves +12% 2,359 MMBOE

32 What Drives Our Performance Focused strategy, anchored in North American resource plays Low resource and country risk Low unit cost structure High performance value-focused business unit organization Disciplined portfolio management and capital investment criteria and project execution All decisions driven by increasing NAV per share Value Creating Growth

33 To Deliver Growth & Returns Our Commitment to Investors Reserves Production $ ROCE NAV

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