2011. In this annual information form - Encana

Cutbank Ridge
Cutbank Ridge is a key resource play located in the Canadian Rocky Mountain foothills, southwest of Dawson
Creek, British Columbia. Key producing horizons in Cutbank Ridge include the Montney, Cadomin and Doig
formations. Montney and Cadomin are almost exclusively being developed with horizontal well technology.
Significant improvements have been achieved with respect to horizontal well completions with the application of
multi-stage hydraulic fracturing. In 2011, Encana drilled approximately 55 net wells in the area and production
after royalties averaged approximately 529 MMcf/d of natural gas and approximately 3.2 Mbbls/d of oil and NGLs.
At December 31, 2011, Encana controlled approximately 724,000 net acres covering the deep basin Montney
formation, with approximately 252,000 net acres located within Encana’s core development area near Dawson
Creek, British Columbia. Encana has tested Montney extensively over the last several years and by applying
advanced technology has reduced overall development costs significantly, achieving a greater than 65 percent
reduction in costs on a completed interval basis over the past five years.
Encana holds a 60 percent working interest in the Sexsmith gas plant, which has sour gas processing capacity of
approximately 125 MMcf/d and an additional 50 MMcf/d of sweet gas processing capacity.
In December 2011, Encana announced the sale of its interest in the Hythe and Steeprock natural gas processing
plants, including compression and associated gathering pipelines, for proceeds of approximately C$920 million.
The natural gas plants had sour gas processing capacity of approximately 374 MMcf/d with an additional 142
MMcf/d of sweet gas processing capacity. The sale of the natural gas processing plants closed on February 9,
2012 and the proceeds were received. As part of the sale, Encana has entered into an agreement for firm
gathering and processing services in the Cutbank Ridge area.
During 2011, Encana entered into negotiations with Mitsubishi to jointly develop certain undeveloped lands owned
by Encana. On February 17, 2012, Encana announced that the Company and Mitsubishi had entered into a
partnership agreement for the development of Cutbank Ridge lands in British Columbia. Under the
agreement, Encana will own 60 percent and Mitsubishi will own 40 percent of the partnership. Mitsubishi will
pay approximately C$1.45 billion on closing and will invest approximately C$1.45 billion in addition to its 40
percent of the partnership's future capital investment for a commitment period, which is expected to be about five
years, thereby reducing Encana's capital funding commitments to 30 percent of the total expected capital
investment over that period. The transaction does not include any of Encana’s current Cutbank Ridge production,
processing plants, gathering systems or the Company’s Alberta landholdings. The transaction is expected to
close by the end of February 2012.
In 2010, Encana signed a deep cut processing agreement securing approximately 90 MMcf/d of firm processing
capacity at Gordondale. The agreement allows the Company to extract NGLs from its natural gas stream. The
addition of deep cut facilities in Gordondale, expected to come on-stream in 2012, will provide additional capacity
for Encana’s NGL extraction initiative.
Bighorn
Bighorn is a key resource play in west central Alberta. The primary focus is on exploiting multi-zone stacked
Cretaceous sands in the Deep Basin. The primary properties in Bighorn are Resthaven, Kakwa, Redrock and
Berland. In 2011, Encana drilled approximately 40 net wells in the area and production after royalties averaged
approximately 230 MMcf/d of natural gas and approximately 3.5 Mbbls/d of oil and NGLs. At December 31, 2011,
Encana controlled approximately 514,000 gross acres (384,000 net acres) in the resource play.
Encana has a working interest in a number of natural gas plants within Bighorn. The Resthaven plant, in which
Encana has an approximately 70 percent working interest, has a capacity of approximately 100 MMcf/d. In
October 2011, Encana signed an agreement that is expected to result in an unrelated third-party investing
approximately $230 million to expand the Resthaven plant’s processing and NGL extraction capacity. The
expansion is scheduled to come on-stream in late 2013.
Encana owns 50 percent of the Kakwa gas plant and has firm processing capacity for the remaining 50 percent.
The plant has a capacity of approximately 60 MMcf/d. Encana also holds a 24 percent working interest in the
Berland River plant, which has a capacity of approximately 165 MMcf/d.
Encana Corporation
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Annual Information Form (prepared in US$)