2011. In this annual information form - Encana

For those reasons, estimates of the economically recoverable natural gas, oil and NGL reserves attributable to
any particular group of properties, classification of such reserves based on risk of recovery and estimates of
future net revenues expected therefrom, prepared by different engineers or by the same engineers at different
times, may vary substantially. Encana’s actual production, revenues, taxes and development and operating
expenditures with respect to its reserves may vary from such estimates, and such variances could be material.
Estimates with respect to reserves that may be developed and produced in the future are often based upon
volumetric calculations and upon analogy to similar types of reserves, rather than upon actual production history.
Estimates based on these methods generally are less reliable than those based on actual production history.
Subsequent evaluation of the same reserves based upon production history will result in variations, which may be
material, in the estimated reserves.
Encana’s hedging activities could result in realized and unrealized losses.
The nature of the Company’s operations results in exposure to fluctuations in commodity prices. The Company
monitors its exposure to such fluctuations and, where the Company deems it appropriate, utilizes derivative
financial instruments and physical delivery contracts to mitigate the potential impact of declines in natural gas and
liquids prices.
Under IFRS, derivative instruments that do not qualify as hedges for accounting purposes, or are not designated
as hedges, are fair valued with the resulting changes recognized in current period net earnings. The utilization of
derivative financial instruments may therefore introduce significant volatility into the Company’s reported net
earnings.
The terms of the Company’s various hedging agreements may limit the benefit to the Company of commodity
price increases. The Company may also suffer financial loss because of hedging arrangements if the Company is
unable to produce natural gas, oil or NGLs to fulfill delivery obligations, or if counterparties to the Company’s
hedging agreements fail to fulfill their obligations under the hedging agreements.
Encana’s operations are subject to the risk of business interruption and casualty losses.
The Company’s business is subject to all of the operating risks normally associated with the exploration for,
development of and production of natural gas, oil and NGLs and the operation of midstream facilities. These risks
include blowouts, explosions, fire, gaseous leaks, migration of harmful substances and liquid spills, acts of
vandalism and terrorism, any of which could cause personal injury, result in damage to, or destruction of, natural
gas and oil wells or formations or production facilities and other property, equipment and the environment, as well
as interrupt operations.
In addition, all of Encana’s operations will be subject to all of the risks normally incident to the transportation,
processing, storing and marketing of natural gas, oil, NGLs and other related products, drilling and completion of
natural gas and oil wells, and the operation and development of natural gas and oil properties, including
encountering unexpected formations or pressures, premature declines of reservoir pressure or productivity,
blowouts, equipment failures and other accidents, sour gas releases, uncontrollable flows of natural gas, oil or
well fluids, adverse weather conditions, pollution and other environmental risks.
The occurrence of a significant event against which Encana is not fully insured could have a material adverse
effect on the Company’s financial position.
Fluctuations in exchange rates could affect expenses or result in realized and unrealized losses.
Worldwide prices for natural gas and oil are set in U.S. dollars. However, many of the Company’s expenses
outside of the U.S. are denominated in Canadian dollars. Fluctuations in the exchange rate between the U.S.
dollar and the Canadian dollar could impact the Company’s expenses and have an adverse effect on the
Company’s financial performance and condition.
In addition, the Company has significant U.S. dollar denominated long-term debt. Fluctuations in the exchange
rate between the U.S. dollar and the Canadian dollar could result in realized and unrealized losses on U.S. dollar
denominated long-term debt.
Encana Corporation
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Annual Information Form (prepared in US$)