UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.  20549

FORM 40-F

(Check One)

[   ] Registration statement pursuant to Section 12 of the Securities Exchange Act of 1934

or

[X] Annual report pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934

For the fiscal year ended December 31, 2010

Commission file number 1-15226

ENCANA CORPORATION

(Exact name of registrant as specified in its charter)

1800-855 2nd Street, S.W., P.O. Box 2850, Calgary, Alberta, Canada  T2P 2S5
(403) 645-2000
(Address and Telephone Number of Registrant’s Principal Executive Offices)

CT Corporation System, 111 8th Avenue, New York, NY  10011
(212) 894-8940
(Name, Address (Including Zip Code) and Telephone Number
(Including Area Code) of Agent For Service in the United States)

Securities registered or to be registered pursuant to Section 12(b) of the Act.

Securities registered or to be registered pursuant to Section 12(g) of the Act.       None

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act.      Debt Securities

For annual reports, indicate by check mark the information filed with this Form:

Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the annual report:  736,272,054

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 (the “Exchange Act”) during the preceding 12 months (or for such shorter period that the registrant was required to file such reports); and (2) has been subject to such filing requirements for the past 90 days.

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (s.232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

The Annual Report on Form 40-F shall be incorporated by reference into or as an exhibit to, as applicable, each of the registrant’s Registration Statements under the Securities Act of 1933:  Form F-3 (File No. 333-150453), Form S-8 (File Nos. 333-124218, 333-85598 and 333-140856) and Form F-9 (File No. 333-165626).

FORM 40-F

Principal Documents

The following documents have been filed as part of this Annual Report on Form 40-F, beginning on the following page:

(a)                               Annual Information Form for the fiscal year ended December 31, 2010;

(b)                              Management’s Discussion and Analysis for the fiscal year ended December 31, 2010; and

(c)                               Consolidated Financial Statements for the fiscal year ended December 31, 2010 (Note 21 to the Consolidated Financial Statements contains a reconciliation of those financial statements to United States Generally Accepting Accounting Principles (U.S. GAAP)).

40-F1

Encana Corporation

Annual Information Form

February 17, 2011

This is the annual information form of Encana Corporation (“Encana” or the “Company”) for the year ended December 31, 2010. In this annual information form, unless otherwise specified or the context otherwise requires, reference to “Encana” or to the “Company” includes reference to subsidiaries of and partnership interests held by Encana Corporation and its subsidiaries.

In this annual information form, the term “liquids” is used to represent crude oil and natural gas liquids (“NGLs”). Liquids also include condensate volumes. Certain liquids volumes have been converted to millions of cubic feet equivalent (“MMcfe”) or thousands of cubic feet equivalent (“Mcfe”) on the basis of one barrel (“bbl”) to six thousand cubic feet (“Mcf”). Also, certain natural gas volumes have been converted to barrels of oil equivalent (“BOE”) on the same basis. MMcfe, Mcfe and BOE may be misleading, particularly if used in isolation. A conversion ratio of one bbl to six Mcf is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent value equivalency at the well head.

Unless otherwise indicated, all financial information included in this annual information form is determined using Canadian Generally Accepted Accounting Principles (“Canadian GAAP”), which differs from Generally Accepted Accounting Principles in the United States (“U.S. GAAP”). The notes to Encana’s annual audited consolidated financial statements contain a discussion of the principal differences between Encana’s financial results calculated under Canadian GAAP and under U.S. GAAP.

Readers are directed to the sections titled “Note Regarding Forward-Looking Statements” and “Note Regarding Reserves Data and Other Oil and Gas Information”.

Unless otherwise specified, all dollar amounts are expressed in United States (“U.S.”) dollars and all references to “dollars”, “$” or to “US$” are to U.S. dollars and all references to “C$” are to Canadian dollars.

Encana Corporation is incorporated under the Canada Business Corporations Act (“CBCA”). Its executive and registered office is located at 1800, 855 - 2nd Street S.W., Calgary, Alberta, Canada T2P 2S5.

On November 30, 2009, Encana completed a corporate reorganization (the “Split Transaction”) to split into two independent publicly traded energy companies – Encana Corporation, a natural gas company, and Cenovus Energy Inc. (“Cenovus”), an integrated oil company. In conjunction with the Split Transaction, Encana’s articles were amended to make certain changes to its share capital. Further information on the Company’s share capital is disclosed under “Description of Share Capital”.

The following table presents the name, the percentage of voting securities owned and the jurisdiction of incorporation, continuance or formation of Encana’s principal subsidiaries and partnerships as at December 31, 2010. Each of these subsidiaries and partnerships had total assets that exceeded 10 percent of the total consolidated assets of Encana or annual revenues that exceeded 10 percent of the total consolidated annual revenues of Encana as at December 31, 2010.

The above table does not include all of the subsidiaries and partnerships of Encana. The assets and annual revenues of unnamed subsidiaries and partnerships in the aggregate did not exceed 20 percent of the total consolidated assets or total consolidated annual revenues as at December 31, 2010.

As a general matter, Encana reorganizes its subsidiaries as required to maintain proper alignment of its business, operating and management structures.

Encana was formed in 2002 through the business combination of Alberta Energy Company Ltd. (“AEC”) and PanCanadian Energy Corporation (“PanCanadian”). On November 30, 2009, Encana completed the Split Transaction which resulted in two independent publicly traded energy companies – Encana, a natural gas company, and Cenovus, an integrated oil company.

Encana is a leading North American natural gas producer that is focused on growing its strong portfolio of natural gas resource plays in key basins from northeast British Columbia to east Texas and Louisiana. Encana’s other operations include the transportation and marketing of natural gas and liquids production.  All of Encana’s reserves and production are located in North America.

Encana employs a decentralized decision making structure and is currently divided into two operating divisions. The operating divisions are:

·           Canadian Division, which includes natural gas exploration, development and production assets located in British Columbia and Alberta, as well as the Deep Panuke natural gas project offshore Nova Scotia. Four key resource plays are located in the division: (i) Greater Sierra in northeast British Columbia, including Horn River; (ii) Cutbank Ridge in Alberta and British Columbia, including Montney; (iii) Bighorn in west central Alberta; and (iv) Coalbed Methane (“CBM”) in southern Alberta. Prior to the Split Transaction, the Canadian Division was known as the Canadian Foothills Division.

·           USA Division, which includes the natural gas exploration, development and production assets located in the U.S. Five key resource plays are located in the division: (i) Jonah in southwest Wyoming; (ii) Piceance in northwest Colorado; (iii) East Texas in Texas; (iv) Haynesville in Louisiana and Texas; and (v) Fort Worth in Texas.

Encana’s proprietary production is substantially sold by the Midstream, Marketing & Fundamentals Corporate Group, which is focused on enhancing the Company’s netback price. Midstream, Marketing & Fundamentals manages Encana’s market optimization activities, which include third party purchases and sales of product to provide operational flexibility for transportation commitments, product type, delivery points and customer diversification.

In 2009, the Company formed the Natural Gas Economy team to focus on pursuing the development of expanded natural gas markets in North America, particularly within the areas of power generation and transportation. Due to the technical breakthroughs with natural gas extraction, the commercial resource in North America has grown to a historical high. This abundance improves the longer term affordability and reliability of natural gas for these potential markets. In addition, increased use of natural gas has the potential to yield lower green house gas and volatile organic compound emissions as compared to other fossil fuel use.

For 2010 financial reporting purposes, Encana’s reportable segments were: (i) Canada; (ii) USA; (iii) Market Optimization; and (iv) Corporate and Other. The Canada reportable segment includes the results from the Canadian Division and Canada – Other.  Canada – Other includes the upstream results from the former Canadian Plains Division and former Integrated Oil – Canada operations which were transferred to Cenovus as part of the Split Transaction.

Unless otherwise indicated, select financial, production and other operating data for Encana for periods prior to the November 30, 2009 Split Transaction have not been adjusted to remove the results associated with Canada – Other assets which were transferred to Cenovus. The Canada – Other results are reported as continuing operations in accordance with the full cost accounting requirements. The former Integrated Oil – U.S. Downstream Refining operations were also transferred to Cenovus and are reported as discontinued operations for financial reporting purposes.

The following describes significant events in the development of Encana’s business over the last three years. In this section, all divestiture proceeds are provided on a before-tax basis unless otherwise noted.

2010

·           In June 2010, Encana and the China National Petroleum Corporation (“CNPC”) signed a memorandum of understanding, outlining a framework for the two companies to negotiate a potential joint venture investment.  On February 9, 2011, Encana announced the signing of a Co-operation Agreement with PetroChina International Investment Company Limited, a subsidiary of PetroChina Company Limited, that would see PetroChina pay C$5.4 billion to acquire a 50 percent interest in Encana’s Cutbank Ridge business assets in British Columbia and Alberta. Under the Co-operation Agreement, the two companies would establish a 50/50 joint venture to develop the assets.  CNPC is the controlling shareholder of PetroChina Company Limited.

The transaction is subject to regulatory approval from Canadian and Chinese authorities, due diligence and the negotiation and execution of various transaction agreements, including the joint venture agreement.

·            In the first quarter of 2010, Encana entered into farm-out agreements with Kogas Canada Ltd., a subsidiary of Korea Gas Corporation (“Kogas”), which has agreed to invest approximately C$565 million over three years to earn a 50 percent interest in approximately 154,000 acres of land in Horn River and Montney in the Greater Sierra and Cutbank Ridge key resource plays.

·            Encana completed the acquisition of various strategic lands and properties that complement existing assets within Encana’s portfolio. In 2010, acquisitions were approximately $592 million in the Canadian Division and $141 million in the USA division.

·            Encana completed the divestiture of non-core assets for proceeds of approximately $288 million in the Canadian Division and $595 million in the USA Division.

2009

·            On November 30, 2009, Encana completed the Split Transaction resulting in Encana and Cenovus, two independent publicly traded energy companies. The Split Transaction was initially proposed in May 2008 and was designed to enhance long-term value for shareholders by creating two independent and sustainable companies. In October 2008, due to an unusually high level of uncertainty and volatility in the global debt and equity markets, Encana delayed seeking shareholder and court approval for the Split Transaction until there were clear signs that the global financial markets had stabilized. In September 2009, Encana announced plans to proceed with the split.

In connection with the Split Transaction, Encana entered into an Arrangement Agreement with Cenovus and another subsidiary of Encana dated October 20, 2009 and a Separation and Transition Agreement with Cenovus dated November 20, 2009. The Arrangement Agreement set out the terms and conditions to the arrangement, including the plan of arrangement. The Separation and Transition Agreement set out the mechanics for the separation of the businesses including the dividing of assets, assumption of liabilities and matters governing certain ongoing relationships between Encana and Cenovus, including reciprocal indemnities with respect to the assets and liabilities kept by Encana or transferred to Cenovus.

·            Encana completed the divestiture of mature conventional oil and natural gas assets for proceeds of approximately $1,000 million in the Canadian Division, $73 million in the USA Division and $17 million in Canada – Other operations.

2008

·            Encana acquired, in several transactions, certain land and mineral interests in Haynesville in Texas and Louisiana for approximately $1,010 million, net to Encana. These acquisitions increased Encana’s land position in Haynesville to approximately 435,000 net acres, including approximately 63,000 net mineral acres.

·            Encana completed the divestiture of mature, non-core conventional oil and natural gas assets for proceeds of approximately $400 million in the Canadian Division, $251 million in the USA Division and $47 million in Canada – Other operations.

·            Encana completed the sale of all of its interests in France and Brazil and withdrew from Qatar.

·            In the third quarter of 2008, the Wood River refinery received regulatory approvals to start construction on the Coker and Refinery Expansion (“CORE”) project. The Wood River refinery was part of the Downstream Refining assets transferred to Cenovus as part of the Split Transaction.

The following map outlines the location of Encana’s North American landholdings and key resource plays as at December 31, 2010.

Encana’s operations are focused on exploiting North American long-life natural gas formations, including tight gas, shales and CBM. Encana attempts to identify early-stage, geographically expansive gas-charged basins and then assembles a large land position to try to capture core resource opportunities. Encana then focuses on determining cost efficient means for extracting natural gas through a combination of detailed reservoir studies and pilot testing available and emerging drilling and completions technologies. Encana's manufacturing-style development approach extends over many years. Capital and operating efficiencies are pursued on an ongoing basis and shared across Encana's expansive portfolio.

Encana’s operations are primarily located in Canada and the U.S. All of Encana’s current reserves and production are located in North America.

The Canadian Division includes natural gas exploration, development and production assets in British Columbia and Alberta, as well as the Deep Panuke natural gas project offshore Nova Scotia. Four key resource plays are located in the Division: (i) Greater Sierra, including Horn River; (ii) Cutbank Ridge in Alberta and British Columbia, including Montney; (iii) Bighorn; and (iv) CBM. The CBM key resource play (Horseshoe Canyon coalbed methane and commingled shallow gas) is located within the Clearwater area. The Canadian Division also manages the offshore Deep Panuke natural gas project in Atlantic Canada. Prior to the Split Transaction, the Canadian Division was the Canadian Foothills Division.

In 2010, the Canadian Division had total capital investment in Canada of approximately $2,211 million and drilled approximately 1,206 net wells. As at December 31, 2010, the Canadian Division had an established land position in Canada of approximately 10.9 million gross acres (9.1 million net acres); of these, approximately 5.8 million gross acres (4.9 million net acres) are undeveloped. The mineral rights on approximately 39 percent of the total net acreage are owned in fee title by Encana, which means that the mineral rights are held by Encana in perpetuity and production is subject to a mineral tax that is generally less than the Crown royalty imposed on production from land where the government owns the mineral rights. The Canadian Division’s 2010 production after royalties averaged approximately 1,402 million cubic feet equivalent per day. The 2010 average production volumes increased over 2009 by approximately 6 percent, or 83 million cubic feet equivalent per day, due to successful drilling programs, as well as bringing on shut-in and curtailed production volumes. The 2010 volumes were lower by approximately 65 million cubic feet equivalent per day due to net divestitures.

The following tables summarize the Canadian Division landholdings, daily production and producing wells as at and for the periods indicated.

Note:

(1)          The CBM key resource play located within the Clearwater area averaged production of approximately 322 million cubic feet per day in 2010 (320 million cubic feet per day in 2009).

Production (After Royalties)

Note:

(1)          The CBM key resource play located within the Clearwater area averaged production of approximately 317 million cubic feet per day in 2010 (316 million cubic feet per day in 2009).

Producing Wells

Notes:

(1)          Figures exclude wells capable of producing, but not producing, as of December 31, 2010.

(2)          At December 31, 2010, the CBM key resource play had approximately 7,795 gross producing gas wells (7,153 net gas wells).

Key Resource Plays and Activities in the Canadian Division

Greater Sierra

Greater Sierra is a key resource play located in northeast British Columbia. The primary focus is on the continued development of the Devonian Jean Marie formation and the Horn River Devonian shale formation. In 2010, Encana drilled approximately 47 net wells in the area and production after royalties averaged approximately 236 million cubic feet equivalent per day. Production has remained relatively constant over the last five years while Encana has reduced capital expenditures, excluding the Horn River development.

At December 31, 2010, Encana controlled approximately 423,000 gross undeveloped acres (264,000 net undeveloped acres) in the Devonian shale formation of Horn River in northeast British Columbia. Horn River formation shales (Muskwa, Otter Park and Evie) within Encana’s focus area are upwards of 500 feet thick. At December 31, 2010, these shales have been evaluated with 90 gross wells (7 vertical and 83 horizontal), 43 of which have been placed on long-term production (1 vertical and 42 horizontal). In 2009, Encana and its partner commenced drilling a larger program of horizontal wells in the Two Island Lake area and constructed a compressor station and 24-inch raw gas transmission pipeline.

At December 31, 2010, Encana held an average 81 percent working interest in 14 production facilities in the area that were capable of processing approximately 715 million cubic feet per day of natural gas. Encana also held a 100 percent working interest in the Ekwan pipeline which has a capacity of approximately 400 million cubic feet per day and transports natural gas from northeast British Columbia to Alberta. As part of its strategy to develop transportation solutions for its Horn River production, Encana has conditionally agreed to sell its Ekwan Pipeline to TransCanada PipeLines Limited. (“TCPL”) to form part of TCPL’s proposal to build a pipeline that interconnects Horn River to its Alberta pipeline system.

Encana is also the operator of the Cabin Gas Plant, in which it holds an ownership interest. On January 28, 2010, Encana received an environmental assessment certificate for the Cabin Gas Plant from the British Columbia Environmental Assessment Office (EAO) followed by regulatory approvals from the British Columbia Oil and Gas Commission. The plant was approved for up to 800 million cubic feet per day of capacity. Planning and construction of the project is already underway with the first phase having a planned capacity of 400 million cubic feet per day and is expected to be in-service in the second half of 2012. The second phase, which is planned to add an additional 400 million cubic feet per day of capacity, is fully subscribed and undergoing project sanctioning. Once in operation, the plant will receive compressed and dehydrated raw feed gas, containing CO2 and traces of H2S. Once processed to meet sales gas specifications, it is expected that the treated gas will be shipped to market via the TCPL pipeline system. On December 10, 2010, Encana issued notification that it will be sending out a request for proposals to companies interested in buying Encana’s interest in the Cabin Gas Plant.

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 2010, Encana drilled approximately 62 net wells in the area and production after royalties averaged approximately 401 million cubic feet equivalent per day.

Encana holds approximately 693,000 net acres covering the deep basin Montney formation, with approximately 244,500 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 80 percent reduction in costs on a completed interval basis over the past four years.

Encana has sour gas processing capacity of approximately 393 million cubic feet per day at its 100 percent owned gas plants at Hythe and Steeprock, with an additional 110 million cubic feet per day of sweet gas processing capacity. Encana also holds a 60 percent working interest in the Sexsmith gas plant, which has sour gas processing capacity of approximately 125 million cubic feet per day and an additional 50 million cubic feet per day of sweet gas processing capacity.

In the fourth quarter of 2010, Encana signed a deep cut processing agreement securing approximately 90 million cubic feet per day of firm processing capacity at Gordondale. The agreement will allow the Company to extract out the liquids from its gas stream, thereby capturing more value and enhancing returns.

Bighorn

Bighorn is a key resource play in west central Alberta, with a focus on exploiting multi-zone stacked Cretaceous sands in the Deep Basin. The primary properties in Bighorn are Resthaven, Kakwa, Redrock and Berland. In 2010, Encana drilled approximately 51 net wells in the area and production after royalties averaged approximately 239 million cubic feet equivalent per day.

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 million cubic feet per day. The Kakwa gas plant has a capacity of approximately 60 million cubic feet per day. Encana owns 50 percent of this plant and has firm processing capacity for the remaining 50 percent. Encana holds a 24 percent working interest in the Berland River plant, which has a capacity of approximately 165 million cubic feet per day.

In the fourth quarter of 2010, Encana signed a deep cut processing agreement securing approximately 105 million cubic feet per day of firm processing capacity at Musreau. The agreement will allow the Company to extract out the liquids from its gas stream, thereby capturing more value and enhancing returns.

Clearwater

Clearwater extends from the U.S. border to central Alberta. The primary focus of the Clearwater area is the CBM key natural gas resource play which involves Horseshoe Canyon Coals integrated with shallower sands. Within Clearwater, Encana holds approximately 4.7 million net acres with approximately 2.0 million net acres on the Horseshoe Canyon trend. Approximately 75 percent of the total net acreage landholdings are owned in fee title. In 2010, Encana drilled approximately 1,044 net CBM wells and production averaged approximately 317 million cubic feet per day of natural gas from the CBM key resource play.

Atlantic Canada

At December 31, 2010, Encana held an interest in approximately 76,000 gross acres (32,000 net acres) in Atlantic Canada, which includes Nova Scotia and Newfoundland and Labrador. Encana operates five of its eight licenses in these areas and has an average working interest of approximately 42 percent.

Encana is the owner and operator of the Deep Panuke gas field, located offshore Nova Scotia. The Deep Panuke

natural gas project involves the installation of the facilities required to produce natural gas from the field, located approximately 250 kilometres southeast of Halifax (on the Scotian shelf). Produced gas will be transported to shore by subsea pipeline and Encana will transport this natural gas via the Maritimes & Northeast Pipeline to a delivery point in eastern Canada. Work has been progressing in anticipation of first production in the second half of 2011.

The USA Division includes Encana’s natural gas exploration, development and production assets in the Jonah field in southwest Wyoming, the Piceance Basin in northwest Colorado, the East Texas basin in Texas, the Haynesville shale in Louisiana and Texas and the Fort Worth basin in Texas. Five key resource plays are located in the Division: (i) Jonah; (ii) Piceance; (iii) East Texas; (iv) Haynesville; and (v) Fort Worth.

In 2010, the USA Division had total capital investment of approximately $2,499 million and drilled approximately 448 net wells. As at December 31, 2010, the USA Division had an established land position of approximately 3.1 million gross acres (2.6 million net acres). Approximately 2.5 million gross acres were undeveloped (2.1 million net acres), with the majority in Colorado, Texas, Louisiana, Michigan and Wyoming. The USA Division’s 2010 production after royalties averaged approximately 1,919 million cubic feet equivalent per day. The 2010 average production volumes increased over 2009 by approximately 14 percent, or 235 million cubic feet equivalent per day, due to operational success in Haynesville and Piceance, as well as bringing on shut-in and curtailed production volumes. The 2010 volumes were lower by approximately 65 million cubic feet equivalent per day due to net divestitures.

The following tables summarize the USA Division landholdings, daily production and producing wells as at and for the periods indicated.

Producing Wells

Note:

(1)          Figures exclude wells capable of producing, but not producing, as of December 31, 2010.

Key Resource Plays and Activities in the USA Division

Jonah

Jonah is a key resource play located in the Green River Basin in southwest Wyoming. Production is from the Lance formation, which contains vertically stacked sands that exist at depths between 8,500 and 13,000 feet. Historically, Encana’s operations have been conducted in the over-pressured core portion of the field. In 2008 and 2009, Encana began conducting development in the adjacent normally pressured lands. In 2010, Encana drilled approximately 112 net wells within the core area and production after royalties averaged approximately 559 million cubic feet equivalent per day.

At December 31, 2010, Encana controlled approximately 116,000 undeveloped gross acres (104,000 net acres). Within the over-pressured area, Encana plans to drill the field to ten acre spacing with higher densities in some areas. Outside of the over-pressured area, Encana owns approximately 112,000 undeveloped gross acres, where 40 acre and possibly 20 acre drilling potential exists.

Piceance

Piceance is a key resource play located in northwest Colorado. The basin is characterized by thick natural gas accumulations primarily in the Williams Fork formation. Encana’s 2004 acquisition of Tom Brown, Inc. provided a significant amount of the acreage under current development. In addition to Williams Fork, Encana has recently initiated the evaluation phase of the Niobrara formation, a thick shale predominate throughout the basin. At December 31, 2010, Encana controlled approximately 657,000 undeveloped gross acres (601,000 net acres). In 2010, Encana drilled approximately 125 net wells in the area and production after royalties averaged approximately 458 million cubic feet equivalent per day.

Between 2006 and 2010, Encana finalized ten agreements to jointly develop portions of Piceance. During 2010, Encana drilled approximately 159 net wells primarily utilizing third-party funds. For the period of 2011 to 2016, it is expected that Encana will drill approximately 774 net wells which will be partially funded by third-parties under existing agreements.

Compression and processing facilities in Piceance include approximately 2,600 kilometres of pipelines and a processing facility with a capacity of approximately 60 million cubic feet per day. In addition, Encana has access to third-party processing facilities within Piceance.

East Texas

East Texas is a key resource play characterized as a tight gas play with multi-zone targets in the Bossier and Cotton Valley zones. Encana first entered East Texas in 2004 with the acquisition of Tom Brown, Inc. In 2010, Encana drilled approximately 16 net wells in the area and production after royalties averaged approximately 348 million cubic feet equivalent per day.

In 2005, Encana entered the Deep Bossier play through an acquisition of a 30 percent interest in the Leor Energy group’s Deep Bossier assets. Subsequently, in 2006, Encana increased this interest to 50 percent. In November 2007, Encana acquired the Leor Energy group’s remaining interests in the Deep Bossier play as well as additional East Texas acreage. At December 31, 2010, Encana controlled approximately 180,000 undeveloped gross acres (162,000 net acres).

Haynesville

The Haynesville shale is a key resource play located in Louisiana and Texas. Encana acquired its first leases in 2005, drilled its first three vertical wells in 2006, and has continued to acquire land. In 2007, Encana signed a 50/50 joint exploration agreement with an unrelated party to explore and develop the lands. In 2008, Encana increased its leased acreage in Haynesville to approximately 435,000 net acres through a series of transactions totaling approximately $1,010 million. At the end of 2009, Encana finalized a joint venture with an unrelated party to develop part of Haynesville in East Texas.

In 2010, Encana drilled approximately 106 net wells in the area and production after royalties averaged approximately 303 million cubic feet equivalent per day. Encana’s drilling plans through 2010 were focused on land retention and completion optimization. The December 2010 exit rate production for Haynesville was approximately 419 million cubic feet per day. In 2011, it is expected that the majority of planned development activity will focus on the maximization of gas recovery in Haynesville and Mid-Bossier.

At December 31, 2010, Encana controlled approximately 486,000 undeveloped gross acres (284,000 net acres), with the majority of the leaseholds in North Louisiana being located in the DeSoto and Red River parishes. Certain Haynesville undeveloped acreage is subject to leases that will expire over the next several years unless production is established on the acreage held. In 2010, Encana completed the majority of its land retention program.

Fort Worth

Fort Worth is a key resource play located in North Texas, producing from the prolific Barnett shale. Since entering the basin in 2003, Encana has applied horizontal drilling and multi-stage reservoir stimulation to improve performance in this play. In 2010, Encana drilled approximately 30 net wells in the area and production after royalties averaged approximately 124 million cubic feet equivalent per day.

At December 31, 2010, Encana controlled approximately 15,000 undeveloped gross acres (11,000 net acres).

Other Activity

Encana has established a significant land position in the Collingwood shale play located in Michigan.  In 2010, Encana acquired approximately 193,000 net acres, bringing the total landholdings to approximately 424,000 net acres.

Market Optimization activities are managed by Encana’s Midstream, Marketing & Fundamentals Corporate Group. Market Optimization is focused on enhancing the netback price of the Company’s proprietary production. Market Optimization activities include third-party purchases and sales of product to provide operational flexibility for transportation commitments, product type, delivery points and customer diversification.

Natural Gas Marketing

Encana’s produced natural gas is primarily marketed to local distribution companies, industrials, other producers, and energy marketing companies. Prices received by Encana are based primarily upon prevailing index prices for natural gas in the region in which it is sold. Prices are impacted by competing fuels in such markets and by regional supply and demand for natural gas.

Encana seeks to mitigate the market risk associated with future cash flows by entering into various risk management contracts relating to produced natural gas.  Details of those contracts related to Encana’s various risk management positions are found in Note 17 to Encana’s audited Consolidated Financial Statements for the year ended December 31, 2010 which are available via the System for Electronic Document Analysis and Retrieval (“SEDAR”) at www.sedar.com.

Other Marketing Activities

Encana sells its crude oil, condensate and NGLs to markets in Canada and the U.S.  Sales are normally executed under spot, monthly evergreen and term contracts with delivery to major pipeline/sales hubs at current market prices. In addition, Encana holds interests in two power assets, the Cavalier and Balzac Power Stations, to optimize its electricity costs, particularly in Alberta.

Delivery Commitments

As part of ordinary business operations, Encana has a number of delivery commitments to provide natural gas under existing contracts and agreements. The majority of Encana's production is sold under short term contracts at the relevant market price at the time that the product is sold. As at December 31, 2010, Encana had no material long term physical sales contracts or delivery contracts.

Former operations, referred to as Canada – Other and U.S. Downstream Refining, were transferred to Cenovus as part of the Split Transaction on November 30, 2009. Canada – Other includes the results from the former Canadian Plains Division and former Integrated Oil Division – Canada operations.

Canada – Other

Canada – Other included established natural gas development and production activities in southern Alberta and southern Saskatchewan, crude oil development and production activities in Alberta and Saskatchewan as well as exploration for, and development and production of bitumen using enhanced oil recovery methods in Alberta. Five key resource plays were contained in Canada - Other: (i) Shallow Gas in southeast Alberta and Saskatchewan; (ii) Pelican Lake in northeast Alberta; (iii) Weyburn in Saskatchewan; (iv) Foster Creek in northeast Alberta; and (v) Christina Lake in northeast Alberta. The Foster Creek and Christina Lake enhanced oil recovery projects were part of the integrated oil business created by Encana and ConocoPhillips in January 2007.

For 2009, Canada – Other had capital investment of approximately $848 million (2008 - $1,500 million) and had drilled approximately 639 net wells (2008 - 1,514 net wells). For 2009, natural gas production after royalties was approximately 762 million cubic feet per day (2008 - 905 million cubic feet per day) and liquids production after royalties was approximately 99,900 barrels per day (2008 - 100,250 barrels per day).

Except where indicated otherwise, the financial, production and other operating data for Encana in this annual information form as at dates prior to, or for periods entirely or partly prior to, the Split Transaction have not been adjusted to remove the results associated with Canada – Other (former Canadian Plains Division and former Integrated Oil – Canada operations) assets which were transferred to Cenovus under the Split Transaction. Canada – Other results are reported as continuing operations in accordance with the full cost accounting requirements.

U.S. Downstream Refining

Prior to the Split Transaction, Encana’s Integrated Oil Division was comprised of the Integrated Oil – Canada operations and U.S. Downstream Refining operations. U.S. Downstream Refining focused on the refining of crude oil into petroleum and chemical products at the Borger refinery located in Borger, Texas and the Wood River refinery located in Roxana, Illinois. The refineries were acquired through the creation of the integrated oil business between Encana and ConocoPhillips in January 2007. The refineries were 50 percent owned by Encana and operated by ConocoPhillips.  U.S. Downstream Refining was transferred to Cenovus as part of the Split Transaction on November 30, 2009.

For 2009, U.S. Downstream Refining had capital investment of approximately $829 million (2008 - $478 million). The expenditures primarily related to the Wood River refinery’s CORE project. For the period ended September 30, 2009, the refineries’ gross crude oil capacity was approximately 452 thousand barrels per day (year ended December 31, 2008 - 452 thousand barrels per day) and crude utilization was approximately 90 percent (year ended December 31, 2008 - 93 percent).

The U.S. Downstream Refining results prior to the Split Transaction are reported as discontinued operations for financial reporting purposes.

Encana is required to provide reserves data prepared in accordance with Canadian securities regulatory requirements, specifically National Instrument 51-101 (“NI 51-101”).  Certain reserves and oil and gas information in accordance with Canadian disclosure requirements are contained in Appendix A – Canadian Protocol Disclosure of Reserves Data and Other Oil and Gas Information. Additional disclosure required by NI 51-101 is included in the preceding sections of this annual information form, and referenced accordingly herein.  Select supplemental reserves and other oil and gas information disclosure is provided in accordance with U.S. disclosure requirements in Appendix D – U.S. Protocol Disclosure of Reserves Data and Other Oil and Gas Information. See “Note Regarding Reserves Data and Other Oil and Gas Information”.

The practice of preparing production and reserve quantities data under Canadian disclosure requirements (NI 51-101) differs from the U.S. reporting requirements. The primary differences between the two reporting requirements include:

·                  the Canadian standards require disclosure of proved and probable reserves; the U.S. standards require disclosure of only proved reserves;

·                  the Canadian standards require the use of forecast prices in the estimation of reserves; the U.S. standards require the use of 12-month average prices which are held constant;

·                  the Canadian standards require disclosure of reserves on a gross (before royalties) and net (after royalties) basis; the U.S standards require disclosure on a net (after royalties) basis;

·                  the Canadian standards require disclosure of production on a gross (before royalties) basis; the U.S standards require disclosure on a net (after royalties) basis; and

·                  the Canadian standards require that reserves and other data be reported on a more granular product type basis than required by the U.S. standards.

Since inception, Encana has retained independent qualified reserves evaluators (“IQREs”) to evaluate and prepare reports on 100 percent of Encana’s natural gas and liquids reserves annually. In 2010, Encana’s Canadian reserves were evaluated by McDaniel & Associates Consultants Ltd. and GLJ Petroleum Consultants Ltd., and its U.S. reserves were evaluated by Netherland, Sewell & Associates, Inc. and DeGolyer and MacNaughton.

Encana’s Vice-President, Corporate Reserves & Competitor Analysis and five other staff under this individual’s direction oversee the preparation of the reserves estimates by the IQREs. Currently this internal staff of four professional engineers, an engineering technologist and a business analyst have combined relevant experience of over 100 years. The Vice-President and other engineering staff are all members of the appropriate provincial or state professional associations and are members of various industry associations such as the Society of Petroleum Engineers and the Society of Petroleum Evaluation Engineers.

Encana has a Reserves Committee of independent board members which reviews the qualifications and appointment of the IQREs. The Reserves Committee also reviews the procedures for providing information to the evaluators. All booked reserves are based upon annual evaluations by the IQREs. Annually, the Reserves Committee recommends the selection of IQREs to the Board of Directors for its approval.

The evaluations by the IQREs are conducted from the fundamental petrophysical, geological, engineering, financial and accounting data. Processes and procedures are in place to ensure that the IQREs are in receipt of all relevant information. Reserves are estimated based on material balance analysis, decline analysis, volumetric calculations or a combination of these methods, in all cases having regard to economic considerations. In the case of producing reserves, the emphasis is on decline analysis where volumetric analysis is considered to limit forecasts to reasonable levels. Non-producing reserves are estimated by analogy to producing offsets, with consideration of volumetric estimates of in place quantities.

Encana’s growth in recent years has been achieved through a combination of internal growth and acquisitions. Encana has a large inventory of internal growth opportunities and also continues to examine select acquisition opportunities to develop and expand its key resource plays. The acquisition opportunities may include corporate or asset acquisitions. Encana may finance any such acquisitions with debt, equity, cash generated from operations, proceeds from asset divestitures or a combination of these sources.

The following table summarizes Encana’s net capital investment for 2010, 2009 and 2008.