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, 2013

Commission file number 1-15226

ENCANA CORPORATION

(Exact name of registrant as specified in its charter)

Suite 4400, 500 Centre Street S.E., 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:  740,946,505

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.

Yes X                        No    

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).

Yes X                        No    

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. 333-187492), Form S-8 (File Nos. 333-124218, 333-85598, 333-140856 and 333-188758) and Form F-10 (File No. 333-181196).

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:

40-F1

This is the Annual Information Form of Encana Corporation (“Encana” or the “Company”) for the year ended December 31, 2013. 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, daily natural gas volumes are referenced in either thousands of cubic feet (“Mcf”) per day (“Mcf/d”), millions of cubic feet (“MMcf”) per day (“MMcf/d”), or billions of cubic feet (“Bcf”) per day (“Bcf/d”).  The term “liquids” is used to represent oil, natural gas liquids (“NGLs”) and condensate.  Daily liquids volumes are referenced in either barrels (“bbls”) per day (“bbls/d”), thousands of barrels (“Mbbls”) per day (“Mbbls/d”) or millions of barrels (“MMbbls”) per day (“MMbbls/d”).

Certain liquids volumes have been converted to billions of cubic feet equivalent (“Bcfe”) on the basis of one barrel (“bbl”) to six Mcf. Bcfe 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 wellhead. Given that the value ratio based on the current price of oil and NGLs as compared to natural gas is significantly different from the energy equivalency of 6:1, utilizing a conversion on a 6:1 basis may be misleading as an indication of value.

All financial information included in this Annual Information Form is prepared in accordance with United States (“U.S.”) generally accepted accounting principles (“U.S. GAAP”). The Company’s annual audited Consolidated Financial Statements for the year ended December 31, 2013, including required comparative information for 2012 and 2011, have been prepared in accordance with 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 U.S. dollars, all references to “dollars”, “$” or to “US$” are to U.S. dollars and all references to “C$” are to Canadian dollars.  All proceeds from divestitures are provided on a before tax basis.

Encana Corporation is incorporated under the Canada Business Corporations Act (“CBCA”). Its executive and registered office is located at 4400, 500 Centre Street S.E., Calgary, Alberta, Canada T2G 1A6.

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, 2013. Each of these subsidiaries and partnerships had total assets that exceeded 10 percent of Encana’s total consolidated assets or annual revenues that exceeded 10 percent of Encana’s total consolidated annual revenues as at December 31, 2013.

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 Encana’s total consolidated assets or total consolidated annual revenues as at December 31, 2013.

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 a corporate reorganization (the “Split Transaction”) to split into two independent publicly traded energy companies – Encana and Cenovus Energy Inc. (“Cenovus”).

Encana is a leading North American energy producer that is focused on developing its strong portfolio of diverse resource plays producing natural gas, oil and NGLs. Encana’s operations also include the marketing of natural gas, oil and NGLs.  All of Encana’s reserves and production are located in North America.

As at December 31, 2013, Encana’s operating and reportable segments were: (i) Canadian Division; (ii) USA Division; and (iii) Market Optimization.

·             Canadian Division includes the exploration for, development of, and production of natural gas, oil and NGLs and other related activities within Canada. Resource plays in the Division include: Cutbank Ridge in northern British Columbia, Bighorn in west central Alberta, Peace River Arch in northwest Alberta, Clearwater in southern Alberta, and Greater Sierra in northeast British Columbia. In December 2013, the Deep Panuke natural gas facility located offshore Nova Scotia commenced commercial operations. Emerging plays in the Division include the Duvernay in west central Alberta.

·             USA Division includes the exploration for, development of, and production of natural gas, oil and NGLs and other related activities within the U.S. Resource plays in the Division include: Piceance in northwest Colorado, Jonah in southwest Wyoming, Haynesville in Louisiana, and Texas. Emerging plays in the Division include the DJ Niobrara in northern Colorado, the San Juan Basin in New Mexico and the Tuscaloosa Marine Shale in Louisiana and Mississippi.

·           Market Optimization activities are managed by the Midstream, Marketing & Fundamentals team, which is primarily responsible for the sale of the Company’s proprietary production and enhancing the associated netback price. 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.

Corporate and Other is not an operating segment and mainly includes unrealized gains or losses recorded on derivative financial instruments. Once the instruments are settled, the realized gains and losses are recorded in the operating segment to which the derivative instruments relate.

In 2014, Encana does not anticipate any significant change in reportable segments as a result of the business strategy announced in November 2013. However, the Company may realign certain plays to complement its capital allocation strategy, as described under the Business Objectives section of this Annual Information Form.

Significant events which contributed to the development of Encana’s business over the last three years included the following:

2013

·             Appointed Doug Suttles as Encana’s President & Chief Executive Officer and Director of the Company in June 2013 and subsequently announced a realignment of the Company’s business strategy and corporate organizational structure in November 2013 to be implemented in 2014.

·             Announced plans to transfer Encana’s royalty business, whose assets comprise fee simple mineral title and certain royalty interests in lands located predominately in Alberta, into a separate company. Encana plans to subsequently divest a portion of its interest in the new company through an initial public offering (“IPO”) in mid-2014. Encana intends to retain a majority stake in the new company. The transaction is subject to approval by Encana’s Board of Directors, due diligence, favourable market conditions and stock exchange, regulatory and third party approvals.

·           Commenced production at the Deep Panuke natural gas facility located offshore Nova Scotia in August 2013 and reached commercial operation with the issuance of the Production Acceptance Notice in December 2013.

·           Completed the divestiture of assets for proceeds of approximately $685 million in the Canadian Division which primarily includes the sale of the Jean Marie natural gas assets in the Greater Sierra resource play.

·           Completed the sale of Encana’s 30 percent interest in the proposed Kitimat liquefied natural gas (“LNG”) export terminal in British Columbia in February 2013.

2012

·             Entered into a partnership agreement with a Mitsubishi Corporation subsidiary (“Mitsubishi”) to jointly develop certain Cutbank Ridge lands in British Columbia. Mitsubishi agreed to invest approximately C$2.9 billion for a 40 percent interest in the partnership, with C$1.45 billion received in February 2012. The remaining amount will be invested over the expected commitment period of approximately five years.

·           Entered into an agreement with a PetroChina Company Limited subsidiary (“PetroChina”) to jointly explore and develop certain Duvernay lands in Alberta. PetroChina agreed to invest approximately C$2.18 billion for a 49.9 percent working interest in the lands with C$1.18 billion received in December 2012. The remaining amount will be received over the expected commitment period of approximately four years.

·           Entered into an agreement with a Toyota Tsusho Corporation subsidiary (“Toyota Tsusho”) under which Toyota Tsusho agreed to acquire a royalty interest in natural gas production from a portion of Encana’s Clearwater resource play. Toyota Tsusho agreed to invest approximately C$600 million for a 32.5 percent gross overriding royalty, with C$100 million received in April 2012. The remaining amount will be received over the expected commitment period of approximately seven years.

·             Entered into a long-term joint venture agreement with a Nucor Corporation subsidiary (“Nucor”), under which Nucor will earn a 50 percent working interest in certain natural gas wells to be drilled over the next 20 years in the Piceance Basin in Colorado. Nucor agreed to pay its share of well costs plus a portion attributable to Encana’s interest.

·             Entered into a joint venture agreement with Exaro Energy III LLC (“Exaro”) in March 2012 under which Exaro agreed to invest approximately $380 million over the next five years to earn a 32.5 percent working interest in certain sections of the Jonah field in Wyoming.

·             Renegotiated certain gathering and processing agreements which result in Encana receiving additional NGL volumes from the Company’s processed gas in the Piceance and Jonah areas in the U.S.

·             Closed the sale of two natural gas processing plants in British Columbia and Alberta for proceeds of approximately C$920 million in February 2012.

2011

·             Acquired various strategic exploration and evaluation lands and properties which complement existing assets within Encana’s portfolio, totaling $515 million. Land capture included additional acreage with potential oil and natural gas streams with associated liquids.

·             Acquired a 30 percent interest in the planned Kitimat LNG export terminal in British Columbia.

·           Completed divestitures for total proceeds of $891 million, which included Encana’s interest in the Cabin natural gas processing plant in British Columbia, the Fort Lupton natural gas processing plant in Colorado and the South Piceance natural gas gathering assets in Colorado.

·           Closed the majority of the sale of its North Texas natural gas producing assets for proceeds of $836 million.  In March of 2012, Encana completed the remainder of the sale and received additional proceeds of $114 million.

·             Entered into deep cut processing arrangements, which allow the Company to extract additional NGL volumes from its natural gas streams starting in 2012 at the Musreau plant in Bighorn and Gordondale plant in Peace River Arch.

The following map outlines the location of Encana’s North American landholdings, resource plays and emerging plays as at December 31, 2013.

Encana’s operations are focused on exploiting long-life natural gas and oil formations.  Encana strives to identify early-stage, geographically expansive hydrocarbon-charged basins and then assembles a large land position to try to capture core resource opportunities. The Company’s operations are primarily located in Canada and the U.S.  All of Encana’s reserves and production are located in North America.

In November 2013, Encana announced a new strategy that is committed to growing long-term shareholder value through a disciplined focus on generating profitable growth. The Company is pursuing the following key business objectives:

·                  Balance the commodity portfolio

·                  Exercise a disciplined capital allocation strategy

·                  Maintain portfolio flexibility to respond to changing market conditions

·                  Improve capital and operational efficiency and reduce cost structure

·                  Preserve balance sheet strength

The Company has a history of leveraging technology to unlock resources and build the underlying productive capacity at a low cost. The Company’s resource play hub model is a manufacturing-style development approach, which utilizes integrated production facilities to develop resources by drilling multiple wells from central pad sites. Capital and operating efficiencies are achieved across Encana’s expansive portfolio through repeatable operations, optimizing equipment and processes, by applying continuous improvement techniques.

As part of the new strategy, Encana may realign certain plays to complement its capital allocation strategy.  In 2014, Encana’s capital allocation strategy is focused on accelerating growth from a limited number of high return, scalable projects, while optimizing production performance from the remainder of the Company’s resource base.

As of December 31, 2013, the Canadian Division includes the exploration for, development of, and production of natural gas, oil and NGLs and other related activities within Canada. Resource plays in the Division include: Cutbank Ridge in northern British Columbia, Bighorn in west central Alberta, Peace River Arch in northwest Alberta, Clearwater in southern Alberta, and Greater Sierra in northeast British Columbia. In December 2013, the Deep Panuke natural gas facility located offshore Nova Scotia commenced commercial operations. Emerging plays in the Division include the Duvernay in west central Alberta. In 2014, as part of Encana’s new strategy, the Company may realign certain plays to complement its capital allocation strategy, as described in the Business Objectives section of this Annual Information Form.

In 2013, the Canadian Division had total capital investment of approximately $1,365 million and drilled approximately 390 net wells.  Production after royalties averaged approximately 1,432 MMcf/d of natural gas and approximately 30.4 Mbbls/d of oil and NGLs.  At December 31, 2013, the Canadian Division had an established land position in Canada of approximately 8.9 million gross acres (7.0 million net acres), including approximately 4.2 million gross undeveloped acres (3.2 million net acres).

Mineral rights on certain of Encana’s total net acreage are owned in fee simple mineral title, 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 Crown land where the government owns the mineral rights. In November 2013, Encana announced plans to transfer fee simple mineral titles into a separate company and subsequently divest a portion of Encana’s interest in the new company through an IPO in mid-2014, as described in the Recent Developments section of this Annual Information Form.

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

Note:

(1)          Figures exclude wells capable of producing, but not producing.

Resource Plays and Activities in the Canadian Division

Cutbank Ridge

Cutbank Ridge is a resource play located in the Canadian Rocky Mountain foothills, southwest of Dawson Creek, British Columbia. Key producing horizons in Cutbank Ridge include the Montney, and to a lesser degree the Cadomin and Doig formations. The Montney is 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 2013, Encana drilled approximately 30 net wells in the area and production after royalties averaged approximately 506 MMcf/d of natural gas and approximately 1.8 Mbbls/d of NGLs.

At December 31, 2013, Encana controlled approximately 426,000 gross undeveloped acres (220,000 net acres) covering the deep basin Montney formation in British Columbia, with approximately 83,000 net acres located within Encana’s core development area near Dawson Creek. Encana has tested Montney extensively over the last several years and by applying advanced technology has reduced overall development costs significantly, achieving approximately 70 percent reduction in costs on a completed interval basis since 2006.

Encana has a partnership agreement with Mitsubishi to jointly develop certain Cutbank Ridge lands.  Under the agreement, Mitsubishi agreed to invest approximately C$2.9 billion for its 40 percent partnership interest, of which approximately C$1.8 billion has been received.  In addition to its 40 percent of the partnership’s future capital funding investment, Mitsubishi is required to invest the remaining amount of approximately C$1.1 billion over the remaining expected commitment period, thereby reducing Encana’s capital funding commitment to 30 percent of the total expected capital investment over that period. Encana proportionately consolidates 60 percent interest in the partnership, including reserves.

As at December 31, 2013, Encana has natural gas processing capacity of approximately 740 MMcf/d with six plants located in Alberta and British Columbia, with commitment terms ranging from two to twenty years and plant capacities from 50 MMcf/d to 200 MMcf/d. Of the total processing capacity, approximately 260 MMcf/d is used to process natural gas for the partnership with Mitsubishi.

Bighorn

Bighorn is a resource play located in west central Alberta. The focus is on exploiting multi-zone stacked Cretaceous sands in the Deep Basin. In 2013, Encana drilled approximately 21 net wells in the area and production after royalties averaged approximately 255 MMcf/d of natural gas and approximately 8.9 Mbbls/d of oil and NGLs. At December 31, 2013, Encana controlled approximately 298,000 gross undeveloped acres (252,000 net acres) in the resource play.

Encana has a 70 percent ownership interest in the Resthaven gas plant and a 50 percent ownership interest in the Kakwa gas plant, with combined processing capacity of approximately 160 MMcf/d (net 100 MMcf/d to Encana).  Encana has an agreement with an unrelated third party to expand the Resthaven plant’s gas processing and NGL extraction capacity by an additional 200 MMcf/d in two phases. Completion of the first phase is expected in mid-2014.

Encana has current processing capacity of approximately 235 MMcf/d at the Musreau plant under a seven year commitment with a third party. Current net liquids production from the deep cut facility is approximately 7.2 Mbbls/d after royalties.

Peace River Arch

Peace River Arch is a resource play located in northwest Alberta.  The focus is on the continued development of the Montney formation in Alberta.  In 2013, Encana drilled approximately 39 net wells in the area and production after royalties averaged approximately 133 MMcf/d of natural gas and approximately 8.7 Mbbls/d of oil and NGLs. At December 31, 2013, Encana controlled approximately 256,000 gross undeveloped acres (235,000 net acres) in the Montney formation.

Encana holds an approximate 60 percent ownership interest in the Sexsmith plant, which has a total capacity of approximately 210 MMcf/d (net 125 MMcf/d to Encana).  The Company also has current compression and gathering capacity of 61 MMcf/d under a 20 year commitment with a third party.  Under this agreement, the third party has agreed to complete an expansion project which will increase the capacity to 161 MMcf/d.  Completion is expected in 2014.

Encana has current processing capacity of approximately 90 MMcf/d at the Gordondale sour gas deep cut plant under a ten year commitment. The deep cut facility has averaged net liquids production of approximately 3.6 Mbbls/d after royalties.

Clearwater

Clearwater is a resource play that extends from the U.S. border to central Alberta and includes natural gas and oil resources. Natural gas development has been focused on the Horseshoe Canyon coals which is integrated with shallower sands and exploiting deeper targets using an integrated wellbore strategy. Encana is in the early stages of oil development from multiple oil horizons.

Encana has an agreement with Toyota Tsusho under which Toyota Tsusho will acquire a 32.5 percent gross overriding royalty interest over a five year period in natural gas production from a portion of Encana’s Clearwater resource play. Toyota Tsusho has invested C$227 million and is required to further invest approximately C$373 million over the remaining commitment period.

In 2013, Encana drilled approximately 238 net natural gas wells and 45 net oil wells.  Production after royalties averaged approximately 335 MMcf/d of natural gas and approximately 9.9 Mbbls/d of oil and NGLs.  At December 31, 2013, Encana controlled approximately 1.7 million gross undeveloped acres (1.5 million net acres) in the resource play.  Approximately 81 percent of the total net acreage landholdings in Clearwater are owned in fee simple mineral title.

In November 2013, Encana announced plans to transfer the Company’s royalty business, whose assets comprise fee simple mineral title and certain royalty interests in lands located predominately in Alberta, into a separate company. Encana plans to subsequently divest a portion of its interest in the new company through an IPO in mid-2014.

Greater Sierra

Greater Sierra is a resource play located in northeast British Columbia. The continued focus is on the development of the Devonian aged Horn River shales. In 2013, Encana drilled approximately five net wells in the area and production after royalties averaged approximately 156 MMcf/d of natural gas and approximately 0.3 Mbbls/d of oil and NGLs.

At December 31, 2013, Encana controlled approximately 193,000 gross undeveloped acres (159,000 net acres) in the Horn River Basin shales. Horn River Basin shales (Muskwa, Otter Park and Evie) within Encana’s focus area are upwards of 500 feet thick. At December 31, 2013, these shales have been evaluated with approximately 136 gross wells (14 vertical and 122 horizontal), 91 of which have been placed on long-term production (one vertical and 90 horizontal).  In 2013, Encana divested its acreage in the Jean Marie formation.

Encana has gas processing capacity of approximately 570 MMcf/d (net 285 MMcf/d) at various facilities in the area. In 2013, Encana completed the transfer of a processing commitment to a third party related to the Cabin natural gas processing plant located in British Columbia. Encana has an additional processing commitment related to a planned expansion of the Cabin plant for which commissioning and expansion was suspended in 2012.

Duvernay

The Duvernay is an emerging liquids play located in west central Alberta.  At December 31, 2013, Encana controlled approximately 492,000 gross undeveloped acres (263,000 net acres). In 2013, Encana drilled approximately 12 net exploration wells. Net production after royalties averaged 4 MMcf/d of natural gas and 0.7 Mbbls/d of liquids.

Encana has an agreement with PetroChina to jointly explore and develop certain Duvernay lands. Under the agreement, PetroChina agreed to invest approximately C$2.18 billion for a 49.9 percent working interest in the lands. PetroChina has invested approximately C$1.33 billion and will further invest approximately C$850 million over the remaining commitment period, which will be used to fund half of Encana’s capital funding commitment.

Atlantic Canada

Encana is the owner and operator of the Deep Panuke gas field located offshore Nova Scotia, approximately 250 kilometres southeast of Halifax on the Scotian shelf. Natural gas from Deep Panuke is produced and processed by an offshore Production Field Centre (“PFC”) which is designed to process up to 300 MMcf/d from four wells. Produced gas is transported to Goldboro, Nova Scotia, via subsea pipeline which interconnects with the Maritimes & Northeast Pipeline, where the natural gas is ultimately transported to markets in eastern Canada and the northeast U.S.

In December 2013, the PFC commenced commercial operation with the issuance of the Production Acceptance Notice.  In 2013, natural gas production after royalties averaged approximately 41 MMcf/d. Encana sells all natural gas produced from Deep Panuke under a long term physical sales contract at the prevailing market prices in that region.

At December 31, 2013, Encana controlled approximately 76,000 gross acres (32,000 net acres) in Atlantic Canada, which includes Nova Scotia and Newfoundland and Labrador. Encana operates six of its nine licenses in these areas and has an average working interest of approximately 42 percent.

As of December 31, 2013, the USA Division includes the exploration for, development of, and production of natural gas, oil and NGLs and other related activities within the U.S.  Resource plays in the Division include: Piceance in northwest Colorado, Jonah in southwest Wyoming, Haynesville in Louisiana, and Texas. Emerging plays in the Division include the DJ Niobrara in northern Colorado, the San Juan Basin in New Mexico and the Tuscaloosa Marine Shale in Louisiana and Mississippi. In 2014, as part of Encana’s new strategy, the Company may realign certain plays to complement its capital allocation strategy, as described in the Business Objectives section of this Annual Information Form.

In 2013, the USA Division had total capital investment of approximately $1,283 million and drilled approximately 237 net wells.  Production after royalties averaged approximately 1,345 MMcf/d of natural gas and approximately 23.5 Mbbls/d of oil and NGLs.  At December 31, 2013, the USA Division had an established land position of approximately 3.1 million gross acres (2.6 million net acres) including approximately 2.4 million gross undeveloped acres (2.1 million net acres).

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

Note:

(1)          Figures exclude wells capable of producing, but not producing.

Resource Plays and Activities in the USA Division

Piceance

Piceance is a resource play located in northwest Colorado. The basin is characterized by thick natural gas accumulations primarily in the Williams Fork formation. In addition to Williams Fork, Encana has begun exploration drilling in the Niobrara and Mancos formations, which are thick shales predominant throughout the basin. In 2013, production after royalties averaged approximately 455 MMcf/d of natural gas and approximately 5.1 Mbbls/d of oil and NGLs. At December 31, 2013, Encana controlled approximately 592,000 gross undeveloped acres (545,000 net acres).

Encana has a long-term joint venture agreement with Nucor under which Nucor will earn a 50 percent working interest in certain natural gas wells to be drilled in Piceance over the commitment period.  Under the agreement, Nucor agreed to pay its share of well costs plus a portion attributable to Encana’s interest.

In addition, Encana has several other existing joint venture arrangements to develop portions of the Piceance Basin.  In 2013, Encana drilled approximately 85 net wells, of which 81 were drilled primarily using third party funds.  For the remaining term of the joint venture arrangements, it is expected that Encana will drill approximately 2,667 net wells which will be partially funded by third parties.

Encana has current processing capacity of approximately 280 MMcf/d under commitments with remaining terms of up to 13 years. In 2012, the Company renegotiated certain gathering and processing agreements, which resulted in Encana receiving additional NGLs volumes from the Company’s processed gas in the Piceance and Jonah areas.

Jonah

Jonah is a 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. In 2013, production after royalties averaged approximately 323 MMcf/d of natural gas and approximately 4.7 Mbbls/d of oil and NGLs.  At December 31, 2013, Encana controlled approximately 115,000 gross undeveloped acres (103,000 net acres).

Historically, Encana’s operations have been conducted in the over-pressured core portion of the field. Within the over-pressured area, Encana plans to drill the field to 10 acre spacing with higher densities in some areas. Outside of the over-pressured area, Encana owns approximately 114,000 gross undeveloped acres (101,000 net acres), where 40 acre and possibly 20 acre drilling potential exists.

Encana has two existing joint venture agreements whereby the partners earn working interest in certain areas of the Jonah field. In 2013, Encana drilled approximately 88 gross wells (49 net wells), all of which were drilled primarily using third party funds. Over the next two years, Encana expects to drill approximately 110 gross wells (64 net wells) primarily using third party funds under existing arrangements.

Haynesville

The Haynesville shale is a resource play located in Louisiana. The focus is on maximizing gas recovery in the Haynesville and Mid-Bossier horizons.  Encana has developed the lands using a multi-well pad approach in key areas. In 2013, Encana drilled approximately 19 net wells in the area and production after royalties averaged approximately 348 MMcf/d of natural gas. At December 31, 2013, Encana controlled approximately 97,000 gross undeveloped acres (66,000 net acres), with the majority of the leaseholds in north Louisiana being located in the DeSoto and Red River parishes.

Encana has current processing capacity in Haynesville of approximately 1,070 MMcf/d under commitment terms through to 2020. In 2012, Encana secured the regulatory approval of cross unit lateral wells, enabling horizontal wells with lengths of approximately 7,500 feet.

Texas

Texas is a resource play with operations primarily located in East Texas. The focus is on tight gas with multi-zone targets in the Bossier and Cotton Valley zones, as well as shale gas in the Haynesville and Mid-Bossier horizons.  In 2013, Encana drilled approximately one net well in Texas and production after royalties averaged approximately 136 MMcf/d of natural gas. At December 31, 2013, Encana controlled approximately 93,000 gross undeveloped acres (54,000 net acres).

DJ Niobrara

The DJ Niobrara is an emerging liquids play located in the DJ Basin in northern Colorado. The primary formation targets in the basin are the Codell, J-Sand and the Niobrara. At December 31, 2013, Encana controlled approximately 8,800 gross undeveloped acres (8,400 net acres). In 2013, Encana drilled approximately 34 net horizontal wells with an average effective length of 4,700 feet. Production after royalties averaged approximately 39 MMcf/d of natural gas and approximately 8.4 Mbbls/d of oil and NGLs.

San Juan

San Juan is an emerging oil play located in the San Juan Basin in New Mexico. The primary formation targets in the basin are the Gallup and Mancos silt.  Encana has established a significant land position in the play. At December 31, 2013, Encana controlled approximately 322,000 gross undeveloped acres (181,000 net acres). In 2013, Encana drilled approximately 19 net horizontal wells with an average effective length of 4,300 feet. Production after royalties averaged approximately 3 MMcf/d of natural gas and approximately 1.4 Mbbls/d of oil and NGLs.

Tuscaloosa Marine Shale

The Tuscaloosa Marine Shale is an emerging oil play located in Louisiana and Mississippi. Encana has established a significant land position in the play. At December 31, 2013, Encana controlled approximately 317,000 gross undeveloped acres (302,000 net acres). In 2013, Encana drilled approximately three net horizontal wells, with an average effective length of 5,944 feet. Production after royalties averaged approximately 1.1 Mbbls/d of oil and NGLs.

Other Activity

Encana has established a land position in the Eaglebine oil play located in the East Texas Basin. At December 31, 2013, Encana controlled approximately 59,000 gross undeveloped acres (57,000 net acres). In 2013, Encana drilled approximately six net horizontal wells, with an average effective length of 7,856 feet.

Encana has established a significant land position in the Collingwood/Utica Shale liquids play located in Michigan.  At December 31, 2013, Encana controlled approximately 387,000 gross undeveloped acres (387,000 net acres). In 2013, Encana drilled approximately two net horizontal wells, with an average effective length of 7,380 feet.

Market Optimization activities are managed by Encana’s Midstream, Marketing & Fundamentals team, which is responsible for the sale of the Company’s proprietary production and enhancing the associated netback price. 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.

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 regional supply and demand for natural gas and by competing fuels in such markets.

Encana sells its oil, NGLs and condensate 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 in Alberta.

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. Encana sells all natural gas produced from Deep Panuke under a long term physical sales contract at prevailing market prices in that region. As at December 31, 2013, Encana had no material long term fixed price physical sales contracts or delivery contracts.

Encana seeks to mitigate the market risk associated with future cash flows by entering into various risk management contracts relating to produced natural gas, liquids and power.  Details of those contracts related to Encana’s various risk management positions are found in Note 21 to Encana’s audited Consolidated Financial Statements for the year ended December 31, 2013 which are available via the System for Electronic Document Analysis and Retrieval (“SEDAR”) at www.sedar.com and the Electronic Data Gathering, Analysis and Retrieval System (“EDGAR”) at www.sec.gov.

Encana is required to provide reserves data prepared in accordance with Canadian securities regulatory requirements, specifically National Instrument 51-101, Standards of Disclosure for Oil and Gas Activities (“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:

Since its formation in 2002, Encana has retained independent qualified reserves evaluators (“IQREs”) to evaluate and prepare reports on 100 percent of Encana’s natural gas, oil and NGLs reserves annually. In 2013, 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 six other staff under this individual’s direction oversaw the preparation of the reserves estimates by the IQREs. This internal staff consisted of four professional engineers, one engineering technologist and two business analysts with a combined relevant experience of over 100 years. The engineering staff were all members of the appropriate professional associations as well as being members of various industry associations such as the Society of Petroleum Engineers and the Society of Petroleum Evaluation Engineers.

Encana has a Reserves Committee composed of independent board members that reviews the qualifications and appointment of the IQREs. The Reserves Committee also reviews the procedures for providing information to the IQREs. 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. All locations to which proved undeveloped reserves have been assigned are subject to a development plan adopted by Encana’s management.

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 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 any of these sources.

The following table summarizes Encana’s net capital investment for 2013 and 2012.

Capital investment during 2013 reflected the Company’s disciplined capital spending which focused on investment in Encana’s highest return resource plays, investments in opportunities where development has demonstrated success and executing drilling programs with joint venture partners. Acquisitions primarily included land and property purchases with oil and liquids rich natural gas production potential.

Divestiture proceeds for 2013 in the Canadian Division included the sale of the Jean Marie natural gas assets in the Greater Sierra resource play in northeast British Columbia and other assets. For additional information, see “General Development of the Business – Recent Developments – 2013”.

All aspects of the oil and gas industry are highly competitive and Encana actively competes with other companies in the industry, particularly in the following areas:

·     Exploration for and development of new sources of natural gas, oil and NGL reserves;

·     Reserves and property acquisitions;

·     Transportation and marketing of natural gas, oil, NGLs, diluents and electricity;

·     Access to services and equipment to carry out exploration, development and operating activities; and

·     Attracting and retaining experienced industry personnel.

The oil and gas industry also competes with other industries focused on providing alternative forms of energy to consumers. Competitive forces can lead to cost increases or result in an oversupply of natural gas, oil or NGLs, each of which could have a negative impact on Encana’s financial results.

Encana’s operations are subject to laws and regulations concerning pollution, protection of the environment and the handling and transportation of hazardous materials. These laws and regulations generally require Encana to remove or remedy the effect of its activities on the environment at present and former operating sites, including dismantling production facilities and remediating damage caused by the use or release of specified substances.

The Corporate Responsibility, Environment, Health and Safety Committee of Encana’s Board of Directors reviews and recommends environmental policy to the Board of Directors for approval and oversees compliance with government laws and regulations. Monitoring and reporting programs for environmental, health and safety (“EH&S”) performance in day-to-day operations, as well as inspections and assessments, are designed to provide assurance that environmental and regulatory standards are met. Contingency plans are in place for a timely response to an environmental event and remediation/reclamation programs are in place and utilized to restore the environment.

Encana monitors developments in emerging climate change policy and legislation, and considers the associated costs of carbon in its strategic planning. The Corporate Responsibility, Environment, Health and Safety Committee of Encana’s Board of Directors reviews the impact of a variety of carbon constrained scenarios on Encana’s strategy with a current price range from approximately $10 to $80 per tonne of emissions, applied to a range of emissions coverage levels.

Encana expects to incur abandonment and site reclamation costs as existing oil and gas properties are abandoned and reclaimed. In 2013, expenditures for normal compliance with environmental regulations as well as expenditures beyond normal compliance were not material. Encana’s current estimate of the total undiscounted future abandonment and reclamation costs to be incurred over the life of the reserves is approximately $4.3 billion. As at December 31, 2013, Encana has recorded an asset retirement obligation of $966 million.

Encana has a Corporate Responsibility Policy, an Environment Policy and a Health & Safety Policy (the “Policies”) that articulate Encana’s commitment to responsible development. The Policies apply to any activity undertaken by or on behalf of Encana, anywhere in the world, associated with the finding, development, production, transmission and storage of the Company’s products including decommissioning of facilities, marketing and other business and administrative functions. The Corporate Responsibility Policy articulates Encana’s commitment to conducting its business ethically, legally and in a manner that is fiscally, environmentally and socially responsible, while delivering strong financial performance. The Corporate Responsibility Policy has specific requirements in areas related to governance, people, environment, health and safety, engagement, and community involvement.

With respect to Encana’s relationship with the communities in which it does business, the Corporate Responsibility Policy states that Encana will: strive to be a good neighbour by contributing to the well-being of the communities where it operates, recognizing their differing priorities and needs; engaging, listening and working with stakeholders in a timely, respectful and meaningful way; and aligning its community investments with its business strategy and seek to provide mutually beneficial relationships with the community and non-governmental organizations.

With respect to human rights, the Corporate Responsibility Policy states that Encana will abide by all applicable workplace, employment, privacy and human rights legislation.  In addition, Encana will provide a respectful, inclusive workplace free from harassment, discrimination and intimidation.

The Environment Policy recognizes that responsible environmental practices contribute to long-term shareholder value creation and articulates Encana’s commitment to environmental stewardship. The Environment Policy outlines specific requirements in areas related to: compliance with environmental laws and regulations; environmental risk assessment and mitigation; air emissions management; water sourcing, handling and disposal; pollution prevention and waste minimization; and habitat, plant and wildlife disturbance.

The Health & Safety Policy recognizes that all occupational injuries and illnesses are preventable and states Encana’s goal of achieving a workplace free of recognized hazards, occupational injuries and illnesses. The Policy provides all personnel working on an Encana location with the authority and responsibility to stop work without repercussions when an unsafe situation is recognized or suspected.

The Policies and any revisions are approved by Encana’s Senior Management Team and its Board of Directors. Accountability for implementation of the Policies is at the operational level within Encana’s organizational structure. The operating teams have established processes to evaluate risks and programs have been implemented to minimize those risks. Coordination and oversight of the Policies resides with Encana’s Policy, Environment and Sustainability group.

Some of the steps that Encana has taken to embed the corporate responsibility approach throughout the organization include:

In addition, Encana’s Board of Directors approves such policies, and is advised of significant contraventions thereof, and receives updates on trends, issues or events which could have a significant impact on the Company.

At December 31, 2013, Encana employed 3,303 employees as set forth in the following table.

The Company also engages a number of contractors and service providers.

As at December 31, 2013, all of Encana’s reserves and production were located in North America, which limits Encana’s exposure to risks and uncertainties in countries considered politically and economically unstable. Any operations and related assets outside North America may be adversely affected by changes in governmental policy, social instability or other political or economic developments which are not within the control of Encana, including the expropriation of property, the cancellation or modification of contract rights and restrictions on repatriation of cash.

The following information is provided for each director and executive officer of Encana as at the date of this Annual Information Form.

Notes:

(1)          Denotes the year each individual became a director of Encana or one of its predecessor companies (AEC or PanCanadian).

(2)          Member of Audit Committee.

(3)          Member of Corporate Responsibility, Environment, Health and Safety Committee.

(4)          Member of Human Resources and Compensation Committee.

(5)          Member of Nominating and Corporate Governance Committee.

(6)          Member of Reserves Committee.

(7)          Ex officio non-voting member of all other committees. As an ex officio non-voting member, Mr. Woitas attends as his schedule permits and may vote when necessary to achieve a quorum.

(8)          As an officer of Encana and a non-independent director, Mr. Suttles is not a member of any Board Committees.

Encana does not have an Executive Committee of its Board of Directors.

At the date of this Annual Information Form, there are 10 directors of the Company. All of the current directors were elected at the last annual meeting of shareholders held on April 23, 2013, except for Douglas J. Suttles, who was appointed by the Board of Directors effective June 10, 2013.  At the next annual meeting, shareholders will be asked to elect as directors each of the individuals listed in the above table, except for David P. O’Brien, who has reached the Company’s mandatory retirement age. The Company’s mandatory retirement age restrictions, which have been established by the Board of Directors, stipulate that a director may not stand for re-election after reaching the age of 71.

During the last five years, all of the directors and executive officers have served in various capacities with Encana or its predecessor companies or have held the principal occupation indicated opposite their names except for the following:

Mr. Suttles joined Encana in June 2013. From March 2011 until June 2013, he was an independent businessman performing consulting services in the oil and gas industry and serving on the boards of Ceres, Inc. (a publicly traded energy crop company) and NEOS GeoSolutions (a privately held geosciences company). Mr. Suttles was Chief Operating Officer at BP Exploration & Production from January 2009 until March 2011.  From December 2006 until December 2008, Mr. Suttles was the President of BP Alaska.

Ms. Farley is a Member of KKR Management LLC, the general partner of KKR & Co. (“KKR”) as of December 2012, and was a Managing Director of KKR’s energy and infrastructure group from November 2011 to December 2012.  Prior to joining KKR as an employee, Ms. Farley co-founded RPM Energy LLC (a privately-owned oil and gas exploration and development company) created in September 2010 and partnered with KKR.  She was an Advisory Director of Jefferies Randall & Dewey (a private global oil and gas energy industry advisor) from August 2008 to September 2010 and was Co-President of Jefferies Randall & Dewey from February 2005 to August 2008. She was a Managing Partner of Castex Energy Partners (a private exploration and production limited partnership) from August 2008 to January 2009.

Mr. Fowler is a director of Spectra Energy Partners, LP (a public entity). He was Chairman of Spectra Energy Partners, LP from October 2008 until November 2013. He was President & Chief Executive Officer of Spectra Energy Corp. (a natural gas gathering, processing and mainline transportation company) from December 2006 to December 2008 and served as a director from December 2006 to May 2009.

Ms. Nimocks was a director (senior partner) with McKinsey & Company (a private global management consulting firm) from June 1999 to March 2010 and was with the firm in various other capacities since 1989, including as a leader in the firm’s Global Petroleum Practice, Electric Power & Natural Gas Practice, Organization Practice, and Risk Management Practice, as a member of the firm’s worldwide personnel committees for many years and as the Houston Office Manager for eight years.

Ms. Peverett was President and Chief Executive Officer of BC Transmission Corporation (“BCTC”) (electrical transmission) from April 2005 to January 2009.

Mr. Shaw has been a director of Patheon Inc. (a publicly listed provider of drug development and manufacturing services) since December 2009, Manulife Bank of Canada (a private chartered bank) since February 2012 and Manulife Trust Company (a private trust company) since February 2012.  Prior to that, Mr. Shaw was Chairman and Chief Executive Officer of CIBC World Markets Inc. from 2005 through 2008.

Mr. Waterman was Executive Vice President, International Development of Agrium Inc. (a public agricultural supply company) from February 2012 through January 2013.  From April 2011 through February 2012, Mr. Waterman was Executive Vice President and Chief Strategy Development & Investment Officer of Agrium and from April 2000 through April 2011 he was Senior Vice President, Finance & Chief Financial Officer of Agrium.

Mr. Hopwood was Senior Vice President and General Counsel of Suncor Energy Inc. (a public oil and gas company) from 2002 to February 2011.

All of the directors and executive officers of Encana listed above, as a group, beneficially owned or controlled or directed, directly or indirectly, as of February 12, 2014, an aggregate of 348,707 common shares representing 0.05 percent of the issued and outstanding voting shares of Encana, and held options to acquire an aggregate of 2,775,677 additional common shares.

Investors should be aware that some of the directors and officers of the Company are directors and officers of other private and public companies. Some of these private and public companies may, from time to time, be involved in business transactions or banking relationships which may create situations in which conflicts might arise. Any such conflicts shall be resolved in accordance with the procedures and requirements of the relevant provisions of the CBCA, including the duty of such directors and officers to act honestly and in good faith with a view to the best interests of the Company.

The full text of the Audit Committee mandate is included in Appendix E of this Annual Information Form.

The Audit Committee consists of four members, all of whom are independent and financially literate in accordance with the definitions in National Instrument 52-110 Audit Committees. The relevant education and experience of each Audit Committee member is outlined below.

Suzanne P. Nimocks

Ms. Nimocks holds a Bachelor of Arts in Economics (Tufts University) and a Masters in Business Administration (Harvard Graduate School of Business). She is a Corporate Director. Ms. Nimocks is a director of Rowan Companies plc (a public international contract drilling services company), ArcelorMittal (a public international steel company) and Owens Corning (a global producer of residential and commercial building materials). She was a director (senior partner) with McKinsey & Company (a private global management consulting firm) from June 1999 to March 2010 and was with the firm in various other capacities since 1989, including as a leader in the firm’s Global Petroleum Practice, Electric Power & Natural Gas Practice, Organization Practice, and Risk Management Practice, as a member of the firm’s worldwide personnel committees for many years and as the Houston Office Manager for eight years.

Jane L. Peverett (Audit Committee Chair)

Ms. Peverett holds a Bachelor of Commerce (McMaster University) and a Master of Business Administration (Queen’s University), together with a designation as a Certified Management Accountant and a Canadian Security Analyst Certificate. She is also a Fellow of The Society of Management Accountants (FCMA). Ms. Peverett is a Corporate Director. She is a director of Northwest Natural Gas Company (a public natural gas distribution company), Canadian Imperial Bank of Commerce (one of Canada’s largest banks), the B.C. Ferry Authority, Associated Electric & Gas Insurance Services Limited (a private mutual insurance company), Postmedia Network Canada Corp. and Postmedia Network Inc. (a public publishing company). She is also the Audit Committee Chair of Canadian Imperial Bank of Commerce. She was President and Chief Executive Officer of BCTC (electrical transmission) from April 2005 to January 2009 and was previously Vice President, Corporate Services and Chief Financial Officer of BCTC from June 2003 to April 2005. In her 18-year career with the Westcoast Energy Inc./Duke Energy Corporation group of companies, she held senior executive positions with Union Gas Limited (Ontario), including President, President and Chief Executive Officer, Senior Vice President Sales & Marketing and Chief Financial Officer, among others.

Brian G. Shaw

Mr. Shaw is a Chartered Financial Analyst, holds a Masters of Business Administration (University of Alberta) and a Bachelor of Commerce (University of Alberta) and is a Corporate Director. Mr. Shaw is a director of Patheon Inc. (a publicly listed provider of drug development and manufacturing services), Manulife Bank of Canada (a private chartered bank) and Manulife Trust Company (a private trust company) and Ivey Canadian Exploration Ltd. (a private exploration company). He is also the Chairman of the Audit Committee of Patheon Inc. and a member of the Audit Committees of Manulife Bank of Canada and Manulife Trust Company. He has experience in corporate finance, capital markets, investing activities and corporate governance gained through his executive level position at CIBC World Markets Inc., which included his role as Chairman and Chief Executive Officer of CIBC World Markets Inc. from 2005 through 2008.

Bruce G. Waterman

Mr. Waterman holds a Bachelor of Commerce (Queen's University) and a designation as a Chartered Accountant.  He is also a Fellow of the Chartered Accountants (FCA). Mr. Waterman is a director of Enbridge Income Fund Holdings Inc. and a trustee of Enbridge Commercial Trust. He is also a director of Irving Oil Limited. He was Executive Vice President of Agrium Inc. (a public agricultural company), where he held senior roles as Chief Financial Officer, as well as in Business Development and Strategy, from April 2000 through to his retirement in January 2013. Prior to joining Agrium, Mr. Waterman was the Vice-President & Chief Financial Officer of Talisman Energy Inc. (a public oil and gas company) from January 1996 to April 2000.  Mr. Waterman also has extensive expertise in oil and gas exploration and production operations, having spent 15 years (1981 to 1996) at Amoco Corporation, including Dome Petroleum Limited, a predecessor company. At Amoco (a global chemical, oil and gas company which merged with British Petroleum in 1998), his roles included various positions in finance, accounting and business development.

The above list does not include Clayton H. Woitas who is an ex officio member of the Audit Committee.

Encana has adopted policies and procedures with respect to the pre-approval of audit and permitted non-audit services to be provided by PricewaterhouseCoopers LLP. The Audit Committee of the Board of Directors has established a budget for the provision of a specified list of audit and permitted non-audit services that the Audit Committee believes to be typical, recurring or otherwise likely to be provided by PricewaterhouseCoopers LLP. The budget generally covers the period between the adoption of the budget and the next meeting of the Audit Committee, but at the option of the Audit Committee it may cover a longer or shorter period. The list of services is sufficiently detailed as to the particular services to be provided to ensure that (i) the Audit Committee knows what services it is being asked to pre-approve; and (ii) it is not necessary for any member of management to make a judgment as to whether a proposed service fits within the pre-approved services.

Subject to the next paragraph, the Audit Committee has delegated authority to the Chair of the Audit Committee (or if the Chair is unavailable, any other member of the Committee) to pre-approve the provision of permitted services by PricewaterhouseCoopers LLP which have not otherwise been pre-approved by the Audit Committee, including the fees and terms of the proposed services (“Delegated Authority”). All pre-approvals granted pursuant to Delegated Authority must be presented by the member(s) who granted the pre-approvals to the full Audit Committee at its next meeting. The fees payable in connection with any particular service to be provided by PricewaterhouseCoopers LLP that has been pre-approved pursuant to Delegated Authority (i) may not exceed C$200,000, in the case of pre-approvals granted by the Chair of the Audit Committee; and (ii) may not exceed C$50,000, in the case of pre-approvals granted by any other member of the Audit Committee.

All proposed services, or the fees payable in connection with such services, that have not already been pre-approved must be pre-approved by either the Audit Committee or pursuant to Delegated Authority. Prohibited services may not be pre-approved by the Audit Committee or pursuant to Delegated Authority.

The following table provides information about the fees billed to the Company for professional services rendered by PricewaterhouseCoopers LLP during fiscal 2013 and 2012.

Notes:

(1)          Audit fees consist of fees for the audit of the Company’s annual financial statements or services that are normally provided in connection with statutory and regulatory filings or engagements.

(2)          Audit-related fees consist of fees for assurance and related services that are reasonably related to the performance of the audit or review of the Company’s financial statements and are not reported as Audit Fees. During fiscal 2013 and 2012, the services provided in this category included reviews in connection with acquisitions and divestitures, research of accounting and audit-related issues and the review of reserves disclosure.

(3)          Tax fees consist of fees for tax compliance services, tax advice and tax planning. During fiscal 2013 and 2012, the services provided in this category included assistance and advice in relation to the preparation of corporate income tax returns.

(4)          During fiscal 2013 and 2012, the services provided in this category included the payment of maintenance fees associated with a research tool that grants access to a comprehensive library of financial reporting and assurance literature.

Encana did not rely on the de minimis exemption provided by Section (c)(7)(i)(C) of Rule 2-01 of Securities and Exchange Commission (“SEC”) Regulation S-X in 2013 or 2012.

The Company is authorized to issue an unlimited number of common shares, an unlimited number of first preferred shares and an unlimited number of second preferred shares. As of December 31, 2013, there were approximately 740.9 million common shares outstanding and no preferred shares outstanding.

The holders of the common shares are entitled to receive dividends if, as and when declared by the Board of Directors of the Company. The holders of the common shares are entitled to receive notice of and to attend all meetings of shareholders and are entitled to one vote per common share held at all such meetings. In the event of the liquidation, dissolution or winding up of the Company or other distribution of assets of the Company among its shareholders for the purpose of winding up its affairs, the holders of the common shares will be entitled to participate rateably in any distribution of the assets of the Company.

Encana has stock-based compensation plans that allow employees to purchase common shares of the Company. Option exercise prices approximate the market price for the common shares on the date that the options were issued. Options granted under the plans are generally fully exercisable between three to four years and expire five years after the grant date.

The November 30, 2009 Split Transaction was effected by way of an arrangement under the CBCA, under which the holders of common shares of Encana received one new Encana common share and one common share of Cenovus for each Encana common share previously held. Holders of the stock options of Encana became the holders of stock options of Encana and Cenovus, with the exercise price under the stock options being adjusted based on the relative trading prices of the Encana and Cenovus common shares.

The Company has a shareholder rights plan (the “Plan”) that was adopted to ensure, to the extent possible, that all shareholders of the Company are treated fairly in connection with any take-over bid for the Company. The Plan creates a right that attaches to each present and subsequently issued common share. Until the separation time, which typically occurs at the time of an unsolicited take-over bid, whereby a person acquires or attempts to acquire 20 percent or more of Encana’s common shares, the rights are not separable from the common shares, are not exercisable and no separate rights certificates are issued. Each right entitles the holder, other than the 20 percent acquirer, from and after the separation time and before certain expiration times, to acquire one common share at 50 percent of the market price at the time of exercise. The Plan was reconfirmed at the Company’s 2013 annual meeting of shareholders and must be reconfirmed at every third annual meeting thereafter.

Preferred shares may be issued in one or more series. The Board of Directors may determine the designation, rights, privileges, restrictions and conditions attached to each series of preferred shares before the issue of such series. Holders of the preferred shares are not entitled to vote at any meeting of the shareholders of the Company, but may be entitled to vote if the Company fails to pay dividends on that series of preferred shares. The first preferred shares are entitled to priority over the second preferred shares and the common shares of the Company, and the second preferred shares are entitled to priority over the common shares of the Company, with respect to the payment of dividends and the distribution of assets of the Company in the event of any liquidation, dissolution or winding up of the Company’s affairs.

The following information relating to Encana's credit ratings is provided as it relates to Encana's financing costs and liquidity.  Specifically, credit ratings affect Encana’s ability to obtain short-term and long-term financing and the cost of such financing.  Additionally, the ability of Encana to engage in certain collateralized business activities on a cost effective basis depends on the Company maintaining competitive credit ratings.  A reduction in the current ratings on the Company's debt by its rating agencies, particularly a downgrade below investment grade ratings, could adversely affect the Company’s cost of financing and its access to sources of liquidity and capital. In addition, changes in credit ratings may affect the Company’s ability to, and the associated costs of, entering into normal course derivative transactions for risk management activities.

The following table outlines the ratings issued by the respective rating agencies as of February 12, 2014.

Credit ratings are intended to provide investors with an independent measure of credit quality of any issue of securities. The credit ratings assigned by the rating agencies are not recommendations to purchase, hold or sell the securities nor do the ratings comment on market price or suitability for a particular investor. Any rating may not remain in effect for any given period of time or may be revised or withdrawn entirely by a rating agency in the future if, in its judgment, circumstances so warrant.

S&P’s long-term credit ratings are on a rating scale that ranges from AAA to D, which represents the range from highest to lowest quality. A rating of BBB by S&P is within the fourth highest of ten categories and indicates that the obligation exhibits adequate protection parameters. However, adverse economic conditions or changing circumstances are more likely to lead to a weakened capacity of the issuer to meet its financial commitments. S&P’s short-term Canadian commercial paper ratings are on a scale that ranges from A-1 (high) to D, which represents the range from highest to lowest quality. A rating of A-3 is the fifth highest of eight categories and indicates adequate protection parameters. However, adverse economic conditions or changing circumstances are more likely to lead to a weakened capacity of the obligor to meet its financial commitment on the obligation. A negative outlook means that a rating may be lowered.

Moody’s long-term credit ratings are on a rating scale that ranges from Aaa to C, which represents the range from highest to lowest quality. A rating of Baa2 by Moody’s is within the fourth highest of nine categories and is assigned to obligations judged to be medium grade and subject to moderate credit risk.  As such, they may possess certain speculative characteristics. The addition of a 1, 2 or 3 modifier after a rating indicates the relative standing within a particular rating category. The modifier 1 indicates that the obligation ranks in the higher end of its rating category, the modifier 2 indicates a mid-range ranking and the modifier 3 indicates a ranking in the lower end of its rating category. Moody’s short-term credit ratings are on a rating scale that ranges from P-1 to NP, which represents the range from highest to lowest quality.  A rating of P-2 is the second highest of four categories and indicates that the issuer has a strong ability to repay short-term debt obligations.

DBRS’ long-term credit ratings are on a rating scale that ranges from AAA to D, which represents the range from highest to lowest quality. A rating of BBB by DBRS is within the fourth highest of ten categories and is assigned to obligations considered to be of adequate credit quality. The capacity for the payment of financial obligations is considered acceptable. DBRS’ commercial paper and short-term debt credit ratings are on a scale ranging from R-1 (high) to D, which represents the range from highest to lowest quality. A rating of R-2 (mid) is the fifth highest of ten categories and indicates that the short-term debt is of adequate credit quality. The capacity for the payment of short-term financial obligations as they fall due is acceptable and the issuer may be vulnerable to future events or may be exposed to other factors that could reduce credit quality.

Encana has paid each of S&P, Moody’s, and DBRS their customary fees in connection with the provision of the above ratings.  Encana has not made any payments to S&P, Moody’s or DBRS over the past two years for services unrelated to the provision of such ratings.

See “Risk Factors – A downgrade in Encana’s credit rating could increase its cost of capital and limit its access to capital, suppliers or counterparties” in this Annual Information Form.

All of the outstanding common shares of Encana are listed and posted for trading on the Toronto Stock Exchange (“TSX”) and the New York Stock Exchange under the symbol “ECA”. The following table outlines the share price trading range and volume of shares traded by month in 2013.