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, 2014

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:  741,188,439

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. 333-196927).

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

Encana Corporation

Annual Information Form

March 3, 2015

This is the Annual Information Form of Encana Corporation (“Encana” or the “Company”) for the year ended December 31, 2014. 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.

The following volumetric measures may be abbreviated throughout this Annual Information Form: thousand cubic feet (“Mcf”); million cubic feet (“MMcf”) per day (“MMcf/d”); billion cubic feet (“Bcf”); trillion cubic feet (“Tcf”); barrel (“bbl”); thousand barrels (“Mbbls”) per day (“Mbbls/d”); million barrels (“MMbbls”); barrels of oil equivalent (“BOE”) per day (“BOE/d”); thousand barrels of oil equivalent (“MBOE”) per day (“MBOE/d”); million barrels of oil equivalent (“MMBOE”) per day (“MMBOE/d”); and million British thermal units (“MMBtu”).

Certain natural gas volumes have been converted to BOE on the basis of six Mcf to one bbl.  BOE may be misleading, particularly if used in isolation.  A conversion ratio of 6:1 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 natural gas as compared to oil 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.

The term “liquids” is used to represent oil, natural gas liquids (“NGLs”) and condensate. The term “liquids rich” is used to represent natural gas streams with associated liquids volumes.

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, 2014, including required comparative information for 2013 and 2012, have been prepared in accordance with U.S. GAAP.

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

This Annual Information Form is available via the System for Electronic Documentation Analysis and Retrieval (“SEDAR”) at www.sedar.com and the Electronic Data Gathering, Analysis and Retrieval System (“EDGAR”) at www.sec.gov.

Unless otherwise specified, all dollar amounts are expressed in U.S. dollars, all references to “dollars”, “$” or “US$” are to U.S. dollars and all references to “C$” are to Canadian dollars.  All amounts are provided on a before tax basis, unless otherwise stated.

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 T2P 2S5.

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, 2014. 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, 2014.

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, 2014, respectively.

As a general matter, Encana reorganizes its subsidiaries and partnerships 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, 2014, Encana’s operating and reportable segments were: (i) Canadian Operations; (ii) USA Operations; and (iii) Market Optimization.

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.

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

2014

The following map outlines the location of Encana’s North American landholdings, plays and emerging plays as at December 31, 2014.

Encana’s operations are focused on exploiting strategic, high return and scalable natural gas and oil formations.  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.

Encana is committed to growing long-term shareholder value through a disciplined focus on generating profitable growth. The Company’s key objectives include:

·                  Balancing the commodity portfolio

·                  Exercising a disciplined capital allocation strategy

·                  Maintaining portfolio flexibility to respond to changing market conditions

·                  Maximizing profitability through operational efficiency and reducing costs

·                  Preserving balance sheet strength

The Company has a history of identifying and entering into strategic prospective plays and leveraging technology to unlock resources and build the underlying productive capacity at a low cost. Encana continually strives to improve operating efficiencies, foster technological innovation and lower its cost structures.  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 diverse portfolio through repeatable operations, optimizing equipment and processes and by applying continuous improvement techniques.

Encana’s capital investment strategy is focused on accelerating growth from a limited number of strategic, high return and scalable projects, while optimizing production performance from the remainder of the Company’s resource base.

The Canadian Operations includes the exploration for, development of, and production of natural gas, oil and NGLs and other related activities within Canada. Plays in Canada include: Montney in northern British Columbia and northwest Alberta; Duvernay in west central Alberta; and Other Upstream Operations including Clearwater in central and southern Alberta, Deep Panuke located offshore Nova Scotia and Other and emerging.  Other and emerging includes: Cadomin/Doig in northeast British Columbia, Horn River in northeast British Columbia and Granite Wash/Doig in northwest Alberta.  Other Upstream Operations comprises plays that are not part of Encana’s strategic focus as well as prospective plays which are under appraisal.

In 2014, certain plays were reorganized to align with the Company’s business objectives, as described in the “Business Objectives” section of this Annual Information Form.  Accordingly, comparative information has been reorganized. Montney and Duvernay reflect Encana’s focus on the future growth and development in those plays.  Montney comprises the Montney formations that were formerly held in Cutbank Ridge and Peace River Arch.  Duvernay was formerly presented in Other and emerging.  Other and emerging primarily includes: the remaining properties previously held in Cutbank Ridge, which was renamed Cadomin/Doig; Greater Sierra, which was renamed Horn River; and the remaining properties previously held in Peace River Arch, which was renamed Granite Wash/Doig.

In the second quarter of 2014, Encana transferred ownership of its royalty business, which comprised fee simple mineral title and certain royalty interests in lands formerly held within the Clearwater play into a separate company, PrairieSky, and subsequently completed an initial public offering of 59.8 million common shares of PrairieSky for gross proceeds of approximately C$1.67 billion. In the third quarter of 2014, Encana completed a secondary offering of the remaining 70.2 million common shares of PrairieSky for gross proceeds of approximately C$2.6 billion.  Following the completion of the secondary offering, Encana no longer holds an interest in PrairieSky.

In the third quarter of 2014, Encana divested of Bighorn for proceeds of approximately $1.7 billion, which included approximately 360,000 net acres, along with Encana’s working interests in pipelines, facilities and service arrangements.  These divestitures are further described in the “Recent Developments” section of this Annual Information Form.

In 2014, the Canadian Operations had total capital investment of approximately $1,226 million and drilled approximately 279 net wells.  Production after royalties averaged approximately 1,378 MMcf/d of natural gas, approximately 13.6 Mbbls/d of oil, and approximately 23.6 Mbbls/d of NGLs.  At December 31, 2014, the Canadian Operations had an established land position in Canada of approximately 5.6 million gross acres (4.1 million net acres) including approximately 2.8 million gross undeveloped acres (2.0 million net undeveloped acres).

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

Note:

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

Notes:

(1)          During 2014, Encana divested its Bighorn play and investment in PrairieSky.

(2)          During 2013, Encana divested its Jean Marie natural gas assets in Horn River.

Notes:

(1)          During 2014, Encana divested its Bighorn play and investment in PrairieSky.

(2)          During 2013, Encana divested its Jean Marie natural gas assets in Horn River.

Plays and Other Activities in the Canadian Operations

Montney

Montney is a play located in the Canadian Rocky Mountain foothills, which extends from southwest of Dawson Creek, in northern British Columbia to northwest Alberta. Montney is being exclusively 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 2014, Encana drilled approximately 79 net wells in the area and production after royalties averaged approximately 514 MMcf/d of natural gas and approximately 18.7 Mbbls/d of oil and NGLs.

At December 31, 2014, Encana controlled approximately 574,000 gross undeveloped acres (395,000 net undeveloped acres) covering the deep basin Montney formation. Since the first horizontal well completion in the area in 2006, Encana has continued to apply advanced technologies to reduce the overall development costs by approximately 75 percent on a completed interval basis.  During 2014, Encana focused on drilling longer wells with an average effective length of approximately 8,700 feet and tighter completion spacing at approximately 80 feet per perforation.

Encana has a partnership agreement with Mitsubishi to jointly develop certain lands predominately in the Montney.  Under the agreement, Mitsubishi agreed to invest approximately C$2.9 billion for its 40 percent partnership interest, of which to date approximately C$2.0 billion has been received as of December 31, 2014.  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$0.9 billion over the five year development plan of the area, thereby reducing Encana’s capital funding commitment to 30 percent of the total expected capital investment over that development plan. Encana proportionately consolidates 60 percent interest in the partnership, including reserves.

As at December 31, 2014, Encana has natural gas processing capacity of approximately 700 MMcf/d with eight plants located in Alberta and British Columbia under contract with third parties with commitment terms ranging from three to 17 years. The plant capacities range from 100 MMcf/d to 225 MMcf/d of which Encana has approximately 90 MMcf/d of processing capacity at the Gordondale sour gas deep cut plant, which has averaged net liquids production of approximately 6.0 Mbbls/d after royalties.  Of the total processing capacity under contract, approximately 260 MMcf/d is used to process Encana’s net share of natural gas for the partnership with Mitsubishi.  Encana also has gathering and compression capacity of 161 MMcf/d under a remaining 19 year commitment with a third party in the Pipestone/Sexsmith area.

In addition to the contracted capacity, Encana owns natural gas processing capacity of approximately 175 MMcf/d at three plants located in Alberta, with plant capacities ranging from 115 MMcf/d to 210 MMcf/d, of which Encana holds an approximate 60 percent ownership interest in the Sexsmith plant that has total capacity of approximately 210 MMcf/d (net 125 MMcf/d to Encana).

Duvernay

Duvernay is a play located in west central Alberta and includes properties that are primarily located in the Duvernay formation.  The focus of development is on exploiting shale gas and condensate in the Duvernay formation.  In 2014, Encana commenced pad drilling in the northern part of the play, which is being developed with horizontal well technology.  Encana is currently achieving significant improvements in drilling costs and cycle times through application of its resource play hub model and continuing to develop long-term take-away capacity.  In 2014, Encana drilled approximately 24 net wells in the area and production after royalties averaged approximately 11 MMcf/d of natural gas and approximately 2.1 Mbbls/d of oil and NGLs.  At December 31, 2014, Encana controlled approximately 563,000 gross undeveloped acres (345,000 net undeveloped acres) in the Duvernay formation.

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$1.59 billion to date and is to further invest approximately C$590 million over the remaining commitment period that expires in 2020, which will be used to fund half of Encana’s capital commitment.

Encana holds an approximate 50.1 percent ownership in two Simonette gas plants with a combined natural gas processing capacity of 55 MMcf/d (net 28 MMcf/d to Encana) and NGLs production capacity of 10 Mbbls/d (net 5.0 Mbbls/d to Encana).

Other Upstream Operations

Clearwater

Clearwater is a play located predominantly in central and southern Alberta and includes both natural gas and oil resources. Natural gas development has focused on the Horseshoe Canyon coals which are integrated with shallower sands. Encana is using an integrated wellbore strategy to exploit deeper targets within the formation.  In 2014, Encana drilled approximately 174 net natural gas wells. Production after royalties averaged approximately 292 MMcf/d of natural gas and approximately 8.6 Mbbls/d of oil and NGLs.  At December 31, 2014, Encana controlled approximately 737,000 gross undeveloped acres (570,000 net undeveloped acres) in the play.

During 2014, Encana divested its royalty business comprising approximately 6.3 million gross acres of fee simple mineral title and 0.5 million gross acres of certain royalty interests, for aggregate gross proceeds of approximately C$4.27 billion in two separate offerings of common shares of PrairieSky held by Encana.  On January 15, 2015, Encana completed the sale of certain working interests in properties in Clearwater to Ember Resources Inc. for C$556 million after closing adjustments.  The sale comprised approximately 1.4 million gross acres (1.2 million net acres) and contained over 6,800 producing wells.  In 2014, the production associated with these wells averaged approximately 172 MMcf/d of natural gas and approximately 0.3 Mbbls/d of oil and NGLs. Collectively, the divestiture of the royalty business to PrairieSky and the sale of certain working interests to Ember Resources Inc. constituted a substantial portion of the acreage in Clearwater.  See the “Recent Developments” section of this Annual Information Form.

Subsequent to the divestitures, Encana has retained a working interest in approximately 1.4 million gross acres (1.1 million net acres) with approximately 537,000 gross undeveloped acres (419,000 net undeveloped acres) primarily in the Wheatland area of southern Alberta.  Development is focused along the eastern edge of the Horseshoe Canyon Fairway with approximately 479,000 gross acres (466,000 net acres).  In 2014, production after royalties associated with the retained acreage averaged approximately 97 MMcf/d of natural gas and approximately 2.4 Mbbls/d of oil and NGLs.  To align with Encana’s retained acreage in the area, Clearwater is expected to be renamed Wheatland in 2015.

Encana has an agreement with Toyota Tsusho under which Toyota Tsusho will acquire a 32.5 percent gross overriding royalty interest in natural gas production from a portion of Encana’s Clearwater play. Toyota Tsusho has invested C$277 million to date and is required to further invest approximately C$325 million over the remaining five year commitment period.

Deep Panuke

Encana is the owner and operator of the Deep Panuke gas field located offshore Nova Scotia, which is 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. The PFC is under a lease arrangement which has an initial term that expires in 2021, with the option to extend the lease for 12 successive one-year terms at fixed prices after the initial lease term.  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.  The PFC commenced commercial operations in December 2013.

In 2014, natural gas production after royalties averaged approximately 190 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, 2014, Encana controlled approximately 41,000 gross acres (30,000 net acres) in Nova Scotia. Encana operates five of its six licenses in these areas.

Other Activity

Cadomin/Doig is located in northeast British Columbia. In 2014, Encana’s natural gas production after royalties averaged 94 MMcf/d.  At December 31, 2014, Encana controlled approximately 212,000 gross undeveloped acres (115,000 net undeveloped acres).  Production is gathered and processed using the same facilities located in Montney.

Horn River is located in northeast British Columbia. The focus of development has been in the Horn River Basin shales (Muskwa, Otter Park and Evie), which are upwards of 500 feet thick. In 2014, Encana’s natural gas production after royalties averaged approximately 83 MMcf/d.  At December 31, 2014, Encana held within the development area of the Horn River Basin shales approximately 99 gross producing horizontal wells (50 net producing horizontal wells).  At December 31, 2014, Encana controlled approximately 183,000 gross undeveloped acres (159,000 net undeveloped acres) in the Horn River Basin shales.  Encana owns natural gas compression capacity in Horn River of approximately 570 MMcf/d (net 285 MMcf/d to Encana) at various facilities in the area. Encana has a processing commitment with a third party related to a planned expansion of the Cabin natural gas processing plant, for which commissioning and expansion was suspended in 2012.

Granite Wash/Doig is located in northwest Alberta.  In 2014, Encana’s production after royalties averaged approximately 31 MMcf/d of natural gas and 0.2 Mbbls/d of oil and NGLs. At December 31, 2014, Encana controlled approximately 175,000 gross undeveloped acres (162,000 net undeveloped acres) in the formation. Production is gathered and processed using the same facilities located in Montney.

The USA Operations includes the exploration for, development of, and production of natural gas, oil and NGLs and other related activities within the U.S.  Plays in the U.S. include: Eagle Ford in south Texas; Permian in west Texas; DJ Basin in northern Colorado; San Juan in northwest New Mexico; and Other Upstream Operations including Piceance in northwest Colorado, Haynesville in northwest Louisiana and Other and emerging.  Other and emerging primarily includes Tuscaloosa Marine Shale in east Louisiana and west Mississippi.  Other Upstream Operations comprises certain plays that are not part of Encana’s strategic focus as well as emerging prospective plays which are under appraisal, such as Tuscaloosa Marine Shale.

In 2014, certain plays were reorganized to align with the Company’s business strategy, as described in the “Business Objectives” section of this Annual Information Form.  Accordingly, comparative information has been reorganized. DJ Basin and San Juan have been reorganized to reflect the Company’s focus on the future growth and development of those plays.  DJ Basin, previously named DJ Niobrara, and San Juan were formerly presented in Other and emerging. Piceance and Haynesville are included in Other Upstream Operations.

During 2014, Encana divested of approximately 121,000 net acres in Jonah for proceeds of approximately $1.6 billion after closing adjustments and approximately 91,000 net acres in East Texas for proceeds of approximately $495 million after closing adjustments, as described in the “Recent Developments” section of this Annual Information Form.

In 2014, Encana acquired properties in two new plays including approximately 45,500 net acres in Eagle Ford in south Texas for approximately $2.9 billion after closing adjustments, and approximately 137,000 net acres in Permian in west Texas through the acquisition of Athlon, as described in the “Recent Developments” section of this Annual Information Form.  The acquisitions are strategic oil weighted plays and complement the Company’s business strategy.

In 2014, the USA Operations had total capital investment of approximately $1,285 million and drilled approximately 204 net wells.  Production after royalties averaged approximately 972 MMcf/d of natural gas, approximately 35.8 Mbbls/d of oil, and approximately 13.8 Mbbls/d of NGLs.  At December 31, 2014, the USA Operations had an established land position of approximately 2.3 million gross acres (1.8 million net acres) including approximately 1.5 million gross undeveloped acres (1.2 million net undeveloped acres).

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

Note:

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

Note:

(1)               During 2014, Encana divested the Jonah and the East Texas plays.

Note:

(1)               During 2014, Encana divested the Jonah and the East Texas plays.

Plays and Other Activities in the USA Operations

Eagle Ford

On June 20, 2014, Encana acquired certain properties in the Eagle Ford shale formation located in south Texas in the Karnes, Wilson and Atascosa counties.  Eagle Ford is a tight oil play with the focus on development of the thickest portion of the Eagle Ford shale in the Karnes Trough, where Encana holds a largely contiguous position. From June 20, 2014 to December 31, 2014, production after royalties averaged approximately 32.0 Mbbls/d of oil, approximately 36 MMcf/d of natural gas and approximately 5.1 Mbbls/d of NGLs.  During 2014, the Company completed an acreage swap, whereby Encana was released from certain third party joint development obligations, thereby increasing the Company’s working interest and allowing Encana to operate and control the pace of development throughout its acreage.  At December 31, 2014, Encana controlled approximately 45,000 net acres.

Encana is developing the play using horizontal wells with lateral lengths averaging 5,000 feet at an average measured depth of 16,000 feet, based on a 30 to 40 acre down spacing.  Encana has been actively optimizing well design and improving drilling costs through its resource play hub model.  Since June 2014, Encana has reduced drilling costs by approximately 10 percent.  At December 31, 2014, Encana has 314 net producing horizontal wells, of which Encana has drilled 35 net horizontal wells since acquiring the properties.

Oil production is gathered at 32 central production facilities, with the majority of the oil subsequently transported to sales points by pipeline or trucked from facilities depending on the sales contract. Encana has dedicated approximately 26 MMcf/d to 60 MMcf/d of natural gas under a remaining commitment term of up to six years for gathering and processing capacity.

Permian

On November 13, 2014, Encana acquired certain properties in the Permian through the acquisition of Athlon.  Permian is located in west Texas in Midland, Martin, Howard and Glasscock counties. The focus is on the development of the Clearfork, Spraberry, Wolfcamp, Cline, Strawn, Atoka and Mississippian formations, in the Midland basin, where Encana holds a large contiguous position.  The properties are characterized by an extensive production history from vertical drilling and development and mature infrastructure, with multiple producing horizons spanning over 3,000 feet to 4,000 feet of stratigraphy (also referred to as “stacked pay zones”).  The multiple stacked pay zones can accommodate multiple completions in a single wellbore with the potential for both vertical and horizontal drilling.  From November 13, 2014 to December 31, 2014, production after royalties averaged approximately 18.6 Mbbls/d of oil, approximately 37 MMcf/d of natural gas and approximately 7.6 Mbbls/d of NGLs. At December 31, 2014, Encana controlled approximately 137,000 net acres.

With exposure to 11 potential productive horizons, Encana intends to focus future development primarily with horizontal wells using multi-well pad development.  Since acquiring the asset in 2014, Encana has drilled 7 net horizontal wells with lateral lengths averaging approximately 7,700 feet at a measured average depth of approximately 16,600 feet and completed drilling 21 net vertical wells.  At December 31, 2014, Encana has 1,092 net producing vertical wells and 24 net producing horizontal wells.

Oil and natural gas facilities located at well locations include field gathering systems, storage batteries, saltwater disposal systems, separation equipment and pumping units.  In addition, the play has an established pipeline infrastructure to transport oil from wellhead to tank batteries which is subsequently transported by the purchaser via pipeline or truck.  Natural gas is transported from wellhead to the purchaser’s meter and pipeline interconnection point through Encana’s gathering system.

DJ Basin

DJ Basin is a liquids rich play located in northern Colorado. The focus is on the development of the Codell, J-Sand and the Niobrara of the Wattenberg field. In 2014, Encana drilled approximately 64 net horizontal wells with an average effective length of 5,300 feet.  Encana is pilot testing various well spacing and completion combinations in order to maximize resource recovery and minimize the development footprint.  In 2014, production after royalties averaged approximately 43 MMcf/d of natural gas, approximately 7.4 Mbbls/d of oil and approximately 4.2 Mbbls/d of NGLs. At December 31, 2014, Encana controlled approximately 9,000 gross undeveloped acres (8,500 net undeveloped acres).

Encana has certain joint venture agreements whereby its partner earns a 50 percent working interest in certain natural gas wells to be drilled at Encana’s discretion in the DJ Basin. The joint venture partner will pay its share of costs plus an additional carry amount for wells drilled, which is determined with reference to certain benchmark prices and the nature of the well drilled. The commitment has a remaining term of 11 years with potential additional five one-year extensions thereafter.  Either party can elect to suspend drilling for natural gas wells in event natural gas or oil benchmark prices fall below a specified threshold. To date, Encana has received $224 million under the terms of the agreements. In 2014, third party funds were primarily used to drill all 64 net horizontal wells.

Encana has dedicated natural gas production under a commitment with a third party for processing. The third party’s total plant capacity is approximately 625 MMcf/d.  Encana is currently constructing a central liquids gathering facility near Erie, Colorado that is anticipated to have approximately 22.0 Mbbls/d of capacity.  Construction is expected to be completed in the latter half of 2016.

San Juan

San Juan is a light sweet oil play located in the San Juan Basin in northwest New Mexico. The primary formation targets in the basin are the Gallup sandstone and Mancos silt.  Encana has established a significant land position in the play and continues to delineate the acreage held. In 2014, production after royalties averaged approximately 3.3 Mbbls/d of oil, approximately 8 MMcf/d of natural gas and approximately 0.6 Mbbls/d of NGLs. At December 31, 2014, Encana controlled approximately 303,000 gross undeveloped acres (175,000 net undeveloped acres).  Encana currently has an average rig count of two and drilled approximately 43 net horizontal wells in 2014, with effective lateral lengths ranging from 3,800 to 7,300 feet and an average vertical depth of 5,300 feet.

Other Upstream Operations

Piceance

Piceance is a 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 also focused in the Niobrara and Mancos formations, which are thick shales predominant throughout the basin. In 2014, production after royalties averaged approximately 402 MMcf/d of natural gas, approximately 1.6 Mbbls/d of oil and approximately 3.4 Mbbls/d of NGLs.  At December 31, 2014, Encana controlled approximately 525,000 gross undeveloped acres (485,000 net undeveloped acres).  In 2014, Encana drilled one net well in the play.

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.  Under the terms of the agreement, Nucor will carry Encana for approximately $750 million, of which Encana has received approximately $24 million as of December 31, 2014.  Nucor will further invest the remaining amount over the remaining long-term commitment period. The joint venture partner will pay its share of costs plus an additional carry amount for wells drilled, which is based on pre-determined percentage allocations partially indexed to natural gas prices.  It also contains certain limitations on the minimum and maximum number of wells that may be drilled in any calendar year over the duration of the agreement. Either party may suspend drilling operations if the average price of natural gas falls below a pre-determined threshold but neither party has a unilateral right to terminate the agreement.  Since December 2013, Encana and Nucor jointly agreed to suspend drilling natural gas wells due to the current weak natural gas price environment.

In addition, Encana has other existing joint venture arrangements to develop portions of the Piceance.  To date, Encana has drilled approximately 271 net wells under the agreements, primarily using third party funds.  The pace of development is determined in accordance with the joint venture agreements.

Encana has current gathering capacity of approximately 276 MMcf/d under commitments with third parties with remaining terms up to 12 years.  Encana has contracted processing capacity up to 650 MMcf/d with a third party, with no volume commitment.

Haynesville

The Haynesville shale is a play located in northwest 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 2014, Encana focused on production optimization by completing a 12 well re-stimulation program and compression implementation.  Production after royalties averaged approximately 311 MMcf/d of natural gas. At December 31, 2014, Encana controlled approximately 91,000 gross undeveloped acres (62,000 net undeveloped acres), with the majority of the leaseholds in northwest Louisiana being located in the DeSoto and Red River parishes.

Encana has current natural gas gathering and compression capacity in Haynesville of approximately 826 MMcf/d under a commitment through 2020.

Other Activity

The Tuscaloosa Marine Shale is an emerging oil play located in east Louisiana and west Mississippi and currently under appraisal. Encana has established a significant land position in the play and is focused on maximizing oil recovery in the Tuscaloosa Marine Shale formation.  In 2014, Encana drilled approximately 14 net horizontal wells with an average effective lateral length of 6,800 feet. Production after royalties averaged approximately 1.8 Mbbls/d of oil. At December 31, 2014, Encana controlled approximately 322,000 gross undeveloped acres (201,000 net undeveloped acres).

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

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, less than 12 months in duration, at the relevant market price at the time 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, 2014, Encana had no material long term fixed price physical sales contracts or delivery contracts.

Encana’s produced oil is primarily marketed to other producers and energy marketing companies.  Produced oil is transported primarily by the purchaser to sales points by pipeline or trucked from facilities depending on the sales contract.  Prices received by Encana are based primarily upon the prevailing index prices in the relevant region under contract terms that range from one to four years.

Encana seeks to mitigate the market risk associated with future cash flows by entering into various risk management contracts relating to produced natural gas, oil and NGLs and power.  Details of those contracts related to Encana’s various risk management positions are found in Note 23 to Encana’s audited Consolidated Financial Statements for the year ended December 31, 2014, which are available via SEDAR at www.sedar.com and 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 2014, 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 Cawley, Gillespie & Associates, Inc.

Encana’s Chief, Reservoir Engineering and six other staff under this individual’s direction oversee the preparation of the reserves estimates by the IQREs. This internal staff consisted of engineers, six of whom have professional designations, 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 has a large inventory of internal growth opportunities and also continues to examine select acquisition opportunities to develop and expand its 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 2014 and 2013.

Capital investment during 2014 reflected the Company’s disciplined capital spending which focused on investment in high return scalable projects and opportunities where development has demonstrated success, as well as executing drilling programs with joint venture partners. Acquisitions in the Canadian Operations of $21 million primarily included land and property purchases with oil and liquids rich production potential.  Acquisitions in the USA Operations of $2,995 million primarily related to the acquisition of properties in the Eagle Ford shale in south Texas for $2.9 billion, which is predominately an oil-weighted play.

Divestiture proceeds for 2014 in the Canadian Operations of $1,847 million primarily included the sale of the Bighorn properties in west central Alberta for approximately $1,725 million. Divestiture proceeds in the USA Operations of $2,264 million primarily included the sale of properties in Jonah in Wyoming and certain properties in East Texas for aggregate proceeds of $2,131 million.  For additional information on acquisitions and divestitures, see the “Recent Developments” section of this Annual Information Form.

Other Transactions

The following transactions relate to the acquisition or disposition of common shares and are therefore excluded from the net capital investment table above.

On November 13, 2014, Encana acquired all of the issued and outstanding shares of common stock of Athlon for $5.93 billion, or $58.50 per share, as described in the “Recent Developments” section of this Annual Information Form.  The properties acquired through the acquisition of Athlon are located in the Permian Basin in west Texas, which is an oil-weighted play.

During 2014, Encana divested its royalty business, comprising fee simple mineral title and certain royalty interests, for a total of approximately C$4.27 billion in two separate offerings of common shares of PrairieSky held by Encana.  During the second quarter of 2014, the initial public offering of 59.8 million common shares of PrairieSky for C$28.00 per common share was completed for proceeds of approximately C$1.67 billion.  During the third quarter of 2014, the secondary offering of the remaining 70.2 million common shares of PrairieSky for C$36.50 per common share was completed for proceeds of approximately C$2.6 billion.

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 NGLs reserves;

·     Reserves and property acquisitions;

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

·     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 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 business plans with a current price range from approximately $20 to $125 per tonne of emissions, applied to a range of emissions coverage levels.  Encana's forecast cost of carbon associated with British Columbia and Alberta regulations is not material to Encana and is being actively managed.

Encana expects to incur abandonment and site reclamation costs as existing oil and gas properties are abandoned and reclaimed. In 2014, 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 $3.6 billion. As at December 31, 2014, Encana has recorded an asset retirement obligation of $913 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; engage, listen to and work with stakeholders in a timely, respectful and meaningful way; and align 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 Executive Leadership 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, 2014, Encana employed 3,129 employees as set forth in the following table.

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

As at December 31, 2014, 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.