2012 Annual Information Form

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2012 Annual Information Form Encana Corporation Annual Information Form February 21, 2013 Table of Contents Introduction .................................................................................................................................................................................. 2 Corporate Structure ...................................................................................................................................................................... 3 General Development of the Business ......................................................................................................................................... 4 Narrative Description of the Business .......................................................................................................................................... 7 Canadian Division .......................................................................................................................................................... 8 USA Division ................................................................................................................................................................ 13 Market Optimization ..................................................................................................................................................... 16 Reserves and Other Oil and Gas Information .............................................................................................................. 17 Acquisitions, Divestitures and Capital Expenditures .................................................................................................... 18 Competitive Conditions ................................................................................................................................................ 19 Environmental Protection ............................................................................................................................................. 19 Social and Environmental Policies ............................................................................................................................... 20 Employees ................................................................................................................................................................... 21 Foreign Operations ...................................................................................................................................................... 21 Directors and Officers ................................................................................................................................................................. 22 Audit Committee Information ...................................................................................................................................................... 25 Description of Share Capital ....................................................................................................................................................... 27 Credit Ratings ............................................................................................................................................................................ 29 Market for Securities .................................................................................................................................................................. 30 Dividends ................................................................................................................................................................................... 30 Legal Proceedings...................................................................................................................................................................... 31 Risk Factors ............................................................................................................................................................................... 31 Transfer Agents and Registrars ................................................................................................................................................. 38 Interest of Experts ...................................................................................................................................................................... 38 Additional Information ................................................................................................................................................................. 38 Note Regarding Forward-Looking Statements ........................................................................................................................... 39 Note Regarding Reserves Data and Other Oil and Gas Information .......................................................................................... 40 Appendix A - Canadian Protocol Disclosure of Reserves Data and Other Oil and Gas Information ....................................... A-1 Appendix B - Report on Reserves Data by Independent Qualified Reserves Evaluators (Canadian Protocol) ....................... B-1 Appendix C - Report of Management and Directors on Reserves Data and Other Information (Canadian Protocol) .............. C-1 Appendix D - U.S. Protocol Disclosure of Reserves Data and Other Oil and Gas Information ................................................ D-1 Appendix E - Audit Committee Mandate ................................................................................................................................. E-1 Encana Corporation Annual Information Form (prepared in US$) 1 Introduction This is the Annual Information Form of Encana Corporation (“Encana” or the “Company”) for the year ended December 31, 2012. 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. On January 1, 2012, Encana adopted U.S. generally accepted accounting principles (“U.S. GAAP”) for financial reporting purposes. The Company’s annual audited Consolidated Financial Statements for the year ended December 31, 2012, including required comparative information for 2011 and 2010, have been prepared in accordance with U.S. GAAP. All financial information included in this Annual Information Form is 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 United States (“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 Annual Information Form (prepared in US$) 2 Corporate Structure Name and Incorporation Encana Corporation is incorporated under the Canada Business Corporations Act (“CBCA”). Its executive and registered office is located at 1800, 855 - 2nd Street S.W., Calgary, Alberta, Canada T2P 2S5. Intercorporate Relationships 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, 2012. 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, 2012. Percentage Jurisdiction of Directly or Incorporation, Indirectly Continuance Subsidiaries & Partnerships Owned or Formation Encana USA Holdings 100 Delaware 3080763 Nova Scotia Company 100 Nova Scotia Alenco Inc. 100 Delaware Encana Oil & Gas (USA) Inc. 100 Delaware Encana Marketing (USA) Inc. 100 Delaware Encana USA Investment Holdings 100 Delaware 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, 2012. As a general matter, Encana reorganizes its subsidiaries
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