7FEB200604161381 ANNU AL INFORMATION FORM February 23, 2007 ENCANA CORPORATION ANNUAL INFORMATION FORM This is the annual information form of EnCana Corporation (‘‘EnCana’’ or the ‘‘Corporation’’) for the year ended December 31, 2006. In this annual information form, unless otherwise specified or the context otherwise requires, reference to ‘‘EnCana’’ or to the ‘‘Corporation’’ includes reference to subsidiaries of and partnership interests held by EnCana Corporation and its subsidiaries. Unless otherwise specified, all dollar amounts are expressed in United States (‘‘U.S.’’) dollars and all references to ‘‘dollars’’ or to ‘‘$’’ are to U.S. dollars and all references to ‘‘C$’’ are to Canadian dollars. All production and reserves information is presented on an after royalties basis consistent with U.S. protocol reporting. Unless otherwise indicated, all financial information included in this annual information form is determined using Canadian generally accepted accounting principles (‘‘Canadian G AAP’’), which differs from generally accepted accounting principles in the United States (‘‘U.S. G AAP’’). The notes to EnCana’s audited consolidated financial statements contain a discussion of the principal differences between EnCana’s financial results calculated under Canadian G AAP and under U.S. G AAP. i TABLE OF CONTENTS Page NOTE REGARDING FORW ARD-LOOKING STATEMENTS . 1 NOTE REGARDING RESERVES DATA AND OTHER OIL AND GAS INFORMATION . 2 CORPORATE STRUCTURE . 3 Name and Incorporation . 3 Intercorporate Relationships . 3 GENERAL DEVELOPMENT OF THE BUSINESS . 4 NARRATIVE DESCRIPTION OF THE BUSINESS . 8 Canadian Plains Division . 9 Canadian Foothills Division . 11 USA Division . 14 Integrated Oilsands Division . 16 Offshore & International Division . 19 Midstream & Marketing Division . 20 RESERVES AND OTHER OIL AND GAS INFORMATION . 22 Reserves Quantities Information . 22 Other Disclosures About Oil and Gas Activities . 24 Sales Volumes, Royalty Rates and Per-Unit Results . 28 Drilling Activity . 39 Location of W ells . 41 Interest in Material Properties . 42 Acquisitions, Divestitures and Capital Expenditures . 44 Delivery Commitments . 45 GENERAL . 45 Competitive Conditions . 45 Environmental Protection . 45 Social and Environmental Policies . 45 Employees . 46 Foreign Operations . 47 Reorganizations . 47 DIRECTORS AND OFFICERS . 47 AUDIT COMMITTEE INFORMATION . 51 DESCRIPTION OF SHARE CAPITAL . 53 CREDIT RATINGS . 54 MARKET FOR SECURITIES . 55 DIVIDENDS . 55 LEGAL PROCEEDINGS . 55 RISK FACTORS . 56 TRANSFER AGENTS AND REGISTRARS . 61 INTERESTS OF EXPERTS . 61 ADDITIONAL INFORMATION . 61 APPENDIX A — Report on Reserves Data by Independent Qualified Reserves Evaluators . 62 APPENDIX B — Report of Management and Directors on Reserves Data and Other Information . 64 APPENDIX C — Audit Committee Mandate . 65 ii NOTE REGARDING FORW ARD-LOOKING STATEMENTS This annual information form contains certain forward-looking statements or information (collectively referred to in this note as ‘‘forward-looking statements’’) within the meaning of applicable securities legislation. Forward-looking statements are typically identified by words such as ‘‘projected’’, ‘‘anticipate’’, ‘‘believe’’, ‘‘expect’’, ‘‘plan’’, ‘‘intend’’ or similar words suggesting future outcomes or statements regarding an outlook. Forward-looking statements in this annual information form include, but are not limited to, statements with respect to: oilsands strategy and the benefits of this strategy, Suffield development plans, potential shut-ins and the possible receipt of royalty credits, the effect of Alberta Energy & Utilities Board commingling guidelines, capital investment levels and the allocation thereof, drilling plans and the timing and location thereof, production capacity and levels and the timing of achieving such capacity and levels, the timing of completion of the Foster Creek and Christina Lake expansions, the anticipated capacities of and the timing of capacity expansions for the Wood River and Borger refineries, anticipated capacity for and timing of expansion of the Steeprock natural gas plant, the development of the Jonah area, the potential for natural gas resource play development on the Foix permit lands, reserves estimates, the level of expenditures for compliance with environmental regulations, site restoration costs including abandonment and reclamation costs, pending litigation, exploration plans, acquisition and divestiture plans, including farmout plans and net cash flows. Readers are cautioned not to place undue reliance on forward-looking statements, as there can be no assurance that the plans, intentions or expectations upon which they are based will occur. By their nature, forward-looking statements involve numerous assumptions, known and unknown risks and uncertainties, both general and specific, that contribute to the possibility that the predictions, forecasts, projections and other things contemplated by the forward-looking statements will not occur. Although EnCana believes that the expectations represented by such forward-looking statements are reasonable, there can be no assurance that such expectations will prove to be correct. Some of the risks and other factors which could cause results to differ materially from those expressed in the forward-looking statements contained in this annual information form include, but are not limited to: volatility of and assumptions regarding oil and natural gas prices, assumptions based upon EnCana’s current guidance, fluctuations in currency and interest rates, product supply and demand, market competition, risks inherent in EnCana’s North American and foreign oil and natural gas and market optimization operations, risks of war, hostilities, civil insurrection and instability affecting countries in which EnCana and its subsidiaries operate and terrorist threats, risks inherent in EnCana’s and its subsidiaries’ marketing operations, including credit risk, imprecision of reserves estimates and estimates of recoverable quantities of oil, natural gas and liquids from resource plays and other sources not currently classified as proved reserves, EnCana’s and its subsidiaries’ ability to replace and expand oil and natural gas reserves, the ability of EnCana and ConocoPhillips to successfully manage and operate the integrated North American heavy oil business and the ability of the parties to obtain necessary regulatory approvals, refining and marketing margins, potential disruption or unexpected technical difficulties in developing new products and manufacturing processes, potential failure of new products to achieve acceptance in the market, unexpected cost increases or technical difficulties in constructing or modifying manufacturing or refining facilities, unexpected difficulties in manufacturing, transporting or refining synthetic crude oil, risks associated with technology, EnCana’s ability to generate sufficient cash flow from operations to meet its current and future obligations, EnCana’s ability to access external sources of debt and equity capital, general economic and business conditions, EnCana’s ability to enter into or renew leases, the timing and costs of construction of gas storage facilities, wells and pipelines, EnCana’s ability to make capital investments and the amounts of capital investments, imprecision in estimating the timing, costs and levels of production and drilling, the results of exploration, development and drilling, imprecision in estimates of future production capacity, EnCana’s and its subsidiaries’ ability to secure adequate product transportation, uncertainty in the amounts and timing of royalty payments, imprecision in estimates of product sales, changes in environmental and other regulations or the interpretation of such regulations, risks associated with existing and potential future lawsuits and regulatory actions against EnCana and its subsidiaries, political and economic conditions in the countries in which EnCana and its subsidiaries operate, difficulty in obtaining necessary regulatory approvals and such other risks and uncertainties described from time to time in EnCana’s reports and filings with the Canadian securities authorities and the United States Securities and Exchange Commission (the ‘‘SEC’’). Statements relating to ‘‘reserves’’ are deemed to be forward-looking statements, as they involve the implied assessment, based on certain estimates and assumptions, that the reserves 1 described exist in the quantities predicted or estimated, and can be profitably produced in the future. Readers are cautioned that the foregoing list of important factors is not exhaustive. The forward-looking statements contained in this annual information form are made as of the date hereof and, except as required by law, EnCana undertakes no obligation to update publicly or revise any forward-looking statements, whether as a result of new information, future events or otherwise. The forward-looking statements contained in this annual information form are expressly qualified by this cautionary statement. NOTE REGARDING RESERVES DATA AND OTHER OIL AND GAS INFORMATION National Instrument 51-101 (‘‘NI 51-101’’) of the Canadian Securities Administrators imposes oil and gas disclosure standards for Canadian public companies engaged in oil and gas activities. NI 51-101 and its companion policy specifically contemplate the granting of exemptions from some of the disclosure standards prescribed by NI 51-101 to companies that are active in the U.S. capital markets, to permit the substitution