TMX group

Valero's Ohio refinery upgrader initiative not proceeding

CALGARY, Dec. 15 /CNW/ - EnCana Corporation's (TSX, NYSE: ECA)
partnership EnCana Midstream & Marketing and Valero Energy Corporation    
(NYSE: VLO) have completed their previously-announced study of the conversion
of Valero's Lima, Ohio refinery to process Canadian heavy oil. Given the
anticipated project costs and Valero's other strategic investment
opportunities, it has been decided that the Lima conversion project will not
proceed.
EnCana continues to evaluate other marketing options that will help
expand the development of its large oilsands resource. In November, EnCana
announced plans to examine a number of proposals from other oil companies,
including major multinationals, integrated producers and international oil
companies, who are interested in participating in the development of EnCana's
oilsands assets. EnCana is willing to consider creative business
opportunities, including equity investments, farm-ins, asset swaps, long-term
bitumen supply agreements and the integration of upstream and downstream
assets, to achieve value recognition and accelerate the development of its
large oilsands resource.
"While we believe the Lima refinery conversion had the potential to be a
viable part of our integrated oilsands strategy, we have for several months
been investigating other ways to advance our oilsands development. More than
20 companies expressed interest in our oilsands initiatives and substantive
proposals of interest to EnCana were received by the November 30th due date
for our consideration. We are encouraged by these proposals and are now
evaluating them. We plan to proceed with a short list early in 2006," said
Bill Oliver, President of EnCana's Midstream & Marketing.
"We are also continuing to work on transportation arrangements to advance
our oilsands development. Earlier this year we signed an agreement that will
enable us to tap into the world diluent supply by importing up to 25,000
barrels per day of offshore diluent through Methanex Corporation's Kitimat,
British Columbia facility. This added diluent supply will help transport our
growing oilsands production in northeast Alberta to market," Oliver said.
EnCana announced in November that it is developing plans to expand
oilsands production to a potential production rate of 500,000 barrels per day
in the next 10 years, which is more than a ten-fold increase from the current
47,000 barrels per day of production. With 1.2 million acres of oilsands lands
that contain an estimated 40 billion barrels of original oil in place, EnCana
is confident it can profitably accelerate the development of this tremendous
oilsands resource.

EnCana Corporation
With an enterprise value of approximately US$50 billion, EnCana is one of
North America's leading natural gas producers, is among the largest holders of
gas and oil resource lands onshore North America and is a technical and cost
leader in the in-situ recovery of oilsands bitumen. EnCana delivers
predictable, reliable, profitable growth from its portfolio of long- life
resource plays situated in Canada and the United States. Contained in
unconventional reservoirs, resource plays are large contiguous accumulations
of hydrocarbons, located in thick or areally extensive deposits, that
typically have lower geological and commercial development risk, lower average
decline rates and very long producing lives compared to conventional plays.
The application of technology to unlock the huge resource potential of these
plays typically results in continuous increases in production and reserves and
decreases in costs over multiple decades of resource play life. EnCana common
shares trade on the Toronto and New York stock exchanges under the symbol ECA.

ADVISORY REGARDING RESERVES DATA AND OTHER OIL AND GAS INFORMATION -
EnCana's disclosure of reserves data and other oil and gas information is made
in reliance on an exemption granted to EnCana by Canadian securities
regulatory authorities which permits it to provide such disclosure in
accordance with U.S. disclosure requirements. The information provided by
EnCana may differ from the corresponding information prepared in accordance
with Canadian disclosure standards under National Instrument 51-101          
(NI 51-101). EnCana's reserves quantities represent net proved reserves
calculated using the standards contained in Regulation S-X of the U.S.
Securities and Exchange Commission. Further information about the differences
between the U.S. requirements and the NI 51-101 requirements is set forth
under the heading "Note Regarding Reserves Data and Other Oil and Gas
Information" in EnCana's Annual Information Form.

ADVISORY REGARDING FORWARD-LOOKING STATEMENTS - In the interests of
providing EnCana shareholders and potential investors with information
regarding EnCana, including management¿s assessment of EnCana¿s and its
subsidiaries¿ future plans and operations, certain statements contained in
this news release are forward-looking statements within the meaning of the
¿safe harbour¿ provisions of the United States Private Securities Litigation
Reform Act of 1995.  Forward-looking statements in this news release include,
but are not limited to: future economic and operating performance; anticipated
growth and success of resource plays and the expected characteristics of
resource plays; projected production from oilsands resources in 2005, 2006 and
beyond, including in 2015; the potential benefits of importing offshore
diluent and its effect on transportation; anticipated costs; anticipated
capital requirements, project rates of return and estimated project life;
estimates of original oil in place and recoverable resources; anticipated
business opportunities, joint ventures and partnerships in connection with
oilsands resources development, including in 2006; anticipated strategies for
reducing risk, enhancing value, accelerating development and realizing
attractive returns from the company¿s bitumen resources; estimates of
recoverable oil in place; anticipated drilling; references to potential
exploration; anticipated growth potential of the company¿s resource play
portfolio; and anticipated total resource play life. 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 forward-looking statements will not occur, which may
cause the company¿s actual performance and financial results in future periods
to differ materially from any estimates or projections of future performance
or results expressed or implied by such forward-looking statements. These
risks and uncertainties include, among other things: volatility of and
assumptions regarding oil and gas prices; assumptions based upon the company¿s
current guidance; fluctuations in currency and interest rates; product supply
and demand; market competition; risks inherent in the company¿s marketing
operations, including credit risks; 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;
risks associated with technology; the company¿s ability to replace and expand
oil and gas reserves; its ability to generate sufficient cash flow from
operations to meet its current and future obligations; its ability to access
external sources of debt and equity capital; the timing and the costs of well
and pipeline construction; the company¿s ability to secure adequate product
transportation; changes in environmental and other regulations or the
interpretations of such regulations; political and economic conditions in the
countries in which the company operates, including Ecuador; the risk of war,
hostilities, civil insurrection and instability affecting countries in which
the company operates and terrorist threats; risks associated with existing and
potential future lawsuits and regulatory actions made against the company; and
other risks and uncertainties described from time to time in the reports and
filings made with securities regulatory authorities by EnCana. 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. Readers are cautioned that the foregoing list of important factors
is not exhaustive.

Furthermore, the forward-looking statements contained in this news
release are made as of the date of this news release, and EnCana does not
undertake any obligation to update publicly or to revise any of the included
forward-looking statements, whether as a result of new information, future
events or otherwise. The forward-looking statements contained in this news
release are expressly qualified by this cautionary statement.