ENCANA CORPORATION. Operational Excellence. Michael McAllister. Executive Vice President & Chief Operating Officer

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1 ENCANA CORPORATION Operational Excellence Michael McAllister Executive Vice President & Chief Operating Officer

2 ENCANA Delivering Quality Corporate Returns North American leader in: Generating free cash flow Ŧ ~$1.5 billion cumulative over plan Cash flow Ŧ growth ~ 25% CAGR Corporate returns ROCE Ŧ climbs to 10-15% Execution efficiency ~$9,000 per flowing BOE Disciplined capital allocation 99% of capital to core assets Multi-basin advantage World class premium inventory in Texas oil and Canadian condensate Strong balance sheet Innovation company Focus on environmental, health, and safety performance Ŧ Non-GAAP measures defined in advisories. For additional information regarding non-gaap measures see the Company s website. TOP TIER RESOURCE OPERATIONAL EXCELLENCE BALANCE SHEET STRENGTH MARKET FUNDAMENTALS CAPITAL ALLOCATION 2

3 AN OPERATOR YOU CAN COUNT ON Strong Track Record of Delivery Ranked in the top 3 on well productivity in every play Managing cost inflation with integrated supply chain and efficiency focus Delivering through busier environment Constructed gross 70,000 bbls/d and 800 MMcf/d of new plants 10% under budget and months ahead of schedule Tower Plant 3

4 INNOVATION LEADERSHIP AT ENCANA A Competitive Advantage Subsurface Drilling & Completions Production Operations Commercial Arrangements geo-cellular reservoir modeling to identify the best rocks leveraging massive proprietary analytics dataset (core, logs, seismic, micro-seismic, fracture diagnostics, production) proprietary in-house well design integrated team with on-the-fly modeling capabilities advanced completions fibre-optic real-time pressure/completions design analytics real-time production data capture & analysis automation enables highly efficient growth remote surveillance and control boosts well and facility up-time creating optionality and managing risk disrupting the commercial status quo Culture of Innovation Structured and driven to business outcomes Real time knowledge sharing across portfolio Analytics linked with deep understanding of first principles 4

5 INNOVATION IN OPERATIONS Driven By Culture Chiefs organizational structure Promotes rapid transfer of technology between plays Rapidly translated success in tight cluster design from Eagle Ford to other plays Scaling to cube development model Applying advanced completions at tighter well densities Well results keep getting better Type curves updated across the portfolio to reflect productivity improvements Deliberate and disciplined approach driving incremental value Data-driven innovation linked with first principles Short cycle times facilitate rapid implementation, learning and refinement Conceptual Advanced Completions Design Advanced Completions Tightening clusters maximizes fracture complexity 5

6 EXECUTION EXCELLENCE Efficient Operations are Safe Operations Leveraging our experience >4,500 horizontal wells drilled Rapid knowledge transfer between basins Leading industry safety performance year-over-year Development approach reduces risk Scope and scale necessitates highly sophisticated planning and logistics Integrated supply chain and established relationships with service providers Economies of scale reduce costs and improve infrastructure utilization Relentlessly pursuing additional optimization opportunities Multi-Spread Completions Plan vs. Actual Lease 6

7 CUBE DEVELOPMENT Differentiated Execution At Surface Increased D&C efficiencies Multi-well pads Faster drill times Multi-rig spreads Increased horsepower utilization Integrated infrastructure Shared services Scale advantages Leverages supply chain logistics More efficient for service providers Minimized surface footprint Reduces lease construction & pipeline costs Highly efficient development Cycle times similar to 4 well pads Dual Rig Drilling Operations in the Montney 7

8 MANAGING INFLATION Delivering in a Busier Environment Fully offsetting inflation with efficiency improvements Capital spent & wells drilled/on-stream match plan Seamless linkage between supply chain and ops teams Managing the supply chain Self-sourcing sand, water, OCTG, chemicals, drilling mud Better pricing & security of supply Secured services with options to extend Locked-in rates for majority of frac services for 2018 Legacy rig contracts expiring and renegotiated at lower market rates Reducing consumable usage Recycling water, optimizing trucking and fuel Challenging industry norms Increasing pump time per day Combination of logistics and local sand has driven delivered sand costs lower ECA D&C Cost Breakdown 40% of well cost is drilling 60% of well cost is completions D&C Key Component Cost Breakdown 30-35% sand & water 10-12% casing 10-12% pressure pumping 9-11% drilling rig 6-8% cement and mud 8

9 Capital ($MM) Cum. Free Cash Flow Ŧ ($MM) Production (MBOE/d)** 5 YEAR PLAN Self-Funding Post 2017 Production Growth Within Cash Flow Ŧ Resilient to operational risk Focus on high margin production Continuous improvement drives quality corporate returns Liquids production CAGR of ~20% Leading capital and operating efficiency sets up free cash flow * Assumes flat $50/bbl WTI and $3/MMBtu NYMEX. **2017 production does not include volumes from assets divested in ,000 2,000 1, F 2018F 2019F 2020F 2021F 2022F ~$1.5B* of Cumulative Free Cash Flow Ŧ to ,750 1,500 1,250 1, F 2018F 2019F 2020F 2021F 2022F Capital Cumulative Free Cash Flow 9