Encana Finishes Cutbank Ridge Midstream Sale

Bought 100% WI in Steeprock plant in NE BC &Hythe plant in NW AB, along with compression &associated gathering pipelines, gaining 516 MMcf/d of gas-processing capacity &approximately 370 kilometers of pipelines.

Encana Corp., Calgary, (TSX & NYSE: ECA) has concluded its deal to sell two natural gas processing plants servicing the Cutbank Ridge area to Veresen Inc. (Toronto: VSN) for approximately US$920 million.

The sale includes Encana's 100% interest in its Steeprock plant in northeastern British Columbia and its Hythe plant in northwestern Alberta, along with compression and associated gathering pipelines. The midstream assets include approximately 516 million cubic feet per day of gas-processing capacity and approximately 370 kilometers of pipelines. The Steeprock plant is approximately 50 kilometers south of Dawson Creek, B.C. and about 10 kilometers west of the Hythe plant, in Alberta.

As part of Encana's midstream divestiture approach, Encana has entered into a competitive, long-term gathering and processing fee agreement with the new owner on terms that provide cost stability for the company's ongoing natural gas development in Cutbank Ridge and will help Encana efficiently deliver natural gas and liquids to market.

"This sale agreement marks the conclusion of the major components in our 2011 divestiture program, which, upon closing of all transactions, will result in proceeds of about US$3.5 billion," says Randy Eresman, Encana president and CEO. "Although not all of our announced transactions will be completed this year, the expected proceeds will help us achieve our 2011 target range for net divestitures of between $1 billion and $2 billion."

RBC Capital Markets and Jefferies & Co. Inc. were financial advisors to Encana.