Ryder McRitchie - VP of IR & Corporate Communications Doug Suttles - President & CEO Sherri Brillon - EVP & CFO Mike McAllister - COO David Hill - EVP for Exploration and Business Development Renee Zemljak - EVP for Midstream, Marketing & Fundamentals

Greg Pardy - RBC Capital Markets Jeffrey Campbell - Tuohy Brothers Brian Singer - Goldman Sachs Jeoffrey Lambujon - Tudor, Pickering, Holt and Company Sameer Uplenchwar - Global Hunter Securities

Thank you, Laurel, and welcome everyone to our first quarter results conference call. This call is being webcast and slides are available on our website at encana.com.

Before we get started, I must refer you to the advisory regarding forward-looking statements contained in the news release and at the end of our webcast slides, as well as the advisory on Page 40 of Encana's Annual Information Form dated February 20, 2014, the latter of which is available on SEDAR. In particular, I want to draw your attention to the material factors and assumptions in those advisories.

Encana reports its financial results in U.S. dollars.

Accordingly, any reference to dollars, reserves, resources or production information in this call will be in U.S. dollars and after royalties, unless otherwise noted.

This morning, Doug Suttles, Encana's President and CEO will update you on the progress we’ve made in implementing our new strategy, which was announced in early November. Sherri Brillon, our CFO will then discuss Encana’s first quarter financial performance and Mike McAllister, our COO will provide some operational highlights from the quarter.

Following the slide presentation, we will have time for Q&A. In addition to our guidance document that we've posted to our website, there are also tables that detail our guidance in the supplemental portion of the slide presentation.

I will now turn the call over to Doug Suttles, Encana's President and CEO.

Thank you, Ryder and good morning, everyone. Encana achieved very strong results in the first quarter and the execution of our new strategy is unfolding faster than many expected.

This momentum has continued into the second quarter and as we near the midpoint of the year, I continue to be very impressed by the results our team is achieving. We remain focused on meeting the commitments we made to our shareholders that are embedded in our strategy and we saw proof of that in the first quarter.

We maintained our capital discipline by focusing about 80% of our capital on our five core growth plays. We increased total liquids production by 56% to nearly 68,000 barrels a day versus the first quarter of 2013.

We aligned our corporate structure with our strategy to focus our efforts on operating efficiency, optimization of our base production and portfolio transition. We achieved operating and administrative cost reductions of about $40 million attributed to aligning our workforce with our new strategy.

Before Sherri walks through the details of the first quarter, some of the highlights of our year-to-date accomplishments include our recently announced acquisition of the Eagle Ford position, which is our sixth core growth play. We believe this position is in the core of the core.

We closed the sale of our Jonah asset for gross proceeds of about $1.8 billion, and announced the sale of our East Texas assets for about $530 million. We filed a preliminary prospectus for our Royalty business IPO PrairieSky.

We reduced our debt by $1 billion and continue to have a very strong balance sheet. Our core growth plays are delivering strong results and are building momentum for the second half of this year and we see early signs of success in reducing the decline rate in our base assets.

When we undertook our strategy review last summer, it was clear that one of the key changes that was needed at Encana was a greater focus on our asset base. We needed to significantly reduce the number of plays we were funding and direct a vast majority of our capital expenditures to a small number of high return, scalable, liquids-rich assets.

Since the launch of our strategy, we've been engaged in an active program to test the market's interest in some our gas assets. Resource identification is one of our core competencies that I think Encana has and needs to excel at in order to be successful.

To compete in our industry, we always need to be on the lookout for the best rocks and opportunities to enhance our asset base. Our teams have been very busy over the last several months.

Their work has resulted in a number of transactions, which we believe will accelerate the transition to a more balanced portfolio and an increase in shareholder value. This will also lead to more focused -- a more focused and efficient business.

Last week we announced an agreement, which is expected to add a six core growth play in the Eagle Ford shale. Gaining a position in this world-class resource play replaces the natural gas weighted production from our Jonah and East Texas assets with higher margin oil and NGL production.

This transaction is expected to close by the end of the second quarter. We also believe that we will unlock new value from Encana\s 5.2 million acres of Alberta fee title lands with petroleum and natural gas rights with the IPO of PrairieSky Royalty, which remains on track to close at the end of this month.

The great thing about the transactions that have been announced today is that they were not required to deliver our strategy and the goals that we set out for the company. However, by simplifying our business, adding high margin production and providing additional financial liquidity, we believe these transactions all contribute to the acceleration of our strategy and our goal of delivering value to our shareholders.

I will now turn the call over to Sherri who will provide additional detail on our first quarter results.

Thanks Doug and good morning, everyone. As Doug mentioned, we had a very strong start to the year and this is evident in our financial results.

Our first quarter cash flow was approximately $1.1 billion or $1.48 per share, while operating earnings totalled $515 million or $0.70 per share. Compared to the first quarter 2013, cash flow per share was up by 87% and operating earnings per share were up 192%.

Natural gas production in the first quarter averaged about 2.8 billion cubic feet per day, down by about 2% compared to the first quarter of last year. Oil production averaged about 32,000 barrels per day, up over 60% compared to Q1 of 2013, while NGL production averaged about 36,000 per day, up about 52%.

During the quarter, we realized exceptionally strong pricing from Deep Panuke, where we sell our production into the U.S., North East daily spot market. The average realized price for Deep Panuke production during the quarter was $19.14 per Mcfe.

While we certainly benefitted from the strength of natural gas prices, during the quarter, Encana's total average realized natural gas price excluding hedges was $6.37 per Mcfe. The increase in cash flow and earnings was also driven by several other factors such as the acceleration of our liquids programs and our efforts to reduce cost.

In the first quarter of operation, Deep Panuke ran at over 85% of design capacity, contributing $395 million to our operating cash flow. Liquid volumes during the quarter resulted in about $145 million increase in revenues versus Q1 of 2013.

As expected, we saw a significant reduction in our normalized cost during the quarter, a direct result of the implementation of our new strategy. Removing the impact of long term incentives, restructuring charges, foreign exchange and legal costs, administrative costs were down by 12%, compared to the first quarter of 2013.

Similarly upstream operating expenses excluding the impact of long term incentives and foreign exchange were down about 26% from Q1 of 2013. These cost reductions are largely the result of realigning our workforce to be more consistent with our strategic focus as well as operational efficiencies achieved in both core and base production assets.

We are focused on leveraging technology and technical expertise across our business and we continue to actively seek ways to reduce cost, improve efficiencies, strengthening cash flow and maximize margins. Encana maintained its strong liquidity position during the quarter with a quarter-end balance of about $2.2 billion in cash and cash equivalent, while making a significant reduction to our total debt.

Our strong financial position and our agile organizational structure enabled us to be opportunistic and act quickly with respect to our recently announced Eagle Ford acquisition. We plan to fund the acquisition with cash on hand, which includes the proceeds we received from the sale of our Jonah asset and expected proceeds from our East Texas disposition.

In addition we have about $4.2 billion of undrawn bank lines committed until 2019. So we have tremendous financial flexibility.

During the quarter, we paid approximately $768 million of our May 2014, $1 billion debt maturity pursuant to a consent tender and have since redeemed the remaining balance. Net debt to debt adjusted cash flow as 1.2 times at the end of the quarter compared to 1.5 times at year end.

Our strong financial results along with the sustainability of our business model resulted in the recent revision to a stable outlook from S&P. It was previously negative.

And we increased our oil hedges during the quarter. As of March 31, we had hedged approximately 15,000 barrels per day of expected April to December 2014 oil production using WTI fixed price contract at an average price of $95.82 per barrel.

Our natural gas hedges remain largely unchanged. We have posted on our website this morning an update to our 2014 corporate guidance.

This update includes the impact of the Jonah asset sale that does not include the impact of any other A&D activity such as the recently announced acquisition in the Eagle Ford, the sale of properties at East Texas or the impact of the planned IPO of PrairieSky Royalty. We will update guidance only once transactions have closed.

All of these transactions are expected to close during the second quarter. Our revised guidance reflects the first quarter actual and increased full year commodity price assumptions of $4.50 per million BTU NYMEX natural gas and $98 per barrel WTI.

With respect to cash flow, the total cash flow range has increased to $2.9 billion to $3 billion from $2.4 billion to $2.5 billion previously, recognizing strong first quarter gas prices. This also includes the sales of Jonah.

Maintaining capital discipline is a key focus for us and as such our capital investment plans remain unchanged at $2.4 billion to $2.5 billion. We now expect to generate free cash flow of approximately $300 million in excess of our capital expenditures and expected dividend payments.

Our guidance reflects a slight decrease to our original natural gas, oil and total production volume, which is primarily due to the impact of the Jonah sale. Our cost guidance at this point remains unchanged.

I will now turn the call over to Mike McAllister, who will provide an update on our Q1 operational highlights.

Thanks Sherri and good morning, everyone. When our new strategy was announced last fall, there was a strong sense of recognition amongst our staff that 2014 would be a critical year for us operationally as we look to focus our capital more aggressively on our core growth plays and maximize the profitability of our base assets.

We are nearly half way through the year and I am pleased to say that we continue to build momentum in the core growth plays and we expect this to start flowing through our financial results in the second half of the year. This slide highlights some of our recent activities and achievements in the core growth plays.

The DJ basin well performance continues to exceed our expectations with current 30-day initial production rates in the range of 330 barrels per day. Drilling costs have come in below budget on our range -- excuse me, on our long laterals at a cost of $340,000 per 1,000 feet on an average lateral length of 6,800 feet.

We added a sixth rig in the DJ during the first quarter and we are evaluating feasibility of maintaining six rigs for the remainder of the year. In the Montney, the performance we've seen from our revised well-designed and cut anchorage area has been very encouraging.

We are drilling longer laterals with more intense stimulation, which is yielding 75% increase in initial production rates. In the liquids rich portion, pipestone portion of the Montney, drilling costs are trending downwards to an average of about $3.5 million per well compared to $4.1 million in 2013.

In addition, liquid yields and pipestone, the 12 most recent wells are approximately 20% higher than initially forecast. Encana is currently running eight rigs in the Montney.

In the San Juan, our year-to-date well cost are trending downward as we achieved average drill complete and high end cost of $4.9 million on our last four wells. The well performance continues to be in line with our expectations and we are encouraged by the recent improvements and permitting cycle.

We currently have one rig running in the play and plan to have four running by the end of the third quarter. In the Duvernay, we made significant progress on logistics, which allowed us to stockpile equipment and supplies enabling five rigs in facility construction projects to continue through spring breakup.

During the first quarter, we spud eight -- two -- excuse me, two eight well pads. We are continuing completion design of experiments with five or six high intensity stimulated wells on or above expectations.

Higher intensity means more entry points, more fluid and more sand. Encana now has 10 horizontal wells that have been tested or are on production in the Kaybob Simonette area.

Some of these wells date back to 2012 and the results have continued to improve over time. We have also advanced our midstream initiatives in the Duvernay in the first quarter with a five-year commitment from Encana and its partner Phoenix Duvernay for transportation on the alliance pipeline with five year rich gas sales up to 195 million per day to Aux Sable.

These agreements support our upstream development plans and offer pricing diversity for our liquids production. Our 2014 drilling program in the TMS has been largely successful year-to-date.

As the last three wells, one Encana operated and two non-operated brought on production are meeting or exceeding our expectations and normalize for a 1,000 foot lateral length basis. We are currently operating two rigs in the play.

During the quarter, we entered into an agreement with a third party to help accelerate our evaluation of TMS. We still hold approximately 200,000 net acres in the play with an average working interest of 91% where we are focused in the central and eastern portions of our original land base.

This allows us to realize some immediate value from our large land holdings in an area and focus our activities on areas where we can best develop rather than having to drill wells for simple land retention. Recently we have seen significant drilling ramp up by industry in the TMS.

This is good news for us because having multiple companies operating in early life resource play, accelerates the appraisal and assists in unlocking its full potential. We are also very pleased with the performance of our Deep Panuke offshore natural gas project, which averaged 253 million cubic feet per day during the quarter.

The detailed reservoir characterization work of our technical team has confirmed that well performance is consistent with expectations. As Sherri mentioned, we saw very strong cash flow growth from Deep Panuke during the quarter.

Although we do not expect to see the strength of first quarter realized pricing continue through the year, we are very pleased with how the project has bolstered our cash flow and offset a portion of our declines from our base natural gas assets. Optimizing our base production is another critical component of our strategy.

It's something our teams have been very focused on over the last several months. We have implemented various strategies across our asset base to help offset decline rates on our producing assets.

In the Haynesville for example, we have re-stimulated wells and installed both sour gas processing and fuel booster compression. We've also implemented a natural gas and NGL diversion project in Resthaven area in response to a facility outage and we've implemented various artificial lift initiatives across our land base.

Our teams continue to find innovative and cost efficient means of optimizing base production. As such, we believe we are well positioned to meet our target 2014 base decline rate of 25% to 27%, or about a 10% improvement from our historical decline rate.

The strong performance of our base business underscores our focus on profitability and enables us to accelerate the execution of other strategic initiatives. I'll now turn the call back to Doug.

Thanks Mike. 2014 is setting up to be a transformational year for Encana as the execution of our new strategy is now well underway and is delivering meaningful results.

We are rapidly accelerating the transition of our asset base to increase our waiting to oil and natural gas liquids. We have maintained a disciplined capital program.

We continue to see our cost structures coming down and are driving efficiencies into everything we do. We are building momentum in each of our core areas and expect to see strong results from these plays in the second half of the year and we are maintaining our financial strength.

Through our disciplined focus on generating profitable growth, we are striving to grow shareholder value and we believe we are delivering on this objective. Thank you.

And the team is now ready and prepared to take your questions.

Thanks. Good morning.

I am going to ask a couple of questions, but the first one is just around guidance. Does the updated production outlook for 2014 largely and highly reflects the Jonah sale?

And the second question is may be just for Sherri, what's your thinking around cash taxes for 2014 and if it was in the guidance, I just missed it?

Yeah Greg thanks for the question. I'll just make a couple of comments and hand it over to Sherri.

I think first is the kind of the way we think about updating guidance is as you know, we have a lot of significant transactions underway and when those close, we'll update guidance. So the significant one that's closed year-to-date is Jonah and our guidance now fully reflects Jonah, but it does not yet reflect announced, but not yet closed transactions.

Sherri?

Yeah, the only other thing Greg, I would add on the guidance is that it reflects Jonah and reflects the results of our strong first quarter performance. We did update the outlook on price based on the March 31 forward strip and we did account for some of the FX changes moving to a $0.90.

We haven't made changes at this point given how early it is around any of our operating cost guidance, but we will look at that as we move through the year. Cash taxes, it's really difficult to assume cash taxes on a quarter basis but I think for now this updated guidance is really looking at about $50 million in cash taxes for about 2014.

And then as we undertake our transactions, we'll try to update you with any changes as we go through guidance around what our cash tax position assumptions are at that time.

Okay. Thanks for that.

Secondly, I was wondering if we can dig into the -- into your Duvernay program a little bit and may be some of the specific questions would be the high end, just the timing on the high end of the two well pads where your liquid volumes are perhaps currently and where you see those going. And then the last piece of that is just around your oil and liquids yields, just the numbers that you are presenting in the press release, does that solely reflect field liquids and could those numbers increase with processing?

Thanks.

Hi Greg, it's Mike McAllister here. With respect to the Duvernay, we are very pleased with the progress that we are seeing.

We were able to get in all of our sand and equipment as well as our facility construction equipment to be able to execute here through spring break up. So keeps us on track with respect to getting to our tie ends.

We are looking at significant facility, the [531] (ph) facility come on here in the third quarter. With respect to liquids, what we are seeing is actually improved liquid-to-gas ratios up in our Northern portion of the Simonette area.

We are actually in the volatile oil window there. So liquids are looking a little richer than what we had originally anticipated.

We are seeing up to 400 barrels per million, where I think we had mapped that out at about 150 barrels per million. Yes, so we are essentially on track as well on from a drilling cost standpoint, now that we have the two eight well pads that have been spud.

Our first wells are coming in on progress with respect to cost.

And then just -- my thanks for that, just for a second, what's the timing then on the second pad? Or is 531 a super pad.

No that's actually a facility. We've got nine or ten and four 402 eight well pads.

That's a facility that's coming on and it will be -- we are looking probably to the backend of the third quarter for it to come on stream.

Okay. Great.

And what can you say about -- just about current production levels and where you would see those going? Like I don't want to pin you down to an exit rate, as we've been down that journey before, but may be just thinking about what we should expect as we go in towards the end of the year?

We are going to be looking at a good ramp-up on liquids. I don't have -- I don't have that number handy right now in terms of the exit rate, but we can get back to you there, Greg.

Okay. Thanks very much all.

Good morning. The first thing I wanted to ask is if you could remind us of your expectations for the TMS that were exceeded in the most recent operated and non-operated wells?

Thanks Jeff. I will ask David Hill, who is our EVP for Exploration and Business Development to pick that up.

Excuse me, hi Jeff. We have one well that's on here in the first quarter and that well is continuing to perform with us on the type curve and two other wells that are non-operated by Encana, also continue to hit the type curve.

So these are the first three well that have had significant production in the first quarter. So we are very encouraged at normalized per thousand foot that these well are hitting type curve for us.

Okay. Thank you.

I also wanted to ask you, since you are adding rigs in the San Juan; does this imply that the Bureau of Land Management permitting is less of an impediment in the second half of the year?

Hi, it's Mike McAllister here. Yeah, actually we've seen some significant improvements in permitting that's really encouraging in terms of a reduction in the days that's taking us to get our approval of drill as well as our right-of-way.

So we are feeling more encouraged that the length of time to get the permits is coming down. So fingers crossed on that one going forward.

Okay. Great and let me ask one final question.

Since we don't really have all the numbers in front of us for what expectations are or what have you. Let me just ask a broad question, if you can consistently drill Duvernay and Montney well similar to the results you are getting in the first quarter of 2014, can we say that these are commercial wells and will produce acceptable returns or are we not there yet?

Yeah, Jeff this is Doug. I think that we consider both of those plays commercial today.

In the Montney, it's an incredibly attractive play and Mike just lightly touched on some well design, completion design changes we've made, which have taken -- which was already very commercial and made an incredibly attractive 75% increase in early production rights is incredible. Our teams has done a great job.

And in the Duvernay, what we've done is distinguish the northern part of our position versus the southern. So the Kaybob Simonette area, we consider commercial today and that's why we are moving forward on two eight well pads.

In the south an area we refer to as Willesden Green, we are still in appraisal there, we haven't made that decision, but in the northern part of the Duvernay and an in the Montney, we consider both of those areas very commercial, very attractive places to invest.

Okay. Thanks Doug, that's very helpful.

Congratulations on the quarter.

Thank you.

Thank you. Good morning.

On Deep Panuke, could you just have to what prices you are receiving currently and then your expectation for how long you would expect to just sustain production rates and then what the decline profile would look like?

Sure Brian. This is Renee Zemljak.

The prices that we received for Panuke are based off of Boston City Gate, which is Algonquin. So we tend to sell that production into the daily markets in the winter time.

And then we have transport deducted of that.

And can you say as winter has ended, the impact that that's had and what pricing you are receiving today and then how long you expect before you see declines from Deep Panuke and what those decline rates would be?

Sure I'll let Mike speak to the volumes, but with regards to has the winter ended, yes, we are expecting the Panuke pricing for the balance of the summer to be more equivalent to NYMEX prices. And then I'll pick back up as we enter into the next winter.

And with that, I'll turn the volume question over to Mike.

Hi there Brian. Yeah, with respect to Deep Panuke, on the well performance as well as our resource estimates, we are looking at about three years that we will be able to hold that at design capacity or close to design capacity.

Great. Thank you.

And then lastly following up on the Tuscaloosa Marine Shale question earlier, when you mentioned your operating well was performing above expectations, can you just remind us what your base case is, that is perfuming above in terms of well cost and well performance?

Yes, regarding performance, again early days, less than -- right around 30 days on production, but the type curve that we are seeking to achieve here is about 730 million barrels and from well cost perspective that's an early well, so we aren’t really comparing well cost to our RPH method at this time, but we are really focused in on well performance.

Okay. Great.

Thank you.

Good morning, guys. Thanks for taking my question.

Just a couple for me actually. On the Montney, your new well design, can you talk a bit more in detail about that and your plans to implement this across your position?

Hi Jeff, it's Mike McAllister here. Yeah, we are really excited about the new well design.

We've essentially significantly increased our fracture intensity. We cut our inter-frac spacing, our inter-cluster spacing in half to 25 meters versus 50 meters and kept the sand concentration the same.

And we're seeing IP rates, 75% above where we were previously and we see that design applicable across all of our land base. So it's somewhat of a game changer for us in the Montney.

Great and then just jumping to the recent Eagle Ford deal, any updated thoughts around your plans, your strategy just around growing your foothold or if you're just going to see what you've got with the recent deal?

Yeah Jeff, it's Doug. We are really pleased with the deal we've done.

I think that David and his team were actually very well prepared when this opportunity emerged. We talk about these four competencies that we think are critical to success over the long term.

And one of them is all about understanding the rocks. And we really like that this is in the core of the core, this is in oil position.

75% of the production is sort of low 40 API gravity oil. So it's a premium product.

It obviously comes with a lot of production today, comes with a lot of cash flow today. It has a modest amount of running room.

And I would say just like our other core growth areas, we'll constantly be looking at, do we want to build on to those or not. We are not in a rush to do it.

And over the next few weeks, as we get from today to closing, Mike and his team are already starting to look at what's the appropriate pace of development here. I can tell you our focus is not on maximizing production, but it's on maximizing value and it's about how can we get the best performance out of the existing base production and how can we get the best potential from the development opportunities that exist there and once we get that deal closed, we'll update our guidance reflecting our plans for the balance of this year in Eagle Ford.

Thank you.

Good morning, guys; a great quarter. Quick question on the fundamentals like natural gas fundamentals.

What's your view going forward for 2014, 2015 and then longer term regarding natural gas, is the plan to do the similar kind of hedging what you are doing in 2014 and 2015 and 2016?

Sameer, before I hand it over to Renee, I kind of feel like echoing the words of Gregg Popovich, not too long ago at the NBA playoffs and say, is this just between us, but I'll hand it over to Renee and let her share her thoughts.

Thank you. Our view for pricing for 2014 are really going to be based off of what happens coming this summer as we go to inject the gas into storage.

We have a tremendous amount of gas that we need to inject over the balance of the summer and as a result of that, we see that there is going to be support to the natural gas prices for the balance of the year. Going into 2015 and beyond, our long term view on gas prices really hasn’t changed.

It's really consistent with what we laid out when we rolled out the strategy. So we are thinking longer term, gas prices will be somewhere between $4 and $5.

Thank you. And then the follow-up question is on A&D, you've sold a lot of natural gas high cost assets and then moving or recycling that cash into accretive acquisitions like you did with Eagle Ford, is there more of this coming in 2014, how should we think about it from that perspective and how are you thinking about the assets for sale?

Thank you.

Yes, and Sameer we rolled out our strategy back in November. What we've outlined was the organic sort of what was possible within our existing portfolio and that was our base case.

We also said at that time, we would test the market, we believed we had a set of very high quality gas weighted assets and there was lots of speculation about whether there was or wasn't a market for some of those assets. We weren’t in a position when we had to sell anything and we've gone out and tested and clearly on two of our assets, we found what we believe are good buyers for high quality assets.

I would actually say that Jonah is a world-class gas resource in the new TPG Jonah team, I think we'll -- I suspect a great success with it. And of course we've unlocked value with what we are doing.

We are in the process of doing with our PrairieSky Royalty IPO. I think we'll continue to test the market with some of our gas assets and some of our tail.

We've also done a number of divestments, which are not of significant scale on proceeds, but simplify the business. For instance, we've effectively exited now our natural gas economy business and I think we've succeeded with what we set out to do, which was prove the use of natural gas in a number of new applications including drilling rigs and frac spreads and mining equipment and trains and pickup trucks and lot of places and now it's great that someone else will scale that business.

But we'll continue to look to divest some of our positions and as we've always said, we have a number of choices of what to do with that capital and it will -- any acquisition will be accretive to the plan we laid out in November that is a must deliverable item for us and it will be consistent with our strategy and what you should hear and that is we continue to want to increase our balance between liquids and natural gas. But once again I think we've shown we can be opportunistic.

We have the financial strength to do that and I think we have the organizational capability to act quickly. I think what we did on this Eagle Ford transaction was at the very sharp end of pace actually.

It was as quick as anything I've ever seen done in my career.

Thank you.

Thank you, Laurel. As a reminder, Encana's Shareholder -- Annual Shareholder Meeting will be held this morning at 10 AM Mountain Time at the BMO Centre in Calgary.

A live audio webcast of the meeting as well as presentation slides will be available on our website. So I'd like to thank everybody for joining us this morning and our conference call is now complete.