(Corrects third-quarter production to 424,000 boe/day, from 424 million boe/d, in paragraph 8)
* Q3 oper EPS C$2.56
* Reuters Estimates EPS view C$2.28
* Cash Flow up 72 pct (Recasts, adds details)
Oct 23 (Reuters) - Petro-Canada PCA.TO, Canada's No. 4 oil refiner and explorer by market value, posted a 61 percent rise in third-quarter profit, on higher oil prices.
Oil prices have averaged $118.22 over the quarter ended Sept. 30, 57 percent above average for the third quarter of 2007.
It earned C$1.25 billion ($984.8 million), or C$2.58 per share for the quarter, up from C$776 million, or C$1.59 per share, a year ago.
Operating earnings, which exclude most one-time gains and charges, almost doubled to C$1.24 billion, or C$2.56 per share, from C$630 million, or C$1.29, a year ago. The company was expected to post earnings per share of C$2.28, before items, according to Reuters Estimates.
Petro-Canada's cash flow, a key indicator of its ability to pay for new projects, rose 72 percent to C$2.12 billion, from C$1.23 billion in the year-ago quarter.
Investors have questioned the company's ability to go ahead with the Fort Hills oil sands project after cost estimates for the project rose by half, to more than C$21 billion, over a year and the credit crunch raised financing costs.
The company's overall production averaged 424,000 barrels of oil equivalent per day during the quarter, 3 percent lower than the third quarter of 2007.
Petro-Canada shares closed at C$25.41 Wednesday on the Toronto Stock Exchange. The shares have lost about 40 percent since the end of the quarter as oil prices have plunged by more than a fourth. ($1=$1.27 Canadian) (Reporting by Ajay Kamalakaran in Bangalore; Editing by Himani Sarkar)