* Q3 shr C$0.12 vs C$0.03 yr-ago
* Q3 shr C$0.02 from cont ops vs C$0.09
* Sees 2010 production of 415,000 boe/d
* Shares rise 1.9 pct (Recasts, add details and comment)
By Scott Haggett
CALGARY, Alberta, Nov 2 (Reuters) - Talisman Energy Inc TLM.TO, Canada's No. 4 independent oil producer, said on Tuesday its third-quarter profit rose fourfold on higher natural gas prices and rising output from its shale gas prospects in North America.
Talisman said a lengthy restructuring to focus its North American operations on prolific shale gas deposits is nearly complete and production is set to climb as it wraps up the sale of properties that don't fit into its new operations.
Indeed, on Tuesday the company boosted its forecast for 2010 production to 415,000 barrels of oil equivalent per day from 400,000, backed by a 24 percent rise in natural gas production from its shale holdings.
"They're moving in the the right direction ... and they've made themselves an interesting story," said Phil Skolnick, an analyst with Canaccord Genuity.
Though it plans a further C$2 billion in asset sales this year, Talisman said the majority of its restructuring is complete and it expects its production growth to continue.
Its rising forecast is backed by a big jump in output from its holdings in Pennsylvania's Marcellus shale gas region.
Output from Marcellus averaged 222 million cubic feet per day in the quarter, up from 38 million in the third quarter of 2009.
"Shale now accounts for 36 percent of our North American natural gas holdings, up from 6 percent a year ago," John Manzoni, Talisman's chief executive, said in a statement.
Benchmark gas prices rose 23 percent in the quarter, averaging $4.23 per million British thermal units on the New York Mercantile Exchange. However Talisman said its average price increased just 13 percent as the Canadian dollar strengthened.
Talisman also said it was considering bringing in a partner to help develop its shale gas holdings in the Montney region of northeastern British Columbia. The strategy has been used by other companies, including Encana Corp (ECA.TO), which teamed up with Chinese and Korean companies to speed up drilling on its northeastern British Columbia holdings.
Talisman reported net income of C$121 million ($119.6 million), or 12 Canadian cents per share, up from C$30 million, or 3 Canadian cents, in the year-prior quarter.
Excluding one-time items, the company earned C$22 million, or 2 Canadian cents a share from continuing operations, down from C$95 million, or 9 Canadian cents a share, in the year-earlier quarter. Talisman attributed the shortfall to changes in the value of foreign currency holdings, which cost it C$70 million in the quarter.
Analysts, on average, had forecast a profit of 12 Canadian cents a share, according to Thomson Reuters I/B/E/S.
Cash flow, an indicator of the company's ability to pay for new projects and acquisitions, fell to C$727 million, or 71 Canadian cents per share, from C$838 million, or 83 Canadian cents a share, a year ago.
Production at Talisman, which also operates in the North Sea and Southeast Asia, averaged 404,000 barrels of oil equivalent a day, up from 401,000 in the year-earlier quarter.
Talisman shares rose 34 Canadian cents to C$18.78 midmorning on the Toronto Stock Exchange.
$1=$1.01 Canadian Additional reporting by Sakthi Prasad in Bangalore; editing by Rob Wilson