Talisman Energy profit up 10-fold

Shares of Calgary-based Talisman Energy rose more than  two per cent Tuesday after the company  reported a nearly 10-fold increase in second-quarter profit.

The oil and gas producer earned $603 million, or 59 cents a share, compared with $63 million, or six cents a share, in the year-ago period when it booked losses on contracts to protect itself from swings in oil prices.

Talisman shares closed up 40 cents at $17.49 on the Toronto Stock Exchange.

The company also said its 2010 capital spending may end up lower than expected.

"I'd characterize our second quarter as a strong quarter, in which we've done exactly what we said we would do, with the portfolio now increasingly set for sustainable, profitable growth," CEO John Manzoni told analysts on a conference call .

Talisman said its capital spending is expected to come in at $4.6 billion, down from its November estimate of $5.2 billion, due to exchange-rate fluctuations. And there could be further drops head, Manzoni said.

"I think our annual spend may turn out closer to $4.4 to $4.5 billion, although this absolutely doesn't represent any strategic shift or change," he said.

"But we'll need to keep an eye on it over the next quarter and we'll adjust guidance properly for you as it becomes clearer in the second half."

Talisman has been shifting its focus toward unconventional natural gas plays in Canada and the United States, amassing substantial land positions in the Horn River and Montney plays in northeastern British Columbia, as well as the Marcellus play in the northeastern United States.

It also has less developed holdings in Quebec shale.