UPDATE 1-Talisman reports profit on asset sales
* Quarterly production falls 11 pct to 392,000 boe/d
* Fourth-quarter costs fall 43 pct to $1.11 bln
* Cash flow declines to $675 million from $824 million
Feb 13 (Reuters) - Talisman Energy Inc , Canada's fifth-largest independent oil producer, reported a quarterly profit on gains from asset sales and said it was looking at disposing off some natural gas reserves in North America due to weak gas prices.
The company said last month it plans to cut by a fifth its annual general and administrative costs of $1.3 billion and exit less-profitable operations. Talisman lowered its 2013 capital budget by a fourth to about $3 billion.
"We will live within our means, reducing investment to live within cash flow," Chief Executive Hal Kvisle said on Wednesday.
Excluding one-time items, Talisman lost 10 cents per share in the fourth quarter.
Cash flow, a glimpse into the company's ability to fund drilling, was $675 million, or 66 cents per share, down from $824 million, or 81 cents per share, a year earlier.
Production fell 11 percent to 392,000 barrels of oil equivalent per day due to lower contributions from its North Sea operations.
Talisman recorded a gain of $862 million related to the sale of a 49 percent stake in its North Sea operations to China's Sinopec Corp and some other divestitures in North America.
The company had a net income of $376 million, or 37 cents per share, in the fourth quarter, compared with a loss of $117 million, or 11 cents per share, a year earlier.
Total costs fell 43 percent to $1.11 billion.
Last year, Talisman had two-thirds of its total gas production of 1,582 million cubic feet per day from North America.