UPDATE 1-Iteration Energy posts Q3 loss in line with estimates

* Q3 loss C$0.08/shr in line with est

* Q3 production rev falls 61 pct

* Raises '09 funds from operations view to C$0.24/shr

Nov 12 (Reuters) - Oil and gas exploration company Iteration Energy Ltd (ITX.TO) posted a third-quarter loss that was in line with market estimates, and raised its funds from operations forecast for the year, citing higher commodity prices.

The company now sees 2009 funds from operations of C$47 million, or 24 Canadian cents per basic share, up C$7 million from its previous forecast, and said it expects the figure to double year-over-year in 2010.

For the latest quarter ended Sept. 30, Iteration posted a net loss of C$16.5 million, or 8 Canadian cents a share, compared with earnings of C$26.7 million, or 16 Canadian cents a share, last year.

Production revenue fell 61 percent to C$42.1 million.

Analysts on average had expected the company to post a loss of 8 Canadian cents a share on revenue of C$42.7 million, according to Thomson Reuters I/B/E/S.

Funds from operations -- an indication of cash available for capital commitments, debt repayments and other expenditures -- fell to C$10.1 million, or 5 Canadian cents a share, from C$59.3 million, or 35 Canadian cents a share, last year.