UPDATE 2-OMV says higher profits help its investment plans
* Clean CCS EBIT up 6 pct to 851 mln eur vs poll avg 835 mln
* Cash flow up 9 pct to 1.4 bln eur
* Shares up 1.4 percent after reaching 4-1/2-year high (Recasts, adds CFO comments on Black Sea investment; shares)
By Georgina Prodhan
VIENNA, May 14 (Reuters) - Austrian energy group OMV reported higher-than-expected profit and cash flow for the first quarter after downstream activities reversed a year-ago loss, and said this would help it pursue its ambitious investment programme.
OMV is switching focus from refining and selling oil and gas to higher-risk but higher-reward exploration and production, and plans a hike in investments this year. It is exploring what may be its biggest ever gas find, in the Black Sea.
OMV reported underlying profit rose 6 percent to 851 million euros, better than the average in a Reuters poll, and free cash flow rose 9 percent.
"The group has very exciting possibilities in the Black Sea which are also going to consume capital," said Chief Financial Officer David Davis, playing down analysts' hopes for a dividend rise.
"We prefer to see what's available before we distribute it," Davis told journalists on a webcast.
He confirmed OMV's long-term target to pay out 30 percent of earnings, after a 29 percent payout last year.
OMV's shares rose almost 4 percent in early trading on Tuesday to a 4-1/2-year high, the leading gainers in a flat European oil and gas index.
OMV, whose core countries are Austria and Romania and which also operates in the North Sea, North Africa, the Middle East, Australia and New Zealand, is raising its capital expenditure to 2.8 billion euros ($3.6 billion) this year from 2.4 billion.
It said preliminary results from its Black Sea Neptun block, which may be its biggest gas find ever, showed potential production of 630 million cubic feet per day.
The joint venture between OMV's Romanian subsidiary Petrom and ExxonMobil includes the first deep-water exploration well in Romanian waters.
OMV's exploration expenses fell in the first quarter to 115 million euros from 130 million a year earlier after it wrote off unsuccessful wells in Norway and Britain, and production costs also fell by 2 percent on cost savings and higher volumes.
Cash flow from operating activities rose to 1.40 billion euros as OMV cut its working capital by 500 million euros.
Clean net profit fell by 8 percent to 349 million euros, missing analysts' expectations of 380 million. ($1 = 0.7703 euros) (Reporting by Georgina Prodhan; Editing by Sophie Walker)
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