UPDATE 2-Consol ramps up gas output as energy push pays off
* First-quarter profit $0.50/share vs est. $0.19/share
* Revenue up 15 pct, exploration, production sales up 58 pct
* Expects higher natural gas production in second quarter
* Shares rise as much as 5 pct (Adds analyst estimates, comments; updates shares)
April 29 (Reuters) - Consol Energy Inc plans to ramp up its natural gas output in the second quarter, after a 59 percent jump in sales of oil and gas helped the company report a better-than-expected quarterly profit.
The coal and gas producer's shares rose as much as 5 percent to a more than two-year high of $44.00 in early trading.
Consol, which plans to become an exploration and production company with a coal subsidiary, expects natural gas production to rise as much as 35 percent to 50-52 billion cubic feet equivalent (bcfe) in the current quarter.
The company plans to spend 75 percent of its 2014 capital budget of $1.5 billion on gas production.
Consol is making a big push into oil and gas production as its coal mining operations continue to be weighed down by weak prices for steel-making, or metallurgical, coal.
However, the company said on Tuesday that it expects a pick up in pricing and demand for thermal coal, used in power generation.
Low coal and gas inventories, weak hydro-electric output, and higher natural gas prices were pushing up contracts for thermal coal, Consol said.
The company raised its forecast for thermal coal sales to 25.3 million tons from 23.8 million tons.
However, the company cut its sales forecast for steel-making coal to 3.6-4.2 million tons from 4.2-4.7 million tons and said it was cutting production at its Buchanan Mine in Virginia.
"Though it is unfortunate that Consol's Buchanan mine may run less than flat out, we believe this to be a more-or-less expected turn of events given the current market environment and more lasting decisions being made by the company's met coal producing peers," Brean Capital analyst Lucas Pipes wrote in a note to clients.
Bigger rival Peabody Energy Corp said last week that it was reviewing some of its higher-cost operations, while Walter Energy Inc has said it would idle its Canadian mines and temporarily lay off about 700 employees.
Weak prices for steel-making coal dragged down Consol's total coal sales by 2.4 percent to $534.7 million in the first quarter ended March 31.
However, the weak prices were more than offset by a rise in natural gas prices and lower costs.
Consol said natural gas output rose 23 percent in the first quarter, while average sales price rose by $1.22 per thousand cubic feet equivalent.
The company reported net income of $116 million, or 50 cents per share, in the first quarter, compared with a net loss of $1.8 million, or 1 cent per share, a year earlier.
Revenue rose 15 percent to $969.2 million.
The average analyst estimate was for a profit of 19 cents per share on revenue of $889.94 million, according to Thomson Reuters I/B/E/S. (Reporting By Kanika Sikka and Sneha Banerjee in Bangalore; Editing by Maju Samuel and Sriraj Kalluvila)