UPDATE 1-UK Coal says deep mine output in line with view

* Surface mine production hit by weather, seen recovering

* Says contracts lift long-term price, short-term cash flow

* Property business progressing as expected

May 15 (Reuters) - UK Coal Plc (UKC.L), Britain's biggest coal producer, said on Friday that its deep mine production had continued broadly in line with expectations since March 27, the end of its first quarter.

Surface mine production at the start of the year was affected by the weather, but production is expected to recover during the year, UK Coal said.

It said new contracts negotiated or amended during the current financial year had increased its long-term contracted coal prices and short-term cash flows.

UK Coal said its property business Harworth Estates continued to progress as expected.

The company said production in the first quarter was flat at 1.7 million tonnes.

UK Coal shares eased 0.3 percent to 143.75 pence by 0748 GMT on the London Stock Exchange. (Reporting by Austin Lobo in Bangalore; Editing by Mike Miller)