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(Adds analyst and executive comments; updates shares)
By Anet Josline Pinto
July 28 (Reuters) - Coal and natural gas producer Consol Energy Inc lowered its 2015 budget for oil and gas operations by 13 percent to $800 million, the second cut this year, and slashed dividend as it struggles to cope with dismally low commodity prices.
The company, which also posted a surprise quarterly loss, said it expected the steps to help it turn free cash flow positive in the second half of the year.
Consol's shares rose as much as 12 percent on Tuesday, reversing course, after it announced gas flow from a well in Pennsylvania.
The company maintained its 2015 target of 30 percent growth in gas production and said it would complete already drilled wells, rather than drill new wells.
The Pennsylvania well, in the Utica shale field in Westmoreland County, had a 24-hour flow rate of more than 61 million cubic feet, Timothy Dugan, chief operating officer of the oil and gas business, said on a post-earnings call.
The development boosts the value of the 500,000 acres Consol holds in Pennsylvania, Suntrust Robinson Humphrey analyst Neal Dingmann said, without estimating the assets' value.
Consol's increased focus on natural gas has not helped its cash flow so far as prices have plunged due to a supply glut. The company last reported positive free cash flow - operating cash flow minus capital expenditure - nearly four years ago.
Consol also said on Tuesday it would delay the listing of a unit holding its steel-making coal assets due to weak prices.
The company, which had planned to launch the initial public offering of the unit in the fourth quarter, is now looking for a partner to grow the business before taking it public.
Consol reduced its quarterly dividend to 1 cent per share from about 6 cents.
The company's net loss widened to $603.3 million, or $2.64 per share, in the second quarter ended June 30 from $24.9 million, or 11 cents per share, a year earlier.
Excluding an $829 million impairment charge on its oil and gas assets, Consol reported a loss of 37 cents per share.
Revenue dropped nearly 31 percent to $648.9 million.
Analysts on average had expected a profit of 1 cent per share and revenue of $789.6 million, according to Thomson Reuters I/B/E/S.
Consol's shares were up 3.6 percent at $17.98 in afternoon trading on the New York Stock Exchange, after falling nearly 7 percent earlier in the session. (Writing by Swetha Gopinath; Editing by Maju Samuel and Kirti Pandey)