The production, which is also 12% higher than the second quarter and 86% over the third quarter of 2007, underscores the rising importance of CSM to Origin.

The company, which is the target of a $A12.9 billion takeover bid from BG Group, reported a 3% increase in total production to 23.8 petajoule equivalent for the March quarter.

Increased CSM production and the commissioning of the Otway Gas Project more than offset declines from the BassGas project, which undertook a planned maintenance and shutdown, and the Perth Basin where production at Beharra Springs was shut down to rectify some plant damage.

Sales volumes were down 4% from 23.4PJe in the previous quarter to 22.4PJe while revenue was also down 4% to $120.8 million.

Liquids production was down 9% though this is expected to increase once BassGas is restored to capacity and Otway ramps up.

Further increases in CSM production are also on the horizon with work on Phase 5 of the Spring Gully Project set to increase production from about 93 terajoules per day to 150TJ/d.

Origin drilled 12 development wells during the quarter, bringing the number of wells to 36 of the planned 60 development well campaign, and commissioned a third compressor at the Strathblane gas plant.

A fourth compressor is being installed and will be commissioned in the next quarter while a fifth has completed a factory acceptance test and is ready for shipment.

Origin also expects production at the Queensland Gas Company-operated Kenya/Argyle field to increase gross production from 21TJ/d (8.5TJ/d Origin's share) to 120TJ/d by 2010 when the expansion of the project is completed.

Drilling of the first phase of Talinga development program is expected to start in the next quarter.

The program consists of 100 initial wells along with gas and water processing facilities to achieve production of 90TJ/d that will be used to supplement supply from Spring Gully to meet gas demand from the Darling Downs Power Station and Rio Tinto Aluminium.