Origin reported higher oil production from the Perth Basin following a successful field development drilling program and continuing increases in coal seam methane production. The company also reported success in the Santos-operated Cooper oil project and progress at its Kupe gas project in New Zealand, which remains on schedule for first gas in 2009.

But at close of trading yesterday, Origin shares were at $9.07, down 29c or 3.1% for the day. So it seems these significant successes were overshadowed by the problems at BassGas in the minds of investors.

BassGas successfully completed key endurance and maximum design capacity (67 terajoules per day) milestones last October, and sales gas, condensate and liquid petroleum gas are being produced and sold daily.

But operational issues with plant amine and dehydration systems have reduced the maximum continuous production volumes since November. Modifications and inspections to resolve these operational issues are planned during a short shutdown in the second quarter of this year, according to Origin.

The company has also had problems at the Woodside-operated Otway gas project, which is behind schedule and over budget. Woodside is expected to give an update on the project timing this month.

Origin, which last month received a merger proposal from AGL Energy, said over the six months to December 31, production increased 11%, product sales by 13% and revenue by 15% compared with the previous corresponding period.