UPDATE 1-Australia's Origin Q4 output jumps, boosts full-year

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PERTH, July 31 (Reuters) - Takeover target Origin Energy Ltd (ORG.AX), Australia's No. 2 energy retailer, on Thursday posted a year-on-year 35 percent rise in fourth-quarter production and record full-year production, thanks to higher gas output.

Origin also reported a 66 percent increase in its proved and probable (2P) oil and gas reserves, adding the size of its coal seam gas reserves provides the opportunity to consider a coal seam gas-fuelled liquefied natural gas (LNG) project.

Origin, which received a takeover offer from Britain's BG Group Plc (BG.L), said in a statement that revenue in the fourth quarter rose 26.4 percent from a year ago to A$154.6 million ($146 million), bringing total revenues for the full year to a record A$531 million.

Total oil and gas output in the April-June quarter was 30 petajoules equivalent (PJe), bringing full year production to a record of 101 PJe, Origin said.

Origin said the higher output was largely driven by increases in coal seam gas production, the start of its Otway gas project off Victoria state and higher output from its BassGas unit, also off Victoria, following maintenance work in the previous quarter.

An initial three-week contribution from the offshore Taranaki Basin in New Zealand acquired from Swift Energy also helped to boost output, Origin said.

"In the next financial year we expect growing coal seam gas production, a full year contribution from the Otway gas project, and in the 2010 financial year, commencement of the Kupe Gas project," Managing Director Grant King said in a statement.

Origin said its total 2P oil and gas reserves rose 66 percent to 5,770 PJe, largely boosted by its coal seam gas resources, which jumped 92 percent from a year ago to 4,751 PJe.

Origin's coal seam gas assets, the largest in Australia, have attracted BG Group, which hopes to use Origin's reserves to swiftly expand the capacity of a coal seam gas-fuelled LNG plant it is proposing in Queensland state.

BG Group launched a $13.1 billion, or A$15.50 a share bid for Origin earlier this month. Origin has rejected the overture, saying its coal seam gas reserves were worth a lot more.

Shares in Origin, up about 15 percent since BG launched its bid, closed 1.55 percent lower at A$15.85. (Reporting by Fayen Wong, editing by James Regan)