The deal gives Cougar the proposed project as well as more flexible access to additional Surat Basin coal leases where Cougar could develop a second UCG project.

Cougar said Kingaroy was continuing on schedule with a drilling program collecting data for a pilot burn and groundwater monitoring equipment being installed.

The final design for the 400MW gas processing plant has been completed and manufacture of key plant items is in progress.

Cougar said the project was free from overlying petroleum tenements, a major bonus as conflicts between companies erupt over rights to access the same seam for UCG or coal seam gas.

Under the deal, Cockatoo will be issued with 15 million Cougar shares.