The positive results on the coal lease – in which Cougar has a farm-in agreement with Metallica Minerals – means Cougar will commence conceptual project planning and discussions with Queensland government authorities.

Underground coal gasification (UCG) involves the in-situ conversion of coal into a gas, which can be brought to the surface through drilled production wells and used as a fuel for power generation and manufacture of petrochemical products including diesel fuel.

Proponents maintain that UCG is more efficient in utilising the total energy in the coal seam than coal seam gas extraction, and is cheaper than using above-ground gasification techniques, requiring no mining operations.

Drill results confirmed a coal seam of 11.8–14.7m thick at a depth of at least 157m over 2.5 square kilometres.

“This area far exceeds the half a square kilometre required to develop a UCG plant feeding gas to a 40MW gas turbine for a life of 30 years,” Cougar executive director Len Walker said.

“The results permit early consideration to be given to a significant expansion of the initial operation with incremental increases to a 200MW power station and even larger plants in the longer term.”

Cougar plans to undertake a supplementary drilling program for mid-2007 to bring the resource up to JORC standards.