Despite heavy rainfall, Cougar said five drillholes have been completed, and two existing holes deepened to clarify the eastern margins of the coal deposit.

All holes intersected the target Goodger Seam at depths of 146-209m, ranging in thickness from 12.5-19m, Cougar said.

The three holes completed in the northern part of the deposit have been prepared for installation of water monitor equipment, planned for mid-January.

"These water monitor bores will collect baseline water samples for comparison with samples to be recovered during the planned pilot gasification phase," Cougar managing director Dr Len Walker said.

"Following the Christmas break, and completion of the remaining exploration drilling, the field program will undertake pump testing of the coal seam, and the installation of the first three process wells in readiness for further in-situ testing and the initiation of the pilot burn."

Dr Walker said the preliminary design and costing of the surface gas treatment facility for the pilot burn had also been completed.

"The purpose of this plant is to allow a variety of data to be obtained relating to the composition of the gas before and after cleaning, and the composition and treatment of both the liquid hydrocarbon and waste water condensates," he said.

"The plant will contain some flexibility in operation to ensure that the final product gas will meet the requirements of gas turbine manufacturers."

In addition, Cougar and its partner Cockatoo Coal have applied for a mineral development licence (MDL), covering almost 9 square kilometres.

The licence covers the area known from past drilling to contain the Goodger coal seam with a thickness of 12m or more at a depth exceeding 150m.

At the date of submission, Cougar's ownership of the MDL application will increase from 51% to 70% in the next month as the company's expenditure on the area reaches $A750,000.