mou in victoria

10 September 2007
NEW FOCUS ON VICTORIAN BROWN COALS FOR
POTENTIAL UNDERGROUND COAL GASIFICATION
Cougar Energy Ltd (ASX Code: CXY) is to investigate the potential for applying the Underground
Coal Gasification (UCG) process to Victorian brown coal resources under a Memorandum of
Understanding (MoU) with Victoria Coal Resources Pty Ltd (“VCR”) announced today.
Cougar Energy’s ultimate goal is to use the UCG process within the vast coal fields to produce gas
for cheaper and more environmentally friendly power generation and for liquid fuel production.
VCR sees this as a means of expanding the utilisation of its coal resource.
Under the terms of the MoU, Cougar Energy will review data defining the brown coal deposits
contained within Exploration Licence 4416 (“EL 4416”), held by VCR under a farm-in agreement
with CBM Resources Pty Ltd, to determine their suitability for application of the UCG process.
EL4416 covers an area of about 1 million acres adjacent to the Latrobe Valley in Victoria, and is
estimated to contain 50-100 billion tonnes of brown coal situated under a limestone layer*.
The MoU will remain in place for one year with a 12 month extension by mutual agreement of the
parties. In the event that Cougar Energy gives notice that the potential for a UCG project exists in
Designated Areas within EL4416, the parties will form a 50:50 Joint Venture to pursue its
development.
Victorian brown coals have a high moisture content and low calorific value, and techniques for
drying the coal for later use can be expensive. Use of the coal in conventional coal-fired power
plants results in low efficiencies and high CO2 emissions per MWh of electricity generated.
The UCG process involves the in-situ conversion of coal into gas which is recovered from
production wells, and which can be used for power generation or liquid fuel production. If the
process can be applied to the brown coals and the product gas used in combined cycle power plants,
the potential exists for achieving low power costs in association with lower greenhouse gas
emissions, as well as the production of a low cost feed gas for the liquids plant.
Both Cougar Energy and VCR are excited about working together in Victoria to investigate the
potential for this alternative and more efficient use of the State’s huge brown coal resource.
In accordance with the Listing Rules of the Australian Stock Exchange Limited, the information in this report relating to
coal resources has been compiled by Rod Webster , who is a member of the Australasian Institute of Mining and
Metallurgy, and a full-time employee of AMC Consultants. Mr Webster has relevant experience in relation to the type
of deposit under consideration to qualify as a Competent Person as defined by the Australasian Code for Reporting of
Minerals Resources and Reserves. Mr Webster consents to the inclusion in this report of the matters based on his
information in the form and context in which it appears.
*There has been insufficient exploration to define a Mineral Resource and it is uncertain if further exploration will
result in the determination of a Mineral Resource.
Dr. L.K.Walker
Managing Director
Media contact:
Dr Len Walker John Field
Managing Director, Cougar Energy Field Public Relations
Tel: 03 9909 7200 Tel: (08) 8234 9555