cxy is due for a major rerating soon

CXY due for major re-rating over the next few weeks

Several major announcements are likely to be made over the next few weeks, which you would expect will have a positive impact on the SP.

Near term company objectives

• Project Finance: Long term project financial plan to be developed with Direct Invest AG (due mid-September) Could raise around $280 million over the next 18 months for the Company’s proposed underground coal gasification and power station project near Kingaroy in Queensland.
• Victorian Coal Resources Pty Ltd MOU (EL 4416): A decision on extension or JV agreement is due by 10 September 2008. Brown coal resource estimate 50 – 100 billion tones.
• Kingaroy: Preparations for Pilot Burn at Kingaroy. A new drilling program is scheduled to start at Kingaroy in mid-August to obtain Underground Coal Gasification (UCG) process design data, establish a groundwater monitoring program, install the first injection and production wells, and expand on the existing JORC resource. Project planning and costing of first stage Power Plant (approx 200MW) will also be undertaken.
• Wandoan lease (EPC 1118): Exploration program is scheduled to commence in mid-September.

Longer-term projects by Cougar Energy (UK) (47.8% owned by Cougar Energy Ltd)

• Pakistan - Thar Coal Project: Cougar Energy Limited (ASX Code: CXY) has signed an MOU with the Sindh Coal Authority in Pakistan for the granting of an Exploration Licence covering 50 km2 of the Thar coal field, for the purpose of developing a 400 megawatt power station to be fuelled by underground coal gasification (UCG). (Estimate up to 100 billion tones)
• India - Cougar Energy (ASX: CXY) announced that it has expanded its international interests in Underground Coal Gasification (UCG) into India, with the signing of a Memorandum of Understanding (MOU) with Essar Exploration and Production Limited (EEPL). The MOU specifically provides for both companies to jointly evaluate and develop UCG projects within coal concessions held by a number of Public Sector Undertakings in India and with other companies within and outside India as may be mutually agreed.

Valuation of CXY

You would expect the valuation of CXY to be at least similar to CNX, if not more.
• CXY 498.9m ord + 155.1m 12/08 5c options Mkt Cap. $60m SP 12.0c
• CNX 490.4m ord Mkt Cap $265m SP 54.0c

Both companies have UCG projects nearing trial stage (CXY at Kingaroy and CNX at Bloodwood Creek). CXY have already trialed UCG successfully at Chinchilla in 1999 – 2002. They will do a trial burn at Kingaroy to check that the site is suitable for UCG, then fast-track the building of the Stage 1 200MW Power Plant. A MOU for project finance for $280m has already been signed and sign-off for the financial plan is imminent. CXY is ahead of CNX in terms of UCG experience in Queensland, project finance and doesn’t have the same problems of overlapping tenure under the relevant Petroleum legislation (the nearest such tenure being more than 100km distant).

Comparing projects:

CNX

Key Project: Bloodwood Creek - This UCG Trial will be the world’s first commercial scale, oxygen-injected Underground Coal Gasification (UCG) trial and is based on a standard 1 petajoule (PJ) per year UCG syngas module.

Oil Shale: Premier Anna Bligh has placed a 20-year moratorium on the development of oil shale in Queensland.

Uranium: There is a moratorium on the development of Uranium mines in WA and Queensland. SA and NT mines approved on a case by case basis.

Gold: Carbon Energy retains 852,350 attributable in ground ounces of gold in the Laverton area.

CXY

Key Project: Kingaroy - This UCG Trial will be the world’s first commercial scale, oxygen-injected Underground Coal Gasification (UCG) trial and is based on a standard 1 petajoule (PJ) per year UCG syngas module.

Victorian Coal Resources Pty Ltd MOU (EL 4416): Potential 50 – 100 billion tonne brown coal resource.

Wandoan lease (EPC 1118): EPC1118 is 100% owned by the Company, and covers an area of approximately 65sq. km. It is located strategically to the down-dip side of the subcrop zone of the Macalister Seam, the most prospective seam within the Walloon Coal Measures in terms of quality and thickness.

International UCG Projects: In India and Pakistan via 47.8% holding in Cougar Energy (UK) Pty Ltd.

CXY appears to have the edge in quality near-term projects.

As always DYOR!

Good luck to all shareholders.

Cheers,

GrayNomad