A formal JV agreement is being prepared by the parties, with exploration drilling planned to commence immediately after signing of the JV agreement.
Under the terms of the JV agreement, Cougar Energy and IER will each have a 50% interest in the UCG JV, and the areas of agreed UCG interest in exploration lease EL 4416 will become property of the UCG JV. Upon signing the JV agreement, Cougar Energy will contribute AUD1m for the initial exploration drilling activities and associated work programs.
The areas of mutual interest in EL 4416 cover approximately 400sqkm in the lignite rich Gippsland region. The UCG JV will assess these target areas for underground coal gasification development for power generation or the manufacture of petrochemical products.
Len Walker, managing director and CEO of Cougar Energy, said: “Our partner Ignite Energy Resources brings significant tenement areas in Gippsland to the UCG JV, which we believe may be well suited to UCG projects. This is the first dedicated UCG project being investigated in the state of Victoria. It would follow successful implementation by Cougar Energy of its UCG technology in Queensland.”
Len Humphreys, CEO of Ignite Energy Resources, said: “IER is anticipating great results from working with Cougar Energy and its world class UCG technology platform. This terms sheet represents an important step in IER’s multifaceted strategy to create high-value low-emission products from the vast lignite reserves in EL 4416.”
At Cougar Energy’s UCG project in Kingaroy, Queensland, final commissioning steps are being completed in preparation for production of gas this month.
