Highlight

1. Share placement for AUD 1.44 million
2. Funds will be utilized to continue the advancement of the Kingaroy power project as well as the Mid West and China projects
3. New Australian and international institutions and sophisticated investors join the share register
4. Discussions continue with potential cornerstone investors to participate in Cougar Energy’s power projects
5. Re-ignition of the gasification process at Kingaroy due by third week of July 2010

Cougar Energy Limited announced the completion of a placement of shares for AUD 1.44 million.

The placement of 20,094,968 new fully paid ordinary shares at AUD 0.072 per share was made to institutional and sophisticated investors in both Australia and offshore. A range of institutions and sophisticated investors joined the Cougar Energy register for the first time.

Settlement is scheduled to take place on July 6th 2010 with the allotment and quotation on the ASX of all of the new fully paid ordinary shares issued under this placement occurring on July 7th 2010.

The funds will be used to advance several projects, including the 400MW Kingaroy Power Project in Queensland the Mid West joint venture in Western Australia as well as preliminary funding of the development of projects in China. Discussions continue with off-shore parties in the energy and utilities sectors on participation in the Cougar Energy power station projects.

At the Company Kingaroy underground coal gasification pilot project, the installation of the first of the two new wells has been completed, with installation of well P6 currently in progress. Cougar Energy anticipates gas production will recommence at Kingaroy by the third week of this month.