Synthetic gas producer Cougar Energy Ltd (ASX: CXY) said on Friday that company measures were underway that would adequately address the environmental issues that plagued its underground coal gasification (UCG) project in the South Burnett region of the southeast Queensland.

Fears of further contamination from the alleged leaks on the company facility's water bores sparked water contamination fears in the area near Cougar's processing site and compelled the Queensland government authorities to order the shutting down of Cougar Energy's UCG plant.

A subsequent initial report, outlining Cougar's findings into the ground-water scare, was filed by the company before the state's Department of Environment and Resource Management (DERM) but the study was rejected by the department, further derailing Cougar Energy's gasification activities in Queensland.

DERM minister Kate Jones again instructed the company on Thursday this week to furnish fresh reports on Cougar's new rounds of test on its UCG site, giving it until December this year to comply with the requirements.

The company immediately sent word to the ministry that work is being done to meet the new deadline as Cougar Energy spokesman Brad Glynne said in a statement that the company has been with DERM though an environmental audit.

Mr Glynne stressed that Cougar Energy has declared clear enough "to the Government, to the department, to politicians and to the market that we believe it's in our best interests and the best interests of our shareholders to continue to work closely with DERM."

Cougar Energy reiterated its firm commitment in completing the whole process required of it in order "to convince both the Government and the department that we haven't caused any environmental harm."