Underground coal gasification (UCG) plant operator Cougar Energy Ltd (ASX: CXY) said on Tuesday that company securities were suspended from further trading as exchange authorities await the decision of Queensland government on whether to allow the resumption of its pioneering Kingaroy operations or to stay its current shuttered status.

In its reaction, the company said that its board would necessitate more time to evaluate the impact of the latest decision with utmost considerations for the requisite working capital, as it added that "Cougar hopes to be in a position to make a further announcement to the market in relation to its outcome by August 3, 2010."

In a letter sent to the Australian Securities Exchange (ASX), Cougar said that it is deeply troubled that "until the board has completed consideration of these issues there may be uncertainties surrounding the implications for the Company's operations and that the market in its securities may therefore not be fully informed."

Last week, the Queensland government required three UCG project operators to reveal the results of past water quality testing and Cougar Energy was subsequently ordered to halt its operations in Kingaroy following tests that showed bores near the facility were contaminated by a known carcinogenic, benzene and the toxic chemical toluene.

On Friday, authorities belatedly advised residents around the area to refrain from drawing and drinking water found in and around the area, for fear that the supplies were already contaminated.