In a move that disappointed South Burnett landholders, the company filed a notice of appeal in the Queensland Planning and Environment Court last Friday.

In to a notice released by Cougar to the Australian Stock Exchange on Friday, the company stated it had "significant grounds" for appeal against the Department of Environment and Resource Management (DERM) decision.

Coolabunia producer, Damien O'Sullivan, said landholders did not believe it was fair Cougar had the opportunity to appeal the decision, given locals could not challenge the initial decision to establish the trial site.

"It seems unjust they are given a right to appeal, when we were never given any rights to start off with," he said.

Traces of contaminants, formaldehyde and thiocyanate, were found at a water source at Mr O'Sullivan's property.

It is the third contamination scare at the property, which borders the Cougar trial site, in the past 18 months.

Mr O'Sullivan said DERM was continuing tests at the property, with government officials again finding traces of formaldehyde at the same water source this week, with still no explanation as to the cause of the incident.

Landholders across the South Burnett had welcomed the announcement by DERM on July 7 that no further UCG would be permitted at the project site.

Cougar was told to remove all infrastructure from the site and treat and dispose of any contaminated water in surface storages and clean up groundwater. However, the infrastructure remains at the site.

The department also charged Cougar Energy with breaking the conditions of its environmental approval by contaminating the site and failing to promptly notify authorities.

In a separate matter, the complaint and summons filed by DERM for alleged breaches of the Queensland Environmental Protection Act against the company has been adjourned until December 15.