A high profile coal seam gas project located partly in the drinking water catchment will remain suspended until its long term viability is more secure, the company backing the project says.
In financial statements released late last month, Ormil Energy confirmed its emphasis for the next 12 months would be on its separate CSG interests in Africa.
The company, which recently completed a takeover of Energy Botswana, has also changed its name to Magnum Gas & Power Limited and relocated its corporate office from Sydney to Perth.
Ormil (now Magnum) has a joint venture with Illawarra coal seam gas explorer Apex Energy that includes a plan to drill 16 exploratory boreholes in the area around Darkes Forest and Maddens Plains.
But the expiry date for the project has passed.
Apex has lodged an application to extend the timeframe and is now reviewing more than 100 public submissions.
"Unfortunately the project has been hindered by unwarranted negative publicity and delay by government authorities.
"More recently, there is some uncertainty in the renewal of one of the three licence areas," Ormil chairman Ted Ellyard said in a letter with the financial statements.
"Exploration activity on this project will be suspended until some assurance can be shown in the project's long term viability in the prevailing political climate," said Mr Ellyard.
"However, the company is confident that in the long term this project will have considerable value and be part of Sydney's energy mix."
The NSW Government offered to renew one of the Illawarra joint venture's CSG exploration licences last month, at the same time as it released new regulations including an aquifer interference policy and CSG codes of practice.
The company said it believed the regulations provided a framework for CSG exploration to recommence in a "timely and sensible manner".
Its statements showed a $718,522 loss for the financial year.