The six-month freeze on NSW Petroleum Exploration Licences (PELAs) and Petroleum Special Prospecting Authority (PSPA) applications has been extended for an additional year.
The freeze was initially going to end today, but will now last until September 26, 2015.
The Dubbo Field Naturalist and Conservation Society President Tim Hosking said he supported the movement.
"It's good to see the state government is further considering coal seam gas," Mr Hosking said.
Gas Field Free Dubbo Region's interim convener Sally Forsstrom said it was good news to see the government make a commitment to peruse the impacts of coal seam gas mining on the water supply.
"It's a very good idea for the government to be considering the impact of mining," she said.
Lock the Gate Alliance's national co-ordinator Phil Laird has also come out in favour of the 12-month extension .
"The idea that there is too much control of this unsafe industry in New South Wales is ludicrous," Mr Laird said.
However, he said more still needed to be done.
"We would like to see the review of petroleum licences extend to identifying no-go areas for mining in precious water resources, important farmland and special bushland."
Minister for Resources and Energy Anthony Roberts said the extended freeze would allow the Office of Coal Seam Gas (OCSG) to complete its comprehensive examination of current Petroleum Exploration Licence Applications (PELAs) and allow the government to further assess the application process for petroleum titles.
"The former Labor Government handed out 39 Petroleum Exploration Licences in a careless and clumsy fashion with little oversight. NSW deserved better," Mr Roberts said.
"The NSW Liberals and Nationals Government has put in place the most comprehensive regulations for the CSG industry in the country.
"These regulations ensure that gas extraction from coal seams is done in a way that is safe and has minimal impacts on the environment and other industries.
"The framework also ensures that companies involved in the NSW gas industry meet the highest standards of technical expertise and financial capability to undertake explorations.
Petroleum Assessment Leases will be available to companies with existing PELs, or those who applied before the freeze.