The state government will extend the freeze on Petroleum Exploration Licences until September 2015 in NSW.

The NSW government is set to extend the freeze on coal seam gas (CSG) exploration licences for another year while it continues to investigate the transparency of applications.

The freeze on new Petroleum Exploration Licences announced six months ago was due to end on Friday.

But NSW Resources and Energy Minister Anthony Roberts said the freeze will continue until September 2015.

In March, then premier Barry O’Farrell accused the former Labor government of granting petroleum exploration licences “like confetti” and warned the government would also audit existing licences.

He also criticised Labor for only charging $1000 for exploration applications, which was “less than Ian Macdonald (former mining minister) spent on his average lunch”.

That fee has since been raised to $50,000.

The extended freeze will give the Office of Coal Seam Gas (OCSG) more time to complete its detailed examination of current exploration licences, Mr Roberts told ABC.

“We make no apologies for introducing a level of transparency and openness with respect to Petroleum Exploration Licences,” Mr Roberts said.

About 10 licences have already been cancelled, Mr Roberts said, while several other licence holders have been issued a show-cause notice as to why theirs shouldn’t be revoked.

The decision comes as NSW chief scientist Mary O’Kane prepares to hand her final report into the state’s CSG industry to the government.

Premier Mike Baird said the report would be “the line in the sand” on how the industry must operate in NSW.

Conservation groups have welcomed the decision to extend the freeze for another year, but say it doesn’t protect the communities already affected by CSG development.

“It also fails to protect those people living under the shadow of coal seam gas development at Gloucester on the north coast and around the Pilliga in the state’s northwest,” said NSW Nature Conservation Council CEO Kate Smolski in a statement on Thursday.

The government “must identify no-go zones to protect important agricultural lands and sensitive natural areas that are too important or sensitive to be put at risk by this dangerous, dirty industry,” she said.

Lock the Gate Alliance is calling for upfront protections for water resources, farmland and bushland to be introduced as part of the process.

“There is currently no protection at all for important water resources or farmland in the North West and Northern Rivers or in Sydney’s drinking water catchment,” said Lock the Gate’s National Co-ordinator Phil Laird.

“The reckless decision by Queensland and the Commonwealth governments to allow three huge coal seam gas export projects to be built simultaneously in Queensland has thrown the east coast gas market into some turmoil and sharply driven up the price of gas that households and manufacturers in NSW are being forced to pay.”