An oil and gas exploration company is seeking $2.7 billion in damages from the Victorian Government after the state moved to ban fracking, saying the decision was "unlawful".

Lakes Oil, which is part owned by Gina Rinehart's Hancock Prospecting, said it was seeking to recover the losses it suffered by the ban.

"The writ filed today asserts that the actions of the Victorian Minister for Resources is depriving the company of its opportunity to use its exploration permits for the purpose for which they were intended," the company said in a statement.

It said it was seeking $2.6 billion in lost future earnings, along with $92 million that had already been spent.

Last month the Andrews Government introduced legislation into Parliament to permanently ban fracking in Victoria following a parliamentary inquiry and long-running community campaign.

The process extracts gases by pumping high-pressure water and chemicals into the ground to release them.

There were concerns the process could contaminate ground water supplies and there was strong opposition from farmers.

"The unjust and unlawful actions of the Victorian Government and its proposed bill to ban onshore exploration have caused significant losses to the company and its 11,000 long-standing shareholders," Lakes Oil said.

"[The legal action] is based upon a fundamental legal principle that a party, having given a thing with one hand, is not to take away the means of enjoying it with the other."

A spokeswoman for Resources Minister Wade Noonan said as the matter was before the courts, they would not be making any comment.