Energy company AGL has announced a major internal review of its coal seam gas (CSG) business, after a number of setbacks in recent months.

CSG operations at Gloucester, north of Newcastle, ceased indefinitely in January due to the detection of toxic chemicals in flowback water.

The banned chemical BTEX was found in flowback water taken from two of the four wells at the site, and from an aboveground water storage tank.

An Environment Protection Authority (EPA) report into the incident is expected in the next few days.

The report focused on why AGL waited almost a fortnight to inform the EPA of the potentially toxic chemicals.

The Coalition Government banned the use of BTEX as part of the fracking process, but the chemical compound is naturally occurring and CSG activity may bring it out of the ground.

AGL executive Mike Moraza, who led the CSG arm of the company, retired immediately as the internal review begins.

In a statement, the company said it will look into what structure it needs to safely explore for and produce gas resources.

"The review will encompass the management structure and the operational and management practices required to position the business to deliver on its goals of safely exploring for and producing gas resources for AGL's customers," it said.

AGL's managing director and chief executive, Andy Vesey, said it was important to adapt the company's structure and governance frameworks.

"The gas business has the potential to provide vital gas resources for our NSW customers and is set to contribute significantly to our balance sheet and deliver solid returns for our shareholders," he said.

"It is important that we get the structure right."

Chair of activist group Groundswell Gloucester, Julie Lyford, said AGL should walk away from coal seam gas in the area.

"If AGL want to keep their good corporate name, exploring and drilling for coal seam gas in the Gloucester Valley and in Camden - they need to pack up their bags, and walk away," she said.

"I would suggest they throw their full weight and their shareholders money towards what the rest of the world is embracing, that is the renewable energy sector.

"AGL have the capacity to do that.

"But they do not have the capacity to industrialise the Gloucester area and further industrialise the Camden area."

In January the NSW Resources Minister Anthony Roberts assured voters he would not allow AGL to restart operations at its Gloucester CSG site until the company had proven its activities were safe.