Investigations into the incident revealed a de-gasser unit that wasn't being used properly caused a foamy substance to shoot into the air but found there was probably no environmental damage as a result.

Greens MP Jeremy Buckingham shot footage of the leak at the Camden Gas project's Sugarloaf 3 gas well, close to the water supply channel, on May 17.

The official warning came in the form of a letter from the Office of Environment and Heritage on August 4.

AGL Group's general manager for upstream gas, Mike Moraza, said the foam release was caused by liquid soap escaping during a routine clean of the well.

"As we've said from the outset this should never have been allowed to happen," Mr Moraza stated on the company's website.

"AGL takes its commitment to safety and the environment very seriously and this incident was clearly a breach of our own very high standards.

"While we have always been confident that there was no harm to the environment and we welcome OEH's similar conclusion, we understand that incidents like these can cause concern in the community.

"We will heed the warning from the OEH and ensure our employees understand the seriousness of the situation.

"We have now taken steps to ensure the incident should not be repeated."

Mr Buckingham said he remain unconvinced the incident was not harmful and said it raised concerns about coal-seam gas mining near residential areas.

"AGL have breached their licence conditions with this gas well blowout," Mr Buckingham said.

"Their exploration licence for the Camden North expansion that expired on March 28 this year should not be renewed."