Embattled New South Wales gas explorer Metgasco has taken the red pen to capitalised exploration expenditure and downgraded its reserves to nil, blaming the huge uncertainty over the timing of development of its gas in the Northern Rivers region.

The accounting adjustment involves an $80 million impairment of all the capitalised exploration and evaluation expenditure on its balance sheet last year and will take Metgasco deeper into the red for the 2014-15 financial year.