The move comes just two days after the traditional owners flagged moves to block operations at Watarrka.

Privately-held Palatine has been working on the Kings Canyon project in central Australia for around four years, and was seeking permission to move to the next step.

So the traditional owners, who have long opposed the company's plans, petitioned federal environment minister Greg Hunt to step in and protect the land under Commonwealth legislation.

However, the NT's Giles government was one step ahead.

Late yesterday, NT energy minister David Tollner and parks minister Bess Price said exploration permit applications for Watarrka National Park and the Coomalie Council Region would not be granted.

The pair said new guidelines arising from the Hawke Inquiry, which otherwise found fraccing is safe if conducted with due care, clashed with Palatine's plans.

"Government recently implemented these new measures, on top of its already robust regulations, to ensure onshore oil and gas activities can proceed alongside other land usages in a safe and sustainable manner," Tollner said.

"Both applications were assessed as not satisfying all of the recently announced criteria."

The rules found that Palatine's lease applications conflicted with the new rules on areas of high ecological value or cultural significance.

The same rules apply to applications in urban areas, areas of intensive agriculture or areas that include assets of strategic importance to nearby residential areas.

"The NT government understands the sensitivities associated with allowing exploration activities in the region and hasn't taken this decision lightly," Tollner said.

"It is unfortunate that the Central Land Council chose to be vocal about the actions of the Northern Territory government before allowing proper processes to be undertaken to ensure all parties affected in this decision could be consulted," he added.

In a statement, the Central Land Council's David Ross said the senior traditional owners of Watarrka had made it "very clear for a long time" that they opposed any mining exploration in the park.

Watarrka's 105,200 hectares of land is under the custodianship of the Martutjarra-Luritja people and contains three Aboriginal living areas: Lila, Wanmarra and Ulpanyali.

The park contains more than 600 species of plants and numerous native animals. It is culturally significant to Aboriginal people and continues to be a place of traditional observance, customs and ceremony.

Watarrka, about 300 kilometres south-west of Alice Springs, was declared a national park in 1989, and in 2005 was scheduled under legislation as NT parks freehold land.

The native title groups are now hoping that Hunt permanently declares the park protected under the federal Aboriginal and Torres Strait Islander Heritage Protection Act in order to stop "all forms of mining".

Palatine is understood to be disappointed with the decision and is considering its options.

Its EPA 253 and 258 are in the Amadeus Basin, and were expected to host the Horn Valley Siltstone, and were on the Surprise oil trend.

It aimed to drill on a ridge away from springs to reduce environmental risks.

The fracced Mereenie oil is just 20km north of EPA 253.

There were four wells in the application areas with two having shows: Lake Amadeus-1 and East Johnny Creek-1.

Palatine was founded by explorationist Dr David Falvey, a co-founder of Tamboran Resources. It maintains interests in the Officer Basin, Western Australia, and an area of overlap between the northern Perth Basin and southern Carnarvon Basin.

It also has an application in the Arauco Basin, Central Chile.