The intention of the prohibition communicated so far "would severely curtail the ability for the Hawke's Bay to realise the benefits of our industry operating there".
So, PEPANZ felt there were better ways to achieve the regional council's goals around oil and gas without stifling any economic benefit for the region.
He cited the model used by the Taranaki Regional Council, which was "more comprehensive in coverage than the current Hawke's Bay Regional Council plan".
"We would be comfortable with that type of model, learning from a regulator who's already doing it and balancing the economic opportunities for the region with protecting sensitive environmental areas.
"It's been done pretty effectively here and we'd like to do that in the Hawke's Bay as well."
Although regional council chairman Rex Graham said he felt they had a "very constructive conversation" with PEPANZ, this had not changed his mind.
The council respected what Taranaki had done, "but we have decided to go in a different direction".
Responding to comments the sector would fight the proposed prohibition, Mr Madgwick said they had communicated very clearly to the council "that it was our strong preference to work with them not against them".
Council had sought legal advice, but he noted "if they pursued this other than on the grounds of evidence and fact then we would need to reconsider our position".
Mr Graham said council respected PEPANZ's position, however "we're not going to change and we will confront whatever has to be confronted".
"We don't see the economic benefits of oil drilling or fracking around our aquifer in Hawke's Bay, as a matter of fact the contrary is true.
"We see our reputation as being pure and green," he said.
"Producing healthy food for the world market is more important to us than drilling for oil and taking the risk of drilling for oil close to our aquifer or close to our water bodies."
Concerns around the industry's impact on waterways was disputed by Mr Madgwick, who said there had been no contamination of any aquifer or water body in Taranaki.
"We would employ the same techniques in Taranaki in the Hawke's Bay if we were to operate there," he said.
"We take steps to minimise risk ... our record is very strong. We do not contaminate water bodies because of the techniques and technologies that we employ."
Guardians of the Aquifer spokeswoman Pauline Doyle said it was vital that drilling in the catchment of the Heretaunga aquifer be prohibited.
"If we have learnt anything from last August's gastro crisis in Havelock North it is that the security of our aquifers is vital for safe drinking water for our people, and safe irrigation water for our horticulture industry."