Southwestern Energy was awarded licences to explore for oil or gas by the Oil and Gas Authority last year.
Company director Gerwyn Williams said the county's geology was "very similar to big gas producing areas in the US" and "could be very, very productive".
However, campaigners are concerned it could pave the way for fracking.
Southwestern Energy hold exploration licences for a number of areas close to the Somerset coast, stretching from Clevedon to Minehead.
Mr Williams said: "We know there is oil shales there and we think there are shales that could be very, very productive.
"But we'll need to spend at least another year doing studies and then go through the process of gaining all the permissions - so it's likely to be two years before we look at drilling an exploration well."
Although he said the company's target was for "conventional gas rather than shale gas" he admitted fracking could be an option.
"We know quite a lot about the geology in Somerset and we feel it can produce gas," he said.
"And I'm not going to give up until we see gas being produced from the areas we've been working on."
However, Rachel Stevens from Frack Free Exmoor Quantocks and Sedgemoor, said if fracking was given the green light it could be the "single biggest health, safety, environmental and economic issue" for the region.
"If we are fracking on Exmoor or the Quantocks that is going to have an impact on the Somerset Levels," she said.
"Water travels great distances so you can't just frack in one place in an isolated fashion and not expect it to impact on another."
The process of fracking involves blasting shale rocks with water, chemicals and sand to release the gas trapped within.
Exploration drilling for gas near the coast of Somerset could begin in about two years time, an energy firm has told the BBC.