Bradley Ross Learmonth has pleaded guilty to possessing the unregistered bolt-action .22 firearm, and now faces a raft of conditions on bail after the incident at a Dungowan property.

The 30-year-old lodged a release application late on Tuesday in Tamworth Local Court, which was granted, just hours after he was released from hospital.

Learmonth pleaded guilty to possessing the unauthorised firearm; possessing an unregistered gun; possessing ammunition; and possessing drugs. He's denied charges of being armed with intent to commit an indictable offence.

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The bail application triggered a show cause hearing because it involved a serious indictable offence while on conditional liberty, but after the pleas, magistrate Julie Soars granted conditional release, ordering him to return to court in December.

As part of the conditions, Learmonth will have to report to police three times-a-week; and live with a family member in Oxley Vale.

He's been ordered not to enter Dungowan, or go within 10km of the area; and must not possess any firearms; or contact any prosecution witness.

Police were called to the property about 9pm after reports a man had pulled a firearm during a dispute with neighbours.

Oxley Detective Acting Inspector Jason Darcy said when officers arrived, a 29-year-old man, along with a 30-year-old and a 41-year-old, had been involved in a verbal altercation with Learmonth who was seated in his vehicle outside the property.

Learmonth is alleged to have reached for the .22 bolt-action rifle which was on the passenger side of his car.

Detective Darcy said it was the police case that two of the neighbours grabbed the barrel and a struggle unfolded.

As a result, police claim the men pulled Learmonth out of the car, while the 41-year-old was able to grab the firearm and the accused was restrained.

"During a search, police seized a 22 bolt-action rifle, various types of ammunition and cannabis, and the vehicle was also seized for further examination," Detective Darcy said.

"Investigations are continuing into the origins of the firearm."

Learmonth was arrested at the farm, and taken to Tamworth hospital for treatment for facial injuries he suffered in the scuffle.

He was released on Tuesday and then taken to Tamworth police station where he was questioned and charged.

Detective Darcy said investigations were continuing.

"Any matter involving a firearm is extremely serious and we will act swiftly," he said.

"Firearms in the wrong hands could be deadly.

"We would again urge anyone in possession of unregistered firearms to surrender them immediately - there is no excuse."