On the northern boundary of the town, the Namoi River flows westward on its way to link into the major river systems of the Barwon, Darling, and Murray.
Passive recreational areas plus sporting fields have been established along a stretch of land adjacent to the river.
The Woolshed Reserve has a picnic shelter, wood barbecue, tables and chairs, and some playground equipment.
The historical significance of the 'Woolshed' relates to the early settler John Johnson who established a woolshed on the banks of the river. The area was known as the 'Woolshed' before being named Gunnedah in 1860.