Mitchell James Martin, 33, formerly of Burrendong Way, appeared in Orange District Court after pleading guilty to demanding property with menace, and larceny.

The court heard the offence was out of character for Martin who attended court with an apology letter for the victim and a $60 cheque for petrol he stole.

Judge Graham Turnbull said Martin filled a ute with $60 of petrol at the BP petrol station on Bathurst Road at 12.30am on October 25, 2019.

He then approached the service desk and raised a large hunting knife so it was visible to the attendant and told the attendant to give him "all the smokes".

When the attendant asked if he was joking he said he was serious and he raised the knife towards his own face.

The attendant said he would get the items from a back storage area and told Martin he was phoning the police just before he locked himself into a back room.

Martin left without paying for the petrol. He was not disguised and was wearing a singlet that revealed distinctive tattoos.

Martin's actions were captured on camera and police tracked him down via the ute's number plate and found the knife under a pillow in his bedroom.

Judge Turnbull said Martin could have pleaded not guilty with a mental health defence.

"He might not have been criminally liable but he accepts responsibility. It's clearly an exceptional case," Judge Turnbull said.

Martin had been released from a mental health program due to resoucing issues prior to the offence.

He was living on his own, had not been taking his prescribed medication and said he had been drinking wine and used the drug ice.

"It's so unlike me I don't know what happened to me," Martin said.

"I'm so embarrassed and ashamed ... I've never done anything like that before and I cannot remember it."

Martin was described in court as a "gentle soul" who even when unwell had never threatened anyone.

He had no prior criminal record, and he previously worked in service industry jobs including as a petrol station attendant.

Since the offence Martin has complied with strict bail, undertaken drug, alcohol and mental health treatment and resumed taking his medication.

The maximum sentence that could be available to the court for demanding property with menace is 10 years of full-time jail.

However, Judge Turnbull took into account the reports tended to the court, a guilty plea being entered at the first opportunity and evidence of Martin's contrition and remorse.

He convicted Martin and gave him a two-year supervised community correction order.