Seven wells along a line of section in the southern Cooper Basin were studied. Examination of coals in Permian and Triassic sequences revealed marked vertical and lateral trends in vitrinite, inertinite and exinite content and their microlithotypes. Vitrinite content in the coals increases from the Permian to the Jurassic whilst exinite content increases over the major anticlinal trends. Variations in coal-sediment associations, maceral groups and microlithotypes suggest a complex and varying depositional environment. Vitrinite depth-reflectance gradients indicate that coalification in the Permian and Jurassic was influenced by time of deposition, stratigraphic position, depth from basement, type of basement and extraneous geothermal influences. The inferred geothermal history of the basin varies complexly in both space and time. Evidence suggests the coal in the presently producing Permian formations (Toolachee and Patchawarra Formations) is the source of commercial hydrocarbons found, being well placed for hydrocarbon generation. Potential for further commercial hydrocarbon discoveries in the Permian is very good. Future small commercial hydrocarbon discoveries from Jurassic reservoirs appear likely, with the Jurassic sediments in many areas having attained suitable maturation stages for hydrocarbon generation, and the coals and shales containing suitable hydrocarbon precursors.