In January 1993, 15 water bores in the South-East were sampled for headspace gas. 7 of these bores provided sufficient gas for compositional analysis of hydrocarbons. Methane values ranged from 25% to 92% of the total gas for these bores, with nitrogen and oxygen accounting for the remainder of the gas, plus varying levels of carbon dioxide. Only minor concentrations of C2+ hydrocarbons were detected, making difficult any determination of the maturity of the gas. Significantly, the most favourable gas shows encountered during an earlier survey in 1987 could not be validated in 1993 due to insufficient yield of sample. Six samples taken from the 7 bores were analysed for stable carbon isotope composition using delta13C for methane and carbon dioxide to provide an estimate of the ratio of biogenic to thermogenic gas. With the exception of one sample, all gases are of bacterial origin, although associated CO2 is clearly thermogenic, possibly derived from a volcanic source. The remaining sample from a water bore close to Kingston SE on the northern margin of the Otway Basin has a significantly less negative stable carbon isotopic composition, indicative of methane generation from a low maturity sapropelic (possibly marine) source, although there remains a possibility that the methane may represent a mixture of gases generated from a combination of terrestrially-derived organic matter and bacterially-derived (biogenic) gas. Given the predominantly terrestrial origin of source intervals in this area, in particular extensive lignites of the Early Eocene Dilwyn Formation, this second scenario seems more likely.