Paleocene Kabalar Formation (Goynuk, Bolu/Turkey) has been studied by a combination of organic geochemical methods (LECO/Rock-Eval, gas chromatography), light microscopy and bulk combination method (elemental analysis) in order to assess the hydrocarbon source potential of the abundant and extensive lacustrine shale intervals present in the formation. The organic matter in the shales is an algal material (type 1 kerogen) having a rich oil potential. The shales have an organic carbon content of up to 10% and hydrogen index values of up to 900. Pyrolysis yields (TOC, S-2 and H1) and organic petrography, (kerogen type, amount % and maturity) indicate that the oil shales are excellent potential source rocks, containing type 1 organic matter Thermal maturity, assessed from the spore color index and T-max, indicates that the Paleocene Kabalar Formation has probably entered the thermal zone of oil generation and may produce oil. Scanning electron microscope (SEM) studies of the shale samples show the presence of morphological structures interpreter to be of hydrocarbon droplets.