Abstract The late Cretaceous Mukalla Formation of the Mahra Group is present in the subsurface of eastern Yemen. The palynofacies, thermal maturation and hydrocarbon potential of this formation recorded from three exploratory wells in the Qamar Basin are discussed. Two of the wells are in the offshore part of Block 16 and one is in the onshore part. Both organic geochemical and palynofacies analyses indicate that the formation contains oil- and gas-prone kerogen. Rock-Eval pyrolysis and gas chromatography data show a peak thermal maturation stage for organic matter types II/III and III and good conditions for hydrocarbon generation and expulsion. Three major palynofacies types are identified through the succession. These indicate open marine, marginal- to shallow-marine and fluvio-deltaic environments, reflecting multiple marine transgressive and regressive phases during the period of deposition of the formation, which took place in a humid, subtropical to tropical climate.