The Stuart Oil Shale Deposit is a major oil shale resource located near Gladstone on the central Queensland coast. It contains an estimated 3.0 billion barrels of oil in place in 5.6 billion tonnes of shale. Commissioning of a plant capable of producing 4,500 barrels per day has recently commenced. The shale is preserved in Tertiary age sediments of The Narrows Beds in the southern part of The Narrows Graben. The oil shale sequence consists of repetitive cycles composed of oil shale, claystone and lesser carbonaceous oil shale in the 400 metre thick Rundle Formation. The formation is the main oil-shale bearing unit in the preserved half-graben sequence up to 1,000 metres thick. Previous studies on the lacustrine sedimentology of the Rundle Oil Shale Deposit in the northern part of The Narrows Graben have recognised eight facies that exhibit unique and recognisable cycles. The cycles and sequence for the Kerosene Creek Member of the Rundle Formation is correlatable between the Rundle and Stuart deposits. The nature of these facies and the cycles is reviewed in some detail. In conjunction with the principles of sequence stratigraphy, the ideal oil shale cycle is described as the equivalent of a parasequence within a lacustrine system. The lacustrine parasequence is bounded by lacustrine flooding surfaces. The organic material in the oil shale consists of both Type I (algal dominated) and Type III (higher plant matter dominated) kerogen. Where Type I kerogen dominate, oil yields greater than about 100 litres per tonne are common. In contrast where Type III kerogens are dominant, yields above 100 litres per tonne are rare. The variation in oil yield is described for the Stuart lacustrine system. The variation is consequent on the balance between production, preservation and degradation of the kerogen in the parasequences within systems tracts. A system for the recognition of oil shale deposition in terms of lacustrine systems tracts is established based on oil yield assay parameters and the assay oil specific gravity. The oil yield and oil specific gravity variation within the Rundle Formation is modelled by member and the nature and distribution of oil yield quality parameters in terms of the contribution of organic and inorganic source material are described. The presence of significant oil yield (greater than 50 litres per tonne) is dependent on the dominance of lacustrine transitional systems tracts and to a lesser extent, lacustrine highstand systems tracts within the parasequence sets deposited in a balanced lake system in a generally warm wet climate during the middle to late Tertiary.