Natural gas can be biogenic (bacterial in origin) or thermogenic in origin. Two distinct processes produce hydrocarbon gas: biogenic and thermogenic degradation of organic matter. Biogenic gas is formed at shallow depths and low temperatures by anaerobic bacterial decomposition of sedimentary organic matter.

Thermogenic gas is formed at deeper depths by (1) thermal cracking of sedimentary organic matter into hydrocarbon liquids and gas and (2) thermal cracking of oil at high temperatures into gas.

Biogenic gas is very dry (i.e., it consists almost entirely of methane). In contrast, thermogenic gas can be dry, or can contain significant concentrations of “wet gas” components (ethane, propane, butanes) and condensate (hydrocarbons).