The Kockatea Shale is a proposed target for unconventional gas development in the North Perth Basin in Western Australia. This research is concerned with correlating the extent of thermogenic gas leakage into deep aquifers overlying the Kockatea Shale with an assessment of how close the formation is to mechanical failure. Data from two petroleum exploration wells located approximately 20 km apart were considered. Both have comparable stratigraphy; however, they differ by their local tectonic setting. The stress regime is strike slip at Arrowsmith 2 well and for an assumed hydrostatic pressure the Kockatea Shale is not close to frictional limits. Minor amounts of methane and trace amounts of short chain alkanes are leaking into deep aquifers pre-development. In contrast, the stress regime is strike slip/normal at Woodada Deep well and the Kockatea Shale is close to frictional limits. Significant volumes of gas including methane and condensate are leaking into deep aquifers. The sealing capacity of the Kockatea Shale as evidenced by the variation in gas concentration in aquifers at the two sites indicates the formation is sensitive to stress. Additionally given the low permeability of the regional Kockatea Shale seal, it is assumed that at both locations gas leakage is via critically stressed faults. Deep aquifers proximal to the shale gas target are low salinity (<5000 ppm NaCl eq.) at Woodada Deep well and are saline at Arrowsmith 2 well. Based on this assessment, it is suggested that hydraulic fracture stimulation at the Woodada Deep well poses a significant environmental risk.