Abstarct: Shale gas systems which are one type of unconventional reservoirs, are producing gas in developed country now. In Iran, a safe and long-time source of energy could be provided by developing shale gas systems. Therefore Investigation into generation potential of unconventional reservoirs has come to attention of oil industry. In this study, the organic geochemical characteristics of two formations, Garau and Sargelu, located in Lorestan has been investigated. For this purpose, a study of the properties of Barnett Shale was done and a set of geochemical parameters were defined and their values- in Garau and Sargelu- were compared with minimum threshold values in Barnett Shale. Samples in both Garau and Sargelu formations have a combination of kerogen type III and type II. Although all the samples belong to surface sections they are in oil window to dry gas window maturity. These formations have experienced different environmental condition in time of deposition. HI and TOC values of Sargelu samples in northeast of Lorestan are low, indicative of low generation potential of hydrocarbon in this formation. In northwest of Lorestan Sargelu formation does not show shale gas potential because it is in oil window maturity level. In northeast and southwest of Lorestan Garau formation could be shale gas baxsed on maturity parameters. Garau formation in Lorestan region has original TOC value of 1.31% wt, original hydrogen index of 141.25 mg HC/g TOC and original generation potential of 1.85 mg HC/gr Rock. Calculated retained gas value for this formation is 33.19 bcf/section which is not considerable compared to Barnett shale.