Thirty-six formation waters, gas, and microbial samples were collected and analyzed from natural gas and oil wells producing from the Paleocene to Eocene Wilcox Group coal beds and adjacent sandstones in north-central Louisiana, USA, to investigate the role hydrology plays on the generation and distribution of microbial methane. Major ion chemistry and Cl⁻Br relations of Wilcox Group formation waters suggest mixing of freshwater with halite-derived brines. High alkalinities (up to 47.8 meq/L), no detectable SO₄, and elevated δ¹³C values of dissolved inorganic carbon (up to 20.5‰ Vienna Peedee belemnite [VPDB]) and CO₂ (up to 17.67‰ VPDB) in the Wilcox Group coals and adjacent sandstones indicate the dominance of microbial methanogenesis. The δ¹³C and δD values of CH₄, and carbon isotope fractionation of CO₂ and CH₄, suggest CO₂ reduction is the major methanogenic pathway. Geochemical indicators for methanogenesis drop off significantly at chloride concentrations above ∼1.7 mol/L, suggesting that high salinities inhibit microbial activity at depths greater than ∼1.6 km. Formation waters in the Wilcox Group contain up to 1.6% modern carbon (A¹⁴C) to at least 1690 m depth; the covariance of δD values of co-produced H₂O and CH₄ indicate that the microbial methane was generated in situ with these Late Pleistocene or younger waters. The most enriched carbon isotope values for dissolved inorganic carbon (DIC) and CO₂, and highest alkalinities, were detected in Wilcox Group sandstone reservoirs that were CO₂ flooded in the 1980s for enhanced oil recovery, leading to the intriguing hypothesis that CO₂ sequestration may actually enhance methanogenesis in organic-rich formations.