The source rock potential and sealing capacity of the Baluti Formation in Gara and Akre areas has been studied. Petrographic and microfacies studies show that the most likely depositional environment for the Baluti Formation was a supratidal, intertidal, subtidal setting and a restricted lagoon. The presence of the fenestral structures indicates that the Baluti was exposed occasionally (Shinn, 1983b; Flügel, 2010). In addition, the rare occurrence of fossils and the absence of burrowing in the lime mud indicate that part of the Baluti may have been deposited in a restricted lagoon (Flügel, 2010). The rare fossils content and periods of subaerial exposure are reflected in the low organic carbon content where the TOC of the Baluti is generally less than 0.5 %wt except for a few samples. The formation has Type III-IV kerogen in the studied area and the hydrogen index (HI) is 105 mg HC/g rock on average which is consistent with the biomarker characteristics of the Baluti Formation. In the other hand, none of the studied seep-samples (bituminous carbonates and bitumen-seeps) in the area are in correlation with the Baluti Formation biomarker-characteristics which indicate the seeps might be from Jurassic and Lower Cretaceous source rock formations. 1D- Basin modelling constrained with measured temperature and maturity data, shows that the Baluti Formation source rock is thermally mature and at peak oil window in Gulak-1 and Bijell-1 wells. However, in Bakrman-1 to the far west of the studied wells area, the formation started generating condensate since the Late Cretaceous. The present-day transformation ratio of the hydrocarbons is about 42% in Gullak-1 and Bijell-1 wells, and about 70% in wells Bakrman-1 and Bekhme-1. Lithological characteristics, porosity and permeability studied and the lateral variation of the Baluti Formation indicate that the formation can hardly act alone as an effective caprock. However, when combined with the upper most Triassic anhydrite thin layers of the Kurra Chine Formation, it proved (using 2-D modelling) to be a perfect cap rock. The 2-D model has also showed that the sediments thickness has not a significant effect on the capability of the formation to act as a top seal and hold hydrocarbons in a trap.