Lateral drainage and high temperatures in the shelfal area of the Lower Kutai Basin provide an exceptional opportunity to study compaction of Miocene mudrocks and overpressure generation. Previous workers agreed that the principal mechanism of overpressure generation is disequilibrium compaction, but sonic and resistivity logs in several fields display reversals at a transition zone into high overpressure, indicating that overpressure is generated by unloading processes. The transition zone coincides with the vitrinite reflectance threshold for gas generation. Extreme overpressures in some wells are associated with reversals on density logs too, interpreted to result from opening cracks. The density-depth trends through the mudrocks are similar in all wells and independent of overpressure until extreme overpressures are encountered. This observation strongly suggests that porosity reduction is controlled by chemical compaction and that cementation has caused the mudrocks to become overcompacted, relative to the prevailing effective stress, at burial depths of approximately 3 km (1.9 mi) where the top of overpressure is encountered. Hence, the Lower Kutai Basin contains a unique reported example, to date, of a Neogene succession in which high overpressures are generated by unloading processes with no contribution from disequilibrium compaction. Density logs from the Peciko field have been used to derive the empirical porosity-depth trend phi = 0.434e,(-0.164z) for mudrocks in the depth range 6000 to 15,000 ft (1800 to 4600 m), where z is depth in thousands of feet. The corresponding temperature range is 85 to 170 degrees C, so this compaction curve applies for mudrocks in the chemical compaction regime, where no discrete smectite is present.