This study focuses on the implications of a global hyperthermal event, the Paleocene–Eocene Thermal Maximum (PETM) for the origin, preservation and maturation of organic matter (OM) in the Late Paleocene Patala Formation, Himalayan fold-and-thrust belt, Pakistan. The OM present in the full array of lithofacies of the Patala Formation is characterized by petrographic (vitrinite reflectance) and geochemical techniques (total organic carbon (TOC), total organic nitrogen (TON), Rock-Eval pyrolysis and stable C and N isotopes). These analyses record deposition of the formation in a Late Paleocene shallow marine shelf environment. The organic geochemical proxies indicate the presence of Type III mixed with subordinate Type II kerogen as well as thermally immature to early mature source rocks. OM is derived both from terrestrial and marine sources. Rather high TOC (> 2 wt.%) and a negative carbon isotope excursion (CIE) reveal that the prevalence of anoxic conditions, at least for short periods, enhanced OM preservation. The quantity and quality of OM, as well as the thickness and thermal maturity of the Patala Formation, make it a potential target for shale-gas exploration. During PETM, the extensive biological activity and addition of organic carbon into shallow marine eastern Tethyan settings provided precursor materials for hydrocarbon source rocks and shale-gas generation within the Patala Formation. The high organic influx and suboxic to anoxic conditions during PETM also facilitated OM preservation within the formation. Thus, the transient global warming PETM event significantly contributed to the OM accumulation and its preservation, which implies the suitability of such source rocks for shale-gas exploration within the Potwar Basin (Pakistan) and similar basins in neighboring areas.