The subsea Prince Colliery of the Sydney Basin extracts coal at depths up to 330 m below sea level from beneath the Prince Sandstone, a channel body and local aquifer. The sandstone has up to 42.5 md permeability and 19.5% porosity, mainly secondary porosity generated from near-complete dissolution of early formed calcite cement, remnants of which are present locally. Some pores are partially filled with quartz overgrowths on framework grains and aggregates of kaolinite, quartz, siderite, and minor illite. Formation waters within the Prince Sandstone are Na-Ca-Cl fluids with total dissolved solids (TDS) from 7,950 to 47,840 mg/L, increasing downdip, and high Br:CI ratios. Salinity estimates using geophysical logs on wells drilled prior to mining agree well with the TDS values, confirming that the fluid samples are relatively pristine. The saline component originated as residual evaporative brines derived from the underlying Windsor Group, and probably entered the sandstone along faults during deep Permo-Triassic burial. The saline formation waters have been diluted by fresh surficial fluids that, based on isotopic data, were warmer than present :precipitation, suggesting interglacial or preglacial sour:es. These surficial fluids entered the Prince Sandstone aquifer along the nearby Mountain Fault and/or from the surface, and dilution may have taken place at any time since the mid-Mesozoic, when basin inversion brought the strata to a near-surface position. The dilute fluids may have promoted generation of secondary porosity within the sandstone, probably long after maturation of the coals, as there is little evidence in the coalfield that fluids released during maturation generated high porosity levels.