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Geomechanical and geological datasets from fold–thrust belts and passive margins that have been subject to neotectonic activity often provide contradictory evidence for the state of contemporary stress. Southeastern Australia has relatively high levels of neotectonic activity for a so-called stable continental region. In the eastern Otway Basin, this neotectonic activity consists of compressional deformation and uplift, indicating a reverse fault stress regime. However, this is inconsistent with the stress magnitudes estimated from petroleum exploration data, which indicate normal or strike-slip fault stress regimes. A new wellbore failure analysis of 12 wells indicates that the maximum horizontal stress azimuth in this basin is c. 135° N, consistent with neotectonic structural trends. Our results indicate that the lithology and variations in structural style with depth exert important controls on horizontal stress magnitudes. The observed partitioning of stress regimes and deformation styles with depth within the basin may reflect the contrasting mechanical properties of the basin-fill. There is an overall increase in the minimum horizontal stress gradient of c. 1–2 MPa km−1 from west to east, corresponding to a change in structural style across the basin. In the central Otway Basin, rift-related faults strike near-parallel to the maximum horizontal stress azimuth and there are comparatively low levels of neotectonic activity, whereas in the eastern Otway Basin, where rift-related faults strike near-orthogonal to the maximum horizontal stress azimuth, the level of neotectonic faulting and uplift is much higher. Our results show that the integration of structural geology with geomechanical datasets can lead to improved interpretations of contemporary stresses, consistent with neotectonic observations.

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