Abstract: The southern depression in Yanqi basin is the reserve replacement area for exploration. Based on study of sand- body distribution, source direction, sedimentary facies and lithologic properties, the oil - bearing properties of reservoirs are analyzed in combination with geologic logging, drilling, logging and testing data. It is believed that the sedimentary system in this area is proximal delta with well - developed sandbodies and poor reservoir physical properties. The reservoirs belong to low - very low porosity and very low - extra - low permeability reservoir types that do not have secondary hydrocarbon generating conditions, thus oil- bearing degrees are low. There are 90 million tons of remaining hydrocarbon resources in the southern depression of which 27 to 36 million tons can be proved. The favorable exploration targets are the Bonan nose structural zone, the Amailai fault nose structural zone, the piedmont thrust zone and the deep depression zone.