Abstract: The Zhongmachang structural belt, with one uplift standing between two sags, has become a key exploration target area since the discovery of Baolang oilfield and Benbutu oilfield in Yanqi basin. The Well Ma 1, Ma 2 and Ma 3 drilled during 1996 and 1997 displayed rich oil and gas shows, but did not give out commercial oil and gas flows. It is believed that drilling failure is due to the high structural position of the drilled trap, strong denudation and poor oil and gas. preservation conditions. Reservoir characteristics study reveals that both the reservoir rock texture maturity and the compositional maturity are low, diagenesis is strong and reservoir physical properties are poor. The reservoir characteristics in the west are better than that in the east. The Badaowan Formation and the Sangonghe Formation (targets) with well developed secondary pores are at late diagenetic stage A. Source analysis reveals that the Zhongmachang structural belt is located in the favorable directional zone of oil and gas migration in both the south and the north sags during Yanshan stage, it also can trap the secondary oil and gas generated in the Sishilicheng secondary sag during Himalayan stage, thus oil sources are rich. The degree of formation denudation and fault activity are the key factors to oil and gas preservation. Comprehensive analysis reveals .that the low fault blocks in the Zhongmachang structural belt, the fault nose with well preserved Miocene, the fault traps and the anticlines in the Badaowan Formation and the stratigraphic lithologic traps have oil and gas exploration potential.