According to basic theories of sedimentology, sequence stratigraphy and the previous research, using cores, seismic data and logging data, the sequence of Shahezi Formation is divided. Shahezi Formation is a second-order sequence, which can be divided into four third-order sequences and nine fourth-order sequences. After sequence division, the stratigraphy framework of Shanhezi Formation is established. Three main sedimentary facies are identified, namely braided delta, fan delta and lacustrine facies. According to the tectonic evolution of the faulted basin, the favorable reservoir zones are predicted. It can be concluded that braided delta plain is the favorable reservoir zone laterally, and third-order sequence SQ4 has a good exploration potential vertically. [ABSTRACT FROM AUTHOR]