The Liaodong Bay area in northeast China has abundant hydrocarbon resources. The study area (referred to as D-1) is located in the southeast portion of the Liaodong Graben, a tectonic unit of Liaodong Bay, where the focus for exploration is on sandstone units in the Palaeogene Shahejie Formation. Here, hydrocarbons with an oil production capacity of 629 m 3 /day have been discovered in well D-1-2SA. The reservoir facies have been analysed by combining the cuttings, logging, seismic data, sedimentary facies, and sequence stratigraphy. In the sequence stratigraphic study, the second member from the base of the formation is divided into one third-and four fourth-order depositional sequences. The sedimentary facies include fan deltaic, braided river deltaic, and lagoonal systems. Seismic attribute inversion of the sequence framework, depositional models, and sediment distribution has been conducted for each system tract. The reservoirs facies in the D-1 area are characterized by medium to low porosity, and medium to low permeability. The development of reservoirs facies is related to the subaqueous depositional channels of the fan deltaic system with the best quality for hydrocarbon storage. These channels have strong root mean square amplitudes used for seismic attribute identification for reservoir targets. The formations of the source-to-sink system with granitic and metamorphic source rocks and relative distant transportation are considered to have the best potential for hydrocarbon reservoirs.