Abstract: Based on the latest cracking data from the Xiaermen deep reservoir,it was discussed in this paper the lithology,physical property,oil-bearing capacity,electric property and oil-water identification method in the study area.A new identification standard for oil,water and dry layers was proposed.47 wells in the Xiaermen deep reservoir were reviewed,and several potential layers were found.Industrial oil flows were discovered by cracking in two wells,achieving good economic benefits.