The Liaohe basin is a Tertiary rift developed on a paleohigh, characterized by widespread volcanic rocks and active fault subsidence. Source rocks consist of mudstone of Paleogene age, and reservoir rocks consist of volcanic rocks, sandstones of Tertiary age, and buried hills of Mesozoic-Paleozoic age. Traps are a combination of structural and stratigraphic, with drape features being dominant. Cap or seal rocks consist of volcanic rocks and mudstones of Paleogene age. Source maturation and migration timing are closely linked to the volcanic episodes. The higher geothermal gradient provided by magmatic activity resulted in early maturation of source rocks. These hydrocarbons are locally reservoired in volcanic rocks. These favorable hydrocarbon-play parameters make the Liaohe basin an attractive hydrocarbon province.