Many small gas fields have been discovered in the west of North Shongliao Basin of China while drilling for oil. Applications and results of DTIT and GEOPET II codes indicate that the formation and distribution of these gas fields are controlled by hydrocarbon expulsion and migration from the major Qingshahou source rock. This generated most of the oil and gas at 88-50 Ma and 50-0 Ma, respectively; the ratio of oil to gas is about 70:30. Most of the separate-phase oil was expelled at 35-15 Ma, but no separate-phase gas was expelled because of total solution of generated gas in oil and in connate water. Gas dissolved in water tended to migrate from the deep source rock centre to the West Slope (shallower formations) of the basin through sandstone reservoirs and normal faults, gradually being released from solution and accumulated in traps along the migration route. Gas dissolved in oil tended to migrate to traps around the source rock centre, and was released and accumulated at the tops of oil reservoirs. The best area for prospecting for gas is between 500 m to 2000 m.