Xujiahe Formation in Puguang area belongs to ultra-low porosity and ultra-low permeability sandstone reservoirs on the whole. The result shows that the main controlling factors of reservoir development are the sedimentary facies and diagenesis. Among them, the controlling of sedimentary facies against reservoir is reflected mainly through the change of grain size and quartz content. The influence of reservoir diagenesis mainly includes compaction, cementation and denudation. The structural fractures developed well in the local part in Xujiahe Formation. The effect of the fractures on reservoir is a key of producing the commercial gas flow.