Abstract: With the progress of exploration, the fault sealing has become the main focus for shallow oil and gas exploration in the Panyu 4 area. The methods commonly used for study of faults include the method of profile analysis by Allan(1980) and the mudstone smearing coefficient method by Yielding(1993). This paper argues that in the area with high angle fractures, fracture development stage is a key factor for the formation of an oil reservoir. The early stage of the Yuehai Formation was a stage for migration of large amount of oil and gas, and the inactive faults may act as vertical seals then for oil accumulation. In such a case, the structural fractures are conducive to the accumulation and preservation of oil and gas. In other stages, however, fault activity is not favorable for the preservation of hydrocarbons.