Abstract: Exploration for oil and gas is divided into three stages in line with the characteristics of deposition in continental basins and the complicated geol-ogy for oil and gas occurrence in China. 1. Stage of regional exploration: To investigate the geological conditions of a basin as a whole and the basic conditions for oil and gas formation in the region; to locate depressions favourable for oil generation and pick out zones favourable for its accumulation; and to predict types of traps that probably exist and make a preliminary estimate of reserve or resources in place. 2. Stage of preliminary exploration of traps: To start exploratory drill-ing on favourable traps to ascertain the oil possibilities of structures, their horizons andindustrial value and to work out their probable reserve. 3. Stage of detailed exploration of field: To define the oil and gas bo-undary and make out the area holding oil; to study the characteristics of the oil and gas pools; and to figure out the proved reserve of the field to serve as the basis of development planning. In a field complicated by small fault blocks, planning for exploration, development and production should be integrated so that subsurface condit-ions are disclosed along with the gradual extension of the area for develop-ment. In management, the amount of increase of different categories of reserve is the ultimate result of exploration, and the cost of per ton provedreserve is an index of economic gains from exploration, the paper concludes.