Abstract: There is different opinions about the source of Penglai 19-3 area and through the analysis of heavy mineral, light mineral, grain size analysis, distribution of sandrocks and seismic data in Neogene of Penglai 19-3 area, it is believed that the sedimentary source is mainly from the east. Considering the analysis of resource and algal, it is believed that large water body exists in this area. Guantao stage is of braided delta with narrow channels, while Minghua stage is mainly of shallow water facies. So it is suggested that oil filed geology and reservoir study should take sedimentary source and facies into consideration and perfect the structure of fluid produc-tion so that improve the effects of oilfield development.