Permian Gufeng and Qixia source rocks were drilled in Well XQ-1 in Yangcheng Sag, Subei Basin. Gufeng Formation is only 11.3m thickness of dark mudstone with the average 0.74, TOC( maximum 1.44,), which shows Type Ⅲ kerogen. Qixia Formation is dark carbonate rock with larger than 42m thickness that is converted by TOC>0.4,, mainly showing Type Ⅱ2 kerogen. These source rocks are relatively low in thermal maturity and so still within oil-generating window. Several beds of gas showings are met in Upper Cretaceous Pukou and Lower Permian Qixia reservoirs. Research indicates that the gas in Pukou Formation is likely to derive from deep Permian source rock and the gas in Qixia Formation maybe comes from deeper Cambrian source rock, which is significant to oil and gas exploration if it is identified and proved.