Based on the analysis and comparisons of drilled wells, geological and seismic data, it is shown that two phases of karst cycles developed during Ordovician period in the west part of Lungu area, which results in four sets of palaeokarst reservoirs related with caves in vertical. Among them, the second reservoir is mainly distributed in the karst slope so that plenty of caves and pores are developed and have fillings less than those in relatively higher structural locations. The second reservoir is recognized as the most favorable one for hydrocarbon accumulation in this area.