Continental shale is an important succeeding field of shale gas exploration and development. The formation conditions and exploration potential of shale gas in Dongyuemiao Member of the Lower Jurassic Ziliujing Formation are analyzed on the aspects of mineral composition, organic geochemistry, reservoir characteristic and gas content from the latest drilling data (Well FY10). The results show that the Dongyuemiao Submember 1 in the study area has higher organic matter content (TOC at range of 1.31,~4.04, with average value more than 1.50,) with thickness more than 20 m of high-quality shale, and the organic matter type is mainly type Ⅱ with high thermal maturity. Both of the inorganic and organic pores are developed in the shale, and the average porosity is more than 4,，which indicates good reservoir properties of the shale. The water immersion test of core shows that the shale gas bubbles are dense and persistent, which indicates good formation and enrichment conditions of shale gas. The burial depth of the Dongyuemiao Member in the study area is moderate, and the shale contains a large amount of calcareous shell laminae to improve the fracturing effect, which reveals good potential for shale gas exploration and development.