Badaowan Formation in the hinterland of Junggar Basin is a potential exploration replacement field of Jurassic. By analyzing the formation conditions and sedimentary characteristics of the lowstand system tract(LST) sand body of Badaowan Formation in Western Well Pen-1 Sag, combined with the study of reservoir forming conditions, this paper proposes that LST sand bodies are developed below the slope break of depressional lake basin, and the reservoir forming conditions of LST sand body are superior. The results show that: (1) A complete third-order sequence is developed in the Badaowan Formation of the Western Well Pen-1 Sag in the Junggar Basin, and during the Badaowan sedimentation period, slope breaks are developed around the Western Well Pen-1 Sag. Braided river delta from the eastern provenance system prograde towards the sag, and unload sediment in the sag area below the slope breaks, creating conditions for the development of LST sand body in the sag area. (2) LST sand bodies of braided river delta are developed in Badaowan Formation of Western Well Pen-1 Sag, which is formed through the continuous unloading of sediment below the slope break after long distance transportation. The LST sand body is sand-shale interbeded, and laterally contacts with the flood plain mudstone of the delta plain, so the roof and floor and shielding conditions are good. Therefore, the lithologic trap conditions are superior, and the LST sand bodies have the conditions to form a large-scale lithologic trap group. (3) The low porosity and ultra-low permeability reservoir of LST sandstone is developed in the Western Well Pen-1 Sag, and the local microfractures improve the physical properties of the reservoir. Two sets of source rocks of the Permian Fengcheng Formation and Lower Wuerhe Formation are developed in the sag, so the source conditions are good. (4) In addition, two groups of deep and shallow faults are developed around the Western Well Pen-1 Sag, vertically connecting the LST sand bodies of Badaowan Formation with Permian source rocks, which is conducive to the accumulation oil and gas, so the LST sand bodies have great exploration potential and are favorable exploration fields for the next step of oil and gas discovery in the Junggar Basin. This understanding provides a geological basis for the next step of oil and gas exploration in Junggar Basin, and also provides a reference for oil and gas exploration in depressional lake basins with similar geological backgrounds at home and abroad.