A new geological model of Member 3 of Shahejie Formation reservoir in the Liuzan Oilfield, eastern Hebei Province was constructed by using modern reservoir modeling technology as sequence stratigraphy and conditional simulation combined with traditional geological analysis. The model consists of a stratigraphic framework model, a structural model, a sedimentary model and a reservoir model. The study shows that the reservoir is a relatively integrated nose structure, whose strata can be divided into 4 sets of parasequence, 12 parasequences. The submerged branched channel of fan delta front is the favorable microfacies, which controls the geometric shape and physical properties of reservoir sandstone. Oil is distributed in premium reservoir sandstones at structural high positions. According to the new geological model, not only the geological contradictions appearing during oil field development are resolved, but also the oil-bearing area is enlarged by 2.7km2 and geological reserves increased by 156.9 million tons. The production capacity of the Liuzan Oilfield is increased by 0.27 million tons per year.