Microfacies and depositional architecture of the lacustrine deepwater gravity flows implicate exploration and development of hydrocarbon reservoirs in lacutrine environments. The seventh oil layer group of the third member of the Yanchang formation of the upper Triassic (Chang 7) is crucial for shale oil exploration from the Heshui Area of the Ordos Basin, China. Based on logging data interpretation, core description, and reservoir laboratory tests, this paper analyzed the sedimentary microfacies and reservoir characteristics of the Chang 7. According to the thickness of sand bodies, lithology characteristics, and logging curves response, we recognized two sedimentary facies including sublacustrine fan and lacustrine facies, three sub-facies including middle fan, semi-deep, and deep lakes, and four microfacies including distributary channel, proximal margin of distributary channel, and distal margin of distributary channel, and lacustrine mud, spatial and temporal associations of which represent depositional processes and environments in space and time at the Heshui Area of the Ordos Basin. Using the multivariate comprehensive parameter method, the Chang 7 reservoirs were divided into four categories including type I, type II, type III, and type IV, and the potential of their oil productivity decreases in turn. As main producing objectives, type I and type II reservoirs are chiefly distributed in the middle, northwest, and north of the study area with the strip and block shapes. The research results will provide an effective basis for shale oil exploration and development of the Chang 7 in the Heshui Area of the Ordos Basin, China.