During the past year, a report on the simulation work performed on the U-8 reservoir was completed. Upon completing the history match of the reservoir and the running of several predictive runs, evidence indicates the following: layers "A" and "B" of the U-8 sand are in communication; the given reservoir relative permeability data was not appropriate for the U-8 sand reservoir and the relative permeability's were modified to enable a history match to be obtained; the vertical permeability values were found to be within the accepted range for the Gulf of Mexico (O.lKx < Kz < 0.5Kx, with Kx = Ky) at 0.4 Kx; based on industry's desired design (water injection of 5100 BBL/D), the best possible production scenario is in the northeastern portion of the reservoir; if the water injection rate is doubled 10,200 MSTB/D, the additional oil recovery may be increased by 33% (1,214 MSTB) in the vertical well scenario and by 37% (1,320 MSTB) in the horizontal well scenario; by converting the production wells to water injection wells and drilling a horizontal production well in the north-central portion of the reservoir, the production obtained is approximately 90% of the production obtained from the northeastern portion of the reservoir at the same field injection rate. Also, modifications to handle steeply dipping reservoirs have been successfully implemented in the MASTER simulator and critical process parameter laboratory experiments and computer simulations of the experiments have been completed. In addition, development of predictive models for undeveloped oil and immiscible/miscible processes began. The methodology for determination of undeveloped potential has been completed. The design of the miscible and updip displacement models as well as the design of the economic and timing models is underway. The coding and calibration of the models began. Data validation, map measurements, model development and supporting cost data collection was in progress. The approach for the TORIS predictive modeling includes gathering raw data from MMS files, both electronic and hard copy; reducing the data to fit a simplified model of salt piercement reservoir geometry; redescribing the resource to accommodate known production behavior and certain geologic assumptions; and assessing the unrecovered oil potential of the redescribed resource under various economic and technologic scenarios.