In heterogeneous reservoirs where discrete features such as fractures, faults and discontinuous sand distribution play a significant role in permeability, the ultimate recovery can be as low as 10% of the estimated oil-in-place (OIP). The unrecovered in such reservoirs constitutes a significant potential resource for the mature petroleum industry in the United States. In conventional reservoir engineering, simplifying assumptions are made, based on a "layer cake "continuum concept that fails when discrete features control flow at the well scale, or networks of discrete features cont flow at the interwell scale. In this project, the Golder Associates team developed and demonstrated the use of discrete feature network (DFN) models as the key tool for integrating geological, geophysical and engineering data from a wide range of scales t improve reservoir development and increase oil production efficiency. The key issues addressed by the new technology are: placement of injection and production wells that could determine production efficiency, development of enhanced completion connection between well completion and the discrete reservoir flow network and development in gel treatment to effectively seal the fractures and improve reservoir sweep efficiency. The usefulness of DFN approach in IOR applications was demonstrated in four producing fields by first developing DFN models of discrete features in the reservoirs from reservoir data and then extrapolating the features using a combination of geological and geostatistical methods. Preliminary data indicate that the application of DFN approach to surfactant injection in Yates field resulted in enhanced oil production of 36,300 barrels and the gel treatment in South Oregon field yielded 10 BOPD from each well. The DFN technology is directly applicable to a large percentage of the secondary and tertiary oil recovery projects currently underway in the United States, and could be of significant value in the design of future oil recovery projects. The new approach should DE-AC26-98BC15101 1 be applicable to a wide range of heterogeneous reservoirs, the most important of which are the fractured carbonate reservoirs that account for 20% of total oil production within the United States and abroad. On a conservative estimate, the successful application of this approach should help to add at least 182 million barrels of oil 1.77 TCF of natural gas to the national reserves. Development of these resources should generate 288 and 941 million dollars in tax and royalty incomes and create 1082 new jobs in all sectors of the national economy