Abstract: The preferred embodiment of the instant invention preferably takes place in three stages. In the first stage, a determination is made as to which sands (or other reservoir bodies) are in fluid communication with the existing wells, and the disconnected sands are removed from the fine scale geological model. In the second stage, the transmissibilities in the fine scale model are upscaled to the course grid for direct use in the simulation. In the third stage the connected sands only are upscaled and a simulation is carried forward to the point when a new well is to be drilled. The pressure and saturation data are exported to combine with newly connected sands (reservoir bodies), and new pressure and saturation is calculated. The new values are exported in the simulation model and simulation run is continued.