Abstract: There is disclosed herein a systematic, computationally-efficient, two-stage method for determining well locations in a 3D reservoir model while satisfying various constraints including: minimum interwell spacing, maximum well length, angular limits for deviated completions, and minimum distance from reservoir and fluid boundaries. In the first stage, the wells are placed assuming that the wells can only be vertical. In the second stage, these vertical wells are examined for optimized horizontal and deviated completions. This solution is expedient, yet systematic, and it provides a good first-pass set of well locations and configurations. The first stage solution formulates the well placement problem as a binary integer programming (BIP) problem which uses a “set-packing” approach that exploits the problem structure, strengthens the optimization formulation, and reduces the problem size. Commercial software packages are readily available for solving BIP problems.