Reservoir quality controls the storage, distribution, and flow of fluids within a reservoir. Porosity and permeability are key parameters that are readily measured on rock samples and from well logs; with calibration, porosity can be mapped from 3D seismic surveys. If core material is obtained from a well and porosity and permeability measurements are made on the core, the values can be compared with porosity logs and a permeability log can be developed. Although “flow units” can be determined using a suite of geologic and petrophysical parameters, method uses only the three easily obtained wellbore parameters of porosity, permeability, and thickness to calculate flow units in terms of their capacity to store and transmit fluids within the reservoir. Three-dimensional flow-unit models of a reservoir can be used for reservoir fluid-flow and performance simulation. Flow units can be upscaled, as needed, to meet the requirements of computing time and capability. Capillary properties of a rock also affect the storage and flow of fluids through the rock. Capillary properties are routinely measured and used to determine fluid saturations, height of the oil column above the free water level, and maximum height of the column that can be retained by a reservoir topseal. These are very important parameters for characterizing a reservoir for development and management purposes. Values of porosity, permeability, and capillarity will vary not only according to the nature of rocks comprising a reservoir but also according to the way in which the values were obtained. Caution is the key to interpreting laboratory-derived data, and it is worth knowing just how and where on a rock sample the measurements were made prior to using them for reservoir characterization. Also, upscaling or averaging values such as Sw can provide misleading results, particularly in thin-bedded stratigraphic intervals. The greater the amount of upscaling, the less realistic the reservoir geologic model becomes!