Reservoir performance and characterization are vital parameters during the development phase of a project. Infill drilling of wells on a uniform spacing, without regard to characterization does not optimize development because it fails to account for the complex nature of reservoir heterogeneities present in many low permeability reservoirs, especially carbonate reservoirs. These reservoirs are typically characterized by: (1) large, discontinuous pay intervals; (2) vertical and lateral changes in reservoir properties; (3) low reservoir energy; (4) high residual oil saturation; and (5) low recovery efficiency. The operational problems they encounter in these types of reservoirs include: (1) poor or inadequate completions and stimulations; (2) early water breakthrough; (3) poor reservoir sweep efficiency in contacting oil throughout the reservoir as well as in the nearby well regions; (4) channeling of injected fluids due to preferential fracturing caused by excessive injection rates; and (5) limited data availability and poor data quality. Infill drilling operations only need target areas of the reservoir which will be economically successful. If the most productive areas of a reservoir can be accurately identified by combining the results of geological, petrophysical, reservoir performance, and pressure transient analyses, then this 'integrated' approach can be used to optimize reservoir performance during secondary and tertiary recovery operations without resorting to 'blanket' infill drilling methods. New and emerging technologies such as geostatistical modeling, rock typing, and rigorous decline type curve analysis can be used to quantify reservoir quality and the degree of interwell communication. These results can then be used to develop a 3-D simulation model for prediction of infill locations. The application of reservoir surveillance techniques to identify additional reservoir 'pay' zones, and to monitor pressure and preferential fluid movement in the reservoir is demonstrated. These techniques are: long-term production and injection data analysis, pressure transient analysis, and advanced open and cased hole well log analysis. The major contribution of this project is to demonstrate the use of cost effective reservoir characterization and management tools that will be helpful to both independent and major operators for the optimal development of heterogeneous, low permeability carbonate reservoirs such as the North Robertson (Clearfork) Unit.