Publisher Summary In the process of illustrating the primary functions of a reservoir engineer, namely, the estimation of hydrocarbons in place, the calculation of a recovery factor and the attachment of a time scale to the recovery; this chapter introduces many of the fundamental concepts in reservoir engineering. The description of the calculation of oil in place concentrates largely on the determination of fluid pressure regimes and the problem of locating fluid contacts in the reservoir. Primary recovery is described in general terms by considering the significance of the isothermal compressibilities of the reservoir fluids; while the determination of the recovery factor and attachment of a time scale are illustrated by describing volumetric gas reservoir engineering. The material balance equation, for any hydrocarbon system, is simply a volume balance that equates the total production to the difference between the initial volume of hydrocarbons in the reservoir and the current volume. In gas reservoir engineering, the equation is very simple and will now be considered for the separate cases in which there is no water influx into the reservoir and also when there is a significant degree of influx. This chapter finishes with a brief qualitative account of the phase behavior of multi-component hydrocarbon systems.