"The work completed during this quarter of December 1, 1986 through February 28, 1987 is on ""The Development of a Reservoir Simulator for Thermal Recovery of Heavy Oil/Tar Sands in the Presence of Gas Hydrates"" reviewed in the following pages. The concepts used in the fundamental gas hydrate dissociation model have been extended and generalized to develop a r-z mathematical model simulating the injection of steam in layered hydrate oil configurations. The model accounts for heat transfer to the hydrate zone by both conduction and convection and treats oil as a two component mixture to allow solution gas and steam distillation. The flow equations, mass balance equations, heat transfer equations and boundary conditions have been converted to fully implicit finite difference equations. A numerical procedure, using Newton-Raphson method was developed to solve the set of difference equations."