This report outlines progress in the third 3 quarter of the first year of the DOE project ''High Resolution Prediction of Gas Injection Process Performance for Heterogeneous Reservoirs.'' A simple theoretical formulation of vertical flow with capillary/gravity equilibrium is described. Also reported are results of experimental measurements for the same systems. The results reported indicate that displacement behavior is strongly affected by the interfacial tension of phases that form on the tie line that extends through the initial oil composition.