This paper presents a study on the development of efficient methods for scaling petrophysical properties from high-resolution geological models to the resolution of reservoir simulation models. These methods were evaluated using data for the Gypsy field located in northeastern Oklahoma near Lake Keystone. Various criteria that may be used to reduce the number of layers to represent a reservoir in simulation studies were investigated. The approach attempts to reduce the number of grid blocks needed by combining thinner layers and representing them by scaled petrophysical properties assigned to the resulting thicker layers. Three different geological models were developed based on channel identifiers, lithofacies, and flow units, respectively. The effect of the criteria used for combining layers on simulation results was studied by conducting scale-up for three different geological models, three different production scenarios, and three different boundary conditions. In addition to the linear flow scale-up of transmissibility between two grid blocks, a scale-up of the productivity index (PI) was found to be important and necessary in order to account for the radial flow around the wellbore. Special consideration was also needed for the pinch-out grid blocks in the system. The validity of the proposed approach was evaluated by comparing the performance prediction for various reservoir flow scenarios using fine-scale and coarse-scale reservoir models. Strategies of geological modelling were found to have a significant impact on simulation results, especially during the early phase of flow. The use of lithofacies as a criterion provided the closest match to fine-scale results. Amongst various drive mechanisms compared, the best matches for both water production and reservoir pressure were achieved for the line-drive scenario. A better match was obtained for no-flow boundary conditions compared to an open boundary conditions scenario.