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Reservoir simulation is essential for optimizing the development and management of compartmentalized reservoirs. This study evaluates the impact of compartmentalization on reservoir performance and development strategies in Field EDA, a compartmentalized oil reservoir. A dynamic reservoir model was built using tNavigator and calibrated through history matching with actual production data. The material balance method was applied to divide the reservoir into compartments based on pressure and fluid behavior. The study integrates key principles of reservoir engineering, including fluid properties and drive mechanisms, were integrated to enhance the simulation's reliability. Material balance techniques validated the presence of compartments and supported accurate modeling of pressure changes and fluid expansion, aiding in more precise history matching. Field EDA was divided into four compartments, North, South, East, and West by grouping wells with similar pressure and fluid characteristics. The validated model showed with only a 5% deviation. Field development plan was implemented, involving reactivating three wells every three months and adding three infill wells at similar intervals. Simulation results showed the recovery factor improved by 9.04% with reactivations and reached 10.58% after infill drilling. The study confirms that compartmentalized development planning significantly enhances reservoir performance and simulation accuracy in complex field settings.