1. A computer-implemented method for simulating one or more characteristics of a formation wherein a displacement fluid comprising at least one component is injected into the formation through at least one well to displace hydrocarbons in the formation, comprising the steps of: (a) equating the formation in at least one dimension to a multiplicity of gridcells; (b) dividing at least some of the multiplicity of gridcells into three or more regions, the distribution of components in each of the three or more regions being essentially uniform; (c) constructing a model representative of fluid properties within each of the three or more regions, fluid flow between the multiplicity of gridcells using principles of percolation theory to provide fine-grid adverse mobility displacement behavior through functional dependencies, and principles of component mass transfer rate between the three or more regions; and (d) using the model to simulate one or more characteristics of the formation.