In this talk we continue our expository material on wells in reservoir simulation, this time focusing on secondary oil and gas recovery using waterflooding. We give overview of the associated PDE models and of difficulties in their numerical approximation. The focus of this talk is on additional levels of complexity encountered when the numerical PDE model is just one element of a complicated system of reservoir characterization and optimization. We show results from large scale computations involving geostatistical simulations and optimization of well placement. In the former we use GSLIB methodology and Monte Carlo simulations, the latter involves a Simulated Annealing algorithm.