Petroleum production from restricted shelf carbonates of the Lower Ordovician Ellenburger Group is commonly considered to have been a result of a pervasive, relatively homogeneous tectonic fracture system within the reservoir rock. However, regional facies and diagenetic (paleokarst) studies of Ellenburger strata, based on cores and wireline logs, have demonstrated that significant reservoir compartmentalization was caused by karst modification in the upper part of the unit. Ellenburger Group carbonates, which attain a thickness of over 1,700 ft (520 m), record sedimentation on a shallow-water restricted shelf occupying most of west Texas. Logging of over 10,000 ft (3,050 m) of core from 63 wells has allowed recognition of six facies assemblages: (1) lithic arenite, (2) mixed siliciclastic-carbonate packstone-grainstone, (3) ooid-peloid grainstone, (4) mottled mudstone, (5) laminated mudstone, and (6) gastropod-intraclast packstone-grainstone. These facies assemblages record initial transgression and subsequent progradation and aggradation. Paleoslope was generally south and east from the Texas arch toward the Ouachita and Marathon orogenic belts. All facies assemblages, with the local exception of the ooid-peloid grainstone assemblage, are characterized y very low intergranular and intercrystalline porosity. Porosity development in Ellenburger Group carbonates is directly related to a prolonged period of subaerial exposure that coincided with a Middle Ordovician eustatic lowstand prior to transgression of Simpson Group siliciclastics. During this episode, a widespread system of caves, sinkholes, joint-controlled solution features, and collapse breccias developed. Of particular importance to reservoir development was the formation of a regionally extensive cave system between 100 and 300 ft (30 and 90 m) beneath the exposed Ellenburger surface. Infill of this cave system by Simpson Group sand and clay segmented the upper Ellenburger into three karst facies, which are, in descending order, (1) cave-roof dolomites (fracture and mosaic breccias), (2) laterally persistent cave-fill facies (siliciclastic-matrix-supported and carbonate-matrix-supported breccias), and (3) lower collapse facies (chaotic clast-supported breccias) of the cave floor. Pronounced vertical segregation of permeable zones defined by the three karst facies is evident in the Emma, Andector, Martin, Block 13, and several other major Ellenburger reservoirs. Lateral reservoir heterogeneities formed by localized laterally extensive collapse structures, such as in the Shafter Lake reservoir, also contribute to compartmentalization of producing zones within the upper Ellenburger Group. Secondary and tertiary recovery programs in these Ellenburger reservoirs can be optimized by integrating concepts of lateral and vertical heterogeneity predicted by the karst model.