This paper presents a two-stage stochastic model that caters to the large-scale geological heterogeneities resulting from different rock types and the inherent spatial variability of rock properties. The suggested approach combines several elements from a variety of models, methods, and algorithms that have emerged during the last few years. This two-stage procedure can be used to generate several geologically sound realizations of an oil or gas reservoir in an efficient manner. Stage 1 preserves the important geological architecture, while Stage 2 provides small-scale variability in the rock properties. At both stages, the stochastic models are conditional on the actual values observed in wells. Hence, every realization honors the observations. An example from a highly heterogeneous North Sea reservoir, deposited in an upper shore-face environment illustrates application of the model.