Abstract: Material balance equation is one of the most commonly-used methods to calculate dynamic reserves of gas reservoirs, but for condensate gas reservoirs with oil rings, their dynamic reserves are not only related to oil and gas production, but also to retrograde condensation degree. Since mass conversion occurs among different products, it is difficult to accurately calculate the amount of conversions and to establish material balance equation with volume balance or molar balance. Also, conversion from wellhead oil and gas flow rate to bottom-hole inflow rate can’t be realized by the direct use of the volume factor and the gas-oil ratio, hence the material balance equation for conventional gas reservoirs greatly differs from that for condensate gas reservoirs with oil rings. On the basis of the law of mass conservation, this paper proposes a general formula of the material balance equation for natural water-drive condensate gas reservoirs with oil rings under production conditions, in which multi-phase flow displacement theory and oil saturations corresponding to curve interpolation are used to get the dynamic reserves of such reservoirs with oil rings by optimizing the objective function through non-linear regression, without converting condensate oil into equivalent gas with empirical formula and without by means of concepts of two-phase deviation factor and state equation of liquid. Therefore, the new formula can avoid the variations in oil and gas components and their volumes resulted from complicated phase changes. The obtained material balance equation has a stronger theoretical foundation and can better reflect the actual status of condensate gas reservoirs