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What Do These Terms Mean? And Why Does it Matter?

 The video below initially shows a well with homogenous reservoir properties, which fills with hydrocarbons over time, illustrated by a FWL slowly moving downward. The green curve represents the water saturations. This process is called "drainage" and refers to the water being "drained" out of the rock. Note the blue line showing the water saturation profile when the FWL is at 2020 m.

Once the FWL reaches a depth around 2050 m, the simulation changes into an imbibition model, with the red curve showing the new water saturation profile as the FWL moves upward, with water "imbibing" back into the reservoir. This process models either leakage or hydrocarbon production with aquifer support.

At the end of the simulation, the difference between the blue and red curves is the additional hydrocarbons that will be located in the reservoir with the same pressure-derived FWL if the reservoir has undergone drainage followed by imbibition rather than just drainage.

In other words, you need to understand the saturation history of your reservoir to model the volumes correctly!