Petrophysical cutoffs of a hydrocarbon reservoir are among the key parameters to determine net pay, net-to-gross ratio (NTG), original hydrocarbon(s) in place (OHIP), and reserves estimation. Although the concept of cutoffs has been continuously used since the 1950s, so far there is no universal agreement on their definition and quantification methods. In the most commonly used procedure, log-derived shale-volume faction (Vsh), porosity (f), and water saturation (Sw) are tied back to experimentally measured rock permeability (k) values through a porosity/permeability crossplot. Then, limiting values of the three log-derived parameters are determined by use of fixed-permeability-cutoff values of 1 and 0.1 md for oil and gas reservoirs, respectively. Although these values, which are usually referred to as rule-of-thumb cutoffs, seem to be appropriate in some reservoirs, they can be misleading in most cases (e.g., tight gas and heavy oil). Furthermore, these fixed values have no mathematical basis because they were founded mainly on the basis of the experience in a number of typical reservoirs. Therefore, application of the rule-of-thumb cutoffs may cause significant errors in evaluation of petroleum reservoirs. This study focuses on technical and economic factors that have to be considered for delineating net pay. Mobility cutoff in this paper is founded on the flow equation (Darcy’s law) and combined with economic-profitability condition to quantify the cutoff individually in gas and oil reservoirs. Thereafter, a novel structured procedure is provided to integrate all core, petrophysical, and fluid data with the calculated mobility cutoff, thereby introducing a single permeability cutoff for the reservoir. One of the advantages of the new procedure over the traditional methodologies is that once a cutoff is determined for permeability, it does not require subsequent tying back to f, Vsh, and Sw to quantify the extra discrete cutoffs. In addition, the technique benefits from the use of permeability distribution within the reservoir in cutoff quantification. The procedure is simple, straightforward, general, and practically rationalized. Despite the previous works, it is noteworthy to mention that the newly developed approach is applicable to all types of hydrocarbon reservoirs, including typical reservoirs, tight oil and gas reservoirs, heavy-oil reservoirs, laminated- thin-bed reservoirs, and discrete stacked reservoirs, with wide ranges of rock and fluid properties. An example calculation is presented for application of the methodology in an Iranian carbonate reservoir. The example clearly illustrates how all available data from a reservoir should be integrated for appropriate determination of the permeability cutoff.