Water flooding is one of the most important ways to develop oilfields currently. Influenced by reservoirs，fluid，well pattern and other conditions，water displacement in different directions are obviously different from each other. When water flooding reservoir entered to high and extra-high water cut stage，the remaining oil distribution becomes more and more complex，and traditional development adjustment methods may not be applicable. Practices of oilfield development indicate that the production performance is closely related to the equalization degree of displacement by injected water. The equilibrium displacement concept was proposed and used to guide the design of production plan. However，the relationship between the displacement equalization degree and the development performance was mainly studied on the basis of qualitative analysis but lacking of quantitative and theoretical analysis. Based on reservoir engineering and seepage flow mechanics theory，the relationship between the cumulative water injection and cumulative oil production in various injection-production directions during the water flooding was derived to describe the displacement dynamics. Then the relationship between the net present value and the displacement dynamics was derived and analyzed. Moreover，formulas for well spacing and optimization design of injection-production pressure difference was given to achieve equilibrium development.