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In this paper an IMPES-type thermal volume balance technique is presented applying a direct solution of the set of mass and energy conservation equations. The effect of the convective energy transport can be considered in the isothermal pressure (volume balance) equation by a modification of the coefficients. The solution yields the pressure implicitly, component masses and energy explicitly (IMPEME technique) while keeping the mass, and energy balance. The explicit treatment demands timcstep limitation. Volume balance errors are used to control timesteps. Similarly to the direct isothermal volume balance approach, however, significant volume balance errors occur only at the front and at well regions. This is the portion of the reservoir in an adaptive implicit method (AIM) where the fully implicit handling is utilized. The IMPEME method is proposed to be the explicit approximation of a thermal AIM. The method can also be incorporated by black oil or compositional isothermal volume balance models in order to include thermal effects.