TX 75083-3836, U.S.A., fax 01-972-952-9435. AbstractInterpretation of well-log data into petrophysical variables, such as effective porosity, permeability, and effective fluid saturation, provides an initial assessment of commercial hydrocarbon assets in the near vicinity of a well. A more accurate assessment requires quantitative indication of lateral continuity away from the well. Because wireline tools can only sense rock formation properties a few meters away from the well, assessment of lateral continuity is at best done qualitatively with the aid of stratigraphic analysis or well-towell correlations. Seldom do these extrapolation methods take advantage of the nowadays commonly available 3D seismic data. In effect, despite possessing much less vertical resolution than well-log data, 3D seismic data have good lateral resolution that can naturally complement the vertical resolution of well-log data. We have developed an estimation procedure whereby wireline data can be extrapolated away from existing wells using geostatistical inversion of post-stack 3D seismic data. This procedure works by estimating a joint probability density function (PDF) that defines a physical relationship between seismic measurements (e.g. P-wave velocity, and P-wave acoustic impedance), and petrophysical variables (e.g. density/porosity and bed thickness) rendered by well-log data. The estimated joint PDF is further normalized to reflect a vertical resolution midway between the resolution of seismic data and the resolution of well-log data. Variograms are also estimated from well-log and seismic data that define the expected degree of lateral smoothness away from the well. We then generate stochastic realizations of petrophysical variables that not only honor the well-log data, but most importantly, that fully honor the 3D seismic data in a least-squares sense. In the presence of closely spaced wells, geostatistical inversion can also be used to estimate an accurate static reservoir model for the subsequent simulation and planning of in-fill drilling and/or enhanced-oil-recovery operations. Examples are described in which geostatistical inversion provides lateral delineations of sand units consistent with measured fluid production data.