The water cutting rate is recorded dynamically during the production process of a well. If the remaining oil saturation of the reservoir can be deduced based on the water cutting rate, it will give guidance to improve the reservoir recovery and can save expensive drilling costs. In the oil–water two-phase seepage experiment on core samples, the oil and water relative permeability reflects the relationship between the water cutting rate and water saturation, that is, percolating saturation formula. The relative permeability test data of 17 rock samples from six seal coring wells in Daqing Changyuan were used to optimize and construct the coefficients of the index percolating saturation formula that vary with the pore structure parameters of reservoirs, to form an index percolating saturation formula with variable coefficients that is more consistent with the regional geological characteristics of the reservoir. Based on this, the formula of water saturation calculated by the water cutting rate is deduced. And the high-precision formula for calculating the irreducible water saturation and residual oil saturation by effective porosity, absolute permeability, and shale content is given. The derivative formula of water saturation on the water cutting rate was established, and the parameters of 17 rock samples were calculated. It was found that the variation velocity of water saturation of each sample with the water cutting rate presented a “U” shape, which was consistent with the actual characteristics that the variation velocity of the water saturation in the early, middle, and late stages of oilfield development first decreased, then stabilized, and finally increased rapidly. The research results were applied to the prediction of remaining oil saturation in the research area, and the water saturation about six producing wells was calculated by using their present water cutting rates, and the remaining oil distribution profile was predicted effectively. The analysis of four layers of two newly drilled infill wells and reasonable oil recovery suggestions were given to achieve good results.