The goal is to improve industry's ability to understand reservoir production behavior in geologically complicated reservoirs, thus improving recovery efficiency. The objective was to develop computer software, algorithms and approaches for efficiently merging time-lapse seismic and production data to image saturation changes in a producing reservoir and infer reservoir properties such as permeability and porosity. Developed time-lapse derived saturation and pressure inversion and submitted paper to the journal Geophysics on using time-lapse pressure estimates to infer reservoir permeability, and Successfully used time-lapse geophysical observations to image permeability between two boreholes at the Lost Hills oil field in California. This project had two primary tasks. The first was to develop coupled seismic and production data inversion code and the second was to apply the methodology to field observations. By integrating high-resolution seismic data with field production history to characterize inter-well saturation distributions, the methodology takes advantage of the dense spatial coverage of the seismic data and the strong coupling of inter-well saturation variations to the production response. The key elements of this approach are very fast streamline-based flow simulation techniques and the coupling of seismic inversion with matching production history. Because this approach is extremely efficient, savings in computation time should result.