Abstract: A method is presented to estimate the productivity index, PI, and the well condition, s, of a pumping well utilizing the knowledge of pump runtime versus downtime. Runtime and downtime may be constantly and automatically recorded and transmitted to a central location. A model runtime is computed assuming the two unknowns, PI and s. The model is then compared with the actual runtime data. A nonlinear optimization technique is used to search for the unknown parameters such that the differences between the measured data and the numerically simulated data are minimized in a least-squares fashion. The proposed estimation procedure is an economical and accurate method for monitoring the behavior of a well resevoir system during runtime.