Abstract This paper through a case study exemplifies the use of some common sense reservoir engineering methods using performance data in characterizing heterogeneity and compartmentalization in a complex fractured reservoir producing from the Monterey formation. The field is highly faulted and water influx has been a source of energy in this reservoir. Guided by 2D-3D seismic interpretation, we have examined the merits of using performance data (oil rate, cumulative oil production, GOR and WOR) to characterize block to block communication as an important aspect in characterization of geological complexities in various compartments of the reservoir. Using performance data for a number of wells, we have made estimations about the historical rise of oil-water contact and its relationship to the water influx, communication among blocks, block capacities and future production potential. Monitoring of water ratios has indicated that there are differences in the level of water entry depending on individual blocks properties. GOR's have indicated different stages of depletion. Our study shows that the performance data can provide insight and further assist in geological characterization.