Abstract One of the common assumptions used in horizontal-well interference test analysis is to ignore fluid flow in an out of the horizontal observation well and represent it by an observation point. In some cases, the active well is also approximated by a vertical line source. Using a semi-analytical model, this paper answers three fundamental questions: i) What is the critical distance between the wells to represent the horizontal observation well by an equivalent observation point? ii) Where should the equivalent observation point be placed along the horizontal well? iii) Under what conditions can the active well be approximated by a vertical line source and the exponential integral solution be used for the observation well responses? Two correlations are presented to simplify the analysis of horizontal well interference tests. Example applications are presented and error bounds are documented.