A method of interactively deriving and validating a computerized model of a hydrocarbon reservoir with downhole measurements from one or more wells in the earth, comprising: receiving data corresponding to downhole measurements acquired over time at a wellbore of at least one well of interest, and corresponding to flow rates from a plurality of wells including the well of interest; receiving inputs from a user identifying attributes that define a model of a hydrocarbon reservoir, wherein the model of the hydrocarbon reservoir comprises formation regions, connections between the formation regions, and wells into the formation regions, and the identified attributes define shapes and properties of the formation regions, properties of the connections between the formation regions, and the locations of the wells into the formation regions; operating a computer to evaluate pressure interference responses between each of a plurality of wells in the reservoir and the at least one well of interest in the reservoir by solving a fluid flow problem for a structure defined by the model of the hydrocarbon reservoir; operating a computer to superpose the data corresponding to measured flow rates from the plurality of wells to the evaluated pressure interference responses to calculate a simulated downhole pressure at the at least one well of interest over time; comparing the simulated downhole pressure at the well of interest over time with data corresponding to downhole measurements acquired over time at the at least one well of interest; after the comparing step, receiving inputs from a user modifying the reservoir attributes; and then repeating the operating and comparing steps for the structure corresponding to the modified reservoir attributes, wherein the identified reservoir attributes further comprise a plurality of perforations, each perforation corresponding to an intersection of one of the wells and one of the formation regions; wherein the step of operating the computer to evaluate pressure interference responses comprises: calculating a pressure interference response at each perforation in response to a unit flow rate at each perforation. receiving data corresponding to downhole measurements acquired over time at a wellbore of at least one well of interest, and corresponding to flow rates from a plurality of wells including the well of interest; receiving inputs from a user identifying attributes that define a model of a hydrocarbon reservoir, wherein the model of the hydrocarbon reservoir comprises formation regions, connections between the formation regions, and wells into the formation regions, and the identified attributes define shapes and properties of the formation regions, properties of the connections between the formation regions, and the locations of the wells into the formation regions; operating a computer to evaluate pressure interference responses between each of a plurality of wells in the reservoir and the at least one well of interest in the reservoir by solving a fluid flow problem for a structure defined by the model of the hydrocarbon reservoir; operating a computer to superpose the data corresponding to measured flow rates from the plurality of wells to the evaluated pressure interference responses to calculate a simulated downhole pressure at the at least one well of interest over time; comparing the simulated downhole pressure at the well of interest over time with data corresponding to downhole measurements acquired over time at the at least one well of interest; after the comparing step, receiving inputs from a user modifying the reservoir attributes; and then repeating the operating and comparing steps for the structure corresponding to the modified reservoir attributes, wherein the identified reservoir attributes further comprise a plurality of perforations, each perforation corresponding to an intersection of one of the wells and one of the formation regions;