A method of analyzing properties of rock in a formation in real-time during drilling, the method comprising the steps of: sending sampling commands to a surface data acquisition unit in communication with a downhole data interface through a surface data interface and a communication medium extending between the surface data interface and the downhole data interface, the downhole data interface operably coupled to a plurality of acoustic sensors carried by a downhole sensor assembly, said plurality of acoustic sensors generating raw acoustic sensor data representing an acoustic signal generated real-time as a result of rotational contact of a drill bit with rock during drilling; the method being characterized by the steps of: receiving, by a surface computer, the raw acoustic sensor data in digitized form from the surface data acquisition unit; transforming the raw acoustic sensor data into the frequency domain; filtering the transformed data; and performing, by the computer, the following processing steps: deriving a plurality of acoustic characteristics from the filtered data, the plurality of acoustic characteristics including mean frequency and normalized deviation of frequency, comparing the mean frequency and the normalized deviation of frequency for the rock undergoing drilling with mean frequency and normalized deviation of frequency for a plurality of rock samples having different lithologies, identifying lithology type of the rock undergoing drilling responsive to the step of comparing, and deriving petrophysical properties from the filtered data utilizing a petrophysical properties evaluation algorithm to predict one or more petrophysical properties of rock undergoing drilling. sending sampling commands to a surface data acquisition unit in communication with a downhole data interface through a surface data interface and a communication medium extending between the surface data interface and the downhole data interface, the downhole data interface operably coupled to a plurality of acoustic sensors carried by a downhole sensor assembly, said plurality of acoustic sensors generating raw acoustic sensor data representing an acoustic signal generated real-time as a result of rotational contact of a drill bit with rock during drilling; the method being characterized by the steps of: receiving, by a surface computer, the raw acoustic sensor data in digitized form from the surface data acquisition unit; transforming the raw acoustic sensor data into the frequency domain; filtering the transformed data; and performing, by the computer, the following processing steps: deriving a plurality of acoustic characteristics from the filtered data, the plurality of acoustic characteristics including mean frequency and normalized deviation of frequency, comparing the mean frequency and the normalized deviation of frequency for the rock undergoing drilling with mean frequency and normalized deviation of frequency for a plurality of rock samples having different lithologies, identifying lithology type of the rock undergoing drilling responsive to the step of comparing, and deriving petrophysical properties from the filtered data utilizing a petrophysical properties evaluation algorithm to predict one or more petrophysical properties of rock undergoing drilling. receiving, by a surface computer, the raw acoustic sensor data in digitized form from the surface data acquisition unit; transforming the raw acoustic sensor data into the frequency domain; filtering the transformed data; and performing, by the computer, the following processing steps: deriving a plurality of acoustic characteristics from the filtered data, the plurality of acoustic characteristics including mean frequency and normalized deviation of frequency, comparing the mean frequency and the normalized deviation of frequency for the rock undergoing drilling with mean frequency and normalized deviation of frequency for a plurality of rock samples having different lithologies, identifying lithology type of the rock undergoing drilling responsive to the step of comparing, and deriving petrophysical properties from the filtered data utilizing a petrophysical properties evaluation algorithm to predict one or more petrophysical properties of rock undergoing drilling. deriving a plurality of acoustic characteristics from the filtered data, the plurality of acoustic characteristics including mean frequency and normalized deviation of frequency, comparing the mean frequency and the normalized deviation of frequency for the rock undergoing drilling with mean frequency and normalized deviation of frequency for a plurality of rock samples having different lithologies, identifying lithology type of the rock undergoing drilling responsive to the step of comparing, and deriving petrophysical properties from the filtered data utilizing a petrophysical properties evaluation algorithm to predict one or more petrophysical properties of rock undergoing drilling.