Many oil fields in Oman are developed with horizontal wells to maximize productivity and develop wider drainage areas for more cost effective recovery. Premature water breakthrough either from water injectors or from water aquifer reduces the wells profitability because of both reduction in net oil rate and additional cost for water handling. To determine the best solution to shut-off, source and nature of the water entries must be well identified. The flow dynamics and fluid entry mechanisms in horizontal wells are complex and identification of water inflow zones is challenging even when using the best production logging technology available today. Traditionally, when the water cut increase becomes abnormally high, production logging tool (PLT) is run to identify water inflow zones. However interpretation of PLT logs in horizontal wells is not an easy task for log analysts because of the complex flow dynamics and logging tool's limitations in measuring downhole fluid velocities and fluid holdups coverage across the borehole. This paper discusses the limitations of PLT and focuses on diagnosing excessive water production problems using water-oil-ratio (WOR) plots, which is commonly used for screening and selecting water shut-off candidates. A 3-D simulation model was used to investigate the effect of water arial coning and channeling through fractures on WOR and WOR derivative trends in vertical and horizontal wells. Simulation results are in good agreement with field data, which are also presented in this paper.