Vertical permeability, often a key parameter in reservoir engineering, can be calculated from the analysis of a limited entry pressure transient. Analytical solutions for limited entry welltests, where a fraction of the reservoir interval is perforated, have been available in the literature for some time. This paper considers the evaluation of limited entry welltests in heterogeneous layered formations. A number of field examples have been analysed using both conventional analytical techniques and a new general purpose numerical welltest analysis application. The examples show that in layered formations vertical permeability can be significantly under estimated by conventional analytical analysis.