A system and method is provided for estimating an occurrence of a water breakthrough in a production well that includes estimating, at least periodically, a measure of water in the fluid produced from one or more production zones and estimating the occurrence of the water breakthrough utilizing at least in part a trend of the estimated measures of the produced fluid. A controller determines one or more actions to be taken to mitigate an effect of the water breakthrough and may automatically initiate one or more such actions.