A reservoir pressure in an underground formation surrounding a well is analyzed based on a direct measurement of the pressure at the wall of the well using the permeability of mud cake on the wall of the well in the region in which the pressure measurement is made; determining the thickness of mud cake on the well of the well; determining the hydrostatic pressure in the well in the region in which the pressure measurement is made; calculating a pressure decay index from the mud cake permeability and thickness, the hydrostatic pressure and the measured pressure; and using the pressure decay index to analyze the measured pressure to derive the reservoir pressure.