A method and system for estimating water cut or water fraction. The method may include independently establishing a production index for a region in a well. An initial flow rate in the region may be computed from the production index. Further, a measured flow rate may also be monitored within the region on an ongoing rate, for example, with a Venturi device. Thus, a comparison of the initial and measured flow rates may also take place on an ongoing basis so as to provide a real time read of fluid density. This, in turn may be used to estimate water cut of anywhere between 0 and 100% for the region in a dynamic manner. As a result, production from the overall well may be optimized with greater accuracy as a determination on the amount of production allowed, if any, is made on a region by region basis with improved water cut accuracy regarding each region.