Book excerpt: We have extended a three-dimensional finite difference elastic wave propagation model previously developed at the Massachusetts Institute of Technology (MIT) Earth Resources Laboratory (ERL) for modeling and analyzing the effect of fractures on seismic waves. The code has been translated into C language and parallelized [using message passing interface (MPI)] to allow for larger models to be run on Linux PC computer clusters. We have also obtained another 3-D code from Lawrence Berkeley Laboratory, which we will use for verification of our ERL code results and also to run discrete fracture models. Testing of both codes is underway. We are working on a new finite difference model of borehole wave propagation for stressed formations. This code includes coordinate stretching to provide stable, variable grid sizes that will allow us to model the thin fluid annulus layers in borehole problems, especially for acoustic logging while drilling (LWD) applications. We are also extending our analysis routines for the inversion of flexural wave dispersion measurements for in situ stress estimates. Initial results on synthetic and limited field data are promising for a method to invert cross dipole data for the rotation angle and stress state simultaneously. A meeting is being scheduled between MIT and Shell Oil Company scientists to look at data from a fractured carbonate reservoir that may be made available to the project. The Focus/Disco seismic processing system from Paradigm Geophysical has been installed at ERL for field data analysis and as a platform for new analysis modules. We have begun to evaluate the flow properties of discrete fracture distributions through a simple 2D numerical model. Initial results illustrate how fluid flow pathways are very sensitive to variations in the geometry and apertures of fracture network.