An apparatus and method for determining permeability of a subterranean formation is provided. The apparatus and method comprise a work string, at least one selectively extendable member mounted on the work string to isolate a portion of the annular space between the work string and borehole. A predetermined distance proportional to the radius of a control port separates at least two ports in the work string. A sensor operatively associated with each port is mounted in the work string for measuring at least one characteristic such as pressure of the fluid in the isolated section.