A method for estimating equivalent top of fluid level or a theoretical surface annular back pressure in a subterranean wellbore includes acquiring first and second axially spaced pressure measurements in the wellbore. The pressure measurements may then be processed to compute the equivalent top of fluid level and/or theoretical surface annular back pressure of drilling fluid between the measurement locations. A tool string including a large number of axially spaced pressure sensors (e.g., four or more or even six or more) electronically coupled with a surface processor via wired drill pipe may be used to obtain a plurality of values corresponding to various wellbore intervals. The equivalent top of fluid level and/or theoretical surface annular back pressures may be used in automated managed pressure drilling operations.