A method for determining a formation thermal neutron decay rate from measurements of radiation resulting from at least one burst of high energy neutrons into formations surrounding a wellbore includes determining a first apparent neutron decay rate in a time window beginning at a first selected time after an end of the at least one burst, a second apparent decay rate from a time window beginning at a second selected time after the burst and a third apparent decay rate from a third selected time after the burst. The second time is later than the first time. A thermal neutron capture cross section of fluid in the wellbore is determined. A decay rate correction factor is determined based on the first and second apparent decay rates and a parameter indicative of the wellbore capture cross-section. The correction factor is applied to the third apparent decay rate to determine the formation thermal neutron decay rate.