A new approach to obtaining oil and water flow rates in producing horizontal wells has been developed with a pulsed-neutron tool (PNT). This approach uses separate measurements of oil and water velocities in combination with separate holdup measurements to obtain the flow rates. The velocity measurement uses water-soluble and oil-soluble chemical markers, both of which are insoluble in the other fluid phase for the measurement. The markers are injected into the borehole by a logging tool at one location and detected by a PNT at a second location. The transit lime between injection and detection of the marker gives a measurement of the fluid velocity. Because the markers are soluble in only one phase, the velocity of each phase can be measured separately. This measurement has been made under both laboratory and field conditions to measure velocities from 10 to 500 ft/min at horizontal and several degrees deviation from horizontal. The results of these tests show good linearity and repeatability of the measurement. The holdup measurement is performed with the inelastic data from a PNT With these data, it is possible to obtain quantitatively the holdup of all three phases by combining information from the inelastic near/far (N/F) ratio with the near and far carbon/oxygen (C/O) ratios. This approach to the holdup measurement has been demonstrated by use of a combination of laboratory data, Monte Carlo modeling, and field data. The results of this study have demonstrated that the root-mean-square (RMS) accuracy of this measurement is about 6% on each of the three phases.