Thermal conductivity is a key parameter for evaluating wellbore heat losses which plays an important role in determining the efficiency of steam injection processes. In this study, an unsteady formation heat-transfer model was established and a cost-effective in situ method by using stochastic approximation method based on well-log temperature data was presented. The proposed method was able to estimate the thermal conductivity and the volumetric heat capacity of geological formation simultaneously under the in situ conditions. The feasibility of the present method was assessed by a sample test, the results of which shown that the thermal conductivity and the volumetric heat capacity could be obtained with the relative errors of -0.21% and -0.32%, respectively. In addition, three field tests were conducted based on the easily obtainable well-log temperature data from the steam injection wells. It was found that the relative errors of thermal conductivity for the three field tests were within +/- 0.6%, demonstrating the excellent performance of the proposed method for calculating thermal conductivity. The relative errors of volumetric heat capacity ranged from -6.1% to -14.2% for the three field tests. Sensitivity analysis indicated that this was due to the low correlation between the volumetric heat capacity and the wellbore temperature, which was used to generate the judgment criterion. (C) 2012 Elsevier Ltd. All rights reserved.