diff --git a/src/ert/analysis/_es_update.py b/src/ert/analysis/_es_update.py
index 667213e2b42..f70b2c3ab75 100644
--- a/src/ert/analysis/_es_update.py
+++ b/src/ert/analysis/_es_update.py
@@ -3,6 +3,7 @@
 import functools
 import logging
 import time
+import warnings
 from collections.abc import Callable, Iterable, Sequence
 from fnmatch import fnmatch
 from typing import (
@@ -16,6 +17,7 @@
 import numpy as np
 import polars
 import psutil
+import scipy
 from iterative_ensemble_smoother.experimental import AdaptiveESMDA
 
 from ert.config import GenKwConfig
@@ -515,7 +517,37 @@ def adaptive_localization_progress_callback(
     else:
         # Compute transition matrix so that
         # X_posterior = X_prior @ T
-        T = smoother_es.compute_transition_matrix(Y=S, alpha=1.0, truncation=truncation)
+        try:
+            with warnings.catch_warnings(
+                record=True, category=scipy.linalg.LinAlgWarning
+            ) as all_warnings:
+                T = smoother_es.compute_transition_matrix(
+                    Y=S, alpha=1.0, truncation=truncation
+                )
+            if all_warnings:
+                progress_callback(
+                    AnalysisStatusEvent(
+                        msg="Warning encountered while computing transition matrix in update"
+                        f"Results may be unreliable: {all_warnings}",
+                    )
+                )
+
+        except scipy.linalg.LinAlgError as err:
+            msg = (
+                "Failed while computing transition matrix, "
+                f"this might be due to outlier values in one or more realizations: {err}"
+            )
+            progress_callback(
+                AnalysisErrorEvent(
+                    error_msg=msg,
+                    data=DataSection(
+                        header=smoother_snapshot.header,
+                        data=smoother_snapshot.csv,
+                        extra=smoother_snapshot.extra,
+                    ),
+                )
+            )
+            raise ErtAnalysisError(msg) from err
         # Add identity in place for fast computation
         np.fill_diagonal(T, T.diagonal() + 1)
 
diff --git a/src/ert/run_models/base_run_model.py b/src/ert/run_models/base_run_model.py
index bd6392647de..22036bc18bc 100644
--- a/src/ert/run_models/base_run_model.py
+++ b/src/ert/run_models/base_run_model.py
@@ -801,7 +801,7 @@ def update(
         except ErtAnalysisError as e:
             raise ErtRunError(
                 "Update algorithm failed for iteration:"
-                f"{posterior.iteration}. The following error occurred {e}"
+                f"{posterior.iteration}. The following error occurred: {e}"
             ) from e
         self.run_workflows(HookRuntime.POST_UPDATE, self._storage, prior)
         return posterior