diff --git a/src/ert/analysis/_es_update.py b/src/ert/analysis/_es_update.py
index 9ab3bf83fe2..5fa744f2785 100644
--- a/src/ert/analysis/_es_update.py
+++ b/src/ert/analysis/_es_update.py
@@ -192,7 +192,9 @@ def analysis_ES(
         ] = observation_handle.update_snapshot
         observation_values = observation_handle.observation_values
         observation_errors = observation_handle.observation_errors
-        if len(observation_values) == 0:
+
+        nobservations = len(observation_values)
+        if nobservations == 0:
             raise ErtAnalysisError(
                 f"No active observations for update step: {update_step.name}."
             )
@@ -203,13 +205,13 @@ def analysis_ES(
         )
 
         if A is not None:
-            noise = rng.standard_normal(size=(len(observation_values), Y.shape[1]))
+            nrealizations = A.shape[1]
+            nparameters = A.shape[0]
+            noise = rng.standard_normal(size=(nobservations, nrealizations))
             if module.localization():
                 A_ES_loc = []
-                N = A.shape[1]
-                p = A.shape[0]
-                for i in range(A.shape[0]):
-                    A_chunk = A[i, :].reshape(-1, N)
+                for i in range(nparameters):
+                    A_chunk = A[i, :].reshape(1, nrealizations)
                     corr_idx_Y = _correlated_parameter_response_pairs(
                         A_chunk,
                         Y,
@@ -291,7 +293,7 @@ def analysis_IES(
     # Looping over local analysis update_step
     for update_step in updatestep:
 
-        S, observation_handle = update.load_observations_and_responses(
+        Y, observation_handle = update.load_observations_and_responses(
             source_fs,
             obs,
             alpha,
@@ -307,16 +309,18 @@ def analysis_IES(
         observation_values = observation_handle.observation_values
         observation_errors = observation_handle.observation_errors
         observation_mask = observation_handle.obs_mask
-        if len(observation_values) == 0:
+
+        nobservations = len(observation_values)
+        if nobservations == 0:
             raise ErtAnalysisError(
                 f"No active observations for update step: {update_step.name}."
             )
 
         A = _get_A_matrix(temp_storage, update_step.parameters)
-
-        noise = rng.standard_normal(size=(len(observation_values), S.shape[1]))
+        nrealizations = A.shape[1]
+        noise = rng.standard_normal(size=(nobservations, nrealizations))
         A = iterative_ensemble_smoother.update_step(
-            S,
+            Y,
             A,
             observation_errors,
             observation_values,