Residuals are the result of:

data problems:

the data may be taken at different times but used to calibrate a steady state model

the sampling schedule may not capture average conditions (aliasing - notice how the points below do not capture the character of the variation)

data may be from a heterogeneous system, but not all of the heterogeneities are represented in the model

data may be from poorly sealed or partially penetrating wells

measurement error

interpolation problems:

interpolation from grid nodes to the well location does not honor the flow equations, nor recognize the influence of heterogeneities

model problems:

poor conceptual model

model construction - discretization causes averaging as illustrated below:

Look these values over and realize that the source of the error is the coarse grid size (both laterally and vertically) relative to the change in heads in the model.