The problem of lost circulation while drilling with high density oil base muds, especially in the "Gulf Coast" type drilling environment, is a difficult and frustrating problem that has plagued the use of oil base muds in the drilling industry. It has been found that the problem seems to go away if the wells are drilled with water based mud systems. However, certain geological and drilling constraints such as high wellbore temperatures, high deviation directional drilling programs, and differential sticking problems preclude the use of water based muds in certain cases in these environments.

General observations in the field suggest that the lost circulation problem occurs while drilling with both diesel and mineral oil base muds, but. is less frequent with diesel systems and more prevalent at mud densities above 14 ppg. The problem also occurs in both permeable and impermeable lithologies.

To address this problem, a joint industry project was undertaken three years ago to determine the causes, mechanics and solutions to the lost circulation phenomenon. The experiment consisted of hydraulic fracturing tests in permeable and impermeable rocks using water, diesel, and mineral oil base muds with and without lost circulation materials.

This paper presents an interpretative analysis of the test data collected from the project and some insights into possible field applications of the results.

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