A Finite Element Model is developed for investigating the BHA dynamics. The stabilizers, WOB, and gravity effects are considered. The natural frequencies as well as the mode shapes are obtained through modal analysis. The results show that in certain drillstring configurations a small amount of parameter variation (disorder) may cause what is known in structural dynamics literature as "mode localization". If the modes are localized, vibrational energy is confined to small geometric regions instead of being propagated. This in turn results in very large amplitudes at certain locations which are not predictable through analysis of the nominal system. A field case is used to demonstrate the occurrence of this phenomenon under realistic conditions. Several operational and design methods to avoid the occurrence of mode localization are suggested.