Description of Proposed PaperAs the drilling industry moves towards extended-reach wells in more challenging formations, the need to identify operational solutions (e.g., drilling fluids/lubricity additives) to reduce friction, torque, and drag has become more important. Additionally, as the industry looks to maximize the use of water-based drilling fluids (to benefit from lower drilling fluid costs and improved environmental profile), the need to find novel additives that can improve lubricity has become more pressing. However, current methodologies for reducing downhole friction in horizontal wells generally involve reactive addition of lubricant products that are broadly acting, that may adversely affect the rheology of the fluid system, or that may dissipate or degrade over time. To address the need for new additives, a novel biotechnology method for encapsulating oil in polysaccharide-based polymers has been developed that selectively delivers high pressure lubricants at areas of high shear, pressure, and friction (e.g., between the drill string and formation or casing and also between drill bit and formation). ApplicationDue to the protection afforded by encapsulation, this targeted friction inhibitor can be proactively added to water-based drilling fluid systems, where it circulates through the system until conditions are met to break the capsule and release lubricant. Observations in laboratory and field testing suggest potential operational improvements in running casing, reduction of torque/drag, reduction of bit balling, and faster Rate of Penetration (ROP) from targeted lubrication. 2 SPE-169547-MS Results, Observations and ConclusionsOur characterization of encapsulated oil has shown the ability to reduce the coefficient of friction by over 80% in water-based mud formulations in the laboratory. In field-scale testing at the Catoosa Testing Facility, we have observed reductions in drag of up to 50%, reductions in torque of up to 45%, and up to 20% improvement in Rate of Penetration (ROP) in horizontal drilling after addition of encapsulated oil to a water-based polymer mud system. These results were substantially improved relative to observed results in an exploratory field well, in which ROP increased by up to 216% after addition of encapsulated oil in a saturated sodium chloride drilling fluid system. Significance of Subject MatterOur field testing and characterization in the laboratory and field have demonstrated the utility of adding encapsulated oil to a water-based mud-system to drill horizontal wells to improve the operational efficiency of drilling.