From My 1992, Petroleum Development Oman (PDO) embarked on a series of field trials to assess the operational feasibility and commercial benefits of Underbalanced Drilling (UBD) for improving the company's oil production. The target formations were depleted sandstone reservoirs and fractured carbonate reservoirs, known for deferred oil production due to flushing by lost circulation. After four foam drilling trials in depleted reservoirs, it was concluded that, although a production increase was identified, a clear commercial quantification of UBD benefits was still lacking. A larger campaign in a single field with considerable offset production data was therefore desirable to establish the production improvement as a result of reduced impairment. Furthermore, UBD had to be extended to Underbalanced Operations (UBO) which includes logging and completing, without killing the well at any point to reap the full benefits. The scope for UBO had to be increased to include free flowing wells. The Nimr field (in South Oman) was identified as a suitable area where many offset wells are available (some 100 wells drilled to date) and where a large application of UBO is envisaged, once it has proven to be commercially attractive. The Nimr field contains viscous (400 cP) oil with traces of H2S in sandstone reservoir at a depth of 950 m with a pressure of 810.4 kPa/m. The wells are completed with a horizontal 7" predrilled liner and 4 1/2" wire wrapped screens over the reservoir. Technical solutions are presented to drill, evaluate and complete these wells without the need to kill. Health, Safety and Environment (HSE) issues of UBO have been addressed and where necessary appropriate measures have been taken to maintain the same level of HSE standards as applicable for conventional overbalanced operations. The criteria and the means to determine the economic merits of UBO were established before embarking on a campaign in the Nimr field. A maximum incremental well cost for the campaign has been set on the basis of the possible productivity increase. A possible increase in rate of penetration (ROP) during the campaign would be an added benefit, but is not considered the main driver behind the project. Horizontal wells in the Nimr field show a significant spread in inflow performance and a statistical approach was applied to determine the number of wells needed to prove with confidence that the break-even productivity increase has been achieved. Pre-campiagn trials for Coiled Tubing logging and shale stability have been conducted. Results of the shale stability trial have led to the decision to discontinue the Nimr UBO campaign because it caused the project to become uneconomical. However, PDO will continue to look for areas where UBO may offer economic opportunities, following the same approach as outlined for the Nimr field! Based on PDO's past experience and the recent developments in coiled tubing operations, it is envisaged that in 1996 a merger will take place between these two key technologies to allow for a technically integrated and commercially more attractive approach to underbalanced operations.