The Banuwati field offshore southeast Sumatra, Indonesia, presents major challenges to both drilling and liner running operations because of the problematic lower Baturaja limestone formation, which is a carbonate reef structure known for severe lost-circulation conditions. The operator previously had experienced severe losses with wellbore-stability issues while drilling this formation with the inability to set the 7-in. drilling liner at the planned depth in Well A-3. The liner had to be pulled out of the hole, leading to the eventual abandonment of the existing openhole section and resulting in the sidetracking of the well. Liner-while-drilling technology was identified as the most suitable solution for setting the planned 7-in. drilling liner through the loss interval because of the following:• Documented lost-circulation problems have been minimized or eliminated through the use of liner drilling technology possibly attributed to the "smear effect" (Fontenot et al. 2004) phenomenon.• The liner system selected provided for high torsional capability as well as the requirement for both a mechanical and a pressure event to release the setting tool, thus minimizing the chances of premature release.• A drill shoe with a displaceable polycrystalline-diamond-compact (PDC) cutting structure was used to drill the 8½-in. hole section and subsequently displaced before cementing so as to allow drill out with a conventional drill bit and bottomhole assembly (BHA). This paper will discuss the implementation of liner drilling technology in the Banuwati field project. This technology was used to drill successfully through the known lost-circulation zone with the 7-in. liner cemented in place, allowing the operator to reach the completion objectives while realizing a savings of more than USD 1 million.