Losses are common in carbonate reservoir drilling due to highly fractured nature of limestone and the existence of karst. Complete and unsustainable fluid losses encountered in the offset well threatened the loss of the primary barrier -hydrostatic column -that could result in a catastrophic well control incident / loss gain scenario. Total losses in the offset well were approximately 25,000 bbls. Losses were stopped only with cement plugs. A total of 17 days were spent to mitigate the losses. The well was plugged and abandoned.To drill and develop this marginal carbonate field with efficient and low cost wells, the team decided to use Mud Cap Drilling (MCD) with Continuous Annular Injection. The sub-normal nature of the reservoir allowed the use of this technique as opposed to a more conventional Pressurized Mud Cap Drilling (PMCD) method utilizing Light Annular Mud (LAM). Continuously injecting seawater down the annulus to prevent gas migration while simultaneously injecting seawater down the string to transport cuttings up to the loss zone and cool the bit, eliminated the mud cost and fluid logistics that normally dominate the PMCD process.During the development program, two horizontal wells penetrated the carbonate at the same TVD and only one of the wells experienced complete and unsustainable losses. Carbonate structures are anisotropic. Several wells can be drilled that do not experience losses yet the next well in the same field could require MCD. For this reason it is necessary to prepare for MCD as a contingency when drilling carbonates. No kicks or well control issues were experienced during this development program. Well barrier policies were accomplished by maintaining the annulus with overbalanced fluid (seawater) at all times using this method. Well was drilled to TD and completed successfully, and all the primary well objectives were achieved. Drilling time was reduced significantly by over 50%, and fluid cost for this operation was reduced to almost zero. This innovative technique was applied for the first time in PCSB Malaysia drilling operations.