Abstract: In Haituozi area of Jiling Oilfield, inducing fractures and stress releasing fractures exist, and some of the fractures are well developed. Severe drilling fluid lost circulations and hole collapses are frequently taking place during drilling in this area, which not only impedes the exploration and development but also causes severe formation damages. Based on these problems and the formation structures in this area, a type of micro-foam drilling fluid with such advantages as low density, low cost, good inhibition and cuttings transportation, and easy field maintenance, etc. is applied therefore, and a foam-facilitating equipment is self-developed to enhance the field batching of the recyclable micro-foam drilling fluid, which effectively shortened the batching time needed. In field application of this drilling fluid system in Haituozi area, no sloughing or hole collapsing were encountered, and the severe lost circulations were eliminated effectively. In addition, this drilling fluid technology is also a new alternative for developing the low pressured reservoirs.