Abstract Managed Pressure Drilling (MPD) is an alternative to overbalanced and underbalanced drilling in conditions where pore pressures and fracture gradients are so close to each other (depleted reservoirs, deep and ultra-deep offshore reservoirs) that it is not possible to drill significant depths without setting a casing. While MPD enables an operator to drill longer footages without setting a casing, it requires precise estimation of equivalent circulating density (ECD) during drilling and static bottomhole pressure (SBHP) during non-drilling times. General practice in the drilling industry is to use rheological and volumetric properties of drilling fluids measured at surface to estimate ECD and SBHP. Consequently, ECD and SBHP measured using MWD and LWD tools in the field do not match the theoretical calculations. This study shows the importance of introducing the effect of downhole conditions to hydraulic equations in order to estimate ECD's and SBHP's accurately. Paraffin-based synthetic drilling fluid is used for this purpose. The effect of pressure and temperature on density of fluid is determined using PVT cell experiments. An equation relating the density of the fluid to pressure and temperature is determined using linear and non-linear regression techniques. Rheological characterization of the fluid was obtained on a Fann 75 HPHT rotational viscometer. A Bingham plastic model was used to define shear stress - shear rate relation of the fluid in all pressures and temperatures. The effect of pressure and temperature on plastic viscosity and yield point are determined using linear and non-linear regression techniques, similar to the ones used in PVT analysis. Both onshore and offshore cases are investigated and the effect of incorporating downhole effects to density and rheological parameters on ECD are analyzed. Introduction As a result of the depletion of most of the known reservoirs around the globe, companies are searching for oil and gas in more challenging areas such as deep and ultra-deep offshore locations. In addition, high oil prices motivate the industry to produce the last measure of oil from mature oil fields where the pressure is depleted. The conventional overbalanced drilling technique creates a major drawback to drilling in ultra-deep and depleted reservoirs. In ultra-deep offshore locations, pore pressure and fracture pressure gradients are very close to each other, and with conventional drilling, it is hard (sometimes impossible) to drill a hole up to the target depth(1). In the case of depleted reservoirs, pore pressure is so low that it is not possible to drill without damaging the formation. These challenges create the need for a new technology to drill in such hostile environments. Managed Pressure Drilling allows drilling of longer intervals by drilling overbalanced while maintaining near constant bottomhole pressure, using a combination of drilling fluid density, equivalent circulating density (ECD) and casing back pressure in a closed system(2, 3). While MPD will enable operators to drill longer sections and use light drilling fluids, it does require better wellbore pressure management. Only by managing the wellbore pressure, will it be possible to decide on which type of drilling fluid to use and how deep it can be used.