Abstract: Lost circulation is one of the main technical roadblocks to safe, fast and efficient drilling in Shunbei oilfield. Analysis of the field operation data concerning lost circulation showed that the Permian system in Shunbei oilfield is highly heterogeneous and full of fractures of different sizes and that are easy to propagate. Generally speaking, lost circulation in the north of the field is not as serious as that in the south of the oilfield. The mechanisms of the lost circulation are mainly caused by pressure differential in the Permian system. Fracture propagation, on the other hand, is a minor cause of lost circulation. A highly efficient plugging agent, SMGF-1, an LCM used while drilling is going on, was selected and added into the drilling fluid by 3%. Laboratory test with this LCM drilling fluid sample showed that the pressure bearing capacity of a sand-bed with 0.45-0.90 mm artificial fractures was 8.5 MPa, indicating that SMGF-1 is effective in controlling mud losses. Another high efficiency lost circulation material, SMKZD-1, an LCM used for controlling mud losses under pressure, was tested on a sand-bed with fractures of 1-3 mm, and the pressure bearing capacity was greater than 5 MPa, indicating that SMKZD-1 is a broad-spectrum high performance LCM. Field operations showed that the use of the two lost circulation materials improves the job quality of preventing and controlling mud losses into the Permian igneous rocks.