We have tested the loop elevation system. We raised the mast to approximately 25 to 30 degrees from horizontal. All went well. However, while lowering the mast, it moved laterally a couple of degrees. Upon visual inspection, severe spalling of the concrete on the face of the support pillar, and deformation of the steel support structure was observed. At this time, the facility is ready for testing in the horizontal position. A new air compressor has been received and set in place for the ACTS test loop. A new laboratory has been built near the ACTS test loop Roughened cups and rotors for the viscometer (RS300) were obtained. Rheologies of aqueous foams were measured using three different cup-rotor assemblies that have different surface roughness. The relationship between surface roughness and foam rheology was investigated. Re-calibration of nuclear densitometers has been finished. The re-calibration was also performed with 1% surfactant foam. A new cuttings injection system was installed at the bottom of the injection tower. It replaced the previous injection auger. A mechanistic model for cuttings transport with aerated mud has been developed. Cuttings transport mechanisms with aerated water at various conditions were experimentally investigated. A total of 39 tests were …