This report includes a review of the progress made in ACTF Flow Loop development and research during 90 days pre-award period (May 15-July 14, 1999) and the following three months after the project approval date (July15-October 15, 1999) The report presents information on the following specific subjects; (a) Progress in Advanced Cuttings Transport Facility design and development, (b) Progress report on the research project ''Study of Flow of Synthetic Drilling Fluids Under Elevated Pressure and Temperature Conditions'', (c) Progress report on the research project ''Study of Cuttings Transport with Foam Under LPAT Conditions (Joint Project with TUDRP)'', (d) Progress report on the research project ''Study of Cuttings Transport with Aerated Muds Under LPAT Conditions (Joint Project with TUDRP)'', (e) Progress report on the research project ''Study of Foam Flow Behavior Under EPET Conditions'', (f) Progress report on the instrumentation tasks (Tasks 11 and 12) (g) Activities towards technology transfer and developing contacts with oil and service company members.