This paper describes an experimental investigation of formation damage in a fractured carbonate core sample under underbalanced drilling (UBD) conditions. A major portion of this study has concentrated on problems which are often associated with UBD and the development of a detailed protocol for proper design and execution of an UBD program. Formation damage effects, which may occur even if the underbalanced pressure condition is maintained 100% of the time during drilling operation, have been studied. One major concern for formation damage during UBD operations is the loss of the under-balanced pressure condition. Hence, it becomes vital to evaluate the sensitivity of the formation to the effect of an overbalanced pulse situation. The paper investigates the effect of short pulse overbalance pressure during underbalanced conditions in a fractured chalk core sample. Special core tests using a specially designed core holder are conducted on the subject reservoir core. Both overbalance and underbalanced tests were conducted with four UBD drilling fluids. Core testing includes measurements of the initial permeability and return permeability under two different pressure conditions (underbalanced and overbalanced). Then the procedure is followed by applying a differential pressure on the core samples to mimic the drawdown effect to determine the return permeability capacity. In both UBD and short pulse OBP four mud formulations are used which are: lab oil, brine (3% KCL), water-based mud (bentonite with XC polymer) and fresh water. The return permeability measurements show that a lab oil system performed fairly well during UBD and short OB conditions. The results indicate that a short overbalance pressure provides a significant reduction in permeability of the fractured formations. In most tests, even application of a high drawdown pressure during production cannot restore the initial permeability by more than 40%.