1. n. 
The reduced or total absence of fluid flow up the annulus when fluid is pumped through the drillstring. Though the definitions of different operators vary, this reduction of flow may generally be classified as seepage (less than 20 bbl/hr [3 m3/hr]), partial lost returns (greater than 20 bbl/hr [3 m3/hr] but still some returns), and total lost returns (where no fluid comes out of the annulus). In this severe latter case, the hole may not remain full of fluid even if the pumps are turned off. If the hole does not remain full of fluid, the vertical height of the fluid column is reduced and the pressure exerted on the open formations is reduced. This in turn can result in another zone flowing into the wellbore, while the loss zone is taking mud, or even a catastrophic loss of well control. Even in the two less severe forms, the loss of fluid to the formation represents a financial loss that must be dealt with, and the impact of which is directly tied to the per barrel cost of the drilling fluid and the loss rate over time.
See: lost circulation
2. n. 
Another term for lost circulation, a lack of mud returning to the surface after being pumped down a well. Lost circulation occurs when the drill bit encounters natural fissures, fractures or caverns, and mud flows into the newly available space. Lost circulation may also be caused by applying more mud pressure (that is, drilling overbalanced) on the formation than it is strong enough to withstand, thereby opening up a fracture into which mud flows.
Synonyms: lost circulation
See: bridging material, circulation loss, fiber lost-circulation material, flake lost-circulation material, granular lost-circulation material, gunk plug, gunk squeeze, hydrostatic pressure, lost-circulation material, mud weight, pill, shear strength, shear-strength measurement test