1. n. 
A volume of mud that is more dense than the mud in the drillpipe and wellbore annulus. A slug is used to displace mud out of the upper part of the drillpipe before pulling pipe out of the hole and is mixed in the pill pit by adding additional weighting material (barite) to a few barrels of mud from the surface pits. The pill is pumped into the top of the drillstring to push mud downward, out of the pipe, thus keeping the upper stands of pipe empty.
Synonyms: slugging pill
2. n. 
A small volume of fluid, often of a higher density than the main body of fluid, within the circulating or production-fluid system that influences the flow or production characteristics of the well. A slug may be placed to ensure that fluids are naturally drained from a tubing string as it is pulled from the wellbore. The term may also be applied to a small volume of liquid produced from a gas well. Similarly, it is used to describe the flow characteristics that occur when a mixture of liquid and gas result in a sporadic production regime as the liquids are unloaded erratically.