Quantification of fluid losses and filter cake formations during the drilling operations using water-based muds (WBM) are some of the critical issues related to successful operations. In this study, short term (30 min) and long term (420 min) fluid loss tests on the drilling mud with various amounts of bentonite contents were performed using the API fluid loss device with filter paper and compared it to the field clay soil (porous media) at a pressure of 100 psi (0.69 MPa). The permeability of the saturated clay soil was 0.026 mD, representing a porous formation. Bentonite content in the drilling mud was varied from 2% to 8% (by the weight of water). The field soil and bentonite were characterized using the particle size distribution and X-ray diffraction (XRD) analyses. Bentonite particle size distribution was finer than the field clay soil. Vipulanandan correlation model predicted the changes in the permeability with time in the clay soil with the filter cake formation very well. With the API fluid loss study, the long-term (420 min) fluid losses were about 2.5–4 times greater than the standard fluid loss study of 30 min (short-term). The filter cake thickness was high with the soil formation compared to the API method. Also, the fluid loss per unit area with the API method was higher than the clay soil formation agreeing with the observed differences in the filter cake thicknesses. The Vipulanandan fluid loss model predictions were compared to the API model and it predicted both short term and long term fluid losses very well based on the root mean square error (RMSE) values. Also, the Vipulanandan fluid loss model predicted the maximum fluid losses under various testing conditions.