Although the use of compressible drilling fluids is experiencing growth, the flow behavior and stability properties of drilling foams are more complicated than those of conventional fluids. In contrast with conventional mud, the physical and rheological properties of foam change along the wellbore. The complex flow mechanisms involved in compressible drilling fluid circulation make determination of the optimum combination of controllable drilling parameters very difficult. The accurate determination of the foam properties in circulating wells helps to achieve better estimation of foam rheology and pressure profile in the annulus. There are some key drilling parameters which would affect the circulating bottomhole pressure. Some of these parameters are controllable at the surface and some are not. The question is how to combine different controllable and uncontrollable parameters in order to obtain optimum cuttings transport performance, pressure distribution, and bit hydraulics. Using a Finite Difference Method (FDM), a mathematical model and a numerical analysis of the foam hydraulics have been presented earlier. The model has been incorporated into a computer code and has used for processing the data and closely simulate the pressure change along the wellbore during drilling a well. In this study, based on the developed simulator, a comprehensive sensitivity analysis is performed to determine the effects of important controllable and uncontrollable parameters such as: back-pressure, rate of penetration, gas/liquid injection rates, cuttings concentration, cuttings size, and formation water influx. Optimum selection of Gas Liquid Ratio (GLR), gas/liquid injection rates, back pressure, and drilling rate is the key issue in hydraulic design in order to achieve the desired circulating pressure. A proper hydraulic design will aid the industry in identifying practices that lead to drill wells more economically and efficiently.