A directional surveying technique has been developed to monitor the directional drilling of two closely spaced, parallel horizontal wells. The well-tracking technique, which is based on magnetostatic homing-in technology, uses the magnetic field of the casing in the first well as a reference for monitoring the drilling trajectory of the second well. For this purpose, the casing joints of the horizontal section of the first well are magnetized before running in the hole so that the unique magnetic-field pattern can be detected in the second well with a measurement-while-drilling (MWD) tool. Additional tools and access to the first well are not required while drilling the second well. The well-tracking technique was applied successfully as part of Shell Canada’s Horizontal Well Demonstration Project.