Wellbore instability is one of the major problems that arise in drilling shale formations. Drilling in these formations may lead to breakouts and induce fractures. In Pakistan, drilling companies face quiet a number of formations that are shaly in nature and are candidates for wellbore instability issues. To counter these issues, it is required to have good understanding about the composition of the shale and its chemical reactivity with drilling fluids. Shale samples of three different formations have been obtained. These samples belong to two different regions of Indus Basin of Pakistan and were subjected to cation exchange capacity test and X-rays diffraction analysis to determine the reactivity and mineralogy, respectively. The samples were then tested for swelling properties using linear dynamic swell meter. The testing was done in two different water-based drilling fluids. The increase in height and swelling percentage for each sample was then recorded against each type of drilling fluid. A comparative analysis was done as to what type of drilling fluid systems out of the two used in the swelling test would best inhibit the swelling nature of shale for each formation in these regions of Pakistan. Finally, analytical and numerical modeling was performed on each shale sample. It was observed that the swelling parameter A (total swelling) increases significantly for Middle Indus Basin Shale Formation, and on the contrary, the filtration term (C) becomes independent of time after certain period of testing.