A method for operating a wellbore system for producing hydrocarbons from a wellbore in an underground formation in which a working fluid is circulated through the wellbore during operation. The method includes detecting a loss of the working fluid, allocating the loss to one or more layers of the underground formation, determining a ballooning potential of the wellbore based on the allocated loss and a lithology of the one or more layers of the underground formation, detecting an increase in a return flow of the working fluid from the wellbore, and comparing the increase in the return flow to the ballooning potential of the wellbore to determine whether the increase in the return flow is due to an influx of formation fluid into the wellbore. Remedial action may be taken in response to a determination that the increase in the return flow is due to an influx of formation fluid.