Many oil and gas reservoirs are characterized with complex geological conditions and thin reservoirs. In recent years, drilling lateral and multilateral wells has become the best option to improve the reservoir productivity due to the increase in the well contact. However, drilling issues with high severity most often occurs, e.g., borehole washouts, breakouts, collapses, peak-offs, stuck drill pipes and drill bits, and even losses of boreholes which lead to a non-productive time and significant increase in drilling cost. To avoid these problems, it is important to have a good understanding of rock mechanics and in situ stresses, especially the maximum horizontal stress around the borehole which is critical parameter in drilling optimization and wellbore stability modeling. In this research, three dimensional geomechanical model is adopted to improve the prediction of the maximum horizontal stresses of the fields from the formed breakouts in the drilling operations. The model is based on poroelastic constitutive law in conjunction with Mogi-Coulomb shear failure criterion that considers the impact of the intermediate principal stress, 𝜎𝜎2. The maximum horizontal stress was estimated using both Mohr Coulomb and Mogi-Coulomb failure criterion to study the impact of intermediate stress. The results show that considering the intermediate principal stress have a significant impact and provide a better estimation of the maximum horizontal stress from the observed breakouts. The developed three-dimensional geomechanical model was utilized to study nine different field cases for different rock formations. In all the studied rock formations, the model was able to accurately predict the maximum horizontal stress that was compatible well with the actual field observations. Moreover, a sensitivity analysis was conducted on shale formations in Oman in order to study the effect of each parameter individually on the estimation of the maximum horizontal stress. It has been found that the stability model is sensitive to the rock geomechanical properties, which are cohesion and friction angle followed by the minimum horizontal stress and pore pressure.