To characterize the effect of pipe inclination, low viscosity, flow rate and inlet water cut on annular flow pattern, a low viscosity oil-water two-phase annular flow in horizontal and slightly inclined (+1°, +3° and +5°) pipes with diameter of 20 mm has been experimentally investigated. A modified VOF model based on the CFD software package FLUENT was used to predict the in-situ oil fraction and pressure drop. The experimental data indicate that annular flow appears at a medium-high water cut. The slip ratio increases with flow rate increase but decreases with increasing water cut. The changes are more significant as the degree of inclination increases. Pressure drop is strongly dependent on flow rate, as it increases rapidly as inlet flow rate increase. Good agreement between the experimental data and calculated results of slip ratio and pressure drop was obtained.