A method for forming two or more wellbores in a subsurface formation includes forming a first wellbore in the formation. A second wellbore is directionally drilled in a selected relationship relative to the first wellbore. At least one magnetic field is provided in the second wellbore using one or more magnets in the second wellbore located on a drilling string used to drill the second wellbore. At least one magnetic field is sensed in the first wellbore using at least two sensors in the first wellbore as the magnetic field passes by the at least two sensors while the second wellbore is being drilled. A position of the second wellbore is continuously assessed relative to the first wellbore using the sensed magnetic field. The direction of drilling of the second wellbore is adjusted so that the second wellbore remains in the selected relationship relative to the first wellbore.