Besides the syntax error that there's no End With statement to match
your With statement, you can't stick an unrelated action into the
setup of a .Find object and have it work for a ReplaceAll. You have to
change to doing each replacement individually in a While loop, and put
the action (in this case, drawing the line) into that loop.

Another problem is that you never update the variable i (the vertical
position) for each selection; it gets set once wherever the selection
happens to be at the time the macro starts. That, too, has to go into
the loop so it's reevaluated for each Selection location.

I made a few other small patch-ups in the following...

   Dim oFFline As Shape
   Dim i As Long
   Dim idx As Long
   On Error GoTo Endthis
   
   idx = 1
   Selection.HomeKey unit:=wdStory
   
   Selection.Find.ClearFormatting
   Selection.Find.Replacement.ClearFormatting
   With Selection.Find
       .Text = "          "
       .Replacement.Text = ""
       .Format = False
       .Forward = True
       .Wrap = wdFindStop
   End With
   
   'Selection.Find.Execute Replace:=wdReplaceAll
   Do While Selection.Find.Execute(Replace:=wdReplaceOne)
       i = Selection.Information(wdVerticalPositionRelativeToPage)
       Set oFFline = ActiveDocument.Shapes.AddLine(554, i + 12, 524,
i + 12)
       oFFline.Name = "hline" & idx
       idx = idx + 1
   Loop
   
Endthis:

--
Regards,
Jay Freedman
Microsoft Word MVP        FAQ: http://word.mvps.org
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