A composition containing a blend, reaction product, or mixture thereof, of (A) one or more hydrophobizing component or agent (e.g., an amine or amide containing compound), and (B) one or more phenolic material or composition comprising phenolic polymers or salts thereof (e.g., lignin, a lignin derivative, or mixture thereof), which may be utilized as a drilling fluid additive or as a component of a drilling fluid additive, is described. A method of making the composition or drilling fluid additive is also described. Further, a drilling fluid containing the drilling fluid additive or composition is described.