A drilling fluid has a redispersible polymer powder introduced as a water dispersion that is capable of providing a deformable latex film on at least a portion of a subterranean sand formation and which inhibits or controls fluid loss and acts as a sealing agent when used to drill in sand formations for hydrocarbon recovery operations. The redispersible polymer powder may be made by drying the emulsion in which they are formed and then grinding into a powder or by spray drying. The polymer particles of suitable size precipitate or collect or assemble onto the pores of a subterranean sand formation to at least partial seal the formation with a deformable polymer film.