Complex sentence: Mud can be "oil-based" or "water-based", in many areas oil-based muds are being phased out as they are seen as being less environmentally friendly, although in some formations they are necessary because of chemical compatibility issues.
Split into simpler sentences: Mud can be "oil-based" or "water-based". In many areas oil-based muds are being phased out, as they are less environmentally friendly, although in some formations they are necessary because of chemical compatibility issues.