What: Every oil and gas producer has its breaking point when it comes to commodity prices, and it appears that Noble Energy (NYSE:NBL) hit its breaking point in July. For Noble, it wasn't oil's decline to around $50 per barrel that was a fear for Noble investors -- it was the decline in gas prices. 

So what: Noble is a unique oil and gas producer in the sense that it is extremely diversified for its size. Unlike other mid-sized oil and gas producers that have decided to focus solely on shale development, Noble has kept a more diversified portfolio with producing assets in the Gulf of Mexico, off the coast of Equatorial Guinea, and Israel. So, unlike many peers of its size, it isn't completely reliant on what happens in the U.S. for its long-term success. 

However, that didn't seem to matter that much because the prices for all forms of hydrocarbons, both oil and gas sold to domestic or foreign markets, declined in the quarter. In the previous quarter, Noble generated a net loss of $32 million when realized prices for oil were $46 per barrel of oil and $2.81 per thousand cubic feet of gas. So with prices declining to within these ranges, it appeared to have increased investors fears that earnings would disappoint on August 3.

And disappoint they did. Noble realized prices of $56 per barrel and $2.30 per thousand cubic feet in the quarter, and it led to missing analyst estimates on revenue, EBITDA, and GAAP earnings per share.

Now what: You have to give Noble some credit. It has been one of the few companies out there being opportunistic in this down cycle as it recently acquired Rosetta Resources. Noble was able to net some pretty attractive acreage at a relatively cheap price, but it will still take higher oil and gas prices for that purchase to really pay off.

In terms of financial strength, Noble is in a better position than some independent oil and gas producers. However, anyone looking to take advantage of cheaper stock prices needs to know that oil prices are a real wild card right now, and it could be a really rough ride for a while before Noble's shares find stable footing. 

Tyler Crowe has no position in any stocks mentioned.  You can follow him at Fool.com or on Twitter @TylerCroweFool.

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