What: While August started out pretty rough for Halcon Resources(NYSE:HK) investors, it ended much better. That's because an end-of-the-month rebound in the oil price was combined with some good news on the company's debt situation. Those two catalysts combined to fuel a big surge in the company's stock price as it climbed out of a more than 20% hole to end the month up 12.7%. 

So what: On Aug. 28, Halcon Resources announced it had agreed to a debt exchange with some of its creditors. It will be issuing $1.02 billion of new 13% third lien notes due in 2022 in exchange for $1.57 billion of its outstanding notes. The net result of the exchange will lower the company's annual interest expenses by $12 million while reducing its total outstanding debt by $548 million.

Reducing recurring expenses such as interest will really help the company better manage its cash flow during the downturn in the oil price. Meanwhile, the lower leverage will put the company in a much stronger financial position as it will have less debt weighing it down. While the company still has a lot of debt on its balance sheet, this move was clearly a step in the right direction.

Now what: Halcon Resources is doing what it can to improve its financial footing as the downturn in the oil price continues. While oil did rebound toward the end of the month, Halcon Resources needed to address its debt situation even before oil prices plunged last year. That's why the company still has a lot more work to do. But if it can continue to whittle down its debt, that will go a long way to ensuring it will be able to make it through the downturn.