What: Despite it being a largely anticipated move, OPEC's decision to maintain its current output level sent oil prices down by more than 2.5% on Friday. That's because there was still some hope in the market that it would agree to stop pumping at full capacity. However, with an OPEC rescue off the table, energy stock are getting slammed with Targa Resources Partners (NYSE: NGLS), Stone Energy (NYSE: SGY), and Whiting Petroleum (NYSE:WLL) all dipping double digits at some point in the day.

So what: Targa Resources Partners experienced the steepest slide, with it down more than 15% just before 3:00 p.m. EST Friday. While Targa Resources doesn't produce a drop of oil, investors are growing gravely concerned about the ability of midstream companies like Targa to weather the downturn. The concern stems from the fact that the midstream business model of paying out nearly all of its cash flow to investors and using debt and equity to fund growth appears to be broken. With energy debt levels elevated and equity prices thrashed, it has the potential to impact Targa's ability to fund its growth at a reasonable price.

Meanwhile, Whiting Petroleum, which dipped more than 10% by 10:00 a.m. EST Friday, and Stone Energy, which slumped over 12% by 1:45 p.m. EST Friday, were more oil-price-driven moves. With oil now right around $40 per barrel it's calling into question Whiting's 2016 plan to maintain both flat production and cashflow break-even because that plan is predicated upon oil averaging $50 a barrel next year. Meanwhile, Stone Energy's weakness is more due to concerns surrounding the company's debt, which is certainly a concern if $40 it's the new normal for oil. That said, the company is selling assets to reduce its debt while also planning to curtail capital spending next year to more closely align cash flow with capex.

Now what: It's expected that oil stocks will have a bad day when oil prices take a tumble, especially after the market had been holding out a glimmer of hope that OPEC would come to its senses and reduce its output in order to boost prices. With that off the table for now, it means the market will need to continue its slow rebalancing efforts, which suggests lower oil prices -- and the negative impact that will have on oil-related stocks -- for longer than the market would like to see.

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