What: Shares of Pengrowth Energy (NYSE:PGH) slumped by double digits in November after the company reported a weak third quarter.

So what: For the quarter, Pengrowth Energy reported a loss of $0.61 per share, which was a whopping $0.55 per share worse than analysts were expecting. That said, the bulk of the loss was due to a non-cash impairment charge the company took thanks to to weak oil and gas prices.

On the brighter side, the company was able to grow its funds from operations by 8% quarter over quarter to $120.6 million, or $0.22 per share. That increase was largely due to higher heavy oil volumes from the company's Lindbergh assets as well as from commodity prices hedges.

The concern for Pengrowth, which is same one many of its peers have, is that the company's balance sheet is still weighed down with a lot of debt. It's an issue the company is addressing via asset sales, with it setting a goal to sell $600 million in non-core assets this year. This is a path that several of its peers are taking, with Penn West Petroleum (NYSE:PWE) also relying heavily on asset sales to right its ship. Both companies have made solid progress, with Pengrowth already halfway toward its goal and clear line-of-sight to exceed it by year-end. Meanwhile, Penn West Petroleum just recently unloaded roughly $400 million in assets, which -- when combined with other sales -- have enabled the company to reduce its net debt by more than a third since the start of 2013. That said, Penn West's sales netted it a double-digit multiple of normalized net income, while Pengrowth fetched a mere mid-single-digit multiple for one of its recent sales. In other words, Penn West's asset sales are moving the needle a bit more than those of Pengrowth. 

Now what: Despite solid cash flow generation, and progress on reducing its debt, Pengrowth investors remain very concerned about the company's ability to survive the downturn. That uncertainty really weighed on the stock last month, and likely won't be lifted until both oil prices and its balance sheet shows meaningful improvement.