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What: November was another tough month for embattled driller Halcon Resources (NYSE:HK). Thanks to a combination of weak crude prices, lackluster earnings, and continued balance sheet worries, the driller's stock dropped double digits for the month.

So what: Halcon Resources reported its third-quarter results in early November, delivering a good, but certainly not a great report. On the plus side, Halcon's drilling costs and operating costs both trended down, which helped shrink its cash flow gap. However, the company also benefited mightily from its oil and gas hedges, which enabled the company to realize $78.44 per barrel of oil during the quarter, well above the market price of $40.71 per barrel. The issue is that the company's hedges aren't quite so strong as it heads into 2016, suggesting tough times ahead if oil prices don't improve.

And, at the moment, the timing of crude oil price improvement is anyone's guess. Especially after crude dove more the 12% last month and has continued to slide in early December.

Because crude prices remain weak, Halcon has had to focus on bolstering its balance sheet due to the tremendous amount of debt it carries. In mid-November, the company announced an offer to exchange up to $150 million of new second lien senior secured notes for some of its unsecured notes, offering just $0.39 on the dollar. It was an offer that credit investors begrudgingly accepted with the early tender results released this week, suggesting the company will be able to exchange at least $112 million of the second lien notes for $287.5 million of its existing notes, thus reducing net debt by roughly $175 million. That said, even with this exchange, it still leaves the company with more than $3 billion in outstanding debt.

Now what: Halcon Resources is really at the mercy of the market and the price of oil. It enters 2016 with weakening cash flow because it isn't as well hedged, which is going to make it tough for the company to operate because it still has too much debt for the current market environment. Suffice it to say, the company faces a real tough stretch if the price of crude doesn't start to show signs of life.

Matt DiLallo has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.