What: Shares of deeply indebted oil companies Halcon Resources (HK), California Resources (CRC), and Bonanza Creek Energy (CIVI -1.28%) all plunged double digits today. Another dive by oil prices, along with renewed industry credit worries and the Fed rate hike weighed on these stocks.

So what: Oil prices dove more than 4.5% by 2:30 p.m. EST after inventories unexpectedly swelled. According to the EIA, 4.8 million more barrels were added to storage this week, which is already at levels not seen in 80 years. Worse yet, the market was expecting a drawdown of 1.4 million barrels, which suggests that oil producers continue to pump more oil out than the market can handle, driving the price of oil down.

This persistent weakness in oil pricing is causing concern that the industry might not have sufficient cash flow to pay back its debt. That concerned led credit rating agency Moody's to announce earlier today that it was reviewing 29 U.S. E&P companies for a potential credit rating downgrades. What was concerning about the list was that it contained some of the largest independent oil companies in the country. That implied that smaller drillers like Halcon Resources, California Resource Corp, and Bonanza Creek Energy are really in trouble because they don't have the scale or diversity of these larger players. Furthermore, with interest rates now set to rise, it marks the end of the cheap debt these companies had been relying on for so many years.

Debt worries aren't new for these three. Just last week California Resources announced that it had entered into a $2.8 billion bond swap deal with bondholders in an attempt to address its balance sheet concerns. Under the terms of that deal it would exchange new second lien notes for some of its older notes at $0.80 on the dollar. It's a similar approach to the one taken by Halcon Resources, which recently offered to exchange new second lien notes for some of its old notes at just $0.39 on the dollar. Bonanza Creek, on the other hand, has chosen to address its debt via an asset sale, with the company recently announcing that it will sell its Rockies infrastructure subsidiary to bolster its balance sheet. While these moves are clearly a step in the right direction, the market doesn't think that these companies have done enough to address their debt worries, especially with oil prices continuing to decline.

Now what: Smaller, debt-laden oil companies face a tough road ahead. The market is very worried that the falling price of oil is only digging these companies into a deeper hole.