What: December was a rough month for the energy patch with even the stronger names like EOG Resources (NYSE:EOG) falling by double digits. This was after the price of oil fell dangerously close to the company's drilling break-even point.

So what: Thanks to growing supply, which continues to pile up in storage, the price of domestic crude slumped 11% in December to just over $37 per barrel. At that price a lot of oil plays are uneconomic, with several of EOG Resources' shale positions requiring $50 oil just to be marginally economic. That suggests the company's returns and margins going forward will be very tight and it might not be able to support its drilling program with internally generated cash flow.

Those concerns led to the company's credit rating agency putting it and 28 other U.S. independent oil companies on review for a possible ratings downgrade. EOG Resources balance sheet, however, isn't quite the concern as some of the other companies on that list given that it has the second lowest net debt-to-EBITDA ratio among its peer group. Because of that low leverage EOG Resources has been able to continue to invest in its business with the company drilling, but not completing hundreds of wells, while it also recently acquired some drilling acreage in the Delaware basin to bolster its position in that key play.

That's quite the opposite of what many of its peers are doing. As an example, Marathon Oil (NYSE:MRO) has been forced to sell assets and reduce its quarterly dividend in order to bolster its balance sheet. Marathon Oil's dividend reduction alone was expected to result in a $425 million annual savings to its cash flow. That will allow Marathon to bolster its cash position after it used $1 billion in cash to retire a looming debt maturity.

Now what: Despite a strong balance sheet, and very-low-cost drilling positions, even EOG Resources hasn't been immune to the continued drop in the price of oil. The current price will squeeze its drilling returns, while also completely eliminating some drilling locations. Having said that, it has the balance sheet to withstand the current environment and likely won't need to join Marathon in reducing its dividend just to feel more comfortable with its financial position.