What: December was a rough month for Newfield Exploration (NYSE:NFX) after the price of domestically produced crude slid 11%, to just more than $37 per barrel. That weakness, combined with credit concerns, overshadowed some of the positive news surrounding the company last month.

So what: As the price of crude oil continues to slide, it's really squeezing the margins and drilling returns of oil companies. That's causing concern that the credit quality of these companies will start to deteriorate.

This weakening outlook caused credit rating agency Moody's to put 29 U.S. oil producers, including Newfield Exploration, on review for a possible ratings downgrade. While Newfield Exploration's balance sheet is in decent shape after it sold $2.5 billion in assets and then raised capital early last year, it still isn't immune to the impact of persistently weak oil prices.

Newfield still has attractive drilling options thanks to its position in the STACK play, which is still profitable to drill in the current environment. For perspective on the profitability of the play, peer Devon Energy (NYSE:DVN) spent $1.9 billion last month to acquire a STACK producer. The driving force behind Devon Energy's acquisition was the 40% drilling returns that this company was capturing at a $40 oil price from its STACK acreage. That deal highlights the value that Newfield is creating by shifting its focus to developing the STACK play, which is something investors are overlooking due to all the negativity surrounding oil prices and credit concerns.

Last month, investors also overlooked that Newfield Exploration was put on RBC's list of quality oil stocks that should rebound in the second half of 2016. While it was only one of a dozen names on that list, which included Devon Energy, Newfield joined that group because of its lower leverage and asset quality, thanks, in part, to its strong position in the STACK play.

Now what: While December was a tough month for Newfield Exploration, the company is better positioned than many of its other peers thanks to a stronger balance sheet and prime position in the STACK. Right now, these strengths are overshadowed by weak oil prices and credit concerns; but when those shadows pass, the company could quickly reverse its December slide.