Image source: Newfield Exploration.

What: Shares of Range Resources (NYSE:RRC) slumped by double-digits last month. A range of issues weighed on the stock including a credit rating downgrade, its plans for 2016, and concerns that the company might need to issue equity.

So what: Credit rating agency Moody's continued to gut the credit ratings of oil and gas companies in February. Range Resources was among the many that saw its rating cut last month, joining Newfield Exploration (NYSE:NFX) in seeing its credit rating reduced from Ba1 to Ba3, pushing both further below investment grade. The credit rating reduction reflected the rating agency's concerns that their higher leverage could lead to problems down the road should commodity prices remain lower for longer.

That leverage was a driving factor behind Barclays putting Range Resources and Newfield Exploration on a list of companies that likely will need to raise equity capital in 2016. It sees that need because both could benefit from bolstering their balance sheets to ensure that they have the capacity to cover gaps between cash flow and capex should commodity prices weaken any further.

Range Resources, however, would rather not have to issue equity given how steeply its stock price has fallen. Instead, it's looking to close the gap between capex and cash flow by cutting capex, with the company slashing its spending by 45% from last year to just $465 million in 2016. That said, despite that big drop in spending, the company is projected to grow its production by 8% to 10% over last year. That growth, however, is really unwarranted at the moment given the company's credit concerns and the fact that the market is still oversupplied, which is another reason investors sold off the stock last month.

Now what: Investors are growing a bit concerned that the downturn in the oil and gas market is starting to make Range Resources' financial situation deteriorate. That's something that analysts on the credit and equity side both pointed out, with credit analysts downgrading its credit rating while equity analysts think it needs to raise equity capital to bolster its balance sheet. The company, however, continues to push forward on a growth plan despite those concerns and the fact that the market doesn't need any more production at the moment.

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