Chesapeake Energy filed for bankruptcy on Sunday to carry out balance sheet restructuring.

According to CEO Doug Lawler, by filing for Chapter 11, Chesapeake will eliminate $7 billion in debt and address its legacy financial weaknesses. It would also be able to take advantage of its operational strengths.

Lawler said, “Despite having removed over $20 billion of leverage and financial commitments, we believe this restructuring is necessary for the long-term success and value creation of the business.”

The shale oil company has secured $925 million in debtor-in-possession financing under its revolving credit facility for continuing operations during the Chapter 11 process. The company has another $600 million commitment from its lenders and noteholders upon emerging from bankruptcy.

Chesapeake’s troubles have been exacerbated by a fall in the prices of oil and gas caused by the pandemic.

Between 2010 and 2012, the company’s debt burgeoned as it attempted to fuel expansion. Chesapeake spent $30 billion more drilling and leasing than it garnered from its operations during this period.

According to CNBC’s sources, Chesapeake will now scale back operations, keeping only a small portion of its gas rigs and no oil rigs.

The company’s largest creditors include Franklin Resources and Fidelity National Financial.

Chesapeake’s debt equaled that of both Exxon Mobil and Chevron combined when Lawler began his stint in 2013.

The company’s founder, Aubrey McClendon, was ousted as CEO in 2013 and indicted on federal conspiracy charges in 2016. He died a day after the indictment in a car crash.

Chesapeake Energy shares traded 0.34% higher at $11.89 in the after-hours session on Friday. The shares had closed the regular session 7.28% lower at $11.85.

This story originally appeared on Benzinga.

© 2020 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

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