Stone Energy Corp. has filed for Chapter 11 bankruptcy to eliminate about $1.2 billion in debt through a restructuring plan that would transfer control of the oil-and-gas producer to bondholders.

Stone has struggled to service its debt amid the lingering downturn in oil prices. As Reuters reports, scores of oil-and-gas exploration and production companies have filed for bankruptcy since prices began falling from more than $100 a barrel in 2014.

Stone’s prepackaged bankruptcy plan calls for its senior and convertible bondholders to forgive about $850 million of the $1.075 billion in debt they hold in exchange for control of the reorganized company. Current shareholders would retain a 4% stake, with with warrants for up to an additional 10%.

“Though Stone has said it has broad creditor backing for its plan, the company’s largest shareholder, Thomas Satterfield, has said he plans to challenge the proposed restructuring in court,” Reuters said.

Stone’s Chapter 11 petition lists $1.2 billion in assets and $1.7 billion in debt. It will not require special financing to continue operating during the bankruptcy process.

The company drills for oil and gas in the Gulf of Mexico and Appalachia. For the nine months ended Sept. 30, it generated about $264 million in revenue, a 39% decline from the year-ago period that reflects a 23% decrease in production volumes.

Under the reorganization plan, bondholders would also receive $100 million of cash from the sale of Stone’s acreage in the Marcellus and Utica shale, which was reduced from an October plan that proposed giving them $150 million in cash.

Stone CEO David Welch recently said he was confident the energy industry will bounce back, perhaps in late 2017, but companies must get their balance sheets in order to draw capital investment and prepare for the turnaround.