Oil and gas producer Chesapeake Energy Corp. on Sunday announced it voluntarily filed for Chapter 11 business reorganization protection, according to a prepared statement from the company.

The Oklahoma City-based Chesapeake intends to use the bankruptcy proceedings to strengthen its balance sheet and restructure its legacy contractual obligations to achieve a more sustainable capital structure, according to the prepared statement.

The company has an office in Casper and its operations are focused in the Powder River Basin. The prepared statement did not say anything about the future of this office or its employees in Casper or elsewhere in Wyoming.

Chesapeake, like other energy companies, has been hammered by low energy prices.

Chesapeake has filed customary motions with the U.S. Bankruptcy Court for the Southern District of Texas that seek "first-day" relief including authority to pay owner royalties, employee wages and benefits, and certain vendors and suppliers in the ordinary course of business.

In the prepared statement, president and CEO Doug Lawler said the company is  fundamentally resetting its capital structure and business to address its financial weaknesses and capitalize on its operational strengths.

"By eliminating approximately $7 billion of debt and addressing the legacy contractual obligations that have hindered our performance, we are positioning Chesapeake to capitalize on our diverse operating platform and proven track record of improving capital and operating efficiencies and technical excellence," Lawler said.

As part of its restructuring support agreement, Chesapeake has secured $925 million in debtor-in-possession financing from certain lenders under its revolving credit faith, which will be available upon approval by the bankruptcy court.

The financing package will provide Chesapeake the capital necessary to fund its operations during the Court-supervised Chapter 11 reorganization proceedings, according to the prepared statement.

"Over the last several years, our dedicated employees have transformed Chesapeake's business — improving capital efficiency and operational performance, eliminating costs, reducing debt and diversifying our portfolio," Lawler said in the prepared statement.

'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," he said.

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