New York CNN Business  — 

Chesapeake Energy helped pioneer America’s shale natural gas revolution. Now, the company is warning that it may not survive the era of cheap gas it helped to usher in.

The Oklahoma-based energy company said Tuesday in a filing to the Securities and Exchange Commission that if “depressed prices persist,” there is “substantial doubt” about its ability to continue as a “going concern.”

The warning underlines just how far Chesapeake Energy (CHK) has fallen. The company’s early bets on fracking made it a natural gas powerhouse, and at one point it was the nation’s No. 2 natural gas producer. Aubrey McClendon, Chesapeake’s late founder and CEO, was considered one of the leaders of the shale boom.

But the company now is drowning in $10 billion of debt. And it’s struggling to pay it all back, because America is swimming in excess natural gas, keeping prices very weak. Chesapeake’s average realized natural gas price dropped nearly 12% during the third quarter.

Chesapeake’s share price plunged 15% on Tuesday to $1.34 following the warning and a weak earnings report. The stock has lost 98% of its value since closing at a record high of $65.63 in July 2008.

The financial problems have been amplified by a bid to diversify away from natural gas by betting big on oil. The company’s October 2018 deal for shale oil driller WildHourse Resource Company, valued at $4 billion, including debt, came when US oil prices were trading at nearly $70 a barrel. Weeks later, crude plunged below $45 a barrel. Oil prices have yet to fully recover.

Chesapeake’s balance sheet is carrying $9.7 billion of debt, compared with $8.2 billion at the end of 2018 – nearly five times more than Chesapeake’s entire market value.

The company warned in the SEC filing that its leverage ratio could breach certain restrictions over the next 12 months. Failure to comply with these restrictions would cause the company to default on its revolving credit facility and other loans, Chesapeake said.

Chesapeake said that these restrictions could be waived by its bankers. And in the meantime, the company is scrambling to pay down debt.

Citing weak prices, Chesapeake on Tuesday announced plans to slash its drilling and completion activity by 30% in 2020. And the company plans to cut production and general expenses by about 20% in a bid to achieve free cash flow. Executives also said they will consider selling assets to raise cash.

“We’ve been keenly focused on absolute debt reduction, and we’ve made great strides,” Domenic Dell’Osso, Chesapeake’s chief financial officer, told analysts during a conference call.

“The volatile commodity price environment has pressured the speed and timing of accomplishing these goals,” Chesapeake CEO Robert Lawler said during the call, “but we will continue to make incremental progress and improve our competitiveness and profitability”