Chesapeake Energy spearheaded the shale revolution a decade ago that ushered in an era of US energy independence, embodying a period of corporate extravagance as it rose to become a $35bn company. Now the indebted group is on the brink of a bankruptcy that would make it the biggest casualty of the turmoil sparked by a coronavirus that is ravaging America’s oil and gas sector.

Its shares have plunged 90 percent since January, taking its market capitalization to just $13om. Bond markets are pricing in default. A reverse stock split in April raised fears of imminent insolvency. A Chapter 11filing is at best “a matter of weeks, not months away”, said a restructuring adviser to one of Chesapeake’s creditors, adding that this would open the floodgates for other bankruptcies across the sector.

A smaller Chesapeake, freed of liabilities and more tightly focused on natural gas in the prolific Marcellus shale of the US north-east, is likely to emerge from the restructuring. Doug Lawler, chief executive since 2013, has battled for years to clean up the company’s balance sheet and lighten a $23bn debt pile amassed during a period of explosive growth under predecessor Aubrey Mcclendon.

“He inherited a company that was unsustainable,” said a former Chesapeake executive. But the coronavirus pandemic and brutal oil­ price collapse have hastened the decline. “There’s not much even a great CEO can do to change the reality of the commodity price crash.”