Chesapeake Energy shares lost a third of their value on Monday following a report that the natural gas giant had hired lawyers with a specialization in restructuring.

Chesapeake shares closed at $2.04 US, down $1.02, trading as low as $1.51 US at one point earlier in the day. The company's shares peaked in 2008 at more than $66 and are now at their lowest level since 2000.

The stock cratered on Monday after news agency Debtwire first reported on Friday evening that the company had retained law firm Kirkland & Ellis to advise it on its options. That firm has a specialization in corporate restructuring.

Once the shares started falling, Chesapeake put out the following statement:

"Chesapeake Energy Corporation stated today that Kirkland & Ellis LLP has served as one of Chesapeake's counsel since 2010 and continues to advise the company as it seeks to further strengthen its balance sheet following its recent debt exchange. Chesapeake currently has no plans to pursue bankruptcy and is aggressively seeking to maximize value for all shareholders."

That reassurance wasn't enough to stop the bleeding, as trading in the company's shares was halted more than once on extremely heavy volume of 122 million shares.

Debt in the billions

The company, formerly the second-largest natural gas driller in America, is struggling under an enormous $9.8 billion US debt load, including $500 million worth of loans that are due in a little over a month, on March 15. The company's total debt load is almost eight times what the entire company is worth.

Last month, Standard & Poor's downgraded Chesapeake's credit rating from B to CCC+, and said its view was "negative" on the company while it considers another downgrade.

In its last financial year, Chesapeake has cut about 15 per cent of its work force and wrote down the value of some oil and gas assets, adding to impairment charges the company had already booked.

In the third quarter of 2015, Chesapeake reported a loss of $4.69 billion US, compared with a profit of $169 million US the same quarter the year before.

Analysts expect the company to post a loss of 16 cents per share when it posts quarterly results on Feb. 24, widening from a loss of 5 cents last quarter.

With files from Reuters News Agency