Chesapeake Energy Corporation (CHK) shares are trading sharply lower on Thursday, after a report emerged that the company is preparing a bankruptcy filing, citing people familiar with the matter.

Chesapeake Energy Corporation has held discussions with creditors about a possible loan that would aid operations while it goes through bankruptcy proceedings, Reuters reported on Wednesday afternoon.

Back on Feb. 28, an MKM Partners analyst gave the stock a zero dollar price target.

Analyst John Gerdes said in a note at the time that "5%-10% higher capital intensity, approximately 2% lower oil production composition and the uncertainty as to the long term [viability] of the company’s capital structure." Gerdes expected capex to dwindle to $1 billion by 2024 as production falls by a third.

On April 13, Chesapeake Energy's Board of Directors approved a 1-for-200 reverse stock split.

Chesapeake Energy shares were trading down 26.89% at $19.63 in Thursday’s pre-market session. The stock has a 52-week high of $598 and a 52-week low of $12.30 per share.