Whiting Petroleum Corp. has filed for Chapter 11 bankruptcy protection, the first publicly traded casualty of crashing crude-oil prices that are expected to bite into record U.S. output.

Whiting was once the largest oil producer in North Dakota, now the second-biggest oil-producing state in the country.

The company said Wednesday that it has agreed with creditors to cut its debt by about $2.2 billion through an exchange of some of its notes for 97% of new equity. Existing shareholders will own 3% of the reorganized company.

Notably, Whiting said in a regulatory filing that on March 26, in response to the circumstances affecting the oil industry, it revised its compensation program to pay out more than $13 million in bonuses to several executives, including $6.4 million to CEO Brad Holly.

Numerous shale-oil and gas producers, faced with burdensome debt loads, have cut spending aggressively as oil prices have plunged by about two-thirds this year with the coronavirus pandemic slamming fuel demand, and Russia and Saudi Arabia flooding markets with extra crude.

A U.S. drilling boom over the last three years lifted national oil production to a record of roughly 13 million barrels per day, but investors have grown frustrated with poor returns. Callon Petroleum and other companies have hired advisers to restructure debt.

Shares of Whiting were trading at 37 cents a share on Wednesday, up a penny from Tuesday.

The company's market valuation has shrunk to $32 million from as much as $15 billion at its peak in 2011, when investors were discovering the burgeoning shale sector. As of Dec. 31, Whiting had $2.8 billion in debt and more than $585 million in cash on its balance sheet.

Whiting is among the most shorted oil and gas stocks, with more than 60% of its outstanding shares borrowed for short selling, according to FIS Astec Analytics data.

Analysts believe the energy sector is primed for more defaults in coming months.