Oil drilling in the US under pressure as the price of oil plummets.  The end of oil is not on us, but the rocky road to alternate forms of energy is well underway.

Paragon Offshore said it has elected to defer an interest payment of $15.4mm that is due today. The payment is due on the company’s $457mm senior unsecured notes due in 2022.

If the company is unable to reach an agreement with its creditors in the next 30 days, repayments on the 2022 notes and revolver could be accelerated causing a default and making Paragon Offshore the second offshore driller to enter bankruptcy this downcycle (following Hercules Offshore). Paragon’s $750mm cash balance is less than the $1.2bn outstanding on its revolver and 2022 loan.

The reason Paragon has such a significant cash balance is that the company drew down substantially all of the available borrowing capacity on their revolver on September 3, 2015 – a step to try to preserve liquidity and give them leverage in discussions with borrowers.

Also today, Seadrill announced an agreement with DSME shipyard to defer the delivery of two ultra-deepwater drillships. The West Aquila and West Libra will be pushed out to 2Q18 and 2Q19, respectively.

Offshore drillers have delayed delivery many times this downturn. But what is new here is the reason. Earlier deferrals often cited the looming oversupply and poor contracting prospects for newbuilds.   A total of $5 billion in U.S. shale writedowns. BHP Billiton said Thursday that it expects an impairment charge of $4.9 billion (post-tax, or ~$7.2 billion pre-tax) against the value of its shale assets in the US, and Tokyo Gas Company said it expects to writedown $90 million on its US shale gas project in the Barnett Shale.