There have been no bigger causalities from the drop in oil prices than the deep water drillers. And the biggest casualty of all could be Seadrill Ltd (NYSE:SDRL).

Oil prices have never fully recovered to their 2014 peaks, and the prolonged multiyear downturn has continued to zap SDRL and its rivals right in the pocket book. But while some of its competition has been navigating the waters successfully, Seadrill hasn’t been so lucky. And that comes from the firm’s massive debt load.

It seems for SDRL, that time is ticking for that debt load to finally eat the driller and its shareholders for lunch. And while there is a slight glimmer of hope, SeaDrill is very much toast. This isn’t the time to go gambling with shares.

Seadrill Kicks the Can

With oil hovering between $45 and $50 per barrel and the glut of crude not ending, it doesn’t make much sense for energy firms to tackle expensive deepwater projects. That’s a problem if you rent/own the high-tech equipment needed to tap the ultra-deepwater areas of the Gulf of Mexico or the North Sea. It’s particularly a major issue if you have more than $11 billion in debt.

So it shouldn’t come as a surprise that SDRL has cratered over the last two years and can now be had for less than a buck.

And it also shouldn’t come as a surprise that Seadrill is looking to restructure some of this debt to reduce that burden. While SDRL has been working hard with its creditors, Chapter 11 bankruptcy isn’t out of the question, and we supposed to hear the results of its efforts at the end of July. However, SDRL managed to kick the can on the negotiations.

Thanks to a re-upping of its $450 million credit facility, SDRL has extended its wheeling and dealing with creditors until Sept. 12.

For some, this has given hope that SDRL will be able to get a deal done and recover from its massive debt overhang. Part of that hope has come from the complexity of Seadrill’s obligations and company structure. There are a lot of moving parts — from billionaire John Fredriksen’s ownership to SDRL’s stakes in subsidiaries like Archer Ltd. and North Atlantic Drilling Ltd. (NYSE:NADL). It’s a complicated deal.

And with that, some think that SDRL might pull it off and current shareholders could still see some equity after it’s all said and done.

Don’t Bet On SDRL Stock

But that chance sounds pretty slim to none … mostly because SDRL said so. The firm has filed multiple times with SEC stating that Chapter 11 was on the table and that it “expects that shareholders are likely to receive minimal recovery for their existing shares.” Moreover, Seadrill’s restructuring plan is designed to either convert bonds to equity stakes and dilute/wipe out current shareholders or provide for only pennies on the dollar for bond holders. SDRL even predicts that its restructuring plans would have a grave effect on other stakeholders, such as shipyards.

In the end, there’s going to be very little for shareholders when this is all said and done.

And considering that oil has only continued to fall further, SDRL’s cash flows and earnings have deteriorated even more. For lenders sitting at the negotiating table, a firm that is dying is not really one you want to continue to bet your horse on or be willing to cut some slack. No wonder negotiations aren’t going very well.

This just ramps up the bankruptcy percentage further.

SDRL Is A Miracle Longshot

For investors looking at SDRL, the gamble is that some white knight comes in and magically save the company.

Restructuring its debts in such a manner that current shareholders would be protected instantly sends the stock through the roof. However, the odds of that happening are pretty much zero. That means at 38 cents per share, SDRL is effectively a lotto ticket and has been trading as one. And as we get closer to that Sept. 12 deadline, the odds of that ticket expiring worthless keep increasing.

That’s fine, if that’s your bag. But for any serious investor, staying away from Seadrill could be the smartest move.

As of this writing, Aaron Levitt did not hold a position in any of the aforementioned securities.