In this work, the motion of a nonlinear inverted pendulum (NIP) on deformable terrain due to foot contact forces is used for energy analysis and footstep placement. In order to include the linear and rotational motions of the NIP, the mass moment of inertia of the body is also considered in the center of mass (CoM) model. The terrain deformation is modeled using a spring-damper contact model, and based on the rigid body dynamics of the NIP, its motion is generated. The energy analysis of the system provides the regions of possible foot placement. Based on the loss of potential energy due to ground deformation, the limits of terrain stiffness are also obtained for walking on uneven deformable terrain.