Something changed on Friday. We know it’s been the “Y2K” reaction to the coronavirus (not the virus itself) that has led to a massive worldwide slowdown as terrified politicians, scared of the public inquiry, attempt to slow the spread of the disease and buy time to manufacture a vaccine.

Each day, what data driven reporting could have existed has been thrown out, and the media isn’t even trying to calm anyone down. Remember 2 weeks ago when the media used to count new Chinese cases every day? 450, 575, 800, 2000! Well, yesterday it increased by just 45 and I didn’t read that in an article, did you? But I did hear that New York is in a panic with 4,000 people quarantined over 89 cases and declared a state of emergency!! (that said, here is one of the more balanced piece of journalism I’ve seen lately, and that isn’t saying much).

So, I’ll be the level head. If you are less than 50 and freaking out, you need to get a massage. The mortality rate is the same as the normal flu for that demographic as far as we can tell.

But, while I’m encouraging calm for people around coronavirus, it’s time to panic for US E&Ps. When the Russians decided not to play ball on production cuts, my entire oil bull thesis was blown up. As if to make the point, Russian Energy Minister Alexander Novak told reporters leaving the meetings in Vienna on Friday that it meant that members could now pump what they liked starting April 1. So though MBS and Saudi Arabia need higher prices, has citizens levered into Saudi Aramco shares at a time when oil is hitting new lows and he had two rivals arrested Friday to further consolidate his power, if you missed it, on Saturday the Saudis just priced April barrels as they begin an all out price war with Russia. Add their proxy war in Libya and the game of chicken is in full swing.

The US producer, already full of debt, and now with zero margin left is caught in the middle, and by caught I mean … dead.

This is an emergency and I’m concerned that our companies aren’t planning on bringing their A game to the crisis. Point 1. Hedging doesn’t protect the “next” barrel unless 100% of your volumes are hedged. At current prices (I’m expecting <$35 Monday am), debt : EBITDA metrics are already shot and the marginal barrel is produced from the 2020 capital program. Point 2. It takes 18+ months to pay out a completion and 36 months to pay out a well at $50. At these prices, they won’t pay out. The reality is the only chance for the survival of your shareholders and employees, and the industry in the US, is to shut down capital activity now and hope the market rebalances by September. Turn off ESPs. No buyback gas in gas lift. No fixing rod parts. No completions. No drilling.

To offset the price war between Russia and Saudi Arabia and the demand loss from coronavirus (it’s depth as of yet unknow), the U.S. needs 3 mmbo/d of production declines to be safe, and ALL surplus cash needs to be spent on debt repayment. Staff probably needs unpaid time off like United Airlines has offered. I don’t want to be an alarmist but I believe this is so much worse than 2014/2015 and we don’t have 9 more months to react. We need to react today. For F@&King real.