We move now from the Petroleum Lease Marketplace module to the Financial Marketplace module for a review of its features. There are a couple of overall objectives that the Financial Marketplace module provides the innovative oil and gas producer and Joint Operating Committees. Those are the alignment of the financial interests with the legal, operational decision making, cultural, communication, innovation and strategic frameworks of the Joint Operating Committee, and the compliance and governance frameworks of the hierarchy. The second objective is to make the capital structure of the innovative producer more efficient than that which is achieved under any other ERP system.
Recognizing and leveraging the Joint Operating Committee in our systems in the manner that the Preliminary Specification does is a substantial breakthrough in terms of our research. Significant value is gained by the innovative and profitable oil and gas producer by using People, Ideas & Objects Preliminary Specification and its recognition of the Joint Operating Committee. One of the keys to that value is the alignment of the seven frameworks of the Joint Operating Committee. Alignment is a key buzzword in systems integration. However, by using the Joint Operating Committee in the manner that we have in the Preliminary Specification we have achieved an alignment that is fundamental and to the core of the producer.
Within the Financial Marketplace module the alignment of the financial interest across the participants in the Joint Operating Committee is the alignment that we are seeking. To have a bank finance each of the participants working interest share, and therefore aligning the interests of that one bank with the participants of that Joint Operating Committee is the alignment that we are discussing. When banks, as they do in most instances today, take a general claim against all of the assets of the producer firm, and that occurs with each participant in the Joint Operating Committee, it is difficult to reach a consensus in terms of the banking issues for one specific property.
In terms of the second objective of the Financial Marketplace module of making the capital structure of the producer more efficient, this is provided in the following manner. There are a number of assumptions made about the way that business will be done in the future of the oil and gas industry. The Preliminary Specification makes these assumptions based on a reasonable trajectory of the manner in which “things” are progressing today. We can safely say that the level of work or activity in the production of one barrel of oil will be substantially more tomorrow then it is today. The demand for energy will be higher and the production volumes from the industry will be necessarily much higher as a result. It is also reasonable to assume that the volume of earth science and engineering resources will not materially change over this period of time. Doing more with the same resources is therefore somewhat of a given. The same could therefore be stated for the capital structure of the producer firm as well. Much more capital will need to be raised to fuel the increase in production volumes, and those volumes will require greater capital investments to be made.
It would therefore be incumbent upon us to include these assumptions in the designing and delivery of our ERP systems that we will use during this period of time. And that is what the Preliminary Specification has done. We will discuss these points more in the days to come but the two points that have to be considered are speed and control. The producer must have the ability to turn over larger volumes of capital in shorter periods of time if they want to be successful. And having speed is nothing without having the control necessary to deal with that speed. Having an ERP system that enables the producer and Joint Operating Committee with the speed and control in the capital markets are what will be necessary for the innovative and profitable oil and gas producer to deal with the marketplace in the future.
The Preliminary Specification provides the oil and gas investor with the business model for profitable exploration and production. People, Ideas & Objects Revenue Model specifies the means in which investors can participate in these user defined software developments. Users are welcome to join me here. Together we can begin to meet the future demands for energy.