If I had a topic to close out these summer months on it would have to be natural gas prices. I really like discussing this topic. The Preliminary Specification provides solutions to the operational issues that occur in the oil and gas industry. The natural gas prices are one of the critical operational issues that are addressed by our product. Who wouldn't want to discuss them. The bureaucracy has an inability to even discuss the problem and choose to ignore the consequences of these low prices. I would expect that this winter we will see no marked improvement in the natural gas prices, and no further actions by the bureaucracies.
The amount of time that the natural gas prices will remain depressed will be based on two factors. One the duration of the shale gas reserves. And the length of time that the bureaucracy remains in control. Its as simple as that. We can't expect anything to change on the basis of prayers or wishes from the collective bureaucracy. No matter their faith. However by adopting the Preliminary Specification we can remove the bureaucracy from the scene and affect the prices by removing the marginal production from the marketplace. In that way we have the opportunity to produce the shale gas reserves on a profitable basis.
Everyone is aware that the issue regarding natural gas prices is over production. The prolific nature of shale gas reserves and their abundance have depressed prices. Making all production unprofitable. The removal of 10 - 15 % of production would be all that is required to restore prices to what is recommended by the industry as what is required for a healthy industry, $6.70 / mmbtu. However whom is to take the production cut is unknown and certainly “not in my backyard” is the standard operating procedure. Therefore it continues. The concern of the producers is that the high overhead of the firm will be exposed with the lower production volume. That high overhead being a fixed cost of business and is unable to be reduced without significantly diminishing the capabilities of the firm.
The Preliminary Specification takes the producers fixed costs of the overhead capabilities and makes them a fixed cost of the industries capabilities. They are then charged on a variable basis to the Joint Operating Committee when there is production. If there is no production then there are no charges for the overhead or production costs and the property only has the costs of capital uncovered during times of shut-in production. Removing the bad optics of high overhead and low production volumes from the producer during times of shut-in production.
Making the overhead of the producer variable is the appropriate step in allowing for the producer to shut-in production. It is this feature of the Preliminary Specification that will enable the producers to reduce their production during times of overproduction and to successfully produce the shale gas reserves.
The Preliminary Specification provides the oil and gas producer with the most profitable means of oil and gas operations. 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.