A Finer Point

 I’ve realized that I’ve made an assumption in the Preliminary Specification that may not be evident to everyone. When we’ve discussed the profitability of the Joint Operating Committee it has mostly been from the perspective of the producer corporation. Noting that shutting-in the unprofitable properties production would cause the producers corporate profits to rise as a result. Losses would no longer be diluting the earnings of the producers other profitable properties. We see this in most businesses where they shut-in or stop producing products or services that can no longer be produced profitably until such time as the market provides different opportunities. What I haven’t realized is that we’ve never discussed this from the point of view of just the single, stand alone Joint Operating Committee. A Joint Operating Committee can consist of a single well, just land, a gas plant or a unitized facility. Any asset(s) managed by a Joint Venture agreement establishes a Joint Operating Committee. Therefore it is also possible that we can treat the assets and facilities within a Joint Operating Committee as its own unique reporting entity as that is exactly what the Preliminary Specification does. Therefore, assuming a property consisted of fifty wells held through the Joint Venture agreement that would include the interests of, for purposes of this example, four producers. 

Within the Preliminary Specification we will be breaking the data down to the finest levels possible. Which means the well data at a minimum. Each well will then have its own fully identified financial statements available for each of the four producer owners to review, as well as the financial performance of the well as a whole. These will detail the capital, operating and overhead costs of each well. Note each of the producers will have a different set of financials that are unique to their share of assets characteristics and costs. For example one of the producers may have purchased an interest in the property and therefore will have far different performance criteria in which to evaluate the property. Alternatively a producer may have custom processing or an interest in the processing facilities that other producers don’t. The Preliminary Specification takes the Joint Venture Agreements determination of production allocation and applies that at each location. This technical flexibility is enabled through the highly engineered process we will be undertaking in the software development of the Material Balance Report. Each of these four producers would therefore be aggregating their specific revenues for each commodity based on the distribution defined in the Joint Venture agreement. 

Each producer's financial performance may vary materially from the point of view of profit or loss. Therefore the decision to shut-in the individual well to enhance the Joint Operating Committees performance may be conflicted. Within the Preliminary Specification we have dealt with this conflict from the Joint Operating Committee by way of the following. The Joint Operating Committee is the legal, financial, operational decision making, cultural, communication and strategic framework on an industry wide basis, and is its standard. In the Research & Capabilities module, as it is throughout the Preliminary Specification we have moved the knowledge to where the decision rights reside. As Professor Richard Langlois pointed out.

The question then becomes: why are capabilities sometimes organized within firms, sometimes decentralized in markets, and sometimes coordinated by a myriad contractual and ownership arrangements like joint ventures, franchisees, and networks? Explicitly echoing Hayek, Jensen and Meckling (1992, p.251) who point out that economic organization must solve two different kinds of problems: "the rights assignment problem (determining who should exercise a decision right) and the control or agency problem (how to ensure that self-interested decision agents exercise their rights in a way that contributes to the organizational objective)." There are basically two ways to ensure such a "collocation" of knowledge and decision making: "One is by moving the knowledge to those with the decision rights; the other is by moving the decision rights to those with the knowledge." (Jensen and Meckling 1992 p. 253). p. 9

It will therefore be within the Joint Operating Committee, where the knowledge of the financial situation at each of the producers, their abilities and capabilities and their rights to make their decisions in their best interests come into play. These are detailed in the Research & Capabilities and Knowledge & Learning modules. Within the Joint Venture Agreement it has been established within the Operating Procedure what the necessary criteria are and how decisions are to be made. The voting rights of each producer and the percentage ownership necessary to pass a decision will dictate the outcome of these decisions. As it is with the corporate decisions to shut-in an entire unprofitable property, People, Ideas & Objects believe it would be in the best interests of those producers to take the global, or gross working interest, perspective of the wells ownership interests financial performance in determining the outcome of these decisions. 

Producer bureaucrats may be jumping up and down at this point saying that this is exactly what it is that they do. Which may be correct except for three distinct differences that the Preliminary Specification implements. Until recently producers have refused and objected to shutting in any and all production. Prior to the virus they were adamant that formation damage would cause production losses to be material for the long term. This they now admit will not be the case. Secondly, the financial statement granularity that is provided by having the service providers re-engineering all of the processes of the producer to ensure they’re optimal and the data is captured at the lowest possible level. This provides for the direct overhead costs to be charged directly to the Joint Operating Committee enabling the decentralized production models price maker strategy. This can only occur with complete financial statements that detail all of the costs of exploration and production. Currently all of the overhead, however much is incurred, is recorded at the corporate level in property, plant and equipment of the producer. And woefully inadequate overhead allowances are charged to the properties. Actual, detailed and accurate financial statements are not currently prepared on any asset in North American oil and gas. If any decisions are currently made in this manner they would be woefully inadequate as they’ve left the major costs of overhead and depletion out of the decision. Lastly, the Preliminary Specification has eliminated the operator designation and replaced it with the pooling concept at the Joint Operating Committee. Decisions being made by one producer as operator introduced the conflict. Moving the decision making to where decisions are authorized removes the conflict the operator has had with the Joint Operating Committee. 

Bureaucrats always jump up and down at this point and suggest that neither the way the Preliminary Specification operates or what is suggested here is viable due to the fact that there are contracts of various kinds that need to be considered. Which of course there are. However, for the sake of a contract they’ll terminate discussion and destroy the industry on a wholesale basis. Contracts are written and rewritten everyday. If the producers do not engage any lawyers now might be a good time to begin a review of these self imposed constraints their contracts are having. Having their operations so severely constrained by a series of contracts might be considered foolish in the oil and gas industry that People, Ideas & Objects, our user community and their service provider organizations are building. A greater flexibility needs to be built into the industry and that is one of the benefits of the Preliminary Specification. 

Nonetheless there may be some wells within a specific Joint Operating Committee where the performance is not adequate to continue with its production. Within the Preliminary Specification there are two specific modules that will assist in the review and analysis of all of a producers Joint Operating Committees and the individual assets within these. They are the Analytics & Statistics module which provides analysis of the producer and the Performance Evaluation module for the analysis of the Joint Operating Committee. Let's look at two aspects of how People, Ideas & Objects enable different performance trajectories over what is available today. First, the Security & Access Control module seeks to provide the right people with the right access to the right information with the right authority at the right time and at the right place. We know the need for this access in the market is much greater today than just last year. It is not that I’m hedging on this ambitious goal set out in the Preliminary Specification. I know that Oracle has the technologies to provide this. I know that we’ve budgeted the right amount of financial resources to engineer the solution. I know that user driven software development such as People, Ideas & Objects Preliminary Specification demands that significant input from the sponsored community needs to be provided to our user community in order to achieve what is possible. This input or support has not yet been evident. And indeed it has been woefully inadequate. Having our budget funded may have producers change their minds on how to get involved by “having some skin in the game.” The commitment of the industry is the missing ingredient at this point. With the amount of losses being incurred at this point, and the history of losses we would assume this is satisfactory to the bureaucrats and this may not change until such time as their removal. 

The second aspect of how these modules provide a different performance trajectory is, we provide a division of labor between computers and people that is in stark contrast to what is implemented in the industry today. Computers will be used to store and process data. People will be employed in the efficiency and effectiveness of their organizations, quality, specialization, division of labor, automation, innovation, leadership, integration, issue identification and resolution, creativity, collaboration, research, ideas, design, planning, thinking, negotiating, compromising and financing to name just a few of the key points. Analyzing and accessing the data and information in the Joint Operating Committees and producer firms will enable new perspectives and understanding of how these financial statements can be used to generate new forms of value. A tool set that will be a blank slate that is provided to each of the producers in the form of advanced capabilities that have not been available before. Rendering a means of distinct competitive advantage that has not been available within the industry to date. 

The Preliminary Specification, our user community and service providers provide for a dynamic, innovative, accountable and profitable oil and gas industry with the most profitable means of oil and gas operations, everywhere and always. Setting the foundation for profitable North American energy independence. People, Ideas & Objects have published a white paper “Profitable, North American Energy Independence -- Through the Commercialization of Shale.” that captures the vision of the Preliminary Specification and our actions. Users are welcome to join me here. Together we can begin to meet the future demands for energy. And don’t forget to join our network on Parler or Twitter @piobiz, anyone can contact me at 713-965-6720 in Houston or 587-735-2302 in Calgary, or email me here. 

My Last Kick at This Dead Horse, For the Year That Is

 People, Ideas & Objects Preliminary Specification provides oil and gas producers with the most profitable means of oil and gas operations, everywhere and always. Who would have thought focusing on profitability would make us pariahs?

Our White Paper “Profitable, North American Energy Independence -- Through the Commercialization of Shale” documents the state of affairs in the oil and gas ERP market. A summary of that discussion would reflect that Qbyte, which is owned by P2, and SAP have the largest market shares in the industry. Qbyte began life in the 1980’s and its life cycle has been extended repeatedly due to the lack of any serious competition being fostered in the market. SAP, as I suggest in the white paper, sells an ERP solution in the oil and gas industry however do not have an oil and gas solution. Their market is the multi-tiered manufacturing concerns where revenues from one of those implementations dwarf what they earn from oil and gas. We note that IBM, the prior owner of Qbyte left as a result of a lack of support from producers in 2005, and Oracle with their Oracle Energy solution did the same in 2000. It needs to be asked if P2 and SAP were adequate for the oil and gas industry, would the industry be in the disastrous condition that it currently finds itself? I don’t blame these software vendors, they like People, Ideas & Objects have been used and abused by their alleged “customers” and it is the starvation diet they’re provided by producer bureaucrats that keeps their offering as lean as they are. My point is, if you were responsible for what People, Ideas & Objects has alleged as a scam and a fraud you might be able to argue the difference if you had pristine accounting and systems in which to argue the point. Oil and gas, as I’ve commented here many times, does not have pristine accounting and systems. The question that none of the producer bureaucrats can answer is, using actual revenues, depletion, operation and overhead at the property level, which are their most profitable properties? Or here is another good question, what is the corporation's gross overhead costs? Therefore, why would you accept any of the major vendors like Oracle or those such as ourselves who are offering solutions focusing on real profitability and standardized, actual, factual accounting to provide the facts to offset People, Ideas & Objects allegations? 

When I began this adventure in 2003 it was inconceivable that any business would redevelop their ERP systems from scratch. My belief in the necessity of a “rip and replace” method was a result of three factors that forced its justification. First there was the fundamental change that’s introduced in the Preliminary Specification as a result of the use of the Joint Operating Committee, the legal, financial, operational decision making, cultural, communication, innovation and strategic framework of the industry. Secondly the pending failure of the producers as I saw it, as a result of the specious accounting methods used in the industry at that time and still used today. And finally, the quality of the systems of the producers are predominately manual, are inadequate and incapable of being rehabilitated to satisfy the needs of basic compliance and governance. Which begs the question of how did any of this financial and operational disaster we’re witnessing today pass muster with the professional accounting firms annual audits? This in no way should be taken as a criticism of my ERP competitors who I feel have done excellent work with no financial or moral support from the producers throughout their life cycle. As an ERP provider, incremental change was the only way for them to have proceeded from a financial scavenger point of view. 

Now, in 2020 “rip and replace” has become the only method for all industries to approach the development and implementation of new ERP systems. “Rip and replace” is now seen as the manner to strategically manage the enterprise and build real value. This task however does not form part of any ERP client organization's distinct competitive advantage. Development of ERP systems and their implementation are conducted on a decades long cycle. Purchases from vendors is the proven method for success, particularly in the cloud era. Producer bureaucrats criticize People, Ideas & Objects for undertaking the scope and scale of both the Preliminary Specification which is a comprehensive and integrated business model, and implementing it across the oil & gas, and service industries and our service provider organizations. Yet, they will approach the internal development and implementation of software that will undertake the same scope for their own organization with their budget, and think nothing of the viability or success of the task. We have argued consistently that the unshared and unshareable costs of the non-competitive attributes of oil and gas administration and accounting, being replicated in whole within each and every producer firm, is another reason for the lack of current and future profitability. We hear nothing but the complaints of the complexity and difficulty of managing oil and gas from the bureaucrats as an excuse to justify their excessive personal financial compensation, yet People, Ideas & Objects use of specialization and the division of labor in order to move the fixed administrative and accounting costs of the producer to the shared, variable administrative and accounting costs of the industry in order to deal with these high costs is refused to be considered.

You’ve read in this blog a number of times the time frame that I’ve personally been working on this issue of bringing appropriate oil and gas ERP systems to market. People, Ideas & Objects Preliminary Specification is a well researched and functional business model that addresses and resolves the issues that exist in the marketplace today. As a result of the behaviors of the producer bureaucrats over the past number of decades, not only have their ERP systems atrophied through a lack of financial support. The number of offerings in the market have also atrophied. To the point where the only solution that addresses the points of concern of the industry is the Preliminary Specification. This is due to the fact that we have Intellectual Property as one of our key competitive advantages, and a foundation of our organization. But also that there is and has been no money in it for any of the ERP software vendors. These software vendors have learned the oil and gas industry in North America is small in terms of outright numbers and a difficult, technical business that once again, no one makes money in. Therefore I would ask, who would be able to satisfy the need for oil and gas ERP systems if the Preliminary Specification didn’t exist? Or maybe you could ask who would want to? You could say that I’ve been persistent. Others would have other adjectives. Who would be the one to step up with a solution that provides a resolution to the issues at hand in the current North American oil and gas industry? They would have to do so without the inclusion of any of my Intellectual Property. And they would have to undertake the same onerous and difficult task of researching how a solution would operate in a functional business model. Knowing the bureaucrats in power today, that decade of research may be timely.

The producers expectation today is that oil and gas investors are just going to resume their investing. This “muddle along strategy,” is well outside the range of reasonable. The destruction that has been undertaken by their current administration is comprehensive. They feign to have no concept of what “real” profitability is or how they’ve betrayed their prior investors. Some people outside the industry have even alleged that this betrayal of the oil and gas investors was undertaken on a deliberate basis. Yet producer bureaucrats expect to be handed the investors cash once again so they can recommence the wild, uncontrolled spending in order to crash commodity prices even further? They will belittle People, Ideas & Objects budget as comical and out of context. Yet incur on behalf of the greater oil and gas economy hundreds of billions of dollars in actual losses each quarter, and hundreds of billions of dollars in opportunity costs to make their argument. We have priced the Preliminary Specification on the basis of the value that it provides industry. We believe that it holds a value proposition in the range of $25.7 to $45.7 trillion dollars over the next 25 years. Yet these bureaucrats feign once again not to understand the basic business principles that support the Preliminary Specification. The investors that would otherwise be interested in oil and gas, if not for the obtuseness of the bureaucrats, will not be investing in an industry that has no capacity or desire to invest in its own profitability. Spending is not a distinct competitive advantage outside of oil and gas, and there are many opportunities in which investors can invest profitably elsewhere. Unprofitability and the inability to address its chronic shortfalls is not changing anyone’s mind.

How many times do you see such a united, unanimous and symetrical front being put forward across an industry such as what these bureaucrats are doing at this time. Usually that’s an indication of a scam and when one of them breaks their discipline, they’ll all scatter for shelter. I think that day is near. The motivation for bureaucrats to stay has to come into question more and more each day. Which if they did leave, which has been the historical fact in these situations, it will be done as a herd so that no one remembers any of the individuals names, then all of us will be left with the issues that we know and are aware of today, but also what we’re unaware of. It’s nice to know that the bureaucrats are able to reap the past weeks benefits of oil price increases. If we review the reasons for the recent increases we see that OPEC+ has settled on a much smaller production increase than was originally scheduled. There are a number of vaccines that are coming onto the market that should be available which will remove the government imposed foolishness that has caused the decline in demand. Nonetheless we can congratulate the producer bureaucrats on doing absolutely nothing to earn any recognition for these rewards. My question is, doesn’t now look like a good time for them to execute that exit? With a mild upswing in commodity prices, end of the fiscal and calendar year, end of the virus in sight and an undecided Venezuelan style election that may set the United States down a tragic road.

The Preliminary Specification, our user community and service providers provide for a dynamic, innovative, accountable and profitable oil and gas industry with the most profitable means of oil and gas operations, everywhere and always. Setting the foundation for profitable North American energy independence. People, Ideas & Objects have published a white paper “Profitable, North American Energy Independence -- Through the Commercialization of Shale.” that captures the vision of the Preliminary Specification and our actions. Users are welcome to join me here. Together we can begin to meet the future demands for energy. And don’t forget to join our network on Parler or Twitter @piobiz, anyone can contact me at 713-965-6720 in Houston or 587-735-2302 in Calgary, or email me here. 

Who's Going to be the Bigger Fool?

 Further to our discussion of Monday and Wednesday. Producer bureaucrats have displayed two characteristics regarding their fiduciary duty to manage their investors money. There is never any question that the commitment made to their investors is fulfilled to the letter through their rigid “capital discipline.” However, once the cash is returned in the form of oil and gas revenues the use of that money is fair game. The WSJ was the latest to notice this in their article “Shale Companies Had Lousy Returns. Their CEO’s Got Paid Anyway.” Now that producers have set their sites on other horizons they’ll use those revenues to support a business where the performance has never been proven. And the lack of performance in oil and gas will be sloughed off as “it's a dying business.” Further evidence that we must not accept that they can continue in their unaccountable fashion. If this did happen, and we’re here again in a decade from now, who would be the bigger fool?

The producer's third quarter 2020 reports reflect there is, and should be, a sense of urgency in terms of action to resolve the industry financial and operational issues. World Oil began discussing the difficulties inherent in oil and gas as a result of the situation producer bureaucrats have placed the entire oil and gas economic system in. This article argues that OPEC+ once again assumes the “swing producer” role in the market. I have argued that the swing producer is the North American producer. This assertion has been based on my misunderstanding of what the definition of swing producer is. Wikipedia provides the definition that World Oil and others are following, however I still assert that the swing producer is the one that alters their production volume to meet the demand in the market. Whether OPEC+ is trying to punish the market, the role of the swing producer, at this time is not in question. And just as it is stated overtly in the July 1986 Calgary Herald articles that we referenced on newspapers.com. OPEC has been instituting a war in the market in order to distill some cooperation among North American producers as to the chronic overproduction and oversupply that is a result of the North American based high cost producers. Overproduction and oversupply being defined as unprofitable production that has been conducted in North America for many decades. North America is the high cost producer and therefore would fulfill what I consider the swing producer role in that they will increase or decrease production based on the profitability of their production in the market. As the high cost producer their production will become unprofitable first, with OPEC production, being the lowest cost producer, continuing at a steady state always. The swing, or high cost producer would add or subtract production based on each of the properties ability to earn a profit. This would be enabled through the implementation of People, Ideas & Objects Preliminary Specifications decentralized production model’s price maker strategy into the North American market where we provide the most profitable means of oil and gas operations, everywhere and always.  

The cyclical nature of the industry's boom and bust cycle is a bureaucratic feature, not a bug. Claims to have been profitable have contrasted the five good years that I could identify out of the past 34 years. They say it’s the nature of the business and they’ll muddle through! Most people are sick of it, as industries all across the globe have worked to eliminate the boom and bust nature of their industries. Since 2008 what car manufacturer has had a bad year? None, because what they do is manage their inventories to ensure they don’t overwhelm the market with products that will kill their auto market prices. The exact thing every other business does and what we’ve recommended in the Preliminary Specification, but these producer bureaucrats have accused People, Ideas & Objects of “collusion” when we recommend that they too begin managing their inventories. Our response to their charge of collusion has been to question them on how are the independent business decisions of a producer at the property level, based on a standardized, actual, factual accounting considered collusion? We still haven’t heard their excuse, blaming or viable scapegoat regarding our argument. 

It takes intelligence, effort and a variety of other difficult attributes to make a profit. None of which has been evident in the C suite of any of the North American producers. But why not just stuff one's pockets full of cash and sit on the couch. They’ve consistently looked down their noses towards OPEC and their suggestions of working to stabilize the market. Suggesting that North American producers were all dominant and all others would be told what to do. It is true that at one time Houston was the centre of the energy universe. It should have been incumbent upon the management to have worked these boom / bust cycles out of the business by now, as they have in most other industries. We’ve only begun to see the depths of destruction that’s been conducted by those that were responsible for building the business. 

What we know at this point is that North American based producers will never implement the definition of what real profitability is or what real profits mean. They know, as do most business people, that the difference between real profits and making fudge are the same difference between vacationing in Hawaii and working in a coal mine. One of those takes work, effort, risk and skill, the other doesn’t. Why would you fly from Hawaii to take up a forty year career in Pennsylvania coal country? People, Ideas & Objects always felt that bellowing at sunbathers on the beach in Hawaii would be a futile marketing campaign therefore we took a different approach. Our marketing has always focused on those that have been affected by the inactions of the bureaucrats and to clearly identify the damage it's causing today and in the future. Our campaign has also been to promote our solution to what ails the industry and replace the disastrous bureaucracy through disintermediation. To organize our user community, which we began doing with the publication of our user community vision in March 2014, to resolve this inevitable and consequential disaster. You can only imagine how popular I was when I was completing the Preliminary Specification and speaking of the looming demise of the industry in January 2014 when oil prices were averaging $91.17. Yet seven years later this is where the bureaucrats have taken us, so much for being visionaries, and does anyone doubt what bureaucrats see in the clean energy future?

We noted earlier this week that the bureaucrats' answer to their insurance risk, culpability and guilt they’ve incurred is that they’ll move off to other industries. Capitulation of any and all responsibility is directly in line with their genetic predisposition and moving away from that which they’ve been entrusted with but destroyed. Leaving the devastation behind, and all those that have been damaged by these individuals actions. How much delusion exists within these bureaucrats when they consider they can just “shift” to clean energy with minimal staff, those being the ones they haven’t cut, the diminished resources they have at their disposal and no support from investors or bankers? A service industry that will need to be actively rebuilt with direct producer involvement and cash. And they have sugarplums dancing in their heads about zero emissions. Leaping tall buildings in a single bound, traveling faster than a speeding bullet. Clearly bureaucrats are not tough enough to stand the heat, therefore let's get them out of the kitchen. The issue now is what do shareholders and the employees of the producers have in terms of legal rights in litigation against the bureaucratic officers and directors of the producers they’ve been involved with? In a word plenty. The standard of care necessary for these individuals is that they’ve… from Wikipedia.

Tort liability is predicated on the existence of proximate cause, which consists of both: (1) causation in fact, and (2) foreseeability. A plaintiff must prove that his or her injuries were the actual or factual result of the defendant's actions.

The cause was and is the chronic overproduction and oversupply brought about by specious accounting that I’ve documented throughout this blog. The overproduction and oversupply is also documented in the commentary of Qatar’s Oil Minister in the July 26, 1986 Calgary Herald articles. The foreseeability arrives as a result of considering that I’ve been at this for 29 years, which only proves that I’m not as bright as an oil and gas bureaucrat. Yet, I was able to foresee the issue and start working on a remedy in May 1991 and had the Preliminary Specification published in December 2013. Guilt and culpability are reflected in the bureaucrats desire to cover their risk with ever more officer and director liability insurance coverage, paid for by the producers.

And from Legal Match.

A tort is an act that results in injury, suffering, unfair loss or harm to another person. Torts are governed by tort laws and serve two basic purposes (1) to compensate the victim for any losses caused by the defendant’s violations; and, (2) to deter (discourage) the defendant from repeating the violation in the future.

I would therefore ask the following questions;

• Were they (bureaucrats as officers and directors) aware of the systemic and chronic overproduction and oversupply of oil since July 1986? If not why not?
• Were they aware of the systemic and chronic overproduction and oversupply of natural gas since 2010? If not why not?
• Were they aware of Shale's inability to generate free cash flow for the past decade? 
• Were they aware of People, Ideas & Objects Preliminary Specification as a solution?
• Why were officers and directors liability insurance coverage increased in July 2020?
• Did they know, or should they have known about these imminent financial difficulties?
• What assessment of the shift to clean energy and / or zero emissions was made?
• Why is this shift supported and subsidized through oil and gas revenues?
• What actions or inactions were taken with respect to any of the above?
• What have the organizations CFO’s commented internally about the over capitalization, over supply and over production issues? What were their concerns about clean energy and zero emissions targets?
• Conversely, what has been asked of the CFO’s about the issues regarding their financial statements, the business environment or People, Ideas & Objects Preliminary Specification?

After these discussions have been undertaken it would need to be determined if fraud or fraudulent misrepresentation was involved. For determination of that we see the legal definition from Legal Match.

5) Fraud or Fraudulent Misrepresentation

Fraud is deliberate deception to secure unfair or unlawful gain. The intent behind fraudulent misrepresentation make it the most serious of all types of misrepresentation. As a result, it carries the most severe penalties. The required elements for a tort cause of action include the following:

Intentional misrepresentation or concealment of a material fact.

The misrepresentation is made with the intent for the other party to rely on it.

The other party does rely on the material fact.

The reliance on the material fact harms the person.

Fraudulent misrepresentation need not be a positive verbal assertion. It can be any act that would deceive another including simple gestures, innuendos, half-truths, and in some instances, silence.

I’m not a lawyer and therefore I’m not going to get into the finer points here. We’ve heard the bureaucrats suggest, when asked about the destruction that has been created on their watch, “that they too had lost money.” I find this a curious comment in light of the facts presented. A) who cares that they’ve lost money, B) who was in the best position to stop the loss, and indeed had the authority and responsibility to do so, and C) is this just another excuse posing as a deliberate deception?

The sequence of these events is the issue that has been present in the market since July 1986, People, Ideas & Objects solution has existed since December 2013 and nothing has been done whatsoever to remedy the losses, damage or devastation that these officers and directors have caused. We know that there was ample time and opportunities in which to work to resolve and avoid these issues and the only producer efforts were to “shoot the messenger” People, Ideas & Objects. We know two things today. Muddle along and doing nothing, the de facto strategy throughout this time, has failed catastrophically. We detailed this risk to the officers and directors in early June, July and August of this year. Yet nothing has been done except the increase in insurance coverage and the shift to clean energy. It looks to me like we’re being played for fools again. Shame on us?

The Preliminary Specification, our user community and service providers provide for a dynamic, innovative, accountable and profitable oil and gas industry with the most profitable means of oil and gas operations, everywhere and always. Setting the foundation for profitable North American energy independence. People, Ideas & Objects have published a white paper “Profitable, North American Energy Independence -- Through the Commercialization of Shale.” that captures the vision of the Preliminary Specification and our actions. Users are welcome to join me here. Together we can begin to meet the future demands for energy. And don’t forget to join our network on Parler or Twitter @piobiz, anyone can contact me at 713-965-6720 in Houston or 587-735-2302 in Calgary, or email me here. 

I Say We Want a Revolution!

 Bureaucrats have been rewarded with three vaccines that have increased the prices of oil and gas, and hence the value of their shares. I was saving this gift for the bureaucrats' Christmas however since they're now in the holiday mood and are being rewarded for doing nothing, I thought I’d indulge them. The gift that I find keeps on giving is the one we documented last summer. The two Calgary Herald articles “OPEC can see Economic Destruction” and “Return to Glory Days Unlikely.” Recall these articles documented situations in the industry that mirrored the events of today, however they were written on July 26, 1986! These can be sourced from Newspaper.com (paywall) and are listed on the front page of the business section or page 33 of that day's paper. The quotes that best reflect the situation that exists today are. 

Qatar's oil minister has called on both OPEC and non-OPEC nations and industrialized countries to cooperate with OPEC to work out a policy aimed at restoring stability to the world oil market or face grave consequences. 

He said that continuation of the current situation would lead to destruction of the economies of both oil producing and oil consuming countries. 

“OPEC has no choice but to continue the current policy of capturing a fair share of the market until non-OPEC producers discern the importance of co-operating with OPEC.” Oteiba was quoted as saying. 

And

However, what those [OPEC] ministers do at the International Hotel on the shore of Lake Geneva could help decide a lot: Whether gasoline and heating oil prices will continue to drop or rebound instead, whether the devastated economies of oil producing states and provinces like Oklahoma, Texas and Alberta will continue to crumble and whether the debt problems of Mexico will get more severe. 

Only Saudi Arabia, which started the price plunge by boosting its output so it could protect its market share, has gained revenue amid the price war. That oil rich country is earning 10 to 15 percent more oil exports than last summer. 

Amid lower prices, the number of active oil rigs in the United States and Canada has plunged. 

As we noted in August these symptoms of overproduction and oversupply have been the case since at least July 1986 and have been evident each and everyday since. It is the reason I began this journey in May of 1991 to build a system where producers could just shut-in production. Something they were unable and unwilling to do in that era of the industry. And as we see since that time there has been nothing done about a critical, global, existential issue to all of those involved in oil and gas. It is only today we find the radical change of the producers moving out of the business to pursue their lofty dreams of clean energy and zero carbon emissions. As we noted in our “radical” recommendation on Monday, let them go, or have them spin off the oil and gas exploration and production to their existing shareholders. We could also just kick the bums out. That clean energy future with zero emission is what the bureaucrats have bought into, we should free them of these oil and gas assets and allow them to travel unconstrained into their new quest. This is what everyone else has been denied over the past four decades due to their bureaucratic mismanagement and let's admit it, fraud, corruption and self dealing. 

Corporations are structured so that directors and officers of that corporation are held personally accountable for any and all shortcomings that occur knowingly or unknowingly by the principles in these organizations. People, Ideas & Objects is another attempt by myself to take “another kick at the cat” after prior failures in the oil and gas ERP market. This attempt began in August 2003 with the commencement of our comprehensive research into what a dynamic, innovative, accountable and profitable producer would need in terms of using the Joint Operating Committee. This research took the better part of a decade with the result being the Preliminary Specification being published in its final form during December 2013. It's been since that time the officers and directors have been well aware of this solution in the market. Even if I was the only one that was aware of the published Preliminary Specification it doesn’t matter. There existed a published solution in the market as of December 2013 that the officers and directors should have been aware of and that fulfills the standard for shareholders to meet the demand of the courts to prove these corporations should have known. This is the law of torts and we’ll be discussing this more on Friday. 

How this particular part of our journey began was with the publication of a series of blog posts on June 2nd, July 6th and 8th of 2020, and subsequently, that detailed the manner in which insurance companies managed risk in their portfolio of officer and director liability insurance. That insurance companies will force the cancellation of coverage if the individual continues to work for the company they deem as too risky for them to continue. Forcing the individual officer or director out the door of the producer in order to maintain their insurance coverage. It’s in the July 6, 2020 blog post that I note the Reuters article stating that increasing officers and directors liability insurance coverage was a trend they’d noticed. People, Ideas & Objects asked explicitly if this is implied guilt and culpability?

After six months has passed a quick update in terms of People, Ideas & Objects activities. Shows that none of the North American based producers have contacted us in any way shape or form. And why would they, I’m just a guy behind a keyboard. The only action that we can document on the bureaucrats behalf is the wholesale exit from the oil and gas industry into clean energy and zero carbon emissions. I have stated here throughout my writing that bureaucrats can’t, won’t and will not ever do anything to resolve their issues. They’re genetically predisposed to avoid action unless it involves covering their personal compensation or risk. 

Whether we have the investors force a spin off of the oil and gas assets into new corporations or summarily fire the bureaucrats is a choice that someone needs to make. Either way let's make Christmas just as special for these individuals as they have for everyone else. It’s time for action and I’m one guy with a keyboard, but I also have the solution to what ails the industry. There is no reflection of any care or concern being expressed for the profitability of the industry, other than what it can do for these individuals' pocketbooks. Take these oil and gas revenues away from them before they declare ever larger annual bonuses for the job not done. We never want them using oil and gas revenues to support their activities in an unrelated industry which has repeatedly proven itself to be uncommercial even with substantial government subsidies. I’m now calling for a revolution within oil and gas to clear out the bureaucracy.

The Preliminary Specification, our user community and service providers provide for a dynamic, innovative, accountable and profitable oil and gas industry with the most profitable means of oil and gas operations, everywhere and always. Setting the foundation for profitable North American energy independence. People, Ideas & Objects have published a white paper “Profitable, North American Energy Independence -- Through the Commercialization of Shale.” that captures the vision of the Preliminary Specification and our actions. Users are welcome to join me here. Together we can begin to meet the future demands for energy. And don’t forget to join our network on Parler or Twitter @piobiz, anyone can contact me at 713-965-6720 in Houston or 587-735-2302 in Calgary, or email me here.