New Cost Structures, Part IV

I just have to include this Tim Cook CEO of Apple quote in Inc. magazine. It captures for me where we are in society and why things are collapsing everywhere we look. Collapsing yes, but in a good way. Being cleared away so that we can rebuild anew. 

The path of least resistance is rarely the path of wisdom. We're here today because the path of least resistance is rarely the path of wisdom.

Tim Cook

Producer bureaucrats may have a point. The argument that People, Ideas & Objects have overstated the severity of their crisis is a possibility. Therefore let's look at the facts. Since 2015 investors have steadily withdrawn from their interests and investments in oil and gas. Bankers took a while longer and are finding the producers current difficulties leading to their loans being put at risk. The lack of any structural financial support may be a non-issue, as the producers assert, however the follow on consequences of diminishing working capital and exposure of their chronic overproduction, unprofitability and specious accounting were exposed as the cause of the industries demise. They managed to keep things quiet, except for one annoying blogger, for decades prior to this slip up. The long term effects of ignoring the need to remove the unprofitable production from the market, since at least July 1986, has been systemic and tragic throughout North America. Let's be reasonable, simply managing the oil and gas business as all other industries and businesses do, by managing the unprofitable overproduction and excess inventories would have seen OPEC’s repeated declarations of war never occur. Here’s a few questions: would OPEC’s declarations of war affect North American producers if they produced profitably everywhere and always? When bureaucrats are happy with their take of $1 to $2 per boe coming off the top, do they really care if the full price realized is $40 or $140 or where the rest of that money goes! 

The legacy of non-performance is a bureaucratic asset that provides an ease and comfort to them. To suggest that People, Ideas & Objects have a plan, a strategy, a business model and hope for the future of the industry, fails to pass as interests to those in the rarified air of the C suites and Boards. We know that oil and gas is subject to a never ending increase in the underlying cost of exploration and production. This cost increase affects not only the pursuit of new supplies in technically challenging areas but also the recovery of the remaining resources in place. The escalating costs are a result of the ever increasing technical difficulty of earth science and engineering effort involved in each incremental barrel of oil equivalent produced. Which is translated in the service industry with increased effort and time necessary to release the resource. With People, Ideas & Objects Preliminary Specification ensuring that all production is produced profitably everywhere and always. These escalating costs of oil and gas are captured and covered on a day to day basis as an inherent part of our business model. Everywhere and always. Note too that the $1 to $2 bureaucratic burden we just discussed would be removed from the equation.

What we know is the petroleum reserves are there. Today they are worthless as they require cash in order to be produced. They are a drain on society. They’ll need a new approach in order to build the value that will be necessary for the industry to move forward. The rest of the infrastructure has been designed and built in an era when, metaphorically, the America’s Cup was generating speeds just above the speed of the wind. We can do much better. We certainly won’t be getting to that higher performance trajectory on the “muddle through” and “do nothing” strategy of the current bureaucrats. That should be obvious. We also know the retirement of the unrecognized capital costs of past production, the reclamation costs and the costs of rebuilding and refurbishing the infrastructure need to be done nonetheless, these will not be financed by investors or banks. They’ve already paid for them, and they would be foolish to pay a second time. When an investor invests in a business it’s generally understood that their investment would generate a number of “things.” Those include dividends, reductions in debt and the funding of future capital expenditures. After they collapsed the commodity prices, these aspects of the oil and gas “business” were diverted to feed the hungry bureaucrats with their “innovative,” excessive, executive compensation. Investors would be interested in knowing how their oil and gas reserves are going to pay for the recapture of unrecognized capital costs of past production, reclamation, rebuilding and refurbishing of their infrastructure. We do not need this rebuilding process to be short changed by the bureaucrats diversion into clean energy. It is here that we can begin to see the real cost of the management failures and the absolute capitulation of responsibility with the bureaucrats viable scapegoat of moving to clean energy as a diversionary fraud. This loss of faith, trust and credibility in the bureaucrats is maybe what we should call the producers' sixth crisis. It’s not that I’m numbering these in any particular order, it's just as they’re mentioned they take the next number in the series. These crises were documented in 2020 and are summarized as follows. 

Crisis # 1,

The chronic overproduction and oversupply of oil came home to roost. Since July 1986 we’ve documented that the same issue has plagued the industry with no response or recognition from said bureaucrats. It was the financial crisis in late 2009 that saw the natural gas prices follow the same footsteps of chronic overproduction and oversupply that collapsed the North American oil prices. 

Crisis # 2

The second crisis was the effect that the virus created. Who would have thought that a pandemic would affect the most vulnerable industry? Certainly not the always unprepared bureaucrats.

Crisis # 3

The third crisis was the prediction of mine that there was going to be a looming debt crisis about to play out as soon as the October 2020 bank reviews were completed. Producers are heavily indebted. That’s based on their published financial statements. If we accept People, Ideas & Objects arguments that most of the costs in property, plant and equipment are in fact the unrecognized capital costs of past production, adjust for this with a pro-forma adjustment of 65% of property, plant and equipment to depletion. These producers are in a debt situation that will be terminal to many and action will be precipitated by the banks review. I see the consolidation trend playing out as a defensive strategy to offset the bank risk.

Crisis # 4

The bureaucrats fourth crisis is nothing other than the virus induced OPEC+ reductions in oil production of around 8 mm boe / day. This surplus capacity, with the unknown surplus capacity they had prior to their declaration of war on the North American producers is a dead weight on the price of oil for at least a decade. This of course does not consider the doubling or tripling down of the praying that has been done recently by the bureaucrats. We saw towards the end of 2020 Russia begin to assert their desire to increase their production. Strategically and tactically if they were in a war with the North American producers, their sense of timing is good.

Crisis # 5

A fifth crisis will come about when the capacities and capabilities of the industry, and what the producer once enjoyed, are no longer available. The retirement of the knowledge base of the industry has been undergoing for the past five years has been at an accelerated basis. The service industry has been cannibalizing their equipment and the people who once worked for them have found stable work in other industries. The reputation of the industry is the money is good at times, the stability however is unable to support a mortgage or family. Recently we heard the identification and utterance of a new viable scapegoat that went like. “Current employees have been poorly trained, this new generation is not as good as the old.” There is no depth to the bureaucrats capacity to point fingers.

Crisis # 6

We also identified that the risk to bureaucrats accelerated when we noted in our June 2, 2020 post the potential scenario in which their insurance providers may trigger the future withholding of coverage of the directors and officers liability policies. We then noted in a Reuters article that this knowledge was taken as fact by bureaucrats and they immediately increased their coverage by 70%. Implying a guilt and culpability in the bureaucrats documented actions. Triggering what I believe to be a systemic and complete lack of faith, trust and credibility in management by their investors. If the overproduction issue has been documented to be in existence since at least July 1986. And the Preliminary Specification has been available since December 2013. Why have the bureaucrats not undertaken their fiduciary duties?

Crisis # 7

Joe Biden. This will become the producer bureaucrats new, favorite viable scapegoat for the next four years. Nothing will be able to be done due to the bureaucratic nightmare they're being exposed to. There is nothing more that a bureaucracy loves than facing a government bureaucracy. If the industry is unable to progress in the next four years. I suggest we develop some software and organize ourselves as proposed in the Preliminary Specification for the desperately needed work that will follow Joe Biden. 

It was recently announced that 26 Republican Senators wrote a letter to ask for a meeting about the White House's Executive Orders regarding oil and gas. Seventy five percent of the deplorables believe that the presidential election was stolen. Evidence exists of severe Chinese government influence in the Biden family. The Democratic party is seeking to silence any opposition and deprogram these "white supremacists." And Republican Senators sent a letter!

When you don’t tend to your garden the weeds tend to steal the nutrients from what you expect to eat. The culling of the weeds in the industry would be the prompt removal of the bureaucrats. In light of these current and looming crises. A weed infested garden is an excellent analogy of the situation. The capital costs that investors have already paid for and are essentially resisting the bureaucrats request that they fund for a second time. Assets should generate a return that would have the capacity to maintain them in commercial condition. Secondly there are the reclamation of the assets that have been in service for their entire useful life. These costs are accelerating and are being monitored closely by the governments, environmentalists and John Q. Public. They will be hard for the producers to ignore. It will also be difficult to convince any investor or banker that producers will have any capacity to generate a return that will support further investment into their organization after reclamation costs are considered. And lastly those rebuilding and refurbishment costs will be done on someone else’s dime, not the investors and bankers. With new issues such as aging of the assets, rebuilding capacity increases and new technologies the producer bureaucrats can also view the landscape of devastation they’ve caused throughout the greater oil and gas economic structure. Bringing industry giants like Schlumberger and Baker Hughes back will be a task that will not happen serendipitously no matter how much praying is done. Bringing in new talent and training them over the long term…

Oh wait a bureaucratic just called, (facetiously of course) they’ve found even more drilling locations!

The Preliminary Specification seeks these funds from the price of the commodity. The consumer is the only source of funds large enough to approach these needs as we’ve identified them. Our value proposition is broken down into two components. The first is the demand for future capital, reclamation, rebuilding and refurbishment costs and are estimated to be in the range of $20 to $40 trillion. The second component is the $5.7 trillion in pure, incremental, and real profit, the kind that you can take to the bank. These funds can only come about with a mechanism that allows for a fair and reasonable method of production allocation across the continent. That is our decentralized production models price maker strategy. If these costs don’t get passed on to the consumer the industry will continue to operate as a charity with no donors. That’s opposed to what they’ve been these past four decades, a charity with fraudulently deceived donors. 

It’s alway good to look on the bright side and there’ll be plenty of work for everyone. Even the bureaucrats. They’ll be busy defending themselves in litigation from those that they deceived, aka as their prior investors. But as we noted last summer, there could also be a new class of litigation for them. Their insurance providers may have felt deceived when the industry began increasing their coverage by 70% after I had detailed the issue was present since July 1986 and our solution, the Preliminary Specification has been available since December 2013. Insurance companies may want to know why producers increased their coverage in July 2020 after I pointed out their lack of fiduciary duty and risk on June 2, 2020?

As for the rest of us it may seem like an impossible job, but that’s the fun part. Instead of walking around in the mindless sludge of “muddle through” for another bad year in an endless string of bad years in oil and gas. We’ll be focused on performance in order to provide the rebuilding of the industry to what we all know oil and gas could and should be. A bit of a different vision. Negative prices in April 2020 will be last year's news and we can all laugh at how bureaucrats had their satellite based Rube Goldberg machines analyzing shadows of floating tanks and crunching out paper that predicted absolutely nothing. Such an elaborate system, employing how many, that could not foresee negative $40 oil! Very effective. Bureaucrats will never take responsibility, they’ll never act in anyone’s interest but their own. They’re conflicted and compromised as all bureaucrats are focused on themselves. We should not expect anything from them other than the few words they’ll get in edgewise when we toss them out. We’d be fools not to and they certainly don’t deserve any more chances.

What we know is that we face great difficulties in this industry. We are standing on financially unstable ground. Our capabilities and capacities are diminished and the leadership of the industry hasn’t been seen in over four decades. The three costs that we’ve identified, the recovery of the unrecognized capital costs of past production, reclamation, rebuilding and refurbishment costs will swamp the demand for capital for productive operations. Productive operations being new business. What should be clear in this series is that our solution provides the resources necessary to cover all of these costs from the only source large enough to provide that scale of financial resources, the consumer. By invoking our decentralized production models price maker strategy the industry can insure that all production is produced profitably everywhere and always based on a standardized, actual, factual accounting. That these costs will be returned to the producer firm in the form of cash to be redeployed again and again. Bureaucrats believe investors will provide the capital for these costs and their unauthorized use of oil and gas revenues to fund their diversions into clean energy. People, Ideas & Objects ensure there is no longer any need, and certainly no ability, for the investment community to expand, or is it “build the balance sheets” or “put cash in the ground” totaling $20 to $40 trillion dollars and wait for the day when… 

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. Anyone can contact me at 713-965-6720 in Houston or 587-735-2302 in Calgary, or email me here. 

New Cost Structures, Part III

 When reviewing the Preliminary Specification some producers claim they have all those noted aspects of our software in operation within their organizations. And I’m sure that they do. Just as they use landlines to conduct all of their communications. That revolutionary communications with new forms that are superior and more effective exist in the market doesn’t matter, they have it all covered. With new methods in the form of email and smartphones, producers are essentially claiming they have corporate communications covered with their switchboard operators. This is to go along with their manual and spreadsheet based accounting processes. What we know that producers do not have in 2021 is they don’t have any money, they don’t earn any money, they don’t know how to make money and no one will give them any money. A viable business model doesn’t exist. Other than the Preliminary Specification they have no prospects of making any money. The bureaucrats, the C suite and directors, are fine however and they thank you for asking.

In addition to our business model finally recognizing the unrecognized capital costs of prior production and reclamation costs, there is also the rebuilding and refurbishing costs that will need to be done across the North American continent. As with much of the infrastructure that will be retiring which is leading to the reclamation costs, there are many facilities and assets that will be falling into the category of requiring significant capital investments in order to be upgraded, repaired and refurbished. Facilities and production that will remain operational for a decade or more, but must be brought up to code, to standard and to deal with the reality of the configuration of the oil and gas industry as it presents itself in the very near future. The area of electrical and electronic equipment upgrades has been a constant in the industry. These costs will take on a new urgency as the possibilities of the Internet of Things and other IT initiatives become viable, profitable additions to the asset mix. 

This will not be done on the basis of the spending frenzy that has driven the industry for the past four decades. Long term profitability will be the objective and that will invoke new dynamics, such as innovation. Today is the end of the working month of January, a time which also saw the start of the America’s Cup Challenger Selection Series in New Zealand. This year they’ll be racing the new AC75 specification which is truly an innovation that must be seen. Capable of exceeding the speed of the wind by up to four times, these yachts are impressive for their technology and their application. A key to this year's America’s Cup specification is the somewhat loosening of the regulations in terms of what teams were able to bring to their boats. On the one hand the Preliminary Specification provides the oil and gas industry with the capacity to produce oil and gas profitably everywhere and always. To my way of thinking it also provides the ability to metaphorically move the industry from sailing at a little over the speed of the wind to today’s innovative four fold performance. Providing assurance to the consumer that innovation in the earth science, engineering and elsewhere are the core of the producer organizations and industry at large. Innovations that provide for a secure, profitable, domestic supply and innovations that ensure consumers energy consumption is achieved at the lowest consumer prices. Innovation is not a happenstance occurrence. In racing, innovation is the source of winning. What People, Ideas & Objects learned in our research into the Preliminary Specification was that innovation was as much about the structure of organizations and industries as it was about anything else. The application of the necessary ingredients to facilitate innovation within the producer organizations and throughout the industry was purpose built into the 12 modules of the Preliminary Specification. It is these organizational constructs that will enable producers to innovate on the scientific basis of the oil and gas business and expand the performance and productive capacity of their organizations and the industry. Then again however, People, Ideas & Objects are the pariahs of the industry for thinking of profits and innovations.

Much of this innovation, as it always has, will be conducted outside of the producer firms themselves. Producer bureaucrats spin stories of how they’ve innovated. Yet we have strong evidence that their ability to get up off the couch and do something regarding an existential threat to their organization is not a motivating force even after decades and decades. The innovations will come from the service industry once it’s purposely rebuilt with the financial resources that producers will have generated and provided for the rebuilding of the service industries capacities and capabilities, which are currently atrophying at remarkable rates. In addition to proving to the rest of the world that oil and gas is now responsible for its own business and can take care of itself, by itself, they’ll be able to show solid profitability on top of the rebuilding exercise. Therefore the rebuilding and refurbishment of the industry doesn’t take into account just the physical infrastructure involved in the production process. It also involves the rebuilding of the service industry and the credibility within its own domain of operation. Such as geology and engineering, field operations and head office staff. Recognizing the scope and scale of the issues that have been caused and the fallout consequences of the bureaucrats' greed and ignorance, I’ll stop describing them there, it is going to take much effort for those that have this rebuilding and refurbishing process to undertake. 

And therefore that’s the opportunity. Using the assets and revenues that exist today we can turn them profitable by building and implementing the Preliminary Specification, generate the cash that is necessary to undertake these noted tasks with the previously invested “cash that had to be put in the ground” to “build bureaucrats balance sheets” and realize these capital costs for what they are, the unrecognized capital costs of past production. Use this cash for the purpose of rebuilding and refurbishing the industry infrastructure, the service industry and everything else that has been thoroughly damaged and to do so in a way that provides real value to all concerned. 

But that’s not all. The service industry are the real innovators who have brought the technologies to the field. We’ll need them to also bring with them the application of Information Technology to what it is they do and build out the Internet of Things as it applies to oil and gas. People, Ideas & Objects uses specialization and the division of labor at high levels to move the performance trajectory of the industry to a higher level. This can also be brought to the forefront of the service industry with their addition of IT. We are bringing about the means to innovate and set in place the foundation in which automation of the business processes in oil and gas can be conducted. These will also be done with the service industry as we’ve spelled out predominantly in the Resource Marketplace module of the Preliminary Specification but also in the Research & Capabilities and Knowledge & Learning modules. 

Doing this in the next quarter is not the plan. People, Ideas & Objects looks at the long term horizon of 25 years in which we can realize the full potential of our value proposition of $25.7 to $45.7 trillion. There isn’t much argument these days about these numbers. They’re easily calculated today when one sees just the current devastation that has occurred in natural gas this past decade. If it's not clear today, wait a year or two and it will be. All one has to do is extrapolate the bureaucrats business model out 25 years vs. what the Preliminary Specification provides. Today I feel it contrasts the dearth of the bureaucrats' understanding of the business that they’re in, but also their lack of a basic understanding of business. 

It’s easy for me to sit and cherry pick the advantages of our model over the business model of the bureaucrats. So let me elaborate. It was on July 26, 1986 The Calgary Herald had two articles entitled “OPEC Minister Can See Economic Destruction” and “Return to Glory Days Unlikely” were published. (Paywall, newspapers.com) They document the difficulties in the industry at the time. They show that what ailed the industry then is the exact same as what has ailed the industry for every day since. That which has fundamentally destroyed both oil and gas. It has been 35 years of pious bureaucratic mismanagement that has refused to accept reality due to it being against their own personal vested interests. Not to add further insult to injury though, it was over seven years ago in December 2013 the Preliminary Specification was published in its final form. There have been some additions here and there, but nothing material, nothing has changed with respect to the subject matter of dealing with the issue that was present since at least July 1986. I did point out the facts regarding these two dates to the bureaucrats last summer at which point they jumped into action by increasing the value of their officers and directors liability insurance coverage by 70%. Implying a guilt and culpability in their actions, and for anyone thinking that they were incapable of action, we see in this that they are as long as it involves them. 

What is and should be abundantly clear is the oil and gas business has fallen on hard times as a result of the self serving and misguided adventures of the producer bureaucrats. They have lost control and are unable to see the situation in a clear context or what is necessary to remediate the issues causing their difficulties. They’re in over their heads and they’ve been exposed in terms of the scam and the fraud that they’ve perpetrated for the past four decades. Moving away from the industry into the “clean energy” and “zero emissions” industry is a continuation of the scam for their personal benefit. Unaccountable and irresponsible in oil and gas they’ll capitulate there to move to an industry that has not performed at any point in its existence. Even with abundant government subsidy and support. That won’t be their concern as they’ll have the oil and gas revenues to fall back on and prop up the failing businesses they’re pursuing and to continue to leech off the shareholders that provided their funds for oil and gas in good faith. This is unacceptable and without a whisper of authorization these decisions were made in the dark of night without the shareholders knowledge or approval. Bureaucrats may feign that they’re operating on the basis of the demands of the shareholders that expect this transition to clean energy. Generating fake news to support their claims, however, never before has such a hijack of an industries prosperity, as reflected in its revenue stream, been diverted at the whim of a CEO who feels the quarterly report needs to have some distraction to cover for the abysmal financial performance and scam these bureaucrats have orchestrated. 

We’ve now documented three key expenditures that are massive in scale which contain the implication that they’re unable to support a future return on investment of the producer firm. In fact they’ll have to, in the case of the bloated property, plant and equipment, be required to perform in order to pay past shareholders what they are entitled to. In other words they’ll be a drain on the producers profitability in the future to pay for past promises. These three costs will rob them of the cash that they’ll be required to use to build out the industry in the vision of Preliminary Specification, therefore making their plans in clean energy untenable. In other words the cupboards are bare and they’ll be bare for the next decade. Any cash that does show up will be needed for seven different reasons just in the oil and gas business. My only recommendation is to cut the high costs of overhead immediately by disposing of these bureaucrats who have proven they have no wherewithal to deal with the issues they’ve caused. Issues that were well quantified in July 1986 and have been present every day since. And the solution as represented in the Preliminary Specification as it has stood for the past seven years. When we lose these bureaucrats, we gain the ability to begin rebuilding the business, stop the diversion of monies to industries that are of no interest to oil and gas and cease the leakage of cash out the back door. 

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. Anyone can contact me at 713-965-6720 in Houston or 587-735-2302 in Calgary, or email me here. 

New Cost Structures, Part II

 I want to start this second post of our cost structure series with a comment that needs clarification. I’ve repeatedly noted the amount of time that I’ve been working on bringing a solution to the industry and the zero support that I’ve received from industry. Maybe I’m wrong in my approach, I don’t know, I’ll know in the future. Why I raise these points is to highlight the opportunities and timeliness that producer bureaucrats have forsaken. And to contrast their lack of action. I’ve been motivated to do this work and am very satisfied with what I think I’ve accomplished, the timeliness of the solution, the opportunity to resolve what can only be described as the largest issue in oil and gas, ever, and set the industry on a path to profitability. Altruistic and deluded, probably, but I enjoy what I do to the extreme. Lately, it has taken on an even greater appeal to me and I’m having found what feels like a new approach to this work. 

Our second major cost category that People, Ideas & Objects sees escalating uncontrollably in the very near future is none other than the reclamation costs looming on the horizon. We expect these costs to escalate and make up a noticeable portion of our value proposition which we’ve valued in the $25.7 to $45.7 trillion range over the next 25 years. These are somewhat new costs as the fields where oil and gas production began are beginning to be retired and the volume of retirement of these fields will increase as time passes. Producers have been forced to account and to set aside provisions for reclamation costs by the various regulators of the areas in which they operate. However, as we all know and understand, these provisions would be classified as inadequate to fulfill their purpose. Methods have been employed by the producers to try and avoid these upcoming costs and some of the various governing jurisdictions are beginning to deal with the producers who are developing such “innovations.” The key here is that these costs are going to be significant. The point that I want to make is that the material nature of them is one area of concern. The second is that these cost’s capability to attract a return on investment is zero, they are a drag on the producers activities and will become more evident to everyone as time goes on. Especially evident to any prospective, future investors that today’s bureaucrats may have thought they might be able to rope in. 

Without the capacity to deal with these costs in their high throughput production model. Today’s oil and gas producers will incur them at the expense of their alleged “profitability” however specious that number may be. The only alternative is the Preliminary Specifications decentralized production models price maker strategy that will have profitable production produced everywhere and always. Profitable from the point of a view of a reasonable accounting for capital, operations which would include reclamation costs, and overhead. Although it would be reasonable to suggest that the producer has benefited from the production of these fields that need to be reclaimed, it is also the consumer that has benefited the most from the oil and gas they have been able to consume. Therefore passing these costs on to the consumer as they’re incurred is the only reasonable method for the producers to maintain their “real” profitability as People, Ideas & Objects define it, and to deal with these escalating reclamation costs. It will be the consumer that will demand that the land be reclaimed to pristine condition and consumers will support the environmentalists in these endeavours. It is therefore reasonable to assume that the costs of reclamation and the environmentalists requirements will be passed on to the consumers as they’re incurred. Investors are not going to bite in the current bureaucratic business model that sees investors being annually called for this cash, and exposed for the liability and litigation of reclamations non-performance.

With the high throughput production model, which producers currently use, they produce at 100% everywhere and always. This is in order to cover as much of the high overhead that is necessary and incurred in order to produce at full capacity. With the introduction of shale based reserves to an already decades old toxic model of chronic overproduction and oversupply, or as we define it unprofitable production, global markets for oil and gas commodity prices have collapsed beyond what will remedy themselves. Any discussion of higher commodity prices with this model in place is as specious as the producers financial statements. Hoping and praying for higher prices has to be doubled or tripled down on or alternative solutions need to be deployed. OPEC+ have reduced their production by 7 million barrels per day due to the virus. We are unaware what surplus capacity they had, and importantly could now have, prior to this covid induced reduction. Of note and significance is that crude oil futures are $52.80 for April 2030. Natural gas prices on a global scale will not be remediated without deliberate and sustained effort within the United States over the course of many years. According to the commodity futures market, natural gas prices, primarily due to U.S. shale gas production, has obliterated any hope of commercial gas prices for at least the next decade. Without active intervention to remediate the market and return it to profitable pricing this situation in natural gas will not change. Depressed pricing in North America was the issue a few years ago. The world’s prices for natural gas remained profitable. This prompted the LNG buildout on the Gulf Coast. The oversupply in North America then spread across the globe to where the natural gas prices for LNG are at times inadequate to pay the shipping costs. Who would sit and do nothing in the face of such destruction and dismal future prospects when the Preliminary Specification offers the alternative? We’ve seen through the obstinance of the bureaucrats that they will not change. This bureaucratic obstinance is now into its second decade, or maybe that is better expressed as it's second decayed. 

The Preliminary Specifications decentralized production models price maker strategy enables this oil and gas price remediation to occur through use of the commodity market mechanisms. By realizing that oil and gas are subject to price maker characteristics and that by only producing what can be produced profitability, ensuring that all costs are included in a fair, objective, standardized and reasonable accounting, can producers begin to generate the financial resources necessary to operate the industry as needed, but also remediate the commodity markets and stabilize them by removing the boom / bust cycle and pay for the looming reclamation and other costs we’re detailing here. Managing product inventories to ensure that overproduction does not destroy prices in business is about as American as apple pie. Yet the producer bureaucrats believe it to be something evil. Or, it’s just they’ve personally never had it so good under their current method. They also assume that the “market” will take all the production they can give it, which sort of defines the ridiculous nature of this issue and my discussion. For them “markets” are magical.

As we documented last summer OPEC have been attempting to work with North American producers since at least July 1986. Their inability to do so has led them to employ their last resort of declaring a number of price wars. Their last declaration of war occurred just before the virus. Inaction through the muddle along strategy has been the de facto, unanimous procedure that has solved all of the North American producers problems since 1986. However any of the issues bureaucrats may have felt were resolved by their inaction were only deferred, and assuaged by investor cash and now those issues cumulatively stand as an existential threat to their organizations and the greater oil and gas economy at large. A threat that they refuse to acknowledge or deal with. And now with these previously ignored and unidentified reclamation costs building, as just one of many aspects of this threat, their business model is unable to proceed without the structural capital support of their investors and bankers due to the critical loss of faith, trust and credibility that would otherwise be needed. It’s good to recall however the bureaucrats are fine, and they thank you for asking.

To address this requires the type of plan and strategy that the Preliminary Specification provides with profitable production everywhere and always. Alternatively and finally, bureaucrats announced their own plans and strategies during the fourth quarter of 2020. We haven’t heard from everyone yet, however, eventually we will as they begin to see the effectiveness of the plan and strategy as laid out by BP, Shell, Total, and to a lesser extent Exxon being welcomed in the media and John Q. Public. These plans include nothing other than the permanent movement away from dirty hydrocarbons to clean energy and zero emissions. Which kind of solves all these bureaucrats problems doesn’t it? I suggest we suspend their administration post haste and ensure that they achieve their objectives immediately. That is we take the oil and gas revenues and assets away from the bureaucrats and spin them off to the shareholders who paid for them. That way bureaucrats can approach their new business plans with a clean slate and start anew. Feel the fire of the entrepreneurial spirit burn as their ideas are met with the reality of the bleak revenues they generate.

One of the methods that we’ve seen used throughout the years to deal with the reclamation costs here in Canada has not been that innovative. Although it ultimately proved unsuccessful in this transaction, it also seems to have awoken the administrative state to the inherent risks of oil and gas reclamation costs to society. The method was used by Shell regarding their Jumping Pound, Waterton and Caroline natural gas facilities. Caroline being in the high 90%’s of H2S. Jumping Pound was developed in the early 1950s, Waterton in the 1960s and Caroline in the 1980s. My father worked in the engineering department for Shell and I remember tagging along on some of his trips to Waterton while it was being built. Gathering lines were being welded and the place was abuzz with activity. To cross the trenches that were dug for the lines I was too young to jump across so I was just picked up and tossed across from one adult to the other. It was very interesting to me and a much different time than it is today. Selling these properties in a package to a very small oil and gas producer that the regulators didn’t think had the wherewithal to be able to operate them. Secondly, this may have been an attempt to avoid the reclamation costs that the Alberta government assessed at many hundreds of million dollars, and in this article regarding the transaction, some are speculating that Alberta may be currently facing $.5 trillion in reclamation costs. In this sense I guess it’s been fortunate that Alberta was nowhere near as productive as the United States. A review of the referenced document will provide a better understanding of the scope and scale of the problem just in Alberta. 

The story says a lot about where the world’s fossil fuel industry finds itself at this precarious moment, as it struggles to balance falling revenues against mounting environmental liabilities.

And

It’s not known whether Sorensen mentioned to O’Regan the findings of a 2018 analysis on the economics of exporting LNG from Canada. The Canadian Energy Research Institute, which is partly funded by the government, concluded any project would need at least a $100 oil price or $11.6 per million British thermal units over the life of the project to be viable. (The European Union natural gas import price is currently $2.12, a nearly 60 per cent drop from last year’s $4.90 per million British thermal units.)

Of interest is the article's noted distribution of risk of the reclamation costs to the various funding units involved in the transaction. If there was a failure of the producer these costs would fall to the remaining producers in the industry, based on the current model. Or society in general. It is the funding risk that one party experienced in this transaction that producers should analyze to determine if this will further disable their capital structures from being rebuilt in the future, if they should continue to muddle through without an answer on how their businesses will operate?

We noted the high throughput production model that producers currently use. Another aspect of that business model is cost control. Which is an engineering discipline derived from the efficiency objective. Oil and gas has become a science project with the dominance of the earth science and engineering people dominating the principal positions in the industry. This has become the culture for the past three decades with the business types taking a back seat behind the main receptionist, huddled in with the mail boy and switchboard operators. Cost control has been the only area of concern. That oil and gas is a business, and businesses are profitable are foreign concepts. Passing the costs of oil and gas exploration and production on to the consumers is considered abhorrent and the talk of the devil by the scientific culture of the industry. To paraphrase “there are investors who will help them build the business in whatever direction and to whatever size that no one knows or understands.” It’s an adventure and “you have to put cash in the ground.” To suggest that the costs be passed on to the consumer in a timely and accurate manner, and particularly the capital costs of a capital intensive industry, invokes shock and fear, but to those who suggest such hearsay, persecution.

Who benefits from oil and gas is a question that’s never asked. On a barrel of oil equivalent basis, society leverages that barrel into 23,200 man hours of labor. This is a phenomenal, unbelievable achievement that represents the brilliance of all those that have come before us throughout history. On a personal consumption basis the costs are lower than bottled water. It is therefore disrespected, abused and wasted without regard to its value or scarcity. If the prices were to triple or quadruple from today they would still provide the greatest value proposition of all time. Then they may even come to be appreciated as commodities of value and appreciate the work that is done to provide for them. Lunacy I know, but that’s why I like this job. Our movement away from hydrocarbons will be the death of our standard of living in a rapid manner. It is the most powerful economy that consumes the most energy, which today is China. Oil and gas is here to stay as our primary source of energy for the remainder of this century and any thoughts otherwise is highly regressive to our standard of living. This naval gazing about the future energy makeup is an academic exercise which distracts and doesn’t belong in the industry. Our role is to provide the economy with the most cost effective, yet profitable oil and gas production to ensure that North America reaches its full potential. 

Producer bureaucrats believe that the capital costs of oil and gas exploration and production have to be funded by investors. As these costs increase and the environmental costs escalate exponentially, lets search for those naive and stupid investors willing to pay the trillions of dollars for reclamation costs? No, lets first get rid of the bureaucrats, implement the Preliminary Specification, and start fueling the North American economy profitably. 

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. Anyone can contact me at 713-965-6720 in Houston or 587-735-2302 in Calgary, or email me here. 

New Cost Structures, Part I

 First, I want to comment that my arguments and accusations directed to the producer bureaucrats in 2020 became rather sharp. Some may think with a new year I’d revisit my approach and amend my ways. Which I’ve done. I can’t hold any respect for these producer bureaucrats. The damage and destruction has been epic as I’ve discussed throughout the past fifteen years. I have difficulty holding any respect for these producer bureaucrats, those being the C suite and directors, it is they who are responsible for all the damage, it is they who should be accountable and it is they who have had the authority and power to do something about it. Let us not forget it is they who have profited from their administration at the expense of everyone else. And we have seen, as I enter my thirtieth year of attempting to resolve these issues that they continue to play their Mr. Magoo, Sgt Schultz, and Bernie Madoff routine for their own personal financial benefit. They must be shown the door. On a lighter note I’ve awarded all these bureaucrats 2020 participation ribbons to go with their prior “awards.”

I want to begin the new year with the identification of three new cost categories oil and gas producers will need to deal with for the next few decades. The material nature of these costs will put an exclamation mark on their chronic non-performance and make investors want to run the other way, even faster. This is due to the nature of these costs and their inability to ever generate a return on investment at any point in the bureaucrats current business model. These are the types of costs that will haunt the industry in whatever configuration it takes and it is these costs that can be clearly identified today due to the lack of the producer bureaucrats ability to pay attention to the business of the business. For them it is all about earth science and engineering. It is only the Preliminary Specification and the business models that are inherent in our offering that provide the industry with a methodology that deals with these costs. It is these costs that we identified much earlier and which materially inflate our value proposition to the $25.7 to $45.7 trillion dollar range. We have seen some unsuccessful methods used in the industry to try and deal with these costs, which we’ll discuss. None have been effective and the methods used have only served to provide further financial losses and an inability to command the necessary higher commodity prices in order to capture and recover these costs. We’ll be discussing in detail each one of these cost categories over this and the next two posts and then provide an overall summary as the fourth. The overall question that we’ll answer in this series is how will producers pay for these costs and where will the money come from?

The first category of costs will be familiar as a result of the discussion we’ve had over the past number of years. We’ll be reviewing these points once again with a few new attributes added to the discussion. Although the first category of cost we’re discussing will be looked down upon by the bureaucrats as financial or accounting losses. These are real, tangible losses over the course of the organization's life cycle. Our first category of costs is the fully discussed issue of bloated property, plant and equipment as recorded on the highly distorted financial statements of the producers. To suggest that these financial statements are generic and oddly similar throughout the industry would be an understatement. The size of the producer is the only difference between them. All of them have massively bloated property, plant and equipment offset by essentially very high levels of debt. The working capital is miniscule if it exists, with most reporting a strong trend toward diminishing working capital on a quarterly basis. This trend has left most of the producers with negative working capital. Shareholders equity in many producers no longer exists as the retained losses now exceed the capital that was raised during its lifetime. In most producers the losses have materially diminished or extinguished the retained earnings of the producers, and in many cases shareholders equity. If as we suggest property, plant and equipment is overstated, and these are what support the very high levels of debt, then the leverage is far in excess of the criteria that are claimed and these producers are seriously overleveraged. It is however sunshine and rainbows as far as the bureaucrats are concerned.

People, Ideas & Objects have asserted that the “assets” in property, plant and equipment are nothing of the sort. They are the unrecognized capital costs of past production. This is how we perceive the distorted nature that producers have interpreted the SEC requirement for Full Cost accounting and associated Ceiling Test. These accounting regulations suggest that the capitalization of the firm should not exceed the reserves value of the organization. Since the late 1970’s when the SEC implemented these regulations producer bureaucrats have interpreted the reserves value as the target of their spending in property, plant and equipment. This has, as a result, taken on cultural distortions that reflect that any and all costs are capitalized in order to achieve their "target." This includes the receptionists time, phone service and Post-it-Notes as capital costs. Nothing is immune from their capitalizations justification, as the SEC has pursued litigation in the industry for the capitalization of operating costs. These distortions are not readily apparent when the industry is recapitalized each and every year by investors that are duped by the increasing assets of the producer, its subsequent profitability and bloated cash flow. 

We’ve argued consistently that consumers have paid the operating costs while investors were paying the capital and overhead costs of exploration and production. Therefore these costs in property, plant and equipment were the consumers capital cost subsidy financed by investors. I stated earlier in this post that these three costs that I’m identifying in this series were unable to provide a return on investment. I could be wrong, but then I’m somewhat immune to the charm of producer bureaucrats, maybe they could have these capital costs in property, plant and equipment provide a return on investment for their future prospective investors? That’s an idea, have investors pay for the same cost twice, what do you have to lose Mr. Bureaucrat! For that is what they are now asking by seeking investors to support their dilapidated failures. This gravy train only stopped in 2015 when investors realized the ponzi scheme of money only went in, was spent and never came out. Some producers declared dividends certainly, however those were financed by next year's investors or friendly bankers. The steady withdrawal of the financial investment into the industry has created the crisis that is today’s oil and gas industry. Banks in 2020 began to catch on to the game and are now beginning to withhold their support. 

The danger that producers face as a result of the bloated balance sheets from property, plant and equipment. And assuming we are correct that these are nothing more than the unrecognized capital costs of past production. These producers are not only obscenely leveraged, their actual losses subject to a reasonable accounting, would leave their financial statements in the most dire condition imaginable. We have asserted that analysis of the producers should include a pro forma adjustment that would move 65% of property, plant and equipment to depletion. Better reflecting the financial condition of the producer firms. This would then show a unanimous consensus that the bureaucrats must be removed. 

Throughout this time the value that had been established in the industry was eroded away and now the industry has no ability to support itself. The business requires a constant stream of new money just to maintain its current status quo of chronic decay. It is an industry that is a drain on society in other words. This drain has been perpetrated by the bureaucrats, the C suite and directors, who have prospered handsomely as a result of their past decades of inaction. Also known as their “muddle along” and “do nothing” strategy and operating procedure. Oil and gas being a capital intensive industry will always generate high levels of cash flow as a result. This cash flow has been used and abused to compensate bureaucrats in new and highly innovative ways. And those are just what's publicly known. This cash flow is due to the return of the high level of prior investments in the form of cash. The issue today is that the damage and destruction that has been experienced in the industry through all the take and no giving bureaucrats, has diminished the value of the assets, and therefore the relative size of the cash flow. These cash flows were and are overstated on the financial statements as a result of reporting everything as capital costs initially, then realized over the course of decades in the form of depletion deferring the recognition of the real cost of exploration and production. When G&A is capitalized to the tune of 85% in the industry, that is the average, no one refutes my number, those overhead costs are not deducted from the fake profits that are reported to determine cash flow and therefore overstates cash flow. This is reflected in the fact that each month these overhead and other expenses are incurred, capitalized and deferred over the course of decades. Leaving the producer unable to recapture those costs in the current price of the commodity, and as such, on the hunt for the necessary cash to fund next month's overhead. This occurs in each and every producer, each and every month. There is no float of cash that is used to pay the overhead costs that should have been returned the following month in the price of the commodity to replenish these overhead costs. This was not an issue when the investors were easily duped to reinvest each year by the bureaucrats' specious accounting. This is currently one of the primary ways in which working capital continues to diminish at remarkable rates across the industry. Producers in reality never made any money and were wholly dependent on chronic dilution of their investors through annual issuances to new investors. Bernie Madoff sends his congratulations and admiration. 

Producers therefore have organizations that stand with no structural capital support from investors or banks. They have an organization that is incapable of funding itself on a day to day basis without making drastic measures to raise the required cash to continue to operate. Their cash balances are continuing to evaporate as a result of low oil and natural gas prices. Liquidity is claimed to be healthy, when they include the amount remaining on their lines of credit. How much it actually costs to produce is unknown as the financial statements are distorted to the point where the ability to know the truth is not possible. And they never made any money. The industry, as are the producers, is valueless at best. Consolidation is the current trend, bigger bureaucracies will certainly be the answer to all of these questions! Really, trust them. That Chesapeake failed far quicker at that strategy is their exception that proves the rule. The accounting trickery has been expanded to the point where the fact that cash balances continue to “miraculously diminish in unexplained and unexplainable way’s” where nothing is done or said about it. 

When I discuss accounting trickery I mean accounting trickery in the underlying fraud and abuse that the bureaucrats have exorcised against their investors. Again I focus on the investors but look to the larger oil and gas economic structure. Without having the clear, honest accounting that the investors should have received, they were deceived, profitability was falsified. When investors are deceived they leave, sending the only message bureaucrats need to hear. You have failed! Without profits in the greater oil and gas economy, there is nothing for the rest of the people that are involved in oil and gas and we fall into the economic super depression that we’ll soon find ourselves in. 

One of the most overt accounting tricks that was perpetrated was the serial claim by all producers that they would be profitable at the new, lower prices the commodity markets were providing from chronic overproduction. This was due to their cost control, diligence and innovativeness they’d claim. The lower price was lower than their prior threshold they claimed to still be profitable at, such as we can make money at $50, then they could make money at $40 etc. These claims are specious and fraudulent. They’re based on the costs that current operations could prospectively be conducted in the field by squeezing the service industry and not based on the actual accounting facts as they are represented to be. How, without any write downs as a result of the ceiling test, would they then begin to reduce their costs from $80 to $50 to generate the continuous alleged profit? Would they have to have been innovative as they claimed? Or would they just need to be innovative in terms of new ways of approaching historical accounting? The majority of those $80 costs are capital in what is generally agreed to be a capital intensive industry. The costs of 97% of their wells and facilities are fixed in the past and not subject to change. Certainly future operations may be conducted less expensively, but that is not what the blanket statement that they can then be profitable at $40 means. This is deliberate, deceptive and designed to keep the lining of bureaucratic pockets filled and filling. Only one of the many ways in which deception has been perpetrated. In response producers will assert they have more reserves in which to allocate their capital costs towards. Which is true however, do those reserves need to be restated as a result of the price drop from $90 to $40 due to their subsequent inability to be produced profitably? In fact what has happened is the reserves volume decreases as a result of large portions are no longer commercially producible when the price drops $50. Quoted prices were determined from the following WSJ graph.

What about shale? The method used to account for capital costs is to allocate the total spending to each of the boe in the known reserves. This practice has continued and People, Ideas & Objects believes there needs to be a reclassification of costs to better reflect the activities in areas of shale based reserves. We know a number of characteristics of shale that make it a significant and valuable resource for the profitable North American energy independence industry needs to provide. Shale reveals substantial reserves, its production is prolific and its decline curve is steep. Allocating the substantial capital costs of drilling and completion of shale wells to the tremendous shale reserves that are exposed reduces the capital costs to a reasonable variable on a boe basis. However, the work necessary to maintain the production profile over the long term is also substantial in terms of cost. These costs are added to property, plant and equipment as capital costs, as are any incremental increase in the known reserves. Does anyone else see the mouse catching the cheese? We suggest the costs of the incremental work be classified as operations and have them retired immediately. Otherwise the objective of bloating the balance sheet by the bureaucrats will continue. We believe that the cash consumed in the capital intensive nature of oil and gas needs to be recaptured and reused on a high frequency basis in order to a) realize the actual costs of oil and gas exploration and production and b) enable producers to internally fund the enormous capital costs they claim are necessary in the near future. 

Today we are seeing the majority of the producers which include BP, Shell, Exxon and Chevron instituting large writedowns of their property, plant and equipment due to the SEC required ceiling test. All these write downs are displaying clearly and unequivocally that the past spending efforts of the producers have failed to generate the value of their spending. And indeed the value of the producers reserves are less than the value of what they’ve spent. These writedowns now account for the waste that has been conducted by these bureaucrats over the past decades and is effectively the destruction of that value being cast to the wind. I also assert the write downs are only beginning. The bureaucrats will claim, as they have always claimed regarding the ceiling test, that these are accounting charges and no one is concerned about them, they are in the past and no one cares. Their capacity to ignore their responsibility and accountability for the money they spent is evident in these fraudulent lies they've uttered over those decades. This chronic lack of accountability and responsibility for the truth has now led to a lack of faith and trust in the bureaucrats themselves and that is why the investors and bankers are and will continue to withdraw until the bureaucrats are gone. Trust and faith has been breached, when you have no credibility, it has gone for good. 

It is these costs in property, plant and equipment, what People, Ideas & Objects call the “unrecognized capital costs of past production” that we assessed as the only remaining residual value in the North American oil and gas industry. They are of value as they could be used in the Preliminary Specifications decentralized production models price maker strategy as capital costs in future oil and gas prices passed on to consumers and recovered in the form of cash to recapitalize the industry. These rebuilt cash balances would then be used and reused to cycle repeatedly and frequently through as capital expenditures once again, and then recognized so as to be returned to the producer as cash on a basis that was consistent with the industry's cash needs. As these writedowns now occur this future opportunity is lost and the only value that we were able to identify in the industry is being frittered and wasted by the chronic “muddling along” of the producer bureaucrats. The Preliminary Specification has been available to them in final form since December 2013, and in development for a decade before that. Yet nothing has been done but abuse People, Ideas & Objects for the threat we represent to the bureaucrats personal cash flows. Disintermediation challenges all industries with new and more effective ways to organize and manage their operations. For further reference on the effects of disintermediation call up your local record store manager. The Preliminary Specification disintermediates these bureaucrats.

People, Ideas & Objects Preliminary Specification ensures that oil and gas is produced profitably everywhere and always. We ensure that the total cost of production is always accounted for on a standardized, objective, reasonable and compliant basis. Ensuring the financial resources that were committed, in a capital intensive industry, are also reflected in the costs of the commodities prices. If the industry is a capital intensive industry it would stand to reason that the commodity prices would contain costs that were capital intensive as well? Instead bureaucrats collect and savor their out of control spending in property, plant and equipment as assets so they can strut down mainstreet in a competition to see who will dominate as the greatest fool. Our perspective looks at this foolishness and provides a better way where the cash consumed in the industry is returned to the producer in the prices that are necessary for profitability, and that is real profitability based on actual, factual accounting of the capital, operations and overhead costs. 

The other key aspect that has to be mentioned here that differentiates us from what is done in the industry is our method of production allocation. There is no fair and reasonable method of production allocation other than the Preliminary Specifications decentralized production models price maker strategy. Government mandates, OPEC limits or any other style of production allocation will always have half the industry unhappy with their allocation of what can be produced. Political influence becomes the means in which to produce more. Our choice of profitability is the only fair and reasonable method. If the property can be shown to produce profitably based on the Preliminary Specifications standardized, objective methods of accounting facts then it will produce. The myriad of excuses of the bureaucrats as to why our method can’t be used have all expired as a result of their arguments being as specious as their financial statements. 

Investors sent their signal to producer bureaucrats half a decade ago. What’s been done as a result. All that I can see is the lies, excuses, blaming and viable scapegoats that have come and gone. The list exceeds 20 items and is well known by all. These all began with natural gas ten years ago or more with bureaucrats “waiting for a cold winter.” How many cold winters have we had in the last decade? I’ve also seen first hand the abuse that I’ve had to take, which has motivated my new attitude this year. If it’s their choice not to do anything and just reap their bounty nonetheless then it leaves not much in the form of questions to ask of them. When I raised the point of their culpability and guilt last summer they, on a wholesale basis, increased their officers and directors liability insurance. Which is a form of action to be sure. There is not much to litigate in the producer firms themselves. No one sues over a failure. The bureaucrats however were responsible, accountable and authorized to do something. That is all that is needed to launch personal litigation against them for any of the shareholders losses that were incurred. It’s too bad that the insurance proceeds cover their liability first, it should seek to liquidate the bureaucrats personal property first and any overage in terms of claims handled by the insurance. But I don’t always get everything I want. 

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 Gab @piobiz, anyone can contact me at 713-965-6720 in Houston or 587-735-2302 in Calgary, or email me here.