Showing posts with label PS-Plan. Show all posts
Showing posts with label PS-Plan. Show all posts

Tuesday, March 19, 2019

Success and Oil & Gas Can Mix

We will discuss in tomorrow’s post why it is that I think People, Ideas & Objects Initial Coin Offering (ICO) will be successful in raising the budget necessary for building the Preliminary Specification. Today I want to discuss the change initiative that we’re undertaking with the implementation of the Preliminary Specification and the rebuilding of the industry in that vision. In our prior plan I set out the scope and scale of the changes being contemplated through the implementation of the Preliminary Specification, were comprehensive from an industry scale. The sense of urgency in which these needed to be approached was what was believed to be the decline and demise of the “old” oil and gas industry through the forces of creative destruction. Seeing our implementation as the formation of the infrastructure of the new oil and gas industry. None of that scope and scale has changed. The sense of urgency for action has now past. We are now in what I consider to be the crisis stage and the future will be an interesting one in my opinion. We therefore have much to do. In order to make this initiative a success in either the new or the old version of the industry it is difficult for me to understand how one individual could be accountable and responsible for its success and therefore the industry. In our prior plan we stated that the risk of failure was not an option for the producers and if they were seeking to transfer that risk and responsibility to me through their classic tactic of issuing a Service Level Agreement, I wasn’t biting. No SLA can capture the ingredients necessary to make this successful. No one individual or organization can make this successful. In the old plan I therefore shifted the responsibility for the success of this initiative to the oil and gas producers themselves. Stating that without them it would not happen in the manner that would meet their needs. Their direct participation was not requested but demanded in order to ensure that the outcome would be successful.

Under our new plan we have to a large extent accepted the outcome of the North American oil and gas industry as final. Therefore the plans that we had to hold industry to the success of the initiative was destined to fail due to the rapid decline we are now seeing in the producer firms. How then under our new plan do we achieve success? I insisted that the producers pay the full budget for the development of the Preliminary Specification in advance. This was primarily a result of the need to protect the user community from the vested interests who would like nothing better than to attack any identifiable member of our user community or service provider. That must be the case in our new plan as well. There must be the assurance that the user community and service provider members and anyone else that subscribes to participate in this development is protected by the knowledge that we have the financial resources to at least complete the job. Starting off on a pay as you go basis would only have had the bureaucrats shut down any further funding after three consecutive days of oil price increases. Then what do the members of our community do? Will they be ostracised from the industry permanently? Based on my treatment I think I have a pretty good idea as to what the results would be.

The first element to our overall success and the subsequent success of the oil and gas industry is the security of the user community and service providers. Which demands that our $8 billion budget be raised in its entirety. A tall order for today’s ICO market. More on that tomorrow. If they can’t feel secure financially in the work that needs to be done what compromises will they then find that need to be made and will they be more concerned about their future. The financial security of their part-time income from being a user community member will help them bridge the distance from being a fully financed participant in the oil and gas industry today to the enterprise they will be building as a service provider in the new oil and gas environment. Therefore with our budget secure their user community fees will be able to be paid in full until the job is complete and then transition to the revenues that they’ll earn in their service provider organization.

Success for the delivery of the Preliminary Specification and its implementation will be as a result of our user community. I’m able to swear on a stack of 100 bibles that I will do everything to ensure the success of this initiative. The problem is that statement amounts to about as much value as it took me to write it. Although the user community will be proceeding with the assumed lack of direct assistance of the oil and gas producer. It is still they who are the ones with the tacit knowledge of how the industry operates. And it will be they who are able to ensure that the explicit knowledge is captured in the system and their tacit knowledge is available and deployed in their service provider organizations, with our software, to the future oil and gas producers. Relying on 3,000 individuals in our user community is the only way in which I see the success of this coming about. It is unfortunate for them to undertake such a burden, however we have seen the depths that the bureaucrats will take their firms before any action occurs. And that of course is never.

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. Setting the foundation for profitable North American energy independence. People, Ideas & Objects Revenue Model specifies the means in which investors can participate in our future Initial Coin Offering (ICO) that will fund these user defined software developments. It is through the process of issuing our ICO that we are leading the way in which creative destruction can be implemented within the oil and gas industry. 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 Twitter @piobiz anyone can contact me at 403-200-2302 or email here.

Monday, March 11, 2019

What's the Plan, Part VI

Our new plan seeks to fund our budget from a pending cryptocurrency offering, our ICO. We expect that we will raise our revised budget of $8 billion there within the next three and one half years. The question therefore is what will happen within the oil and gas industry during that time. That is certainly adequate time for any “recession” to have yielded back to the forces of growth and prosperity. And that is where we have the difference of opinion between what we’re doing at People, Ideas & Objects and the bureaucrats of the producer firms. They believe it to be a temporary setback in which time will heal whatever its cause. We understand it to be rooted in the structure of the industries culture and organizational methods which are incapable of dealing with the issues the industry is presented with, and hence these factors are terminal and an existential crisis to the current producers. Creative destruction is being played out in slow motion due to the large cash flows being sourced by the bureaucrats, for the bureaucrats health and financial welfare. The startup producer has been eliminated from the scene. Junior producers are being challenged financially as never before and all of them are finding the environment so hostile that they’re unable to deal with the force and volume of issues they’re faced with. The weaker intermediates are being challenged in the same manner and will also be replaced. There are no healthy producers when the industry is a rotting corpse, only those that believe, and those that unfortunately now know better.

Bureaucrats have feigned ignorance and at the same time the confidence that they knew what ailed their firm. All the while pursuing a declared universal strategy of “muddling along” and “doing nothing.” They persist in claiming to be unaware and unknowing what it is that the investors and bankers are so concerned about. After three years of an investor strike they feel the majority of the investor induced austerity is over and their perseverance will soon be rewarded when investors finally capitulate. Listening would provide the answer in clear and unpleasant terms. The see no evil, hear no evil and speak no evil tactic has them state that they’ve innovated to reduce costs of drilling by massive amounts and will continue to do so. It is the simple act of drilling wells that unleashes the untold wealth acquired when reserves are discovered. That is how you make money. That this is done unprofitably throughout the industry has never been an issue. There was always one more sucker to bleed for their last bit of cash in any of the thousands of rounds of investor fleecings. However, cash and more specifically working capital, has now become such a critical issue that its management is becoming a major part of the business. It is a drilling and cash management business.

I was surprised the other day when the Alberta Premier rolled over the mandatory production allocations for the month of March. She being from the NDP party which is far left of the Democratic party in the U.S. she stated that inventories were still high. Now why would an industry use inventories to determine actions? Everyone knows in oil and gas when prices collapse you scale back your capital expenditures. That is how you reduce supply! That a government with a left leaning background knows that it is far more important and effective to watch inventory levels than to cut back capital expenditures shows the level of understanding and care that is taken by our oil and gas producer bureaucrats. This fienging of any knowledge or understanding of business is systemic, cultural and leads to the belief that reduction of capital expenditures is the one and only solution. People, Ideas & Objects suggest that reducing capital expenditures is the dullest, bluntest instrument known to business in this universe. It is a useless tool. Both OPEC+ and the Alberta government have shown the management of inventories is the solution to the chronic overproduction. An issue that is aggravated by deceptive and specious capitalization of any and all costs to property, plant and equipment and shows any fool with a size 2 hat can be profitable in oil and gas and therefore the responsibility for any overproduction always falls to “other producers.”

You can not deal with these people. They are quick to blame others and accept none of the responsibility. They sit on the cash flow of a primary industry and disrupt the flows to the secondary and tertiary industries that they depend on fundamentally. Then they are treated as if they’re leeches. Yet not once have producers expressed or considered the long term consequences of these actions. Calgary, and to a lesser extent Alberta are one industry towns. Wholly dependent on oil and gas and its follow on industries. There is an election coming and Jason Kenney the leader of the opposition published the following graphs from Statistics Canada. Showing that almost one third of the payroll of the province has evaporated as a result of the actions of the producer bureaucrats. $5 billion per month taken off of the diner table of every family in the province of Alberta. But hey, who’s counting. What is the consequence of the producer inaction across North America? It probably is not that identifiable in the U.S. due to the diversity and depth of the economy in Texas and other oil and gas based states. Other graphs from Statistics Canada show the severity of this downturn is unprecedented in Alberta’s history. Reflecting a $109 billion drop in Canada’s economy from the probable oil and gas difficulties. Seems like $8 billion to People, Ideas & Objects would be an investment!


Here we see the radical, and completely unnecessary gyrations that the producer bureaucrats, a.k.a. throttle junkies as we call them, create with their application of the dullest, bluntest instrument in the universe, reducing capital expenditures. Only to catch up again soon. Why would you run an industry on this basis in the 21st century?


This last graph shows that some sanity reigned in the 1960 to late 1970 era in Canadian oil and gas. Someone had a steady hand on the spending and control seemed to be the operative word. The throttle junkies soon took over after the SEC implemented their accounting proclamations in either 1977/78 and the rest is history. 1980’s recession in Canada was purely political with Trudeau’s implementation of the National Energy Program. The depth of that recession wasn’t as bad but the scale of the loss was tremendous. Note that the initial decline that we’ve experienced here the past few years has been more dramatic than what was experienced in the 2009 / 2010 time frame. Either the residual of the financial crisis hangover or the beginning of the end for oil and gas when natural gas prices began their spectacular crash.


Issue, what issue? The one argument that I get frequently is the optimistic attitude that it will all be better soon. The media are all in for the producer and everyone just hopes and prays. I always tell people, no, this hasn’t been resolved, it will get worse. They are now believing me more than anyone else. Unfortunately. So it is in these next three and one half years while we work on other things that include our ICO we will sit and watch the industry continue to deteriorate rapidly and radically. It will only get much worse until the Preliminary Specification is implemented. It has been 27 years that we’ve been doing this, it will be 28 in May 2019. Of the past 33 years we’ve noted that the industry has had 28 bad years out of the past 33. To assess where we are in terms of the destruction that the oil and gas producers have done to themselves we suggest a quick exercise be conducted. Take two thirds of the property, plant and equipment account and write it down to depletion in some prior period. This is the net effect of where the producers and the industry exist today. Every producer has done nothing but incinerate money and destroy value. Calling rash spending accumulated over decades “assets” is hilarious. We know that the two thirds of property, plant and equipment account, when evaluating the performance of the producer, is nothing more than the unrecognized capital costs of prior production.

We can solve this. This plan and budget which are designed to build the Preliminary Specification is the solution to all that ails the industry. Three and one half years sounds like a lot of time, and it is, however 28 years doesn’t seem that long ago. We also have many things to do. Review of the user community vision will give you an understanding of what. It may seem like we’re thousands of miles from the resolution, and we are, yet the time will be well spent and the following 25 years in oil and gas will be its best years. If we maintain the long term view and take this opportunity to do things right then we have the control that will ensure the industry realizes that. Big words I know but just look at what the bureaucrats are offering.

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. Setting the foundation for profitable North American energy independence. People, Ideas & Objects Revenue Model specifies the means in which investors can participate in our future Initial Coin Offering (ICO) that will fund these user defined software developments. It is through the process of issuing our ICO that we are leading the way in which creative destruction can be implemented within the oil and gas industry. 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 Twitter @piobiz anyone can contact me at 403-200-2302 or email here.

Friday, March 08, 2019

What's the Plan, Part V

Ours is a 25 year plan to deal with the issues and opportunities within oil and gas, establish a foundation for innovation and profitable operations everywhere and always. It would all be so much easier if we could just phase this project in and take one stage at a time. Except it doesn’t work that way. We run into a unique situation with People, Ideas & Objects Preliminary Specification. With the shift away from the corporate model to the Joint Operating Committee as the key organizational construct of the dynamic, innovative, accountable and profitable oil and gas producer. We change every element of how the industry operates. To have this part of the industry operate on some components of the Preliminary Specification, and leave others to follow on later wouldn’t work and we would gain none of the benefits of the decentralized production models price maker strategy. A strategy which would be the first objective attained in any interpretation of a phased plan. Service providers can’t be built to operate on some functional areas of the industry and not on others. In order to make the transition to the service providers there must be the change where the service providers are available to implement the entire Preliminary Specification. Otherwise that would require duplicate administrative and accounting administrations throughout the industry. One industry based, the other producer based. The service providers are the key organizational change that makes all of the producers costs variable. Taking the fixed overhead capabilities of the producers and rebuilding them as the variable based administrative and accounting capabilities of the industry. Variable based on production.

In order for each producer to benefit from the implementation of the Preliminary Specification each producer has to be operational on the Preliminary Specification. That’s not stating that it's our way or the highway. The Preliminary Specification is more of an industry based ERP system with components operational in each of the oil and gas producers. Each producer needs to be able to use the service providers in order to shut-in any of their unprofitable properties or they will not be able to compete in the new, dynamic marketplace for capital that would be created once the system was operational, the determination of which property is shut-in is based on the profitability of the property. Therefore all of the data and all of the functionality of an ERP system needs to be available in order to determine the profitability of each property. Currently producers know the revenues, capital and operations of a property but use allowances for overhead. These allowances are inadequate to determine the real cost of oil and gas administration and accounting. Service providers will bill for their services directly to the Joint Operating Committee. Therefore the actual overhead costs will be known.

In addition the producers role has been expanded to include two separate and distinct revenue streams. One is oil and gas production. The other is the services of their earth science and engineering capabilities that are provided to the properties they own, or are provided as a service to other producers. The Preliminary Specification costs these resources to the various Joint Operating Committees that these people work at during the month to generate the revenues that offset the producers overheads that are incurred to maintain their earth science and engineering capabilities. This is a detailed costing of these resources, without this feature being available the actual cost of the properties will be unknown and some properties that are unprofitable and should be shut-in will not be, and some producers that should have offset their overhead costs will not have. What we would have is a far more inaccurate accounting then what were provided with today. The Preliminary Specification is seeking to attain an accounting throughout the industry that is timely and accurate, failure to implement the full specification would lead to the reverse of this accounting holy grail. Besides anyone who has worked in oil and gas knows that manually matching and patching systems together to make some kind of coherent sense is what the bureaucrats are good at. Therefore we would only guarantee them further employment. I wouldn’t want to be responsible for that.

Automation, innovation, the benefits of specialization and the division of labor, integration of new technologies, quality and gaining the leadership of the user community and service providers in dealing with the issues and opportunities of the oil and gas industry throughout the industry must be done. Why undertake the review of a mostly manual 1970’s / 1990’s concept of accounting systems and bring only one element of our plan into what can be done, and has proven to be of value in other industries? Bureaucrats believe they can muddle through for another 25 years without revisiting these points. Ours is a comprehensive plan due to the scope and scale of the issues that are destroying the industry. Any critical review of the industry shows that the current model is untenable and must be addressed. Ours is a highly interdependent oil and gas system that deals with the issues and opportunities that are present and sets in place the capabilities to deal with them in the future. Pursuing one issue at a time is beyond the time scale that the producers currently enjoy.

There is the opportunity to have each producer cobble together all of the needed elements mentioned above on their own. What they state is impossible for People, Ideas & Objects to undertake in terms of scope and scale can easily be scaled at each and every producer location with their much smaller individual budgets and with the greater demand for IT services by these producers in an ad-hoc disorganized fashion. One of the elements of People, Ideas & Objects et al’s offering is the permanent software development capability that is being purpose built through this plan. Change will be enabled within the oil and gas industry as a result and the issues we face will be able to be dealt with in this era where software sets organizations in cement. The only way to have the flexibility and dynamism that change demands is for an industry to have the software development capabilities available always.

People, Ideas & Objects et al believe that oil and gas energy independence on the North American continent, for the remainder of this century, is a viable and worthy objective. It is unattainable however with the current bunch. Profitability is foreign to the culture of the industry and they have proven incapable of changing or understanding our point of view. Theirs has been 28 bad years out of the past 33, “so what if the next 25 years doesn’t generate any more value increases.” Energy independence can only be attained and sustained by a profitable industry. As a result we have started down our own road to provide the systems that the dynamic, innovative, accountable and profitable oil and gas producers will be needing not only today but for the next 25 years. Our timelines are a bit scattered here as a result of our new plan. We know that it will be 3.5 years for us to complete the financing of our Initial Coin Offering. Making our delivery of commercial software somewhere beyond the time in which we can accurately plan for. There is much to do, as you could imagine, and there is one main ingredient that is necessary and that is you, so join 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. Setting the foundation for profitable North America’s energy independence. People, Ideas & Objects Revenue Model specifies the means in which investors can participate in our future Initial Coin Offering (ICO) that will fund these user defined software developments. It is through the process of issuing our ICO that we are leading the way in which creative destruction can be implemented within the oil and gas industry. 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 Twitter @piobiz anyone can contact me at 403-200-2302 or email here

Thursday, March 07, 2019

What's the Plan, Part IV

I’ve now published our revised budget to the Preliminary Specifications wiki. I have also updated this plan under the Implementation heading. Both the plan and budget are located on that one page. The old April 7, 2017 plan has expired, however I’ve left it there for the understanding of some background to the process that we’ve passed through and the origins of our current plan. We’re no longer attempting to create a sense of urgency for industry to act in their own self interest. They do not respond to any outside input and have established for themselves a comfortable regime where they’re satisfied with the performance and future of the oil and gas industry. Simply they don’t care, and to build a sense of urgency is futile. There’s is a self-centered and destructive pursuit that realizes the industries cash flow will always be adequate to maintain their fortunes. I believe the remainder of the industry, the secondary and tertiary industries, investors and bankers, governments, royalty holders and most importantly the people involved in these groups are not the concern of the current crop of bureaucrats and I believe we’ve established our credibility in attempting to deal with them.

The relief that I sense in no longer having to create a sense of urgency to act. That we hold the solution no longer implies to me that we hold the responsibility to solve it anymore. We are changing our perspective from an overall concern and sense of urgency to one where the primary focus and concern of the larger community involved here of People, Ideas & Objects, our user community, the service providers and our coin holders is on the quality of our offerings we ultimately deliver. That will be the manner in which we can approach a task that has the scope and scale of difficulty that we are collectively undertaking. We now have the time, and will have the money in order to make this transition successful. We continue to permeate more and more minds each day throughout the oil and gas industry and it is this slow and time consuming process of having people evaluate our offering, assessing the difficulties of the current administration and making their own decisions that will grow to the point where the impossible things we are attempting will become the inevitable.

Of the past 33 years 28 have been financial disasters, all of those as a result of the overproduction that is chronic throughout the industry. Therefore we can be assured that this will not be going away as I see the producers behaviours and actions continuing. The dull blunt instrument of reducing capital expenditures in the face of these issues is now being done for the 28th time in these past 33 years. Anyone see a correlation? There is also handsome profitability being reported by the majority of the producers so each of them know intuitively that they are not the ones that are responsible for any overproduction. And so it will be if their administration is in control of the industry in 2045, who knows, they may be able to muddle through and do nothing to survive that long.

The other characteristic we see through this situation is that the cyclical nature of the commodity prices. When this is married to the phenomenal capability of the industry to suddenly produce oil for $40.00, in a capital intensive industry, where the historical costs of production was I assumed fixed, if the price of oil should happen to drop to $49.00, is the other reason why the producers have the upper hand today. Although more layoffs are still being reported there is a calm in the market that all will be well soon. Which is the same calm that arises almost annually since the natural gas prices collapsed in 2008. The fourth quarter reports show that cash continues to be the area that bureaucrats are unable to resolve. Oddly this has been the case since investors and bankers abandoned the industry. The point being the behaviors have been evident in the industry for decades. These behaviours were overlooked when investors were backfilling the producers with their cash each year. The industry has developed under these behaviours, sees nothing at issue today and these have now formulated into the culture of the industry.

In terms of how I see the situation this frog’s legs are well done, the body is only cooked rare at this point but the brain is still functioning. Therefore the frog still believes it has a future. And we can see through the actions of the bureaucrats that the frog has never been happier. It may be unreasonable to compare the industries leadership to the mind of a frog slowly cooking, however I find it quite appropriate. It is the producers responsibility for the demise of the industry. We went well beyond the call of duty in attempting to deal with them. Sure I had some fun in the process, but they needed to see the other side of the issue and my criticism provided that. Now we need to move forward and do our thing. We have 3.5 years before the financial resources will be raised through our Initial Coin Offering. People who wish to participate in any aspect of our offering will need to be able to use this time productively. Please review the user community vision to determine what it is that you can and could be doing during this time. The most important thing about this plan is that people need to understand that there is a plan in place. It is these people that are the most important aspect of that plan and the solution we are providing for the future of the oil and gas industry. Their role is critical. Taking a moment away from the noise at this point to think about the Preliminary Specification and the role you could take in the future is what you should be thinking about as the opportunities in my opinion are amazing. Now is the time to leverage what we have and begin to bring it all together.

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. Setting the foundation for profitable North America’s energy independence. People, Ideas & Objects Revenue Model specifies the means in which investors can participate in our future Initial Coin Offering (ICO) that will fund these user defined software developments. It is through the process of issuing our ICO that we are leading the way in which creative destruction can be implemented within the oil and gas industry. 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 Twitter @piobiz anyone can contact me at 403-200-2302 or email here.

Wednesday, March 06, 2019

What's the Plan, Part III

Now that I’ve dispatched that Neville Chamberlain characteristic to the history books and taken on the Winston Churchill point of view. Attempting to work with the bureaucrats and have them do the “right thing” was never going to come about. We’ll need to “fight them on the beaches” and such, and most importantly on their ability to generate value for all concerned in oil and gas. The Preliminary Specification is designed to resolve the issues of the industry and build a foundation of innovation for the future. People, Ideas & Objects, our user community, the service providers and our coin holders will provide the most profitable means of oil and gas operations throughout North America. Our value proposition is in the range of $25.7 to $45.7 trillion over the next 25 years and is derived from two critical aspects of the deficiencies in the bureaucrats current business model. Our price maker strategy will bring about at least $5.7 trillion in incremental profits over that time period. The $20 to $40 trillion is based on industries estimates of what amount of capital expenditures will be needed in order to meet the demand for oil and gas during these next 25 years. Bureaucrats believe that they will raise that money from dopey investors who will watch with amazement and excitement at the size of the producers balance sheets, as property, plant and equipment grows to unseen and unheard of heights and spectacle! We believe the capital investment in the industry is adequate as it currently stands and will recycle the approximate $1.5 trillion sitting in property, plant and equipment in rapid fashion, recovering that invested cash repeatedly in order to meet whatever the future demands for capital will be. Bureaucrats have proven that they love to sit on their duff’s, spend money and fill their pockets. Expecting action to be taken by these bureaucrats was foolish of me to have ever considered.

It’s in that sense that we need to discuss our user community. Our focus and the point of our quality software offering. We initially published our budget in November of 2013 as part of the final version of the Preliminary Specification. It was determined at that time the standard charge out rate for user community participants would be $185 U.S. per hour. We are changing that to $250 U.S. per hour in this revised plan. We are also increasing the volume of hours that are dedicated to the user community by 10% to accommodate the recently completed 12th, or Blockchain Module. This therefore increases our budget by $324.7 million for the user communities requirements. With the required Intellectual Property royalties and profit margins of People, Ideas & Objects our budget is raised by $955 million for user community changes. With respect to the increases in cost and the addition of the Blockchain Module we are increasing our development dollars as well. The principle we have always used is that for each user community hour there will be one hour of software development. Therefore there is a commensurate increase in the development costs in terms of hours and we’re also including the rate change in these budget revisions. I am satisfied with this increase due to the fact that we did not adjust our budget in 2018 for the change we made in hiring Oracle Consulting to conduct the work. This was done to reduce the number of calendar years that would have been consumed by People, Ideas & Objects in terms of recruiting, building and having our team perform at the level necessary for the oil and gas industries demands. Or at least what we expect they will need. By cutting the number of calendar years off in this fashion we were able to save the industry substantial amounts of money due to the fact that the price maker strategy would be operational sooner and without it, the industry is losing hundreds of billions of dollars each and every year.

As an incidental item I’m increasing the research budget of People, Ideas & Objects from $10 million for the project to $30 million. We recently refocused our organization around the changes where we’re using Oracle Consulting for our software development. Reclassifying ourselves as a user community, Intellectual Property and research firm. This will help us to deal with the many changes that are occurring in the marketplace from a business, technical and market perspective. Therefore what was a $6 billion budget has now been updated to these new realities and is a $8 billion budget, for now. Time's a wastin and time is money. In our case the value proposition we provide is highly leveraged to those within the oil and gas industry. We have the opportunity to provide our software with any two of three priorities. On time, on budget or feature rich. The general rule in software development is you can pick two at the expense of the third. Therefore we’ve picked the timeliness and feature richness as our two priorities which causes the solution to be inordinately costly.

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. Setting the foundation for profitable North America’s energy independence. People, Ideas & Objects Revenue Model specifies the means in which investors can participate in our future Initial Coin Offering (ICO) that will fund these user defined software developments. It is through the process of issuing our ICO that we are leading the way in which creative destruction can be implemented within the oil and gas industry. 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 Twitter @piobiz anyone can contact me at 403-200-2302 or email here.

Tuesday, March 05, 2019

What's the Plan, Part II

When we’ve discussed the coin holders in the past we’ve always discussed the idea that they would be capturing their revenues from the producers for their share of the extrinsic value of the industry that they negotiated with the producers. It would be from that revenue stream that the coin holders in turn would pay People, Ideas & Objects for the use of the software, any further and future software developments and the user communities participation in those developments. We have also held out the option, at the coin holders discretion of whether or not they also wanted to collect the fees from the producers for the service providers as well. In doing so they would be able to attract a cost plus fee structure of the service providers fees in addition to earning their share of the extrinsic value. The service providers fees would be a current cost to the producers that is paid within the normal accounts payable cycle and as such would take minimal capital requirements in order to participate. The attraction would be that they are earning a fee off the total administrative and accounting costs of the North American oil and gas industry.

To suggest that these incremental costs that are being incurred here and there by People, Ideas & Objects et al are detrimental to the viability of the oil and gas industry is evidence of the inability of current management to critically review the situation as it stands in the industry today. Although our costs are higher in comparison to the current model, we are profitable in that we are applying basic business sense to the exploration and production of oil and gas. In order to motivate the people to make the changes to divert the cash flows away from the current and highly destructive management of today, we will have to incur some small incremental costs. The focus of the People, Ideas & Objects is to provide the dynamic, innovative, accountable and profitable oil and gas producer with the most profitable means of oil and gas operations. This is what we will have to do in order to achieve that. Just out of curiosity what is it that is being offered today?

Having two sources of revenue for the coin holders makes our ICO more appealing. To raise the amount of money needed for this project the attraction will have to be highly compelling, mitigate as much business, technical and market risks and be very profitable for the coin holder. Therefore we will do what we need to do in order to achieve this. The opportunity to participate in the ICO is open to everyone in our community, oil and gas investors, people within the industry and John Q. Public. As opposed to arguing the rising cost issues the point should be to evaluate the Preliminary Specification to determine the viability in the marketplace and its capacity to deal with the well identified issues in oil and gas. Then determine if the ICO is an investment of interest for yourself.

We are unaware of the amount of administrative and accounting costs that will be incurred by the service providers when the Preliminary Specification is operational. Under our model the actual costs of the overhead of the industry is charged directly to the Joint Operating Committee in the current period. This allows the producer to turn around the cash that is used in the payment of the overhead, charge it to the consumer of the oil or gas and reuse it repeatedly throughout the year. What happens in today’s bureaucratic nightmare is that up to 80% of the overhead of the industry is capitalized and held on the balance sheet as property, plant and equipment for upwards of a decade. Then the cash that is consumed each month by the overhead is very slowly returned over the next decade in the form of depletion. A brilliant use of the cash resources of their investors. If the coin holders choose to also manage the service providers revenue stream as part of their value proposition to the industry, then they will add their levy on top of the amount of industry overhead being charged to the Joint Operating Committee and have that cash recovered in the subsequent months accounting period. This is due to the fact that the treatment of overhead under the Preliminary Specification is as a cost, not an asset as it is today. The coin holder would then be able to earn a handsome finance fee for the management of these costs.

We do not expect to define the coin holders percentage of the extrinsic value that we think they should be entitled to. They will better understand their process and will be able to negotiate with the producers what it is that they expect in terms of access to the software. We also do not expect to define what the percentage fee of the service providers costs would be. We see the coin holders being somewhat separate and distinct from People, Ideas & Objects, our user community and the service providers. It's in that sense too that we don’t want to limit the types of revenues that the coin holders would have available to them. There are possibly many other sources of revenue that would be just as valid for them to pursue. As we develop the coin offering these can be better defined with some of their input and begin to assess the incremental costs that will be incurred by the industry. The key point of their business offering is that we are providing them with the access point in which producers will access the oil and gas ERP systems that are being built in the vision of the Preliminary Specification, based on the input from the user community and financed by the Initial Coin Offering or coin holders we’ve discussed here. The value proposition of the coin holders business offering is substantially greater than today’s base case and that will be the draw for oil and gas producers investors to demand they participate in the use of this software and receive their share of the extrinsic value that is generated throughout this community.

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. Setting the foundation for profitable North America’s energy independence. People, Ideas & Objects Revenue Model specifies the means in which investors can participate in our future Initial Coin Offering (ICO) that will fund these user defined software developments. It is through the process of issuing our ICO that we are leading the way in which creative destruction can be implemented within the oil and gas industry. 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 Twitter @piobiz anyone can contact me at 403-200-2302 or email here.

Monday, March 04, 2019

What's the Plan, Part I

No one can successfully argue that People, Ideas & Objects haven’t been patient and persevering in attempting to resolve the issues we see in oil and gas. The one thing that I would suggest is that we’ve given the bureaucrats ample enough time in which to evaluate our solution and begin the developments of the Preliminary Specification. It is not that the Preliminary Specification is inappropriate or unworkable as the reason that it has been rejected by industry. It is a workable model that deals with the chronic overproduction and lack of innovation within the oil and gas producers themselves. That the bureaucracy is conflicted and know they would be eliminated from the industry if the Preliminary Specification ever came to be. Disintermediation is a trend that is affecting all industries in similar ways and the resistance to these changes comes in many different forms. With the destruction of value in the producer firms, with the landscape littered with secondary and tertiary industries that are struggling even more, where the towns and cities where oil and gas has operated all being forced into a depressionary period that never seem to end. With an oil and gas industry that is alleged to be so innovative as the bureaucrats have always claimed, why in the world has this downturn continued for so long and been so deep? Maybe I’ve been patient and persevering but the real award for this has to be presented to the bureaucrats for their ability to hang on to what they have.

As hard as we’ve tried, and maybe I could have been kinder and more pleasant with my approach towards the bureaucrats. There has been no movement, none, zero, nothing from the other side. They are further entrenched than they’ve ever been. They will not move to save the industry from the damages that are being generated by their hands. They have it under control and are truly unchallenged in their position. After more than a decade they know that they are invincible to any force that desires any change in the business. Therefore People, Ideas & Objects must begin a different approach. Change will not come about internally, therefore it will be forced upon the industry in a manner where it will in essence be taken from those that have managed it so irresponsibly to this point.

As I indicated yesterday we will be working to disrupt the cash flow that the producers bureaucrats are dependent upon. Providing an alternative investment vehicle that will compete with the performance of the current producers. The cash flow that is the bureaucrats source of compensation and seemingly everything outside of that is of little to no concern to them. As long as they maintain the cash flow they will remain where they are and with the resources necessary to live a long, prosperous and happy life. As it stands today they’ve also used that cash flow to buy the allegiances of others, such as our competitors and those who are dependent on the status quo. This has effectively aligned most of the current industry against People, Ideas & Objects and our Preliminary Specification as people know where their bread is buttered. Expecting the producers shareholders would support People, Ideas & Objects has to be classified as a failed strategy on my behalf. We have seen them withdraw their money from the industry. They still maintain their positions in the producer firms today. And are demanding that they receive large portions of the cash flow from operations in the form of dividends. This has been granted by the bureaucrats as they have no alternative but to comply. In the course of doing so the shareholders and investors have become satisfied with the status quo. Whoever controls the cashflow will therefore control the fate of the industry. The phrase is money talks and bullshit walks.

We’ve been discussing and considering the Initial Coin Offering for the past 16 months here at People, Ideas & Objects. We have it as our stated objective of how we would raise our funds. Although the cryptocurrency marketplace has taken a strong hit during that time it is showing some resilience. I am satisfied that this is a viable method of raising the financial resources that we need in order to proceed with the development of the Preliminary Specification. Cryptocurrencies are new to the oil and gas landscape and the coin holders will not have any current allegiances to any of those with the status quo. Earning the rights to exclusively control access to the software, and if they should choose, the service of the service providers once the Preliminary Specification is operational. They would be able to compete with the status quo bureaucrats by offering a better value proposition then what is being provided by the producers bureaucrats today. By using the Preliminary Specification we are able to capture the extrinsic value that the bureaucrats feel is of no interest to them, and is unavailable to them. That is many trillions of dollars over the next 25 years and would be the source of determining the price of the software and services they offered. Offering a better deal financially is what we have to offer to all concerned in the industry. The producers, their employees, their investors and bankers, the service industry, and tertiary industries that depend on a healthy and prosperous oil and gas industry. With the larger monetary value being generated by People, Ideas & Objects, our user community, the service providers and now our coin holders we can buy the allegiances of our own communities and align ourselves with those who choose to become unaffiliated with the bureaucrats.

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. Setting the foundation for profitable North America’s energy independence. People, Ideas & Objects Revenue Model specifies the means in which investors can participate in our future Initial Coin Offering (ICO) that will fund these user defined software developments. It is through the process of issuing our ICO that we are leading the way in which creative destruction can be implemented within the oil and gas industry. 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 Twitter @piobiz anyone can contact me at 403-200-2302 or email here.

Tuesday, September 15, 2015

Where's the Outrage

We have focused on the situation in oil and gas and most particularly its difficulties. As I pointed out the responsibility for this downturn in the industry is fully attributable to the bureaucrats that run the industry. Shale formations have brought about a new dynamic of abundance of the resources. There has been no response to this change in the underlying business. With these bureaucrats being unresponsive to market signals. When prices do go up, what's to say they just don’t sit on the production they have and just pocket the booty? The attributes of one’s character can help to determine what their future actions will be. Therefore, since this is the past character of the bureaucrats, you can take it to the bank that they will use any increase in the price of the commodities to line their own pockets. Leaving the industry to perish and decay as we’ve discussed earlier.

The question I guess we have to ask ourselves then is there anything that these bureaucrats are going to be able to say and do that will convince the investors, any investor, to invest in the oil and gas industry in the next, 5, 10, 15 years? Investors have been on strike, more or less, since 2008. Alternative means to fund the industry have been used since the financial crisis to finance the shale boom. It could be argued that the junk bond market is no longer available. The attitude of the oil and gas investor is consistent with mine, I would think. A general disheartening of the bureaucrats in power. A lack of faith in their capabilities, trust and integrity.

Since the financial crisis governments have taken great steps to intervene in the monetary markets with their over the top stimulus measures. Instituting a zero bound interest rate policy has removed any integrity or discipline in the financial markets anywhere in the world. These oil and gas bureaucrats have had the luxury of being compared to the performance of other industries that are about as capable, trustworthy and of low integrity. Performance has not been the concern of anyone in any industry. It has been about survival, dividends and stock buybacks.

Global market volatility is rising as the world prepares to move away from the zero bound interest rates. That means the oil and gas industry will be expected to perform in order to obtain any investment from anywhere. Compete when interest rates on bonds are paying good returns. Compete when other industries can provide real returns on investment. It was easy for the bureaucrats to get away with the low performance and slack attitude during this zero bound interest rate period. Now it will be expected of them to compete.

I don’t think they care. If interest rates do go up it will affect the value of their stock and that might impair some of their compensation. But not materially. What can be counted on is when oil and gas prices do go down from an abundance of production, they will inevitably go up. That time could come quickly and they, the bureaucrats, would be able to enjoy the lifestyle they grew to enjoy as recent as one year ago. The trick will be not to fall into the same difficulty again by spending on drilling which would lead to overproduction and commodity price declines. If we don’t respond to market signals now, we certainly won’t begin to respond to market signals then, they will say.

All of these ingredients are in place. We are subjecting ourselves to an uncaring and unaccountable group of self interested people who feel they are entitled. Why would they change this situation? Put yourself in their shoes, it's not a bad situation to find yourself in, and who has the wherewithal to do anything about it?

The Preliminary Specification and user community provides the oil and gas producer with the most dynamic, innovative, profitable and successful means of oil and gas operations. People, Ideas & Objects Revenue Model specifies the means in which investors can participate in these user defined software developments. Users are welcome to join me here. Together we can begin to meet the future demands for energy. And don’t forget to join our network on Twitter @piobiz anyone can contact me at 403-200-2302 or email here

Friday, July 31, 2015

Onward and Upward!

My hopes that maybe the bureaucrats would be held accountable for their actions have fallen to the wayside once again. It is clear that the ability for them to snow the investment community continues. And on the other hand, although our readership is impressive, we are not reaching enough of the people we need to in order to make a difference. We will however continue to build on what we have here and be the thorn in the bureaucrats side. The lack of oil and gas profitability will continue until such time as the Preliminary Specification is in place. Shale reservoirs ensure that this will be the case. There are a number of other issues that the industry refuses to face, such as yesterday’s discussion of the service industry and the potential decline in its capabilities as a result of the current actions of the bureaucrats. And of course none of the past problems, like the difficulty in transitioning the earth science and engineering brain trust from those that will be retiring soon, are being addressed. I hear that recent university graduates in these disciplines are quite good baristas. Check them out at the local Starbucks.

I get complaints from some people that they are unable to read this blog while at work. I can only assure them that it's not as a result of anything on our end. Some of the producers may be blocking access at the firewall. Which sounds familiar to me. Nonetheless it would be helpful to this cause if we could expand the readership by sending our url’s to others who may be of like mind. One caution is to ensure that you know they are not going to use it against you. We have a job to do and it is going to be done on the basis of everyone doing things that are done differently than the way we do them now.

Our friends the bureaucrats also seem to be relying on a low interest rate environment to maintain the false economy that exists and which they seem to prosper in. Without the demands of an alternative investment that pays 7 or 8% for sitting on your money. The bureaucrats know there is nowhere else that you can invest. Therefore your stuck with their poor performance as the best that there is. What the investors in Encana have realized with the 90% decline in that shares price. Is that there is a potential loss that can occur as a result of sticking with the producers.

And I was thinking more about Encana since their quarterly report. They've lost 90% of their share value due to the fact that they were an almost 100% natural gas producer. They recently acquired an oil producer to offset this exposure. The point is that the natural gas market has been down for more than five years. Shale gas has destroyed the pricing of that commodity for these past five or more years. Maybe it takes five years for the effects of these poor prices to have the types of share price declines that Encana has experienced. If so, and with oil being down for almost one year, we have four more years before the entire industry loses the 90% of their market cap. A reasonable assumption.

I don't see anyway out of the oil and gas industries difficulties without the Preliminary Specification being put in place. And it will take a few years to do that. But then I am biased the bureaucrats would assert. The issues are bad today. And there are many issues that were unaddressed in the recent past that still need to be addressed but have been forgotten. And there are many difficulties in the very near future that I can see. What we do know is the “muddle along strategy,” which has poorly served this business for so long, will still be ineffective. All of these issues are challenging the capacity and capabilities of the industry, and therefore our way of life. And therefore should be considered by the bureaucrats in that context. It is however late July and their cabin’s are in their prime season at this time of year. People, Ideas & Objects have a tiger by the tail, as they say. And therefore we will live to fight another day.

The Preliminary Specification and user community provides the oil and gas producer with the most dynamic, innovative, profitable and successful means of oil and gas operations. People, Ideas & Objects Revenue Model specifies the means in which investors can participate in these user defined software developments. Users are welcome to join me here. Together we can begin to meet the future demands for energy. And don't forget to join our network on Twitter @piobiz anyone can contact me at 403-200-2302 or email here

Monday, May 04, 2015

Our Solution Part XI

People, Ideas & Objects argument that bloated balance sheets don’t provide any value to anyone may miss the essential point for their existence. Large balance sheets can more easily support inordinately large amounts of debt. That is, the large debt will look less out of place if there are assets, and plenty of them, to offset them. The primary benefactor of the large debt balances would of course be our good friends the bureaucrats. Not being able to generate real profits, the money that fuels their machine has to come from somewhere, and that somewhere is either the debt or equity markets. Since 2008 the equity markets have not been friendly to the oil and gas producers. That is to say it wasn’t fueling the party the way it used to. The movement to debt instruments was the logical choice, and hey, look at those interest rates.

The lessons that were being dished out in 2008 were related to the volumes of debt that were being created. Too many people were buying too many houses they could not afford. Mechanisms in which to finance the probable defaults became innovative and this party carried on for a decade or two to long. The solution of course was to drop interest rates to zero and ease the burden on those who were indebted. This would buy them the time they needed in order to repair their financial position and then the economy would continue on. Well its been six years and the problem is that no one is repairing their financial positions. For example the Chinese who entered the great recession in pretty good shape have quadrupled the amount of debt that the governments, industries and people now owe. Just in six years. Oil and gas producers have to have a strong source of capital in order to fund a capital intensive industry. But when they run it with the commodity prices so far underwater, then they really need money. So debt is what has fueled the party for the past six years. But remember its at low interest rates!

And here we are today. The bureaucrats cabin is in fine shape. Able to handle the retirement years of the average bureaucrat in the style of a king. The only real concern to their retirement plans is what will it cost to fuel the boat? If you believe that the bureaucrats are going to be sticking it out through the disaster that they've created then you have a higher opinion of them than I. If they could have fixed these problems in the past, don't you think that they would have? The fact of the matter is that change is not their forte and they are being forced to perform now, or will be soon. And that’s hard. Don't assume that the situation that exists today will last much longer and for them to be able to deal with the outcome. Here is a comment from the Wall Street Journal regarding the Fed and the ability to deal with the poor performing economy.

It’s heresy to say so, but maybe after six years of zero-interest rates, and long after the financial crisis ended, the Fed should wonder if its policies haven’t become an impediment to faster growth. Maybe letting markets begin to set interest rates again would lead to a better allocation of capital and less economic uncertainty. At the very least the Fed should start analyzing why its forecasts have been so wrong for so long.

If interest rates do rise. Something that is a given because they certainly can’t go down. Those with bloated balance sheets, whose purpose is to hide the high levels of debt. Who have not been honest with the total costs of what it takes to produce. Have been overproducing for many years. With that overproduction being undertaken to cover the cost of the overhead of the huge bureaucracy. It should be clear to most that this is the brick wall that is a few feet away from the bumper of the speeding vehicle. We should have made the changes in our velocity a while ago, but their was also the cottage that needed many, many things.

2008 was a wakeup call for everyone regarding the debts that they were carrying. Time was provided through quantitative easing and other antics to deal with our debts, not to incur more. How much longer will low interest rates go on for is the question. Its kind of like during that game of musical chairs that we played when we were younger, anticipating when the music would stop. Has anyone told the investors and bankers that there are no chairs? If anyone expects the bureaucrats to come with a plan, a vision or an excuse, don't wait too long. It doesn't matter what the bureaucrats do. These forces are well in play and will have them removed from, or see them leave, the scenery. What we need to do is to continue to focus on the development of our user community, and then to rebuild the industry around the Preliminary Specification.

The Preliminary Specification and user community provides the oil and gas producer with the most dynamic, innovative, profitable and successful means of oil and gas operations. People, Ideas & Objects Revenue Model specifies the means in which investors can participate in these user defined software developments. Users are welcome to join me here. Together we can begin to meet the future demands for energy. And don't forget to join our network on Twitter @piobiz anyone can contact me at 403-200-2302 or email here

Tuesday, April 28, 2015

What Our Tactics Are Part II

There are two major trends that People, Ideas & Objects are capitalizing on in order to make the necessary changes within the oil and gas industry. The first has been the focus of most of the discussion that has taken place here on this blog. That being the unsustainable business model of the current bureaucrats in the industry. With them there is no future, no plans and no vision. Just more of the same losses and nothingness. The other trend that is as strong and is accelerating each and every day is the impact that Information Technology is having on our lives. People are experiencing change at a rapid pace in their personal lives. What could not be done a few years ago can now be done by the average four year old. It is truly remarkable. To disregard technology, which has been the attitude of many people, is now a dangerous position to put oneself in.

The effect of Information Technology in the business environment over the past ten years is of course a different story. The unchanging bureaucracy know that if they adopt the new technologies they lose control of their dominance and their desired form of organization. They need to stay in control and the way that they do that is to ensure that no technologies enter the organization that will ultimately render them even more obsolete.

So where do we stand in terms of the overall Information Technology horizon. I think that to state up to this point, the whole exercise has been a great exercise. The technologies have not been mainstream or powerful enough to make the promised changes. They have needed to mature and round themselves out in order to deliver on the promises that have been made. This history is one of the main reasons that people point to them as being irrelevant in the current marketplace. I think they are wrong. But its not too late. Now is the time in which to get on board and ride this train to its ultimate destination. Industries such as oil and gas will be fundamentally different as a result of the Information Technology revolution. And People, Ideas & Objects, I think, is the beginning of this trend.

When I began this journey in 1991 there was no way in which to implement the vision in any manner. The Internet was still a half decade away. Oracle’s technology was as dominant then but it was unable to carry the load. And computers, servers for that matter, were no better than what we have in our phones today. Probably most importantly was the problem of the user. How would they fit in? Its different today. I don't need anything more from Oracle other than for them to continue in their innovative ways. The Internet is more than capable. Computers and servers can do what we need in no time. And on that point there is an excellent article from the Wall Street Journal on where we are headed. And lastly the user is well educated and capable in the use and application of technology for their needs. I have what I need to implement the Preliminary Specification within the oil and gas industry. Something that until very recently I was unable to state.

So where do you fit in? Do you think the oil and gas industry needs to change? Is Information Technology an enabling capability to where you think it can go? Do you have ideas on how to improve the way in which we work? What will you do about it? I expect the bureaucrats to self select in the overall process. Either through the implementation of People, Ideas & Objects Preliminary Specification or not. They will retire from active employment in the oil and gas industry. Why do you think they have been spending so much of their money on their cabins these past few years? Either they will leave the industry to us, or they will leave it in shambles, they don't care. Their pensions are vested with the insurance industry. The point should be, what actions will you be taking as a result of this opportunity?

If we look at the Wall Street Journal article and understand the consequences of Information Technology in the workplace. Where can the individual go to implement these technologies and ideas in their business and realize the opportunities that are intimated in that article. In oil and gas people can move with People, Ideas & Objects. A vision of how the industry could operate captured in the Preliminary Specification. One that has as its primary focus the user and the importance of their role in the industry and the software that they develop and use. Its an exciting time to be alive. The next 25 years in oil and gas, and what that means in terms of the application of Information Technology, is as interesting as I think it gets.

The Preliminary Specification and user community provides the oil and gas producer with the most dynamic, innovative, profitable and successful means of oil and gas operations. People, Ideas & Objects Revenue Model specifies the means in which investors can participate in these user defined software developments. Users are welcome to join me here. Together we can begin to meet the future demands for energy. And don't forget to join our network on Twitter @piobiz anyone can contact me at 403-200-2302 or email here

Monday, April 27, 2015

What Our Tactics Are

Over the past few weeks we have been able to define a few issues within the oil and gas industry. We have also been able to show how People, Ideas & Objects Preliminary Specification would provide the capabilities for the dynamic, innovative and profitable oil and gas producers. All of these were focused around the capabilities of enabling “price maker” strategies for producers. And what was included in the costs of oil and gas production to ensure those prices were capable of ensuring profitable operations. What we have proven is that the average North American producer is losing money on operations in both oil and natural gas. And that the capital costs of the industry sit on the balance sheets of the producers where they provide no value other than to subsidize the consumers of these commodities.

These elements are some of the components of the Preliminary Specification and are part of the business model that is included within it. There are also many other components that add value to the producer firm. The quantification of all of these elements for the next 25 years stand at $45.7 trillion in incremental value over what the bureaucracy are offering today. Our value propositions base case of operations will be on display in the next two weeks as the earnings are announced by the various producers. It will be important to remember that the costs of capital should be included in their profit / loss calculations. When it costs 30% on average for a producer to maintain their production profile. With all of these costs and more being capitalized. And they only recognize 6-10% of their asset base as their annual depletion. They are inflating their asset base on an annual basis. This takes away from the investor, and the producer, the opportunity to ever earn a return on their invested capital.

Now we will see the extent of the issue with the earnings that will be announced in the next two weeks. Tomorrow we have two of interest in BP and Hess. Wednesday will have our friends at Penn West, with Exxon and Conoco. Thursday will see Chevrons. And then next week we will start with Occidental, Anadarko, Pioneer and EOG. Tuesday Husky, Chesapeake and Tourmaline. Wednesday is Apache, Canadian Natural Resources and Marathon. And Thursday we'll finish with Bonavista Energy.

People, Ideas & Objects have put our plan and vision forward. What is the bureaucracies? We need to look at the next 25 years and how it is that society will be provided with the energy that consumers need. Will this be at the expense of the investors? Those investors who have built this business to this point? Or will there be a change by the industry to the Preliminary Specification that provides for a sustainable business model. I don't think we could frame our solution any better than what we have by providing the Preliminary Specification. Which uses the industry standard Joint Operating Committee as the key organizational construct of the dynamic, innovative and profitable producer. The Joint Operating Committee is the legal, financial, operational decision making, cultural, communication and innovation framework of the industry. By identifying these frameworks in our software and aligning them with the compliance and governance frameworks of the hierarchy, we achieve a speed, accountability and innovativeness in our producer organizations. It is through these frameworks and their alignment that we are able to approach the issues of the industry, whether they are in the administrative, accounting or operational domain, and provide solutions for them.

What do the bureaucrats have. Fudged numbers of how they have been managing this industry. Continued overproduction in the natural gas industry as a result of shale reserves is the precursor to continued overproduction in the oil industry. Yet you hear nothing of this phenomenon and any approach to fix it! It has been five years in the natural gas business since prices have been destroyed. Not a word. No action. This being the first year in which the oil prices have declined. What we have is the same behavior. Not a word. No action. What is it that is expected from this unchanging and incapable form of organization? What we need to do is build the industry from the bottom up based on the Preliminary Specification. That way we will have the capabilities to deal with the industries issues and opportunities in the next 25 years.

The Preliminary Specification and user community provides the oil and gas producer with the most dynamic, innovative, profitable and successful means of oil and gas operations. People, Ideas & Objects Revenue Model specifies the means in which investors can participate in these user defined software developments. Users are welcome to join me here. Together we can begin to meet the future demands for energy. And don't forget to join our network on Twitter @piobiz anyone can contact me at 403-200-2302 or email here

Tuesday, February 24, 2015

Why is Our Budget so Large

In a world where there’s a $3.99 app for that. It seems odd that People, Ideas & Objects needs such a large budget in order to build the Preliminary Specification. Why not just an app on a phone and be done with it. If that were the case you would have the choice of 3 or 4 apps to choose from already. The difficulty is in the level of change that we introduce into the industry. The impact of that change and how it affects the people that work within the industry. The wholesale changes that we are making to the producer firm and the industry. And the need for these changes to be made in order for industry to function profitably in the future. This requires the level of commitment in terms of the financial resources detailed in our budget. However, this commitment is supported by the value proposition that is realized once we make these changes.

The change dynamic that we introduce is that the Preliminary Specification identifies and supports the industry standard Joint Operating Committee as the key organizational construct of the dynamic, innovative and profitable oil and gas producer. When we do this within our system, everything within the industry is affected by this change. Not one element of the producer or the industry is unaffected by moving from the current corporate model to the Joint Operating Committee. It therefore invokes the need for a complete review of all aspects, the interactions and systems that are used by the producer firm, service and oil & gas industries. People, Ideas & Objects becomes an operating system for the industry. That is a very appropriate description of what the Preliminary Specification does.

At the same time we are only moving the compliance and governance frameworks of the hierarchy into alignment with the seven frameworks of the Joint Operating Committee. This is the paperwork that consumes the bureaucracies time and energy today. Once we have attained this alignment within the People, Ideas & Objects software the producer and the industry will realize a speed, innovativeness, accountability and profitability over the current situation. It is those frameworks of the Joint Operating Committee that are the foundation of the industry and it those frameworks that none of the current ERP systems identify or support. It is the result of our research that we were able to determine “what” and “how” a producer and industry would operate, that People, Ideas & Objects can bring you this offering. This is the cornerstone of our Intellectual Property and available only here.

Others may be able to determine other ways in which to organize the producer firm and the oil and gas industry. If so they can spend the time and energy that I have spent in developing People, Ideas & Objects Preliminary Specification. This multi-decade investment will pay off when the industry funds the initial development costs through Intellectual Property royalties to myself, and corporate profits for the firm. These are the costs of business in the 21st century. These Intellectual Property costs are also contrary to what the industry has been willing to pay for in the past. However, they have a choice, to continue on with their losing ways or realize the value proposition that we offer by funding our budget.

Therefore it is change on a wholesale level throughout the industry and Intellectual Property which are the real costs that make our budget the high cost that it is. There is nothing that can be done about either element of these budget categories and I'm sure it will cause much discussion and pain for the bureaucrats to ever have to fund this. In the mean time we can just keep score with the amount of money they are losing, the loss in their market capitalization and their loss of hope for the future. Its important to remember that bureaucracies never change. It is impossible for them to do so. That is why we are appealing to the oil and gas investor to direct their producers to fund People, Ideas & Objects so that they can remove the bureaucracy and replace it with the Preliminary Specification, our user community and service providers.

The Preliminary Specification and user community provides the oil and gas producer with the most dynamic, innovative and profitable means of oil and gas operations. People, Ideas & Objects Revenue Model specifies the means in which investors can participate in these user defined software developments. Users are welcome to join me here. Together we can begin to meet the future demands for energy. And don't forget to join our network on Twitter @piobiz anyone can contact me at 403-200-2302 or email here

Thursday, October 23, 2014

Let's be Unreasonable

The last few days we have discussed the completely unreasonable and irrational idea that we could reorganize the oil and gas industry. That the prototypical producer would also be reorganized in a radical fashion. Ideas that were put forward here on this website. The methods put forward in the Preliminary Specification require significant change be implemented within the industry and not one thing, that is person, place or producer would be untouched by the changes put forward in that specification. This certainly makes the Preliminary Specification unique in its scope and scale of change. Its a bold statement to make and one that requires frequent checks on ones sanity. I am however, reminded by the saying from George Bernard Shaw

The reasonable man adapts himself to the conditions that surround him... The unreasonable man adapts surrounding conditions to himself... All progress depends on the unreasonable man.

I am certainly an unreasonable man, and I have many people that are willing to attest to that fact. I have also always focused on the value that we are able to provide within our organizations. I have been able to consistently differentiate my work on the basis of the value that is generated through my activities. It is why I went into business for myself back in 1986 so that I could begin to capture some of that value for myself. You have to understand too that you can not build anything of substantial value within a quarter or two. You need to begin with a plan, remain focused and dedicated to stomach the difficulties that will inevitably come your way.

Keeping focused on the plan during the positive and negative distractions that occur are what will keep you on the right track. For example if for some reason we were able to raise our budget tomorrow, a positive distraction, it would not deter us from our focus of developing the user community and then the service providers. The user community is critical to the quality of the software that we will develop. Without them we would only provide another version of what has already been produced. The clear and distinct difference between what we are doing and what has been done in the past is that we are user community ERP based software developments.

Some may think why in the world is that important. What concern does the user have in the world of ERP software. Consider the understanding and knowledge that is contained within what will be the user community. In terms of the work that they do and how they do their job. If it takes on average six months to fully comprehend an individual's role within an organization. And the number of different roles within the industry. Capturing that knowledge and understanding by the developers is a necessity in order to support the user. I think a user community based ERP system should support and provide the tools to the user for the work that is done in the industry. What SAP and other “ERP” systems do is handle the compliance and accounting requirements. And that’s it. Particularly from an oil and gas point of view they do a very poor job. Review the Preliminary Specification to see what I think the users will do and how they need to be supported in an ERP environment. We believe in a strong division of labor between computers and people. Computers should be used to store and process things. People should focus on the leadership, problem solving, decisions, creativity, collaboration, research, idea generation, design and planning amongst other things.

In terms of value we can be responsible for providing trillions of dollars in incremental value from the current base case. Is that justification for making these changes? I think it is. As we will be positioned to be able to provide for additional value as issues and opportunities occur within the industry. People interested in joining People, Ideas & Objects user community should look to build value for themselves and the industry for the long term. We don't plan to begin work until January 2017 and there are many things you can do to prepare before then. If the oil and gas industry is for you, and are disheartened by the bureaucracy what are you going to do about it. I have an idea and it needs you to make it work. Its a little unreasonable but then that is how progress is made.

The Preliminary Specification and user community provides the oil and gas producer with the most dynamic, innovative and profitable means of oil and gas operations. People, Ideas & Objects Revenue Model specifies the means in which investors can participate in these user defined software developments. Users are welcome to join me here. Together we can begin to meet the future demands for energy. And don't forget to join our network on Twitter @piobiz anyone can contact me at 403-200-2302 or email here