Our third white paper of 2025 is now published—this also our second white paper this year focused on our user community. Today’s paper is titled:
I’m pleased to confirm that our February 10, 2025, paper—
will be published on schedule.
I can also announce a fourth deliverable for 2025, slated for release on March 17, 2025, under the current working title:
And as promised, two white papers are being released from People, Ideas & Objects. Building off of the "animal spirits" being released in the North American marketplace. These papers address how the material and consequential issues that have manifested in oil & gas are dealt with through the reconstruction of the oil & gas industry under new leadership. The titles of these papers are.
And
These papers can be accessed here and here. Get yours before they're all gone.
The following is a brief summary and description of the distinct competitive advantages shared between our user community and their service provider organizations. These are the accounting and administrative resources that will be redeployed from the producer firms to be headed up by our user community members in their service provider organizations. These resources will be used to manage oil & gas and associated industries processes. Each advantage shows the unique nature of the competitive environment we seek to build. This is to ensure that North American oil & gas producers are provided with the most profitable means of oil & gas operations, everywhere and always.
Overall the reallocation of producers' administration and accounting resources in this manner provides several advantages. First it enables People, Ideas & Objects decentralized production models price maker strategy. Establishes a sub industry between producers and the Information Technology community. Employ Professor Paul Romers' non-rival New Growth Theory by sharing administrative and accounting resources industry-wide. Producers will no longer need to build and maintain redundant and costly infrastructure for accounting and administration. Producers will share industry-wide capacity and capability. These competitive advantages eliminate ERP constraints that cement organizations into unchangeable structures. Enabling specialization and division of labor, spontaneity, serendipity and creative destruction to return as powerful tools for competition.
We purposely create these distinct competitive advantages in administration and accounting. Delivered to the industry by our user community members and their service provider organizations. It is this unique configuration that enables these major economic forces to be applied and iterated upon. This creates substantial value and is responsible for the majority of our identifiable, tangible value proposition. When producers are prosperous, all those associated with the industry will realize that prosperity. The proof of that statement is in today's chronic downturn.
Accounting & Administration Expertise
Having acquired extensive experience and training in their fields, our user community members will provide administrative and accounting expertise. This applies to their service providers as well. We offer Cloud Administration & Accounting for Oil & Gas as a sub-industry between technology and oil & gas. Filling a gap between the two as we feel they’re not communicating effectively.
Analysis of Conflict & Contradictions as Analytic Tools
Conflict and contradiction indicate where the issue's source is. Analysis of these two factors will reveal alternative solutions. When we apply these to the business environment, behaviors, communication methods and other factors, they can provide insight and understanding into issues and their resolution. These are some of the more advanced tools that will be needed to handle the incredibly large volume of issues the industry and our users will have to resolve in the future.
Application of AI & ML
Artificial Intelligence is overrated in the marketplace at this time. AI is a module in the Preliminary Specification where we can establish effective and efficient algorithms from our user community. These algorithms can be shared across the industry. Offsetting the inordinate cost of each producer involved in the difficult business process of developing, testing and proving AI algorithms. And draining the market of valuable resources to be used elsewhere. Machine learning is a far more effective tool that will be valuable to our user community due to the distinct perspectives they'll have on industry data. They’ll have data sets of the individual processes they manage. That processes data for the entire industry. This data set would be interesting to analyze from the point of view of its unknown unknowns.
Automation
Automation will be implemented to ensure that the most effective and efficient operations are provided to producers participating in these developments. Relieving administrative and accounting resources to pursue higher level, value added opportunities. Reduction of costs in this sense is worthwhile as it implies high automation levels. Automation doesn’t just reduce costs directly it does so indirectly through error reduction. Error reduction reduces time. What admittedly is becoming a critical resource as we proceed through the 21st century economy.
Accounting data sets for producers are inadequate for automation purposes. As well as for general financial reporting purposes. The need to organize and manage the firm's data in appropriate formats is a necessary first step before automation or Artificial Intelligence can be applied.
What information consumes is obvious. It consumes the attention of its recipients. Hence a wealth of information creates a poverty of attention.
- Nobel Laureate and Professor Herbert Simon.
Collaboration
A collaborative, collegial environment would be the basis of a competitive environment between our user community and service provider organizations. The basis of collaboration and cooperation is the importance of the work they're undertaking and their critical role in rebuilding the oil & gas industry on performance and profitability criteria.
Licensing of our user community and their service provider organizations provides the exclusive right to manage an individual process. This is on behalf of the entire North American oil & gas industry. The potential tangible and intangible benefits from service providers will be substantial. To compete on price circumvents the long term value generated from pursuing specialization & division of labor, sharing more broadly and other methods that take time and investment to materialize. Value that is realized by all producers.
Compromising
Finding solutions in a world of difficult and complex issues requires creative solutions that meet the needs of those parties. Although we are rebuilding brick by brick and stick by stick there are established industry methods, regulations and processes that need to be adopted. We need to create effective ways of implementing and organizing them. This demands that our user community members offer industry solutions that work for all concerned.
Creativity & Design
Some may struggle to imagine creativity in administration and accounting. However there is nothing that will be more critical in the discovery, testing and implementation of effective and innovative procedures that provide value to the oil & gas industry. We published the Preliminary Specification in August 2012 and soon after, in March 2014 began the development of our user community. As a result people within the larger oil & gas industry have had the model in the form of the Preliminary Specification and our user community vision in their minds for the better part of a decade. Understanding what their involvement could be, should they decide to join our user community based on the principles set out in these documents. Enabling them to prepare themselves, both directly and indirectly for our development and implementation to begin.
Creative Destruction, Spontaneity & Serendipity
Each of these is an established economic principle that has been eliminated from the 21st century business landscape through ERP software. The unchanging methods and procedures that software defines in organizations, and particularly ERP systems, lock organizations into rigid and unchangeable situations that only serve the status quo. People, Ideas & Objects have established through our user community and service providers that they can make the effective changes necessary to ERP systems. These changes will be derivative of the Preliminary Specification. Establishing a permanent user community and software development capability is necessary for businesses to evolve throughout the 21st century.
Explicit and Tacit Knowledge
Providing software in the marketplace is a small part of the solution today. Software captures explicit knowledge and codifies it within process management. It is the service provided with that software that provides value. Tacit knowledge must be included in the service package. Where producers' accounting and administration are managed, such as our Cloud Administration & Accounting for Oil & Gas. Software and services must be able to make the changes necessary to proactively accommodate the accelerated pace of change of today’s market, and what we can only assume will be the case tomorrow.
Ideas
The uniquely human element that will be in demand. An idea that generates a dollar today will produce a nickel tomorrow. The need to have exponential volumes of ideas will be a demand of the future in everything we do. How these are captured and implemented in our Cloud Administration & Accounting for Oil & Gas software and services will be a necessary part of our user community. And with the shared and shareable model these ideas, once proven, tested and appropriately implemented will be leveraged throughout the industry. Building value for everyone. We believe oil & gas needs to be efficient in process management. The accounting and administration of a producer firm are not distinct competitive advantages.
Innovation
The Preliminary Specification and supporting services are based on innovation. Innovation is a defined and replicable organizational process, according to our research. These have been incorporated throughout the sub-industry we're building. Importantly our user community and their service providers can affect the changes needed to facilitate innovation in efficient and effective ways through the design of their organization.
Integration
Integration or implementation falls under the responsibility of our user community and service providers. These are the critical components and the final steps in ensuring the quality of software and services we’ll provide. Integration begins on day one of development in terms of planning and preparation. Our user community members will ensure that their service providers are appropriately implementing process management. As the principal owner of the service providers they’ll be duly authorized and responsible.
Issue Identification & Resolution
“Muddling through” is over. There will be no more ignoring oil & gas issues. People, Ideas & Objects provide the tools, methods and Organizational Constructs to address and resolve issues. We see that software is the issue in that it seals organizations in concrete. Which is commendable from a governance perspective, however it must be innovative and capable of change to achieve the high level performance trajectory of a dynamic, innovative, accountable and profitable organization in the 21 century. This will be an order of magnitude more difficult than what the oil & gas culture knows. As difficult as the industry situation appears today. Consider how much simpler it was only a decade or two ago. What will it be a decade from now in terms of the issues and opportunities these firms face? To be unprepared as we are today is dangerous and reckless.
Judgment
Not a distinct competitive advantage of computers. A uniquely human characteristic that will be the basis of understanding for the remainder of this century and as long as we choose. Oil & gas is valued in the consumer marketplace. The threat of shortages and their impact on civilization is unfortunate. Setting the proper landscape for a more dedicated environment in which oil & gas can prosper and conduct its business operations. What is our judgment regarding the capability and capacity of current producer organizations to realize these opportunities? When each barrel of oil equivalent provides 10 to 25 thousand man hours of equivalent labor it is the consumer who benefits. This is the producer's value proposition, our focus and drive. Why would oil & gas ever be produced unprofitably when it is irreplaceable and limited?
Leadership
I expect that our user community will provide leadership in the administration and accounting of North American oil & gas producers. Expectations that include the development and evolution of business models and "what, how, and why" profitability is earned. It will provide the industry with the tools to evolve at the speed and capacity required to meet future needs.
Negotiating
Negotiations and compromise on the basis of interactions between producers and our user community will be frequent. Compromises and negotiations on the Preliminary Specification however cannot and will not occur. The business model is integrated and dependent on that model functioning together. Changes at the Preliminary Specification level may have implications unknown in other areas of the system. If these changes are necessary, they can be analyzed and corrected based on the most comprehensive understanding, once developed. While we haven't fully comprehended all its implications, we should be cautious before disrupting it.
We are instituting a cultural shift in industry management. Moving away from “muddle through” to a culture of performance and profitability. There will be attempts to resurrect “muddle through” in its many forms by the status quo. We need to be wise to these and ensure that they are excluded from the Preliminary Specification.
Planning
Planning in a dynamic environment is futile. It however communicates to participants the information necessary to begin the process. It is the first step.
Quality
Define it, clarify it, communicate it and ensure its implementation. It used to be when you drove downtown to work in the morning, and returned at night. You would see 2 - 3 cars broken down on a 15 mile trip. Japan exploited this opportunity to enter the North American auto market. They introduced reliability. There has been a shift in software reliability in recent years primarily because of the cloud computing era that secured the environment of software and services. Phones are far more sophisticated than people realize since Steve Jobs started in the 1980s after being fired from Apple. And Sun Microsystems with Java’s commercial release in 1994. Cloud Administration & Accounting for Oil & Gas, standardization, objective accounting and other methods will provide higher reliability on top of these technologies. A duly authorized, responsible, and capable user community can do so much more.
Research
Primary research is abundant in the 21st century. We can choose to stand on the shoulders of giants, or recreate it again if we like. The amount of primary research unused at this point is probably larger than what has been implemented. There is rich ground here for value generation for those that can turn these ideas into reality in oil & gas. In light of all the competitive advantages listed under our user community, putting research under their domain is a natural fit. We see this as highly complementary to the research People, Ideas & Objects will conduct.
Specialization & the Division of Labor
It has been the source and generation of all economic value realized since 1776. However, software disables its natural development process of “gap-filling” when it has no capacity or capability to change, and the organization has a vested interest in the status quo. Producers have relied on “cost cutting” to generate value for decades and have nothing to show for it but a fundamentally destroyed service industry. Specialization & the division of labor in terms of the development of our user community and their service providers will continue to be a priority. They will introduce the same to the entire oil & gas industry.
Thinking
The contrast between “doing” and “thinking” may grow more significant as we proceed through the 21st century. Writing is thinking. It is becoming increasingly difficult to provide basic services, such as oil & gas, in a timely manner. More may not resolve the issue. Getting ahead of the game may be a thing of the past and a luxury we can tell our grandchildren about. We live in an environment that will require testing hypotheses of various scenarios and assessing the results. Determine what is right based on what generates value for the firm. An environment where what an individual gets out of it is based on their value that they generate.
People, Ideas & Objects occasionally provide updates on our activities in the greater oil & gas community. These updates focus on how people in the industry can become active and turn it around. Using the Preliminary Specifications vision. There are business opportunities available in the North American oil & gas marketplace regarding our disintermediation efforts.
Producers' officers and directors have not listened to investors and bankers. Additionally, their unwillingness to invest in their organizations' profitability, which is undisputedly the most profitable investment they could make, raises further concerns among investors. As a result, People, Ideas & Objects allege previous market failures, along with those that precipitated Oracle and IBM's exits. Were due to the inability to source support for appropriate ERP systems development from any corner of the North American producer population. This lack of support has extended into its third decade and today's oil & gas ERP systems reflect that fact. Producer firms provide little financial support to our competitors. If appropriate governance and accountability had been implemented, would the industry have fallen into the current situation? We suggest that ERP system failures and producer actions are no more than the convenience of not having to deal with investors' accountability demands.
As People, Ideas & Objects have demonstrated through our legacy of pursuing profitability based on the Joint Operating Committee. An unwavering commitment to oil & gas since August 2003 seeking to avoid industry issues today. A protracted conflict between ourselves and producers, officers and directors that began with their giggles. Has resulted in the complete destruction of a primary and all its secondary industries. That statement may elicit more giggles from the bureaucrats' sycophantic entourage. However we’ve seen no evidence of trust, faith or goodwill from anywhere towards the producer firms' officers and directors. Producers must play a vital role in actively rehabilitating the service industry through direct philanthropy. And the inventories of work-in-progress, which we suggest may be as long as a seven to ten year timeline, have been cannibalized to the point where they're counted in months instead of years. This occurs as all U.S. basin production profiles decline. A giggling leadership group that doesn't understand profit, why it's so crucial, or how to earn it. It sits atop cultural manifestations of this lack of understanding. Of course we are unaware of the effectiveness of their investments in clean energy, retail, iPhones or space exploration.
Granted others may not see it the way I do. The most accurate analogy I can suggest is a gigantic log rolling down the mountain. It’s now half way down and threatens to level the town. What do you do? The first thing I suggest is that we don't ask industry leaders.
In an unrelated manner we’re adding two new logs to the fire in the form of further discussion of our user community. This includes their service provider organizations and Profitable Production Rights. I will also highlight any notable changes. Secondly we announced our Sales Commission program that will have this community actively involved and benefiting financially from the sale of People, Ideas & Objects Preliminary Specification. Please see the Wiki for further details. And the other recent announcement was our Whistleblower program which has details available here.
These remind us that Oracle CloudWorld 2023 is September 18-21, 2023. Registration for the free “On Air" conference may still be available. If not, the presentations will be available after the conference for a month. We don’t know what will be the focus of this conference. I would anticipate a further extension of the change in direction founder Larry Ellison and CEO Safra Catz took the company at last year's conference. Having filled out the full scope of enterprise needs in operating systems, databases, development, ERP and other enhancements. Making them as secure, robust and accessible on Cloud ERP as they are today. The next logical step was to work with partners to enhance the level of automation possible with such a strong foundation. Last year's conference was about movement in that direction with a few examples of Oracle Cloud ERP new features.
Oracle's pursuit of these automations will benefit North American oil & gas producers with enhanced value generation. Although many appear to be intangible gains in value it is not too difficult to see the overall benefit of reduced time spent filing, checking and approving expense reports, etc. Oracle is seeking to build value for their global customer base through generic business processes. If producers joined People, Ideas, & Objects they would gain the intangible value Oracle has generated. If they continue to persist in their obstinance, they’ll only be set up with even more structural disadvantages than all the other industries that compete on North American capital markets. Which at this point may be their motivation. In addition to Oracle's advantages, this community would bring similar advantages from automation to the North American oil & gas attributes of the Preliminary Specification.
Lastly we would reiterate that investors are disappointed in the performance and lack of action by oil & gas leadership. They see opportunities and feel excluded from the market due to past performance. However, knowing that past performance is unacceptable. Producers who supported the development of communities focused on developing the Preliminary Specification. And fully fund these development needs. Investors may support producers' capital structures in anticipation that change arrives soon and future performance makes today’s investments sound.
Those who are new to People, Ideas & Objects, they may be unaware of the developments of our user community and their associated service providers. They are our primary focus, competitive advantage and we have been active in our user community development since March 2012. Our user community is unique because of three structural components. These include 1) they are licensed to make changes to the underlying Intellectual Property. 2) People, Ideas & Objects developers are licensed to only take input from our user community. And 3) they have discretionary control over their budgetary processes. They work part-time on the Preliminary Specification development. Gaining an understanding from their ownership of their service provider, industry input and their knowledge from the years they’ve worked in oil & gas administration and accounting. They’re able to make the changes to their ERP systems and processes that are necessary to ensure producers remain dynamic, innovative, accountable and profitable, everywhere and always.
Specialization, the division of labor and sharing of the administrative and accounting infrastructure at the industry level are three among dozens of distinct competitive advantages for our user community service providers. They’ll specialize in the development of a process and in doing so, earn the service provider license to manage that process on behalf of the entire North American producer population. (In most instances.) Service providers are a reallocation of the producer firm's administrative and accounting resources into the various service providers to achieve the three noted distinct competitive advantages. Service providers will be the source of the majority of these individuals' income beyond the part-time income they earn as our user community members. Service providers are expected to be of reasonable size and maintain revenues from which our user community members can build substantial value.
Service providers conduct process management and bill the various Joint Operating Committees for their services. In this way, producers who are unable to profit from a specific property can shut-in that property. The service provider then receives no data for that property, no work will be conducted by them and the Joint Operating Committee will record a null operation. At that time, it will be able to apply its innovations towards moving the property back into profitable production as soon as possible. The benefits of doing this across the industry are documented throughout the Preliminary Specification. They fall under the Preliminary Specifications decentralized production model’s price maker strategy.
The point I'm making is that our user community is a substantial career choice for those in the administrative and accounting areas of the oil & gas industry. To provide for producers to begin to build a prosperous and profitable future for all concerned, including themselves.
Long ago we realized producer officers and directors would never fund the Preliminary Specification as they would be highly conflicted with their personal best interests. Therefore to raise the budget that we feel is necessary to develop the software and support our user community we would need an alternate means of raising money. We also knew that the only method that would prove valid in the long run would be that it has to come from oil & gas production itself in some form. If the industry did not pay for it, they’d show no respect or interest in it and the exercise would become futile. The logic behind how we came up with Profitable Production Rights and Flexible Profitable Production Rights developed on the following basis.
Investors expressed disappointment and displeasure with the producer's officers and directors. Producer officers and directors had not participated in appropriate governance and accountability and have today no comprehension of what is meant by profit. They don't know how to earn it, why they can’t and are culturally constrained to make the changes necessary to be truly profitable. What People, Ideas & Objects see as a dead end for the current officers and directors. Outside of what is available in the oil & gas ERP marketplace it’s a simple matter of you getting what you paid for. And since at least the mid 1990s the producers have participated in nothing. The only alternative offering that identifies today's issues and resolves them is the Preliminary Specification published in August 2012. It is based on ten years of research into what, how and why the solution needs to be. Therefore we believe we have the only solution to industry issues today.
In order for the industry to rehabilitate itself, it will require a rebuild on a new culture of performance and profitability. What the Preliminary Specification focuses on. A rebuild, not a situation where we listen or consider what the current culture or officers and directors expect of their environment. The Preliminary Specification is a full on disintermediation of how computers, iTunes, the iPhone, Pixar and the many other industries that Steve Jobs disintermediated.
Profitable Production Rights simply grant access for each boe to be processed through our Cloud Administration & Accounting for Oil & Gas software and service facility we are building through this community. There are approximately 35 million boe produced each day in North America and therefore there are equal numbers of Profitable Production Rights. Each sells for $600 and entitles the owner to process one boe through the facility. Producer firms will need to license or rent the Profitable Production Rights necessary to process their production. In order to acquire that capability they’ll need to negotiate with the Profitable Production Right holder for monthly access to their rights. Or…?
Some comments on People, Ideas & Objects' handsome budget. I have worked to solve this problem since 1991 and have experienced a number of costly failures in the marketplace to date. I have worked since 2003 to bring about the opportunity for industry to resolve the damage and destruction it has seen at the hands of these officers and directors. My value is earned, in my opinion. My value is not determined by the past 32 years at minimum wage in terms of back pay. I feel I can deliver a substantial value proposition to the oil & gas industry and it is packaged with a big bow at the moment. I have traded one third of my earnings and one third of my Intellectual Property royalties from this to subscribe to 33% of the Profitable Production Rights in what are called Flexible Profitable Production Rights. Which indemnifies the Profitable Production Rights holders from any production being shut-in due to a lack of profitability, with the caveat that the producers are actively looking to bring it back into production. Any suspension or abandonment of the property releases the Profitable Production Rights holders to seek other production. I know that since 1991 I’ve worked as hard as humanly possible to solve the problem. If this is unacceptable, I am fine with that.
This is a brief summary of these rights. They are being rewritten as we speak and will be published in three blog posts starting October 4, 2023. Again they are stated here as a means to show the various ways that we are actively disintermediating the oil & gas industry and setting in place the solution, how this community can participate in doing so and the value they can earn from these activities.
Operationally People, Ideas & Objects, our user community and their service provider organizations introduce a number of new principles of how oil and gas will increase its performance. Taking the lessons that have been and are being learned today from the new paradigm of cloud computing. We’ve expanded the general concept to include the administrative and accounting processes that are conducted within the industry. The benefits that will be achieved as a result of not only the use of cloud computing but also these principles being applied to the other non-competitive attributes of the producer firm. These will be dramatic in terms of increased financial performance that the industry experiences. This is stated when the industry's leadership has capitulated the viability and commercialization of shale to the same dustbin their management has done with the rest of the industry.
What we see is cloud computing simply centralizes or industrializes the computing power that would otherwise be needed by the firm. Making it on demand for a small fee on the basis of how and when it’s used. Moving it from a fixed capital and operating cost to a variable operating cost. The need to build the physical infrastructure and maintain it in house is a costly undertaking with the need to build the capacity and capability that will satisfy the peak demand in a reasonable period of time. The maintenance can become a significant part of the cost when the software stack becomes ever more capable and the features demanded by users more complex. The need to have these resources in house, or to go without the feature, becomes less and less of a viable or financial choice. Whereas the cloud computing providers can disperse what are to them incremental costs across their vast user community. Therefore the cost of computing from a capital point of view disappears. And the resource becomes an affordable variable cost. The features become enhanced and far more capable due to the ability to distribute the costs across the higher population of users. If you’ve never used a cloud computing service on a personal basis I would highly recommend it. Google has its Google Cloud Platform which from a general user perspective is the far superior service in my opinion. However Oracle's Cloud Infrastructure is the industrial choice to use. Note it will also be the cloud computing offering that will be used by our user community and their service providers in the People, Ideas & Objects Preliminary Specification system.
It is this feature of cloud computing that needs to be applied to the larger areas of administrative and accounting in oil and gas. There would be no reason that these same principles could not be applied here to solve many of the issues being experienced in the industry. Taking the administrative and accounting costs of the capacities and capabilities that are demanded of the producers to function in the North American public markets. It is these overhead costs that are consuming producers profitability. Each producer replicating the exact same uncompetitive capability and capacity in an unshared and unshareable configuration is costly and inefficient. We believe this to be the secondary reason behind chronic overproduction that profitability is such an issue. If there is an organizational principle of decentralization that is exploitable by the use of the Internet, making industry overhead variable is most certainly the beginning.
These are what we’ve adopted in the configuration of the Preliminary Specification. It is how we’ve configured the user community and their service provider organizations to function in providing the administrative and accounting capabilities and capacities to the North American producers. It is all of the above and it’s more. It is this configuration that enabled these costs to change their characteristics from being fixed, producer based capabilities and capacities to a variable cost, industry based capacities and capabilities. Where if the accounting of the property in the Preliminary Specification showed that the actual, factual performance of the property was a loss it could be shut-in. When it was shut-in it would be producing no data that would generate any subsequent activity in the service providers, no work would be conducted by them, for example no costs for the recording of revenue, and therefore the property would incur a null operation, no profit but also no loss. Enabling the industry to remove the marginal production from the market. When the pricing of the commodities are subject to the economic principles of price makers then producers will only produce when profits are achieved. Producers will only increase production when it can be done so profitably. And this chronic overproduction across North America will stop, as will the need to always participate on the treadmill in order to pay the fixed overhead costs. A producer capable of producing 100,000 boe / day would be able to produce at any level of their production profile, based on the market price, and remain profitable at all times. Whether that was 100, 95, 80 or even 50 thousand boe / day it wouldn’t matter when all of their costs have become variable cloud based capabilities and capacities.
These are just simple, modern day examples of the expansion of specialization and the division of labor that are available to us as a result of the development of the Internet. They hold untold riches for society when we understand all the value that has been generated by them since 1776 when Adam Smith wrote his book “The Wealth of Nations.” There has been no other source of value generated other than from specialization and the division of labor. Application of it in the form of cloud computing is being experienced and realized today and that is leading to its strong(er) uptake. Expansion of the same concepts within industries is to be realized in other areas and that is an organizing principle that we’ve adopted in the Preliminary Specification. These are detailed in the Organizational Constructs section where we’ve identified the five main organizing forces being employed include Information Technology, Intellectual Property, Markets, Specialization and the Division of Labor and of course the Joint Operating Committee to define and support what is conducted in oil and gas.
There are a number of inherent virtues of configuring the accounting of the industry in this manner. With the service providers conducting the transactions of the producers. There is an objectivity used in how they apply their process to the data they process. In many cases they’ll know very little about the data other than what is necessary for them to effectively conduct the process they’re responsible for. Therefore every producer will be receiving the same standardized accounting process management and transaction processing that any other producer will obtain. This is critical when the onus is on the individual producer to shut-in the production of unprofitable production. The accuracy and timeliness of that accounting information which is the base of that determination of unprofitability is going to need to be objective and producers will need assurance that all other producers were subject to the same criteria in determining their profitability. With these methods described in the Preliminary Specification this assurance will be provided. If Exxon were to be calculating their profitability on an unknown and different basis would other producers be willing to accept that their property was unprofitable? At the same time if Exxon was the source of the accounting system used in industry would anyone doubt the objectivity of that? This independence of the service providers, standardization of accounting and objective nature of the work being done brings a new level of integrity and reliability into the outcome of the efforts of the industry. There will be a standard of objective performance that is applied to all production irrespective of the producer or its influence outside of the business. When the integrity of the accounting of oil and gas is such that the investors have abandoned the industry for the past six years and demanded tier 1 ERP systems. I see this as a mandatory requirement.
Typical of any industry in a crisis the ability for new and innovative firms to enter and prosper ceases to occur. The effect of the inability of the start-up to junior oil and gas firms to prosper in the past several decades has finally become a reality where their existence is challenged and seemingly terminal. There are to my knowledge no new companies being formed and the consolidation of the larger producers is a symptom of the same decaying carcass. For a dynamic, innovative, accountable and profitable oil and gas industry there needs to be a diversity of firms participating. With a broad and robust level of new and innovative firms leading the way. The question therefore is how do you implement a system that introduces the complexity and comprehensive difficulty of Oracle ERP Cloud with the Preliminary Specification into the startup and junior oil and gas firm in order for them to compete for capital in today’s North American capital markets? The lack of success of the small and junior oil and gas producer has been attributable, in my opinion, due to the demand for them to achieve the financial momentum that will include the costs of the executive, accounting and administrative overhead that is demanded as a minimum requirement of a producer listed on the regulated public markets. Let’s put this requirement at $3.5 million which is a standard that demands more than just the engineering and geological skills of a producer.
With People, Ideas & Objects Preliminary Specification, our user community and their service providers, producers large and small gain the ability to be able to access these systems to conduct their business on a standard, objective service that is a variable cost. A startup and junior producer doesn’t need all of the features when they start and can build their firm on the basis of what is used when it is used on a variable cost basis. The benefit of having the service provider delivering their service and the software ensures they’ll have the capacity and capabilities available when required, but also they’ll have the state of the art administrative and accounting providers who are trained in these by their daily use across the industry. Initially access to the Preliminary Specification may be as little as what is needed to prepare their financial statements. This short paragraph does little to establish how the Preliminary Specification, our user community and their service providers are able to provide these services to the startup and junior producers and it is more comprehensively documented in the Organizational Construct section located here. When you sign on to a cloud computing provider you’re signing on to the most complex and comprehensive systems ever conceived. You may not appreciate that when you reduced your accounting close in half and received the shockingly affordable invoice.
I’ve discovered another mistake that I’ve been making throughout these past years. I’ve been referring to the Preliminary Specifications publication and completion as being December 2013. In retrospect I don’t know why. Reviewing this blog I see now that it was actually August 2012 that it was completed and published. What occurred throughout 2013 was a discussion of the impact and consequences of implementation of the Preliminary Specification in oil and gas.
On the other hand we have no shortage of work to do. Much needs to be done in the next few years. The Preliminary Specification needs to be built. The engineering and geological explicit knowledge needs to be captured as Intellectual Property and developed. New oil and gas firms need to be formed, capitalized and organized. Assets need to be transferred to these new producers in innovative, strategic and tactical ways. In this process we’ll all be helping the current producers to travel faster down their chosen journey to clean energy by disposing of dirty oil. This transition to the Preliminary Specification is something that must be done to deal with the financial difficulties the industry is plagued with from the current administration. This also needs to be done as preparation for the future. And to learn from the experience of this transition as we’ll be faced repeatedly with situations that share this same scope and scale of change in the near future of this business. We’ll therefore be somewhat prepared and experienced in challenges of this nature. Please review our Production Rights to see how everyone can participate in making this new oil and gas industry happen. An industry where it will be less important who you know, but what you know and what you're capable of delivering, what the value proposition is that you’re offering?
Those interested in joining our user community are People, Ideas & Objects priority and focus. The Preliminary Specification, our user community and their service provider organizations 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, everywhere and always. In addition, our software organizes the Intellectual Property of the exploration and production processes owned by the engineers and geologists. Enabling them to monetize their IP for a new oil & gas industry to begin with a means to be dynamic, innovative and performance oriented. Providing a new investment opportunity for those who see a bright future in the industry. A place where their administrative, accounting, exploration and production can be handled for the 21st century. People, Ideas & Objects have joined GETTR and can be reached there. Anyone can contact me at 713-965-6720 in Houston or 587-735-2302 in Calgary, or email me here.
We’ve come across an opportunity in terms of implementing the Preliminary Specification in oil and gas. The opportunity is presented to us through the work that Oracle has done with their products, services and offerings. Moving to the cloud has enabled them to bring about enhancements to their offerings, but most importantly it’s the changes that we’ve seen to the Oracle Database. We’ll get into more detail as we proceed however my research has determined that what is attainable and desirable is that we standardize the data within the business model’s and markets of the Preliminary Specification into a data model. The objective being to standardize all the elements of the administrative and accounting processes and management of the greater People, Ideas & Objects community and the greater oil and gas economy onto Oracle’s Database offering. In order to achieve this otherwise unattainable objective, an industry would need to be undertaking a comprehensive, industry wide “rip and replace” development and implementation of their ERP systems. An industry that has been determined to have comprehensively failed and one that has no plans or vision for its future or what to do about the current crisis it finds itself in. Granted our use of the Oracle Database in this manner is at the forefront in terms of technological demands, however I see no issue with the maturity of their technologies undertaking these tasks. I do see unnecessary complexity and confusion being introduced through non-standard data elements being included within the Preliminary Specification due to prior preferences, convenience and time constraints. Convenience and time constraints for the people that are imposing the constraints not for the implementation of the Preliminary Specification. I see my role in the development of the Preliminary Specification as a need to ensure that its development and implementation is successful. I believe that the North American oil and gas industry is unable to resolve its issues without the timely solution of People, Ideas & Objects and our user communities Preliminary Specification. What are the alternatives? The more time that is spent developing the solution the many more hundreds of billions of dollars that are being lost each year in the greater energy economy. This should be evident to everyone at this point. I would ask therefore, what would the data elements of an ERP system be in the year 2030? When and how would that standardization of the data have been established? Is the incidental cost of standardized data offset by People, Ideas & Objects value proposition?
I have spoken many times of the superiority of the Oracle Database technologies. Their development over the past decade has been breathtaking to me in terms of the performance and all other attributes of the product. Interestingly the competitive markets response to their superiority has been to break down database services into unique disparate database offerings. The most obvious of this is Amazon’s offerings of relational databases that include Amazon Aurora, Amazon RDS and Amazon Redshift. Each with a distinct purpose and use. These are the premier database products of Amazon’s eleven databases offered. Oracle uses just one database for all purposes. Therefore no matter what the data, the type of performance that is needed, or the structure of the data, Oracle handles it within the same database. Which presents us with this unforeseen opportunity to standardize the data model for the decentralized production model, overall business model, which includes the three market models of the Preliminary Specification and application user groups. I see this as an opportunity that will enhance the quality of our offering, reduce the need for standardization in the future, reduce the time required to develop and implement the solution and increase the usability and understandability of the applications, and therefore bring the Preliminary Specification to market quicker and with greater efficiency than otherwise would be available.
The comprehensive scope and scale of the Oracle database in the oil and gas industry once the Preliminary Specification is implemented is comprehensive. The more that we make the data standard the more secure, reliable and capable it will be able to meet our performance expectations. We are using a micro-services architecture to implement the data processing and process management from the expected 3,000 service providers. The application itself will run much of the industry on Oracle ERP Cloud through the People, Ideas & Objects applications. Some producers will use the proprietary cloud offering that Oracle provides which moves Oracle's Cloud physically inside their shop. And then there will be a variety of People, Ideas & Objects applications that are used within the oil and gas producers themselves in order to understand and operate their businesses and operations. This can all be done far easier with the standardized data being managed within the Oracle Database as opposed to accessing it from here and there in various formats that are not incompatible, but introduce complexity and risk to our development and implementation and to what we are seeking to achieve. That being our $25.7 to $45.7 trillion value proposition over the next 25 years.
It’s important to note here that what I'm talking about is the data model, not the database. The database requirements in this post can all be handled by Oracle's Cloud Autonomous Database offerings. The fact that each service provider will possibly be operating their own Oracle Database, a shard or through shared tenancy is unknown at this time. The same would apply to each of the producers, however having access to the database through shared tenancy would more than likely be the method used there. The use of one tool, the Oracle Database across the entire People, Ideas & Objects application domain, using a standardized data model provides real value for all concerned and a step closer to everyone realizing our value proposition.
I want to reiterate what my personal plans are for the development and implementation of the Preliminary Specification. I have stated here many times that these developments are derivative of the Intellectual Property that I’ve developed over the past number of decades. It’s unknown how much longer it will take before these developments begin however we can all see that the industry is accelerating the steepness of its downward trajectory. The key for me is to watch the actions of OPEC+ as they have attempted for the past 34 years to deal with the North American producer in what I feel is a reasonable way. A way in which the North American producers' best interests reside. North American producers fighting everyone has not done anything for them and now their business is more or less finished. And as we’ve noted in June and July the only thing left to do would be to litigate the losses that have been created over these past decades and secure some of the benefits of the enhanced officers and directors insurance.
As the budget for the Preliminary Specification denotes there is a big payday for myself personally once we’re funded. However, I’ve also stated I would sell People, Ideas & Objects to the industry upon successful completion of the development and implementation. What I have referred to as my second big payday. Included in that would have been the operating company and all of the Intellectual Property associated with these developments. I’m now changing that as I feel it does not reflect the necessary situation that the user community will need to be placed in once the industry is in the position of owning both of these assets. Therefore, upon reflection and discussion with user community members, I’ll be granting 51% of the Intellectual Property to our user community and selling 49% to the producer purchasers in the sale contract. It is in that way the future of the user community is not in question and will be within their own control. Something that I feel more comfortable with and assured that the direction of the software will be the appropriate direction for the needs of the greater oil and gas economy. Please note this has also been changed in the user community vision.
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 Twitter @piobiz, anyone can contact me at 713-965-6720 in Houston or 587-735-2302 in Calgary, or email me here.
HOUSTON (Bloomberg) --Almost a third of U.S. shale producers are technically insolvent with crude at $35 a barrel, according to Deloitte LLP, highlighting the industry’s acute financial strain even as oil prices rebound from a record low earlier this year.
West Texas Intermediate edged up to $40.06 a barrel at 11:38 a.m. in New York, a substantially higher level compared with most of the last few months, especially April, when prices briefly went negative. But the rebound will do little to prevent 15 years of debt-fueled production growth catching up with many shale producers, Deloitte said in a study. Technical insolvency is an accounting way of saying a company will face problems meeting debt repayments.
“New and unforeseen headwinds continue to jolt the industry’s progress,” authors Duane Dickson, Kate Hardin and Anshu Mittal said in the report. “Although the sub-zero price was a temporary dislocation, this intense volatility highlights the fragile state of the industry.”
An Exxon spokesman said the company is in compliance with accounting rules and SEC regulation about disclosures to investors.
