Clarification of the #User #Development Phases

We have in People, Ideas & Objects a somewhat complicated and possibly not well communicated process of how the user community will develop over the course of the next few years. This post will hopefully clarify the various phases that I see the users going through in terms of their interaction within the user community and People, Ideas & Objects. The first thing to do is to provide a clear definition of who I see being a member of the user community. And that is anyone within the oil and gas, the oil and gas service industry or any related businesses that have a desire, capability, or idea on how to provide the oil and gas producer with the most profitable means of oil and gas operations.

We hear how technologies are maturing and becoming more disruptive in the marketplace. That is true and for oil and gas the Preliminary Specification is that technology. The common theme is that people will be displaced and rendered unemployed as a result. This has been the common theme throughout the computer age. They say this time its different due to the fact that the maturity of the technologies will have a much broader impact. We see with the $170 billion in opportunity costs the scope of the impact of the technologies, and they are positive.

Nonetheless I believe there will be some displacement. To those that choose to participate in the People, Ideas & Objects developments. They will be able to take the front row seats and be the first to select which areas appeal to them the most. I think the types of work that we will be doing in the future will be different. We will be offloading the storage and processing to the computers. And we will be left with the innovation, the collaborations, the thinking, the decisions, the problem solving, the creative work, the research and the generation of ideas. Sounds to me like a better place than where we stuff another ream of paper in the printer.

There are three phases that the user participant goes through during the years we are following our plan. They are joining our network on Twitter @piobiz, then committing to the user community and participating in the developments, and lastly, if so inclined, establishing a service provider organization to manage a process for the oil and gas producers. These three phases of joining the user community are detailed as follows.

Joining @piobiz today on Twitter will allow users to keep up with other users and communicate with one another. If you use Hootsuite you can participate in conversations with other users. Generally this is a loosely formed network of like minded individuals that can informally participate, or just keep up to date on activities in the user community as it develops. There are no costs and there are no commitments, just participation. If you are concerned about the bureaucracy then set up an anonymous Twitter account.

The second level requires a little bit of effort and commitment from the user participant. This next level requires that you introduce yourself to the general community and sign the user license. I don’t expect anyone having to go to this level for some time as our developments are not scheduled until 2019. Intellectual Property is the glue that binds the user community together and requires the user community participant to sign the user license. Recall in the budget you are paid for your contributions in exchange for your Intellectual Property Rights. We acquire the IP this way through the user community license, which in turn provides you with unencumbered access to all of the Intellectual Property that is contained by myself or People, Ideas & Objects. I then use that IP to assess the oil and gas producers with the fees necessary to support the developers and user communities.

The third tier of the user community is the service provider which is the mature user community participant that signed the user license and participated in some element of the development. They have intimate knowledge of some aspect of the People, Ideas & Objects Preliminary Specification that the oil and gas producers need in order to be the most profitable oil and gas operations. These user community participants may want to then establish themselves as service providers and offer these services under a service provider license. These will be open only to those people who participate in the user community. They can then set up a firm and provide these services, a process or subprocess management, to the oil and gas industry as their client base. These service providers will have as their revenue streams the current G&A expenditures of the producers that will be diverted to them by the decentralized production model. These revenues are currently estimated in the tens of billions of dollars.

This may seem like an unnecessarily slow process that could otherwise be done much quicker. Remember we are plotting a revolution and the establishment of the service providers is critical to the success of the whole project. It may seem slow, but there is much to do so join me today and lets get the word out.

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

Allocation of our Margins

One thing about being in the software business is the healthy nature of the margins that are realized. For example Microsoft Office earns 73% profit margins for Microsoft. That also assumes you are able to attain the point in your business that you actually earn any revenues. The real downside of the software business is that all of your costs, the actual cost of development, is conducted without the benefit of any revenues. So you have to incur the costs of development before you get to the point of earning any revenues. Such is the way of the software business. And with People, Ideas & Objects large scope and scale, and the small market for ERP systems that the oil and gas producers make up, we have implemented a Revenue Model that is fundamentally different than most software companies. That is, we are developing the software with revenues from the producers. As the scope and scale is beyond the capabilities of the investment community.

Nonetheless the lead times to get to the point where the revenues are realized are significant. We are planning to commence developments in 2019 and complete them in 2021. I started working on developing oil and gas systems in May of 1991 and signed my companies first comprehensive development agreement with Oracle in February of 1992. It is coming up to 23 years that I have had this vision of the Preliminary Specification rattling around in my brain. It represents a life’s work and a life’s investment. I don’t count the amount of money that I have invested in this software nightmare, but it is substantial. The point is I am either crazy or I'm right. And I am very satisfied with being crazy.

So it is to the margins of our budget. I have allocated a 25% Intellectual Property Royalty, or $500 million to 1 billion to myself, the owner of the copyright of all of this material. I know this will cause some backlash in the industry, you understand that I am satisfied with my position in life. Alternatively you can start with your own vision as I did in 1991 and enjoy the smooth and glorious ride that offers. Bureaucrats will hold this royalty out as a reason not to proceed. Denying the investors the almost $100 billion in annual opportunity costs that are lost by using their current business model.

There are additional profit margins of 25% totalling $500 million to 1 billion as well. These are the profits of the firm and are distributed as dividends to the shareholders. It is true that I control 100% of the firm and as a result these dividends will end up in my pocket. I provide oil and gas producers with the most profitable means of oil and gas operations. This is a tangible difference in our business model. The question becomes how do I realize this value that I generate for the industry? The shares are worthless. Once the development is done the revenues will fall significantly and define a much smaller capitalization. Do I have to sell the company to realize the value that I earn? The methodology defined above is the means that I choose to monetize my efforts, and is commensurate with the value that I provide to the industry.

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

#Oracle Budget

We now turn to the Oracle end of our budget. Oracle plays a critical part in the People, Ideas & Objects Preliminary Specification. Their Fusion Middleware and Fusion Applications are the foundation of the eleven module Preliminary Specification. We also use Oracle’s database, Java, hardware, services and solutions. One could suggest we are an Oracle shop. However with this level of commitment to these product categories we can secure Oracle’s commitment to provide the oil and gas producer with the most profitable means of oil and gas operations.

Lets start off with something tangible. Hardware is used by People, Ideas & Objects to run the People, Ideas & Objects Preliminary Specification in a cloud computing configuration. Oracle engineers their hardware to run their database and Java technologies at far faster speeds than the competition. Evaluating Oracle on a cost / performance basis is a slam dunk. No one can currently come close to the types of performance that Oracle is able to attain with their hardware and database. This is one of the premier reasons that we have selected Oracle. This is the reason that they are the dominant database technology in the world and will stay that way as long as Larry Ellison remains the head of the firm. Larry Ellison is the Steve Jobs of the corporate world, and Oracle is the Apple. We have therefore budgeted $100 to 200 million in hardware for providing the Preliminary Specification to the oil and gas industry on a cloud computing configuration. This amount of computing power is augmented with additional processing power. With a share of the $25 to 50 million in the services budget being allocated for the use of the Oracle Cloud service for any of our peak computing demand requirements.

The second budget allocation is $5 million for software. This number has no basis in its determination other than it is a best guess as to what the cost will be to acquire the software for the cloud configuration of Oracle Fusion Middleware and Oracle Fusion Applications. There are individual user licenses that are also budgeted and noted below, this is for the one time acquisition costs of the software for development purposes.

There are a number of services that are offered by Oracle that can be accessed through this budget. I mentioned the cloud computing services. There are also Database Administrators, tuning and related services that fall outside of the development domain. These are collected and provided in this budget allocation of $25 to 50 million.

Then we come to the Oracle developers. It has been my experience that you can learn about Oracle technologies through experience, or you can hire their developers to implement that high level of knowledge for you. The ability to hire their developers provides you with the understanding of the technologies at a higher level. One that you would have eventually learned, at substantial cost. I choose the cheap way and have allocated a healthy budget for the inclusion of $150 to 350 million or 450 to 1050 man years of Oracle developers. Undertaking a large development such as People, Ideas & Objects Preliminary Specification and using Oracle Fusion based products demands that we extensively use Oracle developers. They are, in a very significant way, an insurance policy for the oil and gas industry in terms of the overall deliverability of the project.

The last budgeted item is for user licenses during the development for the developers and the members of the user community. These user licenses are for development only. Additional charges will come into play for the runtime use of the application. And the user license charges at that time will be much larger as their will be large portions of the industry using the application, not just the user community and the developers. These licenses include the entire stack of database, Java, Oracle Fusion Middleware, Oracle Fusion Application licenses. These are budgeted at $3,700 per man year for a total of $9 to 18 million.

Oracle brings a unique character to the Preliminary Specification. I am pleased to be providing People, Ideas & Objects applications on their technology. When we add the user community to this we become ever so stronger. We are building an application for the 21st century and now is the time to get involved.

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

#User Defined Software

When does People, Ideas & Objects commit to the user community? How do we prove that we are user based developments? We say that we are user based ERP systems developments, but how do we differentiate ourselves from the marketplace in terms of being user based developments? Is it an important point to be “user community based” in the oil and gas industry? These are some of the questions that I will answer today. And in turn provide the direction and leadership that is necessary for the next phase of what we undertake.

Lets first answer the question “is it an important point to be user community based in the oil and gas industry.” It is critical to have the user provide the developers with the leadership and direction for the systems that they will use, in my opinion. If we look at Apple and Google, both of those systems are developed with heavy user involvement. There is a difference that is both quantifiable and qualifiable. The most important difference to us is the impact that the Preliminary Specification has on the industry. Every individual, producer, service provider, service industry participant, etc are affected. Primarily through the decentralized production model. This demands that the people who are involved in this work today, and those that are involved in it tomorrow are intimately involved in the design and development of these systems. We all know what happens otherwise with the traditional top down approach.

Assume for a moment that we had secured all of the financial resources that were needed for the development of the Preliminary Specification. What would be the first thing that we would do with those funds? It would be to develop the user community. And those financial resources would sit and wait for the day in which they could be used to develop the Preliminary Specification. Until the user community is developed there will be no development work undertaken at People, Ideas & Objects. Therefore the user communities development has to be our number one priority at this point.

To organize ourselves doesn't cost anything and helps us to prepare for the time when the development funds do arrive. It will be at that time that we can begin the actual software developments. As we stand today the bureaucracy is well in control of the situation and they will never participate in the development of People, Ideas & Objects. The CEO and CFO, the investors and many of the people in the industry agree that the bureaucracy needs to be replaced with something in the technology field. The Preliminary Specification is a possible alternative. If the user community for the People, Ideas & Objects developments existed it would make the Preliminary Specification a viable alternative. And that has to be our mission in the short term. To provide an alternative means of organization to the oil and gas industry.

By developing the user community we lose no development time due to the bureaucracies attitude towards us. This is work that we can do without the need for financial resources. Participation is simple, just setup, or use your Twitter account and Follow @piobiz its that simple. Things will happen within that network as a result. Users will be able to communicate with other users. People will be able to keep up to date on all that is happening within that network. And as time passes and the user community grows, the industry will see a viable group of like minded individuals that are capable of providing a means in which to provide the oil and gas producers with the most profitable means of oil and gas operations.

If you are concerned about retaliation from the bureaucracy. A very real concern. Set up an anonymous Twitter account. There is no need for anyone in the user community to take any career risk as a result of joining the network. The purpose of this is to communicate and collaborate around the needs of developing the user community and providing an alternative means of organization to the oil and gas industry. So join me now and lets spread the word to other like minded individuals who know there is a better way.

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

Developer Budget Category

We move on from the User Budget Categories to the Developer Budget Category. In many ways this is a far simpler budget in that it maps directly to the user budget. That is each hour of user community time is matched with one hour of developer time. So the allocation of the time of the developers will follow exactly that of the User Budget Categories that we have already spelled out. The costing of the developers is at the same rate of $185 U.S. as the user community. The main difference is that user community is a third party transaction with an independent business, and the payment to the developers is to salaried personnel. The $185 therefore also includes our overhead for office space, administration, computers, networks and software, etc.

We therefore have the same 1,000 to 2,000 man years of time, or $333 to 667 million budgeted for the developers for the term of the first commercial release. As we will see in the Oracle cost section we have additional developer time of 450 to 1050 man years of their developers joining the development. These are for a variety of reasons that we will discuss when we get to that budget category, however it is reasonable to assume that there will be some mixing and matching between the People, Ideas & Objects developers and Oracle developer categories in the user community.

We have two additional budget line items in the developer budget. The first is “Product Owner” which are positions that are part of the developer team. For the type of development we are conducting these people will represent the user community on the development team. They have broad authority and responsibility and can affect changes to the development. They are the user communities representative on the ground in the development team. They will be selected for their industry experience and knowledge of the specific nature of the module or characteristic of that specific development team. Therefore they will be speaking the same language as the user community. They will be senior in terms of their education and experience and understanding of the oil and gas industry. They will also understand the technology. We have budgeted for 25 product owners, one for each of the development teams. Each product owner is provided with support staff and a discretionary budget. The costs for the anticipated three year term of the initial development is therefore $33.6 million.

The second budgeted line item in the developer budget is for research. This is for oil and gas related research in terms of the work that has and will always be carried out by People, Ideas & Objects. We are a research and software development company. It is the ten years of research that we conducted into the use of the Joint Operating Committee that has brought us to the Preliminary Specification. It doesn’t stop here. As we mentioned yesterday the Preliminary Specification is a framework for solving problems. Expanding our research capabilities will help in providing some leadership and direction in terms of where the Preliminary Specification will need to move to solve future issues. We have therefore designated a budget of $10 million for the three year term of the development to provide for the addition of ten people. And therefore the total budget for the Development Budget Category is in the range of $375 to 710 million.

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

Review of the Decentralized Production Model

It has been a while since we reviewed the decentralized production model and I thought that a quick review for the new year would be timely. Our focus lately has been on the value that People, Ideas & Objects brings to its various stakeholders. With $667 million in development funds to the user community, tens of billions in revenues being established in the service provider sub-industry (this being through a reallocation of the G&A of the producers to the service providers), and the opportunity costs of $170 billion for 2013 and 2014 for the producers themselves. This value generation is the opportunity that is open to each of these communities as a result of implementing the decentralized production model of the Preliminary Specification.

Implementing the decentralized production model will be the first material operational solution that the Preliminary Specification has solved for the oil and gas industry. When we move the compliance and governance frameworks of the hierarchy into alignment with the legal, financial, operational decision making, cultural, communication, strategic and innovation frameworks of the Joint Operating Committee. We achieve a speed, accountability, innovativeness and profitability within our producer organizations and Joint Operating Committees. We are also able to solve the operational issues of the industry. This is the value of the Preliminary Specification, the ability to solve problems. Moving the industry away from its muddling along strategy to that of an innovative, dynamic, proactive and profitable industry.

The decentralized production model starts by stripping the prototypical producer down to the C class executives, the earth science and engineering resources, some land and legal, and support staff. The rest of the producer is reallocated to service providers who are focused on a process or subprocess and are using the entire industry as their client base. These service providers are new organizations created as a result of implementing the Preliminary Specification. And are generally owned and operated by the people who are involved in the user community that defines the Preliminary Specification. The service providers form a sub-industry due to their size. With a revenue stream in the tens of billions of dollars, monies that were previously spent by the producers on General and Administrative expenses.

One of the key differences in the decentralized production model is that the service provider will be charging for their service to the individual Joint Operating Committees that originate the transactions. Whether that is for production, revenue or royalty accounting or any other administrative, accounting or overhead item. The service will be provided to the Joint Operating Committee where the production originated and that is where the service fee will be charged. None of the fees for any of the service providers will be charged to the producer firms, only to the Joint Operating Committees.

As a result when the property is shut-in due to low commodity prices, the field data or activity that triggers the service providers to conduct their services, and bill their fees, are not triggered. Therefore no work is undertaken for that property and no service fees from any of the service providers are sent to the Joint Operating Committee that was shut-in. As a result the producer who has an interest in the property saves the reserves for a time when the commodity prices will provide for a profit, incurs a null operation (no loss, and no profit), and removes the excess production from the commodity marketplace allowing for the markets to remain in balance.

The $170 billion opportunity costs calculated above are based on the producers removing 15% of the natural gas production from the marketplace. And in turn they achieve what they prescribe as market rates of $6.70 / mmbtu on average for the year. The decline in production is possible with the decentralized production model because there is a commensurate decline in the overhead that the producer will realize. If they cut 15% of their production they will cut 15% of their overhead costs. Their financials will appear consistent in any production profile as their overheads are now variable under the decentralized production model. For the service provider it may be that they are faced with a 15% decline in their revenues as a result of low natural gas prices. And this is something that they can budget for.

With over 200 years of natural gas reserves, rationing production based on profitability is the only reasonable methodology. That is what the decentralized production model provides the industry. Any producer who produces natural gas at a loss would be penalized in the capital markets for a lack of production discipline. The alternative is to muddle along for another 200 years.

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

Contingencies User Budget Category

We come to the final User Budget Category, that being Contingencies. We will incorporate an overall summary of the User Budget Category in this post as well. How quickly we have spent the $333 to 667 million that has been designated for the user community. 1,000 to 2,000 man years of effort is a sizeable effort, and I think this series shows what the user community can accomplish in terms of ERP systems in oil and gas. Building off of the vision of the Preliminary Specification and the Oracle Fusion Applications provide you with a good foundation that will enable you to achieve our objective of providing the oil and gas producers with the most profitable means of oil and gas operations.

The Contingency User Budget Category is set at 6% of the total funds, or $20 to 40 million, or 60 to 120 man years of effort. These funds can be used in any area where we have misallocated our resources and find the need for more. At 6% it is a small percentage of the total funds as I suspect that there may be some areas where there are funds that are left unspent. Those monies can be clawed back into this contingency fund and used to allocate to other areas where there are shortfalls.

There has never been a software development initiative like People, Ideas & Objects. Basing our project in the user community is the only way in which I will proceed. The complexity of the oil and gas business does not make for the traditional ERP systems fit. It is like trying to stick a square peg in a round hole. The industry is too unique to be subject to a standard package of one size fits all industries. The need for the user community to define the processes that it uses, and have the developers build the software based on that user definition is the only way that the user will have what they need to do their jobs appropriately.

What job, and what process have we left untouched in the Preliminary Specification. We are exercising wholesale changes everywhere and on everything in the industry, the service industry and creating the service provider sub-industry. The prototypical producer is changed and how people are engaged with them. It is this level of change that needs to be analyzed and designed by the user community with the resources in the User Budget Categories. It will be the users that determine the actual makeup and means of the industry when the People, Ideas & Objects Preliminary Specification goes live in the industry. And it will be the user community, who will also be represented in the service providers, who will be the ones that make the transition to this new vision, a lucrative and profitable career choice for themselves.

If you see yourself in this new configuration, taking on a different role in the industry. One in which your skills, experience, education or leadership can be of value in the user community. Where you can see yourself as the proprietor of a service provider. Providing a unique process management to the entire oil and gas industry. Where your team uses the most advanced tools and thinking to provide your clients with the highest quality services. Then now is the time to prepare and begin the process of building that future for yourself.

We have now started the second year of our ten year plan. A plan which sees the Preliminary Specification operational throughout the tenth year. Our objective for this year is to get the word out and get like minded people involved in this community. We are at the very beginning, but we also provide the oil and gas producer with the most profitable means of oil and gas operations.

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

Earth Science & Engineering User Budget Category

The second last User Budget Category is the Engineering & Earth Science User Budget Category. We have allocated $20 to 40 million, or 60 to 120 man years of user community effort to this area. There will be some overlap from the Research & Capabilities and Knowledge & Learning modules in terms of budget synergies. However, I don't think there will be any other budgeted areas where there can be some joint development work undertaken.

This is a unique area for an ERP system to consider and one that we pay appropriate attention to. Using the Joint Operating Committee brings about an operations focus for all that are involved. That is also reflected in the Research & Capabilities and Knowledge & Learning modules of the Preliminary Specification. This operations focus brings the earth sciences and engineering into focus in the business of the oil and gas producers. It is therefore necessary that we allocate an appropriate amount of our budget to the earth science and engineering areas to ensure that we have included all of the necessary elements that a producer and Joint Operating Committee will need.

Our research produced the Research & Capabilities and Knowledge & Learning modules. They allow a producer to focus on the development and deployment of their scientific capabilities. And to conduct specific tasks such as moving the knowledge to where the decision rights are held. These elements arise more from the business side than they do from the science. I am not familiar with the science from the point of view of the processes that are used in the day to day use and development, outside of capabilities development and deployment. There are, I am certain, many things that I am unaware of that would build value in the People, Ideas & Objects application modules that engineers and geologists would immediately ask for. This budget is for the development of those items.

We are also not recreating the engineering or geological applications that exist in the marketplace today. We are looking to manage the processes that are prevalent within an oil and gas producer that can be more effectively managed in a user driven application. Recall that we have reorganized an oil and gas producer through the decentralized production model. Where the producer is a highly focused unit consisting of the C class executives, the earth science and engineering resources, some land and legal, and support staff. With the remainder of the resources being relocated into service providers. The manner in which these earth science and engineering resources operate will therefore have changed materially as a result. Both production and exploration administration are located in service providers. Therefore the processes that the producers will rely upon will need to be redefined, redeveloped and the software built.

For all intents and purposes the oil and gas producer has changed in material ways and we are unaware of how those affect the earth science and engineering resources of the producer firm. At the same time this area is fully one half of the critical competitive advantage of the producer. And we should be able to take this opportunity to move the processes of the producer firms and move them to a higher level of performance. These are the objectives of these User Budgets.

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

Accounting Firm User Budget Category

This next User Budget Category is interesting in that we are achieving many different objectives with the establishment of this user budget category. What we have done is allocated 17% of the User Budget, or $56 to 112 million to the Professional Accounting Firms. This would total 168 to 336 man years of effort. These are the firms that are responsible for the annual audits of the oil and gas firms for compliance to the SEC and other regulations.

The objective here is to have the accounting firms sign off on the People, Ideas & Objects systems in terms of their integrity on behalf of the oil and gas producers. This work is done in the normal course of an audit, however, with the establishment of People, Ideas & Objects there will be a sizeable burden that the producers will have to undertake in order to achieve this sign off. By inviting the accounting firms into the development process, and having the costs of the producers aggregated in the manner that we have, we can mitigate the total costs to the producers, achieve the sign off at an earlier time and achieve a compliant system in the process.

Allocating this workload across the accounting firms that are present in the U.S. and Canadian regions will make it possible for them to acquire the talent necessary for these purposes. No one firm will be asked to deal with this exclusively as that would slow the development work down. The need for these people to keep pace with the developers and the user community would be their responsibility and obligation. Our responsibility would be to implement their recommendations and achieve the sign off.

These funds have synergies with a variety of other pools of funds that are within other User Budget Categories. The Compliance & Governance module holds the coordination and application design roles over the compliance and governance of the producer and Joint Operating Committee in the Preliminary Specification. Its budget is somewhat small but we are looking at this as the overall check and balance of the Compliance & Governance module. Other funds are coming from the Compliance (Tax, Royalty, SEC) category which will be relying heavily on the work that has been done in the compliance areas of the SEC, royalties and tax regimes in publishing technical frameworks. Other miscellaneous resources have been allocated such as the development of royalties in the Partnership Accounting Module.

There are significant resources being allocated to compliance and governance in the Preliminary Specification. When you consider our application relies on Oracle Fusion Applications which have this area covered off well, we will provide the producer with an effective compliance and governance product. The service providers who will be providing the software and services to the producers will also be well versed in the ways that the application operates. This is due to the fact that they will be participants in the user community that are involved in these developments. Moving on after development to provide the software and services on the basis of the decentralized production model.

It is one of the indirect advantages of approaching the compliance and governance and using the accounting firms to sign off in this manner. And I do not wish to sound too derogatory here. By having the accounting firms provide the compliance and governance sign off. They preclude themselves from participating in the user community in any other capacity. Which also precludes them from any participation in the service provider community. Theirs is a unique service which is not dependent on the type of firm that they are auditing. They believe that they can take their people and move them into other areas, such as the opportunity that the service providers reflect, and build value. And with their brand and marketing dollars overcome the common sense of some of the producers. I know different, and I don't want them servicing the People, Ideas & Objects software and I don't want them pushing out the user community from the opportunity that the service provider marketplace provides them. Having the accounting firms conflicted in this regard will keep the service provider marketplace open to those with the experience and skills, and investment in the user community, to service the oil and gas producers and Joint Operating Committees.

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

Service Provider User Budget Category Part II

Clearly the establishment of the decentralized production model will be one of the most significant events that will happen in oil and gas industry. It will provide the oil and gas producers with the ability to achieve market rates for their natural gas and by-products. It will establish a sub-industry of service providers that are dedicated to the efficient and effective administration of the oil and gas industry at the Joint Operating Committee level. And make for a thriving sub-industry that can undertake the types of workload the industry needs in the areas of administration, accounting, process design, technology implementation and research. I see a significant infrastructure being built just to support the service providers that will enhance the service offerings to the Joint Operating Committees. This administrative and accounting capability, available on an industry wide basis, is what is needed for the 21st century oil and gas industry.

In addition to the User Budget Category allocation that we discussed yesterday. We will have a variety of synergies with the Joint Operating Committee User Budget Category allocations that we discussed in Part I to X earlier this month. These allocations will help to define specifically what the processes the service providers need to provide. Additional synergies are available from both the Compliance (Tax, Royalty, SEC) and Service Industry User Budget Categories.

It would be nice to have the industry hand these monies over in a timely manner and for this community to begin these developments. However that is not going to happen. We have to stick to our ten year plan and be prepared to implement them on that basis. The bureaucracy is hell bent on our failure. They want nothing of this initiative to exist. And they will do everything in their power to ensure that it doesn’t. Remember that there's strength in our numbers and we have the ability to state that we provide the oil and gas producer with the most profitable means of oil and gas operations. The bureaucracy is certainly in control today. However, the CEO’s and CFO’s are with us, but they can’t fight the bureaucracy either. If they tried to turn the ship, the ship would fight back and they would have a mutiny on their hands. Our appeal resonates with the investor class and they are more frustrated with the lack of performance than we are. We need to get the word out, which is our 2014 goal. This is so that the user community can begin to form and the investor class knows that there are alternatives in the marketplace.

What I can do to make this happen is show you that there is money on the table. And there are significant budgets and revenue streams associated with the work we are doing. From the $170 billion in opportunity costs for 2012 and 2013 for the producers, $667 million in development costs for the user community and tens of billions of dollars to the service providers in terms of annual revenue streams. What exactly has the bureaucracy offered you lately? The structure that I am detailing here is going to appeal to the movers and shakers in the oil and gas industry and together we are going to revolutionize the way that it is run, managed and operated. One in which we are structured to solve the operational issues as they occur. That is exactly what the Preliminary Specification does. By using the Joint Operating Committee the producer is enabled to solve the operational concerns that they face. So issues such as low natural gas prices can be resolved through solutions like the decentralized production model. That is the value of this business model. And the fear we strike into the bureaucracy. The fear that people are actually solving problems and concerned for the performance of the oil and gas industry.

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