A New #BusinessModel For #Shale #Gas Production

We have seen in the last few weeks a number of spikes in the natural gas price due to the cold weather we have been having. It is winter and this is to be expected. We should thank all of those who prayed for a cold winter this past summer. Their efforts have certainly been successful. With the higher natural gas prices this eliminates the need for industry to adopt the Preliminary Specification. Or so the bureaucracy would like to think. However, it would be typical of the bureaucracy to manage the industry on the basis of the current conditions. It makes me wonder what happens to these people when it gets dark at night.

What we really need to focus on is the two hundred year supply of global natural gas that is available as a result of shale gas. And ask ourselves how are we going to produce it. Continually at a loss, or can we organize ourselves in a manner that would provide the industry with the opportunity to actually earn a profit? I can assure you what these price spikes in natural gas have done is dusted off some old drilling locations that will be spud here in the next quarter. By summer we should be back to $3.00 or less for the gas price. If shale gas is anything, its prolific.

Its comedic, predictable and destructive. The industry is operated on the two human emotions of fear and greed. Nothing in between. Its also inherent in the bureaucracies current business model. One in which requires them to always produce at capacity. This is in order that they can pay for the large overhead costs associated with managing the production, operation, administration and accounting organization. The organization is fixed in size, capabilities and capacity. It is custom built to support producer “A” at production levels of 100%. Not 80% or even 90%. To scale back production would trigger the demand to scale back the organization. And that can't be done. It is a unique one of a kind organization that has no redundancies. Everything is needed at 100% as it is at 80%. And if you make any cuts to the organization you'll damage your capabilities in the long run and hurt yourself in the long term. Its a catch 22 that no one in the industry wants to or will play. And rightfully so.

What is needed is a different way in which to organize the industry, a different business model and that is the Preliminary Specification. Contained within it is the decentralized production model that addresses the ability of the producer to shut-in production that does not meet the marginal costs. Therefore the only production that would be produced would be that which is profitable.

The decentralized production model does this by taking the prototypical producer and reducing their footprint to the C class executive, earth science and engineering resources, some land and legal, and some support staff. All the other resources that were traditionally employed by an oil and gas producer are reorganized into service providers who are focused on the process and have the entire industry as their client base. Then for example the service provider who manages a process to calculate royalties for the purposes of the Texas Railroad Commission will process their work for the client and bill the associated Joint Operating Committee for that work. And this will be the same for all of the processes that are managed by all of the service providers. What we are doing is moving the producers reliance on the firms administrative and accounting capabilities to the Joint Operating Committees reliance on the industries administrative and accounting capabilities. And in turn making the Joint Operating Committees administrative and accounting costs variable.

So when it comes time for the producer to shut-in the property because it is not producing a profit. All of the service providers will therefore not receive any work units associated with that Joint Operating Committee for that month. And as a result will not be processing any billing for any of the administrative or accounting work that is traditionally done for that Joint Operating Committee during the time that it is shut-in. And it will be understood that during times of commodity price volatility the service providers will have declines in their revenue streams as a result of some of the properties being shut-in.

What this does for the producers that own the property is substantial. It first of all keeps the reserves in the ground until the time in which they can be produced for a profit. Secondly they eliminate the loss on operations from the companies performance. The company will only have profitable producing properties and shut-in or “null” operations that don't produce a profit or a loss. And lastly the commodity marketplace will have less of the commodity in the market setting a floor on its pricing and keeping the steep declines we have seen in the past, in the past.

It is this business model that, may not be needed today, that might be needed tomorrow, that will provide a profitable return on all of the shale gas reserves, all of the time. Something that the bureaucracy should give some thought to, and how their mindless, self serving ways are currently destroying the industry. But then I am biased.

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. 

Killing Two Birds With One Stone

Yesterday we noted that we would be making contact with the investor community when the network for the user community was available to offer the investors with an alternative means of organization. Well that is sort of the case. I don't expect to be knocking on any doors or making any phone calls. The chance that you'll get through isn't worth the effort, second of all they probably won’t listen to you. The investors listen to what is going on down on the street. And that is how we will contact and communicate with them. By making this network available to them, it will also get their attention. And that is about the only way that we can motivate them to act in the manner that we want them to. And that is to tell their producer firms to issue the check for our developments.

If I was an oil and gas investor, frustrated with the situation in oil and gas. Poor earnings, the bureaucracy entrenched and not listening. Unable to assert any change even though I have cut them off from any future funding. That I as an investor have not realized any increase in the value of my investments as a result of the commodity price increases. Would keep my ear to the ground for anything and everything of interest in the domain of how to run an oil and gas firm better, faster, smarter or more profitably.

If I then found a community of like minded people committed to a vision of providing the oil and gas producer with the most profitable means of oil and gas operations. And a technical capability to do so. I would be more than interested in hearing more and seeing what they had.

This is the solution that we have to provide the marketplace. And in a way by developing the network and the user community we are killing two birds with one stone. We are building the capability to provide the industry with an alternative means of organization. And we are creating an awareness with the investor community of our presence and the value proposition that we provide. And that is how this community will be funded and proceed with its developments. From the ground up. Brick by brick, and stick by stick.

The investor is not being asked to front their own investment capital. We are asking them to direct the producer firms that they own and control to forward the money to us. And this is not taking money from the bureaucracy. We will know this money is being directed from the investors and the bureaucracy are not interested in making these payments. So when they try to put conditions and caveats on the money, we can tell them good luck with that. We don't have to listen to them, take the check and cash it. The revolution will be financed with money from the old world bureaucrats who will be powerless to effect any change in our progress or direction.

The investors joining us are what happens when you put networks of like minded people together. There are a lot of other things that happen as well. The point is that if you are committed to providing the oil and gas producer with the most profitable means of oil and gas operations. If you find the opportunities here at People, Ideas & Objects interesting. And think that these changes need to take place in the oil and gas industry. You need to join the network (@piobiz on Twitter) and watch what happens over the next few years. Granted these changes will take some time, but participation early is worthwhile as things will begin happening soon.

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. 

Who Are We Looking For

We have noted before that not everyone will become members of the user community. And certainly not everyone in the user community will become a service provider. However most of the user community will be employed at a service provider, or in the rare case a producer firm. What we are looking for in a user community participant is someone who can take the Preliminary Specification and build upon it the software and services they need to provide the oil and gas producers with the most profitable means of oil and gas operations. People, Ideas & Objects will provide the software development capabilities and together we can move the oil and gas industry forward into the 21st century.

Who are we looking for in terms of the people who should join our network (@piobiz on Twitter). Simple, those who work in the oil and gas, service or other related industries that see People, Ideas & Objects as an opportunity to further advance their careers. I’d like to think that the thing that we are providing the most is an opportunity. One that is in a new frontier of the oil and gas, service and related industries. Many people will shy away from the scale of the changes that we are making. Some will run toward them. In many ways this is a community of like minded people who are oriented to change and are interested in the opportunities that will be available as a result. And that is who we are looking for.

In terms of skills, experience, education and capabilities we will need people from all areas and all levels. It really comes down to the orientation towards change and opportunity. And in that sense I can point out that the user community in our current budget is allocated $333 to 667 million in user community fees for 1,000 to 2,000 man years of effort. These are budgeted at our standard rate of $185.00 U.S. per hour. There is also the service providers who will be derivative of the user community. Their revenue stream will be a reallocation of the G&A expenses of the producers. With the decentralized production model the G&A resources of the producers are moved to the service providers in the form of revenues. Therefore the service providers would be provided with a share of the $40 - 60 billion in current producer G&A expenses as revenues for their firms. The share would be determined on the percentage of the amount of the G&A that is offloaded from the producers to the service providers. I would estimate that share to be in the range of 75 to 85%.

So in terms of opportunities the user community can look to significant revenue streams as a result of their participation with People, Ideas & Objects. This is a business venture where there are significant upside opportunities for those that participate. We are not asking anything of the user community in terms of a volunteer basis. We are only asking that we organize ourselves within a network. A network of like minded people who are ready, willing and capable of forming the requisite user community and service providers necessary to provide the oil and gas industry with an alternative form of organization. One that uses the Preliminary Specification as its vision and Oracle Fusion Applications as its technological base. Then when we have these three components we can turn to the investor community and show them that they have alternatives, that we provide real value and only require their financial resources necessary to proceed. That is what is being asked by People, Ideas & Objects.

Development of the user community is the critical next step in our process. We can do this without the assistance of the bureaucracy. Indeed we need to do it without the assistance of the bureaucracy. They will contaminate our initiative if we accept their money or influence. This has to be a revolutionary type of change. One built from the ground up, based on the users needs and wants. And that is how it is going to be built.

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.

One Implication of the Decentralized Production Model

We saw last week Canadian Natural Resources Ltd purchase the conventional assets of Devon Energy Ltd for $2.6 billion. I wonder if CNRL knows something about conventional gas assets that Devon doesn’t. Like what the implications are for implementing the decentralized production model in the oil and gas industry. By doing so, conventional assets become much more valuable as a result. Making this transaction favor CNRL in the long run.

What the decentralized production model does is turn the oil and gas industry into a price maker. This leaves their history as a price taker far behind. And it does it in a way that doesn't require them to collude or break the law in any way. All they have to do is focus on profitable production. If a property doesn’t produce a profit, shut it in and try to innovate ways to bring it back on production profitably.

People, Ideas & Objects decentralized production model works by stripping the innovative producer down to the C class executives, the earth science and engineering resources, land and legal and some support staff. Reallocating the remainder of the firms resources to service providers who are focused on a process or subprocess and are using the entire industry as their client base. The service providers are then able to provide their services based on a heightened level of specialization and division of labor. Providing their services, such as lease rental payments, production, revenue or royalty accounting etc. directly to the Joint Operating Committee that incurs the service. The fee for the administration and accounting services goes directly to the Joint Operating Committee that incurs the service.

As a result when the property is shut-in there are no activities that invoke the various processes for administrative or accounting service providers to incur any of their services. And hence none of their services are charged to the Joint Operating Committee. Therefore during times of shut-in production only the costs of capital are uncovered. There will be no operation, administration or accounting charges to the Joint Operating Committee. And the property will report a null operation. No profits but also no losses. The reserves will be held for a time when they can be produced profitably and the natural gas marketplace has a floor placed on the gas price.

The net result is that the pricing model of the industry is changed to higher values to enable the profitable production. The dynamic that exists in the marketplace today is that there is enough shale gas making up the production profile that it will be more than just the swing production. It will define what the level of profitable production will be, based on shale gas costs.

Therefore the conventional gas costs, which are substantially lower, will not factor in to what the pricing model requires. They will be profitable, highly profitable at all times. This assumes that the conventional gas properties can maintain reasonable production profiles and keep their operational costs low.

The decentralized production model is a business model for the innovative oil and gas producer. It is also a new economic model for the natural gas business. One that is based on the highest cost production. As it is only that high cost production that will come on to the market when a profitable price is received. And since shale is already approximately 40% of the North American production profile. Its costs will be the determining factor to its arrival on the marketplace.

Therefore CNRL’s acquisition of conventional assets at this time may be timely if the decentralized production model becomes the business model that operates within the industry. Maybe they know something that Devon and I don't know, a guy can always dream.

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.

Think, Act and be Patient

If we are to fight the bureaucracy with a revolutionary vision such as the Preliminary Specification, and organize ourselves with the user community around that vision. Then we need the people within the industry to join this network, and provide a viable alternative organization for the oil and gas investor. That is what we need to do for the foreseeable future. And this may be a long process. It takes a while for someone to listen and be open to new ideas. And it seems everyone has a new idea these days. The bandwidth necessary to consider everything just doesn't exist. And if we get the consideration of any individual our message is complex and requires a significant level of oil and gas understanding to appreciate the message. This is why users need to Think, Act and be Patient.

No one said it would be easy, but I guarantee you that it will be worthwhile. We will be taking the entire industry and moving it into the 21st century. Away from its muddling along strategy of doing nothing in the face of tragic losses from low commodity prices. To a dynamic, innovative, proactive and profitable industry that is able to deal with the issues and opportunities that it faces today and tomorrow. With a user community and service provider sub-industry dedicated to providing the oil and gas producers with the most profitable means of oil and gas operations. The industry will be able to bank on the most efficient, effective and profitable operations possible.

Our goal for 2014 is to get the word out. I understands how difficult it is to get the message that People, Ideas & Objects is selling out into the industry. There is a lot of emotion involved in change related initiatives. People are hesitant at first and this is understandable. Over time however they begin to see the value and are charged up by the opportunity. We are at the beginning stages of the development of the user community and I would ask everyone to spread the word and encourage like minded individuals to get involved in the work that we are doing here by joining our network (@piobiz on Twitter). This community will be built over the course of the next few years brick by brick, and stick by stick.

As difficult as that is to believe that we can build the community that one day will ouster the bureaucracy. We need to remember the power of ideas. Over the course of the next few years there will be nothing that rises to challenge the bureaucracy. Other than us that is. And the bureaucracy will remain complacent and arrogant. The current high prices in natural gas have them believing that the good times are about to roll once again. And that very well might be the case. However, it could also be, with the prolific nature of the shale gas reservoirs, that the market is flooded with natural gas chasing the higher prices which causes another collapse in natural gas prices. If they believe now that the need for the Preliminary Specification is eliminated due to the higher prices, will that mean that the demand for the Preliminary Specification will be necessary when the prices collapse. I doubt their thinking along those lines either. The bureaucracies line of thinking is purely from the point of view of their survival.

We should care less what the bureaucracy does in the next few years and focus on the job that we have to do. Provide the oil and gas producer with an alternative means of oil and gas organization. One based on profitability. Think what you need from the Preliminary Specification in order to make it the ideal application for you in the networked world. And Act on those ideas within the community that is being established here in People, Ideas & Objects and we'll be Patient together for our day when we can take the opportunity, offer our solution to the industry and remove the bureaucracy from the field of play.

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.

The Development of Work Related Networks

People from the industry who join our network (@piobiz on Twitter) are able to state that they provide oil and gas producers with the most profitable means of oil and gas operations. This is the key differentiation between what we do at People, Ideas & Objects, the communities that are aligned with us and the rest of the industry. Profitability has been ignored by the bureaucracy for too long. The bureaucracy are incapable of generating any real profits and focus instead on cash flows to convince themselves of performance. Investors now want profits and will not accept anything but. Therefore the industry must restructure itself based on the capability of generating profitable operations. A fundamental shift, and one that requires new business models, like that in the Preliminary Specification.

Its one thing to implement a new business model, and we have all seen how those go. Another round of encouraging doublespeak from the bureaucracy burdened down with presentations on how things need to, and will change. Only for things to fade to the great black hole of the bureaucratic shuffle that we all know and love. This is also one of the reasons that we need to make sure that we are not embraced by the bureaucracy. They will crush us. What we need to do is to create an alternative means of organization for the oil and gas investor to rely on to manage their oil and gas assets. One that replaces and eliminates the bureaucracy.

What if there was a community of like minded people, guided by an overall vision of how they could provide the oil and gas producer with the most profitable means of oil and gas operations. Willing and capable of providing a solution to manage the oil and gas industry in competition to the bureaucracy. Is this what is needed in the oil and gas industry today? Is this the manner of how work is undertaken in the future? Where like minded people organize themselves to solve difficult issues and build value for industry? How else will the bureaucracy be dislodged and eliminated?

What people need to do is to review the Preliminary Specification and determine if it is the vision that they can stand behind. Then they need to join our network (@piobiz on Twitter). There they can communicate and collaborate with other like minded people and begin to develop the community that is needed to show the investors the viability of an alternative organization. It is in that network where members will think, act and be patient as we break down the bureaucracy and build up our alternative. After all it is a revolution that we are talking about.

It is the revolutionary components of what we are doing that differentiate us from the powerpoint wielding bureaucrat. Their change efforts, if we were to try to have them develop People, Ideas & Objects now, would end up in a system with no user community. In other words an unusable system, just what the bureaucrats want. By building the user community now we'll have the people necessary to define and build the systems they want and need when the funds do arrive from the investors. And as a result the chances of success will be much improved.

This network of People, Ideas & Objects is the beginning of a what could be called a “work network.” People are very familiar with social networks as we experiment and learn to use the Internet they eventually will move into the work environment. People, Ideas & Objects “work network” will become the place where industry participants can go to solve their problems, collaborate with other like minded individuals and organize themselves to conduct units of work. It will be for all intents and purposes the replacement to the bureaucracy. So this is not just a temporary one off development of a network. The People, Ideas & Objects network and user community will be the place that you more or less go to work to in the morning. That is what we are developing here, and why its important that we 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 anyone can contact me at 403-200-2302 or email here. 

The Future, Is Here

It arrived late last night and I don't think there is anything anyone can do about it. We now live in an environment where “things” happen faster than we can think about them. Control is a myth, you're either with the flow or you're road kill. I’d like to think that People, Ideas & Objects is with the flow, however, I feel I am getting some push back from the readership. These things will be determined in the near future. What People, Ideas & Objects have is a sound vision in the Preliminary Specification and a strong technical base with Oracle Fusion Middleware and Applications. Our readership feels its time to leverage this into action within the industry and have the software built. I wish it were so easy.

Action by the bureaucrats at this time is not going to happen. They barely raise an eyebrow at the sight of $170 billion in opportunity costs. It is these bureaucrats who are in control of the industry and make the decisions as to whether they will participate in the development of People, Ideas & Objects software. There is no convincing them. The investors on the other hand are furious with the manner in which the industry is operated. Little if any new money has been invested in oil and gas in the past few years. All of the capital investments have been generated by cash flow and bank borrowings. Look at the junior producers and see how they are strained to the limit in terms of financings. There has been a wholesale investors strike in the industry since 2008. They want to see changes and the bureaucrats don’t see any need for any changes. They feel fine as they are!

What is needed is for the investors to see a viable alternative organization that deals with their issues offered to them. The Preliminary Specifications vision and Oracles technologies are a good start but we need the critical element to make this offering real and that is the user community and the service providers to replace the bureaucracy. Therefore it is our number one priority to establish the user community in a manner that the investors can see a viable alternative, get behind it, and direct the producers they control to fund the developments and start the ball rolling. That is how this will develop. If we concentrate on doing our job in this way, I think the funds will flow as a result.

And what we are establishing in a large way is not a new business. It is a sub-industry that sits between the oil and gas, the service and the technology industries. This sub-industry will consist of the service providers who are the administrative and accounting capabilities of the oil and gas industry. This will not come about overnight. We have scheduled development of the software to begin in 2019 which will be heavily dependent on the user community. And require the service provider sub-industry to be fully formed in 2022 when the system is operational. So here in 2014 we have the time and the opportunity to do this right.

Does anyone see the bureaucracy being a viable alternative in 2022. Are they the choice that the industry will continue with for the remainder of this century. With their entrenched power and attitudes how will they be removed from the scene. A difficult task to do if we don't work together under one common unifying theme, towards common goals. And that is why the Preliminary Specification is so important. It provides the vision and goals for people to see where we need to move too. And as we discussed last week it is on the basis of Intellectual Property that this sub-industry operates. It is the glue that holds it all together and makes it work. People who work within this community can say they provide oil and gas producers with the most profitable means of oil and gas operations, because they do.

The future is most definitely here. I can understand the frustration of some of our readers in terms of People, Ideas & Objects current direction and focus. We need to fill out our offering in terms of how we will provide the alternative means of organization to the industry. And then we will be able to leverage that into the action that the people want to see today.

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.

The Value of Ideas in Today's Economy

We are beginning to see the value that ideas are taking in the global economy. And it is consistent with what I have felt their value was for the last few decades. I have spent my time working on ideas as I believe they are the only thing that is of value in the future economy. Physical assets are more or less useless on their own. More than that they are an albatross around your neck that constrain your ability to grow. It isn't worthwhile to own the oil and gas asset unless you have access to the software and services that make the oil and gas asset profitable. That is the logic of the economy that we are heading into. It is also the reason your participation in this user community, and as a service provider, are important to your long term economic health.

Intellectual Property is difficult to develop. It takes a lot of hard work and an immense amount of luck. And I got lucky. Using the Joint Operating Committee as the key organizational construct of the innovative and profitable oil and gas producer is a breakthrough that struck me like a lightening bolt. I knew immediately I had something and set out on almost ten years of research to prove it. I still have years to go before this investment provides any value to me, however, I am much closer now than ever before. This is the road that you can chose to travel if you want to develop Intellectual Property that is unique and new in the marketplace. I own the Joint Operating Committee so you'll have to come up with something else, and I wish you all the good luck in the world.

This user community can offer you a different road. The hard slogging might appeal to some but to most it is a no brainer. As a member of the user community and particularly as a service provider you will have a license to access all of the Intellectual Property that is developed here. As a service provider you are able to leverage that Intellectual Property with the services that you provide the industry. The license will provide you with monopoly rights to manage the process that you are responsible for. The license will not be granted to another service provider in your area. I'm thinking there may be a division between the U.S. and Canada, and maybe there won't be. It’s difficult to tell at this early stage. For the purposes of your process you will have the Intellectual Property rights to administer that process exclusively. Therefore your focus will be on how best to manage the process and use the toolset of specialization and the division of labor to make the services as efficient, effective, and profitable for the oil and gas producers.

Not everyone can be a service provider. But they can still be members of the user community. And those members of the user community will be employed by the service providers. And as a result will have been granted a license by People, Ideas & Objects to freely access the Oracle and People, Ideas & Objects software applications. This will enable them to work on the processes that the service providers manage. This may not seem to be too much of a benefit but not everyone in the industry can be members of the user community.

Members of the user community need to be those people who are committed to providing an alternative organization to the profitable oil and gas producer. They are the people with the education, experience, skills and understanding of the industry that is necessary to make the difference in the industry. It is the user community that is taking on an important role in the future of the industry, and they have the power to make change through control of the Intellectual Property that makes up this environment. And that is why we need to do things this way.

It would seem that we have turned down a dark road when we are selecting who can and who can’t be part of the user community. Anyone can join the network on Twitter and work their way into the user community. User community participation is something that can be earned of course. But a person needs to qualify because of the importance of these positions. The 21st century is a completely different world in terms of Intellectual Property than what the previous centuries were. Its important that you have the means in which to operate in that environment.

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.

Your Personal Information Systems

“A wealth of information creates a poverty of attention.” Nobel Prize winner Herbert Simon.

I have had some disturbing conversations with some people lately that I think reflect they are heading in the wrong direction. They say they are too overwhelmed by the volumes of information that they are receiving. And as a result they are opting out and focusing only on the relevant things that affect them. “Forget about the fire hose and chose only to look at what I am interested in.” I think this is a dangerous and unnecessary step towards being precluded from what happens in the technology and particularly the economic field. This to me is like saying you will no longer participate in the human race. Creating a secondary class of citizens who are unable, and lack the will to participate in an advanced economy that is soon to be upon us.

I think they have misdiagnosed their problem. I think that instead of being tired of the effort necessary to keep up on all of the necessary information required to participate today, their personal Information Systems are failing. The data and information that they are sorting through is too broad and unorganized. Too basic and requires too much manual effort to discern any value from it. What they need is to use their computers to control the flow of information in a way that they can select what is relevant from a variety of sources and choose the most pertinent and highest quality. What I am saying is not simple, and the effort necessary to “build” such a system takes time and effort, but it desperately needs to be done.

In terms of time I have worked to control the flow of information that I need to keep on top of. My Information System has taken me the better part of ten years to put together and it is quite sophisticated. The range of topics that I need to keep on top of include the oil and gas business, the technology marketplace, Oracle’s technologies, the economy, politics, societies demands to name just a few. And we all know the devil is in the details. The amazing thing is I can maintain this domain of knowledge with as little as one and a half hours per day, and no more than two and a half hours per day. Including weekends. I generally know one to two days before the headlines show up on the nightly news. The value of this in my business is immeasurable. In a few years it will be challenged by the flows of informations growth and the importance of it.

So how is it done. Quality is the first criteria in selection. The problem with quality sources is they don't publish regularly so you need a high volume of quality sources. Secondly seek out people who you generally agree with and have a good understanding of their positions. These can be anybody in the public domain. Like minded people are easily found and easily listened to. The next is take an equal amount of people that you have selected that are like minded, and select people who are those that you are diametrically opposed to. People, that you can't stand to listen to or think they are crazy. And listen to them carefully. Understand their point of view. Subscribe to a diverse source of news agencies on a local, national, continental and international basis. Understand your sources, you’ll be receiving the same information from multiple sources. Video is a priority. Will someone have a video presentation of that story then wait for that video. Otherwise select the source that will give you the best perspective on the story.

There are a variety of tools that are available today. Everyone will have their favorites. I use upwards of ten. I never access this on my iPhone, I can’t fit my world into a four inch screen. Some of it can be used on my iPad but most of it comes through my computer. In fact all of can be run through there the easiest.

I think its important that we keep up to date in the world as we progress in what is going to be an important time for mankind. The Internet Age will be the same as the Industrial Revolution in terms of the impact on people. But we have to participate. Opting out now could have consequences that affect your capabilities in the very near future.

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. 

How Does a #User #Community Develop?

What we are doing in terms of the user community development is unique and has not been done before. There is no information that I can find on “user community development.” So in many ways we’ll have to invent it here in order to get what we want. And what we want isn't just a user community in the traditional sense. It is to develop an alternative means of organization to the oil and gas industry. One where the members of the user community are also service providers who use the People, Ideas & Object and Oracle software to provide the oil and gas producers with the most profitable means of oil and gas operations.

The service providers remain members of the user community and are actively involved in future developments of the software. As their needs change in their service offerings they will work with People, Ideas & Objects to make the changes in the software as they need them. This is part of the dynamic nature of the user community that is needed in the oil and gas industry. And one of the key reasons why this user community is unique and never attempted before.

The user community has a role that is above and beyond just defining and designing the software that they will use. They in essence will also be running the industry. With the decentralized production model stripping the producer firm down to the C class executives, the earth science and engineering resources, some land and legal, and support staff. That means all of the administrative and accounting resources from the producers will be reallocated to the service providers. In terms of the number of people that would be involved it would be large. When you count accounting, land administration, production and exploration administration and other administration areas being moved to service providers we are talking about a sizeable volume of the industries resources.

It is the processes that are administered under these groups that are being moved to the service providers. Once these processes are reallocated, each of the service providers will have the monopoly rights to administer their process in the industry. Some consideration may need to be given for each region. Assuming the entire industry was using the Preliminary Specification, the service provider would have all of the producers as their client base and be able to focus on the most efficient and effective means of administering their process. All with a software development capability available to them at all times.

It is this alternative means of organization in oil and gas that we are after. The difference in doing things this way vs. today is calculated at $170 billion in opportunity costs for 2012 and 2013. And that is why the bureaucracy will never proceed with these developments. As it has eliminated them in the process of moving to the decentralized production model. Our appeal is to the investment community who need to see a viable alternative available in order to make any change. We have the vision in People, Ideas & Objects Preliminary Specification, and the technology base in Oracle Fusion Applications. Now we need the means in which to operate the industry. And that is the user community and their ability to organize themselves and offer the service provider offerings. You, as a potential member of the user community and as a service provider are a critical component in making all of this real.

And there are rewards that are significant for those that join the user community. During the software development phase we have budgeted $667 million in user community contributions. And the service providers will have the current G&A expenditures of the producers diverted to them when the decentralized production model is operational. Those G&A expenditures on a continental basis are estimated in the range of $40 - 60 billion per year. Therefore a large portion of those expenditures would then become the revenue streams of the service providers.

Its a different kind of user community that we are developing here. One that leads the industry in terms of how its administration is handled, and how its software is developed. But there’s more. The Preliminary Specification doesn’t just solve the administrative issues of the industry. It also solves the operational issues the industry faces. Just as the decentralized production model resolves low commodity prices. The user community therefore will provide leadership and the capability to resolve the administrative and operational issues that the industry faces. That is the importance of developing this user community and the service providers that you can be part of.

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.