No Posting Today
In recognition of the U.S. Memorial Day holiday.
Monday, May 26, 2014
Friday, May 23, 2014
A New Business Model Based On Value
Our discussion of the business models that are under management by the software of People, Ideas & Objects, the user community and the service providers and how we generate the majority of the value represented in our claim of $705 billion in opportunity costs. What the decentralized production model provides the dynamic, innovative and profitable oil and gas producer is the ability to become a price maker as opposed to the traditional role of a price taker.
What the decentralized production model involves is the reduction of the footprint size of the prototypical oil and gas producer. Focusing on their key competitive advantages of their earth science and engineering capabilities, and their land and asset base. The producer is stripped down to the C class executives, the earth science and engineering resources, the land and legal, with some support staff. The remainder of the firm is reorganized permanently to service providers who are focused on an administrative or accounting process. And use the industry as their client base. It is in this way that the service providers are able to focus on their key competitive advantages of automation, specialization and the division of labor. As a result they are able to provide their clients, the producer firms, with better services at lower costs than what would otherwise be provided under the corporate model, or as we call them, the bureaucracy.
There are additional benefits as a result of using the decentralized production model. Each of the service providers are billing their services directly to the Joint Operating Committee that is incurring the administrative or accounting item. For example if the lease rental payment processor, or the production, revenue or royalty accountant processed a unit of activity for the property that month. Then they would charge that Joint Operating Committee for a lease rental payment processing fee, a production accounting fee, royalty accounting fee or revenue accounting fee. The real value comes into play if the producer decides, if the property is unable to cover the costs of operations and is indeed producing a loss, to shut-in the property. At which time the costs for the production, revenue and royalty accounting process service providers would not have any activity for the month and no administrative or accounting service fees would be incurred for the month where no production was produced. Note there may still be a charge for the lease rental payment as that is a charge that is incurred irrespective of production. And may be classified as a capital charge.
The point in having the administrative and accounting charges for the property to cease when there is no production is to have the property report a null operation. This is simply no loss, and no profit. The revenues less operations less overhead costs of the operation are null. This provides the producer with the benefit that the loss that was previously realized is no longer recorded. That the reserves that were being produced at a loss can be saved for a time when they can be produced at a profit. And the commodity markets can have an effective floor placed under them to ensure that there are no future declines in the commodity prices and that their other production receives a reasonable price.
If producers were to remove 15% of the production from the North American marketplace. The natural gas prices would rise to the point where the remaining natural gas production would all become profitable. This can be done under the decentralized production model without any of the producers being punished or harmed as a result. The reduction of your production profile has an equal effect on the G&A costs of the producer. If you reduce your production to 80% then your G&A would immediately scale to 80% as well. And the profitability on your remaining production would soar. This is the benefit that all producers would achieve under the decentralized production model and the reason for the high value of the opportunity costs.
The service providers would be the ones who would shoulder the loss of revenue as a result of any production cuts by the producers. However they are also the ones that are able to address the costs that they incur in providing the services to the producers. In essence, it is the service providers that are indirectly providing the producers with the ability to control their G&A costs for the very first time in the history of 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.
What the decentralized production model involves is the reduction of the footprint size of the prototypical oil and gas producer. Focusing on their key competitive advantages of their earth science and engineering capabilities, and their land and asset base. The producer is stripped down to the C class executives, the earth science and engineering resources, the land and legal, with some support staff. The remainder of the firm is reorganized permanently to service providers who are focused on an administrative or accounting process. And use the industry as their client base. It is in this way that the service providers are able to focus on their key competitive advantages of automation, specialization and the division of labor. As a result they are able to provide their clients, the producer firms, with better services at lower costs than what would otherwise be provided under the corporate model, or as we call them, the bureaucracy.
There are additional benefits as a result of using the decentralized production model. Each of the service providers are billing their services directly to the Joint Operating Committee that is incurring the administrative or accounting item. For example if the lease rental payment processor, or the production, revenue or royalty accountant processed a unit of activity for the property that month. Then they would charge that Joint Operating Committee for a lease rental payment processing fee, a production accounting fee, royalty accounting fee or revenue accounting fee. The real value comes into play if the producer decides, if the property is unable to cover the costs of operations and is indeed producing a loss, to shut-in the property. At which time the costs for the production, revenue and royalty accounting process service providers would not have any activity for the month and no administrative or accounting service fees would be incurred for the month where no production was produced. Note there may still be a charge for the lease rental payment as that is a charge that is incurred irrespective of production. And may be classified as a capital charge.
The point in having the administrative and accounting charges for the property to cease when there is no production is to have the property report a null operation. This is simply no loss, and no profit. The revenues less operations less overhead costs of the operation are null. This provides the producer with the benefit that the loss that was previously realized is no longer recorded. That the reserves that were being produced at a loss can be saved for a time when they can be produced at a profit. And the commodity markets can have an effective floor placed under them to ensure that there are no future declines in the commodity prices and that their other production receives a reasonable price.
If producers were to remove 15% of the production from the North American marketplace. The natural gas prices would rise to the point where the remaining natural gas production would all become profitable. This can be done under the decentralized production model without any of the producers being punished or harmed as a result. The reduction of your production profile has an equal effect on the G&A costs of the producer. If you reduce your production to 80% then your G&A would immediately scale to 80% as well. And the profitability on your remaining production would soar. This is the benefit that all producers would achieve under the decentralized production model and the reason for the high value of the opportunity costs.
The service providers would be the ones who would shoulder the loss of revenue as a result of any production cuts by the producers. However they are also the ones that are able to address the costs that they incur in providing the services to the producers. In essence, it is the service providers that are indirectly providing the producers with the ability to control their G&A costs for the very first time in the history of 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.
Posted by Paul Cox at 6:00 AM 0 comments
Labels: DecProdModel, Service-Provider
Thursday, May 22, 2014
The Role of IT in Today's Organizations
The last time we discussed the user community we were addressing the two key motivating factors that people would be involved in the user community. And they were, that this was not your typical user community that is constrained in so many ways that caused it not to produce, or have any ideas, or even meet the needs of its community. The People, Ideas & Objects user community was different. In that we documented that it has both the power and the money to determine its and the industries direction with respect to the business models contained within the Preliminary Specification. These business models currently include the Joint Operating Committee and the decentralized production model. As time passes there may be additions to the user communities domain of business models and they would assert their authority over these as well.
Software can dictate the implementation of the business model. Indeed it is software that defines and supports the organizations that we use today. And that is why there have been no changes in your ERP software systems for the last ten years. The bureaucracy knows where their world begins and ends. And if they change the software they risk losing control of the organization. This is why they fight so hard against People, Ideas & Objects. When it comes time to structure the industries business model and provide them with the most profitable means of oil and gas operations it is necessary to get to the software development first. That is the role of Information Technology in the 21st century. It is not a cost of business. It is the business. Many people don't want to admit that fact. And as a result they will be left in the past. The fact of the matter is it is useless to own the oil and gas assets. If you don't also have access to the software that makes the oil and gas assets profitable. This is what People, Ideas & Objects, the user community and our service providers are providing the dynamic, innovative and profitable oil and gas producers.
It is our three organizations that are providing the industry with the choice of who manages their assets. The choice is between the bureaucracy and People, Ideas & Objects et al. We provide the most profitable means of oil and gas operations with over $705 billion in opportunity costs for the period between 2009 and 2019. These are incremental revenues above and beyond what the bureaucracy are able to provide. A substantial value proposition for a minimal cost and a reasonable amount of effort. The bureaucracy would have you join them in Church and sing hymns in prayer for another cold winter. That is what they think is valuable. We however, are offering an alternative.
The user community has defined a leadership team consisting of 28 representatives from the oil and gas industry. These people are being actively recruited now to help in the development of the user community. It is our plan to put together what is necessary, to provide the oil and gas investor, with an alternative means of organization for the oil and gas industry. What that actually consists of and how that comes about is unknown at this time. We will figure this out as time goes on. We have set out an appropriate amount of time for the development of the user community. Five years. And though this is an expensive time in terms of the opportunity costs to the industry. To expect that the bureaucracy will be doing anything but fight us and obstruct us in every way that they can, would be foolhardy. We therefore need this time to build this community on the basis of an effort that is built brick by brick, and stick by stick.
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.
Software can dictate the implementation of the business model. Indeed it is software that defines and supports the organizations that we use today. And that is why there have been no changes in your ERP software systems for the last ten years. The bureaucracy knows where their world begins and ends. And if they change the software they risk losing control of the organization. This is why they fight so hard against People, Ideas & Objects. When it comes time to structure the industries business model and provide them with the most profitable means of oil and gas operations it is necessary to get to the software development first. That is the role of Information Technology in the 21st century. It is not a cost of business. It is the business. Many people don't want to admit that fact. And as a result they will be left in the past. The fact of the matter is it is useless to own the oil and gas assets. If you don't also have access to the software that makes the oil and gas assets profitable. This is what People, Ideas & Objects, the user community and our service providers are providing the dynamic, innovative and profitable oil and gas producers.
It is our three organizations that are providing the industry with the choice of who manages their assets. The choice is between the bureaucracy and People, Ideas & Objects et al. We provide the most profitable means of oil and gas operations with over $705 billion in opportunity costs for the period between 2009 and 2019. These are incremental revenues above and beyond what the bureaucracy are able to provide. A substantial value proposition for a minimal cost and a reasonable amount of effort. The bureaucracy would have you join them in Church and sing hymns in prayer for another cold winter. That is what they think is valuable. We however, are offering an alternative.
The user community has defined a leadership team consisting of 28 representatives from the oil and gas industry. These people are being actively recruited now to help in the development of the user community. It is our plan to put together what is necessary, to provide the oil and gas investor, with an alternative means of organization for the oil and gas industry. What that actually consists of and how that comes about is unknown at this time. We will figure this out as time goes on. We have set out an appropriate amount of time for the development of the user community. Five years. And though this is an expensive time in terms of the opportunity costs to the industry. To expect that the bureaucracy will be doing anything but fight us and obstruct us in every way that they can, would be foolhardy. We therefore need this time to build this community on the basis of an effort that is built brick by brick, and stick by stick.
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.
Posted by Paul Cox at 6:00 AM 0 comments
Labels: Prototypical-Producer, User
Wednesday, May 21, 2014
Pooling of Technical Resources in the Partnership Accounting Module
A few weeks have passed and its time to revisit some element of the Preliminary Specification to keep it fresh in everyone’s mind. Staying within the Partnership Accounting module and continuing on with the theme that we have been discussing regarding the technical resources of a producer firm. Today I want to discuss the pooling and charging of these technical resources to the Joint Operating Committee.
Recently we discussed the need for the members of the Joint Operating Committee to pool the earth science and engineering resources to make up the capabilities necessary for the property. This will be done due to the ability of each and every oil and gas producer to build the capabilities within their own producer firm. This will soon create excessive demand on the earth science and engineering professions that will extend beyond the existing industry resource base. With shortages in the numbers of earth scientists and engineers in the mid to long term. Alternative methods of organization, specialization and the division of labor are the means in which People, Ideas & Objects have chosen to deal with this issue.
When each producer is building the internal capabilities that are needed for their operated properties. They are required to build for every contingency for all of their properties. In doing so they are building capabilities that are unused and unusable when looked at from the industry perspective. These unused and unusable resources are trapped in the producer firm and are otherwise irretrievable. This current method will also discover difficulties as the underlying sciences continue to expand and demand that further specialization of the profession is necessary. Any further specialization, without the ability to reorganize these resources will cause the scope of what a producer needs to have on staff to expand further. Making the financial viability of the producer questionable at any production profile.
What People, Ideas & Objects Research & Capabilities and Knowledge & Learning module enable the producer firm to do is to specialize in their earth science and engineering capabilities. It will be in this way that the producer firm is able reduce the global scope of earth science and engineering capabilities within their firm. And take on a highly specialized capability. Something that the industry demands of the dynamic, innovative and profitable producer of the 21st century. Producers throughout the industry will be doing the same in terms of pursuing their unique specializations and capabilities.
As a result, the abilities and capabilities of the producers that make up the Joint Operating Committee will be diverse and quite probable to include what is required in order to cover off the global scope of the properties needs. A pooling of these capabilities will be enabled through the Knowledge & Learning module as its prime functionality. Additional capabilities, if required, can be made up from the marketplace of other earth science and engineering providers or producers.
Within the People, Ideas & Objects Preliminary Specification it is assumed that the earth science and engineering resources of the firm are not a cost centre but a source of revenue. Whether that revenue is derived as a result of direct charges to the Joint Operating Committee or to, lets call them customer Joint Operating Committees. The dynamic, innovative and profitable oil and gas producer has two separate and distinct revenue streams and lines of business within the lightweight footprint provided through the decentralized production model. This enables the producer firm to develop their earth science and engineering capabilities somewhat independently of their production profile.
The issue that is being resolved through the use of the Preliminary Specification here is the resource limitation of these critical professions. Using organizational methods, specialization and the division of labor are the appropriate means in which to approach the issue. The constraints of the Joint Operating Committee becomes an opportunity as it is the culture of the industry and therefore we are able to release the unused and unusable resources for use into the marketplace. Capturing this surplus capacity and employing it within the producer firms. Creating a second line of business within the producer firm helps to offset the costs of developing these highly specialized resources. Issues and opportunities that the dynamic, innovative and profitable oil and gas producer will need to address in the 21st century.
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.
Recently we discussed the need for the members of the Joint Operating Committee to pool the earth science and engineering resources to make up the capabilities necessary for the property. This will be done due to the ability of each and every oil and gas producer to build the capabilities within their own producer firm. This will soon create excessive demand on the earth science and engineering professions that will extend beyond the existing industry resource base. With shortages in the numbers of earth scientists and engineers in the mid to long term. Alternative methods of organization, specialization and the division of labor are the means in which People, Ideas & Objects have chosen to deal with this issue.
When each producer is building the internal capabilities that are needed for their operated properties. They are required to build for every contingency for all of their properties. In doing so they are building capabilities that are unused and unusable when looked at from the industry perspective. These unused and unusable resources are trapped in the producer firm and are otherwise irretrievable. This current method will also discover difficulties as the underlying sciences continue to expand and demand that further specialization of the profession is necessary. Any further specialization, without the ability to reorganize these resources will cause the scope of what a producer needs to have on staff to expand further. Making the financial viability of the producer questionable at any production profile.
What People, Ideas & Objects Research & Capabilities and Knowledge & Learning module enable the producer firm to do is to specialize in their earth science and engineering capabilities. It will be in this way that the producer firm is able reduce the global scope of earth science and engineering capabilities within their firm. And take on a highly specialized capability. Something that the industry demands of the dynamic, innovative and profitable producer of the 21st century. Producers throughout the industry will be doing the same in terms of pursuing their unique specializations and capabilities.
As a result, the abilities and capabilities of the producers that make up the Joint Operating Committee will be diverse and quite probable to include what is required in order to cover off the global scope of the properties needs. A pooling of these capabilities will be enabled through the Knowledge & Learning module as its prime functionality. Additional capabilities, if required, can be made up from the marketplace of other earth science and engineering providers or producers.
Within the People, Ideas & Objects Preliminary Specification it is assumed that the earth science and engineering resources of the firm are not a cost centre but a source of revenue. Whether that revenue is derived as a result of direct charges to the Joint Operating Committee or to, lets call them customer Joint Operating Committees. The dynamic, innovative and profitable oil and gas producer has two separate and distinct revenue streams and lines of business within the lightweight footprint provided through the decentralized production model. This enables the producer firm to develop their earth science and engineering capabilities somewhat independently of their production profile.
The issue that is being resolved through the use of the Preliminary Specification here is the resource limitation of these critical professions. Using organizational methods, specialization and the division of labor are the appropriate means in which to approach the issue. The constraints of the Joint Operating Committee becomes an opportunity as it is the culture of the industry and therefore we are able to release the unused and unusable resources for use into the marketplace. Capturing this surplus capacity and employing it within the producer firms. Creating a second line of business within the producer firm helps to offset the costs of developing these highly specialized resources. Issues and opportunities that the dynamic, innovative and profitable oil and gas producer will need to address in the 21st century.
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.
Posted by Paul Cox at 6:00 AM 0 comments
Labels: Knowledge-Learning, Partnership-Accting, Research-Capabilities
Tuesday, May 20, 2014
What the Future Holds in Oil and Gas
Our primary focus at People, Ideas & Objects is the development of the user community. We have prepared a vision of how that organization will operate. And set out its objective of providing the oil and gas producer with the most profitable means of oil and gas operations. We are undertaking the user communities development in order to remove and replace the current oil and gas industries bureaucracy from their comfortable positions. Providing the oil and gas industry with a dynamic, innovative and profitable capability to deal with the issues and opportunities it faces on a go forward basis.
To date we have established the vision and objectives of the user community. We have also set out 28 leadership positions that make up a leadership team. These positions are being actively sought from those within the industry to begin the process of building an alternative means of organization for the oil and gas industry. It will be these individuals who will invest their time and energy over the next few years in developing the user community to convince the oil and gas investors to choose the user community and People, Ideas & Object as the manner in which to administer the industry. The leadership team is comprised of the Board of Directors, the C class executives and the Product Owners for the Preliminary Specification.
The motivation for people to invest their time and energy in the user community is substantial. Within the user communities vision is the capability of the community to manage the business model of the oil and gas industry. The current business models of the Preliminary Specification include the Joint Operating Committee and the decentralized production model. It is within the user community that they are the point of contact with respect to any changes that are needed or desired in the business model. It is through control of these business models that the user community exerts significant power within the industry. There are substantial business interests that will be generated from the leadership teams participation in the user community. Derived from the user community are the service providers whom the leadership team would potentially be founding members of. A new sub-industry with revenues in the tens of billions of dollars.
One thing we do know is the bureaucracy are not conceding the marketspace to us. They recognize the power and authority that they have within the industry and are not about to give up on it. However, as opposed to conduct themselves in a constructive manner they choose to do nothing in the face of natural gas prices that provide no one with any earnings potential. After several years of overproduction they continue with a flawed strategy that encourages no discussion or recognition that its even an issue. Their franchise is secure and there is little for them to be concerned about. Recently with our claims of providing over $705 billion in opportunity costs, they have begun to address the problem and begun to copy our ideas. However this is only for appearance sake, as we have documented here on this blog their attempts will be fruitless and are only designed to get them past annual report season with a “plan” to deal with the problem.
The question people should be asking themselves is where does the future of the oil and gas industry reside. Is it a dynamic, innovative and profitable industry where Information Technology plays a key role such as with the Preliminary Specification and the user community. And where does the future of the bureaucracy belong. Is it the dominant method of organization that “muddles along” through the issues and opportunities of the day. Hoping and praying for another cold winter as the best strategy for the industry. We've been endowed with unbelievable reserves of natural gas. Are we destined to produce them forever at a loss. Or can we make the changes necessary to implement People, Ideas & Objects and the user community to make the industry a price maker and turn it into 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.
To date we have established the vision and objectives of the user community. We have also set out 28 leadership positions that make up a leadership team. These positions are being actively sought from those within the industry to begin the process of building an alternative means of organization for the oil and gas industry. It will be these individuals who will invest their time and energy over the next few years in developing the user community to convince the oil and gas investors to choose the user community and People, Ideas & Object as the manner in which to administer the industry. The leadership team is comprised of the Board of Directors, the C class executives and the Product Owners for the Preliminary Specification.
The motivation for people to invest their time and energy in the user community is substantial. Within the user communities vision is the capability of the community to manage the business model of the oil and gas industry. The current business models of the Preliminary Specification include the Joint Operating Committee and the decentralized production model. It is within the user community that they are the point of contact with respect to any changes that are needed or desired in the business model. It is through control of these business models that the user community exerts significant power within the industry. There are substantial business interests that will be generated from the leadership teams participation in the user community. Derived from the user community are the service providers whom the leadership team would potentially be founding members of. A new sub-industry with revenues in the tens of billions of dollars.
One thing we do know is the bureaucracy are not conceding the marketspace to us. They recognize the power and authority that they have within the industry and are not about to give up on it. However, as opposed to conduct themselves in a constructive manner they choose to do nothing in the face of natural gas prices that provide no one with any earnings potential. After several years of overproduction they continue with a flawed strategy that encourages no discussion or recognition that its even an issue. Their franchise is secure and there is little for them to be concerned about. Recently with our claims of providing over $705 billion in opportunity costs, they have begun to address the problem and begun to copy our ideas. However this is only for appearance sake, as we have documented here on this blog their attempts will be fruitless and are only designed to get them past annual report season with a “plan” to deal with the problem.
The question people should be asking themselves is where does the future of the oil and gas industry reside. Is it a dynamic, innovative and profitable industry where Information Technology plays a key role such as with the Preliminary Specification and the user community. And where does the future of the bureaucracy belong. Is it the dominant method of organization that “muddles along” through the issues and opportunities of the day. Hoping and praying for another cold winter as the best strategy for the industry. We've been endowed with unbelievable reserves of natural gas. Are we destined to produce them forever at a loss. Or can we make the changes necessary to implement People, Ideas & Objects and the user community to make the industry a price maker and turn it into 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.
Posted by Paul Cox at 6:00 AM 0 comments
Labels: Investor, Service-Provider, User
Monday, May 19, 2014
No Posting Today
In recognition of the Canadian Victoria Day holiday.
Posted by Paul Cox at 6:00 AM 0 comments
Friday, May 16, 2014
The Dynamic, Innovative and Profitable Producer Part IV
One of the areas of the dynamic, innovative and profitable oil and gas producers competitive advantage is its land and asset base. It is also part of the producer firms lighter footprint that the land and legal resources are part of the firm. It would be inappropriate to leave these resources outside of the domain of the producer considering they are part of its competitive advantage. Within the Preliminary Specification the producer relies on the Petroleum Lease Marketplace module to develop and manage their land and asset base. It is this module that the producer uses to build their land and asset base and apply their competitive advantage. Just as in yesterday’s post, the Research & Capabilities and Knowledge & Learning modules were used to apply the firms earth science and engineering competitive advantages.
The Petroleum Lease Marketplace module sets the focus of the land and legal resources on building the firms assets. Using the Joint Operating Committee in the manner that we are requires that we look at these competitive advantages from a different perspective. Every firm has systems for their land and to a lesser extent their capabilities development and deployment. What is different in the People, Ideas & Objects Preliminary Specification, and demands that we begin these developments anew, is that we are using the Joint Operating Committee as the key organizational construct of the dynamic, innovative and profitable oil and gas producer. There is a substantial difference in these systems over ones that use the corporate model as their organizational construct. There are also technical differences as the Preliminary Specification is hosted as a cloud computing software offering.
If we look upon this development as an opportunity to develop systems that are able to provide the industry with the elements that have been missing in the other systems. If we focus on the Joint Operating Committee and its alignment of the compliance and governance frameworks of the current hierarchy to the Joint Operating Committees legal, financial, operational decision making, cultural, communication, innovation and strategic frameworks. We can then begin to develop the kind of software that people know that is possible, if only. Well now is the opportunity and People, Ideas & Objects, the user community and the service providers are the means in which to achieve that which is possible.
The producers value is represented in the tangible reserves associated with their properties. How a producer develops those reserves is reflected in the interactions that occur during the life of a mineral lease. Providing the producer with the effective means to manage their leases is the domain of the Petroleum Lease Marketplace. A marketplace module that operates in the lease marketplace where people are able to interact and conduct their business. The Petroleum Lease Marketplace module uses the OpenWonderland interface to replicate virtually the lease marketplaces that exist today. There producers are able to post, bid, agree, trade, buy or sell mineral leases. It is this type of interface that will enhance the ability of the producer to build their firm.
Friending someone on a social network does nothing from a commercial point of view. There is no commercial value generated and it is questionable if any value is destroyed. Participation in a virtual representation of a marketplace has as its core a commercial purpose behind the interaction. It is to buy, sell, trade or otherwise engage with someone for the purpose of attaining short or long term value. Marketplaces have always existed. Having a virtual representation of a marketplace is what the People, Ideas & Objects Preliminary Specification provides in order for the user to engage in the marketplace of mineral leases. Engaging in a manner that is more efficient than having to have the physical requirements of participation that the traditional marketplace demands. That is the value of the Petroleum Lease Marketplace.
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 Petroleum Lease Marketplace module sets the focus of the land and legal resources on building the firms assets. Using the Joint Operating Committee in the manner that we are requires that we look at these competitive advantages from a different perspective. Every firm has systems for their land and to a lesser extent their capabilities development and deployment. What is different in the People, Ideas & Objects Preliminary Specification, and demands that we begin these developments anew, is that we are using the Joint Operating Committee as the key organizational construct of the dynamic, innovative and profitable oil and gas producer. There is a substantial difference in these systems over ones that use the corporate model as their organizational construct. There are also technical differences as the Preliminary Specification is hosted as a cloud computing software offering.
If we look upon this development as an opportunity to develop systems that are able to provide the industry with the elements that have been missing in the other systems. If we focus on the Joint Operating Committee and its alignment of the compliance and governance frameworks of the current hierarchy to the Joint Operating Committees legal, financial, operational decision making, cultural, communication, innovation and strategic frameworks. We can then begin to develop the kind of software that people know that is possible, if only. Well now is the opportunity and People, Ideas & Objects, the user community and the service providers are the means in which to achieve that which is possible.
The producers value is represented in the tangible reserves associated with their properties. How a producer develops those reserves is reflected in the interactions that occur during the life of a mineral lease. Providing the producer with the effective means to manage their leases is the domain of the Petroleum Lease Marketplace. A marketplace module that operates in the lease marketplace where people are able to interact and conduct their business. The Petroleum Lease Marketplace module uses the OpenWonderland interface to replicate virtually the lease marketplaces that exist today. There producers are able to post, bid, agree, trade, buy or sell mineral leases. It is this type of interface that will enhance the ability of the producer to build their firm.
Friending someone on a social network does nothing from a commercial point of view. There is no commercial value generated and it is questionable if any value is destroyed. Participation in a virtual representation of a marketplace has as its core a commercial purpose behind the interaction. It is to buy, sell, trade or otherwise engage with someone for the purpose of attaining short or long term value. Marketplaces have always existed. Having a virtual representation of a marketplace is what the People, Ideas & Objects Preliminary Specification provides in order for the user to engage in the marketplace of mineral leases. Engaging in a manner that is more efficient than having to have the physical requirements of participation that the traditional marketplace demands. That is the value of the Petroleum Lease Marketplace.
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.
Posted by Paul Cox at 6:00 AM 0 comments
Labels: Investor, Petroleum-Lease-Marketplace, Prototypical-Producer, Service-Provider, User
Thursday, May 15, 2014
The Dynamic, Innovative and Profitable Producer Part III
Adopting the lightweight footprint that is available with the Preliminary Specification provides the dynamic, innovative and profitable producer with many attributes over what are available today. The dynamic nature of the producer will be one of these attributes. Focused on their key competitive advantages of their earth science and engineering capabilities, their land and asset base. As opportunities and issues arise they will have the flexibility to approach these with new alternatives as a result of this footprint, its lower cost and its dynamic nature. It will also afford more opportunities than the classic bureaucratic style that is in use today.
Within the Preliminary Specification there are the Research & Capabilities module for developing capabilities, and the Knowledge & Learning module for deploying capabilities. It is within the Research & Capabilities module that the process of innovation has been captured and codified in the various interfaces. If a new technology were to look promising in terms of its ability to expand the reserves or deliverability of the firm. It would be in the Research & Capabilities module that the producer would undertake the research necessary to develop the capabilities within the producer firm to build that value. It is where “knowledge begets capabilities, and capabilities beget action.” And where capabilities have been quantified as the “knowledge, skills, experience and ideas” of the producer firm.
Concentrating the energies of the producer firms competitive advantages of its earth science and engineering capabilities in the development of new capabilities based on the understanding of those resources and the activities within the industry is the focus that a producer wants to achieve. In a dynamic, innovative and profitable oil and gas industry things will happen quickly with little consideration for the laggard firm. Oil and gas success will be based on its scientific principles, if it isn’t already. The days when Lawyers could exorcise value through good deals, or financial people could structure good returns are gone. It is the principles of science that will lead the dynamic, innovative and profitable producer for the foreseeable future. The ability to focus on the development of the producers capabilities in the manner that is discussed here will be a critical part of a producers competitive advantage.
Consistent with that ability to focus on the development of the capabilities the dynamic producer will also need systems that enable them to deploy those capabilities in a focused and dynamic manner. And that is where the Knowledge & Learning module comes in to play. First we need to realize that the ability to maintain a focus on all that is happening within the industry will be beyond the capabilities of the majority of the oil and gas producers. The need to specialize in specific domains of the engineering and earth science professions will be a necessity due to the financial constraints of attempting to pursue everything. As we mentioned yesterday the dynamic, innovative and profitable producer will share their capabilities with their Joint Venture Partners who are specializing in their capabilities. It will be a pooling of those capabilities that make up the projects overall requirements. Additional capabilities will be supplied from the marketplace, if required.
It is the Knowledge & Learning module that presents the capabilities of the partners that are involved within the Joint Operating Committee. Each producer tags their capabilities for certain criteria and specific Joint Operating Committees. While in the Knowledge & Learning module for that Joint Operating Committee the user would be presented with the capabilities of all of the participants who are working interest owners in that Joint Operating Committee. It is in that way that the “knowledge begets capabilities, and capabilities beget action” and the “knowledge, skills, experience and ideas” of the people associated with the Joint Operating Committee are able to be employed in a Dynamic, Innovative and Profitable manner.
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.
Within the Preliminary Specification there are the Research & Capabilities module for developing capabilities, and the Knowledge & Learning module for deploying capabilities. It is within the Research & Capabilities module that the process of innovation has been captured and codified in the various interfaces. If a new technology were to look promising in terms of its ability to expand the reserves or deliverability of the firm. It would be in the Research & Capabilities module that the producer would undertake the research necessary to develop the capabilities within the producer firm to build that value. It is where “knowledge begets capabilities, and capabilities beget action.” And where capabilities have been quantified as the “knowledge, skills, experience and ideas” of the producer firm.
Concentrating the energies of the producer firms competitive advantages of its earth science and engineering capabilities in the development of new capabilities based on the understanding of those resources and the activities within the industry is the focus that a producer wants to achieve. In a dynamic, innovative and profitable oil and gas industry things will happen quickly with little consideration for the laggard firm. Oil and gas success will be based on its scientific principles, if it isn’t already. The days when Lawyers could exorcise value through good deals, or financial people could structure good returns are gone. It is the principles of science that will lead the dynamic, innovative and profitable producer for the foreseeable future. The ability to focus on the development of the producers capabilities in the manner that is discussed here will be a critical part of a producers competitive advantage.
Consistent with that ability to focus on the development of the capabilities the dynamic producer will also need systems that enable them to deploy those capabilities in a focused and dynamic manner. And that is where the Knowledge & Learning module comes in to play. First we need to realize that the ability to maintain a focus on all that is happening within the industry will be beyond the capabilities of the majority of the oil and gas producers. The need to specialize in specific domains of the engineering and earth science professions will be a necessity due to the financial constraints of attempting to pursue everything. As we mentioned yesterday the dynamic, innovative and profitable producer will share their capabilities with their Joint Venture Partners who are specializing in their capabilities. It will be a pooling of those capabilities that make up the projects overall requirements. Additional capabilities will be supplied from the marketplace, if required.
It is the Knowledge & Learning module that presents the capabilities of the partners that are involved within the Joint Operating Committee. Each producer tags their capabilities for certain criteria and specific Joint Operating Committees. While in the Knowledge & Learning module for that Joint Operating Committee the user would be presented with the capabilities of all of the participants who are working interest owners in that Joint Operating Committee. It is in that way that the “knowledge begets capabilities, and capabilities beget action” and the “knowledge, skills, experience and ideas” of the people associated with the Joint Operating Committee are able to be employed in a Dynamic, Innovative and Profitable manner.
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.
Posted by Paul Cox at 6:00 AM 0 comments
Labels: Investor, Prototypical-Producer, Service-Provider, User
Wednesday, May 14, 2014
The Dynamic, Innovative and Profitable Producer Part II
Continuing on with our exploration of what the prototypical producing firm will appear like as a result of implementing the Preliminary Specification, the user community and its service providers. Without having to host the administrative and accounting staff. Without having to deliberately and actively go about the development of the necessary capabilities within your organization. The prototypical oil and gas producer will be able to offload, not just physically, but also mentally and emotionally the development of these internal capabilities. What the Preliminary Specification does is move the producer from a reliance on their administrative and accounting capabilities, to a reliance on the industries administrative and accounting capabilities.
The burden for the development of the industries administrative and accounting capabilities falls on the user community and the service providers themselves. They will be the ones that are incurring the physical, mental and emotional effort on behalf of all of their industry clients. When the time comes to enhance the tax capabilities of the oil and gas industry due to some change in legislation it will be the individual service providers that augment their organizations with the requisite resources to enable them to meet the requirements on behalf of all the producers in a timely fashion. The producers will be busy pushing the sciences.
It is the division of labor that enables the producer firm to focus on their competitive advantages of their earth science and engineering capabilities, and their land and asset base. It is the same division of labor that has the service providers and user community focused on their competitive advantages of automation, specialization, division of labor and reduction of the bureaucracy. Currently the producer firm enjoys none of the competitive advantages associated with their administrative and accounting capabilities. They are a tax on their speed, their innovativeness and most importantly their profitability. Each producer must maintain x capabilities in order to function as a producer. This level of compliance and governance is costing the producer a large share of the profits and there are no opportunities for cost control or cost sharing among producers. Use of the service providers moves the capabilities to the industry, enables the service providers to control the costs and most importantly shares the cost and resources among the producers. Key to the cost sharing will be the reduction in costs from the key competitive advantages of automation, specialization and the division of labor. The fact that the bureaucracy will not be paid for is a triple bonus.
This lightweight form of organization gives the producer distinct advantages. People, Ideas & Objects state that the Joint Operating Committee is the key organizational construct of the oil and gas industry. It is the legal, financial, operational decision making, cultural, communication, innovation and strategic frameworks. By moving the compliance and governance framework of the hierarchy into alignment with the seven frameworks of the Joint Operating Committee we attain a speed, innovativeness, accountability and profitability in our producer organization. It is these attributes that a dynamic, innovative and profitable producer needs in the 21st century.
What is the bureaucracy offering you today. Exactly what was on offer during the 1960’s. The fact of the matter is organizations don't change and the current bureaucracy is proof of that. Although they have taken elements of our ideas and used them to make them sound like they offering more than a hope and a prayer for a cold winter, as a strategy. Its a false hope. Organizations don't change, but people do. And that is why we appeal to the individuals in the oil and gas industry. The investors who are fed up with the earnings performance. The people who are tired of the bureaucratic ways of stuffing another ream of paper in the printer. It is the individual decisions of those that will join us in the next few years that will offer an alternative means of organization to the oil and gas industry. And then the investors can choose who they want, the bureaucracy or People, Ideas & Objects, the user community and the service providers to manage their assets.
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 burden for the development of the industries administrative and accounting capabilities falls on the user community and the service providers themselves. They will be the ones that are incurring the physical, mental and emotional effort on behalf of all of their industry clients. When the time comes to enhance the tax capabilities of the oil and gas industry due to some change in legislation it will be the individual service providers that augment their organizations with the requisite resources to enable them to meet the requirements on behalf of all the producers in a timely fashion. The producers will be busy pushing the sciences.
It is the division of labor that enables the producer firm to focus on their competitive advantages of their earth science and engineering capabilities, and their land and asset base. It is the same division of labor that has the service providers and user community focused on their competitive advantages of automation, specialization, division of labor and reduction of the bureaucracy. Currently the producer firm enjoys none of the competitive advantages associated with their administrative and accounting capabilities. They are a tax on their speed, their innovativeness and most importantly their profitability. Each producer must maintain x capabilities in order to function as a producer. This level of compliance and governance is costing the producer a large share of the profits and there are no opportunities for cost control or cost sharing among producers. Use of the service providers moves the capabilities to the industry, enables the service providers to control the costs and most importantly shares the cost and resources among the producers. Key to the cost sharing will be the reduction in costs from the key competitive advantages of automation, specialization and the division of labor. The fact that the bureaucracy will not be paid for is a triple bonus.
This lightweight form of organization gives the producer distinct advantages. People, Ideas & Objects state that the Joint Operating Committee is the key organizational construct of the oil and gas industry. It is the legal, financial, operational decision making, cultural, communication, innovation and strategic frameworks. By moving the compliance and governance framework of the hierarchy into alignment with the seven frameworks of the Joint Operating Committee we attain a speed, innovativeness, accountability and profitability in our producer organization. It is these attributes that a dynamic, innovative and profitable producer needs in the 21st century.
What is the bureaucracy offering you today. Exactly what was on offer during the 1960’s. The fact of the matter is organizations don't change and the current bureaucracy is proof of that. Although they have taken elements of our ideas and used them to make them sound like they offering more than a hope and a prayer for a cold winter, as a strategy. Its a false hope. Organizations don't change, but people do. And that is why we appeal to the individuals in the oil and gas industry. The investors who are fed up with the earnings performance. The people who are tired of the bureaucratic ways of stuffing another ream of paper in the printer. It is the individual decisions of those that will join us in the next few years that will offer an alternative means of organization to the oil and gas industry. And then the investors can choose who they want, the bureaucracy or People, Ideas & Objects, the user community and the service providers to manage their assets.
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.
Posted by Paul Cox at 6:00 AM 0 comments
Labels: Investor, Prototypical-Producer, Service-Provider, User
Tuesday, May 13, 2014
The Dynamic, Innovative and Profitable Producer
One topic that we haven't spent too much time on is the effect that the Preliminary Specification, the user community and the service providers will have on the producer firm itself. We have noted that the producer will have a smaller footprint in terms of its size. With only the C class executives, the earth science and engineering resources, the land and legal and some support staff. However we haven't discussed the implication beyond the footprint size of the producer firm. Specifically in terms of how they will operate in this new environment as a result of the changes that we are discussing in the Preliminary Specification.
First of all the producer firm will be more focused on its competitive advantages of its earth science and engineering capabilities, and its land and asset base. Those are the only remaining resources within their domain that are of interest to the producer. And here specialization and the division of labor is at work to enhance the producers capabilities to focus on their specialized attributes of the sciences. This is done through the Preliminary Specifications ability to mitigate the resource restrictions in the earth science and engineering disciplines that are affecting those professions in the mid to long term. By each producer firm specializing within the sciences; then they are able to share these specialized capabilities among their Joint Venture Partners and pool their resources to achieve the necessary capabilities to meet the demands of the projects.
Additionally new engineering and earth science based service providers will need to be employed to provide some of the basic services that are currently handled within the producer firms. This offloading of lower level tasks will be as a result of a reorganization based on specialization and the division of labor across the industry that seeks to increase the output from the limited resource base. A new organizational method is the only way in which to achieve the mid to long term demand requirements of the professions. Having each producer firm build individual silo’d capabilities that cover off their domain of responsibilities will soon bankrupt each producer. Specialization could be used to correct this, however, specialization without reorganization will cause further problems. A bankruptcy will occur as the scope of the specialization without reorganization within the professions would become so broad as the requirements would exceed the financial capabilities of one firm.
Moving back to the administration and accounting of the producer. These will be done by the service providers that we have been talking about. The service providers that are derivative of our user community. These people will be located within their own firms away from the producer firm and will process the producers documents remotely. Much as the administration and accounting is remotely conducted today. Earning a service fee based on the task and transfer network. Denoting that only when activity occurs within the network will their be a service providers billing generated to the producer. Automation, specialization and the division of labor are the key competitive advantages that the service providers are able to provide the producer firm. And we should add the elimination of the bureaucracy to that list too.
This lighter weight of a producer firm will be much easier to manage for the production profile of the firm. Based on the capabilities of the firm, they may be able to scale up or down based on the commodity prices, or depending on their earth science and engineering capabilities. The administrative and accounting capabilities are industry based capabilities and are available to them on a service fee basis. Their production profile will determine the amount of their G&A costs. If they should double or triple their production profile their administrative and accounting capabilities would immediately be capable of dealing with the new properties or acquisition. And if the producer were to scale back production, the G&A costs would scale back in line with the production profile. This is the nature of the revised industry makeup based on the decentralized production model of the Preliminary Specification and the service providers.
The key focus is what are you capable of in terms of your earth science and engineering capabilities. Both in terms of the scientific capabilities and in terms of your production profile. Those are the two guiding objectives of the producer firm in terms of what they need to concern themselves in managing their organization. The issues of where to get a new tax accountant are today’s problems with the bureaucracy, and I'm suggesting we leave those issues behind by adopting the Preliminary Specification.
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.
First of all the producer firm will be more focused on its competitive advantages of its earth science and engineering capabilities, and its land and asset base. Those are the only remaining resources within their domain that are of interest to the producer. And here specialization and the division of labor is at work to enhance the producers capabilities to focus on their specialized attributes of the sciences. This is done through the Preliminary Specifications ability to mitigate the resource restrictions in the earth science and engineering disciplines that are affecting those professions in the mid to long term. By each producer firm specializing within the sciences; then they are able to share these specialized capabilities among their Joint Venture Partners and pool their resources to achieve the necessary capabilities to meet the demands of the projects.
Additionally new engineering and earth science based service providers will need to be employed to provide some of the basic services that are currently handled within the producer firms. This offloading of lower level tasks will be as a result of a reorganization based on specialization and the division of labor across the industry that seeks to increase the output from the limited resource base. A new organizational method is the only way in which to achieve the mid to long term demand requirements of the professions. Having each producer firm build individual silo’d capabilities that cover off their domain of responsibilities will soon bankrupt each producer. Specialization could be used to correct this, however, specialization without reorganization will cause further problems. A bankruptcy will occur as the scope of the specialization without reorganization within the professions would become so broad as the requirements would exceed the financial capabilities of one firm.
Moving back to the administration and accounting of the producer. These will be done by the service providers that we have been talking about. The service providers that are derivative of our user community. These people will be located within their own firms away from the producer firm and will process the producers documents remotely. Much as the administration and accounting is remotely conducted today. Earning a service fee based on the task and transfer network. Denoting that only when activity occurs within the network will their be a service providers billing generated to the producer. Automation, specialization and the division of labor are the key competitive advantages that the service providers are able to provide the producer firm. And we should add the elimination of the bureaucracy to that list too.
This lighter weight of a producer firm will be much easier to manage for the production profile of the firm. Based on the capabilities of the firm, they may be able to scale up or down based on the commodity prices, or depending on their earth science and engineering capabilities. The administrative and accounting capabilities are industry based capabilities and are available to them on a service fee basis. Their production profile will determine the amount of their G&A costs. If they should double or triple their production profile their administrative and accounting capabilities would immediately be capable of dealing with the new properties or acquisition. And if the producer were to scale back production, the G&A costs would scale back in line with the production profile. This is the nature of the revised industry makeup based on the decentralized production model of the Preliminary Specification and the service providers.
The key focus is what are you capable of in terms of your earth science and engineering capabilities. Both in terms of the scientific capabilities and in terms of your production profile. Those are the two guiding objectives of the producer firm in terms of what they need to concern themselves in managing their organization. The issues of where to get a new tax accountant are today’s problems with the bureaucracy, and I'm suggesting we leave those issues behind by adopting the Preliminary Specification.
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.
Posted by Paul Cox at 6:00 AM 0 comments
Labels: Investor, Prototypical-Producer, Service-Provider, User
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