Looking Forward to 2019

If we look retrospectively at the changes that have been made as a result of the Internet. And the pace of those changes on our daily lives. I think we see a dramatic level of change that makes what had come before the Internet pale in comparison. If we look at just those changes that have happened since 2010, that can be quantified to be “cloud computing” and the impact it has had. We are in a particularly interesting time in terms of human history. Now I may be seeing things from a different perspective than some of my readers. But if we extend these trends out towards 2019, who would doubt that things will be very different from what exists today. And who would doubt that the type of organizations that we use today will be the same that we have used for the past one hundred years.

Its probably a bit embarrassing to state that I can do three hours of my work in the morning without having to get out of bed. Its not that I do that every day, but some days I do. Is there any reason that anyone else can't do the same? I am sure that most bureaucracies demand attendance at 8:00 AM be taken and therefore this is something that will not be happening in the short run. The fact that I can start my day at 4:00 AM in bed is the advantage that the bureaucracies are unable to comprehend.

I chose 2019 as the day that we should look towards. As that is the year that we begin the developments of the Preliminary Specification. That will also mark the fifth year of user community development. It will be that time that we have the vision, the details, the community and hopefully, the oil and gas investors and the resources behind us to begin the developments of the organizational model for the future oil and gas industry. It will also be a time when the Information Technologies have moved society even further than it has today.

During the next five years the user community will be able to take the vision that is the Preliminary Specification and make it into the type of organization that will be managing the oil and gas industry for the next 50 to 60 years. Based on the Joint Operating Committee, using the decentralized production model and all that can be, added to it by the many contributors that will have joined us. This will be how the industry is managed. Using the user community vision where the people who work within the industry have the means to affect the changes in ways that they work within the industry and provide the most profitable means of oil and gas operations.

What we are seeing today is that the Information Technologies are finally having an effect on our lives. And it is to the betterment. I think we can expect that these trends will continue and should soon begin to accelerate. However, they will accelerate much quicker in the hands of those that will be the benefactors. With the way the user community is established. It is they who have the power and the resources to effect the changes that they want in how they do their jobs. Our priority is to provide the oil and gas producers with the most profitable means of oil and gas operations. How and what we do to bring the producers with those profitable operations is within our control. So if something strikes us at 4:00 in the morning we can deal with it then, and not have to wait until the mandatory 8:00 attendance.

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.  

Leadership in the User Community Part VII

What the oil and gas industry needs in the future is the means to deal with change. Change within the business model that it operates upon. Where the strategies, opportunities and risks can be addressed in a timely and effective way. What we do know about software is that it is the equivalent of pouring concrete on an organization. Software both enables and constrains organizations. The capacity to change afterward doesn’t exist unless capabilities to make the changes to the software are also built within the systems. People, Ideas & Objects are building the software development capabilities. However developers are blind and dumb when it comes to the actual activities of what and how people do their jobs in the industry. We need a user community to direct us. One that has the power and the money to be independent and proactive in the industry to solve the issues and pursue the opportunities that occur in the marketplace.

So that is what we are building here at People, Ideas & Objects, our user community based on our user community vision. A dynamic, innovative and profitable oil and gas industry has to be based on a dynamic, innovative and profitable method of organization, software, and user community. We have the Preliminary Specification which has the business models that provide the producer with those attributes. We will build the software that has those attributes once we have built the user community. What we need to do in the next five years is to build that user community that will lead the oil and gas industry and provide for it its dynamic, innovative and profitable nature.

To give an example of how this will work. The user community will realize that the shale reservoirs are creating a new dynamic in the oil and gas industry. One in which the marketplace is being flooded with the commodities. A new and unique situation to the oil and gas industry. What is necessary is for the oil and gas producers to move away from the price taker position and become price makers. This can be done through the Preliminary Specifications decentralized production model. Therefore it is decided in the user community to implement the decentralized production model into the software at the earliest possible point in time. This is how the industry needs to be managed. Effectively and efficiently through the user community that is being established here and now.

You may ask what it is that a producer is to concern themselves with? What they need to concern themselves with is to how to produce their oil and gas at the highest possible profit that they can. Focusing on their competitive advantages of their earth science and engineering capabilities, and land and asset base they have a scope of operations that is within the realm of what is controllable. Being a price maker is not within a producers controllable domain and therefore better left to the user community to deal with. Other issues that the industry face will be able to be parsed in a similar fashion. What the bureaucracy has traditionally left untouched in their muddle along strategy will now be handled through the user community.

It will be through the user community that the producer will be able to have their needs for both the controllable and uncontrollable domains satisfied. Operating software for an organization in the 21st century needs to be built to accommodate change. At People, Ideas & Objects that is what we have done. By building a software development capability that works for the user community we are able to meet the needs of the oil and gas industry in both their controllable and uncontrollable domains.

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.

Leadership in the User Community Part VI

We have been fortunate at People, Ideas & Objects to be able to quantify the differences between our method of organization and the current bureaucracies. Documenting the $705 billion in opportunity costs goes a long way to making our case for change. One area that is just as material in terms of the scope of change, however we are unable to quantify the differences, are the differences that are attributable to the toolset that we employ within the Preliminary Specification of automation, specialization and the division of labor. These will be material in their value to the dynamic, innovative and profitable oil and gas producer. Probably more material than those benefits that we are able to quantify today.

It will be up to the leadership team of the user community to ensure that we employ the toolset in the development of the user community and the Preliminary Specification. This will be a difficult aspect of their work in terms of how it is undertaken. With the reorganization of the industry and reduction in size of the prototypical producer. The service provider becomes a specialized provider who uses their division of labor to approach the entire oil and gas industry as their client base. This of course is an entire new way of organization and perspective of how things are done. The scope of the change is tremendous. The size of the G&A resources that are being shifted in this reorganization are quantified in the region of $40 to 60 billion per annum.

Our leadership will need to spend a significant amount of energy on this topic in order to make this transition effective. I suspect that, in time, the Preliminary Specification will be seen as a desirable method of organization by many in the oil and gas industry. The demand to proceed with the Preliminary Specification will be strong and we will need to have this issue worked out effectively in order to satisfy that demand. This may be one of the critical points that we need to provide to the investors to be able to satisfy them in their decision to choose the Preliminary Specification over the bureaucracy.

The monetary value from the specialization and division of labor changes would be significant. From today’s resource base the North American producers may be able to approach the concept of energy self sufficiency. A material increase in the continents throughput without any footprint increase in the size of the human resource base. How does someone quantify that value. But this is the value of specialization and the division of labor. The ability to increase production from the same resource base. And what we do know is that the producers have been unable to exercise any advantages from specialization and the division of labor due to the constraints of developing all of their capabilities within their organizations. By moving to an industry wide capabilities development we are able to fully exercise the value of specialization and the division of labor in the administration and accounting fields, and earth science and engineering disciplines. Applying this toolset to essentially very fertile fields.

Taking a process and defining it and managing it on the basis of an industry wide capability will need to be the focus of the user community and particularly the leadership of that user community. I think if we have a good answer for how we will conduct this operation and implement it within the People, Ideas & Objects Preliminary Specification. How it will be organized with the service providers organizations and the structure of their work. We will be on our way to convincing the investor and the people within the industry that our solutions is the better solution for the industry in terms of profitability for the oil and gas producers and the people who work in 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. 

Leadership in the User Community Part V

Looking at the overall scope of what can be accomplished by the leadership team and the users in the user community. It is important to remember that the user community has the wherewithal to make this happen. This is documented in our user community vision and includes the money and power that the community has at its disposal. So it is one thing to define broad strokes of a vision of what is possible, as I did in last weeks posts. And another to provide that community with the means to undertake that vision. And I think those mechanisms are within the domain of the user community and its leadership team.

The Preliminary Specification provides a solid vision and workable framework of what an alternative means of organization could be for the oil and gas industry. It works in that there is no deficiency or major failing where there is a breaking down in logic or implementation. It is a result of my vision of what could be, and a decade of very painful research. It is also incapable of providing the industry with the ability to be operated upon, as it stands today. It needs the input of thousands of others who work and understand what and how the industry operates. It is now time for these people, the users, to have their input into the process and build on the framework and vision that is the Preliminary Specification. I have nothing more to add.

This is the job of the leadership team as well. To guide the further development of the Preliminary Specification from its current framework to a comprehensive understanding of what and how the industry operates. With a detailed understanding of what jobs are required, what those jobs consist of and how those jobs are done. And how the software will be developed to serve those users. This needs to be done from stem to stern in terms of the number of people that work within the oil and gas industry. Earth science and engineers, land, legal and support people that are employed within the oil and gas producers. Administrative and accounting people in the service providers. And those people that are in the field and their head office resources of the service industry. This documentation needs to be comprehensive and complete.

And this work will be done with an eye to the understanding that the overall business models of the industry are under the user communities control. That to earn a profit and to be efficient is inherent in the software that the producer uses. That our societies today are structured and defined by the software that its people and organizations use. And that the user community is how the people within oil and gas and the producers use the software that the user community are responsible for. With this immense power comes immense responsibility for the leadership team. Oil and gas producers may own the oil and gas assets. However without access to the software that makes the oil and gas asset profitable, they have an albatross around their neck.

When the Internet came about in the mid 1990’s people saw the potential that this technology could have on society. As a result we had the technological boom in the late 1990’s that saw business models being rewritten by anyone with the ability to host a website. What subsequently happened is well known as the .com crash and the Information Technology field has not been the same since. There has been little in terms of employment opportunities. Businesses have not spent money in this area as it is perceived as a lost cost. And people don’t go into the field due to the generally negative feeling they get that technology is not necessarily the place you want to spend a career. What we do know about change is that change is always overestimated in the short term, and underestimated in the long term. We are definitely at the underestimating stage of the changes brought about by the Internet. What we are doing with People, Ideas & Object and the user community is what is necessary but also what is possible as a result of the maturing of the technologies in the past decades. The power has shifted, when will you.

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. 

Leadership in the User Community Part IV

Yesterday we discussed the career risks to those that may take the plunge and join the user community in one of the many leadership positions that are open. Today I want to discuss what it is these people will be doing if they do join. And what impact they will have on the oil and gas industry in the mid to long term. It would be my opinion that the work that is being done in People, Ideas & Objects and the user community will be some of the most interesting work that has ever been undertaken in the oil and gas industry. Few opportunities of this scale would come around within the lifetime of an individuals career, if at all. I have stated before this may be a once in a century type of opportunity.

The bureaucracy has been the prevalent form of organization in business since they took over from the merchants in the late 1800’s and early 1900’s. What we are doing with People, Ideas & Objects and the user community is retiring the bureaucracy and replacing it with a new form of organization primarily focused around the Internet. This is the trend that is happening in all industries as the Internet is capable of providing greater efficiency in terms of the management of our organizations. This is the scale of the changes that are being made through the implementation of the Preliminary Specification and the development of the user community.

To participate in this level of revolutionary change. That is on such a scale, is a once in a century type of opportunity. The opportunity to take today’s prototypical producer firm and convert it to the one that operates under the Preliminary Specification and the user community doesn’t exist. The scope of change necessary is beyond what is humanly possible. The forces of inertia from the bureaucracy would need to be fought at every step and our energy would be wasted in such battles. So we chose not to concern ourselves with such battles and instead rely on the forces of creative destruction to make the choice between the performance that the bureaucracy provides, and the solution that we present here with the Preliminary Specification and the user community.

The transition from the bureaucracy to the Preliminary Specification may be as a result of successful producers buying out laggard firms that refuse to change. That is the normal course of change as a result of creative destruction. We don't know and we certainly don’t care. What we are concerned with is that we provide the most profitable means of oil and gas operations. And with the Preliminary Specification we already have a material difference in our value proposition. This will be the focus of the development of the user community and particularly the leadership. One area of our value proposition that we are unable to quantify is the value that we will be able to provide the dynamic, innovative and profitable producer due to the toolset that we implement within the Preliminary Specification. And that toolset currently consists of automation of the business process, specialization and the division of labor. With the configuration of the industry into service providers there is ripe material here for the ability to significantly add more value to the industry.

So it is these topics and areas of focus that will be the domain of the leadership within the user community. Very high level, once in a century type of work that will be something an individual can highlight their career with. The changes we are making are dramatic and will have a material effect on the performance, makeup and manner of how the oil and gas operates for the next 50 to 60 years. Foundational work that is material to how the producer performs, and since our organizations are a critical part of our society, healthy organizations lead to healthy societies which lead to healthy individuals.

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. 

Leadership in the User Community Part III

There are significant opportunities that lay ahead for the people who participate on the leadership team of the user community. They will have a hand in developing the organization that defines the manner in which the oil and gas’ business model is defined and supported. As we have noted before, the motivation for participation is the power and the money that the user community and service providers will hold in the new oil and gas industry. That’s the upside, and for the individual members of the leadership team, this upside will be significant. There are however some risks, and most of all the costs associated with participation in the user community in any one of the leadership positions.

The first cost that you'll incur, particularly in the short term. Is that your connections that provide you with your source of income, whatever that is, a job, revenue in your firm etc. will be at risk to dry up faster than you can say “what happened?” The bureaucracy doesn't mind acting out against individuals and when they see an individual who is taking a position that is counter to their long term benefit they act swiftly and ruthlessly. If you need your job or are happy with your company you should think twice about a leadership position. Leaders are expected to suffer for their cause. And this will be the primary way in which you will suffer. I can almost assure you that you will not survive in your job or your business if it is discovered that you have taken a leadership position in the user community.

The upside is that you’ll have significant amounts of time to commit to the user community. The next five years will certainly draw in your time and tax your savings while you pedal backwards in your life while everyone else moves forward in theirs. This can be a difficult thing for some people to sustain. To maintain the necessary focus on the job at hand while their ship is being torn apart by the storm. Do you continue on where the sailing “might” be better or turn back to port. This takes a certain type of fortitude and is not the domain of the majority of the population. It takes a certain type of person. An “A” class entrepreneur I would suggest.

The prize is that there will be revenues that are established in the user community. In the current budget the user community has a budget of $333 to $667 million for the software development costs of the Preliminary Specification. These are for the initial commercial release. As we have indicated before People, Ideas & Objects and the user community are based on the changes that are required in the industry. It is those changes that are the source of our revenues. People, Ideas & Objects and the user community are very much going concerns for the long term.

In addition the members of the user community are the ones that are establishing the service providers who provide the administrative and accounting services to the oil and gas producers under the decentralized production model. It is estimated that the revenues for these service providers for the North American oil and gas industry will range in the area of $40 - $60 billion per annum. These revenues are a replacement of the current G&A costs of the producers. It will be the leadership team that would have the primary opportunities in configuring solutions within the user community and the service providers. Therefore the known risks that were indicated in the earlier part of this post are not without their significant potential rewards.

People, Ideas & Objects have a reasonably high profile with the bureaucracy. If your name should show up as being involved in this project, not something that we would do first of all, they would attack you and anyone who shared that name with you. We can do this quietly. And protect people as much as possible. The Internet will provide us with some anonymity for some time. It also reduces our costs to the time involved in this project. So if you can hold your position and work on this project outside your job, all the better. We just need to realize that we operate in an extremely hostile environment that is very dangerous to those who participate here. And we need to take steps to ensure that no one is subjected to the bureaucracies antics unnecessarily..

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. 

Leadership in the User Community Part II

The first installment of "Leadership in the User Community" was posted on April 22, 2014.

We have consistently asserted that we provide greater value to the dynamic, innovative and profitable oil and gas producer over what the bureaucracy is providing today. Our focus on developing the user community, its leadership and the associated service providers is our primary task in the next five years. We do this as we are striving to provide an alternative means of organization to the oil and gas industry. So that the oil and gas investor, and the people who work in oil and gas can choose the bureaucracy or People, Ideas & Objects Preliminary Specification, the user community and service providers as the method to manage their industry. Organizations don't change. Therefore without alternatives we are stuck with the bureaucracy. If we don’t work towards building an alternative, nothing will change. And just as organizations don't change, people do. And this is the place where people can begin the process of changing the oil and gas industry from a tired, poorly performing, muddling along behemoth to a dynamic, innovative and profitable industry.

We have documented within the Preliminary Specification how it provides over $705 billion in opportunity costs over the current bureaucracy. There are additional benefits that are not quantifiable that can be gained from the tools of specialization and the division of labor. It is a new way of operating the oil and gas industry. And as we have stated here before. Even if the bureaucracy could park their own selfish self interest and wanted to proceed with the developments we would not begin until the user community was fully formed. The Preliminary Specification is a fine vision of what the industry can operate as. However without the user communities involvement in the software developments it will be a great vision without the appropriate implementation. There must be strong user community involvement in the software development of the Preliminary Specification. It is mandatory, and as I have pointed out the user communities development is our current number one priority for the next five years. We have set this long time frame as we are without the support of the industry. The bureaucracy are challenged by the Preliminary Specification. They are eliminated from the landscape by it and therefore don’t want to be part of it. Therefore they will not support us. And therefore we have to build the user community brick by brick and stick by stick. And that takes time.

We have set out the 28 leadership positions of the user community that we are actively seeking to recruit today. These people will form the leadership team and help to develop the user community over these next few years. In preparing an offering for people to make a decision to go with our solution. And what that is qualitatively and quantitatively is unknown and unknowable at this time. We need to figure that out. We have however proven that we provide substantial value over the status quo. And the logic is compelling. People can see where and how they fit in within the industry quickly and begin to effectively and efficiently do their job. Using the Joint Operating Committee is a very natural way of organizing the oil and gas industry.

What compels someone to even think that we need to develop an alternative to the current way things are done. I don't know, and as I have indicated this has been a long term prospect for me. What I do know is that it doesn't sound so crazy anymore. Industry after industry is being disintermediated by Information Technology. And that is what we are doing here with the Preliminary Specification. And it is timely from a business point of view. The prolific nature of shale reserves is demanding a new business model be generated for the oil and gas industry. A business model that deals with the resource abundance and price destroying nature of producers producing unprofitable production. A business model that deals with allocating production fairly, based on profits and doesn’t harm a producer with shut in production with excessive G&A costs. A business model like the Preliminary Specification supported by the user community and the service providers.

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. 

Industry Specific ERP Systems

Modern miracles like the decentralized production model work because they are developed for the oil and gas industry. Just like SAP’s success in manufacturing is so strong. But don't take SAP’s success in manufacturing as the reason that it will succeed in oil and gas. And don't take the Preliminary Specification and expect it to do anything in the manufacturing sector. ERP applications need to be developed specifically for the industry that they operate in. The one size fits all type of ERP software product that is used to limited success currently. Is no longer capable of providing value to the dynamic, innovative and profitable oil and gas producer.

For Ford and GM there is no choice as to which system you want to operate with. SAP was designed and built for a major tier 1 manufacturer such as they are. What it does is schedule and manage the tier 2 and tier 3 manufacturers to bring their supply chain in line with Ford or GM’s needs. All that Ford or GM have to do is say they want a red truck to be built and the purchase orders for all the parts are distributed to all the manufacturers that build those parts and they are brought to the assembly line exactly when they are needed to build that truck. SAP does this with a precision and ease that make it their business in any manufacturing environment of size and scale. This is where they dominate and are the defacto standard ERP system.

At the same time SAP, which is the standard ERP system in the oil and gas industry, has essentially nothing to do with what happens in the oil and gas industry. Oil and gas is somewhat remotely related to a manufacturing process. Or it could be suggested that might have been the case in the past. And therefore elements of the SAP application might have been able to be retrofitted. With what I assert, the dynamic, innovative and profitable oil and gas producer needs, is the focus on the sciences on a go forward basis. And therefore the ability of SAP to deal with the needs of the oil and gas producers demands in the future are lost due to their focus on the tier 1 manufacturing capabilities.

At the same time it would be inappropriate for People, Ideas & Objects to market the Preliminary Specification or the decentralized production model to the likes of Ford or GM. Systems today have unique attributes that are industry specific and once outside of that industry, those software attributes are counter to the interests of any the other industry.

We may see what People, Ideas & Objects are imputing in their offering coming about in other industries in the next few years. What we are imputing is a homologation of the industry on one ERP system. And in the case of oil and gas that one system is People, Ideas & Objects Preliminary Specification hosted in a cloud computing configuration. With the capital costs of development, the focus necessary to complete the developments, high levels of inter-company interactions and the advantages of standardization. Competition in the ERP systems space will be between industry specific players with intra industry competition being a thing of the past.

Some would disagree with me on the viability of a model based on the ability to compete within an industry as a sole provider. Those that would disagree should be reminded that it is the Intellectual Property of the Preliminary Specification that is the source of competitive advantage that is used by People, Ideas & Objects. The ability and capability to circumvent that IP doesn’t exist in the marketplace. Therefore making the scenario that I have sketched out here the more probable one for 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. 

No Posting Today

In recognition of the U.S. Memorial Day holiday.

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.