People, Plans and Priorities.

Our plans for developing the Preliminary Specification and the user community are currently in effect. They will see us continue on with our priority of developing the user community through to January 2019. It is the user community that will make the Preliminary Specification and everything associated with this product stand out as a quality product for the innovative and profitable oil and gas producer. Our commitment to the user community and its development in these next few years will become one of our key competitive advantages. We have established January 2017 as the deadline that we expect the investment community will financially support our user communities development. Support in the form of the advancement of our budgets funds. It will be at that time that we can begin the full development of the user community for the remaining two years prior to the softwares development that commences in January 2019.

There are many things to be done within these time frames. The first order of business is to establish the leadership team of the user community. I have set out approximately 30 positions that need to be filled before the January 2017 deadline. These consist of the board of directors, the executives and the twenty or so product owners. Having a dedicated leadership team that provides the investors in oil and gas with an alternative means of managing their assets is the strategy that we are using to convince them to fund these developments. Providing this as an alternative to the existing bureaucracy and asking them to choose which method they want their assets managed. It is in this manner that the bureaucracy is removed and replaced by an alternative. This is the only means in which to change the ways and means of the oil and gas industry.

The bureaucracy have had every opportunity to deal with us in the past 10 years. They have chosen not to do so. We have a very storied history with these people. Last winter they prayed for a cold winter so as to increase the natural gas prices. And there were moderately higher natural gas prices thanks to a cold winter. However that did not motivate them to change their business model and their overproduction continued. Now the natural gas prices are declining and they say, pray and do nothing. That is because they know no one can remove them from their positions within the industry. Who has the power to make the changes. If the investors want more profitability then they will have to be satisfied by the bureaucracies accounting wizardry to capitalize more royalties. They are corrupt and self serving and know that they are permanently installed and without an alternative.

It will be a group of like minded people in the user community who are able to offer an alternative to the oil and gas investors. People motivated around the business opportunities provided within the user community, but mostly they will be motivated on the basis of providing the oil and gas producer with the most profitable means of oil and gas operations. Our business models within the Preliminary Specification can do that for the industry today and tomorrow. Our user community can lead the industry in resolving the issues and opportunities that occur on a proactive basis. Permanently dispatching the muddling along strategy of the bureaucracy to the scrapheap of history.

The first action of this new and dynamic oil and gas industry will be the change that we exercise in removing and replacing the bureaucracy. By organizing the user community, building the software which defines the ways in which the industry will operate. We will determine its future direction. The bureaucracy will be squeezed out and eliminated through attrition. Deliberately by us. And one day we can say so long, it wasn't nice knowing you.

The Preliminary Specification and user community 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. 

Our App Marketplace

We now want to take some time to document the “apps marketplace” that we recently announced. What is the apps marketplace and why are we establishing this for the innovative and profitable oil and gas producer? Like the service providers, the developers within the app marketplace are providing services on a fee for service basis. Selling their applications to users and producers based on their needs. People, Ideas & Objects are expecting that the mobile applications that are needed will be provided by the app marketplace developers. That People, Ideas & Objects will be providing the infrastructure, process management, software development capability, the Preliminary Specification to solve the large issues of the industry. Such as the decentralized production model and the material balance report. While the app marketplace fills in the needs of the users and producers with the types of applications that are unique and innovative on the mobile platforms.

This division of labor between the mobile marketplace and the areas provided by People, Ideas & Objects give the innovative and profitable oil and gas producer the types of applications that they need. The app marketplace will be dynamic and entrepreneurial with only a license, Application Programming Interface (API) and data model provided by People, Ideas & Objects. These app marketplace developers will be driven by the issues and opportunities that they see in the oil and gas producer marketplace. Having their own revenue stream, they will be able to sell their products into the user marketplace that may total the full 12 million oil and gas professionals and several hundred producers.

Mobile computing is becoming more mainstream as we proceed through these Information Technology changes. It may be difficult to place something as complex as the Material Balance Report on a tablet device. Possibly we could provide it on a read only configuration. It is difficult to say at this point. Nonetheless these issues will be left to the user community to determine. The point that I am trying to make is that although we have left the mobile marketplace to the “app marketplace,” that does not preclude People, Ideas & Objects in providing our applications, reports, processes and functionality in a mobile configuration. What I see as the division of labor is the heavy industrial processing vs the lightweight processing of the purely mobile application providers.

Years ago we published a technical vision consisting of four cornerstone technologies. It still resides in this blogs history however it is not on the wiki. The four technologies that make up the technical vision are Java, what we call Asynchronous Process Management, IPv6 and Wireless. These technologies operate together to change the dynamic in any industry toward a new and more pronounced Information Technology infrastructure in the cloud computing era. They operate on the following basis. Java is a highly “typed” language. That means it is able to discern the differences in many objects. IPv6 is the next generation Internet addressing scheme. Capable of providing Internet addressing for anything and everything that we can think of. Or providing Internet access for a variety of different objects. Wireless Internet access providing the mobility aspect of the technical vision. And Asynchronous Process Management being our term for the ability to break up a process and approach its processing from different perspectives or priorities.

This technical vision fits in with the app marketplace and provides the mobile app marketplace with the ability to grow to its appropriate size and configuration. If we constrained mobile by keeping it within the People, Ideas & Objects domain our focus would otherwise be diverted by these mobile demands of our user community, or alternatively we would miss out providing this important dimension to the producer and user marketplace. By providing a division of labor through establishing the app marketplace we can have the best of both worlds for the users and producer firms.

The Preliminary Specification and user community 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. 

Leaderless, Changeless Bureaucrats

One thing you can count on, is a bureaucrat will always do the same thing over and over. It would seem that they have been carrying on in the oil and gas industry without a hint of thought or consideration to the natural gas marketplace. Producing at capacity, to cover the overheads is the only game in town and that is what they do best. Reliable and destructive. What we can be assured of now is this. As a result of last winters prayer for a long, cold, hard winter the bureaucrats do not have a plan for the natural gas business. When the cold winter arrived they assumed all was good and continued on as if that was the end of the difficult days. Consideration that any tactical change to their operating strategy was not necessary. I suggested that with low natural gas inventories they had an opportunity to establish the price maker strategy by scaling back production by 15%. They didn’t think that was a good idea. They didn’t think. Now storage is filling at a faster rate than what was anticipated thanks to an additional 3 bcf in incremental production. A good bureaucrat is a reliable, destructive bureaucrat.

The natural gas prices will remain depressed for the remainder of the shale reserves life. That’s not a prediction, that is a fact. When you have an industry hoping and praying as opposed to planning and changing their ways through a difficult time. And the difficulties are creating losses of such magnitude on natural gas production. Then no amount of losses will influence a change in the ways and means of the current bureaucratic thinking. Therefore we are destined to continue to produce the remainder of the shale gas reserves at a loss. Besides there's always cash flow. Take the investors money, swish it through a drilling operation, presto chango you have discretionary cash flow that you can use to do with as you please. Consideration that the investor, or any of the other investors from prior years, might want to have some earnings or their investment back doesn't permeate one's mind when you cover your ears and talk louder than them.

Life will continue as it was and the bureaucrats can blame the investment community that they don't understand how sophisticated and difficult the business has become. So difficult that making profits are not really possible, I guess. The problem with these arguments are that the investors have been hearing a lot of comments from the bureaucrats for the past decade or more. The run up in commodity prices has not seen any enhanced profitability in the producer firms. The costs in the business quickly became as dramatic in terms of increases as the commodity prices. There was no commensurate increase in profitability. However there was that time, prior to 2008 where the compensation for the bureaucrats in terms of options and bonuses certainly did become dramatic. I'll bet the bureaucrats still have dreams of their vested options prior to 2008.

And it is too bad about the financial crisis. Times just aren't the same for our friends the bureaucrats. Certainly they still have their jobs and their pensions. But no one has lost their jobs. And absolutely nothing, other than fantastic losses on natural gas, have occurred. Again I would assert, what would possibly come along and make the necessary changes to remove these bureaucrats and implement a plan to deal with these natural gas losses? Everyone knows what needs to be done. All they need is a plan and a method to implement that plan. If only.

The Preliminary Specification and specifically the decentralized production model deals with these issues. However, the bureaucracy doesn’t want any part of People, Ideas & Objects to see the light of day. Therefore we are offering the investment community the choice to have their assets operated by our solution which includes the People, Ideas & Objects software, the user community, the service providers and app marketplace. Its interesting that the bureaucracy haven't done anything other than pray for a cold winter, even though there have been alternatives for them to choose from.

The Preliminary Specification and user community 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. 

Operations of the Service Providers Part III

To call the service providers a sub-industry of the oil and gas industry is appropriate based on their scope and scale. Replacing the industries administrative and accounting capabilities that are housed within each individual producer involves a lot of individuals. And in terms of costs, on a North American basis, it is estimated that the producers incur $40 to 60 billion in G&A costs that would be reallocated as revenues to the service providers. A significant change in the manner in which the oil and gas industry is operated. However People, Ideas & Objects, the user community and service providers value proposition over the life of the shale based reserves is in the trillions of dollars in increased commodity revenues. Therefore the prospect of this change is justified just on the enhanced profitability of the producers. Additional value is generated based on the ability of the service providers to exercise real economic growth through the toolset of specialization and the division of labor.

Arguments against this change will be bureaucratic in nature and their self centered needs. Only a bureaucrat can aspire to defend the current administrative and accounting needs of a producer firm as being anything but necessary. Through the compliance requirements of the various government agencies, the sophistication of the society that we find ourselves in and the needs of the oil and gas producers partners. The administrative and accounting requirements of an oil and gas producer are one of the chief causes of the poor profitability in the oil and gas industry. The business model that the industry is structured under, the high throughput production model, requires that the producer produce at capacity at all times in order to cover these expensive overheads. Production at capacity is leading to the low natural gas prices that are creating the systemic losses that will lead to the demise of the industry at some point in time. The bureaucracy is quite content to wait until that time, I feel we should do something about it and have proposed the Preliminary Specification as a solution to the lack of profitability, performance, accountability and innovation within the industry.

It is the light weight of the producer organization under the Preliminary Specification that enables some of these desired characteristics. Having the administrative and accounting provided by the service providers has left the C class executives, the engineering and earth science resources of the producer firm, the land, some legal and support staff. With this small footprint, no matter the size of the production profile, the producer firm is able to focus on their key competitive advantages of their land and asset base, and their earth science and engineering capabilities. Having state of the art administrative and accounting service providers is what they will have on a service fee basis. Accessing this industry wide capability and freeing them from the task of building the administrative and accounting capabilities in-house.

This will enable the producer to be able to focus on their business of generating greater value for their shareholders. The service providers capabilities will also accommodate change in the manner in which the producers do their work. Through the user community participation and the People, Ideas & Objects software development capabilities the service provider can enable change in the software and processes to increase the productivity of the producer firm. Changes made within the oil and gas producer itself, and changes to enhance the producers key competitive capabilities. These can be handled by the service provider to ensure that they are adopted within the processes that the producer uses. Enabling a further specialization and division of labor within the earth science and engineering disciplines. Something that is suggested here that is necessary in order to address the shortfalls in these critical resources over the mid to long term.

The Preliminary Specification and user community 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. 

Operations of the Service Providers Part II

I want to continue on with the discussion of the operations of the service providers in the environment of the People, Ideas & Objects Preliminary Specification. The service providers role is a critical one. As we discussed yesterday, they have the capability to implement the toolset of specialization and the division of labor on the administrative and accounting processes of the oil and gas industry. The Preliminary Specification moves these capabilities away from each producer having to build the administrative and accounting requirements in-house. To a reliance on the capabilities that are provided on an industry wide basis. This movement of capabilities enhances a producers profitability by reducing the heavy burden of building the enormous capabilities necessary to operate an oil and gas producer today. As a result of this movement, each process that the producer has will be made available through a service provider for a transaction fee.

It is on the basis of changing the relationship of how the producer accesses their administrative and accounting capabilities that we are able to enhance their profitability as we noted above. However, it is also how we are able to implement the decentralized production model. This model provides the capability of the producer to implement a “price maker” strategy that will be a key competitive capability in this shale based reserves era. This is enabled by the producer shutting in any unprofitable production. Reducing the amount of the commodity on the marketplace and therefore increasing the commodities prices. At the same time, during the period that the production is shut-in, the reserves are held for a time when they can be produced profitably. The property records a null operation as there are no revenues, no operating costs and no overhead costs. The lack of overhead costs being incurred is a feature of dealing with the administrative and accounting capabilities on an industry wide basis. When the property is shut-in the service providers will receive nothing from the task and transfer network that will cause them to incur any administrative or accounting action or generate a billing for their services for that month.

The task and transfer network is a part of the Preliminary Specification that will be developed in a variety of different modules. It provides the high level of automation that is necessary for the service providers to efficiently process the oil and gas producers operations. The task and transfer network is the automation of the processes that is a key toolset of the service provider. Just as specialization, the division of labor and cloud computing are key toolsets of the service providers. It is the application of these tools that are the focus of the service providers in providing the oil and gas producers with the most profitable means of oil and gas operations.

The task and transfer network is the beginning of automation of the producers process. When an activity occurs at a property such as production, construction, operation or drilling for example. Then that activity invokes the process management of the software and the pertinent service providers. If nothing is conducted at the property to invoke a process at the task and transfer network then no administrative or accounting work is incurred by the software or the service providers, creating no billing from the service providers. The producers are being billed only for what they use. It is in this way that a producer can control their costs and ensure that they are able to have higher profitability at lower production volumes, and achieve higher commodity prices by removing their excess unprofitable production from the marketplace.

It is the service provider that resides at the point of discovery and conflict of the producers administrative and accounting operations. It is there that they can improve and enhance the process through the substantial toolset that they have at their disposal. Key within that toolset is the People, Ideas & Objects software development capability and their direct participation in the user community. And it is in that way they can effect real change to ensure that their producer clients are provided with the most profitable means of oil and gas operations.

The Preliminary Specification and user community 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. 

Operations of the Service Providers

As an operational service provider, you will be responsible for the management of a process on behalf of the oil and gas industry. A simple job some might say, I would argue that it would be one of the most technically challenging and demanding businesses that could be considered. The dimension of the work would be breathtaking in terms of understanding the scope and scale of the work that is undertaken each month. Without getting into the details of a specific process in this post, and speaking only of the generalities, I want to discuss the scope and scale, and the details of the “what” and “how” of a service provider in the People, Ideas & Objects Preliminary Specification.

Having as the process domain, the entire North American producer population to manage would be a difficult and challenging task to grasp initially. The approach to the process would be fundamentally different than that which would be done in a junior oil and gas company or ExxonMobil. Even they don't come close to that scale of the proposed volume. Therefore the need to design the process within the user community from the basis of some new method of organization will have already been determined as a result of your early participation in the community. The softwares design and process management will be consistent with this new philosophy.

As a result of this new philosophy, the user community research will have determined a new level of specialization and division of labor for the people that need to be involved in that process and the tasks that they will need to do. Defining what the computers and what the people can each do best. As we have noted here many times before, computers are good at storing data and processing information. People are good at making decisions, collaborating, innovation, ideas, planning, creativity, design, leadership and problem solving. This new specialization and division of labor between computers and people will be the base that your service provider will use in this new oil and gas environment. It will be one of the things that you use to enhance your service to ensure that the oil and gas producers continue to achieve the most profitable means of oil and gas operations. A new specialization and division of labor that will provide better services and lower costs to the producers and reveal new ways in which to do business that can add value to their organizations.

And participation in the user community will continue as a result of your work in the service provider. The need to make changes in the specialization and division of labor has to be initiated in the software first and foremost. We are defined and supported, and constrained by the software systems that we use. Any change that we make in our organizations must first be made in the software. As a member of the service provider sub-industry your role in the user community continues so that you have the ability to affect the changes necessary through the People, Ideas & Objects software development capability and user community commitment and vision. This feedback from the service providers is one of the primary reasons that there will be constant development work being done on the systems and services provided by this ecosystem. All to the benefit of the oil and gas producers enhanced profitability.

If this sounds like the more appropriate manner in which to operate the industry. One where change and dynamic capabilities are the competitive advantage of the oil and gas producer. Then you can join me here. The alternative is to continue on with the profit destroying methodology of each producer attempting to develop the entire scope of administrative and accounting capabilities in-house with no sharing of those capabilities. It can't be that I am the first that asks if that is working.

The Preliminary Specification and user community 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.

Show me the Money!

I want to touch on another area where the user community has a significant business opportunity in terms of their participation with the software developments of People, Ideas & Objects. Within the budget of People, Ideas & Objects there are financial resources earmarked for the user community in the range of $333 to 667 million for the development of the first commercial release. To be candid I will not be looking to raise the minimum amount of money from the industry. I do not want to give the bureaucracy any opportunity to interfere with our projects success, and therefore will be asking for the full $4 billion in funding for us at the start. Our value proposition is valid and our costs are minimal in comparison to that value proposition. Therefore to leave an opening for the bureaucracy to obstruct us, if we were required to raise funds a second time, would put this project in jeopardy. Therefore the user community would have the upper limit in terms of their budget allocation.

The first business opportunity for those members of the user community is to establish themselves as permanent members of the community. These positions will not be one time instances during the first commercial release. We are committed to providing the oil and gas producer with the most profitable means of oil and gas operations. Providing the software development capabilities and user community to the industry on a permanent full time basis to ensure that the industry has the capabilities to deal with constraints of the software, the opportunities and challenges of the industry as they occur. Therefore the user community participant would be able to establish themselves as a permanent member of that community and specialize in the types of services that are needed within the community. These could be provided as either an employee of the community or as a business operation.

The second aspect of the user communities business opportunities is the service providers that are derivative of the user community itself. The service providers are comprised of people and businesses that are participating in the user community and also have business interests in the service providers that are being established as a sub-industry of the oil and gas industry. Recall that these service providers have as their revenue stream a reallocation of the funds that the producers incur as G&A expenditures today. These will still be G&A expenses of the producers in the future however instead of being paid to the administrative and accounting personnel they have on payroll, they will be paid to the service providers who will be conducting the administrative and accounting services under the decentralized production model. These costs that are being incurred today by the producers are estimated to be in the $40 - 60 billion range for the North American oil and gas industry.

These service providers will organize themselves around a process that is managed in the People, Ideas & Objects software. Their management of that process will be on behalf of the entire industry in most instances, with the occasional exception for geographical location being necessary. This process management will be supported by a license that provides them with the exclusive management of that process. This license is granted by People, Ideas & Objects and is earned by the service provider through their previous development efforts in the user community.

If you have had the idea that you would like to establish an operation within the oil and gas industry. And believe that People, Ideas & Objects Preliminary Specification will rule the world. As it should. Then this may be the opportunity that comes around once in a lifetime to make that business operation real. Secondly, or maybe primarily, this is the opportunity that you will have to provide the oil and gas producer with the most profitable means of oil and gas operations.

The Preliminary Specification and user community 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.

Where's the Rest of the Plan?

We have been discussing the software development plan of People, Ideas & Objects and the user communities development for the past eight months. During this time we have not discussed the period of time beyond the development of the user community, January 2019, when we are actually into the developments of the software. There are a number of reasons for that which I would like to present today. First of all these details will be determined when the resources of the industry are secured and the user communities leadership team are in place in January 2017. It will be at that time that we will have a better ability to determine some of the key issues and opportunities that will be involved in the final software development.

First of all, as of right now it is somewhat of a moving target to make any estimate of the timing of these developments. The technology industry has gone through a significant maturation of its technologies in the past decade and we are the recipients of the value from this maturation. What we propose to do with People, Ideas & Objects and the user community could only really have been done in the past few years. And with today’s technologies it would be significantly easier and more robust than if we did start several years ago. I think I should thank the bureaucracy for holding us up this long, it really has added significantly to our product quality. Particularly Oracle Corporation is going through some changes that I find very dramatic. Their Oracle Database 12C is a significant leap forward in terms of cloud computing and they are committed to that form of delivery. Their Oracle Fusion Middleware and Oracle Fusion Applications which were a complete, ground-up writing of an ERP system based in Java and other Oracle technologies were released in 2010. They are now becoming robust. And we are the recipients of the value that is generated by them.

Similarly development tools and programming languages have been through revolutionary changes. Java is very robust and we are now able to fully implement our concept of “asynchronous process management” throughout the Preliminary Specification without any difficulty from a programming point of view. This enables us to introduce these concepts that will alleviate many of the timing issues that have traditionally disrupted the accounting processes in oil and gas. Software development teams are also finding different ways in which to operate that provide new levels of productivity, which is good. However the real benefit is the closeness that they can achieve to the user community and the quality in the software product deliverables.

There is also significant stress in the oil and gas industry. It seems every day there is another CEO or CFO that has left their post at their firm. What is the future direction of the oil and gas industry? Who is offering a discussion as to where the direction is headed? I don't see anyone taking up the discussion and nothing but people sitting on their hands trying to survive from quarter to quarter. As good as the oil prices are they can't make up for the costs in the oil business and cover the natural gas losses forever. Projecting this status out past January 2017, let alone to January 2019 for me is very difficult. I can't see what the industry is doing at that time. If I were in industries shoes I would be desperately looking for solutions to this the mother of all muddling along periods.

If the industry wanted to buy some time they could accelerate their forwarding of the financial resources to People, Ideas & Objects from January 2017 to today. That would cut 2 years off our time table. We would be able to recruit the leadership team in a much shorter time period and begin developments much sooner, probably in January 2017. That might be worth a few hundred billion dollars to them. Otherwise we'll stick with the timetable and the plan that we have. To project the software developments out beyond January 2019 and into the future software development realm is into the great unknown. We could be looking at a new generation of applications, programming language features, tools and development methodologies. The productivity and quality of which we could not even imagine today. So we will look forward to that day and stick to our plan and enjoy the scenery, that is the show being played out in the oil and gas industry.

The Preliminary Specification and user community 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. 

Development of the User Community

Our software development plan sees us continuing on our primary focus of developing the user community for the next five years. This leads us into January 2019 when we will commence developments of the Preliminary Specification with the full user community in place. We have allocated the five years that I feel is necessary to establish the user community in the oil and gas community. The role and responsibilities of the user community in the developments of the software are one thing that we are unwilling to compromise on. But there is also the broader issue of the role and responsibility that the user community has in terms of the developments of the oil and gas industry itself. This is reflected in the user communities vision and is expressed in the power and authority that the community holds to define the ways and means of the administration and accounting of the innovative and profitable oil and gas producers. The People, Ideas & Objects user community is not your typical user community, it has the power and the means in which to determine the direction and priorities of the issues and opportunities of the oil and gas industry.

We have embarked on the beginnings of the development of a leadership team that will begin the formation of the user community. There are almost thirty positions that were identified just prior to our vacation that are being actively recruited. These include the board of directors, the C class executives and the product owners that will be the critical parts of the various software development teams. Scroll back to see if these positions have any appeal to you or someone you might know, and then follow the procedure to join here. Ideally we would like to have these leadership positions in place for the January 2017 deadline we have established for industries financial participation. These resources will fund our budget in its entirety and therefore we can begin to develop the remainder of the user community over the following two years. These resources will also be used to set up the software development team and have them prepared to start the software developments in January 2019.

I can not stress the importance of the users involvement in these software developments. The complexity of the oil and gas industry is second only to the space industry. Approaching these software developments in the traditional manner of token user development would be a waste of money and a waste of people’s time. It would also be a waste of a significant opportunity that we have to do this correctly. User participation in determining what and how the systems that they will use are the only systems that work and are usable for the long term. Just compare Google and Apple, which are heavily user represented, to the long term disappointment that Windows provides. To date no ERP system has been developed with user involvement, that is at least in oil and gas. They may claim to be, however, in comparison to what we are discussing here, and the investments that we will be undertaking to develop the user community, there will be no comparison.

There are thousands of individual positions within oil and gas that need to be captured within the Preliminary Specification. Each position requires an individual at least six months in order to fully understand and learn how to do the job that is being done. This knowledge and understanding needs to be captured by the user community in order for the user to be identified and supported within the systems that they need. That takes time and money to undertake. And that is why our budgets are as high as they are. Significant levels of analysis needs to be undertaken to ensure that the user is supported by the systems that we develop. That the work that we do is to ensure that the tasks that are best left to the computers are done by the computers, and the work that is done by the users, the leadership, the unstructured problem solving, acquiring and processing new information and deciding what is relevant, the creativity, the collaboration, research, generation of ideas and design are completed by the people to ensure that they provide the oil and gas producer with the most profitable means of oil and gas operations.

The Preliminary Specification and user community 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.

Advantages of a Dedicated Software Development Capability and User Community

It has been a while since we have had the opportunity to discuss the decentralized production model of the Preliminary Specification. The decentralized production model is one of the business models that are implemented in the Preliminary Specification and will be available to those producers that actively get involved with this community and participate in its development. One of the important elements to remember is that this model provides significant value for the producer, when it is developed. And as it is with software today. Organizations are defined, supported and constrained by the software that they use. It is therefore important that industry adopt People, Ideas & Objects and the user community in order to have the tools to effectively deal with opportunities to implement these and new business models that may provide further value to the innovative and profitable oil and gas producer. The People, Ideas & Objects software development capability and the user community being the type of tools that industry can use to eliminate the constraints of software in their organizations and enhance the definition and support of these business models.

The decentralized production model works through a variety of different modules in the Preliminary Specification. It works to maintain a level of production discipline across the industry in order to avoid the situations where overproduction of natural gas occurs. The method of production discipline is implemented through an allocation method based on profitability. If a natural gas property can be produced profitably then the property will be produced. If the property is incurring a loss then the properties gas production will be removed from the marketplace. This is the necessary methodology to ensure that the marketplace is not supplied with the over production of natural gas and industry wide losses. Situations like what have been the case for the last number of years where overproduction brings down the natural gas prices to the point where all natural gas properties are incurring losses.

The decentralized production model does this by first of all stripping the innovative and profitable producer down to the C class executives, the engineering and earth science resources, land and legal and some support staff. The remainder of the administrative and accounting staff, including the production and exploration administration staff are reorganized into service providers who are focused on the individual process and use the entire industry as their client base. It is with that scope of industry wide clientele that they will be apply the automation, specialization and division of labor toolsets to their process to make them more efficient and cost effective for their producer clients. It will also be that they will bill the individual Joint Operating Committees for the work that they complete on behalf of the properties in what we call the task and transfer network. A fundamentally different methodology in comparison to today’s accounting treatment of the producer incurring the overhead.

Therefore during the times when a property is shut-in due to low natural gas prices the individual service providers will receive no activity from the properties task and transfer network. And therefore there will be no billings generated by the individual service providers for those months that the property is shut-in. And therefore that property will report a null operation. No revenues, operating costs or overhead. Only the costs of capital will be recorded in the accounts for that property during times of shut-in operations.

The advantages of the decentralized production model are many. First of all the property is reporting a null operation. It is not reporting a loss on operations. These losses on operations, as they are incurred today, need to be added to the reserves costs and therefore need to be recovered in the future by higher natural gas prices. Another advantage of the decentralized production model is they save the reserves for the time in which they can be produced profitably when prices are higher. And they remove the excess, unprofitable production from the natural gas marketplace putting upward pressure on the natural gas prices. Cost control of the overhead items becomes a feature of the decentralized production model. This is attained through the service providers managing their operations with the understanding that at any time their operations may experience reductions in revenue from producers shutting in production. Lastly the producers profitability, with the lower production profile, will be higher than the profitability at full production.

It is these types of situations that the capabilities of a dedicated software development team and an enabled user community provide the innovative and profitable oil and gas industry. These capabilities need to be purpose built and require the active long term participation of the oil and gas industry. They also require the financial resources of the oil and gas industry for today and tomorrow. As we stated in yesterday’s post, no one is going to do it on behalf of the producers. I think it is clear that the monetary value of these changes, which I have quantified in the trillions of dollars, are only in the best interests of the oil and gas producers.

The Preliminary Specification and user community 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.