Today's Lesson is Production Discipline

Last week we discussed how the oil prices were breaking down as a result of the Saudi’s not curtailing their production. That they were not assuming their traditional swing producer role due to their desire to teach the shale oil producers a lesson in production discipline. We learned this a few weeks ago from none other than T. Boone Pickens on Bloomberg. Now that oil prices are in “play” we could see any scenario develop in terms of what average oil prices might be in 2015. It also happens to be the end of the season in which natural gas will be injected into storage. Storage volumes aren't quite at last years levels but they are well within their five year average. Not many people thought that the storage levels could be rebuilt to the level that they currently are after such a cold winter. Weekly injections have reached well over 100 bcf at times and have provided the market with excess demand during these past summer months. This demand from storage will now be waning and the problem is that none of the producers have been praying for a cold winter. So we are likely to see a mild winter and the prices for natural gas may be weak as well as the oil prices.

Who would of thought that both the oil and gas businesses would enter a period where both commodities would be performing poorly from a financial point of view? In an age of abundance maybe that is a stupid question. And maybe we need to eliminate that question from the mindset of the oil and gas producer. And replace it with the understanding that they need to have control over the commodity prices through the ability to allocate production, on both the oil and gas side of the business, based on profitability. If the property can produce a profit, it produces. Period. Nothing more or less. Not that the producer has some properties that are profitable and others that are marginal. Only properties that are profitable are produced. That way the industry can deal with the resource abundance that it finds itself in today and probably for the next 20 to 30 years.

The Saudi’s can punish the shale oil producers for many years. We saw them punish the other OPEC members for many years in the 1980’s. The oil and gas producers in North America are not structured to deal with production allocation in any way. They are only structured to produce at capacity. And the bureaucracy within a producer firm is therefore fixed. It is the same bureaucracy that exists at 100,000 bpd as it is at 60,000 bpd. And they are expensive. It is also the same bureaucracy that has been determined not to consider our decentralized production model. Which has been discussed in this blog since 2007, and the draft of the Preliminary Specification was completed in June 2012. Plenty of time for the bureaucracy to jump on board and start pushing. But as we know they never will because it eliminates them from the scene and for some reason they don't like that fact.

How the Preliminary Specifications decentralized production model will provide the oil and gas producer with the much needed production discipline for both their oil and gas production is through a reorganization of the producer firm and the industry. We strip the dynamic, innovative and profitable producer down to the C class executives, the earth science and engineering resources, some land and legal, and support staff. The remaining administrative and accounting resources are reallocated to service providers who are focused on an individual process or subprocess and use the entire industry as their client base. By making these changes we are moving from a producer based administrative and accounting capability to an industry based administrative and accounting capability. The costs of having each individual producer develop the capabilities to administer and account for all of their activities are one of the reasons for the lack of profitability in the industry. Another reason is that those capabilities are not shareable between producers.

The real magic comes in to play when the producer shuts-in an unprofitable property. When the property is shut-in the service providers receive no information, activity or action in the People, Ideas & Objects task or transfer network. And as a result there is no action taken by the service providers and no billing is generated by them and no Joint Operating Committee incurs any costs for any of the administrative or accounting at that property. Therefore the property records no profit but also no loss. The reserves are therefore kept for a time when they can be produced profitably. And the commodities markets find a floor on their prices as the industries production volumes are reduced by the marginal production.

It is the Preliminary Specifications use of the Joint Operating Committee as the key organizational construct of the dynamic, innovative and profitable oil and gas producer that makes this all work and enables the production discipline in this age of abundance. And this is what the Saudi’s are trying to teach us, that if we all want to produce at capacity, they can do it too.

The Preliminary Specification and user community provides the oil and gas producer with the most dynamic, innovative and 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 Canadian Thanksgiving holiday.

Software Quality Through User Community Developments

With natural gas prices being so weak these past few years. There has always been one thing that the bureaucracy has been able to count on to bail them out in terms of covering the losses in the natural gas business. And that is the general health in the oil side of the oil and gas business. If there is one thing that you learn to count on in the oil and gas business is that you can't count on anything. Oil prices seem to be breaking down in terms of their pricing structure. If prices continue their current slide then the industry could be in for a difficult time from a financial performance point of view. One which the investors will be looking for some scalps and maybe some new ways of doing business. If only there was a group of like minded people interested in providing the investor with the most dynamic, innovative and profitable means of oil and gas operations.

And there is. That is to say I see you in our logs. And we are at the very beginnings of this software development. The user community has been our focus since January 1, 2014 and will continue to be so for the life of our firm. People, Ideas & Objects are user based software developments. Our commitment to the user community is our commitment to software quality. This is fundamentally different than what has been developed before in oil and gas. First there is the Preliminary Specification which is revolutionary in its application of the oil and gas culture. We are not using a technological focus, but one based on the Joint Operating Committee the legal, financial, operational decision making, cultural, communication, innovation and strategic framework of the industry. By moving the compliance and governance frameworks of the hierarchy into alignment with the seven frameworks of the Joint Operating Committee we achieve a speed, innovativeness, accountability and profitability in our producer firms.

Next, we are not looking for the traditional technologically focused people to be involved in the development and integration of the People, Ideas & Objects Preliminary Specification. You know who I'm talking about. The accounting firm specialists in SAP integration, or consultants who come in and know the SAP application from stem to stern and are going to make your integration the best integration you can imagine. The kind of people who talk about user involvement until they look at the budget and then skip that process. We don't want these people. We don't need these people. And I won't be letting these people into the user community.

It’s pretty easy to filter these people out of the user community. One look at their resume shows that they are not employed in the accounting or administration of the oil and gas producer. It is after all these people in accounting and administration that are the prospective members of the user community. The ones who are on the ground with their hands on the systems and are in touch with the needs of the producer, because for all intents and purposes they are the producer when we are discussing their ERP needs. These are the user community participants that we want and need. And they are the ideal candidates to form the service providers who will provide these services to the producers in the environment where People, Ideas & Objects applications are operational. What does a community like ours need an individual who is a specialist in SAP integration for?

Our commitment to the user community began almost one year ago. And will continue for at least two more years before we even begin the developments of the Preliminary Specification. Unlike the SAP integration specialist we are not skipping the user participation part of the systems development or integration. It is our key competitive advantage and the key to our quality.

Yesterday on Bloomberg, T. Boone Pickens had a few things to say about the breakdown in oil prices. He thought that it was a result of the Saudi's not curtailing their production when the market was oversupplied. Which is what they normally do as the swing producer. Pickens felt that the Saudi's were trying to teach the shale producers a lesson. I assume that lesson that Pickens meant was the production discipline lesson. The bureaucrats may therefore be seeing some increased pressure as a result of their even poorer financial performance being recorded in the quarters to come. Their ways and means are failing. This alternative, the People, Ideas & Objects user community needs you, and offers an interesting, dynamic, innovative and profitable oil and gas industry in which to pursue your career in.

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

Who, as in You

Continuing on with our discussion of who we are looking for in the People, Ideas & Objects user community. It's maybe best to remember the size of the user community as it is currently contemplated. The budget is for 2,000 man years of user community time in the initial commercial release. There are also thirty members of the leadership team. It is expected that the population of the user community will total approximately 3,000 people as not all of our user community participants are considered to be full time. So from this makeup, who are we looking for in terms of the user community participants.

It is those that are currently employed in the oil and gas producer firm, and the oil and gas service industry. These makeup the type of work that is done in oil and gas. And for a comprehensive ERP system to provide for these services it is necessary to include them in the user community as participants. In order to more full understand the need for their inclusion we need to discuss the reorganization that we are conducting within the application.

It is in this process of organizational change that we have touched on every aspect of oil and gas exploration, production and operations. By using the Joint Operating Committee as the key organizational construct of the dynamic, innovative and profitable oil and gas producer we change everything within the producer firm. Nothing is unaffected by this change. What we are doing is aligning the compliance and governance frameworks of the hierarchy with the legal, financial, operational decision making, cultural, communication, strategic and innovation frameworks of the Joint Operating Committee. Nothing is therefore untouched within the producer firm and the scope of the Preliminary Specification takes on the entire producer firm, the service industry, reorganizes the administrative and accounting resources into service providers and throws out the bureaucrats.

The Preliminary Specification strips the prototypical producer down to the C class executives, the earth science and engineering resources, the land and legal, and some support staff. The remaining resources are reallocated to these service providers who are organized around a single process and use the entire industry as their client base. This reorganization allows the oil and gas producer to shut-in any unprofitable production and save those reserves for when they can be produced profitably. This also removes the commodity from the marketplace, reducing the marginal supply and positively affecting prices. Another advantage is that the property records a null operation. There is no profit, and no loss as there are no operating, royalty, or overhead costs incurred during times when a property is shut-in. With People, Ideas & Objects Preliminary Specifications decentralized production model a producers overhead is variable based on their production profile.

This variable overhead feature operates in the following manner. The service providers receives no activity or transactions for any shut-in production and therefore bills no administrative or accounting fees to the Joint Operating Committee for the shut-in properties. Therefore the oil and gas producer records a null operation on any shut-in properties. A fundamentally different situation than with today’s inability to adjust a producers production profile from anything but 100% capacity. The overhead costs are the domain of the service providers and it will be their responsibility to manage them within their annual budgets.

Therefore to fill the population of the 3,000 people within the user community we need Engineers, Geologists, Geophysicists, Administrators, Accountants, Service Industry Representatives and more or less anyone else who works in the oil and gas industry. Except for the bureaucrats. We’re leaving them out. If we plan on leaving them out, they'll stay out. Everyone needs to keep a close eye on these people, and don't let them sneak back in.

The Preliminary Specification and user community provides the oil and gas producer with the most dynamic, innovative and 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. 

Thinkers and Doers

We'll be starting this week off with a discussion of who generally we are looking for to populate the user community. What types of people are needed to make the user community function to provide for the most dynamic, innovative and profitable means of oil and gas operations.

The world is divided by two different types of people. There are “thinkers” and there are “doers.” Lately thinkers haven’t been appreciated too much, I know I'm one of them. The problem with the oil and gas industry is that they have only rewarded doers for their actions. Thinkers have been shunned and discouraged at every opportunity. As a result little if any “thinking” gets done in the industry and the thinkers have had to transform themselves into doers in order to keep themselves employed. This is a bad situation from the long term perspective of the industry. No one is looking after the store. This turns out to be a good situation for me as it has left a rather large hole for me in which to work.

The proportion of thinkers to doers in society is very small. Nonetheless their effect is tangible. What the user community needs to do is to recruit a disproportionate number of thinkers within the community in order for it to do its job effectively. Therefore if you fall within the category of a thinker, and have been frustrated by the inability to use those talents the user community is the place where you should be. There you will find the kind of environment where the work will challenge these talents on a consistent basis.

For example, assume that you were working on the Material Balance Report. What you would do is start with the understanding that nothing existed in the marketplace and you had to build something to deal with the needs of the producers. You would need to determine what those needs were today. And think what those needs might be in the future. And also think what those needs “could be” if we provided additional information or capabilities. You would then have to design the various processes and subprocesses, thinking through all that exists within the industry in terms of a Material Balance Report. And engineer the kind of solution that is possible for the dynamic, innovative and profitable oil and gas industry.

The enormity of this task would be a team effort, for that there is no doubt. The Material Balance Report would take hundreds of man years of user community and software developer time. It would be the first time that such an undertaking would be accomplished. This is beyond the scope of what one producer firm can do. And since we are aggregating the resources of the industry we can apply ourselves to the time and effort necessary to really solve this difficult and poorly served area of oil and gas administration and accounting. And in saying that I realize that I've probably unnecessarily limited the Material Balance Report to those domains. And maybe it should include the engineering and production concerns as well?

We all know what the problem is in terms of the Material Balance Report. What is the solution. I’m sure there are a few with their hands up now. It is the thinkers who can help lead the way through the difficult process of finding the answer to these questions. Some thinkers and a lot of doers. I know they're out there, I've met a lot of them. And I know what they like to do. And I know that what I am talking about here is the kind of work that keeps them moving forward.

The Preliminary Specification and user community provides the oil and gas producer with the most dynamic, innovative and 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.

Caution, Facts Ahead.

Our value proposition is in the trillions of dollars. We provide for the commercialization of the shale gas reserves. Without the Preliminary Specification, the user community and the service providers, the oil and gas industry will continue on in its losing ways for the foreseeable future. Without us providing an alternative method of organization to the oil and gas industry, it will continue to operate in a failed state. These are difficult statements to process. We are a vision that is based on a number of concepts that are unique in the oil and gas industry. How is it that we are able to make such claims and remain free citizens.

Simply we are out to change the world and the statement that was made in the Apple keynote resonated with us. Without seeing things from a different point of view no progress is ever made, and we are seeking to make progress in the oil and gas industry. Something that we feel is distinctly lacking. For many people, things are ok. The capitalization of royalties is consistent with good policy and there is no need for change. People, Ideas & Objects and our associated communities have nothing for you. Our strategy is to remove you and replace you with our vision.

And so it is that we have a plan in how to implement this vision. January 2017 is when we expect that the investors who are concerned about the industry. Concerned that the shale gas reserves provide a significant endowment of value and resources to the economy. Are being wasted and destroyed by the current bureaucracies. And the progressive producers who may see things in the same way that we do. Fund our budget in its entirety. Once our funding is in place we will have the resources for the user community to develop the Comprehensive Specification and complete the first commercial iteration of the software. Our costs are high, however our value proposition as we noted is in the trillions of dollars.

Until January 2017 we have much to do. We have specified a number of positions within the user communities leadership team. These positions are being actively recruited as we speak. We need these people in place in order to secure the funding from the investors and progressive producers. These positions have been detailed in our user communities vision and number approximately thirty people. I guess we need to ask ourselves, who are the future leaders of the oil and gas industry? And what structure will they use in order to exercise their skills as leaders. Will it be through the classic bureaucratic structure of the oil and gas producer? Or will there be new ways in which to exercise those skills.

Wherever the new leadership is established in the oil and gas industry they will need the power and control over the environment in which they operate. The user community and service providers have at their disposal the Intellectual Property that is the Preliminary Specification and its derivatives. They have the software development capability of People, Ideas & Objects dedicated to the user community. And the sole point of contact for the dynamic, innovative and profitable producer to turn to for their software needs. That is the foundation of power and control that the user community has today with the policies that have been established in the user community vision, and that which the user community leadership team can draw upon.

One of the defining qualities of this new environment will be the dynamic nature of the user community and service providers. The actions of individuals will make a difference in the oil and gas industry. And that begins today with your actions. By joining the user communities leadership team or by preparing to join the user community in the future. Individual actions within the oil and gas industry, and an organizational methodology made up as described, facilitates the dynamic, innovative and profitable oil and gas producers needs.

The Preliminary Specification and user community provides the oil and gas producer with the most dynamic, innovative and 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. 

Revolutionary Information Technology Based Change

If an individual working in the oil and gas industry believed that technology was about to revolutionize the way in which people worked. Much in the fashion of the industrial revolution. And that industry after industry would be converted to more rational ways of organization. Where technology would be a key ingredient in the reorganization of that industry. Where could they go and what would they need to do in order to participate in this new, Information Technology driven environment? There may be multiple initiatives offering these types of opportunities to people in oil and gas. I am only aware of this one. The opportunities that are open to those that are looking for this type of participation in this new economy are significant and are available now with People, Ideas & Objects, the user community and service providers.

Does anyone foresee the current bureaucracy surviving the next few decades? Will it serve the needs of the oil and gas industry? Will it suddenly transform itself into the organizational form necessary to make the industry the dynamic, innovative and profitable industry that everyone needs oil and gas to be? I don't see this happening, ever. It should have happened by now as the need is significant. What’s worse is this is not even identified as an issue. The closest thing we have seen from the bureaucracy is last years hopes and prayers for a colder winter. And this year there has been nothing in terms of discussion of the issues and opportunities that the industry faces.

As a result there is little else that we can do other than remove and replace the bureaucracy with an alternative form of organization based around the Preliminary Specification. The Preliminary Specification is People, Ideas & Objects product that is based on the Joint Operating Committee, the legal, financial, operational decision making, cultural, communication, strategic and innovation framework of the oil and gas industry. By moving the compliance and governance frameworks of the bureaucracy into alignment with the seven frameworks of the Joint Operating Committee we achieve a speed, accountability, innovativeness and profitability in the producer firm.

Building on the eleven module Preliminary Specification we have established the user community to direct and develop the software developments that we conduct. It is participation in the user community that people should consider as an opportunity to participate in the oil and gas industry of the future, and a place where they can make a difference. On September 9th Apple started their keynote presentation for their iPhone 6 and 6 plus with the following text.

Here’s to all those who have seen things differently. The ones who follow a vision, not a path. Where others perceive first as valuable, you value the first thing that actually matters. While others are distracted by the new, you focus on the significance of a whole new take. Even before you could see how, you never doubted we would change things. And then we did change things together again and again. Relentless optimism is what moves the world forward. So keep seeing things differently. Keep trusting there is always another way, a better way, a bigger way. One that lifts up humanity, breaks down our barriers and heals the landscape. You are the difference between the world as it was and the better place it will become. And being different is the one thing about us that will always be the same.

It is these kinds of people that participation in the People, Ideas & Objects user community will appeal to. Ones that can see a better way in which to operate the oil and gas industry. One based on profits that provide value for all concerned. These are the things that we are working on at People, Ideas & Objects.

The Preliminary Specification and user community provides the oil and gas producer with the most dynamic, innovative and 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. 

Continuous Development of the Dynamic, Innovative and Profitable Oil and Gas Producer

Two of the tools that the user community and service providers will use are specialization and the division of labor. These tools will be used on a consistent basis to provide the oil and gas producers with the most dynamic, innovative and profitable means of oil and gas operations. In order to expand the output of the industry it will have two choices. Employ more resources or utilize specialization and the division of labor. With the configuration of the software developers of People, Ideas & Objects, the user community and service providers. The capability to analyze and determine what is the current optimal specialization and division of labor is will be what this groups tasks are. “How” and “What” the specialization of the positions within the service provider will change and develop as time passes.

In many ways this type of analysis, experimentation and implementation of the business process is not being conducted today. What is being done is the software is dictating how the process will be managed, and that is the same as it was for the past decade. With no software development capability within the producer organizations, or within the industry, to deal with the ability to change a process, no processes change. Our organizations stay the same and the bureaucracy are quite pleased with themselves. Pleased because they have not spent any money on developing a software development capability, or on changing any of the software the producer uses. And as a result their empire continues to expand and they are needed more than at any time in the past. The fact that they don't make any money doesn't concern them as there is nothing really anyone can do about that. As they will tell their investors at the next annual meeting.

This environment that we are creating is designed to use specialization and the division of labor in the oil and gas industry for the long term. People, Ideas & Objects is configured on the basis of change. That is we only generate revenues when changes are made to the software code by the user community. Constant development of the code base is what is needed by the dynamic, innovative and profitable oil and gas producer and that is what this environment has been structured to provide. Specialization and the division of labor is responsible for all of the increases in our standard of living since the discovery of these principles in 1776. If we stop developing the software then we stop the development of the progress of the oil and gas producers. And become our own little bureaucracies.

What has happened with the implementation of the computer and ERP software has been the cementing of the organization in time and place. They become stagnant and unmoving as a result of the inability to change with the organizations. With so many of the producers using SAP software and none of the producers employing SAP capable software developers they just continue to use the software that worked last year. For one or two years this is probably ok. For a decade or more the concrete sets and becomes impervious to the changes needed within the organization. All the money in the IT budget is spent on licenses to support the SAP infrastructure and hardware upgrades. And little if any money or time is spent on what the business or the organization needs.

This was detailed in my master’s thesis when I published it in May 2004. What the bureaucracy did was took this understanding and made it policy. That at no time would they change their ERP systems, and therefore, at no time would their franchise be challenged. A completely corrupt interpretation of the understanding. But then what would you expect from them.

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

How We Implement the Preliminary Specification

We have discussed at length the Preliminary Specification, the user community and service providers over the last few years. One area that we haven’t directly discussed is how the software and services would be implemented within the oil and gas industry. We can see in yesterday’s discussion with the user community and service providers making up such a large portion of the industry. That the transition from the current status quo to this new environment might provide some interesting challenges. The question therefore is asked how will the implementation of these technologies be conducted within the industry?

A lot depends on the cooperation that we receive from the current bureaucracy. If they continue in their hostile approach to this project then all bets are off in terms of making this a seamless integration. Their continued refusal to deal with us would cause the implementation to be disrupted in many ways. Their purpose in doing so would be an attempt to stop the implementation from continuing. With trillions of dollars in opportunity costs to be earned by moving to the Preliminary Specification, its existence one day is inevitable. Just as the sun will rise tomorrow the Preliminary Specification will be operational in the oil and gas industry. I read in the U.S. Energy Information Administration weekly report that Marcellus shale gas was selling for $1.79. No amount of prayers from these bureaucrats will stop them from overproducing, and no amount of obstruction is going to stop us.

Our appeal is to the investor class of the North American oil and gas industry. It is they who will directly benefit as a result of implementing the business models inherent in the Preliminary Specification. The sooner the better. We are working towards a ‘remove and replace’ strategy regarding the bureaucracy as the manner in which we are dealing with the situation at hand. With the user communities development as our current priority we are developing the ways and means, or the “what” and “how” in which the industry operates. We expect that the investor class and the progressive producers will direct the bureaucrats to fund our budget on January 2017. At which time we will have the financial resources to begin the development of the systems and procedures, based on the Preliminary Specification, to develop the necessary systems to operate the industry. Once the user community is satisfied that their Comprehensive Specification is complete then we will be able to begin the development of the People, Ideas & Objects systems with the user community.

Once the software is complete and operational. Investors and producers can then begin the process of releasing their processes management to the service providers as they see fit. The reconfiguration of their internal producer organizations can also begin in earnest and they will begin to reap the benefits of the decentralized production model and the other attributes of the Preliminary Specification. Although I expect the bureaucracies to have been raided in terms of the administration and accounting resources for our needs in the user community and service providers. There will be a final transition of these people from the producers as the producers drop their processes under management. It should be obvious that not all people who are currently employed in oil and gas in the producer firms will necessarily be employed in the user community or service providers. There is an inherent efficiency expected in the application of specialization and the division of labor throughout these organizations.

This appears to me to be the most logical form of implementation that we are faced with. Based on the understanding and the level of cooperation that we are receiving from our friends the bureaucrats. This method of implementation essentially ignores them and carries on without their input, needs or concerns. If we had their cooperation it might be a bit more friendly but I don't think a whole lot more productive. They probably would only get in the way and we'd have to swat them like flies.

The Preliminary Specification and user community provides the oil and gas producer with the most dynamic, innovative and 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 Interactive Nature of User Community Participants and Service Providers

We start this week with a look at how the user community, which writes the policies of the administrative, accounting and operations of the dynamic, innovative and profitable oil and gas producer, implements those policies through their control of the software that is developed with the People, Ideas & Objects developers. Operating the industry through their ownership, operatorship and control of the service providers. It is through their early participation in the user community and the leadership that they have shown during their time there that they earn the rights to participate in the service provider sub-industry. The user community will be given the first opportunity to establish these service provider firms.

This is a necessary part of the quality service provider / user community product offering that we are looking for. The user community participant has to have their hands on the situation in which they are working with the People, Ideas & Objects software developers. At the same time they can impart some of the rational as to why the process and software was developed in the manner that it was to the people who are employed within the service provider organization. As they were the ones that designed and implemented it on the basis that it operates on. This feedback loop is necessary for the change dynamic that we are looking for in the industry. For the industry to make a change in the business model, or for the software to change in the smallest of detail, the user community and service providers need to have this crossover in terms of the people who are involved in both organizations.

As we have discussed before the service providers will make up a very large sub-industry. This will not be just a cottage industry approach to the management of processes for the oil and gas industry. With the reorganization required under the decentralized production model the administrative and accounting resources of the industry are reallocated from the producers to the service providers. This reallocation will move a large percentage of the $40 to 60 billion in annual G&A costs of the producers to become the service providers revenues. These revenues are an estimate of the North American based G&A costs of the producers. Therefore the scope of this service provider business operation for the user community participant has the potential to yield significant returns.

Each user community participant will have a limited scope of the entire administrative and accounting processes that makeup the oil and gas industry. This requirement dictates that we have the large population of user community participants in order to cover off the entire scope of the industry. They then can leverage that knowledge across to the service provider who scales the understanding across and throughout the oil and gas industry. Using the People, Ideas & Objects software, derived from the Preliminary Specification, the service provider will manage the process in detail across the oil and gas industry.

This is a business opportunity for those that have the understanding of the oil and gas industry, who are able to solve business related issues, and who have an aptitude for technology and in that order of priority. You may be part of a team of user community participants that own a service provider that take on a large process such as the Material Balance Report. Or you might have a small team that takes care of some unique attribute of accounting. It won't matter. The real value is that the ability to change and focus on the dynamic, innovative and profitable elements of an oil and gas producer are what will be the job at hand. And the fact that as a result of this configuration we will have changed the industry and will begin to realize the many trillions of dollars in opportunity costs that are available from the shale gas reserves and administrative efficiencies we provide.

The Preliminary Specification and user community provides the oil and gas producer with the most dynamic, innovative and 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.