The Age of Abundance Part II

People, Ideas & Objects, our user community and the associated service providers who provide the dynamic, innovative and profitable oil and gas producers with the decentralized production model. Have a value proposition that is valued in the trillions of dollars. If you take the manner in which the industry is being operated today, with its price taker strategy. And compare that over the long term with the decentralized production models price maker strategy. You will generate trillions of dollars in incremental value for the North American oil and gas producers. If you were a member of the user community or service providers you too could tell people that you provide oil and gas producers with the most profitable means of oil and gas operations. And as you can see you would really mean it.

With the decentralized production model the producer firm could potentially be sitting with a large inventory of properties that are shut-in due to their inability to be produced profitably. That’s where the Preliminary Specification comes in handy once again. It has been designed to instill within the producer firm the innovativeness necessary to compete in the 21st century. Innovation is a replicable process and those have been included within the Preliminary Specification. So when a property is shut-in due to financial losses. The ability to begin the processes of innovating to increase the properties reserves base, bring its costs down or production up can begin. This will bring the property back into a profitable situation and therefore can be returned to production. Any properties that do fall into an unprofitable situation can be addressed through the various processes of innovation that the producer firm will be structured to approach as a result of using the Preliminary Specification.

The decentralized production model has also reorganized the producer firm to a much smaller footprint to enable a greater focus on the earth science and engineering capabilities, and land and asset base of the firm. These are the competitive advantages of the producer firm and should be their primary focus. How quickly the producer responds to a Sarbane’s Oxley situation is mostly irrelevant to the performance of the producer. Therefore as we mentioned yesterday the industry has been structured to provide the administrative and accounting capabilities through service providers who are focused on the process and use the industry as their client base. It is in fact the service providers competitive advantage of how they respond to Sarbane’s Oxley. This therefore sees the producer firm stripped down to the C class executives, the earth science and engineering resources, some land and legal, and support staff. The service providers bill for their administrative and accounting services directly to the Joint Operating Committee on a monthly basis and only if there is production.

This methodology would currently remove all of the production from the market as none of today’s natural gas production is making any money. The gas prices would certainly respond quickly, violently, and without hesitation to this change. Gas could then return to the market as it surely would qualify as profitable, and an equilibrium would then be achieved. What the producers have to understand is that it is profitability at the property level that is the factor for determining if the property will produce. Not at the producer level. By taking each property and assessing its profitability the prices will be much higher and there won't be the averaging that will occur if the assessment is made to determine if the producer is profitable. If it is assessed at the producer level, producers will attempt to average their properties profits and losses to show a net average profit. This would be an advanced form of cheating to achieve a higher production profile. Not the production discipline the market requires or is desired. Cheater’s however have always existed in the marketplace. The industry will have to establish the means to control those that do cheat. Maybe they will be able to do that through the Joint Operating Committee which is the operational decision making framework of the industry. And since the Preliminary Specification uses the Joint Operating Committee as the key organizational construct of the dynamic, innovative and profitable oil and gas producer it will have the means in which to deal with these cheaters. Another problem solved.

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 Age of Abundance

To review the natural gas reserves of the producers these days is quite a change from the past. In the past you would see how the producer would struggle to increase their oil and natural gas reserves year over year. Doing everything within their power to expand the reserves base of the firm was a challenge that took many of the best minds in the business. Now producers have so much gas that they have difficulty comprehending the implications of the change. And the business has changed from one of difficulty and scarcity to one of abundance. Where not only do you have several tcf of gas, but all your neighbours do as well. Rushing to get that gas to market is the current strategy for each of these producers. And thankfully for People, Ideas & Objects we have a solution for this situation and the investors who are very disheartened by the producers financial performance.

Producers are jumping ahead of each other offering their gas at lower prices in order to be able to make the sale. This has caused the price to collapse from 6 to 1 when priced to oil to 20 to 1. And some producers seem determined to drop the price even further. This has caused the price of natural gas to fall below the margin for the past number of years. The only remedial action that has been taken by the producers is to reduce their overhead costs. As it is deemed that the costs of carrying the overhead for their production profile is the issue that the investors are concerned about. Not that there is significant overproduction of natural gas in the marketplace. The investors real concern is that the shale gas reserves are unproven as a commercially viable venture.

What is needed is a new business model in which to operate the business based on the changes that are reflected in the business. If there is an abundance of natural gas, and potentially oil as well, then the industry needs to have a business model that deals with that situation. A business model that would allocate production based on profitability would be the most reasonable approach. It would also be the most fair basis in which a producer could approach their business. An easy to enforce business model from the perspective of the investors. With unprofitable producers not being funded, or participated in, by the investment community.

People, Ideas & Objects Preliminary Specification business model is called the decentralized production model and addresses specifically the issues that are raised as a result of the abundance from shale based reserves. It enables a producer to shut-in any production that is not profitable without any financial penalty. It sets out a revised organizational structure of the producer and the industry in which the overhead costs of the producer become variable with their production profile. Therefore as the natural gas price declines in the marketplace, producers can shut-in their unprofitable production, reducing their losses on individual operations and actually increasing their firms profits. This will also save those shut-in reserves for a time when they can be produced profitably. And reduce the amount of production in the commodity markets placing a floor in the pricing structure.

When a producer shuts in production the overhead for that property is not incurred in the decentralized production model. What the Preliminary Specifications decentralized production model does is reconfigure the industry to change from a producer based administrative and accounting capability to an industry based administrative and accounting capability. The fact that each and every producer has to develop the capabilities to be compliant with all of the administrative and accounting regulations are what are causing the producer to lose money. These capabilities are not shareable at the producer level. By establishing industry wide capabilities through the People, Ideas & Objects software, user community and service providers we can specialize on each of the individual processes and bill the individual Joint Operating Committees the overhead costs for each process. If the property is shut-in there will be no charges incurred by the service providers and no billing to the Joint Operating Committee during periods when a property is non-producing.

This is the manner in which the industry needs to operate in the era of abundance from the shale based reserves. Production allocation based on profitability is the only equitable manner in which to proceed in the industry. A method to deal with the fact that everyone has trillions of cubic feet of natural gas in reserves means that some of it will have to be kept off of the market some of the time. The current methodology isn’t working and there is no solution to the situation other than the decentralized production model of the Preliminary Specification.

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. 

Attributes of People, Ideas & Objects System Integration

We need to address the integration of the People, Ideas & Objects applications, and the services of the service providers into the producer firms when the user community has completed the development of the People, Ideas & Objects applications. First I would like to address the issue of funding for the integration, and the larger issue of where the funds for the service providers are derived from. And that is to say not me. Whereas the user communities funds are derived 100% from People, Ideas & Objects we provide no funds to the service providers, ever. They are licensed by People, Ideas & Objects to manage an exclusive domain or process of the application. And therefore access the applications. They are also owned and operated by members of the People, Ideas & Objects user community. It is therefore on that basis that the service providers are deemed to be self funding in terms of their needs. And that would include any investments that were required to initiate the establishment of their services. We feel that with the license and their expertise, the ability to leverage these assets and skills in the financial community would be possible to help establish the service provider in terms of any initial investment requirements. Recall that we see the service providers are undertaking the responsibilities for the administration and accounting capabilities of the oil and gas industry. And as such would earn as their revenue stream the $40 to $60 billion in annual G&A expenses currently incurred by the producers.

Integration, or implementation of the software therefore clearly falls under the jurisdiction of the service providers. They will charge the producers for the costs of the integration of the process that they manage. These will be the first costs that the producer face outside of their initial development costs which they paid for when the project was commenced. The relationship with the service provider will be under a service level agreement and be based on the activity, or non activity of the producer. If there is no activity, shut-in production, there will be no service fees billed by the service provider. This will be a mandatory requirement and is included in all of the People, Ideas & Objects licenses. The Preliminary Specifications decentralized production model requires this feature to be present throughout the service providers.

With regard to integrations I have never been a fan of the big bang ERP integration. There are too many elements that are being managed poorly and too much information being lost in the process to make them practical. However, what we do have is an interesting and unique situation. A cloud computing based offering that is fully funded. Our hardware and software, development and user community is fully paid for as a result of the way we are being funded. Read our Revenue Model for further information. With so many disparate components of the Preliminary Specification being integrated into one unified system, the dependencies are very large and not initially well known by the producers. Therefore the tendency, and probably the necessity, due to these dependencies, is to move to the big bang style of integration.

Each service provider is responsible for their own exclusive domain. They will need their source data and will be able to find what they need to prepare that. They will also be the ones that are managing the process on a going concern basis. It is a domain therefore that is more manageable than what a traditional big bang integration is due to the ability of the service provider to parse their domain down to their scope of process operation. The main difference is the domain of data is much larger than what would have been the case in the past. What also may be the case is the state of affairs in the industry. PennWests recent reduction of 50% of their administrative and accounting people led to the capitalization of royalties. The quality of the accounting by the time we get to the industry integration may be tragic, and the number of people left in the industry may be minimal. That’s also considering the transition in terms of the number of resources that have moved from the producers to the user community and service providers before the integrations begin.

What I therefore see is a massive game of musical chairs where the producers layoff their administrative and accounting people and the service providers rehire them. These people then reengineer the data into the new processes within the service providers that they are re-employed by. In a world where companies are currently cutting half their staff and capitalizing royalties. I don't think this game of musical chairs sound as off the wall as it might have a few years ago.

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. 

Not Your Grandfathers 1984

We recently noted that people who participate as early adopters in the user community would be in essence making a choice in how they want the oil and gas industry operated. To continue on with the current bureaucracy, with their legacy of losses and stagnation in place for the decades to come. Or, begin the restructuring of the industry around a dynamic, innovative and profitable framework based on the early adopters initial action of becoming a People, Ideas & Object user community participant. And in doing so set the path of the industry on one which the individual actions of people within the industry are what makes it dynamic, innovative and profitable. This is the choice that can be made. It certainly doesn't have to be made, but I can assure everyone if people don’t make this decision to act, there is no one else that will make the necessary changes to the industry. And the bureaucracy will remain in place.

What we do in terms of this decision will have significant consequences in terms of what happens next. If we do nothing, then of course nothing will happen as a result. However, if we choose to break away from the bureaucracy and begin the process of building an alternative organizational capability then the investment community will see that they have alternatives in which to manage their assets. And it will be in a few years time that they will be asked to fund the user community and People, Ideas & Objects to develop that alternative organization. This is how I see the situation becoming a reality in the next few years. No one is going to be able to sit and one day decide that this project is a go. No one holds that type of power in the industry. The bureaucracy won't enable us, as what we are doing contradicts their survival and best interests. Therefore the only opportunity we have is to provide the investment community with the choice of the bureaucracy, or a means to operate the industry in a dynamic, innovative and profitable manner by joining us.

In order to make that decision the investors have to see that there are people that are ready, willing and capable of making this new industry structure operate. A leadership team and a community of like minded people capable of managing their assets under an overall sound vision. And this is the user communities choice to provide this alternative. That they are as dissatisfied with the standards set by the bureaucracy as the investors are. That the user community believe that the industry should be reestablished under the vision of a dynamic, innovative and profitable means of operations and that they have that with the Preliminary Specification.

As I have mentioned this initial first step is the beginning of the user community. But also becomes the manner in which the industry is operated in that dynamic, innovative and profitable manner. It is with this first act of individual participation, either as a member of the leadership team or as an early adopter in the user community that the industry is transformed. It will be on the basis of these individual actions by members of the user community in the future that the industry achieves what it sets out to do today, tomorrow and in the future.

I can't see how change of this scale can take place in any other way. There is no one to ask permission of. If we want this done then the only way that it is going to get done is that if we do it. Our timetable is such that we will have two years remaining in which to develop the user community and then we will turn to the investor community to fund these developments. We won't be asking for their money specifically, we will be asking them to direct their producer firms to pay their share of the development costs. And then when we have the funds we can develop the application and the user community, create the service providers and begin the process of converting the producers over to the new method of managing their properties. I'll have more to discuss regarding that integration tomorrow.

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. 

Job Opportunity for the Early Adopters

As a result of yesterday’s post we now have two clearly defined categories of people within the user community. The leadership group which consists of around thirty people that we are currently recruiting to actively lead the user communities development. And now the early adopters that we defined yesterday. These people are the ones willing to invest some time and energy early on in the process to position themselves within the user community and take advantage of the long term opportunities that are made available there. Advantages that include participation in the user community where the fees that will be paid by People, Ideas & Objects are commensurate with the skills and challenges. And most specifically, the positioning in terms of establishing the service providers that will be necessary to provide the software and services to the industry when the final implementation of the software is complete. It is these opportunities in the new economy that are what prompt the early adopters to invest their time and energy now in what may be the future of the oil and gas industry.

No one knows what the future of the oil and gas industry will be. I know what is necessary. And that of course is a dynamic, innovative and profitable industry for the foreseeable future. Which is what the Preliminary Specification and specifically the decentralized production model provides. They lay out a vision of what the industry could be like and give people a choice. Do you want to stay with the bureaucracy, or choose something more dynamic, innovative and profitable. A choice where the actions of individuals within the user community and the service providers are what matter to how the industry responds to the issues and opportunities that it faces. Then, as far as I know, these are the only choices that you are being provided with. And I know how long it took me to come up with the Preliminary Specification. Not years, but decades. So don't expect too many other alternatives to show up soon.

The service providers are the manner in which the bureaucracy, the administration and accounting resources of the industry are removed and replaced. Under the decentralized production model the prototypical oil and gas producer is reduced to the C class executives, the earth science and engineering resources, some land and legal, and support staff. The remaining resources are reorganized into service providers who are focused on a process or subprocess and use the entire industry as their client base. It is these service providers who will take as their revenue streams the $40 to $60 billion in annual G&A expenses that are incurred in the North American industry today. Therefore you can see that when we state that the business opportunity that the early adopters are provided with from a service provider point of view is substantial.

I have to provide people with these two forms of motivation in order to achieve what I think we need. An industry that operates in a dynamic, innovative and profitable nature based on individual initiative. The two forms of motivation for people to join People, Ideas & Objects user community is the altruistic objective of providing the industry with the most dynamic, innovative and profitable means of oil and gas operations. And it is that which we do. However we also need to provide people with a sense that they can build a career and or a business as a result of their participation in this environment. Which is what we also can do. Its no use trying to recruit people for one of these objectives and not the other. Especially when we have both in such abundance, as we do with this project.

Best of all we can do this with no risk to anyone. No one needs to quit their day job to participate as an early adopter. Or expose yourself to the bureaucrats who are seeking revenge on anyone who does participate here. Your time and energy can be done on a part time basis up to the January 2017 funding deadline. And then when we are funded we would proceed at 100% and I think, truly enjoy ourselves with some exciting, interesting and lucrative work.

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. 

An Individual Plan

Having invested your time and effort as an early adopter in the early years of the user community of People, Ideas & Objects. You were able to position yourself well to take part in the further development of the user community. Now in the post January 2017 environment, the time when the financial resources of the investment community have been forwarded and the project is funded you are able to prosper in this new environment. Now you have established yourself with the revenues and resources to fully participate in the development of the Preliminary Specification, and are beginning the investment of your time and effort in the creation of a service provider to manage the process that your expertise is in. As a result, you have personally managed the transition from the old oil and gas industry to the new one with little difficulty and are well positioned to prosper in what has always been referred to as the new economy.

I think this spells out the opportunity that stands before those people that believe the oil and gas industry must transition itself to a more dynamic, innovative and profitable business model. One that is based on the Preliminary Specification, the user community and service providers. I have no conceptual vision that the bureaucracy will be continuing and in control in ten years time. If they do, there are two things I can guarantee, they are losing money, and there are ten years fewer gas reserves. Losing money has to stop and the people that will stop it are the people within the industry who choose to act and take the opportunity that is described in the first paragraph. It is the individual actions of the people in the industry that will make the industry the dynamic, innovative and profitable oil and gas industry. Their first act is to commit to People, Ideas & Objects, the user community and the service providers. And then to continue to act for the remainder of their careers in the best interests of the most dynamic, innovative and profitable oil and gas producer.

To act is counter to the bureaucracies best interest. To act is counter to the bureaucracies ways and means. To act is the natural way in which we respond to a situation. With the user community in control of the Intellectual Property that makes up the Preliminary Specification, and the derivative works of the user community. It is the participants within the user community who will be to determine what is the manner in which to conduct the most dynamic, innovative and profitable means of oil and gas operations. When it comes to the policies and procedures of the oil and gas industry, by controlling the Intellectual Property, the user community participant will be the ones that write these. Giving them the power that was held by the bureaucrats but never used.

However, not only will the user community have the ability to write the policies and procedures. They will be the exclusive audience of the People, Ideas & Objects developers. It will be through the software developers that they are able to use their understanding and creativity to build the kind of applications that can make the difference in the oil and gas industry. Solving the issues and taking advantages of the opportunities that occur in the industry as they happen. When a new business model is developed that can bring new value to the industry, the software can be developed and implemented at will by the user community. No more muddling along for decades while money is lost irretrievably.

And it will be those early adopters who participate in the user community before the January 2017 funding deadline that will have the opportunity to establish the service providers. We all need to make a transition from the old economy to the new. Its important that we get this one right.

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. 

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.