What it Would be Like to Participate in the Developments

Lets assume for a moment that you are a user community participant that has an interest in the Material Balance Report of the Partnership Accounting Module of the Preliminary Specification. Your participation in the user community is oriented around the opportunity to take the Material Balance Report and automate many of the accounting and administrative processes that are dependent on the data in that report. Data and information that is used in the revenue, royalty and production accounting areas. Also in the product marketing and nominations of the products for delivery into pipelines. And determining the product balance in inventories of the commodities. There are many processes that are derived from this data. The Material Balance Report in the Partnership Accounting module holds a special significance to all of these subsequent processes in that the integrity of the data that is published in the report is unimpeachable and therefore the appropriate input for any and all of these subsequent processes. And of course we say unimpeachable from the point of view that these data elements may be subject to amendment, and these amendments would also be automated in the processes.

As a user who has worked within this area for many years you have always marvelled at the physical effort necessary to process the data and information within this domain. Seeing the broad scope of operations in terms of the number of people involved in the accounting and administration of these processes, and the never ending but necessary amendment process, you have always thought that there must be a better way. You knew that it always could be done however the costs and the time commitment necessary for someone to map out all of these processes and make a system work that deals with these is well beyond the scope of what is possible for any one individual oil and gas producer. And that will remain the case for the foreseeable future. However, People, Ideas & Objects are aggregating the resources of the industry in order to apply the solution industry wide, and therefore the scope and scale of this issue are addressable. As a result you have joined the user community and are involved in the developments of these systems.

While in the user community you will be working with other user community participants who have similar skills and understanding of the oil and gas industry. What is interesting is the different perspectives, focus and areas of issue between the users. Everyone has a different history in terms of their understanding and experience in working in the industry. And although that understanding and experience is in many ways the same, the differences can be either enlightening or create tension. Luckily we are all made aware that conflict is the source of creative breakthroughs in terms of solving the difficult issues that we face. And we can see that the Material Balance Report will be a creative and lively environment.

Everyone is well aware of the issues involved in the development of this area of the Partnership Accounting module. We can all agree on what the issues are and to a large part how to solve them. However the devil is in the details and that is where we need to get to and spend the time and energy necessary to make the Material Balance Report of the Partnership Accounting module the system that we know is possible. There are few opportunities in ones career to make the kind of difference that we have here with the People, Ideas & Objects software developments. This will make a significant difference in the lives of those that work in the oil and gas industry. No more of the tedious filing of amendments and chasing data. Instead people will be focused on solving problems, providing leadership, collaborating, being creative, doing research, generating ideas, designing and planning. Things that we need to be doing in order to ensure that we provide the oil and gas producer with the most dynamic, innovative and profitable means of oil and gas operations.

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. 

Time is What we Have.

Preparation by the user community participant is one of the ways that we are using the time that we have available to us. In our previous post we noted that in the time that we have we are committed to the developments of the user community. That this is our priority and our focus. As opposed to handing off the development and implementation of the software to an accounting firms technology group. And having them go through the motions of getting user group by in. We are developing the user community as one of our key competitive advantages for the long term. During this three year user community development. Of which we are almost through our first full year. We have identified the areas where an interested candidate can invest their time and energy to become a more productive user community participant when we begin our software developments.

User community participants are drawn from all areas of the oil and gas sector. From all of the professions that are involved in the industry. When we begin software developments what we will need is for you to relate your experience and knowledge of how it is you do your job to our software developers. To design and configure the best way in which the systems that you will use will be developed and implemented. In order to do that we are now looking to augment your knowledge and understanding with some understanding of the technologies and software development process that we will be using. This will aid in the communications between the user community and our software developers. It is far easier for the user community to learn the basics of the technologies than it is for the software developers to learn the broad scope of understanding of the “how to” knowledge of the industry and each discipline that are involved in the user community. An otherwise essentially impossible task.

We therefore ask that the user community participant undertake to invest some of their time and energy in understanding the current software development processes. Some of the tools that are used in that process and their capabilities. This includes specifically the IDE’s (Integrated Development Environments) that are available in the marketplace which include Netbeans, Oracle’s JDeveloper and Eclipse. These are free to use and will generally be part of any course that you take in the university programs that we recommend that you also invest your time and energy in. It is those university programs that we suggest will give you the overall understanding of the technologies that will provide you with the ability to see the larger picture of what the technologies can do. We have suggested upwards of 5 to 6 university level technology courses in database and Java technologies will give the user community participant the understanding of the development process, the technologies, the communication skills with the software developers and the understanding of the Preliminary Specification necessary to make the application what it can be.

I would like to point out at this time that our budget assumptions in terms of the charge out rate for the user community participant are $195 / hour. This reflects not only our commitment to the development of the community but our expectation in terms of the outcome from it. We are looking for the senior level input of those in the industry who have the wherewithal to participate in what we think will be a permanent career change. These charge out rates also assume that there would be some elements of specialization and division of labor being applied to the role so that an individual would be able to organize themselves into small groups of specialized user community participant providers. Also, these user community participants are the key elements in the founding of the service providers who are the replacement to the administrative and accounting capabilities of the producers. And are supported by what we estimate to be the $40 to 60 billion in annual G&A expenses currently incurred by the North American oil and gas producers. We therefore feel our expectations are not only in line, but to be minimal in terms of the earnings potential of the user community participant. However, these costs incurred by the user community assume that we continue to keep our value proposition in mind. And that is that we provide the oil and gas producer with the most profitable means of oil and gas operations. Our value proposition is how we are able to prosper. Therefore our focus must be appropriately aimed and remain so.

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. 

A User Perspective From the Service Provider

No matter the situation regarding the oil and gas industry. Whether our budget is funded earlier than our plan specifies in January 2017. The user community will have time to develop in the appropriate manner. Time is the option that we have at our disposal and we are using every minute of every day to further develop the user community. That is our priority and our focus and nothing will take that away. Whatever time is required will be what will be committed to the development of the user community. And not to contradict myself or apply any pressure to the community, it is also the user community development that holds up the remaining parts of this project. Therefore even if we were to secure the budget for the developments of the software, if the user community is not ready to begin developments we will sit on that money and wait for the appropriate time to start. Our commitment to quality and user community developed software is unquestionable.

What kind of oil and gas industry do you want to work in. One that the bureaucracy is in control and unaccountable. Then you can stop reading now you have what you want. Or is it a dynamic, innovative and profitable industry that is driven by the people and ideas that are employed within the industry. One where change is the constant and the systems that you are contributing to the design and development of are a critical part of that organizational dynamism. You see this in other industries that have changed as a result of Information Technology. Music is nothing like it used to be. You the user gets the music you want where you want when you want it. Too bad about the record executive though. Uber will get you from point a to point b without a word, or a need to grab your wallet. And now Apple Pay is the last great hope for the credit card companies existence. Why can't there be a solution along those lines for the oil and gas industry?

The only reason that hasn't happened in oil and gas is because you're not involved. It needs the user to be involved in the development of these software applications to make them effective for the work that is done by you the user. The Preliminary Specification dictates a business model of how the industry would operate if we adopted the Joint Operating Committee as the key organizational construct of the dynamic, innovative and profitable oil and gas producer. It provides solutions to the big problems in the industry like the decentralized production models ability to make the producers price makers. And a solution to what is now being called the “Big Crew Change.” In terms of how it provides the support for your job. The desktop and mobile applications that you need to make what you do for the producer firm dynamic, innovative and profitable. That has to come from the user community and that is why we are so focused on the development of the user community at People, Ideas & Objects. It is the source of our quality in terms of our software.

Consider the revised structure of the industry under the Preliminary Specification. With the producers stripped down to the C class executives, the earth science and engineering resources, some land and legal, and some support staff. Where the administrative and accounting resources have been reallocated to service providers. Assuming you would be moved to an accounting service provider. What would it be like doing your job within a service provider where the entire industry is your client base. What applications would you need in order to do your current job there and process the mountain of data and information that you would be faced with. A completely different kettle of fish. One which the sciences of Information Technology on top of your industry knowledge and accounting education would be necessary to add real value for your producer clients. It is assumed that we'll approach this change with a division of labor where the computers will do the storage and processing. And the users will conduct the leadership, problem solving, creative, collaboration, research, idea generation, design and planning type of work. Then we begin to see the special role the user community takes in these software developments. And how the never ending developments of new and better ways of processing that data will constantly bring greater value to the producers. If it is this type of vision that interests you, and there is a bureaucrat lurking in your life, you'll know what to do.

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. 

Our Tactical Plan for the User Community

It is clear to People, Ideas & Objects that the prospective user community participant will not subscribe or participate in these developments until the funds are secured. This has always been understood to be the case. We do however expect that the leadership team will begin their participation at any time. It was on the basis of the leadership teams existence that we would be able to prove to the investor community that we were able to provide an alternative means of organization to them. And then raise our budget on that basis. That was before we were presented with this opportunity to raise our budget in 2015 based on the decline in oil prices. That is, with both the oil and the gas sides of the business performing poorly. Investors will be looking for alternatives to the bureaucracy and therefore the budget can be raised, our leadership team, user community and the Preliminary Specification developed in that order.

If we understand the scope and scale of the Preliminary Specification it involves the work that is done within the oil and gas industry, there is little that is conducted outside of the application. Once we adopt the Joint Operating Committee as the key organizational construct of the dynamic, innovative and profitable oil and gas producer there is little within the industry that is untouched as a result. Therefore we need to include these elements within the application to ensure that it operates in an integrated and functional manner. Therefore the user community will be drawn from the entire population of the oil and gas industry personnel. They will also bring to the application their needs and desires of “what” and “how” they do their jobs. This way we can build the applications, whether for the desktop or mobile, so that they are done efficiently and effectively.

If it takes at least six months to fully comprehend the role the user has within the producer organization. And this is based on the many years of industry experience that a user may have acquired. You can see the value that the user brings to the software development process. When we expect that the costs of user community developments will total $667 million. Total 2,000 man years of time and involve a population of approximately 3,000 individuals. We can see the scope of the undertaking that we are contemplating. And this is what is budgeted for in the initial commercial release. We expect that the user community will continue on in an ever changing and constantly improving manner for the entire time the application is operational in the oil and gas industry. Participation as a user community participant should be considered as a new career choice.

This is in stark contrast to the current model of hiring a number of consultants from the various accounting firms to conduct user development, installation and integration of ERP software. These somehow never have the resources required to complete the user development attributes. As is evident by our budget we're not going that way. We do however have a budget for Oracle consultants. These are primarily for our developers in terms of understanding the Oracle product line.

If you feel that this scope and scale is out of line with what is reasonable in the oil and gas industry I would point out that our value proposition is in the trillions of dollars. And those trillions of dollars are on top of the costs that have already been incurred by the industry. So our value proposition is valued in pre tax profits. We are providing the oil and gas investor with the most dynamic, innovative and profitable means of oil and gas production. That imputes everything involved in the industry to attain production. Therefore the investors investment in us will leverage off the many investments that have been made in the past one hundred years. That is the power of software today, however software is useless unless it is in the hands of an enabled and empowered user community.

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. 

Rememberance Day

There is no posting today in recognition of Remembrance Day.

What a Mess

There are no doubt a few bloody noses and some angry people as a result of my words Friday. I've made it pretty clear that I share the bureaucracies belief that they won't participate in this software development project, the user community or the service providers. They have ignored me up until now. That is the normal procedure you follow with respect to a pest. But when that pest becomes a danger, as we have now that the Saudi’s are dropping the price of oil and the bureaucrats are going to be losing money, and therefore won't have a leg to stand on, they will therefore be looking to exterminate that pest. So yesterday I made sure that they know I’m ready for the fight. Let us begin, and may the best business model win!

And this battle will be short lived and intense. I think the investors are going to be looking quickly for an alternative. Prospective members of the user community could help in sending our message out further and faster. That would help everyone. Other than that keep your head down and watch the show. I promise it will be enjoyable and there is no reason for anyone else to be involved in this fight. It’s just me vs. the bureaucrats. The Preliminary Specification vs. the status quo. And the referee will be the investors who have to call the fight to determine who the winner is. And the winner will be the one that operates the industry on a go forward basis.

That is for the foreseeable future. The next 20 to 30 years. A continuation of the bureaucrats and their losses, with no strategy, vision or prayers as to how to make money other than for themselves. Or a vision of how we provide the industry with the most dynamic, innovative and profitable means of oil and gas operations. One based on the Preliminary Specification which is defined and controlled by the user community. The choice is stark. The scope and scale of change is significant, approximately equivalent to the changes that are being experienced in the oil and gas industry itself. This is the choice that the investors are being asked to be make and what the fight will be about. There are trillions of dollars at stake, and maybe so much more.

There is the point of our user community. Which is our primary focus and will always be. User defined software developments are substantially different than other software developments in my opinion. The user community is our source of quality and success. They will be the reason that the industry achieves the dynamic, innovative and profitable means of oil and gas operations. Our cultivation of the community will continue until we have it developed to the level that it can begin developments of the software. And it will never stop developing for the 20 or 30 years that we are the means in which the industry is operated.

We started this week noting that we were taking on what we have now quantified and qualified as the “fight” against the bureaucracy. This is in order to raise our budget in what we describe as the “opportunity” that we find ourselves in.  An opportunity present now that the Saudi’s are “teaching” the shale producers the lesson of “production discipline.” I have set the context and the tone this week. This battle will continue on through the better part of 2015. And believe me you have the right candidate to provoke and antagonize the bureaucrats in your corner. There is nothing that I enjoy more than a fight and I am itching for this one. This however will not take our focus off the development of the user community. And starting Monday we will begin again with our discussion of the user community. The fight will play on in 2015 and there is not too much that will happen in 2014. And with that I should announce I will be taking six weeks off from December 1, 2014. Time which gives the bureaucrats a chance to clean the place up from the mess they made yesterday.

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. 

"I Did It My Way"

Today I want to address the eight hundred pound gorilla in the room. And that is our budget. It’s controversial and contentious because no one has seen anything like it in the ERP marketplace of the oil and gas industry before. Lets also be clear we will be looking to raise the full $4 billion in funds in order to begin the developments of the Preliminary Specification. I am certain that our costs will be in the range defined in the outer limit of our budget. And for a number of reasons detailed later in this post we will be looking to raise the full amount. The issue and the controversial aspect of the budget is the payment of the Intellectual Property royalty to me, and the net profits. These two items total half of the budget and nothing of its kind has ever been proposed, or paid, in the industry before.

As detailed in earlier posts and elsewhere; the time that I have spent on this project is significant. I started it in 1992. If the industry can come up with a timely solution to its problems that competes with the Preliminary Specification they can begin the process that I started way back when. This blog reflects much of the ten years of applied research that was done in order to take the idea of using the Joint Operating Committee as the key organizational construct of the dynamic, innovative and profitable oil and gas producer. An idea that I first published in August of 2003. And moving it to the situation we have today. Some people may consider that I am lucky that the oil and gas prices declined and the decentralized production model just happened to meet the needs of the industry. I don’t care. I'll have the royalty payments that prove that the industry needed the solution to solve the trillions in potential revenues that they were losing. I have always been able to generate significant value in the work that I do. It’s no coincidence that I also generate significant controversy. The money is how I keep score.

So we can continue on with the controversy and the losses in the producer firms. To me it only matters that the industry provides me with the up front payment of the budget first and foremost. The first reason of course is to pay myself the royalty. Secondly I will deliver the program in its first commercial release in a timely manner and as a result earn the profits that are identified in the budget. If I fail or have difficulties, then the profits that I realize will be diminished. The issue of the up front payment also has to do with the fact that the bureaucracy have chosen, in every instance, not to work with me. Even when faced with the difficulties in their business. Reasonable people faced with the difficulties in their business would have turned to those that have solutions. They will never do that. If I have to be accountable to the bureaucracy in any way it will surely be my demise. By moving the money under my stewardship as the first act of the industries participation in these developments. Ensures that I will be able to deal with the issues as they arise. And the bureaucrats can continue to manage the industry for the short time they have left.

It is our commitment to the user community and the service providers who are providing the removal and replacement to the bureaucracy that will be the keys to the transition. Technology is disintermediating industries all over the world. Just ask the record store manager, or his distributor. Yesterday I detailed how the industries investors were led down the primrose path to build the industry while prices were low. So that when prices did turn higher they would reap what they sowed. This was a farce and the investors were fleeced. The bureaucracy have played the ultimate ponzi scheme and I’m saying to the bureaucrats you're busted. We're offering an alternative. And in reality its a pretty inexpensive alternative compared to what the bureaucracy is currently charging the investors, and will be charging them in the future with no vision or strategy. And, no prayers. So maybe the people in industry think that our scope and scale is out of line with what is historical in the industry. That paying for Intellectual Property is inconsistent with the industries history. I think we've had enough history from the bureaucracy, and I'm declaring that they're toast.

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. 

"Its Just a Flesh Wound"

Those were some of the last words of the “Black Knights” in the movie “Monty Python and the Holy Grail.” They're what immediately came to mind when I read the response of the oil and gas producers to the Saudis discounting of oil for import into the U.S.

What happened on Tuesday was the Saudis began discounting the oil that they sold into the U.S. marketplace. This was in contrast to price increases that were made in the rest of the world. Isolating the U.S. market, and I think specifically the shale producers. Making it unquestionably the shale producers that are the focus of the Saudis concerns regarding the global overproduction of oil. That if the shale producers in the U.S. want to produce at capacity, then the Saudis will produce at capacity, as will the whole of Opec. That is the message that was sent on Tuesday.

On Wednesday the producers responded in a consistent fashion. In a Bloomberg Businessweek article. Saying more or less that “Its just a flesh wound” is not far off from their actual comments. Here is a quote from the Businessweek article.

Executives at several large U.S. shale producers, including Chesapeake and EOG Resources Inc. (EOG:US), have vowed to maintain -- and even raise -- production as they reported earnings this week. They say their success in bringing down costs means they can make money even if prices slump further.

Its obvious to me that the Saudis are playing the long game and the shale producers are playing the short game. This is how I see the situation playing out in the next few quarters. First of all the oil prices are trading on rumor and innuendo. There is no stated policy at this time by anyone in the marketplace. Once there is a stated policy the market will move to reflect that policy. Opec is meeting on November 27, 2014. Which very interestingly happens to be three days after the Americans announce their negotiations with Iran regarding nuclear weapons. What we might see is no change in the announced production quotas and no concern by Opec for the markets pricing. We might also see no date for another Opec meeting set. This will throw the bottom of the market open for a freefall. Finding the low of the oil price market within the 2014 year end period of time. Just about the time that the accountants will retrospectively be looking to value the reserves of the producers for their annual reports. Creating even larger losses for the producers.

Playing the short game when they should be playing the long game, the producers are falling into the Saudis hands here by making the foolish comments that they are making. The investors who are concerned at the losses that the producers have been creating in the gas side of the business, are now beginning the process of losing money on the oil side of the business as well. Investors have already had enough of the fiscal irresponsibility created by these bureaucrats. They don't need to increase, and by a substantial margin, their losses by these fools losing money on both the oil and gas sides of the business. The investors will be forced to act and within a short period of time to deal with the problem within the oil and gas bureaucracy. And that’s where we, the Preliminary Specification, the user community and service providers come in.

The Saudis are playing the long game and can do so for a significant period of time. They have almost one trillion U.S. dollars in reserves. An effective weapon when you consider the enemy is screaming at you with no arms and no legs.

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. 

Herding Cats

It is the tradition in the oil and gas ERP software marketplace that the software provider will raise their capital from the investment community and banks. For a variety of reasons People, Ideas & Objects have chosen not to participate in those methods of raising capital. Those reasons are detailed in our Revenue Model and essentially state that the oil and gas community is too small of a market in which to leverage any investment. The producers themselves know this market is small and have frequently abused the fact that the software provider, who has invested all their investors money, has a limited market to sell to, and as such has very little if any bargaining power. The investment community is wise to this and that avenue is most certainly off limits to us when they see the scope and scale of our budget.

That leaves us with dealing with the producers themselves. Something we have chosen not to do ourselves, again. I have frequently referred to this job as herding cats. You have a handful of producers moving in the right direction, you try to get a few more, and then a shiny object attracts the attention of the others and they're gone again. I have stated in the past that I won't be doing this anymore and I stand by that claim. Working with the producers at this time would be nothing more than working with cats. The added difficulty to this process is that when the CEO was interested in what we were selling. He would naturally pass it down to the CFO and IT manager for further evaluation before any decision was made. The IT manager has no interest in eliminating his department and his job. And the CFO has no interest in having all of his staff moved to the service providers. Which are the results of implementing our software. It is the solemn oath of a bureaucrat that “thou shall not reduce ones staff unnecessarily.” Therefore the recommendation that the CEO will receive will be one of thumbs down. And no matter how much we appeal to the CEO he can’t make the move without the staff, it would create a mutiny in short order.

Therefore we need to create a situation that we can appeal to the investors who own the industry. Those that have significant influence in the operation of the industry as well. We have seen these people, they work quietly in the background and generally get what they want. What we have to do is to appeal to their sensibilities and provide them with a compelling value proposition that deals with the issues and opportunities that exists in the oil and gas industry. Some might argue that these people don't have the influence in the industry that they once had. I say you're listening to a bureaucrat who thinks that they have the upper hand in the relationship. That is because they have had the upper hand for a while now. What we are offering the oil and gas investor is an alternative means of organization based on the Preliminary Specification, defined by the user community and operated by the service providers. This alternative is offered as a removal and replacement of the bureaucracy and has a value proposition valued in the trillions of dollars. This value proposition is so high because the issues and opportunities are so grand as a result of the abuse that the bureaucracy has incurred through their belief that they have the upper hand.

So what are these issues and opportunities. Certainly the profitability under the Preliminary Specification is one of the opportunities. However, the investors were told that during the 1980’s and 1990’s that survival in the industry was the name of the game. And that the building out of the industry in the long term, so that when the time came and higher prices would arrive, they would be in position to realize the benefits of those higher prices. Those higher prices did arrive in the 21st century. And the bureaucracy realized the benefits through stock options and bonuses that were valued in the billions. However, the investors did not necessarily profit as a result of the higher prices. The costs of production in many cases exceeded the gains in the prices. Where was the benefit for the investors that was promised them as a result of building out the industry? It seemed to have been contributed mostly to the bureaucrats in higher bonuses and stock options. Now the prices are in steep decline and the bureaucrats pray for cold winters. That is the scope, scale and the depth of the bureaucrats capabilities. Prayers. I think this year they have seen how stupid they looked last year praying for a cold winter and now don’t even ask for that. So the investors stock valuation did not trade up on the increase in commodity prices because the bureaucrats were unable to increase the profits that were made. The investors would have been better off investing in the commodity exchange, not the stock exchange. Now the stocks of the companies are being significantly affected as a result of the declines in the commodities. And what do the bureaucrats say and do? I haven't received any calls. And I don't expect any from any of the bureaucrats. It’s paragraphs like this one that make them angry. Which is the only emotion they can express.

So when we say we are looking to fund our budget by the oil and gas investors we think we have a group of like minded people who are interested in what we have to offer. They can direct the individual producers to participate in these developments and fund our budget. After all we offer the industry the opportunity to implement a continental wide price maker strategy. One that is driven by the individual producers profits. What a concept. The thing I like about it best is that I don't have to herd cats.

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 Origins of two Different Perspectives

There is a clash of two different perspectives when we discuss the impact of the Preliminary Specifications decentralized production model. The shutting-in of properties to reduce the market supply of commodities is contrary to the current practice within the industry. For one thing it is not currently possible to shut-in properties due to the impact on the producer in terms of their overheads. They are using the high throughput production model which requires production to continue at capacity to deal with their fixed, high overheads and infrastructure. However, the bureaucrats also believe that the manner in which to deal with low oil or natural gas prices is to curtail capital expenditures until the market responds. In terms of the low natural gas prices, which have continued for many years now, someone should ask the bureaucrats how this strategy is working. And now that Opec is also producing oil at capacity, will that strategy of reducing capital expenditures work for oil?

The strategy of curtailing capital expenditures is an engineering inspired strategy. By reducing the number of wells that are drilled during subsequent years the surplus capacity in the marketplace will be absorbed and prices will rebound to the point where profits will return. This has worked in the past. However, it has taken many years before the changes in prices have been seen. Participation by the producers is not always equal either. Some producers feel it is an opportune time to expand their market share, and as such expand their capital expenditure programs. I have described this strategy as a blunt instrument due its inability to achieve the desired result within a reasonable period of time. In theory we have seen the natural gas producers operating under this scenario for the past six years. The time in which natural gas prices have collapsed from their traditional 6 to 1 pricing to the current 20 to 1 in comparison to oil. If the strategy was valid it would have worked by now.

The origins of the Preliminary Specifications decentralized production model are more from the business side. In that profits are what dictate production. And profits are what drive the investment in producers. If producers are not profitable, in theory, why would an investor continue to participate in the producer. Therefore the producer would cease to operate in the marketplace. Production discipline is therefore imputed through the market mechanism that only production that is profitable is produced. Producers that adhere to that principle will receive a welcome response from the investment capital markets.

Engineers and geologists have been the operational and executive members at the helm of the oil and gas industry for the better part of its history. The business is a science and that is the way that it should be operated. However, in terms of the production output of the industry it needs to be profitable. Its not a science experiment, its a business. And the business needs to generate economic value. Something that has been lost in the day to day mindset of the industry. This is evident in the activities of the current “must have” asset. Today its shale. Yesterday it was heavy oil. Before that it was SAGD. And before that it was… whatever. Today producers have to employ production discipline in order to bring this science experiment into the commercial realm.

The accounting I think has been at fault. I think People, Ideas & Objects developed out of the need to address the shortfall in the accounting and systems in the industry. My hypothesis is that in the 1960’s when computers were introduced, accountants asked themselves what they’d be used for. The accounting, tax, royalties and compliance requirements were the natural needs. This continued for a few decades and the isolation of working on those topics created a separation between the compliance and governance of the firm, which has become the exclusive domain of the current accounting function, and the business of the business. By reintroducing the Joint Operating Committee as we are in the Preliminary Specification. We are moving the compliance and governance frameworks of the hierarchy into alignment with the legal, financial, operational decision making, cultural, communication, innovation and strategic frameworks of the Joint Operating Committee. Once we complete this alignment then we achieve the speed, innovativeness, accountability and profitability that we desire in our organizations. This clarity in accounting will provide the engineering and geological resources with the ability to better understand the business that they operate. Allowing them to compete in the profitable oil and gas industry.

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.