Best Business Opportunity, Ever, Part XVII

Taken from the perspective of the next 25 years. Starting over with a startup organization, a clean slate, to pursue the oil and gas industry doesn’t seem unreasonable and is actually the preferred choice. Where will the existing producers be in 25 years? That question requires too much speculation and I’m too biased to provide anything objective. What we do know is there currently exists significant upside to those producer firms that have a current start date. They will be able to purchase the existing producing infrastructure of the North American industry at affordable prices. Maybe not today, but soon. When the only opportunity for survival of an existing producer is to sell properties, the market will be saturated with properties for sale and the prices will be affordable. There is also the additional upside that is provided by using the Preliminary Specifications decentralized production model. With its price maker strategy the incremental value that will be earned is $25.7 to $45.7 trillion over the next 25 years. And lastly the opportunity to make North America energy independent in both oil and gas provides substantial upside on its own.


There is no way that we’re getting to that upside from here with the organizations that we have in place. They’ve proven themselves incapable of action. If we don’t do anything we’ll be sitting with the same issues and questions that we have today. Oil and gas will muddle along on investors money and continue to experience huge booms against the backdrop of protracted busts. Doing nothing is something that oil and gas has excelled at. The Preliminary Specification eliminates the muddle along strategy and replaces it with a dynamic, innovative, accountable and profitable oil and gas producer. The two contrasting visions could not be more different.


Information Technology has been the variable that has determined the outcome of many industries in the past number of decades. Whether it’s computers, cellular phones or music to name just a few. Information Technology was used to leverage change within the industry and remake who and where the industry operated. I have stated repeatedly that it's not necessarily the important thing to own the oil and gas asset. The important aspect of the oil and gas industry will be to have access to the software that makes the oil and gas asset profitable. Without access you will have what we have today, which from my point of view is a mess. People, Ideas & Objects Preliminary Specification defines and supports a revised producer and industry structure that enables the producer to earn the profits that they are unable to earn in the current industry. That is the difference between the old industries and the new industries. The new industries understand that software drives the business. The old businesses believe that buggy whips are good investments. If I can’t motivate you with the opportunity that sits in front of the dynamic, innovative, accountable and profitable, startup oil and gas producer for the next 25 years. Then you should get out of the business.


Maybe all this technology is just a fad and the boom will return soon. If you're in an oil and gas company fighting to keep the doors open, you may not be far from this belief. These opportunities will pass you by when the technological fad’s become the ways and means of the industry and you were too busy stuck trying to restructure a buggy whip manufacturer. We all have choices. And that is what makes living in North America so dynamic. The old stale ways never survive. They’re always swept away by the better way. We’ve always embraced creative destruction. Sometimes it's just difficult to see it when it's here.


The Preliminary Specification, our user community and service providers provide the dynamic, innovative, accountable and profitable oil and gas producer with the most profitable means of oil and gas operations. Setting the foundation for North America’s energy independence. 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. 

Best Business Opportunity, Ever, Part XVI

There seems to be a disconnect between the third quarter financial statements and the tone on the street. We came out of the second quarter reporting period with this giddiness that the low point in the industry had been reached. Then with higher prices being realized in both commodities during the third quarter, further fueling the confidence of the producers. And with the announcement of a potential Opec production agreement, there was the declaration that the war against Opec had been won by the shale producers. This has set these producers up for a serious hit if Opec declares that no agreement can be made.

Producers are missing their Wall Street targets. Missing them by significant, serious amounts. If this trend continues heads will roll. Reading these financial statements reflects the scope of the devastation that has taken place. It appears to me that the producers would need almost three times as much revenue just to be considered solvent. They are absolutely gutted, capital destroying machines. Money goes in, mixes with other money, and it all gets lost. Sinking ships unwilling to admit the end is here.

What it’ll take to turn these around is beyond me. What is there? A recapitalization? There isn’t that much money, anywhere. No investor or banker is going to absolve these firms of their bad past behavior. Especially when nothing has been done to correct the issues in the industry. Pretending that all is well doesn’t sell well when the financial statements are this devastating. The only thing that I can see is an attempted rehabilitation over the long term. Funded by the sale of properties to pay off debts. As the assets are sold the debts are paid and when nothing is left the doors are closed. That may be an optimistic scenario.

We should look at these producers from the perspective of a rational accounting methodology. To adjust for that, take the net asset balance of property, plant and equipment and write it off. This leaves the producer with the massive losses that the firm has really incurred during its lifetime. The debts that it has incurred in creating those losses, and reflects that those assets, in reality are nothing but an albatross on the back of the producer. The cumulative producing assets of the industry earn nothing in terms of financial return. Therefore they are worthless. The producer would perform better financially if they didn’t have any properties. That is the best way in which to evaluate any producer today.

Producers have over the course of the past forty years “believed” in the accounting magic of the SEC that enabled them to capitalize everything to the balance sheet. They then have left those assets on the balance sheet for as long as there are reserves on that property. For accounting purposes, which is to evaluate the performance of the management, would you allow the management to capitalize a concrete building for the period of time the building would be standing, or approximately 100 years? No rational management would do so. Yet we have the equivalent accounting treatment in oil and gas for the past forty years. Creating the belief that the more that the producer spent, the more valuable they became and the more profitable they were. Creating a culture of spendaholics with no concept of value or consideration of the overinvestment they were causing in the commodity markets. The only time producers were subject to a write down of their assets was during the ceiling test. Taking all of the reserves at today’s prices, or the total gross future revenues of the producer, and ensuring that the net asset value wasn’t higher! Ludicrous. Investors and bankers used to participate in these spending binges by funding them. They’ve finally caught on to the game. Now the curtain has been pulled back to reveal the extent of the real damage and the producers think it’s time to carry on!

So what to do. It’s time to start over with a startup oil and gas producer. One that doesn't’ currently carry the albatross of yesterday’s property values and performance. The amount that you spent to build your house has no impact on the value of your house. The amount that a producer may have spent on a property has no impact on the value of that property. Today’s oil and gas property values are history. If the market needs more time to realize this then the startup can wait. The existing producers aren’t going anywhere but down. Leaving the best business opportunity, ever for those startups that can participate. And don’t forget that People, Ideas & Objects, our user community and service providers also provide the opportunity of a lifetime.

The Preliminary Specification, our user community and service providers provide the dynamic, innovative, accountable and profitable oil and gas producer with the most profitable means of oil and gas operations. Setting the foundation for North America’s energy independence. 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. 

Best Business Opportunity, Ever, Part XV

Doing the same thing over and over, expecting different results is a sign of insanity. With that in mind People, Ideas & Objects look forward once again to the quarterly reports of the oil and gas producers. Expecting that these reports will trigger the conclusion that the existing producers do not have the ways or means in which to continue in any purposeful manner. Which it would appear is my general purpose in life. I don’t expect to see much in terms of performance from the oil and gas producers. Commodity prices are up since the second quarter, but the second quarter was as disastrous as 2015, the worst year on record. One thing we did see in the second quarter was that most of the hedges that were providing a safe haven for many producers, have expired. Leaving producers fully exposed to the discounted prices. There had also been the issue of generating enough cash from operations to meet the needs of field operations and the organization. Something they were not doing in the second quarter of 2016 or throughout 2015.

I can scream until I’m blue in the face. It won’t matter and it won’t make a difference in the market. I’m here to provide an alternative to those that know that the industry is unable to continue in the way that it’s currently operating and structured. Convincing the world that this is the case can be highlighted here, but we have to wait for what Winston Churchill calls the “jarring gong” to occur. That being the time when people realize the situation is untenable. I think that’ll happen soon. When I can point out that the value of starting over with new startup oil and gas producers, which can acquire the existing producing infrastructure at fire sale prices from the current producers. Which will earn the $25.7 to $45.7 trillion value proposition by using People, Ideas & Objects Preliminary Specification over the next 25 years. Will also earn the further upside from the industry achieving energy independence in North America. All of this value is waiting to be earned by those that can see this opportunity. As a result I think the “jarring gong” will be heard soon. And as I’ve said before, maybe during this quarterly report season!

Today producers are fueled with optimism regarding a deal with Opec that may be put together by late November. I don’t see it. There is no interest in them putting together an agreement that I can see. Other than to fail at doing so and deflate the optimism that is rampant through the North American industry. This has been the game that's been played for the past number of years. It’s maybe difficult to see it this way when you're so vested in higher prices. Or maybe it’s just that I’m so vested in hearing the “jarring gong.” If the third quarter reports show that no progress has been made by the producers. And the Opec agreement falls apart. I think then this buoyant, optimistic oil and gas market will quickly disappear.

We’ve also come along way in terms of the natural gas market. Prices in the mid $1 to $2 range have been replaced by the low $3. About half of what is needed to be profitable. It was a warm summer and it looks likely to be a cold winter here in Canada. The shale gas production volumes have also come down significantly from their peak of 44 bcf / day and are now in the range of 42 bcf / day. One thing I learned from my years in oil and gas is to never listen to a non-engineer talk about the natural decline curve. So I won’t, there is still ample capacity in Canada and the United States. Storage is almost at capacity. If it takes eight years to destroy the natural gas business to achieve these results the producers should be happy that they’ve arrived, somewhat. Shale gas still exists however, and we’ll find that the producers unconstrained drilling response would overwhelm the market very quickly.

So the score card will show who’s making money and who’s losing money. I expect the tragedy to continue unabated. And these losses will be calculated based on the foolish accounting that has deceived everyone for over forty years. If you used a proper assessment, it would be far worse. The industry has a lot to earn to make up for these past losses. They’ll have to provide a real return on the investments they took, but then lost, but will need to have earned back. When that's done, in the far off future, maybe then they’ll be able to look at some of this upside. Or alternatively we could all just start over now with new organizations and a new way of operating oil and gas based on the Preliminary Specification and earn the value that awaits us.

The Preliminary Specification, our user community and service providers provide the dynamic, innovative, accountable and profitable oil and gas producer with the most profitable means of oil and gas operations. Setting the foundation for North America’s energy independence. 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. 

Best Business Opportunity, Ever, Part XIV

Existing producers believe that given time the commodity markets will rebalance and prices will normalize. Until that happens, they will produce everything they possibly can, regardless of the economics of that production. Does anyone else see the foolishness of this strategy? Markets communicate information through prices. If prices are high and profitable, then producers should produce any property that meets the basic criteria of profitability. If prices are too low to produce a profit, then the producer should shut-in production and wait for prices to rise. That’s how markets work. They are not mythical, magical things that become all knowing and self determining beings. All they do is provide information in the form of prices that they’re willing to pay for the things of value. I have yet to see a market rebalance based on the passive involvement of it’s actors.

Chronically overwhelming the market with oil and gas is the characteristic that we are presented with as a result of the operating strategies of the existing producers and shale based reservoirs. With shale we move from scarcity to abundance in terms of the oil and gas commodities. There will now always be the capacity and capability to overwhelm the market with more supply than there is demand. This will be the case for the foreseeable future, which brings a new dynamic to the oil and gas industry. Managing on the basis of scarcity is no longer valid. Managing on the basis of a fundamental misunderstanding of what markets do, is no longer valid. The need for producers to listen to market signals to determine if a property produces or remains shut-in is what is necessary for the industry to move out of the current boom and bust cycles, and chronic malaise that it finds itself in.

The Preliminary Specifications decentralized production model uses our price maker strategy to enable the producer to make this change to the shale based era. Using a detailed, actual accounting of the property the producer can determine if it’s profitable and if so maintain production for another month. If it’s unprofitable the property is shut-in and the reserves are saved for a time when they can be produced profitably, the producer only produces profitable properties therefore their earnings are not diluted by unprofitable properties and the commodity markets find their marginal costs.

It is on this basis that the startup oil and gas producer will be able to assure their investors that they’re providing them with the most profitable means of oil and gas operations. How they’ve gained the production discipline to ensure that the disaster that is the oil and gas industry today isn’t repeated again and again. That their producer is being treated fairly and equitably in the marketplace through a production allocation methodology that is based purely on the properties profitability. This is how markets work and the startups investors will know that they have the ability to earn profits all the time that they are invested in the oil and gas startup. That they won’t be subject to the boom and bust cycles that have become the accepted norm and are more destructive than any productive activity. That their producer is wholly focused on profitably, delivering all of the upside that this transition to a new profitable oil and gas industry promises. Upside that includes the ability to affordably acquire the producing infrastructure from the existing producers. Realize the People, Ideas & Objects value proposition which is valued in the trillions of dollars. And then profitably provide energy independence to the North American continent.

When the industry is operated on the basis of the Preliminary Specification everything is fundamentally changed. We are relying on creative destruction in order to implement our technology due to the extent of changes within the producer and industry. Changes which are too significant for them to undertake in the normal course. There is too much cultural inertia to overcome within the current producers for us to be successful. The current producers have permanently destroyed the industry that existed just a few years ago. Most if not all of the producers have experienced financial difficulties of catastrophic proportions. If these carcasses appeal to the investor then we have nothing for them. If a fresh start is what appeals then we have the Preliminary Specification.

The Preliminary Specification, our user community and service providers provide the dynamic, innovative, accountable and profitable oil and gas producer with the most profitable means of oil and gas operations. Setting the foundation for North America’s energy independence. 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. 

Best Business Opportunity, Ever, Part XIII

People, Ideas & Objects are focusing the oil and gas industry on profits. The Preliminary Specification is designed to optimize the producer and industry to ensure that they achieve the most profitable means of oil and gas operations. This seems counter to the status quo environmental and stakeholder focus that is the concern of the existing producers. Why is there such a stark difference in the focus of the industry between these two systems. Simply we’ve lost the ability to satisfy any stakeholders needs. The current organizations are confused as to their purpose and conflicted in their goals. These organizations are unable to determine what value is and how to increase it. Many have lost all of the money that they’ve ever raised in the equity markets and much of their debt. Those that haven’t achieved this stellar attribute are well on their way. Oil and gas isn’t a business or an industry, it’s performance doesn’t qualify it as such.

The investors, bankers, bondholders, service industry, the people who work in the industry. All of these stakeholders were invested in the oil and gas industry with their money, their time, their careers and their energy. As a result they have very little to show for it. What do they do now? Wait to see if this bunch gets their act together and figures out a way through the chronic overproduction and oversupply? That’ll take a long time and be a terrible waste. Since when did it become acceptable for an industry to be in such difficult times for the majority of its existence? Why don’t the producers take some kind of action?

People, Ideas & Objects can and have said goodbye to that way of life. There is no manner in which you can deal with a culture that is that convoluted, disorganized and unable to determine what it’s doing. The existing producers need to pass from the scene as a result of their poor performance. They’ve survived for forty years like this which has established their ways and means in stone. They can’t, won’t and will not ever change. Much of their past existence was supported by the annual share issuance and debt financing to cover for their continued poor performance. The investors now see that there is nothing there. They are wise to the game and are choosing alternatives.

An industry where everyone’s focus is on profits will support the investors, bankers, bondholders, service industry and the people who work in that industry. They will pay taxes to the governments and be good corporate citizens. Without profits you have what we have today. If everyone is focused on profits, and therefore can determine what they need to do to ensure that they provide the producer with the most profitable means of oil and gas operations. Then they can build value for the producer, the industry and these stakeholders. That’s how our capitalist system works. Or at least should work. It certainly isn’t in operation today.

Profitable producers would be able to better manage their operations and we would be less subject to the boom and bust disaster management that we have today. A profitable industry would be able to supply society with affordable and reliable energy on a consistent basis. That’s the promise that we provide when we’re focused on a profitable industry. There is money to be made here and that makes this the best business opportunity, ever. Show me a better time and place than this.

The Preliminary Specification provides the focus on profits throughout its eleven modules. Profits are its focus and everything else is secondary to that. Today, organizations are defined and supported by the software that they use. People, Ideas & Objects Preliminary Specification will enable the producers that use our system to remain focused on profits and have their entire organization building value. And that is how we will rebuild this industry brick by brick, and stick by stick.

The Preliminary Specification, our user community and service providers provide the dynamic, innovative, accountable and profitable oil and gas producer with the most profitable means of oil and gas operations. Setting the foundation for North America’s energy independence. 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. 

Best Business Opportunity, Ever, Part XII

We’re at the very beginning of the changes that are happening in oil and gas. The destruction that has been realized by the existing producers is complete. However it may take some time for people to realize the extent of the damage and the resulting capabilities of these organizations. They’re finished, and the sooner we realize that the better off that we’ll be. The upswing in terms of the creative elements are at hand, and as we saw yesterday investments are being made. Now is the time for individuals to prepare and organize themselves to ensure that they maximize their exposure to the best business opportunity, ever.

Taking action now and on a sustained basis is what’s going to be necessary for people to participate in this opportunity. There are many things to be done. The absolute last thing that you want to be doing, and the absolute last thing that you will do, is leave where you're working now. Preparation now is the key to the success that you’ll realize in the future. The moment you set your mind to the process of this change you in essence make it real. That is how we’ll do this. The more minds working in this direction the better. That is the start.

Whether it’s an oil and gas company that you want to start or a service provider organization. The redevelopment of the industry is from the ground up from all disciplines. People, Ideas & Objects are providing the Preliminary Specification as the basis or vision of how the industry would operate in order to ensure that profits are the primary focus of everyone in the industry. Using this vision to guide you in the development of your organization will ensure that you’re consistent with the needs of a profitable oil and gas industry. With everyone in the new oil and gas industry doing the same we can leave behind the destruction and muddle along strategy of the existing producers.

I believe it’s necessary to read the entire Preliminary Specification. Although you will focus on the area that is most familiar to you. The understanding of how the industry operates based on the Preliminary Specification is very important. There are fundamental differences that make up the ability of the industry to focus on profits. The producer is reorganized, the industry is reorganized and the service industry is brought closer to the operations of the producers themselves. How this is done and why are important for everyone to know and understand. No one would undertake a significant journey without first studying a map of the area that they’re heading. The Preliminary Specification provides that level of understanding for those wanting to make these changes.

In order for the new oil and gas industry to realize the upside in the next 25 years. We need to be organized in a way that enables us to realize that upside. There is no way that an organization can function today without software defining and supporting what it does. At the same time that software constrain and cements that organization into an unchanging and unchangeable beast. To proceed down this path without the permanent software development capabilities of People, Ideas & Objects would be foolish. The ability to make changes to the software in the future will ensure that we don’t run into problems such as what we are experiencing today.

If we want to gain the upside of the the dynamic, innovative, accountable and profitable oil and gas producers by acquiring the existing producing capacity, realize the $25.7 to $45.7 trillion value proposition of People, Ideas & Objects and the upside from making North America energy independent. Then we need to ensure that the industry, the producers, the service providers and the service industry are configured in a way to make that happen. The path for that is the Preliminary Specification.

The Preliminary Specification, our user community and service providers provide the dynamic, innovative, accountable and profitable oil and gas producer with the most profitable means of oil and gas operations. Setting the foundation for North America’s energy independence. 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. 

Best Business Opportunity, Ever, Part XI

The evidence that the startup route in oil and gas is the appropriate direction can be seen by these three startup announcements. (Here and here.) Backed by Blackstone and Quantum Energy Partners, Jetta Operating Company Inc, Guidon Energy and Sentinel Peak Resources California LLC were endowed with $1.8 billion. Sentinel has already leveraged their investment to purchase some properties. Now that super star engineer, the one that was passed over for COO at the large independent, who never lost a dollar of the company's money, passed over because he wasn’t as good at the big game politics, is thinking. What if?

I want to stress the difference in the way that the industry will be operated in the future will be on the basis of profits. Real, cash generating profits. That is why the investors are going with the startups, they believe in creative destruction as much as I do. The only way that we are going to keep the focus on profits is through the use of the Preliminary Specification. And I don’t want anyone to come along and say, ok put it in place. It needs to be built with someone's money. A big part of the way in which the industry operates profitably is the value proposition of the Preliminary Specification. Without it, you’ll have a remake of what we have today.

There are trillions of dollars that are available to the producers who use the Preliminary Specification for the next 25 years. This is the upside they receive for investing in the capabilities of having People, Ideas & Objects, our user community and service providers operational. Our compensation is defined in our budget. And I have to say that I am very pleased that I am bringing such a large monetary solution to what can only be described as the biggest issue the industry has ever faced. Information Technology is the means in which all industries are now operating. Without IT business and industry is in the dark ages. Use of the Preliminary Specification will bring the oil and gas industry well into the future of IT functionality and process management. People, Ideas & Objects also provide a permanent, dynamic software development capability to the industry.

Don’t cry on my shoulder if you miss out on this industry wide opportunity. I’ll be busy, as will many with the fortitude to make the leap of faith necessary to change the oil and gas industry. If you're not busting out of your skin right now then I suggest you stay where you are. The winds of change have become a category 5 hurricane wrapped up in a tornado. The opportunities for the people who are capable of establishing a startup oil and gas producer have never been better. The opportunity for those to participate in the development of the Preliminary Specification as a member of the user community exists today. Part time work that is an inherent part of the service provider organization that you’ll establish to provide the administrative or accounting process that you’ll conduct for the entire industry as your client base.

It doesn’t matter what discipline you're from the opportunities are open to everyone. The opportunity to invest in a startup oil and gas producer and service provider organizations is also available to everyone. If you think this much change is going to be a little chaotic, you're correct. If that excites you then there really is no choice but to participate. Creative destruction is inherently chaotic. It is the entrepreneurs, the people who can see their way through the disaster, who will make the difference in terms of the time and intensity of the chaos.

The Preliminary Specification, our user community and service providers provide the dynamic, innovative, accountable and profitable oil and gas producer with the most profitable means of oil and gas operations. Setting the foundation for North America’s energy independence. 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. 

Best Business Opportunity, Ever, Part X

The establishment and development of a new oil and gas producer has been determined to be the best business opportunity, ever. The level of destruction that has occurred in oil and gas has been complete. What we have left are carcasses that have been hollowed out by losses that by any measure are catastrophic. Most if not all producers have, or will have, destroyed their capital base in this downturn. The net, sum total of the producers existence has been to destroy all of the money that was ever given to it. The only things that are left are a collection of assets whose operations consume cash to produce, and debts that far exceed any operational performance possibilities. The dire nature of the existing industry contrasts with the upside of the startup oil and gas producer.

When you begin your startup what will be your area of operations? What will be your expertise and capabilities? These will form the foundations of your competitive advantages for the lifetime of the firm. The existing producers have opened the proverbial WalMart of properties on offer. You can have whatever you want, and for some of the best prices ever seen in the industry. Just remember to time your closing to the seller's debt payment schedule. That way you’ll force the issue and secure the property.

Recall that Chesapeake “sold” their Barnett shale assets for the right to get out from under a $300 million annual cash drain. Consider that the economics of a startup are different than the existing producer. If a startup were to have purchased these Barnett shale assets they could have instructed Chesapeake to shut them in prior to close. The startup would then be incurring a “null operation.” No profit, but also no loss. There are other considerations to consider, such as technical capabilities, but the startup can build those subsequently over time. The point is there are two extreme economic dynamics in play between the existing and startup producers. These economic dynamics can be leveraged by the startups.

As a new oil and gas producer you have much to offer an investor, banker or bondholder. Zero dilution of their investment from a history of bad management and total destruction. The history in the industry is that producers never wanted to account for the capital they used in the business. So they didn’t. As a result their asset values ballooned, or is that a bubble? And their earnings soared. Making it appear like a profitable industry. This has been the case for almost forty years and is the culture of the industry not to consider capital costs in assessing performance. They believe capital costs are “sunk costs” and are therefore irrelevant. The fact that operating a business on this basis creates significant shortfalls in real earnings and cash generation didn't matter. The implications of doing that were offset by the annual share issues that every producer seemed to participate in. Trillions of dollars have been invested in the North American oil and gas infrastructure and it can’t generate $0.02 in earnings. Those being the real type of earnings that the startups will be able to earn, not the fake type of earnings that producers have been claiming for the past forty years.

The investors will have to deal with their past investments in their own time and place. What we can do is provide them with the necessary changes in the industry that will ensure that their future investments are managed appropriately and establishing the value that is available today. That being securing the producing infrastructure of the industry, the value proposition of People, Ideas & Objects Preliminary Specification and the ability to increase the throughput of the industry and achieve energy independence in North America. The point is we are not going to be getting anywhere with the producers that we have today. They are waiting for the mythical market to rebalance. What we need to do is to turn all of the industries production profitable at all times. Then expand the capabilities and throughput of the producers within the industry. And then look to secure the energy independence that shale provides. Without establishing profitability first, none of the rest is ever going to happen. Ever.

And when we talk about profitability we mean that all production that is produced is always profitable. Not just some of the time. Oil and gas commodities are price makers. These commodities react quickly and substantially to shortages and surpluses. What we need these startups to do is to do the rational thing of determining if a property is profitable, based on a detailed accurate accounting, it produces. If it is unprofitable then it will need to be shut-in which will incur what we call a “null” operation. No profit, but also no loss. Under the Preliminary Specifications decentralized production model all of the producers costs are variable. No production = no revenue, no royalties, no operating costs, no overhead, a null operation.

Existing producers seem to think that losing money on all of their production 75% of the time is acceptable. This is the culture of the industry. If you think you can change the culture of the industry, don’t count me in. Creative destruction is the tool that we are using to make this change. The existing producers have exercised the destruction part of the equation to a level that I didn’t expect was possible. They really made a mess of the place. Which makes our job easier and more exciting, so what are you doing?

The Preliminary Specification, our user community and service providers provide the dynamic, innovative, accountable and profitable oil and gas producer with the most profitable means of oil and gas operations. Setting the foundation for North America’s energy independence. 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.

Best Business Opportunity, Ever, Part IX

The choice that people have today is to participate in the development of a new startup oil and gas producer. With all the upside we documented yesterday. Or we can stick with the current producers and rehabilitate them into viable organizations once again. The question is, in ten years from now, which would be the better choice? By choosing the startup route the industry would fund its development during that time by the profits that the startup earns on production. We also know that by keeping with the status quo we will continue to depend on investors to provide the working capital for the industries survival. What are the other differences in terms of this choice that we have at hand? Which is the preferred route to take?

Choosing the startup route has implications for all of the people that are involved in the oil and gas industry. First we should all think of ourselves as investors in one of those startups even if we are unable to participate directly. Secondly People, Ideas & Objects have demands for software developers, administrators and accountants being reconfigured to accommodate these startup organizations. Our user community and service providers being business opportunities themselves that will depend on the entrepreneurial spirit of the people involved in those organizations. By realizing the best business opportunity, ever, we are providing for business, investment and employment opportunities that can only be described as substantial for all involved in the industry.

It's always difficult to determine when the last round of layoffs will occur in a downturn. Things look relatively more positive in the industry since Opec announced their agreement to limit production. I’m seeing a lot of premature declarations that the difficult times are over now and some claims suggesting that shale will make up any reductions that Opec undertake. Our current producers can’t, won’t and will not ever change their behavior or understand that they’re a large part of the problem regarding oversupply and overproduction. Resumption of standard operating procedures is the implied consequence of these comments. There has been plenty of opportunity to change in the past decade. Nothing has been considered, and I can assure you that nothing ever will. This is why creative destruction is such a critical difference to the performance of our society.

It may just be me but I see the implications of today’s losses and difficulties in oil and gas as being fatal to the current producers. They have suffered a terminal event. One in which they are unable to recover from without superhuman effort and skill over a sustained, extensive period of time. With massive investment. Their operations demand cash to operate and will continue to do so. They are unprofitable even though they have employed significant volumes of capital. They’re operated as if they are viable going concerns, however, due to accounting foolishness have never performed as such. This culture has been systemic for four decades and is responsible for the leaderships misunderstanding of performance and accountability. The significant event that has damaged these producers has been perceived as a minor bump in the road, with regular operations resuming soon. I see no change in the operation or outlook of these producers. They will exist in a cash deficient environment where selling assets and producing as much as possible are the only means to keep the lights on. Their destiny is to contract rapidly with the most successful being able to shrink their debts proportionately.

In terms of the startup, they will be establishing their firms on the basis of a different operating model. The Preliminary Specification focuses on real profits and not the artificial accounting profits of the past four decades. Purchasing assets from the current producers will enable them to establish themselves in the industry and build their organization through the deployment of their profits. They will be able to leverage themselves over the next decade with debt based on solid financial performance. Taking the opportunities that we discussed yesterday to purchase the existing producing infrastructure, the value proposition of People, Ideas & Objects Preliminary Specification and the upside as a result of achieving energy independence in North America. They will be able to grow quickly and profitably over the decade to position themselves as a producer that have the skills, capabilities, profitable operations and dynamic nature to approach the subsequent fifteen years as an established producer in the industry.

I think the choice is clear. What are you going to do, start a new oil and gas producer, or rehabilitate an existing one for ten years with massive capital infusions. After ten years you’ll probably be able to have the existing producer standing on its own by itself. And the opportunity to start a new oil and gas producer passed ten years ago. After a decade where the upside has been as promising as the best business opportunity, ever provides. I can assure you the startup will be the more dynamic, capable, profitable and larger firm.

The Preliminary Specification, our user community and service providers provide the dynamic, innovative, accountable and profitable oil and gas producer with the most profitable means of oil and gas operations. Setting the foundation for North America’s energy independence. 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. 

Best Business Opportunity, Ever, Part VIII

The competitive advantages of a newly created oil and gas startup are substantial. They include the ability to purchase the industries existing infrastructure of producing properties from the cash poor, failed producers of today. Realize the $25.7 to $45.7 trillion value proposition from using People, Ideas & Objects Preliminary Specification. Participate in the opportunity to further grow their firm based on achieving the overall objective of North American energy independence. Doing this in a manner in which all production will be profitable, based on an actual, detailed accounting of the property. Never before has such an opportunity been presented to those with the capabilities to participate in founding an oil and gas producer or making that investment in the startup. Now is the time to leverage these elements of value and to act to realize this opportunity for the next 25 years.

We should thank the current producers for messing things up so badly. Investors putting money into the current producers would have to be hell bent on losing it as quickly as they can. What upside is provided by an investment in one of these companies. The opportunity to line up with thousands of other investors if there were ever any dividends. Share any upside with so many investors that you end up with next to nothing! This of course assumes that the producer will have the good fortune to have “cash flow” to pay the interest and debt payments that are due. The history of the industry is that capital investments were always treated as a “sunk cost.” Not to be considered in the forward thinking decisions. While at the same time, the other hand was always stretched out taking the money that was raised in the most recent stock offering. They took the money but never wanted to account for it. Now, they have the legacy of billions of shares outstanding and debt so high that it's about to sink the ship. Leaving the only opportunity for the investors is to treat the existing producers as “sunk costs.”

The existing producers need cash. Flooding the marketplace with production is the easiest method to raise the cash that’s needed. The other method is to sell properties. There are a lot of desperate, cash hungry producers out there. The ability to purchase a property off of them at fire sale prices is rather easy. Just check their debt payment schedules and time your offer so that you will close the deal just before the debt payment is due. Guaranteed purchase. Investors are more interested in this due to the fact that the startups have no capital structure. They have no legacy of debt or history of an annual shareholder fleecing. Investors can take a controlling position in the firm and manage it in a way that avoids the difficulties that the industry is in today. Or, in other words, still have a controlling position in the producer in 25 years based on today’s initial investment! A startup oil and gas firm is a highly competitive offering to an investor in comparison to the existing producer.

Doing the same thing expecting different results is a sign of insanity. The startup oil and gas producer will therefore need to be using People, Ideas & Objects Preliminary Specification to operate their firm. Reestablishing the industry on the basis of profits. Real profits, not the fake ones the current producers have been reporting. As a result the startups will be the ones who are able to earn the value proposition that People, Ideas & Objects have identified. This value proposition is calculated to be in the range of $25.7 to $45.7 trillion over the next 25 years. The key element of this value proposition is our price maker strategy. Instead of dumping all of their production onto the commodity markets and watching the prices collapse for 75% of the time. The startups will have detailed and accurate accountings of each property. They will be able to determine which properties are profitable and which are not. Shutting-in the unprofitable properties which will remove the excess production from the commodity markets and the commodity prices will therefore find their marginal cost. The differences in commodity prices between these two methods of production, our price maker strategy vs. chronically overwhelming the marketplace, is the majority of our value proposition. Which is inherently understandable and logical to those who don’t manage a current producer.

Everyone can see the opportunity for North America to become energy independent in both oil and natural gas. Shale provides. There is no way that investors are going to fund a bankrupt industry with producers who don’t have a clue what a capital cost or a profit is. Expecting this industry to increase its throughput at investor's expense is a non starter. Energy independence has to be achieved on the basis of a profitable industry. It’s the only way. It’s really the only way to run an industry but that hasn’t happened in oil and gas for more than four decades. Expecting that the investment community that has supported all of the unprofitable activity in these past four decades, to continue and expand the throughput without profitability is about as ridiculous a notion as there is.

The Preliminary Specification, our user community and service providers provide the dynamic, innovative, accountable and profitable oil and gas producer with the most profitable means of oil and gas operations. Setting the foundation for North America’s energy independence. 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.