My Argument, Part XXX

Producers love to declare the value that they hold in oil and gas reserves. These numbers are what cause everyone to lose their minds, put their money down and watch it glow for decades on the balance sheet. Recently we saw Exxon having to take the value of their heavy oil investments off their reserves estimates. The cumulative $20 billion investment has added nothing of value to the firm and will be removed. To counter that disappointment we have two announcements from Exxon to mitigate the impact in the market. The first is the switch in their focus towards shale.

CHICAGO (Bloomberg) -- Exxon Mobil Corp. is trading in long-term projects that pump oil over decades for U.S. shale drilling that can be switched on or off as crude prices change.

To augment this new focus Exxon went out and purchased a shale producer that provides them with greater shale exposure. It has been described as the following.

When the transaction closes, Exxon’s Permian asset base will hold the equivalent of 6 Bbbl of crude, an asset that’s worth $324 billion at current oil prices. Wells drilled in the acquired area will generate “attractive returns” even if crude drops back down to $40/bbl, Exxon said when the deal was announced on Jan. 17.

Here we have evidence of the fact that producers hold out the ridiculous value proposition of determining barrels of reserves times the current price. Some might suggest that this is no different than People, Ideas & Objects publication of its value proposition of $25.7 to $45.7 trillion. I would assert that our value proposition is incremental value and is realized on top of the current cost structure of the industry. The statement of $324 billion assumes no costs and therefore is a distortion of the facts. A distortion due to the fact that the producer is unable to produce any oil and gas profitably at this time. Therefore this $324 billion will simply slip through Exxon’s fingers with no value being realized by the shareholders, etc. Note however, the bureaucrats will be fine.

It is the last part of the first Exxon quotation in this blog post that I also want to address. Their comment that “shale drilling that can be switched on or off as crude prices change.” Is there a belief in the marketplace that the producers will move to drill dynamically based on the prices realized? This has been the business model that has been in place for decades. It is a blunt and ineffective instrument. Scaling up capital expenditures in the good times, and scaling them down in troubled times. The difficulty with the current business model is that we only ever seem to be in difficult times. And that in no way is good enough.

Last week we saw the producers participate in the annual CERA conference. In contrast to last years mood producers were boasting their recovery and asserting that the Saudi’s and OPEC were in retreat from the shale producers. Based on the fourth quarter reports I certainly don’t see any recovery in the producers, the oil price might be marginally higher but still unable to cover the costs of production. And no one anywhere is profitable. Shale’s dynamics are pushing U.S. deliverability over 9 million barrels with the inevitable flood of oil on the horizon. North American producers believe they can compete with Saudi costs that include the societal costs of the Kingdom. I see that as an unfair comparison. Saudi production costs are negligible in comparison to shale. If the producers want to assert the costs of the Kingdom then they should adopt the cost of the U.S. debt and deficit as part of their cost structure to make it directly comparable.

I see a lot of deception in the marketplace. Producers are convincing themselves that they can compete and that they are financially capable. Neither are the case. Overproduction is increasing at a time when inventories are at record volumes. Positions in the futures market for further increases in the price of oil are also at records. These are all pointing to another steep decline in the price of oil as a result of the North American shale producers overproduction. This is not a tragic event, the bureaucrats will continue to get paid and that’s all that really matters. I’ve lost count of the number of times we’ve been through this cycle but it does seem to have a good rhythm.

Producers should be careful not to fall into the trap that has been laid for them by the Saudi’s. If they are seen as destroying the oil market in just a few months after a production sharing agreement is implemented. People won’t have difficulty in seeing who’s truly responsible for the poor oil and gas prices.

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. 

Short Break

No posting today or tomorrow, returning Monday.

My Argument, Part XXIX

Through the Preliminary Specification we fundamentally transform the way in which oil and gas is operated. Shifting to identify and support the Joint Operating Committee as the key organizational construct we introduce new dynamics into the industry. The compliance and governance frameworks of the hierarchy are moved from what we call the existing corporate model to align with the Joint Operating Committees legal, financial, operational decision making, cultural, communication, strategic and innovation frameworks. This alignment achieves a speed, innovativeness, accountability and profitability in the oil and gas producers that use the People, Ideas & Objects Preliminary Specification.

Moving away from the corporate model will allow the producer to focus on the business of the property. Today the corporate model is constrained by the compliance and governance of regulatory, tax and accounting requirements as opposed to the business of the business. Drilling wells for the sake of drilling wells is the old business model. Each property must be evaluated each month to ensure that it is profitable in the current commodity price environment and cost structure. If it is not, then the property needs to be shut-in and looked at from the point of view of how its profitability can be enhanced by increasing its throughput, lowering its costs or expanding its reserves and returning it to profitable production. It will be through these individual decisions being made independently at each property based on actual accounting information, each month that will remove the overproduction and oversupply from the commodity markets. And allow the commodity prices to find their marginal cost.

In People, Ideas & Objects system the producers are reorganized to focus on their key competitive advantages of their earth science and engineering capabilities, and their land and asset base. The producers C class executives, the earth science and engineering resources, some land and legal, and support staff remain at the producer on a full time basis. The remainder of the accounting and administrative resources are reorganized into service providers who focus on one process or subprocess and apply it across their client base which consists of all the producers in the industry. It is in this way that they can specialize and divide the labor within the industry in order to expand the capacities and capabilities of the administrative and accounting of the industry.

The industry itself takes on unique organizational changes as a result of implementing the Preliminary Specification. These changes begin with the software development capabilities of People, Ideas & Objects. Software is a critical competitive enabler in all industries. By using software, organizations seal their structures in cement. Disabling them from making any change to accommodate any inevitable business change. Therefore, a permanent software development capability is a key competitive advantage that the oil and gas industry will inherit from People, Ideas & Objects by using the Preliminary Specification. Software today also needs to be user driven in order to ensure that it addresses the needs of the people using the software. The Preliminary Specification is user community based software developments. Our approach to this element of software quality is reflected in our user community vision. A vision that spells out that our users have the power and capabilities to drive the changes that are necessary in the industry.

The service providers mentioned before are a critical aspect of enabling the producers to achieve the most profitable means of oil and gas operations. If a property is shut-in due to it being uneconomic, no data is generated that month and therefore no triggering event will occur in our task and transfer network of the Preliminary Specification. And none of the service providers will therefore have any work to do with that property for the month that it’s shut-in. As a result the producer records a null event. No profit, but also no loss. There will be no revenue, royalties, operations or any overhead costs for that month. No production accounting people, no office space, or printer paper, etc. And therefore the producers profitable properties will no longer be diluted by unprofitable operations. The overhead burden of the oil and gas industry will have shifted from the industry itself to the service providers. Who understand that at anytime they may be subject to a 15% decline in their revenues. Assuming a 15% decline in the industries production profile. Something that they can budget for on an annual basis.

In a world where overproduction and oversupply in North America are the key issues in oil and gas. And the abundance brought about by shale will continue these trends for the long term. This thinking of People, Ideas & Objects is considered by producers to be unreasonable and crazy. You don’t have to be crazy to do my job, but I’ve found it to be a strategic competitive advantage. The damage that has been done in oil and gas is complete. I can’t see how the industry can continue without the changes that have been mentioned here. There is a challenging and opportune future ahead of us and the first thing we need to do is to organize ourselves to ensure that the value to society is realized by all concerned. The producers, investors, governments, royalty holders, employees and service industry representatives. These groups capture the scope of those stakeholders in society. They’ve gone on long enough without benefiting from oil and gas. Its time the bureaucrats stopped gorging only themselves at the trough and let the value flow to these stakeholders.

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.

My Argument, Part XXVIII

There has been a dramatic deterioration in the cash flow of each of the producers during this past year. That would seem to be the natural case with the very low commodity prices at the early part of 2016. However the fourth quarter did not seem to remedy the situation at any of the producers I reviewed. $4 natural gas and $53 oil were some of the healthiest prices that were realized in the past number of years. I think our proposed solution to the industries ailes is the correct remedy. A three fold revenue increase is the only thing that will solve the financial difficulties of any of the producers that I’ve seen. The only way in which to do that is to implement People, Ideas & Objects Preliminary Specifications decentralized production model and price maker strategy. Then producers will only produce profitable oil and gas and generate the cash flow to fund their operations.

We see continued resistance to this position in the industry. Bureaucrats do not believe that they have any impact on the prices of the commodities that they produce. Their actions are not part of the problem and therefore can’t be part of the solution. This is just a capitulation of responsibility and avoidance of the difficult task of implementing the Preliminary Specification. Bureaucrats know that they can’t fight the situation forever and they have no plans to do so. They’re involved in a limited engagement with People, Ideas & Objects to ensure that they maximize their personal revenues from the industry before they begin their mass migration out.

So whether it is the “jarring gong of self preservation” that everyone hears that precipitates the necessary actions to fix the industry. The bureaucrats migrate out. Or the investors express their frustration with their investments poor performance by acting to correct these issues. It will be one of these three scenarios that will be the manner in which the necessary changes are made in the industry. Oil and gas has carried on for far too long with its “muddle along” strategy. Things have changed fundamentally with the development of shale. The business model of the current producers is incapable of dealing with the abundance of the resources that are available through shale reservoirs. The commodity markets are overwhelmed by the volumes of reserves of oil and natural gas. They are overwhelmed by the volumes in inventory and the production that is presented each and every day. Producers don’t discuss these points, they just continue to overproduce and drill for more.

There is now mention in the markets that the Saudi’s will be changing their production strategy once they’ve completed the IPO of Saudi Aramco. Moving back to full production for the long term. This flooding of the markets is consistent with the thinking of BP’s Chief economist who said that only mid-east producers would be profitable in the abundant, oversupplied oil markets. And this would be the case until 2050. If North American producers were smart they would circumvent the Saudi’s motivation to do this while they still have the ability to materially impact prices in both oil and natural gas. If mid-east producers just flood the market until 2050, will there be any opportunity to implement the price maker strategy? Producers should ask their investors if they want to take that path with them. There will come a time when all solutions fail to solve this problem for the North American producer.

The bureaucrats will have moved on by then so you should be careful who you ask. Is it wise to have North America unprofitably produce oil and gas for the next generation? I don’t think so and that is why I think it’s very important that we implement the Preliminary Specification in the industry as soon as possible. The past generation produced oil and gas unprofitably and look at the disaster that 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. 

My Argument, Part XXVII

If it is that we are to hobble along paying one screaming, nasty creditor after another. Spend our time on the phone trying to convince people to give us another chance, to support the firm in its hour of need. Ask employees to do a bit more each week. Camping out at the bank. Selling the next in an never ending parade of crown jewel properties to keep afloat. Then oil and gas is doing all that we could ever have expected of it. When the operational problems arise or the pipelines leak, then those unfortunate producers can show the world those skills and capabilities that’ve been so well honed over the past years and troubleshoot the problem with a package of Band Aid brand bandages. We all know they’re that good. But lets look at the bigger picture.

The opportunities and issues that we face in the next 25 years will be the greatest this industry has ever faced. Hobbling along with our muddle along strategy is the vision that the industry has put forward to meet these challenges. That’s not good enough. The investors and bankers who have seen their investments in the producers themselves perform very poorly will no doubt reconsider their investments. This reconsideration is different than looking up the price of the stock on the exchange. That is not how you evaluate the investment in the producer. In most cases the book value of the producers interest is nothing. Their investments have been eroded away by the chronic losses and the apathy of the bureaucrats. Bank and bond holders have taken the hit in terms of settling at less than face value on their investments.

Expecting these people to then step up and fund the next round of $20 to $40 trillion in investment over the next 25 years will be laughed at. The industry doesn’t have the performance necessary, or the integrity to ask for that. Besides the expectation that that volume of money would be available is ridiculous on its face. What the industry needs to do is to change its business model to the Preliminary Specification and begin the self funding that most businesses do. A business model that also recognizes that shale has changed the industry from one based on scarcity of the resource to one in which there is an abundance of the resource. The reliance on investment capital to provide consumers with a subsidy on their energy consumption is over. The producers are broke. Bureaucrats have fundamentally run the business into the ground. This being the beginning of what should be the industry's golden years.

As with every industry the forces of creative destruction are at work. Eventually all industries fail to produce any value from the business model that they employ. During the downturn in 2008 GM was clearly failing in the marketplace. Something that it had been doing since the Japanese began introducing vehicles in the 1970’s. Until the investors saw the whole in their portfolios did anyone do anything about it. And I’m not holding GM out as an example of productive creative destruction, clearly the firm needs more work. However the signalling event then, as it was with the banking crisis, was when the banks and investors were feeling the pain from their investments. Pain that was in excess of what their financial statements could handle.

As much as the oil and gas bureaucrats like to point to the reserves in the ground as the intrinsic value of the firm. They are worthless to anyone if they can’t be produced profitably. Currently the book value of the industry, based on all the financial statements of the producers is $0.00. The industry chronically loses money and demands cash in large quantities just to produce. This is in sharp contrast to the values represented on the exchanges for each individual producer. This variance will be corrected in the short term. And when the investors are presented with the fact that these bureaucrats have destroyed the industry, have no plans to undertake these golden years of opportunity and are demanding more money just to produce, then we may see the final act of the industry as it stands today.

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. 

Third Friday Off

No posting today.

My Argument, Part XXVI

Over the past few decades it would be a fair question to ask, who’s been winning and who’s lost in the oil and gas industry. It’s difficult to see how anyone outside of the bureaucrats that run the producers can categorize their time, money and efforts over these past few decades as a success. Society in general has to realize the costs of the unemployed in oil and gas and the service industry. The loss in tax revenues from profitable operations and the royalties that would be paid if the products received fair value. The investors and bankers have seen the investment that they’ve made in the producers produce little to nothing in terms of value. No producer has performed in terms of their accounting. Their stocks may be high at present, but those have nothing to do with the value that is being generated by the producer. They are for all intents and purposes a different market. One which could collapse itself. And certainly the people who work in the industry have either been laid off or are having to make up for those that are no longer there. They wouldn’t count themselves on the winning side I’m sure.

The brokerage houses must have inventories of producers stocks that they’re trying to offload onto unsuspecting victims. I read an article yesterday stating how good a job Chesapeake had done and the glowing commentary had little to do with the facts of the firm. These comments coming the day before the producer would be publishing their fourth quarter results. Why would they comment the day before? Wouldn’t they be best served by waiting for the facts and provide their clients with those? Or were they thinking that the stock was going to be hit as a result of the inevitable poor quarter’s performance. Chesapeake has no money, no working capital, no cash flow, debts everywhere, and have lost $19 billion in 2015 and $3.9 so far in 2016. That’s a $3.9 billion loss on $5.8 billion in revenues. Results will be out soon after the posting of this blog post. Maybe the key factor when evaluating Chesapeake is that it’s 70% institutionally owned and some of those institutional investors are nervous.

As bad as the situation is in the United States you haven’t seen anything until you focus on the producers north of the border. Canada has much less “rigorous’ accounting requirements for producers. What you see in the U.S. is a reasonable, factual tale being presented based on the SEC requirements of Full Cost or Successful Efforts. The difficulty that I have is that producers have been reaching the limit of the ceiling test almost each and every fiscal year. The capitalization of any and all costs being the issue. In Canada you have to believe in unicorns in order to interpret the accounting. Cenovus, as an example, reported a profit for the fourth quarter. This as a result of negative depletion. Now I understand that this is possible, however, the company has outsized assets that will take 8.79 years to fully deplete at that rate. This is unreasonable. The CEO was also claiming in the text that cash flow was so strong that it funded capital expenditures and the dividends. This Cenovus categorically did not do.

Acceptance of this level of destruction throughout the industry is difficult. Acceptance of this level of misrepresentation is disheartening. What is going on in the industry? Lipstick on a pig? We were all led to believe that the difficulties in natural gas were about to expire and the industry would rebound. This “market rebalancing” being what has been expected since at least 2010. Natural gas prices were at almost $4 and have lately collapsed, once again, into the $2.60 range and are certainly headed lower at the speed and trajectory their taking. Oil inventories continue to build despite OPEC’s production cuts. North American producers have been increasing field activity and it may not be too long before we see declines in the oil markets. All as a result of overproduction and oversupply. Were we not just at this point six months ago?

The industry continues to swirl around the drain. 2016 is much worse than 2015. Prospects look very dim to me unless we obtain the three fold revenue increase these producers need. There is no discussion of the difficulties in the industry. Producers have their blinders on and only see their tiny part of the world and are unable to grasp the larger picture. Saying things are great isn’t going to make it so. This Ostrich like act is only leading to additional problems down the road as those who were in the industry are seeing less and less opportunity in the future, and are more motivated to get out of the industry permanently. We are not being productive but destructive. The forces of creative destruction are in operation throughout the industry. This is not a changing environment as much as the bureaucrats make it out to be. We will continue to cycle downwards until such time as we take control of the situation and that requires that the industry adopt 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. 

My Argument, Part XXV

If we have no hope of ever producing oil or gas profitably, what are we doing? Producers believe that all of their value is represented in the reserves of oil and gas that they hold. At current prices they’re worth billions of dollars. What isn’t discussed anywhere in the industry, other than at People, Ideas & Objects, is that those reserves are not produced profitably. Never have been and never will be. Not under the current business model. It is flawed and only serves the bureaucrats who operate the industry on the basis that they know people will believe the value they create is in the ground. Unseen and unrealized. This is not a business. A business generates value. Oil and gas has destroyed the investments that have been made in the producers through faulty accounting and bureaucratic mischief. If the value that was represented in the reserves existed as is represented, then the industry would not be subject to these downturns or to the financial disaster that it’s in. Where is the value when the producer always has their hands out for more investment capital and is subject to the ups and downs of the commodity prices?

Cost estimates for the rebuilding and refurbishing of the industry and infrastructure are estimated in the $20 to $40 trillion range over the next 25 years. Are investors expected to line up, invest their money and marvel at it in the ground? The only manner in which the reserves in the ground have any value is on the basis that they can be produced profitably. If they can’t be produced profitably then they’re a drain on the cash of the owner of those reserves or more specifically its investors. Who wants to own that? And if the industry needs that much capital on a go forward basis, I believe, it needs to fund those capital expenditures from the value of those reserves sitting in the ground. And that means they have to be profitable to generate the cash to fuel that investment. Otherwise we are running a scam and kidding ourselves thinking that the money can come from somewhere else. Fools trying to scam innocent shareholders into a failed business model that has proven itself an abject failure.

There I go again. One would think I would be more successful in securing our budget if I didn’t call out the people who are responsible in this industry. You’re probably correct. The damage I see however is complete. And maybe I’m wrong, but I don’t think so. The people who are responsible for this level of damage don’t deserve the respect of anyone. They have deceived and misrepresented the situation and are actively doing it again. They have no plans or discussion about what to do or where to do it. It’s shake the furniture cushions once more and spend the money. It’s not a business, it’s a scam whose purpose is to enrich the bureaucrats and I’ve detailed how they account for their spending. When we see critical comments and news from opposite corners of the industry. Where BP’s Chief Economist says no one can make any money until 2050, where Exxon is concerned they will never earn any money in the oil sands and Lexin Resources operational capabilities have degraded due to financial difficulties to the point where regulators have to take them over, we know the pain is being felt everywhere and by everyone. Pain as a result of the overproduction from overinvestment as a result of over reported profits from faulty accounting. It's time for a new business model such as the Preliminary Specification.

If Exxon was really concerned about the profitability of the oil sands they would do something about it. They don't, they just announce that it won’t be profitable, ever, and that’s that. No one cares in this business. If they did I would have been funded a long time ago. Instead the only treatment I’ve received is repeated visits out back by the dumpster for another round with the baseball bats. They’ve done everything they could to try and silence me and will continue to do so. It’s not that I am unknown in this business, it’s that I am a nuisance. As I’ve stated before, the situation is untenable from the bureaucrats perspective. They're just milking the last few nickels and quarters out of the firms before they parachute out into oblivion and anonymity. Leaving the mess for others to clean up. Or, the lofty prices of the stocks of these producers will fall when the oil price declines. Which would then trigger the bureaucrats migration. Either way we have serious issue on hand.

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. 

My Argument, Part XXIV

Late last week we had a number of announcements that fall outside of what a healthy industry would be involved in. On Thursday an Alberta regulator suspended licenses of Lexin Resources Ltd citing “Lexin has failed to comply with multiple orders, lacks sufficient staff to manage its 1600 sites…” Noting the company was in default on its obligations for site reclamation and other requirements. Reading some of the information about Lexin, the regulators were getting calls from residents in the area that equipment was disappearing. Upon questioning Lexin, they noted the equipment was sold. Lexin were also unable to source any resources from the service industry without first receiving payment. The service industry has been abused by the producers so badly in this downturn. I’m sure the service industry can only dream of the days when the producers just called them lazy and greedy, but at least paid the bills. Our Resource Marketplace module deals with the issues here. Producers should be ashamed of themselves in how they’ve treated the service industry throughout the 21st century. Bureaucrats at Lexin can now congratulate themselves on a job well done and most definitely know now that they withdrew all of the value out of the company. The second interesting piece of news was speculation of an upcoming Exxon announcement that…

In a signal that the threat is growing more serious, Exxon Mobil Corp. (XOM) is expected in the coming week to disclose that as much as 3.6 billion barrels of oil that it planned to produce in Canada in the next few decades is no longer profitable to extract.

The acknowledgment by Exxon, after the company spent about $20 billion to put the oil sands at the center of its growth plans, highlights how dramatically expectations have changed about the future prospects of the region.

I guess the point would be then to just walk away. Again the bureaucrats have done what they could to extract all the value they could for themselves and now have no plans or use for the properties. I think that they should find a new business model, one that’s based on the Joint Operating Committee and defined as the Preliminary Specification which would put the properties back in the black. A business model that provides the oil and gas producers with the most profitable means of oil and gas operations. The capitulation of a $20 billion investment is not unlike what I see throughout the industry. There is no accountability or desire to do anything. Who cares? It’s at best an engineering exercise to build the biggest and best plants that you can imagine, better than your neighbours, run it until the bureaucrats can’t make themselves anymore money and wait for the regulators to take it over. That’s the oil and gas business.

Drilling rig increases continue on their upward trajectory in North America. Activity is the name of the game here. You must be doing something in order for the investors to believe in the scam. Another 10 rigs this week, but this time it’s different, this time the producers say they have “discipline” and won’t destroy the commodity market prices. I see the price of oil falling as a result of the upward trajectory in rigs. It won’t take to much more to convince the market that the real issue is the North American producers and their bad business behaviour causing all the commodity price difficulties. Who will the producers blame then? OPEC have shifted the focus to where the issue lies and people will see that.

Going back to what BP’s Chief Economist stated a few weeks ago about none of the production outside of the middle east being profitable until 2050. The question that I would have is, if more drilling is being done, but none of it is expected to be commercially viable until 2050, why? The answer is because this has never been an economic exercise. This is a scam so that the bureaucrats can live the good life. Some like Exxon were not so involved, at least they’re being honest about it. Others like Lexin’s bureaucrats are now unknown and unknowable.

Who’s that idiot that’s been jumping up and down for the past decade or so. Screaming about profits in the oil and gas industry. Everyone sure had a good laugh about him haven’t they. I seek to please my audience at all times and I’m glad you’ve enjoyed the show. The seriousness of the issue maybe coming into focus for some. The next six months will not be positive in my estimation as I’ve heard that “jarring gong” of self preservation in late 2016. As more and more people hear it, I hope they’ll find the opportunity that exists for those that feel that they can make a difference. There is more opportunity here at People, Ideas & Objects, working to correct this mess, and to build a better industry.

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. 

Alberta Family and President's Day

No posting today.