Something for Everyone, Part II

As a service provider you would have in the range of $6.67 to $10 million in annual revenues. These revenues would be generated by providing People, Ideas & Objects software and your services to the oil and gas industry as a whole. You would also have the incidental, part-time, income from the work that you would do with the People, Ideas & Objects software developers as a user community member. This part-time income would also be a permanent source of revenue as we are a change based software development capability provided to the dynamic, innovative, accountable and profitable oil and gas producers. Therefore you would have a team of 20 to 30 individuals, on average, who would be managing the process that you were responsible for. It will be your focus on the specific process that you manage that provides the quality service to the oil and gas producers. You will have the ability, as a member of the user community, to make the changes to how and what that process is, and the way that it is managed by the People, Ideas & Objects software. Therefore you will be able to continually iterate the way in which your process is managed and the services and software that you deliver to your industry clients.

Your field of competitive advantages are many and far more diverse than what are available today. Certainly technical capabilities and industry understanding will be features of your service provider offering. However there will be much more. Automation will be a key part of your tool set. Through your work as a user community member you will be able to move more of the process to an automated process. This may concern people that jobs will be lost in the industry as a result, just as this concern was raised when computers were introduced in the 1960’s. We are focusing on the work that humans do best in these processes, the leadership, issue identification and resolution, decision making, creativity, collaboration, research, idea generation, design, planning, thinking, negotiating, compromising and innovating. And leaving the storage and processing to the computers. This will open new areas of opportunity to build value for the oil and gas producers and increase the quality of your service provider offering.

All economic development is a result of the expansion of specialization and the division of labor. For the industry to achieve energy independence we will need to increase our capacity and capabilities from the same resource base. Therefore to achieve that higher level of industry throughput, service providers will have to develop ways to increase their throughput through the application of specialization and the division of labor. It will be these tools that will become the competitive environment that exists between the service providers. If for example you are licensed for the lease rental payment process, you will be the exclusive provider of lease rental payments. There will be no other service provider that comes in and undercuts your pricing or offering as a result of the manner in which the Intellectual Property is developed and distributed in the user community and service providers. That process that you manage will be your domain exclusively and the means in which you will compete with other service providers is through iterative levels of automation, specialization and the division of labor.

Review of our user community vision is a worthwhile reread at this time. The combination of user community member and service provider is the means in which the industry moves forward. Each service provider actively moving their process forward into areas where we can’t imagine at this point in time. This won’t be a mindless application of going through a mountain of data each month. The processes that will be managed by the service providers will become highly scientific and determine new and quality information that is otherwise unknown today. All the while enabling the dynamic, innovative, accountable and profitable oil and gas producer to produce only profitable production through our decentralized production model. Only as a result of the service providers existence.

Granting of the service provider licenses will be based on the performance of the individual user community members. In some cases service providers may have multiple user community members. And user community members may have multiple interests in several service providers. These will be assessed based on the outcome of the software’s process management requirements and the participation of the user community members during our initial developments. The key at this point is to submit your application for the user community.

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. 

Something for Everyone, Part I

How People, Ideas & Objects and our user community propose that we rebuild, refurbish and develop the oil and gas industry to achieve energy independence is through profitability. That is the key part of our 25 year plan and our $25.7 to $45.7 trillion value proposition. If the oil and gas reserves in the ground are as valuable as they’re represented to be, then they should be leveraged profitably to fund these needs. The investors in the oil and gas producers have had enough with the dismal performance to date. Expecting investors to now generate the additional $20 to $40 trillion in future capital investment is beyond their capabilities and capacities, and most certainly beyond their desires. If the investors did fund these capital requirements, and based on the producer's current and past performance, how would these investors prosper?

As a practical matter then the Preliminary Specification is the industry's first step to move down this road where profitability fuels the industry. We can then organise ourselves in a manner in which only profitable production is produced in North America at anytime in the next 25 years. Leveraging the investors installed base of investment in the existing reservoirs profitably. Providing them with the long awaited return on that investment, payoff the debts of the producer firms, and fund the capital expenditures that we noted in the first part of this post. That is our plan.

Our plan involves the development of our software that we’ve defined as the Preliminary Specification. People, Ideas & Objects, our user community and service providers are commencing developments of our software on September 25, 2017. What we need from industry is our first years development budget of $100 million and the securing of our complete budget by September 2018. We also need their active participation with our user community. Expressing to the user community what and how it is they do their work. Software developments only provide value to those who actively participate. You only get out what you put in. This by necessity will have to be an industry wide initiative.

Producer firms who may consider letting others do the heavy lifting are mistaken. Coming in to use the software and services after the software has been built will be too late for your firm to benefit. By then those that will have participated in our development will be on a different performance trajectory and I would seriously question the producers ability to bridge the ever growing gap in their performance. Did the record store manager ever respond to iTunes, or Nokia to the iPhone? What makes you think that deferring your participation in the development of the Preliminary Specification will enhance your position?

The reality is that Information Technology is changing every industry on the planet. New business models are replacing ones that no longer perform. Software defines and supports the organisation and the industry. To make any change in the makeup of the industry will require that we develop the software first. Why wouldn't you need to be a part of that?

And for the community of people who would be interested in participation in our user community. We believe at this time that this community will number about 3,000 individuals. Subsequent to our initial developments these user community participants will form the service providers organisations that deliver our software and their services to the dynamic, innovative, accountable and profitable oil and gas producers. These will be replacements to the existing producers accounting and administrative capabilities. These are therefore substantial business opportunities for that community. I expect this newly defined sub-industry will have annual revenues in the region of $20 to $30 billion per year. An average of $6.67 to $10 million to each service provider. Each user community participant / service provider will focus on one process and manage that process for the entire industry based on the vision of the Preliminary Specification. Please proceed quickly with your applications for consideration for our September 25, 2017 start date.

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. 

Battle Lines Being Drawn

Al-Falih, in a clear message to the U.S. industry, said it would be "wishful thinking" to expect that Saudi Arabia and OPEC "will underwrite the investments of others at our own expense" through production cuts.

Clearly, in the mind of the North American producer, OPEC exists to accommodate them. The precision planning undertaken by these producers to make OPEC do exactly what they wanted them to do is impressive. So what’s the plan now? Maybe they could exert this mind control over the Chinese and have their people consume twice as much energy. The sky's the limit really. People say I should cut these producers a break and maybe they’ll fund the project. If the producers only deal with people who kiss their feet we may have identified another critical issue in the industry. Kissing the bureaucrats feet only generates an industry full of blind sleepwalking agents of whomever would feed them. My aim is at the bureaucrats who in a self serving manner have destroyed the producers and the industry.

Oil prices fell on news of the renewed OPEC agreement. Primarily as a result of the phenomenon of “buy on the rumor, sell on the news” and the reduction of the OPEC production doesn’t deal with the real overproduction and oversupply issue, the North American shale producers. Of course with producers only mirroring the commodity prices, all of their stocks were down too. Leading one to ask if investors might be better off just trading in the commodity? It used to be the belief in management that managers added value in up and down markets. But these rules don’t apply to oil and gas bureaucrats.

The reason producers are able to survive in such a difficult financial environment is because oil and gas is a capital intensive industry. Where the return of capital from operations is being diverted to fuel the bureaucrats pocket book and keep the lights on. That may be the primary point that the investors are trying to express to the producers. That although they have capital discipline and judiciously spend the money that is raised through stock issuances and banking, the return of that capital from operations are directed towards lining the pockets of the bureaucrats. Now that the investors and bankers don’t support the industry with new capital, there is a critical cash crisis. Producers should ask themselves why in the world would this happen?

I used to believe that our appeal to the oil and gas investors would have them direct their oil and gas producer firms to develop the Preliminary Specification. I’ve changed my thinking on that. I now think that the oil and gas producers are going to have to deal with their problems constructively before they receive the focus and attention of their investors again. Their investors continue to own the producer firms, and as noted here earlier, with the diversion of cash flow to the bureaucrats, these producers are not going to go out of business, they are the walking dead. Therefore investors will continue to hold their financial interest and not invest any more cash into the industry. Putting more money in will only waste financial resources, dilute their current interests, and provide no one, other than bureaucrats, with any upside. Therefore it’s up to the producers to act to develop the Preliminary Specification in order to set the industry right before any investors show any interest.

Information Technology is disintermediating every industry on the planet. Oil and gas is not immune. The Preliminary Specification eliminates the bureaucracy from the scene and they chose in 2004 to begin our sessions with the baseball bats. Things were really good in the industry in 2004. When I began saying that we provided the most profitable means of oil and gas operations these bureaucrats laughed and said no one in the industry is concerned about profits, its cash flow. It would seem in 2017 that profits have become the issue. The producer's problem is that they may be profitable, but they’re fake profits as they don’t have any cash and their companies are consuming cash at phenomenal rates. So much for cash flow too. With investors on strike, the only source of cash is new production and they can’t get enough. Which of course leads to more of the overall problem.

People, Ideas & Objects, our user community and service providers have chosen to do something about all of this. I find it great sport pointing out the deficiencies of the bureaucrats. However, if we’re sitting here complaining about the bureaucrats a year from now then we’re no better than them because we won’t have done anything either. We have a plan to solve this through the Preliminary Specification and a start date for our software developments of September 25, 2017. As we’ve noted above, the producers are going to continue as the walking dead and as a result the bureaucrats know that their franchise is safe for the next few decades. Therefore it will be interesting to see how this log jam gets broken. Someone needs to fund our first years development costs of $100 million. With follow on financing of our entire budget. I’ve drawn the battle lines, which side are you on?

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. 

Memorial Day

No posting today.

What's in a Name

People, Ideas & Objects is a bit different in terms of a name for a company. The explanation of how I came about this name might provide you with some insight into our priorities and focus. In 2001 Professor Paul Romer published his economic New Growth Theory. It suggests that economic growth in the future will not occur as a result of the traditional increases in capital and labor, but through People, Ideas and Things. We as object based software developers made the change from Things to Objects to reflect that our focus was on economic growth through People, Ideas & Objects. In the abstract of Professor Romer’s paper he notes a particularly interesting point that we should take into consideration regarding our development start date.

Societies that generate and tolerate new ideas, and that continuously adapt to changing economic and technological circumstances are a precondition to sustained economic growth.

This makes People, Ideas & Objects user community, the way that it is constructed, critical to the success of the oil and gas industry. And why our September 25, 2017 start date is important for those potential user community members to be working on their applications. This point is also the basis of my commitment to user community ERP systems development in oil and gas. We will not build software without the involvement and direction of the user community. Our software and services quality is represented in the ability of the user community to provide the oil and gas producer with the most profitables means of oil and gas operations. And to do so by moving producers forward economically. There is no more important role, in my opinion, than what the user community will hold in both our software developments and the oil and gas industry.

It is the user communities strategic competitive advantages that come to mind. The producer firms are currently burdened with developing accounting and administrative capabilities. None of these capabilities provide any incremental value to the producer. They are necessary as a result of compliance and governance, and mostly regulations. Whereas our user community will be able to provide a replacement to these capabilities as part of their strategic competitive advantages. That will be their business offering and they will be able to provide these in the most innovative and valuable way that they can. And as a result of the configuration of the user community, and the configuration of their service provider organizations, they will enable the price maker strategy of the Preliminary Specification for the oil and gas industry. A substantial value proposition for the oil and gas industry.

When was the last time that accounting and administration was discussed from the point of view of strategic competitive advantage, value propositions, economic growth and dynamic change. That is what we are able to provide the dynamic, innovative, accountable and profitable oil and gas producer. With your participation in the user community this will be our future in the oil and gas industry. The process of completing your application is the beginning of that future. It’s that simple.

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. 

T Minus Four Months and Counting

We began our 26th year earlier this month, now we look forward to the developments of the Preliminary Specification on September 25, 2017. Potential members of our user community should complete their applications and submit them before this date in order to be considered in this first years development. We are looking for a total of 100 people to make up 33 man years of effort in this first year. User community participation is always a part-time paid position. However the majority of the time spent and revenue that a user community member will generate will be through the service provider organizations that they develop to meet the needs of the oil and gas industry. These are substantial business opportunities, in my opinion. As the service providers are the replacements to the current accounting and administrative capabilities of the individual producers. Producers will have limited if any accounting or administrative resources employed within each of their firms under the Preliminary Specification. Instead they will engage with the service providers to manage their processes. Service providers in turn will use specialization and the division of labor, automation, innovation based on administrative or accounting expertise, making computers work for us and quality as their key competitive advantages. Managing one process, and only one process, service providers will administer that process across the entire industries data set.

In none of the annual reports or quarterlies that I’ve reviewed over the past decades, has any producer mentioned that accounting or administration were their key competitive advantages. The dynamic, innovative, accountable and profitable oil and gas producers key competitive advantages are their land and asset base, and their earth science and engineering capabilities. The closer they move to a strict interpretation of this division of labor the more focused they’ll be, and the more variable their cost base will be. The Preliminary Specifications takes all of the producers overhead costs and makes them variable costs that are accessed from an industry wide capability. No longer will each producer have to generate accounting and administrative capabilities in-house that are fixed in terms of costs, unshareable and replicated within each individual producer firm. This reorganization under the Preliminary Specification allows for an enhanced profitability across the industry.

This industry based, variable accounting and administrative capability of the service providers enables the price maker strategy of the Preliminary Specification. Each service provider assesses the Joint Operating Committee for their service fee. Not the producer itself. Therefore when the producer finds that a property is unprofitable and shuts in that property no information will be generated as a result in our task and transfer system, our system that drives the service providers. As a result no work will be done by any of the service providers and as a result no invoices will be sent to the Joint Operating Committee. Enabling that property to record a null operation. No revenues, royalties, operations or overheads. No profit but also no loss, a null operation. Therefore the producers profitability is maximized due to the losses on operations are no longer diluting the profitable properties, as they do today. The marginal production has been removed from the commodity markets, enabling the oil and gas prices to increase. The reserves are saved for the day in which they can be produced profitably and those reserves costs will remain constant as none of the losses that otherwise would of occurred would be added to the reserves cost base.

People, Ideas & Objects user community is the critical source of quality for our offering. The user community is endowed with significant and substantial power to affect change within the oil and gas industry. This is not your grandfather's user community. They will be the ones that our software developers work for. We are blind, deaf and dumb to anything and everyone else. The user community is also in complete control of the Intellectual Property that makes up the Preliminary Specification and its derivative works. As a result of these two key components, significant power is attained by them to ensure that they are not blind sleeping walking agents of whomever will feed them. And are able to develop and direct the changes that the oil and gas producers need in order to ensure that their future issues and opportunities are addressed. We do not want to lock the industry into the Preliminary Specifications business model permanently if there are better ways in which to manage the industry. Review of People, Ideas & Objects Revenue Model shows that we are change oriented software developers. That is how we generate our revenues. Through the changes that are initiated by the user community. If you want change based, user community driven ERP systems in the oil and gas industry, what are waiting for?

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. 

Some Deep Soul Searching

The solution to this chronic industry malaise is for the producers to jump on board the People, Ideas & Objects, user community and service providers software developments. These are beginning September 25, 2017 with the initial $100 million in funds that will be sourced from the producers. Enough to fuel our first years developments. If the bureaucrats believed that I would be nice to them after they’ve destroyed the industry to such an extent, then they’d be mistaken. I have many competitors that would tell them all the sweet nothings that their losing propositions have mythically obtained. If bureaucrats take what I’m saying personally then they’re being unreasonable. I have tried to solve this problem for 26 years now and received nothing but a repeated and frequent disciplining with their baseball bats. If they want to fix their business this is the place in which to do so. The question they need to ask themselves is, if they undertake to build the Preliminary Specification will the investors see that as the beginning of a new industry in which they would be interested in investing in? Breaking the log jam of the investors non-participation these past number of years. Their investor's concern is regarding the commercial viability of shale reservoirs. Producers financial statements are showing that the industry is not commercially viable and as a result investors are on strike. Creating the critical cash shortfall all producers are experiencing.

Within the first year of our software developments, and well before September 2018, producers will need to fund People, Ideas & Objects entire development budget. Stopping and starting is not an option, there is only stopping and failing. User community participants need to see that the producers themselves can take the actions necessary to resolve their problems by funding our full budget. There is no other way in which these overproduction and oversupply, and unprofitability issues will be resolved. We should also be concerned with the short attention span of the producers. If the marketplace should happen to temporarily improve this may lead some bureaucrats to believe the follow on financing of People, Ideas & Objects et al is not necessary. This lack of follow on financing would be a critical and fatal mistake and something that I would point out now to the oil and gas investors.

And what’s in it for the producer to follow our recommended course of action. People, Ideas & Objects, our user community and service providers provide the oil and gas producer with the most profitable means of oil and gas operations. We do this with our business model as defined here. Our software defines and supports a reorganization of the industry and the producers to operate a new business model that deals with today's issues. Our value proposition is priced in the trillions of dollars over the next 25 years. With our price maker strategy producers will be able to only produce profitable properties which will remove the marginal production from the marketplace. Producers will then be able to recognize the capital costs they’ve stored these past decades in property, plant and equipment by passing them through to the income statement. This way they will be able to replace those balances with balances in the accounts of current assets and then be able to pay dividends, pay down debt and fund their own capital expenditures.

These changes can only be done through the deliberate act of developing our software. Any attempt to make the changes without the commensurate changes in the software first, will cause the industry and producers to regress back to what the software that exists today identifies and supports. We need to take control of the development of the software that the industry uses in order to take control of the ways and means of the industry. Spontaneous order, of which we have relied on for centuries, is circumvented by the software that we use. Software cements the organization in an unchanging structure. Until now it has been convenient for the bureaucrats to distort this fact and ensure their position remains unchallenged by never changing the organization's software. However the damage to the industry and all concerned is tragic and will only continue to escalate. We may find days which are acceptable intermingled with days where everything is falling apart. What we do know for sure is that the overall trend is on a steep downward trajectory.

Later this week OPEC is meeting to discuss the extension of their production sharing agreement. North American based producers believe they’ve proven that their costs are lower than OPEC’s and have established themselves as the priority in terms of who produces. This may be incorrect. If as the BP Chief Economist suggested a few months ago. That there is adequate oil to supply the world twice over up to the year 2050, and as a result, the low cost producers, which are OPEC, will find the economics of production at any price is better than never realizing any value. This would preclude the North American producers from the oil and gas marketplace, because of their high costs, until the year 2050. There has been an acceptance that North America is the new swing producer. However, there is a misunderstanding as to what that means in the North American marketplace. The swing producer will be the first to curtail their production to support the price. Something producers would achieve dynamically with the Preliminary Specification. I would suggest some deep soul searching on behalf of the North American producers and suggest they develop a plan to deal with the next 25 years. A plan that is consistent with the reality of shale reservoirs, which happens to be the one that we recommend and are moving forward with the commencement of its development on September 25, 2017.

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. 

The Producers Choice

The worst performing stocks of the first quarter of 2017, on a global basis, are the North American oil and gas producers. Even though OPEC has tentatively committed to extending their production cuts until March of 2018. Oil prices remain barely above $50 due to the shale producers zeal to fill any void left by OPEC’s production sharing agreements. Producers all claim that they’re profitable at $34. This is attributable to the fact that they never recognize the capital costs of past production. The capital costs they do recognize are so insignificant, due to the fact they recognize them over the usual 15 year period of depletion. Causing their property, plant and equipment balances to bloat excessively on their “well protected balance sheets.” In the first quarter of 2017 our sample of 23 producer’s spent $10.2 billion on capital expenditures and recognized $14.3 billion in depletion. Reducing the property plant and equipment balance by $4.1 billion to $459.2 billion. At this rate another 112 quarters should clear these balances. The point of the exercise is clearly to store these costs for as long as possible, to never recognize them and pretend that they’re profitable under the basis of a perverted SEC ruling that is the exception and counter to all other industries.

Running a producer as a business is the solution. Moving the balances of property, plant and equipment to the income statement in a timely manner would have recorded a collective net loss of $397.3 billion. Providing key evidence to our claim that producers need a tripling of oil and gas revenues to survive. This would therefore also represent the amount that the investment community, the source of the capital to fuel those losses, has subsidized the energy consumer. With these costs sitting on the balance sheet for eternity the industry will always look profitable. Oil and gas is a capital intensive industry, the real costs are in the drilling and fracing operations not in the operation of pumpjacks. This is not just ludicrous from a business point of view, but from a practical manner as well. If the producers only produced profitable production as with the Preliminary Specifications decentralized production model and price maker strategy. They would obtain the prices necessary to eliminate the property, plant and equipment balances and recognize the real costs of the oil and gas business. In turn the “business” would generate cash that could be used to pay dividends, pay off debts and fuel future capital expenditures. Their property, plant and equipment account on the balance sheet would be replaced by current asset accounts they could use. That would however require they begin running a business.

Our price maker strategy is the issue the bureaucrats point to as being unacceptable. They will never intervene in the market to “make” prices. They want to see the “market rebalance.” Markets do one thing and only one thing and that is provide information by way of price. If the price is adequate for you to produce and make a profit, you produce, otherwise you don’t. And that is the way markets everywhere and our price maker strategy work. If the property earns a profit, considering all of the costs, including capital costs on a reasonable basis of recognition, then it produces, otherwise it’s shut-in. This is not collusion as the bureaucrats claim, its independent business decisions being based on actual factual accounting information. You’re in business to earn a profit. Why would you produce if you didn’t earn a profit? You wouldn’t. With the Preliminary Specifications reorganization of the producer and industry the shut-in production incurs a null operation, no profit but also no loss. The shut-in property will incur no royalties, operating costs and no overhead of any kind. Therefore the producers profits are maximized as a result of only producing profitable properties, no unprofitable properties are diluting their earnings. The commodity markets find the marginal costs of the commodities due to the marginal production being removed from the market. The reserves costs remain constant due to the fact that consecutive losses are not added to the reserves each year. And those reserves are saved for a time when they can be produced profitably.

I’ll admit that People, Ideas & Objects our user community and service providers are part of the lunatic fringe as a result of this thinking. We are absolute evil, and how dare we suggest that the industry be operated as a business. It’s just what we do. This industry has been operated on this basis now for four decades. Most of the people in the industry don’t know anything different. It is culturally ingrained and the destruction is beginning to be recognized. Note the word beginning. When you don’t recognize your capital costs for the first few years, or even decades, it’s an advantage. Then as the balances of property, plant and equipment build up, that advantage turns into a disadvantage in order to equal things out. Mostly due to higher depletion rates, large balances of debt and large numbers of shareholders offsetting these very high balances of property, plant and equipment on the balance sheet. Where’s the upside for a new investor? Outsized balances of property, plant and equipment will be the albatross of these producers for decades to come, under the current methodology. The other consequence of not recognizing your capital costs is that you report healthy profits in the early years which draws in excessive amounts of capital. You remember those good old days don’t you. That excessive capital leads to overproduction or over capacity. Which from a business point of view, I don’t think there is a more dire and difficult business problem to overcome. Most businesses can’t survive when they’ve invested into too much capacity. The increased overhead of the surplus capacity eats you alive. The oil and gas industry has invested into too much capacity. What will happen as a result? Will it be that the producers support one another by participating in the development of the Preliminary Specification, or drag each other down? With the only source of cash being “more” production I think we have our current answer.

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. 

Victoria Day

No posting today.

Third Friday Off

No posting today.