More Chances?

Bureaucrats love to read the tea leaves and determine the implications of the butterfly flapping its wings on the shoulder of the Saudi King. Bureaucrats jumping to the incorrect conclusion that this is a bullish signal. More time and energy is spent reading the markets and determining what level energy demand will be at, and the price that this will produce. The word on the street is don’t worry about supply, focus on demand. This replacing “market rebalancing” as the talking point. So much time and energy wasted. It’s all part of the game of the bureaucrats to make sure that they’re able to impart their wisdom and reflect their brilliance of how the future will unfold. Why not just look at the commodity market price, if any property can make a profit at that price, considering all of the costs of capital, operations and overhead, then keep the property producing. Otherwise shut the property in until prices rise, or develop an innovation that increases the throughput, reduces the costs or increases the volume of reserves. Predictions that the market will rebalance in the second quarter of 2017 were as wrong as they’ll be for the current predictions that it will rebalance in 2018. So why not just focus on the business at hand? Market rebalancing is bureaucratic, willful destruction of oil and gas deliverability. Deliberate waste.

Last week we discussed a scenario that I thought this lack of focus by the producers might send us. Unlike the producers I have some time and energy to spend prognosticating about the future. The three likely outcomes of the summer months were a fundamental collapse of the price of oil, bureaucrats admitting they don’t have a solution to the problems and as a result leaving the industry, and the producers losses coming back as a result of the decline in prices and continued abuse of the industry by the bureaucrats. I have detailed these points in a series entitled My Argument which is available for those who may not want to spend the unnecessary time and energy projecting when the market will rebalance.

None of the bureaucrats have called me in these past few months since we announced our September 25, 2017 start date of our software development’s. They don’t have a solution to the overproduction or oversupply issue, maybe they don’t feel the personal pain everyone else is and as such don’t see any issue. Nonetheless I want to make it clear to everyone that the opportunity for the bureaucrats to participate in these developments is open to them at any and all times. I may be abusive and in a politically correct world that would be an issue, but I don’t live in a politically correct world. The fact of the matter is that these past couple of months will provide those who are in the know, and are concerned about the oil and gas industry, that the bureaucrats will never do anything to rectify the issues brought about by their self serving ways.

The best business to be in here in Calgary is a Ferrari or other supercar dealership. Home renovations are also not a bad place to be. Calgary had record dollar volume of renovations in the first quarter of 2017. These oil and gas bureaucrats are not only comfortable, but confident. This may be a mistake. A critical look at the business model that the bureaucrats employ and it is clear that the destruction in oil and gas is comprehensive and complete. The destruction of the commodity markets, the destruction of the oil and gas financial markets and the destruction of the producer organizations themselves. All on the altar of muddling along, market rebalancing and doing nothing while bureaucrats stuff their pockets full. This has not gone unnoticed. The difficulties that People, Ideas & Objects, our user community and service providers have had to face in our attempt to remedy this situation were also not unnoticed. These difficulties brought about through the turf war between us and the bureaucrats. Nothing was or has been done. Yet the continuation of the status quo for the next 25 years is all that is implied by these bureaucrats actions. Sorry, I’m not sold on that vision.

The bureaucrats have had their chance and they didn’t take it. Were these last few months the last chance in which they were given to remedy the situation? Will they be given any more chances? There are more important things to be concerned about and the profitability of the producers is the first thing we have to approach. President Donald Trump is opening the frontier areas to oil and gas exploration and production. Setting the U.S. on the course to export oil and gas, as well as other forms of energy. This is worthwhile and appropriate. There is just no way that these bureaucrats are going to be able to take these decrepit producer organizations forward as they stand today. The objective is set, now we need to organize ourselves towards fulfilling that objective and all the promise that this industry can provide. But first we must build the Preliminary Specification beginning September 25, 2017 and organize ourselves to provide the most profitable means of oil and gas operations.

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. 

Independence Day

Canada Day, Part II and Independence Day, Part I

Canada Day

Pointing the Finger, Part III

My understanding of history finds no parallel to the current situation I think we find ourselves in. The point that I cannot find a similar circumstance to is the level of inaction and self dealing that is done by the bureaucrats who are responsible for the industry. Muddling along and doing nothing have always been the strategy and operating procedure in the industry. It is the culture. But in the face of such obvious destruction and without a hint of concern is surprising to me. The best that bureaucrats have been able to muster through this past decade is that the markets will rebalance. No other thought or action has been raised. It’s truly amazing and based on my knowledge, I think without historical precedence.

My opinion regarding the recording of capital costs and the impact that causes is not misunderstood by those in the industry. Accounting is a social science involved in the timing and recognition of costs. The time in which those capital costs should have been moved from property, plant and equipment to depletion has been debated for a billion hours in the industry during the past four decades. It was always understood what the implications were as a result of the different ways that the accounting was conducted. That it took four decades and shale based reservoirs to realize the “liberal” methodologies implications in this industry is the surprise that I’ve had to experience. It’s not rocket science to know that if you defer the recognition of the majority of the costs in your organization. That makes you look rich in assets and prosperous in profit. Just by spending like a drunken sailor. The classic bureaucrats argument is that “the SEC defines the policy,” doesn’t hold water with me when each and every producer goes to the limit of their ceiling test each and every fiscal year.

Nothing is ever said about overhead to investors. Overhead is a game of hide and seek with no one knowing what those layers of people in buildings really cost. Overhead costs vary from 1.5% to 20.86% of revenues of our sample of 22 producers for 2016. Which reflects the anything but standard nature of the treatment for their handling. Another accounting principle. The financial performance of the entire industry is now so poor that I don’t think it can be compared to any other industry. It has assets that are monstrous in size. Yet such a small percentage of those assets are current, most of them being property, plant and equipment. The revenues of the producers are a small percentage of its assets size, 29.6% in our sample producers. A reflection of how long the game has gone on for and how much damage has been realized. The point is that the revenues remain significant enough that the overhead, which includes the compensation to the bureaucrats, is maintained. After that what is there.

Crisis, what crisis. The only person concerned about the situation is that sandwich board toting blogger on the Internet. Every industry has one or two of those, you can ignore them. And that is certainly the situation here. However, if I have a time, it's here and now. I can’t see this going on for much longer. The problems are just too difficult to deal with on a day to day basis and the trend is downward. Straight downwards. Either People, Ideas & Objects, our user community and service providers are funded this summer, or...

No one can tell me that producers have been prudently going about their business. That all of this was unknown and unexpected. That is not the truth and they know it. Go along to get along was the way it was done, here’s a stack for you if you keep your mouth shut. Makes it sound shady doesn’t it. Just search this blog for the word bureaucrat and see how many hits you’ll get. There has been no leadership, or discussion, or action or anything. Pursuing alternatives would have enabled the appropriate course to be taken. Now the only course is the Preliminary Specification and it must be successful as a result of a lack of choice. I am very disappointed knowing what I know about the last few years. It will be this summers marketplace that determines the outcome of People, Ideas & Objects, our user community and service providers. Have I been confused about the situation and unnecessarily proposed a doomsday scenario? Or will those things that I’ve predicted come to pass. The fundamental breakdown of the price of oil. The bureaucracy leaving the industry in a wholesale manner. Losses of the producers once again. I am satisfied that I may be considered foolish as a result. If we’re in for what I think we are, then I’m fully prepared to hang up my sandwich board.

Today President Donald Trump will be announcing the new U.S. energy policy. Suggesting that energy exports in oil and gas are the direction the country should head. Based on shale based reserves this is a worthwhile and possible objective. There is however no way that this industry is ever going to achieve this. There are not enough investors that are willing to give up title to their cash so that bureaucrats can fritter and waste. The Preliminary Specification establishes the industry on the basis of profitable production everywhere and always. It then works to overcome the infrastructure and resource constraints that need to be addressed to handle the increased capabilities and capacities. Only then can we approach the President’s goal of energy independence and exports.

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. 

Pointing the Finger, Part II

That I’ve held companionship with those who sprout doomsday scenarios on their sandwich boards is one of the unfortunate aspects of the work that I do. The Internet has made us all the more prolific. It is the company I keep. And I have done this for a significant period of time. Driven by the thought that this could be very dangerous if it was to become the nightmare scenario that I think it has now become. Oil and gas is not the banking industry in terms of its impact on the day to day of everyone’s needs. However, in the long run abundant, affordable energy is the key to the realization of our future. This is what I feel is in jeopardy and why I’ve spent so much time and energy trying to resolve this issue.

As a result of the situation that I feel we find ourselves in. People, Ideas & Objects, our user community and service providers must be successful. There is no alternative. Everything is in place, except the cash, for people to pick up and begin the hard, difficult work of building the solution to this issue. Reading the Preliminary Specification in its entirety is necessary for everyone concerned. There are fundamental changes to the way that the industry and producers are constructed and function. These need to be fully understood and realized throughout all parts of the community that we’re building. We are not replicating the failed industry that stands before us. We need to rebuild it based on the vision of the Preliminary Specification and everyone needs to understand that vision intuitively. We need to break with this failed past and look forward to a dynamic, innovative, accountable and profitable oil and gas industry and producer. We need to build the software that identifies and supports that industry and the producers within it, which also has to work for all the associated other industries such as the service industries and our new sub-industry the service providers. We are the reason that oil and gas will be successful in the future.

As a final parting gift wouldn’t it be nice if the bureaucrats wrote us the check for their share of our budget as they walked out the door. I am crazy, and there’s the proof. I’ve said it many times before that I find being crazy to be a distinct competitive advantage. Bureaucrats would never do such a thing as part ways constructively and leave the money for us to carry on, it would be an admission of guilt and they want to leave town in silence. How the money we need, our interim budget of $100 million, comes about is unknown to me. Which is not great news, but terrible news. The issue is ripening in the marketplace and we’ll see how it develops over the summer. This pending disaster is what I think will be the motivation for whoever it is that will write the check, to begin writing those checks. Recall too that this will have to be followed up in the first year of our development with the remainder of our budget so that we continue on with our developments. If this summer doesn’t motivate those who should be concerned to fuel our budgetary needs, then there is nothing that I, or anyone, can do.

I’m sure many enjoy reading the science fiction element of my writing. There is always the possibility and probability that I’m wrong. The problem is that I haven’t been so far, and the Preliminary Specification is the perfect solution for the issue of the day. In addition to being primarily an accounting related problem. Where every cost is capitalized making producers look valuable and profitable everywhere and always. Causing investors to rush in to overinvest. Creating overproduction as a result of the overinvestment. With overproduction continuing as it appears profitable when in reality it only subsidizes consumers for the costs of their energy. The amount of the consumers subsidy being recorded as property, plant and equipment on the producers balance sheets. Or the amount of the investors overinvestment.

In addition to this accounting problem it is also a software problem. What I call a modern day software bug. The industry and producers organizations are identified and supported by software that is unchanging and unchangeable. Issues continue and manifest themselves in ways that are not evident unless you’re looking for them from that global industry perspective. Industries in general don’t look at themselves from that perspective. That is to say they don’t see the consequences of these software bugs. People, Ideas & Objects and our user community are providing the software development capabilities to the dynamic, innovative, accountable and profitable oil and gas producer to ensure that any future Preliminary Specifications software bugs don’t manifest themselves into other issues.

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.

Pointing the Finger, Part I

The brunt of this issue is beginning to be realized by people. Overproduction and oversupply just never stop in the current business model of the producers. Waiting and doing nothing is the most destructive thing that we can do. If there are four consecutive days of increases in the price of oil, then everything that is being learned right now will be forgotten and everyone will be looking for the good times to arrive right around the corner. It was 2008 when the shale gas volumes began to overwhelm the natural gas marketplace. That is almost a decade lost and nothing is even discussed about that market anymore. It has been destroyed through a process of inactivity and overproduction by the North American producers. A process which continued for so long that the natural gas prices fundamentally broke down. No time in the history of the industry has natural gas traded at 14.73 times to oil. Prior to the breakdown in price it traditionally traded at six times to oil. We now stand at the point, that being this summer, where the oil price is about to fundamentally break down as well. It would then take extensive remedial efforts to rehabilitate both natural gas and oil prices. Meaning time would need to be invested in doing so, and time which the producers do not have.

The financial destruction of the industry and producers is complete. The value that has been retained in the industry after the decades of time and effort, the trillions of dollars that have been invested in good faith, amount to nothing. The industry generates no value and contains no residual value in its organizations, the producers that participate in the industry. The accounting has been a deception for the past four decades where assets were the wholly grail of the producers existence. Bureaucrats then stated that profits were not the objective, cash flow was. Cash flow is only the return of the capital that was spent, in a capital intensive industry, and these dollars were never managed properly. They should have funded further capital expenditures, paid down debt and returned dividends to the shareholders. Instead the bureaucrats spent the cash flow on themselves and just went back to the capital markets for more money for next years spending needs. The net effect of this is you have a spendthrift industry that doesn’t understand the word value and has had the life blood of the industry destroyed through the diversion of cash flow to cover overhead and bureaucratic waste.

If this isn’t a crisis then what is? Which bureaucrat is going to stand up and say they’re responsible and they should be held accountable? This summer will be the time when the exits will be crammed by those that are responsible for this disaster. They can exit with their personal assets and livelihood more or less intact. They’ll find greener pastures in other industries. This is the history of these type of developments. They’re not the ones who are going to stick around and put this back together again.

This has not been unknown to these bureaucrats. I have been talking about these points for many years. It is clear to me that this was inevitable and would happen sooner or later. It's just taken 26 years for it to develop into the full blown crisis that I believe we’re about to experience. Through the period from August 2003 until now the bureaucrats and I have fought over these points continually. On no less than five occasions they’ve attempted to steal the Intellectual Property that is the basis of this initiative. If I am a raving loon then why were they fighting me and trying to take this from me?

In the donut shop analogy we convinced some investors to put some money into our donut shop so that we could quadruple our donut making capacity. We therefore began storing donuts in the parking lot, and soon borrowed the parking space of our neighbors. We then purchased some land and paving equipment so that we could build more parking lots. What’s the price of a donut? No one cared. The thing is the operation remains profitable because we capitalize the flour, oil, cashiers and donut makers wages. Enabling the manager to boast that he’s profitable and not to worry, the market will rebalance.

It is with this backdrop that we’ll be developing the Preliminary Specification beginning September 25, 2017. We need to be actively involved in resolving this issue and rebuilding the industry brick by brick, and stick by stick. There are better ways of doing this, however, the bureaucrats chose to fight the one critic of their administration instead of dealing with their business. Sometimes things only happen during or after a disaster has hit. That’s when it becomes obvious to everyone what needs to be done. That’s where we’re at now with the oil and gas industry. I think however, from a societal point of view, we’ve experienced a lot of damage as a result of the complacency of the bureaucrats. Tax revenues are down, royalty revenues are down, the service industry has been abused and lastly the people are being displaced in ways that are unacceptable to anyone who was paying attention to their business. The thing is this has all been window dressing for the garbage that is going to happen now. I see a lot of pain being distributed as a result of the bureaucrats conscious and willful act of betrayal to all those who are going to feel the associated pain. This summer will be tough.

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. 

No Change in Tone Here

I understand that people are unhappy with the hostility that I’m expressing here. I feel there’s no reason that this much pain and suffering needs to be realized by so many people and so unnecessarily so. I can assure everyone that in four months time I’ll be the most civil person around. And it won’t be as a result of me changing my tone. I have detailed in my series entitled My Argument what I felt was going to happen this summer and why we needed to proceed with the developments of the Preliminary Specification on September 25, 2017. How the commodity prices would collapse, how the bureaucrats would flee and the disaster that is the oil and gas industry will be seen by everyone. It’s the fifth day of summer, the price of oil has slipped into bear market territory. Worse than at any time since 1997. The CEO of Cenovus skedaddled the other day. Looks like that $11 billion deal wasn’t what it was supposed to be. Expect much more of this, the problem is there’s no resiliency in the industry anywhere. Producers are fully exposed to any crisis now. All of the industries reserves and ability to fight this off have been extinguished. We are fully exposed. Soon everyone will know why I am so angry about this.

The bureaucrats will say you only signed on for one good year out of each decade, or maybe they said it was each generation. So what’s the issue? As for me they don’t listen to people who are not civil and kind, those that kneel down before them are the only ones that get the bureaucrats business. And as we proceed down this black hole that “market rebalancing” was supposed to fix, that everyone will soon realize, and bureaucrats will admit, they have no solution to. My tone will be the reason that they enabled this level of destruction to occur. My tone will be the reason they never took any effort to fix this problem.

This Friday will be the end of the second quarter. At the end of the first quarter oil prices were around $54. Recall producers were then able to reduce the amount of depletion that they recognized per barrel of oil. Reduced the amount of depletion to the point where most of the producers were reporting first quarter profits. These profits were claimed as a result of the innovations they employed in reducing their costs. Reducing depletion per barrel is an innovation! Only in oil and gas. The problem is that oil is as low as $42.50 these past few days and those reserves will have to be valued at this new price. As a result the ceiling test may have to be employed and those reductions in the first quarters depletion per barrel innovations will need to be forgotten about. What will the point of their discussion be when the first quarter profits turn into second quarter losses?

I’ve noted before that there’s been a lot of promotion of the oil and gas stocks by the brokerage firms and the media these past six months. Asking the question, based on the movie the Big Short, if as they did in the housing crisis, the brokerage firms were promoting the oil and gas companies in order to get out of the positions that they had in these companies. Dumping the soon to be crappy investments onto John Q. Public for them to realize the losses. I’m sure it only happened in the Hollywood movies and that in real life those types of things would never happen.

Who’s winning in North American oil and gas? Bureaucrats, but that’s it. Under the Preliminary Specification everything is reversed. The bureaucrats are shown the door and everyone else gets to work in a predictable and profitable industry. Bureaucrats are afraid of our price maker strategy. They think it is “market manipulation” and therefore illegal. Which would be correct in a world where you only lose money, don’t know where you're losing it, or don’t know what you’re doing. Or in other words the oil and gas industry. In the rest of the world it’s known as business. Only producing profitable production is how businesses survive and prosper. That way their profits are not diluted by unprofitable operations and their not filling the market with unprofitable production that destroys the pricing power that they do have. It’s not a bug, it's a feature. Anything that a bureaucrat believes is set in stone and can’t be rationalized otherwise. They will go to the end of the earth before they’re led to believe anything else. And you had better watch your tone! It’s just too bad that we all have to suffer as a result of their inability to think.

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 "Market Rebalancing" Fairy

Sunday is the 25th of June. Three months before our Preliminary Specifications software development start date. Recently OPEC put together their production sharing agreement, extended it into 2018 and the price of oil continues to go down! And now the North American producer says it's time for OPEC to cut their production further to accommodate the extra shale production they’re putting on the market. Only the North American producers are entitled to produce, it’s their market and OPEC is lucky that they’re allowed in the business. Or so it would seem. History has shown us time and again that when one side employs this kind of bluster, they’re easily surprised by subsequent events! The world is awash in oil. The North Sea has more tankers being used as storage than has ever been used before. Oil has been stuffed everywhere that it can be and there is just no place left to put it. But the North American producer will continue producing no matter what the consequences are, and expect the rest of the world to accommodate them. Does anyone else see the flaw in this logic? Yet this is no different than what’s been going on for the past decade. It just took that long to get to this point.

It bares repeating. OPEC are the low cost producers. Many like to suggest that’s not the case when you consider that Saudi Arabia is running a budgetary deficit with the current prices. The costs of maintaining that society through their oil revenues makes them the high cost producer. Then to make it comparable, the debt and deficit of the U.S. and Canada should be added to the costs of our production. That would make the costs directly comparable. If we however are looking only at the operations, capital and overhead costs, OPEC is the low cost producer.

The BP Chief Economist made some comments a few months ago that should be reviewed and considered at this time. These comments reflect that the current surplus production and inventory issues are not a temporary thing. The world now has enough oil to supply the demands for the next 33 years, twice over. He suggested that this may change the way that low cost producers see the market. Instead of leaving the oil in the ground for later, they’ll produce it now at whatever price they receive, and at least generate some revenues from their reserves. As the low cost producers OPEC can do that. The North American producer is unable to compete in that marketplace as they are the high cost producers and they have to base their operation in the financial markets. Now more than ever the North American producers need the Preliminary Specification which enables them to identify the profitable properties and shut-in those that are not.

I see the situation today as coming close to being played out. Why is it only OPEC’s responsibility to cut production? If you look at this from the point of view of OPEC, and the political hand that they’ve played here, it appears to me that they’ve now turned the focus to the North American producers as the prime culprits of the overproduction and oversupply problems. They’ve done everything that they can to deal with the problem and the shale producers are racing in to fill the void from the production cuts that OPEC is making. How much longer will OPEC continue to cooperate and reduce their production in this environment? At what point will they say there’s no dealing with the situation and just employ the strategy that the BP Chief Economist says is the logical choice in an oversupplied environment such as this?

Market rebalancing is a myth, just as the moon is made of green cheese. Markets are defined by supply and demand and provide information in the form of price. That is all that markets do, they do not “rebalance” or do anything on their own particularly in the face of continued, chronic overproduction. They do not offset the stupidity of chronic unprofitable overproduction. They provide price information and that is it. Nothing else. If producers can make a profit at the price that the market is offering then they produce. Otherwise producers don’t produce unprofitable production. Markets don’t act, producers act. This is how each and every business operates in the world outside of oil and gas. You don’t produce unprofitably. It destroys value. It reduces your profitable operations. It’s foolish. Yet we continue on in this foolish manner of producing oil and gas unprofitably, expecting lower cost producers to shut-in their production because they should, and waiting for the myth that the “market will rebalance.” It’s as if some oil and gas fairy, the “market rebalancing” fairy is going to come down with her magic wand and make it all better for the North American oil and gas producer. Yes, producers you do look that ridiculous.

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. 

Hard Work To Do

I feel the overproduction and oversupply issue in oil and gas is the largest issue that the industry has ever had to face. Why is this controversial thinking? I feel we’re at a turning point now where we either address it through the development of the Preliminary Specification. Or we decline quickly in our capabilities and capacities creating even more damage to all concerned. This is certainly well beyond the scope of the corporate oil and gas producers responsibilities. That is, it’s beyond their accepted responsibilities. But I wonder who is responsible for this issue and what’s their number? I believe we have a responsibility to provide the consumer with affordable energy products. That implies we’re in business which means we need profits to survive. Without real profits people are displaced, investors lose money, governments lose tax revenues, royalty holders do not receive fair value for the royalties on their products. The only group that has consistently been winning in oil and gas lately are the bureaucrats and they’re not doing anything.

The industry has the opportunity now to undertake the hard work that is necessary to remedy this situation. That is by developing the Preliminary Specification starting September 25, 2017. It will take a greater concern for the industries health than what I am seeing being portrayed in the media. I don’t have the direct contact with the industry so I don’t know if that is the true assessment of the situation. Sitting back and waiting for this issue to resolve itself on its own has done nothing but create more damage. It will take some people with foresight and fortitude to know that the current trajectory of the industry is not one that is healthy or prosperous. They will also need to take the remedial action of moving forward with the Preliminary Specification.

Some of the hardest work will need to be undertaken by the user community and service providers. They will be the point of contact with the producers and will need to determine the “what and how” that is necessary to implement the needs of those producers. The hard part is they’ll be doing this in the environment where we’re creating the future, based on the Preliminary Specification, not remaking the past. It will be the user community that will have to exercise the hard break with this past that we’re currently living with. Determine that that element is no longer needed and that it's part of the problem, and we will be doing this instead. It’s not that we are turning our backs on the producer. We clearly need them and our user community will be working directly with them. Producers need to understand that the user community will have creative license to ensure that hard break with the past occurs.

These decisions and creative solutions will be on top of the difficult work that the user community needs to do anyway. Bringing their years of experience and understanding in oil and gas administration and accounting, on top of their overall understanding of oil and gas. They need to create and implement the appropriate software and services to ensure that the producers achieve the overall success that we’re looking for. Many ERP systems have had user involvement before. Usually when the implementation was going over budget, user involvement was the first cost that was cut from the budget. That is not what we’re doing here. Today user community developed software systems are the only systems that are effective and used in the market today. Developing anything without high levels of user involvement today would be a waste of money, particularly with the scope and scale of the Preliminary Specification.

In addition to the overall success of our initiative. Our user community will have to do this, and other hard work, to ensure that the oil and gas industry and producers are dynamic, innovative, accountable and profitable. The Preliminary Specification is different and provides a good base in which the user community can achieve these outcomes. However it will be up to the user community to be the difference. Yes, it will be very hard work.

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.