These Are Not the Leaders We're Looking For, Part V

 People, Ideas & Objects have been in somewhat of the same situation we find ourselves in today. Where producer officers and directors appear as though they need to act in order to mitigate the personal risks they’ve incurred in their willful misconduct over the past many decades. This is best represented by the 2007 to current natural gas price differentials creating a documented $4 trillion revenue loss. Why do they realize they’re at risk? They understand their Officers and Directors Liability Insurance may not cover them for these purposes.

Recently we announced we were selling Profitable Production Rights at a 90% discount. Disregarding the futility of the methods People, Ideas & Objects need to use to raise the necessary funds for these developments. No producer has contacted us regarding participation in any form in the development of the Preliminary Specification. We began our campaign on October 11, 2023. We are not deceived in the actions of the producers. After 33 years their behavior is consistent and can be summarized as “they control the funds of a primary industry.” If People, Ideas & Objects speaks of risk, that is responded to by “no one cares about risk.” Just as “no one cares about profits” was previously stated by them earlier in our journey. We would also point out the fact that since no producers have jumped at this opportunity through the discount, our prices are not at issue with them. 

One day People, Ideas & Objects believe producers will begin to understand the damage and destruction they’ve inflicted upon the greater oil & gas economy by their unreasonable approach. When they do it is the Profitable Production Rights that will linger as a daily reminder of what ridiculous extremes were necessary to put their business right. People, Ideas & Objects are sticking with this method of funding no matter how foolish the officers and directors feel it is. 

Their lack of business understanding extends to the method the Preliminary Specification provides oil & gas producers with the most profitable means of oil & gas operations everywhere and always. Our price maker strategy reflects that oil & gas commodities follow the principles established by economic “price-makers.” Earlier they accused us of formalizing collusion and price fixing, that they would have nothing to do with. This was their reason for ignoring the Preliminary Specification. We were subsequently able to assert that if producers were making independent business decisions based on actual, factual accounting information, that determines the profitability of a property is collusion, then one of us had a deep misunderstanding of business.

I raise this point to highlight the consistent theme throughout their “muddle through” induced inactivity and passivity. Claiming or feigning a lack of knowledge or understanding may help them in court if they were not officers and directors. However they are held to a higher standard. If they are this obtuse and lack the business knowledge they’ve displayed throughout the past many decades, they’ll still be seen as culpable. Playing on their investors and the service industries sympathies while they destroy the industry is a deception that would be worthy of, and consistent, with their prior actions. 

Oil & gas commodities are too valuable to be wasted. Unprofitable production is waste. These are finite resources and we have an obligation to future generations to prove we managed the resource appropriately. To show we produced oil & gas profitably and that a healthy prosperous industry was passed onto future generations. Neither is the case today. People, Ideas & Objects believes that industry needs to adopt the principles of preservation, performance and profitability in order to turn this situation around. The “muddle through” culture has failed in this endeavor. 

A few months ago I mentioned the impact that natural gas storage had on the prices of that commodity. The storage facilities were built out in the early 1990s by the producer firms in one of their Keystone Cop approaches to capital investments. Everyone piled in only to find out no one figured out how to make money and therefore since it didn’t make money, storage was sold off to midstream operators. Now they have no control over the operation and it has become a depressant on the price of natural gas. Although storage enhances the deliverability of gas, it appears that the gas held in storage is not owned by the producer and therefore, just as with LNG, in the hands of others who benefit from its upside. 

When seasonal demand or production is high then the high deliverability acts as an effective buffer to the market to maintain somewhat steady prices. However, are those prices beneficial to producers? Unprofitable production is seen by People, Ideas & Objects as the exact same thing as overproduction. If all the overproduction in the industry is absorbed by storage facilities for the majority of the year, and during peak demand storage's deliverability is high enough to accommodate the extreme demands, are these normal market forces? Storage operators buy low and sell high during the seasons as their method of earning a return. 

Natural gas storage absorbs any overproduction when storage is available. And when storage is unavailable, it continues to depress the price and will accelerate any price decline into a collapse. The way to eliminate the effect of storage in the market is the same method as with LNG. Producers must only produce profitable production. By producing only profitable production through the use of Preliminary Specifications price maker strategy producers will be able to achieve all their corporate objectives. Profitability, maximized asset value and effectively eliminated any excess financial benefit to those who effectively trade off their product. 

However, based on the response times officers and directors have approached these opportunities. We should be seeing the wind down of oil & gas due to the successful development of pocket fusion reactors. Those officers and directors who should have been accountable, hold the responsibility, authority and can direct the resources necessary to deal with the consequences of their “management” haven’t risen to the occasion, and we believe never will. What I’ve found was their behavior was unacceptable and quite beneath those who were responsible for the “can do,” “wildcatting” days. These officers and directors believe they’ve co-opted and emulated that image as they strut down mainstreet with their big, beautiful, well-built balance sheets. Showing who truly is the biggest spender by putting the most “cash in the ground.” 

It's time for producers officers and directors to reveal what their vision for the industry is. What it is they plan to do. How it is they'll do what they plan to do. And why they're doing it. They've had plenty of time to come up with something. Why not share it?

These Are Not the Leaders We're Looking For, Part IV

 The question we need to ask ourselves is why do officers and directors believe People, Ideas & Objects glow radioactive? Why is there such a strong adverse reaction to the combination of 'real' and 'profits'? Shouldn't generating 'real' profitability, which would provide more cash, align with their interests? There’s no question it’s the case, why has it not happened? And if they are so offended by People, Ideas & Objects, after these 33 years, why haven’t they changed their systems to generate “real” profitability? 

After asking the many pointed questions I’ve asked in the past few weeks. To summarize, the $4 trillion in lost natural gas revenue since 2007 can be attributed to either the incompetence and indifference of officers and directors or their deliberate, self-serving actions. I suggest officers and directors need to choose one of these alternatives to ensure they don’t become accused of both. 

We have spoken before of several motivations as to why producers have not acted in their own profitable interests. These include the opaque nature of the accounting and systems allows for a freedom and creativity that accountability would otherwise expose. A second reason for the lack of action towards profitability is that the Preliminary Specification represents disintermediation, making the current business models of producer firms redundant, inefficient, and uncompetitive. The third reason that there has been no move to enhance profitability is that under their current business model it can not ever be done. 

Firstly, I have vigorously defended my Intellectual Property throughout this journey, making it accessible exclusively to People, Ideas & Objects, our user community, service providers, and Profitable Production Rights holders. Not to others. Second, today’s producers accounting information produced is inadequate to make the decisions that would be necessary to shut-in production. Accounting information is aggregated and consolidated then merged. To gain any detail or understanding of what its makeup is would be impossible to compile. The two most egregious examples are depletion and overhead.

Depletion

Depletion is a necessary element of determining what level of financial performance a Joint Operating Committees has attained. In a capital intensive industry to exclude the cost of capital from a determination of profitability is inappropriate. Many argue that the well paid-out many decades ago. And that is possibly the case. It doesn’t mean from an SEC or accounting point of view that it ever has or ever will. The need for producers to source investment capital as a means to spend has been over for almost a decade. Competition for capital has to consider a broader, North American perspective and producers need to compete with Apple, WalMart and others as much as they do the producer down the street. 

Accounting is accounting on the basis of the SEC, all accounting for all listed companies will be comparable and to a large extent is. Except when oil & gas Full Cost and the Ceiling Test are involved. These calculations, along with the depletion calculations are not completed at the Joint Operating Committee level, they are aggregated at the corporate level. Reliance on the independent reserve report to provide the detail is where a firm would get the information they need. Note: the reserve reports are factual from a reserves basis however, from an accounting basis their costs are as mythical as Harry Potter in comparison to the SEC requirements. 

The implications of Full Cost and the Ceiling Test are not allocated to Joint Operating Committees. A well may have paid out from the point of view of drilling, completion and equipping. But that’s it. Full Cost allows for any cost that was incurred in the exploration and development of the reserves to be added to the pool associated with those reserves. Therefore, the Joint Operating Committee may have significantly larger capital costs than the individual well’s drilling, completion and equipping. From an SEC accounting basis, any capital costs such as the drilling of uncommercial wells in the pool need to be included in the depletion calculation. 

Currently depletion calculations are conducted on a corporate basis. In today’s Information Technology environment depletion would need to be allocated back to the Joint Operating Committee based on the engineering reports proven reserves and monthly production in order to determine an actual monthly profitability. This work is not undertaken. 

People, Ideas & Objects advocate for a more timely recognition of depletion costs, suggesting a thirty-month period for capital cost recovery to enhance competitiveness and financial health. The SEC’s Ceiling Test defines the limit, not a target. There is ample reason for a producer to adopt a policy of zero property, plant and equipment balances. It will be the most competitive producer that maintains a zero balance of property, plant and equipment. The fact they’ve returned all their investments shows their performance has been historically exceptional. Big, beautiful balance sheets are useless to everyone other than those building consolidated paper empires. The same can be said and is said for the purposes of allocating any changes or adjustments as a result of the Ceiling Test.

There is an associated issue with the management of cash due to these policies. Officers and directors have claimed they were “putting cash in the ground” and they were telling us exactly what it was they were doing. By recognizing capital costs over a thirty month period, this cash would be released back to the producer for reuse for dividends, debt reduction and dividends. Letting cash atrophy in the ground for a decade and more is ludicrous. 

Overhead

The detail necessary for industry to identify the individual Joint Operating Committees overhead costs are significant. As a result industry operates on the basis of overhead allowances charged to the Joint Operating Committee. For every charge to a Joint Operating Committee there are 100% of those charges being recovered in some form from working interest partners. The net effect of these charges and recoveries across the industry is that all overhead allowances equal zero each month. The actual overhead is charged to the corporation and at the end of the year, aggregated and a large percentage, People, Ideas & Objects estimate an average of 85%, are capitalized. 

Ask a producer what’s the “actual” overhead cost to account and administer natural gas vs. oil. No one and I mean no one will be able to tell anyone that until such time as the Preliminary Specification is operational. Eliminating the overhead allowances and replacing them with the actual overhead costs of each process will be done when the Preliminary Specification and our user communities service providers are operational. Each service provider manages one process on behalf of the entire North American producer population. Specializing on their distinct competitive advantages that include: Quality, specialization, division of labor, automation, innovation, application of Artificial intelligence, leadership, Internet of Things, integration, domain expertise, deployment and integration of tacit (their services) and explicit (our software) knowledge, conflict and contradictions, issue identification, creativity, collaboration, research, ideas, design, planning, negotiating and compromising to highlight just a few. Processing the work and billing the individual Joint Operating Committees for their fees for managing their process. If the property is shut-in no data or information is generated for the service provider to conduct their work and as a result no billings are rendered, turning all of the producer's costs variable, based on profitable production. 

This has the added benefit of incurring these costs in a profitable operation each month. Passing these costs on to the consumer of the oil & gas. And therefore the cash incurred to pay the service providers is returned to the Joint Operating Committee within the next month. Maintaining a “cash float” for the overhead costs of the producer firm. Or if the property is shut-in, with the variable nature of overhead under the Preliminary Specification, these costs are not incurred and the property creates a null operation, no profit but also no loss. Today, with the majority of the overhead capitalized, the cash is returned when the depletion costs are recognized annually over the next 15 to 20 years. Demanding that producers find new and willing investors or some form of “new” cash each and every month to pay the overhead. When we think producers knew this from the time of the publication of the Preliminary Specifications publication in August 2012. And no changes have been made to their policies. Maybe alternative 1) above, the possibility of incompetence is the appropriate choice to make.

Moving producer costs to the customer on a timely basis is necessary for profitable and healthy producer firms and the greater oil & gas industrial complex. “Building balance sheets” and “putting cash in the ground” have failed as objectives. As any reasonable person would have anticipated. If the Preliminary Specification disintermediates the officers and directors, or their understanding of business concepts are poor there is ample material here for people to discern the scope of their failure. 

The pressing issue now is the industry's future and how it will navigate the mounting challenges it faces, exacerbated by leadership that has squandered the value entrusted to them by previous generations. A future that sees capital expenditures outstrip any era before it. An unidentified and misunderstood impact of the shale era and its consequences on the industry. A lack of support for producers' capital structures. An industry that has been gutted of any and all value that had been handed from prior generations to the current crop of officers and directors. Which summarily incinerated the capital that was raised in the past three decades. An unmotivated, distrusting and abused service industry that producers have shown they were once played for fools, and they now understand intuitively the real depths of producer depravity. They won’t get fooled again and their capacities and capabilities are inadequate for the continent's future needs. A leadership that has somehow yielded untold personal wealth at the expense of everyone else. And yet are unable to conceive of business concepts such as “real” profitability, “free on board,” “cash float” or “shut-in production.” Among many others. 

Conclusion

The absence of an accurate financial accounting assessment, particularly regarding depletion and actual overhead costs, severely hampers the ability to ascertain the true profitability or loss of any property. Therefore the diversity of outcomes of what is and what isn’t profitable are remarkable. Natural gas and its byproducts are far greater in terms of overhead costs to administer, yet there is no recognition of this in overhead allowances. Blindly shutting in production as the producers are now doing, after 38 years of destruction by not doing so. Is potentially as damaging when done on a turn this valve off and open that one basis. In producer firms today the overhead costs are fixed. Ensuring that the unknown, high overhead properties will be a drain on many other operations if they too are shut-in. 

Decisions are made on the basis of engineering reports and estimates as opposed to any actual financial information. Purely due to the lack of available financial information. Without this information the ability to analyze and understand the business does not exist. Leading to issues such as the $4 trillion natural gas revenue loss since 2007. Accounting today is the means in which to have the bills paid. The intricacies of engineering and geology encapsulate the oil & gas industry's value and complexities, often perceived as too intricate for understanding outside those professions. Thus, beyond balancing the books and undergoing audits, traditional accounting practices are seen as obstacles rather than aids to operational excellence.

The detailed, property-level data offered by People, Ideas & Objects promises to revolutionize the industry's understanding of profitability, pinpointing precisely where money is made and lost. Pursuing 100% of a producer's production profile has been demonstrably inefficient and wasteful. Profitability under the Preliminary Specification will be earned at any level of the producers production profile as all production produced is profitable. Therefore if the commodity prices dictate an 80% production profile. It can be done profitably as the Preliminary Specification, our user community and their service providers turn all of the producers costs variable based on profitable production. I understand these are advanced business concepts. We will therefore need to wait 38 more years before the officers and directors comprehend these points. 

These Are Not the Leaders We're Looking For, Part III

 The technical infrastructure and the disintermediation of the oil & gas industry's complexity highlight fundamental issues. The business competitiveness, which officers and directors have chosen to ignore, will soon become wholly unattainable. The state of the North American industry in terms of its ability to approach the most difficult challenges it has ever faced in its history. The so-called 'efficiently' managed and maintained Rube Goldberg machines within each producer firm have summarily failed under the direction of officers and directors commands. Therefore holding the budget for accounting in general and ERP systems in particular to second hand shoestring diets has achieved what their objective was. Opaque accountability and financial statements, supported by inadequate systems, are treated as features rather than bugs. Are these the source of the $4 trillion in lost revenues People, Ideas & Objects have identified?

Consolidation aims to establish totalitarian control, turning industry participants into 'blind, sleep-walking agents of whoever will feed them.' As Milton Friedman has said it is usually the architects of centralization that are the first to rue the consequences of their actions. How will they be able to deal with the speed and complexity as the business world accelerates further. Are they in control now? Or is this a means in which large portions of the officers and directors can exit the industry and wash their hands of the consequences of their actions? Allowing the skeletons that are springing to life to be buried deeper in a broader “more diverse” organization?

Officers and directors have consistently failed to set a clear agenda, objectives, or direction for the industry. It’s always been “muddle through,” “build balance sheets,” “put cash in the ground,” “clean energy” or when difficulties arise they excuse, blame and create viable scapegoats such as “we need a cold winter,” “it’s the government,” or “the monster under the bed.” Never once employing business principles of good governance or critiquing their performance. Silencing and ignoring those that do. This is the established culture, built over several decades, what officers and directors are relying on to carry them forward for a few decades more? To suggest that we rebuild the industry in the vision of a dynamic, innovative, accountable and profitable oil & gas industry is never accepted and shunned. The industry must be rebuilt, not merely to fulfill People, Ideas & Objects vision, but due to the necessity imposed by accumulated damage and neglect. An industry rebuild that must be undertaken by someone as a result of the damage and destruction that has now been realized. 

On Wednesday, February 28, 2024, I questioned whether the $4 trillion in unrealized value was genuinely surprising to officers and directors. Asking if it was in some way deliberate? Or is this purely on the basis that they did not know? I would suggest it was one of those two and the officers and directors are free to pick whichever one they like. Indication of a deteriorating natural gas price structure from 2007 to 2023. Where 6 to 1 fell to over 51 to 1 at one point did not trigger anything other than People, Ideas & Objects continuing concern, our banishment from the industry and $4 trillion in losses.

If I wanted to, I could come up with other reasons for this disaster heading toward a catastrophe. The crucial point is that, regardless of the reasons, this disaster will persist as long as the current officers, directors, and culture remain unchanged. The difficulty is magnified if it is left to continue with its consolidation. As they will become impervious to outside influences. As they may very well be today. 

I have documented throughout the 18 years of this blog, and this adventure I began in 1991. In response to the 1986 oil price collapse. I have not received any support from industry as it conflicts with the good financial health of the officers and directors. Disintermediation is the theme in all industries. Who is coming up behind me with an idea that will replace the status quo, and will or can avoid the Preliminary Specifications Intellectual Property? What issue in industry will anyone approach that will receive the good faith blessing of the officers and directors? Or will the individual look at the situation, see that it may take 33 years to resolve, and even think there is an issue?

And there is a larger issue than this. The service industry is wholly enamored with the producer firms. Having been betrayed when producers' sources of capital dried up. Suppliers were able to keep the producers active in the field for a period of time. What wasn’t known was the producers had no intention of paying for at least 18 months. With covid making the service industry even more difficult they were faced with selling horsepower and cutting up equipment to survive. All while the producers whistled on by. 

Investors were disenchanted with producers' performance and began to suspend their additional support of producers as early as 2015. Nothing has been done by officers and directors to address these most critical issues of what should have focused the mind of each and every one of them. 

This is an ugly picture and I’m sure it’s as fresh as a $4 trillion revenue loss to many of the officers and directors. It is now decision time for those in power, and I argue that the coming months are critical for making these necessary changes. Otherwise, I don’t see it happening.

These Are Not the Leaders We're Looking For, Part II

It seemed that the goodwill extended to producer officers and directors during the 2008 financial crisis had been fully extended. Yet, surprisingly, they received numerous additional opportunities to rectify their underlying issues. The industry's culture, heavily influenced by a 'muddle through' approach, has rendered follow-through impossible, effectively stifling initiative. Regression to the norm occurs rapidly and expectedly. The reliable and permanent disconnect between press releases and the implementation of action underscores a profound failure to act. 

It should take more courage for an officer or director to stand in front of their shareholders and ask for their nomination to be approved for 2024. Where is their acceptance of responsibility? They were duly authorized, accountable, responsible and had the resources to resolve these issues? What is the role of an officer and director if it is not to foresee the difficulties and avoid risks? Clearly the risks and difficulties were pointed out to them for decades. Solutions have been available for more than a decade. And acceptance that shutting - in production was necessary occurred on February 21, 2024. 

It wasn’t that recent natural gas prices of $1.51 were lower than Canadian regulated natural gas prices of $3.75 in 1985. Adjusted for inflation those would be $9.25 today. Or that the price on a traditional 6 to 1 basis would be $12.76. Instead they accepted 52 to 1, a continuation of the deterioration in the factor that began in 2007. Yet from 2007 to 2024 this issue did not warrant a press release! It was the realization that the quantification of $4 trillion revenue loss they had wasted, which has now put their personal fortunes in jeopardy through the potential loss of their Officers and Directors Insurance. That was their motivation in February 2024, and even that only qualified for a press release. Someone should ask them how they intend to resolve their dilemma?

In terms of answering the question, who should we trust? How could we do worse than what we have today? If new leadership was brought in to take the industry forward, would that be better? While the decision on leadership replacement exceeds my authority, the necessity for change is clear. 

However in terms of an organizational structure and culture in which to rebuild the industry I don’t think there is a better choice than People, Ideas & Objects, our user community and their service provider organizations. We have been focused on the critical issues that the industry was facing. That they manifested into such dire consequences was unnecessary and is the result of the officers and directors inaction. Our purpose and objectives focus on cultivating a new culture based on preservation, performance and profitability—a foundation we believe is essential for trustworthy leadership.

And that is not all. The future through our overall organizational focus on dynamic, innovative, accountable and profitable oil & gas producers. Our user community vision, and by extension our permanent ERP software development capability. Ensures that industry doesn’t fall into any organizationally constrained difficulty again. Our Preliminary Specification is ready and is designed to support industry leadership for their administrative and accounting needs for the next 25 years. 

These Are Not the Leaders We're Looking For, Part I

 People, Ideas & Objects highlight the urgent need for officers and directors to make decisive actions regarding their roles in their oil & gas producer firms. This week, we announced the second phase of our campaign, focusing primarily on the removal of these officers and directors. Their actions have demonstrated a lack of qualification and capability to meet their positional demands, necessitating conduct we deem appropriate. 

Officers and directors must implement mechanisms that establish the industry on a foundation of preservation, performance, and profitability. This means prioritizing 'real' profitable production, strictly interpreted, across all operations. Which involves funding the development and implementation of the People, Ideas & Objects Preliminary Specification through our Profitable Production Rights. Subsequently, they should resign their positions. That was easy to write, we’ll see how effective it is in terms of follow through.

The justification for doing so is the compelling case that officers and directors (in)actions have incurred an intentional tort in the form of willful misconduct. If they were to resolve the issue by putting in place the means to resolve the issues, then the classification of an unintentional tort may apply. The difference between these two definitions is that one is covered by their officers and directors liability insurance and the other may not. 

Continuation of their role in the corporation is questionable when they were unable to comprehend the significance of their actions. Or maybe the significance of their actions is the question. To buy gas from the Gulf of Mexico LNG providers and in turn sell it in the Japanese or Netherlands markets can be done, as I understand, with activity in the futures markets. Hedging put and call options on the producer's production was all the rage a few years ago. Therefore the knowledge and ability were within their domain. It's unclear why the industry failed to capitalize on the proceeds from these LNG shipments. Misunderstanding “free on board” is a bit of a stretch for anyone to accept that the entire industry didn’t understand this most basic business concept. Or is the case of a producer selling their production into the Gulf of Mexico while global natural gas prices soar. And then leaving it to “others” to transport and market the gas into foreign markets would be easier and no less suspicious of them.

Officers and directors have a duty of care; their primary responsibility is their fiduciary duty to the corporation's interests. Mistakes can happen and they are covered by insurance for such instances. However, as I’ve provided a solution to the issues that are preeminent in the market today. Whose issues generated $4 trillion in lost revenue during the same period. Investors of these corporations were dissatisfied with the performance of the producers. Nothing was done by officers and directors. This leaves the industry ill prepared, with few resources, no capital structures and one option in the form of the Preliminary Specification. Continued misconduct and inaction by officers and directors risk escalating the situation from a disaster to a catastrophe. 

How are those that are responsible able to account for a $4 trillion revenue loss under these conditions? How is it that a culture of “muddle through” was ever acceptable to them? Do we allow this to continue?

These are the disqualifying facts of the history of the oil & gas producers in the 21st century. Seeking to maintain their positions has been their primary occupation by issuing successive press releases. None of what had been stated by them at any time has turned out to be valid and they’ve refused to accept the input of others. They have flipped and flopped in and out of oil & gas, declared the shale frontier uncommercial and reported specious profitability through the simple act of spending money. 

What qualifies as profitable in oil & gas in nothing more than the ability to spend money. When little of the capital, in a capital intensive industry, is passed to the consumers. Investors have to support the spending. Deceived by specious financial statements alleging profitability, which are marginally less than the gross profit. Throughout the period of time in which I criticized the industries actions. (December 2005 to February 2024.) Not one single change in any accounting practice, attitude or operation has occurred except for on February 21, 2024. That was the day that press releases were issued stating that natural gas production would be curtailed. 

The current organizational structure and industry culture lack any redeeming qualities, necessitating a comprehensive rebuild. People, Ideas & Objects suggest it needs to be rebuilt under the vision of the Preliminary Specification. It is not on the basis that we would need to tear it down to do so. The state of affairs in oil & gas is more or less destitute in my opinion. Given this need for rebuilding, the question arises: who can be trusted to undertake it? 

Announcing Phase II of Our Campaign

 People, Ideas & Objects' Declaration of Victory last Wednesday was timely and appropriate. However, I am fully aware of the potential challenges that may now begin in earnest. Experience has taught us that it is sometimes prudent to view oil and gas officers and directors primarily as advocates of public relations. Issuing press releases to a receptive media one day does not resolve the actual, chronic issue of systemic overproduction. As we have observed, it took 38 years for them to acknowledge that overproduction was a problem; it might take equally long for them to realize the necessity of implementing a solution. Oracle Cloud Infrastructure, People, Ideas & Objects, our user community and their service providers configured as our Cloud Administration & Accounting for Oil & Gas would be our recommendation to producers.

Major Announcement: Sale of 100,000 Profitable Production Rights

Today, we are excited to announce the sale of 100,000 Profitable Production Rights. This initiative is not a market offering and is exempt from regulatory scrutiny. Instead, it represents the licensing of exclusive access rights to our Cloud Administration & Accounting for the Oil & Gas sector, a licensed product anchored in the Intellectual Property of People, Ideas & Objects.

With the established pricing model, we anticipate these Profitable Production Rights will generate $100 million once we've established the necessary technical, legal and organizational frameworks. To facilitate the creation of this infrastructure, we are offering these rights at a 90% discount, aiming to raise $10 million in initial revenue. This strategic pricing is designed to fund the development of the requisite Profitable Production Rights technical, legal, and organizational infrastructure. Interested parties are encouraged to contact People, Ideas & Objects directly.

Campaign Success and Future Direction

The initial phase of our campaign, spanning from October 11, 2023, to February 16, 2024, achieved notable success across two primary objectives. First, producers have acknowledged the necessity of focusing exclusively on profitable production, a principle we've long advocated for, as highlighted in recent discussions. This shift comes in the wake of recognizing a staggering $4 trillion in wasted resources from 764 TCF of gas. Secondly, we are initiating the second phase of our campaign today, which will extend through the end of May 2024. This phase will intensify focus on the significant financial and operational missteps by industry officers and directors, particularly regarding the willful misconduct in resource destruction and the neglect of proven strategies.

Historical Context and Industry Dynamics

• In 2015, investor confidence waned, with many withdrawing further funding from oil & gas producers due to unsatisfactory performance and historical disappointments.
• People, Ideas & Objects published the Preliminary Specification in August 2012, offering solutions to the industry's prevailing challenges, which remain relevant today.
• On July 4, 2019, we released “Profitable, North American Energy Independence -- Through the Commercialization of Shale,” further advocating for the Preliminary Specification, which was unfortunately disregarded by industry leadership.
• The necessity to shut-in production became undeniable in April 2020 when oil prices plummeted to negative $37.64, refuting claims that such measures would lead to substantial formation damage.
• In 2022, a shift in narrative emerged as officers and directors declared shale unviable for commercial success, pivoting towards clean energy initiatives with purported shareholder support.
• By 2023, shale re-emerged as a strategic focus, albeit with a new consolidation theme, signaling a recalibration of industry priorities.

This sequence of events underscores a pattern of mismanagement and strategic misdirection by industry leaders. Culminating in significant financial losses and a questioning of their suitability for a leadership role. This second phase of our campaign aims to highlight these issues, advocating for a reevaluation of leadership strategies and a return to proven, profitable practices. 

Taking action is essential. The issuance of press releases concerning production cuts significantly influenced the price of natural gas on the day of announcement. However, this effect diminished by Thursday and Friday. The reputation of officers and directors for making statements without subsequent action is well-documented and arguably anticipated. It underscores the urgent need for tangible action, specifically through the implementation of the Preliminary Specification. Alternatively, a consistent, daily series of press releases could serve to sustain the illusion of ongoing activity.

Reviewed & Revised Profitable Production Rights, Part III

 New Growth Theory

Among the seven Organizational Constructs outlined in the Preliminary Specification, New Growth Theory plays a pivotal role. It aims to lower the overhead costs linked to oil and gas exploration and production by facilitating the sharing of administration and accounting services. This initiative is executed through People, Ideas & Objects, alongside our user community and service providers, via Cloud Administration & Accounting for Oil & Gas. The development of this software and service is financed through the proceeds from the Profitable Production Rights.

Professor Paul Romer's theory of non-rival goods extends and enhances the value derived from Adam Smith's principles of specialization and division of labor. People, Ideas & Objects is committed to abolishing the outdated and inefficient practice of each producer independently developing their administrative and accounting capabilities. Instead, we advocate for the adoption of Cloud Administration & Accounting for Oil & Gas, which provides a shared, variable-cost, industry-wide administrative and accounting infrastructure. Persisting in duplicative administrative and accounting efforts across producers is illogical in the 21st century, especially within an industry burdened by significant overhead costs like oil and gas.

Because the economics of ideas are so different from the economics of markets. We’re going to have to develop a richer understanding of non-market institutions, science like institutions, this is going to be a new endeavor for economics.

Budget

Our campaign in late 2023 and early 2024 to highlight the damage and destruction in the natural gas marketplace achieved remarkable success. We have now established as an industry fact that over 17 years, $4 trillion in natural gas revenues went unrealized due to the willful misconduct of certain officers and directors. This figure surpasses our initial value proposition estimates, which supported the potential for $5.7 trillion in incremental profits over a 25-year period for the oil and gas sectors combined. We extend our gratitude to these officers and directors for their unwitting contribution to our campaign.

On February 21, 2024, the Wall Street Journal reported that producers:

1023 ET – Short-covering pushes U.S. natural gas futures sharply higher after 

Chesapeake Energy

says it plans to cut production this year in response to current market conditions. The reaction looks overdone, but “we are keeping a close eye on matching or similar production-reduction comments from the other majors,” says Gary Cunningham of Tradition Energy. “If those come in the next week or so we could see summer push towards $3 and winter make a drive for $4.” The front month March contract is up 11% at $1.753/mmBtu, with double-digit gains also for subsequent months. (anthony.harrup@wsj.com)

Few industry participants would dispute that the direct costs associated with People, Ideas & Objects would be in the vicinity of $12.79 billion USD. The status quo finds it particularly challenging to acknowledge the costs for Intellectual Property royalties, earnings, and the valuation of Flexible Profitable Production Rights as outlined in the Preliminary Specification. The expenses tied to this initiative are minor compared to the now-validated, undervalued potential the Preliminary Specification is poised to unlock. Our Request for Proposal (RFP) section delves into the rationale behind the budget for People, Ideas & Objects, offering a detailed comparison between the prospective value the Preliminary Specification promises and the existing plans enacted by the officers and directors.

Promotion of Profitable Production Rights

People, Ideas & Objects has reintroduced Profitable Production Rights to fund the development of the Preliminary Specification and establish our user community. On February 26, 2024, we will announce a development aimed at initiating this process. The oil and gas industry faces a critical juncture; it has lost essential capacities and capabilities, rendering it unable to maintain its production profile. This situation has been aggravated by the attrition of long lead times necessary for drilling and completing wells, a process traditionally spanning ten years but now severely atrophied.

Particularly troubling is the industry's reliance on shale, which, due to its high cost and steep decline curve, has left us exceedingly vulnerable to an unprecedented industry-wide decline. The short-term inability to address this production shortfall signals a potential, catastrophic failure, compounded by our documented $4 trillion revenue shortfall created by existing officers and directors through complacency and a lack of proactive leadership.

Addressing this crisis requires an all-hands-on-deck approach, transcending the complacency that has circumvented industry motivation for action. The severe problem of declining production capabilities, exacerbated by industries overexposure to shale, demands immediate attention. Those in positions of authority and responsibility, who have historically preferred to "muddle through" using capital-intensive industry cash flows to offset their hefty compensation, must now face the urgency of the situation. The business discussion cannot end with executive compensation while ignoring these looming catastrophes. A concerted effort involving revised industry leaders, policymakers, and innovators is essential to forge a sustainable path forward for the oil and gas industry.

Conclusion

Status quo producers have lost sight of their purpose. They have failed, will not succeed, and have proven culturally incapable of earning "real" profitability. They have no desire to change or succeed. As time passes, the difficulties in the industry will become more apparent. The choice of alternative organizational opportunities for the greater oil & gas economy is limited to one choice offered by Oracle, People, Ideas & Objects, our user community and their service provider organizations in the form of our Cloud Administration & Accounting for Oil & Gas application. The time to consider these issues has passed. As part of the Intellectual Property available to develop any alternatives, it will be necessary to consider what solutions have already been developed and avoid what exists in our Preliminary Specification. Then undertake the difficult ten year process of researching a solution to achieve the industry needs.

In light of the trillions of dollars of damage and destruction caused by producer officers and directors throughout the greater oil & gas economy. People, Ideas & Objects provide extensive value propositions, developed new business models that bring new value as a result of disintermediation. The cultural methods we implement in the Preliminary Specification to achieve these advantages are described in our seven Organizational Constructs. We are building the future oil & gas industry on these cultural foundations.

As a result of our budget, the producers' officers and directors have maintained their distance from this project. Because of the scope and scale of these issues and this project, these costs must be recognized. Our next phase of development will not be built on one individual's success. As a result, it will be based on a comprehensive sense of urgency necessary to address these issues in the industry. In addition, the revenue potential and characteristics of Profitable Production Rights should reflect a negotiated share of the BOE's value proposition. And determined by the individual rights owner. We will be offering standard documents to aid their process.

The purchase price of these rights is $1,000 U.S. per North American BOE. In addition, the potential revenues and characteristics of that right reflect a negotiable share of the Profitable Production Rights with those who own the oil & gas production. The proceeds are used to build the Preliminary Specification. Fulfilling the need for People, Ideas & Objects revenues from oil & gas production, albeit indirectly in this case. By operating Cloud Administration & Accounting for Oil & Gas software and services, the Profitable Production Right will reflect the intrinsic value of oil & gas production's ability to organize profitably. It is a perpetual right and exists beyond today's oil & gas producers. Although our costs are large they pale in comparison to the significance of the damage done by these officers and directors. This damage is accelerating, has not been identified or approached and continues. Therefore anyone and everyone can share in the effort, the success and the reward of resolving this industry catastrophe to prevent what could become a societal catastrophe.

The status quo in the oil and gas industry is no longer sustainable. Producers have lost sight of their purpose, trapped in a cycle of unprofitability and culturally resistant to change. As challenges mount, the need for alternative organizational strategies becomes undeniable. People, Ideas & Objects, in partnership with Oracle and our vibrant user community, introduces a revolutionary solution: Cloud Administration & Accounting for Oil & Gas. This product represents the only viable alternative to reinvigorate the industry with real profitability and sustainable practices.

Our approach, delineated in the Preliminary Specification through seven Organizational Constructs, offers a blueprint for disintermediation and cultural transformation. These constructs provide a foundation for developing new business models that promise significant value by addressing the billions in damages caused by current leadership practices.

Recognizing the project's scope and the pressing need for industry-wide collaboration, we propose Profitable Production Rights. Priced at $1,000 U.S. per North American BOE, these rights not only fund the development of our solutions but also allow stakeholders to directly participate in and benefit from the industry's transformation. This model represents a perpetual investment in the future of oil and gas, transcending today's challenges.

As we stand at the precipice of what could become a societal catastrophe, it is imperative that we all contribute to a solution. The Profitable Production Rights offer a pathway to rebuild the industry on principles of profitability, sustainability, and collective effort. Our invitation extends to everyone to join this vital endeavor, shaping an industry capable of meeting the demands of the future while rectifying the mistakes of the past.

The Battle

For over four decades, North America's oil and gas industry has seen billions of barrels of oil and trillions of cubic feet of gas extracted and reported on balance sheets, with unclear benefits to society at large. While the purpose behind these actions may not be fully understood, the necessity for transparency and a reevaluation of strategies is undeniable. Alarmingly, the prosperity generated has largely been confined to the industry's officers and directors, posing a significant risk to societal well-being. People, Ideas & Objects recently documented over $4 trillion in revenue losses were realized in the July 2007 to current period. And did so unnecessarily. With disgruntled shareholders actions since 2015 designed to focus on these issues. And a solution in the form of the Preliminary Specification since August 2012. Willful misconduct are the personal issues in which individual officers and directors need to address.

As these leaders transitioned towards clean energy, taking the industry's revenues with them, questions arose about the legality of this shift. It highlights an urgent need for a system that genuinely aligns with oil & gas profitable oil & gas practices. Enter Profitable Production Rights: a concept designed to steer the industry towards a culture of preservation, performance, and profitability, prioritizing the most profitable means of oil & gas operations.

The Preliminary Specifications seven Organizational Constructs lay the groundwork for this transformation, offering a comprehensive and intuitive cultural framework. This environment invites all concerned stakeholders to engage, innovate, and thrive, marking a pivotal step towards creating a dynamic, innovative, accountable, profitable and prosperous oil and gas sector.

Smell's Like Victory to Me

The oil & gas industry has long been marred by systemic issues, leading to unprecedented losses—764 trillion cubic feet (TCF) of natural gas undervalued for a staggering $4 trillion loss between 2007 and 2024 stemming from their distorted price structure. This chronic overproduction, tracing back to the significant oil price decline of July 1986, has not only impacted North American producers but the economy at large. Nearly four decades later, the consequences of these (in)actions are undeniable, yet it took the risk of personal liability for officers and directors to spur a reevaluation of their strategies. 

How long will it take them for the next issue to be resolved? What is their credibility? Who do you trust?

From today’s Wall Street Journal here and here.

Reviewed and Revised Profitable Production Rights, Part II

 Issues Involved in Profitable Production Rights Licenses

An Inconsistent Software Architecture to What’s Approved

People, Ideas & Objects now hold commercial rights to Paul Cox’s Intellectual Property, marking a significant issue for the traditional officers and directors in the oil & gas sector. Historically, these stakeholders have neither accepted nor recognized IP, fearing that doing so would conflict with their established protocols and operational methods. Intellectual Property safeguards the software within Cloud Administration & Accounting for Oil & Gas, securing its value proposition and, consequently, its asset value. This protection enables us to generate development and maintenance revenue by creating Profitable Production Rights License products, thus preserving their inherent value.

People, Ideas & Objects and the status quo aim to secure commercially what rightfully belongs to People, Ideas & Objects' value as represented in the Intellectual Property developed in the Preliminary Specification and beyond. We leverage this value to drive productive change in the industry and challenge the status quo. The traditional powers seek to halt this progress to preserve their dominance for another generation, hourly compensating those who contribute to their cause, thereby keeping a critical aspect of the industry's future under their control. We have chosen a different path to ensure the health and prosperity of the oil & gas industry.

In this vein, People, Ideas & Objects poses critical questions: Will a dynamic and innovative oil & gas industry emerge without the contributions of those individuals dedicated to solving complex scientific and business challenges? Moreover, will these problem-solvers commit their time, resources, and effort without the safeguards provided by Intellectual Property Laws? These questions underscore the indispensable nature of IP protection in motivating innovators to push the boundaries of what is possible in the oil & gas sector.

This software infrastructure is a primary concern for the Profitable Production Rights Licensee, aiming to secure leverage for their value proposition. It is entirely derived from People, Ideas & Objects and its licensed Intellectual Property. Intellectual Property is a key construct among the seven Organizational Constructs outlined in the Preliminary Specifications. We invite readers to review this section to grasp IP's significance in our community and the broader oil & gas industry.

The prevailing mindset among producers' officers and directors, and the broader commercial marketplace, is that commercial software applications like the Preliminary Specification should be accessible via published Application Programming Interfaces (APIs). The preference for open-source software, due to its expansive community and low cost, allows for creative and innovative enhancements to software through these APIs. This approach seems to offer an improved method of software delivery. However, it's crucial to understand the underlying motivations for this architecture choice and to compare it with People, Ideas & Objects’ strategy of using private APIs for proprietary software, which is accessible only within our licensed domain.

Publicly publishing an API as desired by the status quo would breach the terms of our user community provisions. Our licensing agreement grants users the rights to uphold, secure, and create derivative works. Consequently, publishing an API would enable producer firms to access software code without compensation, undermining the value proposition of the underlying Intellectual Property. This issue came to the forefront on May 6, 2021, when the United States Supreme Court ruled in favor of Google against Oracle, regarding the unauthorized use of the Java Programming Language. The Court determined that using a published API constituted “fair use” and did not violate Oracle’s copyright.

Despite this, producers are still willing to pay for software development conducted by "blind sleepwalking agents," as long as it serves their interests. This situation highlights the contrasting motivations and arguments surrounding this legal nuance. People, Ideas & Objects and the status quo aim to secure commercially what rightfully belongs to People, Ideas & Objects' value as represented in the Intellectual Property developed in the Preliminary Specification and beyond. We leverage this value to drive productive change in the industry and challenge the status quo. The traditional powers seek to halt this progress to preserve their dominance for another generation, compensating those who contribute to their cause, thereby keeping a critical aspect of the industry's future under their control. We have chosen a different path to ensure the health and prosperity of the oil & gas industry.

People, Ideas & Objects ask what benefit will oil & gas producers gain from the ownership of ERP softwares Intellectual Property? Their distinct competitive advantages fall under their land & asset base and their earth science & engineering capacities & capabilities. It is the application and coordination of these towards their asset base that will generate the value and profitability for the producer firm. ERP Intellectual Property will continue to be distractions if producer officers and directors continue to seek them. At the same time IP is critical to the structure and means of an effective ERP marketplace.

Potential Profitable Production Rights Licensees should note that my holdings are evenly distributed between Intellectual Property royalties, People, Ideas & Objects earnings, and fees from producers through the Flexible Profitable Production Rights Licenses I possess. I’m all in to ensure I benefit from a profitable and prosperous North American oil & gas industry as a result. 

Vaporware

Absolutely, and we embrace this label with pride. Our approach has avoided locking ourselves into rigid solutions that might later require expensive software redevelopments. This strategy has allowed us to remain agile and financially autonomous, focusing squarely on the pressing matters at hand. As the oil & gas ERP provider that has faced financial neglect, criticism, and outright vilification, People, Ideas & Objects stands resilient. Despite the heavy criticism from entrenched interests within the industry, we continue to present the sole viable solution to the existential and organizational challenges facing the sector.

Embracing the concept of vaporware to its fullest, we've focused primarily on nurturing our user community since 2014, a meticulous and time-intensive endeavor. The Preliminary Specification, published in 2012, serves as a blueprint for our community, enabling them to grasp the future dynamics of oil & gas operations and contribute their expertise to this vision. This initiative empowers them to actively participate in shaping the industry's evolution. With the exclusive license provided to our user community, they have the unique opportunity to:

• Craft derivative works based on our Intellectual Property exclusively.
• Provide essential feedback to our software developers at People, Ideas & Objects.
• Exercise discretionary control over their budgets.

We safeguard the outcomes of our user community's efforts, protecting them from the scrutiny and jealousy of the industry's traditional power brokers. This protective measure ensures that our contributors can continue to thrive in their roles without risking their positions. They engage in shaping both the future and the revisitation of past practices, doing so both overtly yet inconspicuously.

Upon the completion of our user communities in-depth analysis and enhancement of the Preliminary Specification, we will be positioned to finalize a system architecture and operational framework. This groundwork will enable us to implement cutting-edge, dynamic, and accountable oil & gas operations, setting new standards for dynamic, innovative, accountable and profitable oil & gas producers in the industry.

Scope and Scale

The Preliminary Specification introduces an unprecedented scope within the ERP environment, driven not by mere ambition but by the profound challenges and the unwavering stance of industry leaders over decades. The oil & gas sector, essential to our advanced standard of living, faces potential risks. Yet, the ability of producers' officers and directors to address these challenges dynamically, innovatively, accountably, and profitably seems limited by a pervasive culture of complacency.

The challenges posed by the Preliminary Specification are unique, yet the essence of what we offer does not deviate from what producers must inevitably create themselves. Every producer faces the burden of development costs tied to their Intellectual Property, which must not infringe upon the IP of People, Ideas & Objects. This situation raises a significant issue: the lack of a clear vision and understanding to tackle long standing problems like Production Discipline, unresolved for more than four decades.

Oracle's current initiative to overhaul the U.S. healthcare system by shifting the focus from facilities to patient-centric care presents a parallel in ambition. Their approach, aiming to unify patients' medical histories across different healthcare providers, surpasses the scale of our efforts in complexity and scope. This comparison highlights how isolated systems fail to meet contemporary needs for integrated care.

The question arises: Are the initiatives of People, Ideas & Objects and Oracle merely experimental phases for ERP systems, or are they essential responses to the growing demands for enhanced capacity, capability, and organizational performance within their respective sectors? The necessity of such transformations for societal advancement is undeniable. The success or failure of these ambitious projects will ultimately provide the answers. Given the absence of viable alternatives to the Preliminary Specification, the pressing time constraints, and the urgency of our mission, the success of People, Ideas & Objects is imperative. Resolving these industry-wide challenges requires a collective effort, underscoring the importance of every stakeholders contribution to achieving this goal.

Assuming Oil & Gas Disintermediation is Necessary

Disintermediation is essential across all industries. The future viability of structured hierarchies is in question, as their current functionality fails to meet the efficiency and commercial performance society demands. The internet has catalyzed various organizational models that introduce innovative approaches to value generation, surpassing the capabilities of traditional structures.

The need for disintermediation within the oil & gas industry is a point of contention. People, Ideas & Objects posit that the existing framework has fundamentally failed, a perspective not universally recognized but gaining traction due to the growing concern over the industry's tendency to overlook or inadequately address business challenges.

A hallmark of disintermediation is the clash between defenders of the status quo and advocates for change. In North America, the oil & gas industry's resistance has been so staunch that it detrimentally impacts all facets of the sector and its ancillary industries.

Viewing the situation optimistically, People, Ideas & Objects see disintermediation not merely as a necessity but as an opportunity. The extensive damage inflicted requires substantial corrective measures to rejuvenate the service industry's capacities and capabilities and to revitalize exploration and production competencies within the producing entities. Restoring trust, faith, and integrity among producers is crucial to re-engaging the investment community with the industry. Ensuring that the sector adopts the most profitable means of oil & gas operations is paramount, along with guaranteeing that consumers have access to energy that is affordable, abundant, and reliable. Therefore, the question arises: Why should the industry revert to outdated methods when modern, proven tools and strategies from other sectors can lead to success?

Value Proposition

Our extensive value proposition hinges on a critical premise, leveraged by both categories of Profitable Production Rights Licenses. The historical dependence of producer companies on external capital and the consequent erosion of value over the past four decades have rendered these entities neither profitable nor commercially viable. A well-established principle emerges: over-reported assets lead to inflated profitability figures, triggering excessive investment and, consequently, overproduction. In the realm of oil & gas commodities, adhering to price maker principles is crucial. Decades of overproduction have severely undermined the prosperity of all stakeholders in the oil & gas sector.

This situation reveals an insidious problem eroding industry performance over time. Profitability and financial performance, taken for granted and unquestioned, become ostensibly easy targets. However, over time, organizational performance degrades to a point of complete reliance on external capital for basic operations. The oil & gas industry's culture of unwavering persistence against change has become its Achilles' heel, rendering the sector economically not viable as its present value dips into the negative.

This predicament appears terminal. A market economy cannot thrive with a counterproductive culture; such a culture must be dismantled to prioritize performance as the benchmark for success. Unfortunately, the energy required to dismantle this bureaucratic culture is immense. Luckily, People, Ideas & Objects is poised to reconstruct the industry based on the performance-oriented culture outlined in the Preliminary Specification, ensuring the most profitable oil & gas operations universally.

The industry's pervasive "muddle through" approach, stemming from the assumption that commodity markets will absorb any level of production, sees producers operate at full capacity. However, the Preliminary Specifications decentralized production model and price maker strategy face criticism as potential collusion. Unlike this perception, price makers curtail unprofitable production until it becomes viable, considering oil & gas commodities as price makers to regulate supply by introducing only profitable production to the market.

Directors and officers often mistakenly believe the market will magically balance any volume they produce. This misconception has led to dramatic price declines, including several collapses since 1986 and the unprecedented negative oil price of $37.64 in April 2020. Markets operate on the principle that price conveys information, suggesting production is only justifiable if it yields profit; otherwise, it results in value destruction. This fundamental misunderstanding by oil & gas officers and directors—that they are mere spectators in the market—leads them to persist with production at 100% capacity regardless of market conditions, embodying a culture of loss acceptance.

Profitable Production Rights Licenses capitalize on the disparity between these industry paradigms to offer People, Ideas & Objects compelling value proposition. Predicted to be worth $25.7 - $45.7 trillion over the next 25 years, these licenses could unlock $5.7 trillion in incremental profitability. Contrary to claims that $20 to $40 trillion is needed in capital investment to rejuvenate the industry's capacity and infrastructure. In the Preliminary Specification, this amount is not necessary, since capital costs are recognized competitively with all other industries in North America. Internally generated cash is reinvested to be recovered repeatedly. As a result, it will be invested again and again competitively with what other industries in North America achieve. The costs of a capital-intensive industry such as oil & gas are primarily capital-related and therefore will be the predominant cost passed on to consumers. In contrast to officers and directors strutting down main street comparing their well-built balance sheets and "putting more cash in the ground," the Preliminary Specification puts cash to work, quickly and repeatedly.

Disintermediation, by any standard, holds promise. Despite 19 years of advocating through this blog, the choice of industry leaders to neglect available value in favor of maintaining destructive practices is unsurprising. The value unlocked through disintermediation in various sectors is well-documented, echoing Adam Smith's findings on the impact of specialization and division of labor, which have significantly increased industry throughput. Today, the benefits of specialization and labor division are universally acknowledged as fundamental to our economy's value generation. Yet, ERP software has often cemented organizations in static models, satisfying only those content with the status quo. People, Ideas & Objects advocate for the creation of our permanent software development capabilities to eradicate what we perceive as a contemporary software flaw.

Reviewed & Revised Profitable Production Rights, Part I

 We have concluded our campaign aimed at bringing to light the adverse consequences inflicted upon the oil & gas sector due to the Willful Misconduct of its officers and directors. We extend our gratitude for their cooperation, which has contributed to a significant shift in the natural gas price structure from 24.82 times the oil price on October 11, 2023, to a record high of 49.41 times at last Friday’s close.

Initially, our assertions regarding the industry's damage and destruction, alongside the critical issue of profitability, were met with skepticism. Many producers dismissed the importance of profits, emphasizing cash flow instead. However, investor intervention helped validate our concerns, underscoring the reality that profitability is indeed crucial. Our value proposition, estimating impacts between $25.7 to $45.7 trillion over the next 25 years, has ultimately underscored the necessity for industry leaders to heed the insights offered by People, Ideas & Objects.

In the aftermath of our campaign, we no longer face challenges in highlighting the issues our Preliminary Specification addresses, nor in garnering consensus regarding our value proposition. The credibility of officers and directors who previously dismissed or were oblivious to these flawed business practices has diminished. Their past reluctance to acknowledge or address these issues reveals a level of responsibility they cannot afford to ignore again. We believe there is an urgent need for these leaders to tackle these challenges head-on. To them, People, Ideas & Objects offers its best wishes for swift and effective resolution.

Introduction

People, Ideas & Objects is revitalizing the oil & gas industry by reintroducing a modified Profitable Production Rights Licensing method. This approach not only funds the development of the Preliminary Specification and nurtures our user community but also grants licensees the dual opportunity to engage in the North American oil & gas sector and its ERP software markets. In today's era, every business is becoming a software business, making participation in our ecosystem essential. I’ll restate here why participation in People, Ideas & Objects et al is valuable in the 21st century. It’s no longer enough to just own the oil & gas asset, it’s also necessary to have access to the ERP software and services of People, Ideas & Objects et al’s Cloud Administration & Accounting for Oil & Gas that makes the oil & gas assets profitable.

The transition of producer officers and directors towards clean energy and consolidation, coupled with their historical dismissal of shale's commercial viability, highlights a disregard for the oil & gas sector they once managed. This has led to a culture resistant to change, lacking in accountability and transparency, and neglectful of real profitability. Our 2023 / 2024 focus on the LNG issue has illuminated over $4 trillion in lost revenue since July 2007, a testament to the officers and directors willful misconduct.

The North American producer is portrayed as a failing organization, risking societal jeopardy with its inability to sustain shale production. The industry's operational, financial, and political challenges call for innovation and entrepreneurship—qualities the status quo lacks. As Edmund Burke suggests, technology represents a dynamic counterforce to stagnation and tyranny, offering a path towards innovation and change.

Despite the transformative potential of shale technologies since the 2008 financial crisis, the industry has failed to capitalize on this value. The status quo has led to distorted business practices and value destruction, underscoring the necessity for a new approach. People, Ideas & Objects stands as the sole alternative to outdated methods, offering a solution that ensures dynamic, innovative, accountable and profitable North American energy independence.

Our Profitable Production Rights Licensing provides the keys to accessing a new model of oil & gas organization—one that prioritizes dynamic, innovative, accountable and profitable oil & gas production, everywhere and always. As the industry faces its future, the choice between embracing this new path or clinging to the status quo will determine its trajectory. People, Ideas & Objects invites everyone to join us in building a future where oil & gas remains a cornerstone of North America's economic prosperity.

Licensing

Profitable Production Rights License

In terms of implementation, our objective is to encode each Profitable Production Rights License onto a dedicated blockchain, specifically secured through Oracle Cloud Infrastructure and the Oracle Autonomous Database. This capability is made possible by the recent introduction of the Oracle Blockchain Table. Within the context of the Preliminary Specification, this Oracle database will oversee the administration of Profitable Production Rights Licenses, effectively managing the contracts of rights holders. Consequently, this enables contracted licensees to access People, Ideas & Objects software and services, while also overseeing and managing their revenue and expenses.

Should any assignments, sub-leases, or transfers of the Profitable Production Rights License occur, these actions will not alter or remove the original purchaser's transaction in the database. Instead, they will generate an additional block on the chain or a new row within the Oracle Blockchain database instance. Profitable Production Rights Licenses are organized via their serial numbers to collate all related transactions, assignments, current ownership details, and the licensing of production rights to the respective producing Joint Operating Committee.

The licensee of the Profitable Production Right will maintain ownership and control over the encryption key necessary to access the record database. This database archives the production contracts executed with producers, who are invoiced based on the terms of the Profitable Production Rights Licensees' contracts. The licensing structure grants exclusive access rights, positioning it as a unique solution for organizing North American oil & gas exploration, production, administration, and accounting in a profitable manner.

Oracle's Blockchain Tables are specifically designed as append-only tables to support centralized blockchain applications. Within this framework, peers are identified as database users who rely on the database's integrity to preserve a tamper-resistant ledger. This ledger, implemented via a blockchain table, is both defined and managed by the application, allowing existing applications to safeguard against fraud without the need for a new infrastructure or programming paradigm. Although the transaction throughput for a blockchain table is lower than that of a standard table, its performance is notably superior to that of a decentralized blockchain system.

It is essential to acknowledge that Oracle's Blockchain Database does not represent a pure blockchain implementation, as it does not distribute its blockchain across servers for validation in the case of suspicious transactions. Instead, its design prioritizes higher transactional performance, a critical requirement for our applications. Managed by the Oracle Autonomous Database, it serves as a crucial component of our Cloud Administration & Accounting for the Oil & Gas Software & Service, ensuring data immutability—a fundamental blockchain feature. This system guarantees that Profitable Production Rights Licensees have secure rights, necessitating that North American oil & gas producers obtain sufficient licenses to access our Cloud Administration & Accounting Software & Services for the entirety of their production profile. People, Ideas & Objects is confident that this solution will provide an unmatched competitive advantage in profitably organizing producers.

Flexible Profitable Production Rights License

Oil & gas production inherently comes with its unpredictability. This is particularly true for fields experiencing decline, with shale regions showing notable variability. The global market demand has witnessed significant fluctuations, as evidenced by a 25% decrease in worldwide consumption during the COVID pandemic. Although such a steep decline might be rare, it establishes a critical baseline for analysis. This situation is further complicated by the decentralized production models and the price maker strategy introduced by the Preliminary Specification, potentially leading to greater and less predictable variations in a producer's production volumes.

Addressing these challenges necessitates a robust mechanism to manage the financial implications of production variability, especially considering the fixed overhead costs associated with Profitable Production Rights Licenses—predominantly those related to Oracle software licenses for Cloud Administration & Accounting for Oil & Gas software and services.

To mitigate these challenges, People, Ideas & Objects have introduced two distinct categories of Profitable Production Rights. The first category has already been described as the Profitable Production Rights. The second, the Flexible Profitable Production Rights License, is designed to account for up to 25% of the total production profile of the continent or the subscriber base of People, Ideas & Objects, whichever is lower. This allocation is intended to buffer against up to 25% of production variability across all operations. Each producing property is automatically allocated 25% of the Flexible Profitable Production Rights License to compensate for any potential production decline, thereby indemnifying Profitable Production Rights License owners against the financial risks posed by variable production volumes of a Joint Operating Committee production.

In scenarios of extreme production declines, as observed in the past decade, or when production is halted due to unprofitability—a situation expected to represent a small fraction of North America's total output—the Flexible Profitable Production Rights License comes into play. It covers the revenue loss for any shut-in production, assuming the property is being reworked to resume production, aligning with the core objectives of the Preliminary Specification. Should production become indefinitely suspended or abandoned, Profitable Production Rights Licensees are freed to seek new production opportunities. In such cases, revenue impacts would be borne by Flexible Profitable Production Rights Licensees, not the standard Profitable Production Rights Licensees.

The pricing strategy for the Flexible Profitable Production Rights License does not undervalue it compared to the standard Profitable Production Rights License. By People, Ideas & Objects acquiring all Flexible Profitable Production Rights Licenses this will redistribute the margins generated through People, Ideas & Objects to those shut-in areas. Therefore allocating 25% of the overall production profile in consideration for 100% of the Flexible Profitable Production Rights Licenses. Thereby purchasing the Flexible Profitable Production Rights in exchange for 36% of the budgeted earnings of People, Ideas & Objects. Holding all Flexible Profitable Production Rights Licenses is expected to strengthen our negotiating position when leasing these licenses to producer firms that require coverage for a quarter of their total production. Negotiations for Flexible Profitable Production Rights will begin once all Profitable Production Rights have been fully allocated to each Joint Operating Committee.

Therefore to summarize the configuration of Profitable and Flexible Profitable Production Rights.

The strategy outlined for the Flexible Profitable Production Rights License within the context of People, Ideas & Objects involves a nuanced approach to pricing and redistribution of value within the oil & gas sector, specifically targeting areas of production that are currently shut-in or underutilized. This approach does not undervalue the Flexible Profitable Production Rights License in comparison to the standard Profitable Production Rights License. Instead, it aims to leverage these flexible rights to enhance the overall production profile and financial health of the involved entities, particularly Profitable Production Rights Licensees through strategic negotiations and allocations.

1. Acquisition of All Flexible Profitable Production Rights Licenses by People, Ideas & Objects: By acquiring all Flexible Profitable Production Rights Licenses, People, Ideas & Objects positions itself as a central figure in the redistribution of margins to shut-in areas. This action underlines the intent to revitalize these areas by ensuring that they can contribute to and benefit from the broader production and profit mechanisms within the industry.

2. Redistribution Mechanism: Allocating 25% of the overall production profile in exchange for 100% of the Flexible Profitable Production Rights Licenses signifies a strategic redistribution of resources and opportunities. It effectively means that a quarter of the total production capacity is considered in the valuation and acquisition of these flexible rights, aiming to balance the scales between different production potentials and needs within the industry.

3. Financial Arrangements: The decision to exchange these rights for 36% of the budgeted earnings of People, Ideas & Objects highlights a significant investment in the potential of these shut-in areas. It reflects a confidence that the activation and utilization of these areas will not only be profitable but also contribute substantially to the overall earnings and operational success of People, Ideas & Objects.

4. Strengthening Negotiation Positions: Holding all Flexible Profitable Production Rights Licenses enhances People, Ideas & Objects ability to negotiate with producer firms that need to cover a significant portion of their production. This strategic position allows People, Ideas & Objects to dictate terms that are favorable and ensure that the licensing of these rights contributes positively to its objectives and the wider industry's health.

5. Allocation and Negotiation Process: The strategy indicates a phased approach, beginning with the full allocation of Profitable Production Rights to each Joint Operating Committee before initiating negotiations for Flexible Profitable Production Rights. This sequence ensures that the foundational elements of production rights and responsibilities are established, allowing for a more focused and effective negotiation on the flexible aspects.

What do Flexible and Profitable Production Rights Licensees earn?

The narrative provided outlines an innovative approach introduced by People, Ideas & Objects aimed at transforming the operational and financial frameworks within the oil & gas industry. This transformation pivots around the concept of Profitable Production Rights Licenses, which serve as the cornerstone of People, Ideas & Objects strategy to overhaul how the industry functions, particularly in addressing the inefficiencies and value destruction perpetuated by current management practices.

This strategy is the exclusive access granted to licensees of Flexible and Profitable Production Rights to the Cloud Administration & Accounting for Oil & Gas Software & Services. This exclusivity is pivotal, ensuring that the revolutionary services developed under the Preliminary Specification are reserved for those holding the appropriate licenses. It's a model that not only underscores the value of these licenses but also sets a clear boundary for access to innovative operational capabilities. Each license is designed to enable the profitable processing of one barrel of oil equivalent (BOE) per day, marking a significant step towards more efficient and profitable operations.

An interesting aspect of this strategy is the anticipation of a development phase, a period characterized by the absence of financial transactions, both in terms of revenues and expenses, for the licensees. Despite this, licensees are encouraged to engage with producers early on to secure production rights, laying the groundwork for operations ahead of the commercial launch of Cloud Administration & Accounting for Oil & Gas Software & Services. This proactive approach is indicative of the strategic foresight embedded in People, Ideas & Objects model.

The revenue model proposed is another key element, with Profitable Production Rights Licensees generating income by levying fees on producers for the processing of their BOE through the platform. The flexibility granted to rights holders in structuring these fees allows for diverse and potentially innovative business models to emerge, tailored to the specific dynamics of the engagements between licensees and producers.

People, Ideas & Objects critique of current industry practices forms a critical backdrop to its strategy. The critique is sharp and comprehensive, pointing to a systemic failure to create value, manage capital structures effectively, and compete for capital since the initial oil price collapse of 1986. Through this lens, People, Ideas & Objects highlights the vast potential for transformation in the industry, underscored by the identification of a $4 trillion revenue loss in the natural gas sector from July 2007 to the end of 2023—a stark reminder of the opportunities missed under current operational paradigms. And a source of value in the Profitable Production Rights Holders offering to producer firms.

In response to these challenges, People, Ideas & Objects presents its value proposition as a beacon of change. By leveraging the Preliminary Specification, People, Ideas & Objects envisions an industry that is not only more dynamic, innovative, and accountable but also significantly more profitable. This vision extends across the full spectrum of oil & gas operations, from exploration and production to administration and accounting, offering a comprehensive blueprint for transforming all producers from the startup to integrated multinationals.

In essence, People, Ideas & Objects strategy represents a bold step forward in reimagining the oil & gas industry. By placing Profitable Production Rights Licenses at the core of its approach, People, Ideas & Objects aims to catalyze a shift towards preservation, performance and profitable operations. This strategy challenges the status quo, proposing a future where the industry not only recovers from its historical inefficiencies but also positions itself as a competitive and financially robust sector, capable of attracting and managing capital with unprecedented efficacy.

What do Flexible and Profitable Production Rights Licenses earn?

The innovative approach introduced by People, Ideas & Objects through the Profitable Production Right License represents a significant shift in the oil & gas industry's operational and financial paradigms. The essence of this shift lies in leveraging advanced technological solutions and strategic pricing models to enhance profitability and operational efficiency. This model meticulously balances the integration of technological advancements with pragmatic financial strategies, aiming to redefine the industry's standards for profit generation and resource management.

The core of the revenue generation mechanism under the Profitable Production Right License is a sophisticated negotiation process. This process aims to establish a share of the present value of the differential, which effectively compares the value proposition offered by People, Ideas & Objects and its associated technological and service advancements against the industry's status quo. The outcome of these negotiations, which will be uniquely tailored to each agreement between the Profitable Production Right Licensee and the producer firm, determines the revenue potentials. Such contracts are managed using the Oracle Blockchain database, ensuring transparency and efficiency in handling each specific barrel of oil equivalent (BOE).

A proposed revenue model suggests linking the licensees' earnings to a percentage of the oil & gas commodity price, with a discussion range between 5% and 10%. This range is designed to capture a significant portion of the pretax profitability of commercial operations, ensuring that producer operations remain profitable under the Preliminary Specification. The rationale is to establish commodity prices that are not only marginal but are elevated to a level that secures profitability. This approach addresses a long-standing indifference from current producers towards optimizing profitability, thus presenting a cost that future producers would consider essential for determining their profitability.

The pricing structure of the Profitable Production Right License, set at $1,000 U.S. per BOE, is reflective of the current North American production profile and accounts for the inclusivity of heavy oil production within the People, Ideas & Objects budget. The model acknowledges the unique operational dynamics of heavy oil producers, including their existing ERP systems, while still positioning them as direct beneficiaries of the price maker strategy advocated by People, Ideas & Objects.

Addressing the operational costs associated with the Preliminary Specification, the long-term maintenance of software development and community support is deemed non-material relative to the gross revenues of producers. An analysis comparing the development costs of the Preliminary Specification against the gross revenues of producers in 2021 illustrates that the operational and incremental software development costs post-commercial release are sustainable, amounting to a modest percentage of a single year's oil & gas revenues.

The financial strategy extends to encompassing the overhead costs within a manageable framework for both Flexible and Profitable Production Rights License owners, translating into an all-in cost that reflects these long-term support and development costs. This model ensures that the Profitable Production Rights Licenses do not adversely impact the service providers' fee structures or billing practices, yet indirectly influences the producers' access to service providers through the softwares access rights.

The foundational principle of the Profitable Production Right License is its role as a contract granting producers access to a suite of organizational capabilities aimed at securing profitable production. This right, inherently reconfigurable, detaches the risks typically associated with oil & gas property ownership, providing a transferable, assignable, and leasable avenue for operational flexibility.

Today’s producers' tactical management approach includes everything that comes into their minds. In the past few years we’ve seen $25 million in executive bonuses paid by Chesapeake the week prior to its bankruptcy declaration. It appears that bankruptcy is the means to deal with shareholders who have become too dissatisfied with management performance and is how producers can reshuffle the deck as it were. Profitable Production Rights Licenses circumvent these actions by having a clause that terminates the Profitable Production Rights License upon bankruptcy. Therefore freeing up the rights and maintaining value in the hands of the rights owner. Endorsing the purpose of Profitable Production Rights by separating ownership of oil & gas production from the right to process that production. This is done through organizations represented by Cloud Administration & Accounting for Oil & Gas. The Licensees could then engage bankruptcy trustees to reinstate the Profitable Production Rights License. This would be on terms that maintain independent ownership of the Profitable Production Rights License separate and distinct from the means of production.

Who and why would anyone be interested in purchasing these Profitable Production Rights Licenses?

Answering the who and why anyone would be interested in acquiring Profitable Production Rights outlines a comprehensive strategy aimed at revolutionizing the oil & gas industry. Through the development of People, Ideas & Objects Preliminary Specification, and building of the Cloud Administration & Accounting for Oil & Gas software and services. This approach is designed to address the industry's long standing challenges with preservation, performance and profitability. Marking a decisive shift from traditional practices that have proven ineffective and unpopular among investors and stakeholders. Here’s a breakdown of the key elements and their significance:

Strategy for Industry Transformation

Introduction of Profitable Production Rights License: A core component of the strategy is to incentivize various stakeholders within the industry to adopt new practices that ensure profitability and sustainability. This involves shifting from traditional methods of operation to more innovative and accountable approaches, facilitated by the Profitable Production Rights License. This license serves not only as a revenue generation tool for People, Ideas & Objects but also as a catalyst for industry-wide change.

Target Audiences:

Investors: Highlighting the disillusionment of investors with past industry practices, the strategy aims to re-engage them by offering a stake in a transformed, dynamic, and profitable industry.

Oil & Gas Employees: Acknowledging the risks faced by individuals in supporting industry transformation, the strategy emphasizes confidentiality and the promise of a safer, more rewarding future.

Service Industry Representatives: By addressing the boom/bust cycle and advocating for a more stable and trustworthy relationship between producers and the service industry, the strategy aims to rebuild trust and ensure mutual profitability.

Producers (North American and Worldwide): Encouraging direct investment in Profitable Production Rights Licenses or engagement through lease agreements, this approach seeks to secure production rights and promote a performance-based culture across the global industry.

Our user community and their service provider organizations: Their participation in these software developments proves their motivation for profitability everywhere and always. A Profitable Production Rights License would provide them with an incremental value-add from what they seek to produce for the industry. Securing additional motivation to provide the most profitable means of oil & gas operations, everywhere and always. Our user community and service provider organizations are derived from the general oil & gas community. Having direct participation in the production process is attractive to these people.

Key Benefits and Outcomes

Disintermediation through Information Technology: Leveraging IT to streamline operations, reduce inefficiencies, and foster a more direct connection between production and profit.

Organizational Constructs to support a Cultural Shift: Proposing a reimagined structure for the industry that emphasizes dynamic, innovative, accountable, and profitable producers. Advocating for a wholesale cultural change within the industry to embrace new ways of working that prioritize profitability and sustainability.

Collaborative Effort: Recognizing the need for a collective industry effort to overcome the challenges and risks associated with transitioning to new operational models.

Conclusion

The strategy outlined is ambitious and seeks to address the multifaceted challenges facing the oil & gas industry by fundamentally rethinking how it operates. By focusing on innovation, accountability, and sustainability, and by engaging a broad spectrum of stakeholders through the Profitable Production Rights License, the approach aims to transform the industry into a more profitable, sustainable, and innovative sector. This transformation is not only necessary for the industry's survival but also for its ability to compete and thrive in a global market that increasingly values these attributes.