Podcast # 33, Decentralized Production Model

I’m very pleased with the exceptional value these podcasts are delivering. Admittedly, I may be biased, but they capture precisely what I intended to convey in the Preliminary Specification. They allow anyone with even a passing interest in the project to get up to speed quickly, thanks to the AI’s remarkable ability to synthesize and communicate the material efficiently.

Today’s episode focuses on our Decentralized Production Model—the core value-adding framework that enables the industry to manage reserves responsibly and eliminate the chronic waste of producing unprofitably. All in just 14 minutes.

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The Cost of Inaction, Part III Culpability

We resume the discussion by revisiting the question of how critically the industry required the use of the $4.7 trillion in lost natural gas revenue. The only reasonable conclusion, after reviewing the prior analysis, is one of utter devastation. Officers and directors appear either oblivious to the scale of the damage—or perhaps are concealing a deeper sense of culpability. At this stage, attributing such negligence to mere naivety or ignorance strains credibility.

Investors voiced their dissatisfaction in 2015, citing concerns over performance and accountability, yet producers have made no changes. In a healthy and profitable industry, profits should easily cover debt, dividends, and capital requirements. While investment is needed, there are multiple capital sources; not every company lines up on Wall Street for more money each year. The primary goal is to make money, and despite efforts to educate oil and gas leadership, they have ignored their investors' message.

The strategy of "waiting out" investor demands for accountability, under the assumption that investors "understood" the industry's decline curves and would eventually be forced to invest, was both sophisticated and dangerously unpredictable. This has led to an unprecedented environment where steep decline curves are experienced, even though prolific shale makes up the majority of the industry's deliverability.

In 1991, I began pursuing the application of Information Technologies to solve business issues in oil and gas. My team and I developed a business plan to raise private capital, and in 1992, we signed a joint development agreement with Oracle. This venture failed in 1997 for reasons I only understood in the 21st century, when both Oracle and IBM exited the industry after failing to attract producer interest in developing ERP systems. What Oracle, IBM, and subsequently People, Ideas & Objects learned is that there is no desire to establish accounting systems that would bring about appropriate levels of accountability in oil and gas. IBM was the last to leave in 2005, leaving only People, Ideas & Objects as potential "new" providers in the ERP market. It was far easier to discredit a startup than a multinational tech firm.

Our conclusion of "designed unaccountability" is supported by the lack of ERP market entrants. SAP had a strong uptake in many of the consolidated producers five years ago. The lack of any issues being resolved proves our argument that they are the bureaucracy. People, Ideas & Objects have faced adversarial treatment for two decades, as documented here. We believe there's more to this. ERP is one aspect of accountability; accounting is the other. Neither has been prioritized in producers' budgets. It's one thing to question why the logic of making money through the Preliminary Specification hasn't been implemented, or why we've failed to follow through for two decades. But why has there been no internal change in either ERP or accounting? Budgets have been slashed to prevent accountability from being determined. And why, after a decade, has no one listened to their investors?

This is not merely a disappointing record. When we consider the $4.7 trillion in natural gas losses, we see that decades of unaccountability and inaction have led to atrophy. Today's expectation is that the business will need to be saved by investors, who are expected to pour in capital despite no changes or improvements in accountability. This is more than we can quantify or qualify, other than deliberately abusive.

Chicken Little began this campaign in October 2023 to highlight and seek solutions for the natural gas revenue losses incurred by North American producers. For almost two years, I was ridiculed for stating such "ridiculous things" while those incurring the losses belittled and ignored the issue. To put this in perspective, these losses should have been the first issue raised and resolved in every boardroom since 2009. Natural gas prices shifting from a 6:1 to a 50:1 ratio with oil is unprecedented. The only visible action was that it provoked boards of directors to silence the messenger—the one with the solution, People, Ideas & Objects.

As we know, shale began the deterioration in natural gas prices in 2009. If producers were aware of the Preliminary Specification as a solution in August 2012, why has there been no change in the accounting and ERP budget to accommodate this? The problem exists, is semi-permanent, and demands action due to its material nature and increasing magnitude. Investors demanded accountability and performance in 2015. After being confronted with the actual, factual $4.7 trillion in losses, only LNG contract litigation and ad hominem attacks followed. 

This raises critical questions regarding the industry's resistance to adopting a proposed solution. While a fear of operational change could be a factor, it does not fully account for the sustained financial losses and the unresponsiveness to investor demands. Consequently, the possibility of corporate culpability emerges as a significant consideration in explaining this prolonged inaction. An inaction that has left the industry with a tragic financial consequence it will never recover from. 

The Cost of Inaction, Part II

 Since August 14, 2025, People, Ideas & Objects' X account has been ghost-banned, preventing further communication of our message through that channel. When asked why we use Blog Spot for these posts, my answer is now clear. It is reasonable for the general public to assume, based on the flimsy evidence of a ghost ban on X, that stopping the messenger may have been producers only activity during this period. I believe that to be a safe assumption.

Metaphorically running around the internet, screaming about the sky falling, is easy to belittle in hindsight. The truth of the matter didn't seem to matter; the harder I tried, the crazier I appeared both within and outside the industry. It was complicated. The spreadsheet is messy and filled with volumes of data, including production volumes by field and prices for the 21st century. It was a losing battle.

However, if there was truly nothing to our claims, why did Shell, BP, and others sue Venture Global to reclaim what People, Ideas & Objects were asserting? I would assume that if there was nothing there, then there is nothing there. The contradictory nature of these judgments, with money being awarded to both Venture Global and BP in multi-billion dollar amounts, does not confuse the situation from our perspective. Therefore, our "crazy" hypothesis regarding officers' and directors' willful misconduct and negligence concerning these material revenue losses is proven true.

The question remains: what has been happening? Officers and directors called someone crazy, ghost-banned his X account, and attempted to reclaim revenues through litigation. Outside of this, oil trades at 19 times the price of natural gas, which may seem like an improvement. However, the September 2024 oil price of $70.24 was higher than Sunday's $58.90, possibly indicating the officers' and directors' method of resolving the distorted gas:oil factor.

We have been on quite an adventure these past decades, and "we" in this context refers to all those involved in oil and gas. Some actions did occur, but most were ultimately just words. The record of producer officers and directors during this period is nothing short of shameful. A trip down memory lane provides an understanding of the depth and quality of their thinking. I am unaware of any redeeming quality that could be attributed to this list:

• "Profits don’t matter, it's cash flow."

• "The fix for low prices is low prices."

• "Praying for a cold winter."

• "Microsoft Windows v. 8 will solve it."

• "Oil & gas prices have to stay below alternative energy prices to keep them out of the business."

• "The service industry is greedy and lazy."

• "New found commitment to production discipline."

• "Market rebalancing."

• "We’re innovative."

• Included historical accounting innovations such as declarations of "profitability at $70, $60, $50, $40 and $25," as commodity prices declined. These are impossible, inappropriate, and fraudulent claims.

• "Artificial Intelligence is being used to …"

• People, Ideas & Objects' July 4, 2019, white paper noted that producers could achieve energy independence through shale commercialization. Producers responded by stating that our decentralized production model or price maker strategy "is collusion and unworkable."

• Unworkable as “production can't be shut-in.” Producers claimed it's damaging to the formation to shut production in and costly to restart.

• The global pandemic forced 25% of oil production to be shut-in.

• "No formation damage or production deliverability declines" were reported globally.

• "Shale will never be commercial."

• Officers and directors took oil & gas revenues away from the business without authority to invest in clean energy.

• Declarations of "clean energy is the future."

• Realizing their mistake, if they want to be in clean energy, they should start from the beginning. Officers and directors cannot take the proceeds of shareholders' investments in oil & gas and use them in other lines of business!

• "Shale is the future."

• Declarations that "small producers are the problem to shale profitability. Corporate consolidation is the solution."

• Producers anticipate declining production deliverability, execute large layoffs, and record poor performance. Overproduction in both oil & gas increased, leading to further commodity price declines. We await the inevitable declaration of consolidation strategies' failure.

• What's next? What's the vision? How could the industry in its current configuration, with incumbent leadership, resolve performance issues?

Such a record, created through a passive culture defined by its strategy of "muddle through," stands in stark contrast to the potential benefits of People, Ideas & Objects' Preliminary Specification software and services. Our solution establishes a rebuilt industry around a revised culture of reserves preservation, performance, and profitability.

• People, Ideas & Objects provide oil & gas producers with the most profitable means of oil & gas operations.

• It’s time for each individual and organization to decide if this is meaningful or not.

• Leadership for the next generation needs to stand up.

• Producers would have all the cash they need if they ran profitable operations.

• Producers would gain independence and be able to pursue opportunities.

• Oil & gas reserves NPV are worthless if they can’t produce profitably.

• Profits are the only resource large enough to satisfy this industry's long-term capital needs.

• Investors and governments only reallocate resources.

• Why would producers not invest in their organizations' profitability and performance? Investors have demanded performance and accountability as a precondition to their return since 2015.

• People, Ideas & Objects points to investors' inability to motivate officers and directors this past decade as partial justification for our Preliminary Specification's poor performance since 2012.

We are entering the most challenging and exciting time in the history of this industry, and we could not be more ill-prepared to take this on.

• The industry has a leadership team that is trash.

• Producer organizations hold no inherent structural value. They are old, slow, and incapable of managing today’s complexity or changing dynamics.

• They are cash-poor, unable to make money, don’t know how profitable operations are conducted, and are culturally incapable.

• They have unsupported capital structures.

• The service industry is operating at 25% capacity.

• It is financially ruined with capital structures also unsupported.

• After decades of abuse at the hands of producers, they are unmotivated; they don’t trust, have faith, or any goodwill to extend to producers.

• They expect producers to philanthropically fund the service industries' rebuild.

• Producers broke it; they can fix it.

• With some skin in the game, producers may then think twice about their actions.

Reiterating last Friday's compelling argument for producers to shut-in any unprofitable production serves as further evidence of the lunacy of the material losses of $4.7 trillion in natural gas this century. Why wouldn’t it be done? We should assume oil incurred similar losses; however, unlike natural gas, we have no objective way of assessing what the price should be. These are simply pricing issues and are the most glaring and material issues that the Preliminary Specification resolves. There are dozens of other issues we approached in the business model, and some may not have a quantifiable value. We only highlight the natural gas price losses as representative of how all issues are managed by officers and directors with their "muddle through" strategy.

• Maximized Profitability: Producers maximize profits by eliminating losses from unprofitable properties.

• Strategic Reserve Management: Holding reserves until production is profitable avoids incurring any incremental costs associated with losses.

• Cost Reduction: Keeping oil & gas as reserves reduces production and storage costs tied to excess, unprofitable output.

• Market Stability: Removing unprofitable production allows commodity markets to determine the marginal cost, establishing fair prices for all production.

• Reserves Valuations: Market prices accurately reflect the value of petroleum reserves and expand proven recoverable reserves to fulfill fiduciary duties.

• Innovation Opportunities: While properties are shut in, producers can explore innovative ways to increase production, reduce costs, or expand reserves to restore profitability and return the property to production.

• Replacement Value: Market prices must reflect current exploration and development costs, representing the true cost of energy produced today.

• Production Discipline: Profitability is the only fair and reasonable criterion for production discipline.

• Innovation as a Foundation: Higher commodity prices finance greater innovation, providing financial resources for future industry challenges.

To producer officers and directors, this is somehow considered unacceptable. There is also a consistent pattern of dishonesty in their dealings throughout. In terms of working with their investors, why persevere through a decade with no support? What benefit would have been gained if producers responded quickly? The service industry is in a crisis from the oil & gas industry's point of view, yet we see the classic expectation that it's someone else’s problem. Yes, oil & gas operates in a market economy; however, officers and directors have abused and betrayed every industry, company, individual, and source of capital. No one will do anything on behalf of the industry until they see a wholesale change in leadership, profitability restored, producers' financial contributions in the rebuilding process, and some integrity. I wonder where we would be if the industry had captured that $4.7 trillion in natural gas losses; could we have used that money? A better question might be, in hindsight, wasn’t that money necessary?

The Cost of Inaction, Part I

 The tangible nature of the losses realized by litigants in the Venture Global actions unequivocally proves that People, Ideas & Objects' calculation of $4.7 trillion in natural gas revenue losses is accurate. Thursday's decision against Venture Global resulted in nearly $11 billion, or 32.26%, of market cap losses by Friday. Today, I will delve into the $4.7 trillion in natural gas losses and the severe, unaddressed, and irresponsibly managed repercussions.

We occasionally hear that "natural gas is a byproduct. There is nothing that can be done about it when Permian oil has associated gas produced." While we are not engineers or privy to their operational structures, we recognize chronic, repeated bad excuses. An industry with such significant revenue losses cannot justify it as a mere byproduct. When LNG offers new markets, optimize their value. Or others, such as Venture Global will make good off of the producers' sloth. When investors abandon you, don't just wait for their return. They will not return on that basis. They are seeking fundamental change, which implies new leadership. And do not deny new solutions the light of day; when leadership is inactive, what can it expect from the rest of the organization?

Here is a business lesson that the producers' leadership must now learn. The question is how much future revenue will be consumed to offset the losses from these "byproducts." The answer lies in the amount lost. Is the number an assumption that a 10% profit on all future production would be required to compensate for this "oversight"? Therefore, at 10%, the industry would only need $47.0 trillion in revenues to make up for it! Or is there a more complex answer to the question?

For instance, if we examine a random sample from April 2012, we see oil trading at 48.77 times the price of natural gas. This gives us an actual realized price of $1.95 and a mythical heating value equivalent price of $15.85 (with $95.11 oil). Let's assume $15.85 is profitable at 10%, yielding an overall production cost, in the officers' and directors' scenario of a "byproduct," of $12.31 ($15.85 - 10% - $1.95), which I find reasonable for shale. The amount of profitable reserves needed to cover the calculated loss of $12.31 and $1.58 in profit is 7.77 replacement natural gas volumes. Or $12.31 + $1.58 = $13.89 * 7.77 = $107.93 in natural gas revenue.

As with the specific case of April 2012, the differential forms the basis of all months in the People, Ideas & Objects assessment. Therefore, with a profitability assumption of 10% for that month, the revenue needed to offset the loss of just one MCF would be $15.85 - $1.95 = $13.90 x 10 = $139.00. 

The total value of the differentials is $4.7 trillion as of December 31, 2024. No wonder I didn’t get the attention of the officers and directors; perhaps I should have used a range between the reserves method of $36.5 trillion and the profit method of $47 trillion to motivate them.

While leadership offered excuses, blaming and finding viable scapegoats, we were all belittled by their superior understanding of oil & gas and their dismissal of our comprehension. Decades later, we now witness the results of their obstinate inaction and continued self-righteousness. The undeniable truth is they cannot account for this; it is a magnitude so obscene that no one ever could.

The futility and ineffectiveness of banning my X account in recent months, an attempt to silence me as they dealt with the fallout from lawsuits, was indicative of their actions and what we should continue to expect. I have called for their departure before, and I ask again, what harm is there in their exit?

Podcast # 32, Material Balance Report

 A brief note on yesterday’s BP vs. Venture Global arbitration ruling: while BP’s victory contrasts with Shell’s recent defeat, the outcome underscores that the $4.7 trillion in lost natural gas revenues remains a tangible and consequential issue for at least one side of the dispute. People, Ideas & Objects would further highlight that the LNG component of those losses illustrates the sheer absurdity of the producers’ rudimentary business logic. The material financial losses stemmed directly from the collapse of natural gas prices from chronic and systemic overproduction, which fell from a traditional 6:1 ratio to as low as 50:1 by 2024.

Following the detailed podcast on Work and Job Orders, this podcast provides a high-level summary of the Material Balance Report. This AI impressively prepares summaries of the Preliminary Specification, offering readers and listeners a comprehensive understanding of how production volumes are managed, balanced, and automated through to financial statements.

Our Material Balance Report presents an opportunity to develop software previously impossible. Creating a highly engineered, costly development like our Material Balance Report would not have been cost-effective for even the largest producers to undertake, and the benefits for a sole producer would not justify the investment.

However, when we approach the Material Balance Report from an industry-wide development and implementation perspective, everything changes. The cost would be distributed across the industry on a barrel of oil produced basis, making it affordable for all producers. The real value emerges when reporting through the Joint Operating Committee is managed and integrated into the broader North American oil & gas infrastructure. This integration opens the door to high levels of automation of the comprehensive reporting requirements derived from production data, all the way through to the financial statements.

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The Startup & Small Producer Sectors

 Small producers once thrived, seeking prosperity and profit, but were ultimately overcome by market forces. Today, consolidated producers strategically relocate their head offices, confident in their ability to transition staff. Beyond a select few dynamic, innovative, accountable, and profitable independent producers, the remaining mid-sized producers are positioning themselves as attractive acquisition targets. This is the current state of the North American oil & gas industry. People, Ideas & Objects provides all North American producers with software and services through our Cloud Administration & Accounting for Oil & Gas. Much as everyone accesses the cloud or Artificial Intelligence. 

Society is now recognizing that the consequences of a climate-centric approach—such as freezing or starving—outweigh the perceived environmental nightmare. The industry cannot use the public's past belief that oil & gas was unnecessary as an excuse for failing to provide essential resources. Producers must proactively educate the public about the future, emphasizing that oil & gas will be significantly more expensive in the short term, with no immediate solutions. There is a need to explain why a bottle of water is less valuable than an equivalent volume of gasoline, and why gas is heavily taxed yet still less than half the price. Consumers, often unaware of the volume of their oil & gas consumption, have mistakenly believed that a few solar panels could suffice. The oil & gas industry has failed in effectively marketing its products.

Our current argument highlights the necessity of a robust startup and small producer sector within North American oil & gas. Consolidated producers, like Exxon's Canadian subsidiary Imperial Oil, plan to move staff to their Edmonton refinery by 2028, initiating the next phase of their consolidation strategy. In Calgary, this contributes to a "giant sucking sound," which I view as a significant opportunity for industry renewal. Exxon describes this as a global approach, using offshoring to supplement staffing needs, a strategy mirrored by Chevron, Shell, BP, and others.
I recommend two papers published on January 20, 2025, for those affected. The first, 

Reconstructing Oil & Gas: 

Enabling Engineers and Geologists 

to be This Century’s Pioneers and 

Lead the Industry’s Future

Targets engineers and geologists who may find prosperity in the oil & gas startup small producer sectors. The second paper, 

Catalysts for Cultural Change:

The Leadership Role of 

People, Ideas & Objects 

User Community 

Is for those interested in our user community and service provider organizations.

These papers address how startup and small producers, as with all sectors of the industry, can be established, survive, and thrive to become the prosperous and profitable entities they should be. I want to emphasize three key points: our decentralized production model to obtain production discipline, overhead management, and these producers' two revenue streams. 

The Decentralized Production Model

A fundamental principle for the industry is that the cost of oil & gas production equals the replacement cost of each barrel produced. The incremental effort for each barrel reflects the increasing difficulty of finding and producing oil. With the Preliminary Specification providing detailed, actual, objective, and standardized reporting at each Joint Operating Committee, producers will understand the profit or loss point for each property. If a property's price exceeds its cost, production continues. If it reports a loss, it is shut-in to gain the following benefits:

• Maximized Profitability: Producers maximize profits by eliminating losses from unprofitable properties.

• Strategic Reserve Management: Holding reserves until production is profitable avoids incurring any incremental costs associated with losses.

• Cost Reduction: Keeping oil & gas as reserves reduces production and storage costs tied to excess, unprofitable output.

• Market Stability: Removing unprofitable production allows commodity markets to determine the marginal cost, establishing fair prices for all production. 

• Reserves Valuations: Market prices accurately reflect the value of petroleum reserves, and expand proven recoverable reserves to fulfill fiduciary duties.

• Innovation Opportunities: While properties are shut in, producers can explore innovative ways to increase production, reduce costs, or expand reserves to restore profitability and return the property back to production. 

• Replacement Value: Market prices must reflect current exploration and development costs, representing the true cost of energy produced today.

• Production Discipline: Profitability is the only fair and reasonable criterion for production discipline.

• Innovation as a Foundation: Higher commodity prices finance greater innovation, providing financial resources for future industry challenges.

The Preliminary Specification's service providers will offer standard and objective accounting and process management methods across North America. This ensures that any producer identifying an unprofitable property will recognize that shutting it in is the most effective and profitable solution, based on industry-wide assessments. That to do so is based on the same standard and objective criteria used across North America. This is not Exxon’s or Chevron’s system reconfigured for the industry. Production discipline will be instilled by maintaining and increasing reserve value and maximizing profits through producing only profitable properties.

Overhead

People, Ideas & Objects, our user community and service providers, aggressively tackle overhead costs, similar to a locust invasion on a fall crop, leading to significant reductions in a producer's overhead.

Firstly, the establishment of Cloud Administration & Accounting for Oil & Gas software and services centralizes accounting and administrative costs across the industry. Just as cloud computing reduces computing costs, People, Ideas & Objects extends this paradigm to administration and accounting. Through the sharing of this infrastructure's costs across each barrel of oil equivalent produced, through hyper-specialization, advanced division of labor, and eventually automation and Artificial Intelligence, the quality and productivity of these resources will continuously improve. While the exact percentage of cost reduction cannot be estimated, it is expected to be substantial.

By directly charging overhead costs to the Joint Operating Committee, the burden is further reduced. Instead of capitalizing these costs on the balance sheet for decades, they are incurred as a current cost that is recouped in the current month. This means overhead is either not incurred if the property is shut in, or it is priced into the commodity, returning the cash as proceeds from the commodity sale and establishing a cash float for the producer's overhead.

Two Revenue Streams

In the past, small producers faced the burden of an incremental free cash flow requirement of $3-5 million per year to maintain a public listing. This distorted their performance and shifted their competitive advantage from technical skills to their connections on Wall Street, making lawyers or brokers as CEOs not uncommon.

People, Ideas & Objects believes that a producer firm's only competitive advantages will be its engineering & geological expertise and its land & asset base. Due to retirements and a lack of new entrants, there will be shortages of these resources. People, Ideas & Objects has addressed this issue through various methods documented in the Preliminary Specification.

For small producers, this means an opportunity to establish a second revenue stream based on their technical skills. This will enable them to sustain themselves longer without external capital, as these revenues and significantly lower startup costs can sustain them to become more established.

It is also timely to mention our paper, written on April  7, 2025.

Oil & gas Arbitrage: 

The Market Finds a Way

How small producers approach the industry, with or without Arbitrage investors, remains unknown and undefined. They will not be solely "drill and produce" operations but will employ new, dynamic, and innovative business models. The creativity in how producers function and achieve profitability is limitless. Rebuilding the industry on a culture of reserves preservation, performance, and profitability is a blank slate. When the Preliminary Specification becomes available through Cloud Administration & Accounting for Oil & Gas, industry will be based on the technical aspects of applied engineering and geology, forming the foundation for these startup and small producers—an attractive, compelling, and intriguing approach to oil & gas that is much needed.

Podcast #31, Work & Job Order

 Today's podcast effectively promotes the Preliminary Specifications Work and Job Orders, which are managed through the Business Operations Management module. While the podcast correctly states that the module is used at a high level within the firm, it also accurately notes its application wherever necessary, particularly within the Joint Operating Committee.

The twelve-and-a-half minutes invested in this podcast offer exceptional value. It provides oil and gas professionals with a quick understanding of the podcast's content, encouraging further engagement with People, Ideas & Objects, our user community, and their service provider organizations.

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Timely Solutions, Part VII

 On the final day of the quarter, the accountability and responsibility of producer officers and directors are once again under scrutiny. Whether they were obligated to report their share of the $4.7 trillion in natural gas revenue losses over the past sixteen years is irrelevant. They dismiss it with their usual "muddle through" excuse. The fact that these officers and directors witnessed natural gas prices plummet from a 6:1 to a 50:1 ratio during that period should have prompted them to declare "not on my watch." Perhaps they never noticed the price changes, or they were content with them. They have ignored investor concerns for over a decade, and clearly, no one seems to care!

It's possible we're discussing issues beyond their comprehension. They still don't fully grasp the concept of "free on board." Perhaps they believe they have ample time to act in the coming months, unaware that action is required by September 30, 2025, not just a report on what they might say months from now. Maybe I intentionally withheld this detail, preferring to see them fail spectacularly.

Just another typical day in the oil and gas industry, where everything seems possible, yet absolutely nothing ever gets accomplished.

Podcast # 30, Our User Community and Service Providers

I'm truly pleased with this podcast! The content and presentation are excellent, and the material is a real pleasure to listen to. There are a few minor hiccups here and there, but they're absolutely negligible and don't detract from the experience at all. 🤓

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Timely Solutions, Part VI

 It’s highly inappropriate and somewhat unreasonable to criticize an industry's leadership for their performance over the past decades. People, Ideas & Objects have squarely placed the blame for the industry's difficulties on the producers, officers, and directors. Time will assess People, Ideas & Objects' methods, which appear to be either outright lunacy or rare and exceptional practicality.

If the lunacy should happen to fall to the officers and directors, it is rare and exceptional when individual investors consider a corporation’s investments no longer viable and decide that walking away is their best choice. However, that is not the case in North American oil and gas. The rare and exceptional element of the oil and gas producers is that the industry has been deemed unworthy of continued support.

Investors remain as shareholders to capture some of their investments through dividends. Liquidation of their positions is generally considered untenable due to their size. They expect to realize some value and gain some financial advantage over time if management is successful in rehabilitating their organization.

This level of action exercised against an industry on a wholesale basis is evidently a non-event. When investors signaled their discontent over a decade ago, that’s just history. But not a single producer firm did anything about it? The following question becomes the determinant as to the lunacy label: Which is worse, the investors' signal in 2015, or the subsequent decade of “muddle through.” Readers' choice, as I’d be biased in my answer.

Profits

The lack of “real” profitability is more or less the investors' issue. Profitability is at the heart of the steady decline of the industry's activities, financial liquidity, capacities, and capabilities. Unwilling to limit the damages to themselves, producers made sure to draw in the service industry and take them down harder and faster, betraying them and extinguishing any trust, faith, or goodwill they had in the producers. If anyone needs to understand why profits are so necessary in the industry, they can return to this point in time and realize this is what it’s like without them.

EIA, IEA, and OPEC are all in general disagreement as to the speed and severity of both conventional and shale-based volumetric declines over the next few years. Mark me surprised as they say it’s conventional and global in nature. I’ve always assumed it’s just North American shale volumes that were at risk, making it a continental issue that could be focused and driven. Now, as much as the “muddle through” crowd would like to think investors will rush back in (they weren’t), they’ll rush in elsewhere.

Producers have proven they don’t understand business to the level necessary to be profitable. They are stubbornly persistent about their lack of understanding and are unwilling to accept it and change. Absolutely nothing has happened or will happen until the investors show up at the party and start throwing cash around again.

September 30, 2025 Reporting

I am not aware of any reporting by producers about their need to inform investors of their impact from lost natural gas revenues since at least 2009. Their interpretation of the issue is unknown, and I find it odd their only action involves ghost banning my X account. They may be far smarter than the rest of us; after all, who would have thought we’d be here in 2025 with the industry in this condition?