A View From the Prototypical Service Provider

You have been fortunate enough to position yourself in the past few years to own and operate one of the service providers in this newly configured oil and gas industry. The process that your team is focused on is the Lease Rental Payment process. Your domain of operations is the United States. Paying lease rentals on behalf of all the oil and gas producers may not excite too many accountants or administrators. However, it is this process that is required for producers to maintain the title to the mineral rights that they are producing. One missed payment is unacceptable to the producer client, as it is to the leaseholder and you the service provider. Whether the payment is made to the federal, state or on private lands accuracy and timeliness, the two cornerstones of accounting, are the priorities in the management of this process.

Your clients include that start up that just purchased some producing properties, ExxonMobil and everyone in between. As their agent you will be paying the lease rentals as they become due for all of their lands that they wish to keep. Therefore during development of the People, Ideas & Objects Preliminary Specification your participation in the user community was critical in defining exactly what was necessary in terms of your access to the People, Ideas & Objects systems and data. You were also able to have the process approved where the task and transfer network of the Preliminary Specification would trigger the lease rental payment for the appropriate Joint Operating Committee, 60 days prior to the due date. This would enable the producer to approve the payment and trigger the release of the electronic funds within the appropriate time to the appropriate lease holder.

It is upon the successful payment of the lease rental that your service fee is earned. The task and transfer network calculates your service fee at $x.xx per successful payment of lease rentals charged directly to the Joint Operating Committee that the lease rental is part of. This creates a consistent flow of revenue for your team in which to base your operation. Up to this point we have been concerned with the day to day of paying the lease rentals and the various attributes of the client base and the importance of paying the lease rentals on time. This will be a natural part of each and every one of the service providers in terms of the management of the process that they carry out for their producer clients.

The second element of the work that you will undertake is to look at the process in terms of how it could be improved in both the software and the process itself. Using the division of labor within the team to optimize the workload and automate as much of the process as possible is one area that you will be constantly improving. People, Ideas & Objects software development capability will be available to you the service provider to change the systems at your request as there will be no other service providers in the US region authorized to manage the Lease Rental Payment process. Therefore People, Ideas & Objects only have to update the systems to accommodate this one service provider to meet their needs. And since the one service provider is initiating the change, the implementation of these changes will be minimally demanding on the software developers.

It will also be possible for this service provider to become more specialized in this service offering to their oil and gas clients. Particularly in the area of better service offerings. Knowing lease rental payments, and every attribute of them in the US on behalf of the oil and gas industry will be a skill that they will be able to relate to their producer clients in new and innovative ways that are beyond what producers can develop today. Unable to do so today because of the scale of their lease rental data is too small to engineer the most efficient process or develop the software to deal with that process in the most efficient way. Attributes that the service provider will be able to easily obtain due to the scale of the data that they deal with, the service fees that they receive from the industry, their participation in the user community and the software development capability from People, Ideas & Objects.

The Preliminary Specification and user community provides the oil and gas producer with the most profitable means of oil and gas operations. People, Ideas & Objects Revenue Model specifies the means in which investors can participate in these user defined software developments. Users are welcome to join me here. Together we can begin to meet the future demands for energy. And don't forget to join our network on Twitter @piobiz anyone can contact me at 403-200-2302 or email here. 

A View From the Prototypical Producer

Imagine for a moment that you're a producer operating in the environment where the People, Ideas & Objects Preliminary Specification is operational. This has had a dramatic effect on your firm and your profitability has been soaring as a result. That’s just the first outwardly noticeable change that people see. Within the firm itself the difference is night and day. Gone are over half of the staff that used to occupy the many thousands of square feet that you were able to sublease back onto the marketplace. Those people are now part of the service providers who are providing their services to your firm and other producers on a service fee basis. Gone are the needs to concern yourself with the need to build the accounting and administrative capabilities necessary for an innovative and profitable oil and gas producer. These capabilities are now provided as a service to you from the service providers who provide these to their clients, the oil and gas industry.

As a result your CFO is able to focus on the priority of the firms relationships with the investment community and provide you with the financial resources necessary to fully develop your asset base. And it is your key competitive advantages of your land and asset base, and your earth science and engineering capabilities that you are able to dedicate your focus too. Due to the alignment of the compliance and governance frameworks with the Joint Operating Committees legal, financial, operational decision making, cultural, communication, innovation and strategic frameworks. Not only your organization, but your working interest partners are all focused on these competitive advantages. The conflicts and contradictions that were introduced by the old corporate model no longer exist and the speed, accountability and innovation that is as a result is surprising. You not only know of the innovation, you know who initiated the innovation.

The industry has exploded in terms of the research and development being undertaken in the earth science and engineering disciplines. Participation by your firm in many of these working groups and studies has been facilitated by the People, Ideas & Objects Partnership Accounting modules Work Order. This has enabled producers to work together to study various elements of the sciences involved in oil and gas. Participation in these groups are no longer the accounting nightmare they used to be as the focus on the partnership being the organizational construct is the way that the Preliminary Specification is structured. It is the Joint Operating Committee that is the key organizational construct of the innovative and profitable oil and gas producer. It is People, Ideas & Objects recognition of this that we are able to provide the Preliminary Specification. And as a result we are able to extend this organizational construct to the Work Order.

Another benefit that is not so obvious is that the compliance no longer drives the business. It is a result of the business. As the producer firm your concern is to the innovative and profitable pursuit of your key competitive advantages. Not the implementation of the appropriate Sarbanes Oxley compliance provisions, for example. Its not that these are no longer your concern, it’s that they are no longer your priority. The service providers have undertaken to provide these services on your behalf and have what they need in order to do so. It is their business to know intimately what the compliance requirements are. A benefit of the toolset of the division of labor and specialization. The service providers are specialized in their specific areas of expertise. And it will be the service providers who are able to implement the appropriate controls and methods in their process or the People, Ideas & Objects software in order to ensure your compliance. This division of labor is appropriate for the 21st century to ensure that the scope and scale of one organization does not become so broad as to become unfocused, untenable and unprofitable as the oil and gas producer of 2014 is.

The Preliminary Specification and user community provides the oil and gas producer with the most profitable means of oil and gas operations. People, Ideas & Objects Revenue Model specifies the means in which investors can participate in these user defined software developments. Users are welcome to join me here. Together we can begin to meet the future demands for energy. And don't forget to join our network on Twitter @piobiz anyone can contact me at 403-200-2302 or email here. 

Labor Day

No posting today in recognition of the Labor Day holiday. Returning tomorrow.

How Does the Industry Change?

In terms of being a change initiative People, Ideas & Objects certainly have the overall concept down. As a result of implementing the Preliminary Specification there isn't a molecule in the oil and gas industry that isn't disrupted from its otherwise cozy routine. The one redeeming quality of this change initiative is that we are not having to “map” out for people how things will be in the new environment. We are moving to the natural manner in which to operate the industry. One that is logical and one that fits in with the culture of the industry. Therefore anyone with a few years of industry experience will be able to grasp what the change objectives are and be able to move to the new environment with little effort.

The overall guiding principle in making these changes is to provide the oil and gas producer with the most profitable means of oil and gas operations. This spells out part of the key motivation for people to get involved in the development of the software, participation in the user community, development of the service providers, the app marketplace and implementation of the changes within the industry. There is also motivation for all of the people that are involved in those groups to do so. We are establishing in some cases sub-industries with multi-billion revenue streams where no businesses currently exist. In other words there are substantial financial rewards available to those people as well. Change for the sake of change is not what People, Ideas & Objects are about.

If we had to quantify it today it would be along the lines of, “The new manner in which to operate the industry profitably, for all concerned, for the 21st century” as the overall objective. To take what I perceive as a failing industry. Failing in the sense of performance, leadership, accountability, innovation, strategically and tactically. Some might argue that the industry has performed well in terms of the past few years with the discovery and production of shale reserves. However, they are not making any money on those reserves, and they have no prospects of making any money on those reserves. Many would disagree with my assessment of a failing grade on all these metrics. I however stand on the fact that I am able to provide our value proposition through the proposed Preliminary Specification as evidence of the current industries failure.

It may be difficult to see the problems that I see. However, I have been in accounting and audit in oil and gas long enough to know the tricks of the trade to know that the industry is not making any money. Capitalizing royalties in Canada only shows the level of desperation. I see a dead industry that nobody has told that it has died. A ghost going through the motions not realizing that its not really there. No future, no plans and no energy to undertake any new direction or initiative. Dead. Driven by a self interested bureaucracy that in 1950 would have been considered progressive, but in 2014 is primarily responsible for the deforestation in North America. Other than the vast amounts of paper it consumes not many can point to anything that the bureaucracy does. If given another five years the bureaucracy will have the opportunity to upgrade their summer cabins. Which is the only thing you here in the coffee shops and the elevators. The business of the business is dead.

People, Ideas & Objects as a change initiative is therefore more of a survival of the industry than it is anything else. What will you do with the oil and gas industry when it is in the state that it is in? Who is responsible and what actions can be taken to deal with them? What effective actions can be taken to change the course the industry is currently on? Good luck thinking of something. I’m sure the bureaucracy will have as much fun with you as they have had with me. To put the industry on the appropriate trajectory, one with a heartbeat, needs some serious action. I propose the Preliminary Specification, the user community, the service providers and app marketplace. And that way we can have the dynamic, innovative and profitable oil and gas industry we need for the 21st century.

The Preliminary Specification and user community provides the oil and gas producer with the most profitable means of oil and gas operations. People, Ideas & Objects Revenue Model specifies the means in which investors can participate in these user defined software developments. Users are welcome to join me here. Together we can begin to meet the future demands for energy. And don't forget to join our network on Twitter @piobiz anyone can contact me at 403-200-2302 or email here. 

Decisions, Decisions, Decisions

We have not clearly discussed the role that the producers would have in the development of the People, Ideas & Objects software. Up until now I have isolated them from having to be involved in these developments. The bureaucracy, which operates the producer firms today, will have nothing to do with People, Ideas & Objects. And that I think is why we see such systemic losses, except of course for where the producer capitalizes their royalties. The user community, the service providers and app marketplace are driven by self interested individuals that will take People, Ideas & Objects to the point where we will build the best software possible. There is however a role for the producer in this task, and it is one that requires they undertake a different footing and posture in terms of how they approach their business from this point forward.

I am of course speaking of the muddle along strategy that has been in place throughout the industry for the past number of decades. Sitting around waiting for events to turn favorable really looks inappropriate when you consider the full scope of the value of the shale reserves potential. Are we to muddle along until these reserves are produced unprofitably in their entirety? Is that the strategy of the industry? The ability to let things play out will no longer favourably benefit any producer. That assumes that this strategy ever favoured any producer in the past. And it will be the same with the next issue or opportunity that the industry faces. The time to be proactive and deal with the issues and opportunities that the industry faces is how the industry needs to be managed in the 21st century.

That is “what” the industry needs to do. “How” they do that is through adopting the toolset that People, Ideas & Objects is offering. The software that we develop. The software development capability to deal with the opportunities that occur, and to eliminate the constraints that the software might impose. Our user community and service providers to deal with the changes within the industry, and provide the services that are necessary for a proactive, dynamic and profitable industry. Software’s role in society is much more involved than what the oil and gas industry considers it is today. It is not just a cost of doing business today. Anyone who reads the Preliminary Specification should see that the ability and capability to manage the producer organization strategically and tactically are the capabilities that are being provided. Managing the organization and its development within the industry itself are what the Preliminary Specification provides the innovative and profitable producer firm to undertake.

It appears to me that the majority of people believe that software had its heyday in the build up to the dotcom crash. Pets.com, WebVan and the ridiculous business models that were valued in the billions of dollars one day, and evaporated overnight, were the rightful course of action for the Information Technology want-to-be’s in business. I agree with the assertion regarding the ridiculous nature of the business model’s that were proposed in that era. However, I think that since that time there is an important lesson that needs to be learned. With the Internet, everyone could see the capabilities that it would provide to change everything. The important thing to remember about change is that it is always overestimated in the short term, and underestimated in the long term. The fact that we can provide a value proposition in the trillions of dollars over the life of shale based reserves should be evidence that we are now in the long term perspective of the impact of the changes from the Internet.

A producer therefore cannot just sit idly by and have this activity go on around them. If they do they will be flushed out with the bureaucracy. This change will be comprehensive, quick and unforgiving. Those producers that are progressive and that are with us will have obtained significant competitive advantages. Those that choose to sit and side with the bureaucrats will see their unprofitable assets sold at a discount in the marketplace. If you can't make a profit in a dynamic industry then what other purpose will you serve? Therefore it is incumbent upon those producers to determine if they are in, or are they out of the People, Ideas & Objects software development and user community environment? There is time to consider your decision, but I wouldn't take too much time.

The Preliminary Specification and user community provides the oil and gas producer with the most profitable means of oil and gas operations. People, Ideas & Objects Revenue Model specifies the means in which investors can participate in these user defined software developments. Users are welcome to join me here. Together we can begin to meet the future demands for energy. And don't forget to join our network on Twitter @piobiz anyone can contact me at 403-200-2302 or email here. 

Providing Choices to the Innovative and Profitable Producers

We see with yesterday’s blog post that the decentralized production model is so much more than just an operational strategy that deals with a producers production. It is an operating model that is a key part of the business model contained within the Preliminary Specification. Having the capabilities provided by the software that defines and supports these desired characteristics is what People, Ideas & Objects is building. We are also providing the user community and software development capabilities necessary for the innovative and profitable oil and gas producer to change these business models, if necessary, to deal with the issues and opportunities that will inevitably occur within the industry.

What is unique, and where the capabilities are derived from is the fact that the Preliminary Specification uses the industry standard Joint Operating Committee as the key organizational construct of the innovative and profitable producer. By doing so we have moved the compliance and governance frameworks of the hierarchy into alignment with the legal, financial, operational decision making, cultural, communication, innovation and strategic frameworks of the Joint Operating Committee. It is as a result of this alignment that the business, operational and decentralized production models are able to provide the value to the producer. It is through this alignment that we are able to offer our software that provides the speed, accountability, innovation and profitability over the corporate model that is currently employed in all of the producer firms today.

The Preliminary Specification comes at a substantial cost in terms of the effort on behalf of the oil and gas producers, and of course the financial resources of the producers. I’m sure our budget provides its share of shock value to those producers. I would point out two important points regarding our budget. First that there are a variety of cost effective software solutions on the market today. And that our value proposition is valued in the trillions of dollars when taken over the lifetime of the shale gas reserves. You have an interesting choice to make, I am selling an alternative that I think provides real value. There is a cost to that value. And I would suggest that today’s existing software solutions have a cost that hasn’t been clearly identified or understood by the producers that are using them. Software is of greater importance to our organizations than what the oil and gas industry currently considers. People, Ideas & Objects is working to change that understanding.

Others might want to approach the Preliminary Specification from a limited scope. If all of the benefit is gained from the decentralized production model, why not implement the necessary components of the decentralized production model. To that I suggest the reader read the Preliminary Specification, which they obviously haven’t. Using the Joint Operating Committee as the key organizational construct of the innovative and profitable oil and gas producer changes everything within the industry. There is nothing that is untouched as a result of this change. We are moving towards the manner in which the industry operates naturally. No more contrived corporate model superimposed over the culture of the industries use of the Joint Operating Committee. It is the Joint Operating Committees and the fact that producers are working interest owners of those organizational units. This change to the Joint Operating Committee is the detail that demands the scope and scale of the Preliminary Specification.

There is value to the industry in proceeding with the development as proposed here by People, Ideas & Objects. We are going to continue on with the developments of the user community and particularly the leadership team up to January 2017. It will be at that time that we expect the investors and the oil and gas producers in the industry to support our budget and proceed with these developments. It is after all in their best interests.

The Preliminary Specification and user community provides the oil and gas producer with the most profitable means of oil and gas operations. People, Ideas & Objects Revenue Model specifies the means in which investors can participate in these user defined software developments. Users are welcome to join me here. Together we can begin to meet the future demands for energy. And don't forget to join our network on Twitter @piobiz anyone can contact me at 403-200-2302 or email here.

The Decentralized Production Models Effect on Exploration and Development

Natural gas producers desperately need to get a handle on their business model. Continuing on with the high throughput production model and producing at capacity. Which incurs these losses that are being realized throughout the industry will bankrupt the industry in very short order. There are a few surprises in this summers natural gas marketplace. One is the resilience of the natural gas storage volumes. The ability of the natural gas storage volumes to recover from one of the coldest winters will place a limit on the upside of any future price increases. And the second is the volumes of natural gas from shale. Shale gas production is now well in excess of 50% of the source of the United States natural gas production. A phenomenal volume considering it was as little as 8% in 2008. Looking at the US production capacity increases in just the past 6 months, which are in the area of 3 bcf per day, it would appear that shale gas has not even hit its stride yet.

Producers must implement a method to deal with the realities of the shale based reserves. And enable themselves to allocate production based on profitability. And produce at a fraction of capacity. People, Ideas & Objects have proposed the Preliminary Specification with the decentralized production model which provides this capability to the innovative and profitable oil and gas producer. The question this asks is, does the decentralized production model therefore determine a slower exploration and development of shale gas reserves?

From my point of view I don't see any difference in the approach to the development of the shale gas reserves, or for that matter any of the conventional reserves as a result of the Preliminary Specification. The decentralized production model deals with the production of those reserves in a profitable manner, not with their development. It would be appropriate for a producer to develop their shale gas reserves and their production profile to the extent that they can. Just as they do today with the high throughput production model. The difference is they may hold some of those reserves off of the market while they may be unprofitable to produce. Waiting for the time in which the natural gas prices will rise to the point where profitable production will return. In an era with such prolific production, this capability to withhold production from the market when prices are low will be a necessary function of the innovative and profitable oil and gas producer.

Pursuit of a higher production profile will continue regardless of the current natural gas prices. Higher production volumes are dependent on the economics of the reserves and will be subject to the investment decisions of the producers. With only profitable production making up the producers production profile there will no longer be any unprofitable production consuming capital that needs to be added to the costs of the reserves. Enabling greater capital to be allocated to the exploration and development of future reserves. Therefore the innovative and profitable oil and gas producer will attain a higher production profile under the decentralized production model due to the fact that they will have greater volumes of capital available to invest. Their ability to consistently produce profitable operations will also attract the capital markets to invest further, creating even higher production profile capacities.

And there’s more. With the Preliminary Specification the focus is on the earth science and engineering capabilities of the oil and gas producer. These are the distinct competitive advantage of the oil and gas producer. The Preliminary Specification is focused on innovation and provides the producer with the toolset and the organizational structure to enable innovation. This will enable them to reduce their costs per barrel and in turn allow them to compete as a lowest cost producer. Keeping their production on the market, profitably, will enable them to fully exploit their reserves and optimize their production profile.

The decentralized production model is not an excuse to do nothing for the oil and gas producer. It is the first step in a process where they can begin the process of innovation to bring the costs of the property down, expand the reserves base, enhance the production or all of these things in order to bring the property back on production profitably. It is a means in which to do this in a way that the producer can remain profitable and adjust their overhead immediately to the production profile that exists that day. A flexibility that is necessary in the new shale gas reserves era and one that can ensure that this prolific and robust era can be properly managed.

The Preliminary Specification and user community provides the oil and gas producer with the most profitable means of oil and gas operations. People, Ideas & Objects Revenue Model specifies the means in which investors can participate in these user defined software developments. Users are welcome to join me here. Together we can begin to meet the future demands for energy. And don't forget to join our network on Twitter @piobiz anyone can contact me at 403-200-2302 or email here. 

People, Plans and Priorities.

Our plans for developing the Preliminary Specification and the user community are currently in effect. They will see us continue on with our priority of developing the user community through to January 2019. It is the user community that will make the Preliminary Specification and everything associated with this product stand out as a quality product for the innovative and profitable oil and gas producer. Our commitment to the user community and its development in these next few years will become one of our key competitive advantages. We have established January 2017 as the deadline that we expect the investment community will financially support our user communities development. Support in the form of the advancement of our budgets funds. It will be at that time that we can begin the full development of the user community for the remaining two years prior to the softwares development that commences in January 2019.

There are many things to be done within these time frames. The first order of business is to establish the leadership team of the user community. I have set out approximately 30 positions that need to be filled before the January 2017 deadline. These consist of the board of directors, the executives and the twenty or so product owners. Having a dedicated leadership team that provides the investors in oil and gas with an alternative means of managing their assets is the strategy that we are using to convince them to fund these developments. Providing this as an alternative to the existing bureaucracy and asking them to choose which method they want their assets managed. It is in this manner that the bureaucracy is removed and replaced by an alternative. This is the only means in which to change the ways and means of the oil and gas industry.

The bureaucracy have had every opportunity to deal with us in the past 10 years. They have chosen not to do so. We have a very storied history with these people. Last winter they prayed for a cold winter so as to increase the natural gas prices. And there were moderately higher natural gas prices thanks to a cold winter. However that did not motivate them to change their business model and their overproduction continued. Now the natural gas prices are declining and they say, pray and do nothing. That is because they know no one can remove them from their positions within the industry. Who has the power to make the changes. If the investors want more profitability then they will have to be satisfied by the bureaucracies accounting wizardry to capitalize more royalties. They are corrupt and self serving and know that they are permanently installed and without an alternative.

It will be a group of like minded people in the user community who are able to offer an alternative to the oil and gas investors. People motivated around the business opportunities provided within the user community, but mostly they will be motivated on the basis of providing the oil and gas producer with the most profitable means of oil and gas operations. Our business models within the Preliminary Specification can do that for the industry today and tomorrow. Our user community can lead the industry in resolving the issues and opportunities that occur on a proactive basis. Permanently dispatching the muddling along strategy of the bureaucracy to the scrapheap of history.

The first action of this new and dynamic oil and gas industry will be the change that we exercise in removing and replacing the bureaucracy. By organizing the user community, building the software which defines the ways in which the industry will operate. We will determine its future direction. The bureaucracy will be squeezed out and eliminated through attrition. Deliberately by us. And one day we can say so long, it wasn't nice knowing you.

The Preliminary Specification and user community provides the oil and gas producer with the most profitable means of oil and gas operations. People, Ideas & Objects Revenue Model specifies the means in which investors can participate in these user defined software developments. Users are welcome to join me here. Together we can begin to meet the future demands for energy. And don't forget to join our network on Twitter @piobiz anyone can contact me at 403-200-2302 or email here. 

Our App Marketplace

We now want to take some time to document the “apps marketplace” that we recently announced. What is the apps marketplace and why are we establishing this for the innovative and profitable oil and gas producer? Like the service providers, the developers within the app marketplace are providing services on a fee for service basis. Selling their applications to users and producers based on their needs. People, Ideas & Objects are expecting that the mobile applications that are needed will be provided by the app marketplace developers. That People, Ideas & Objects will be providing the infrastructure, process management, software development capability, the Preliminary Specification to solve the large issues of the industry. Such as the decentralized production model and the material balance report. While the app marketplace fills in the needs of the users and producers with the types of applications that are unique and innovative on the mobile platforms.

This division of labor between the mobile marketplace and the areas provided by People, Ideas & Objects give the innovative and profitable oil and gas producer the types of applications that they need. The app marketplace will be dynamic and entrepreneurial with only a license, Application Programming Interface (API) and data model provided by People, Ideas & Objects. These app marketplace developers will be driven by the issues and opportunities that they see in the oil and gas producer marketplace. Having their own revenue stream, they will be able to sell their products into the user marketplace that may total the full 12 million oil and gas professionals and several hundred producers.

Mobile computing is becoming more mainstream as we proceed through these Information Technology changes. It may be difficult to place something as complex as the Material Balance Report on a tablet device. Possibly we could provide it on a read only configuration. It is difficult to say at this point. Nonetheless these issues will be left to the user community to determine. The point that I am trying to make is that although we have left the mobile marketplace to the “app marketplace,” that does not preclude People, Ideas & Objects in providing our applications, reports, processes and functionality in a mobile configuration. What I see as the division of labor is the heavy industrial processing vs the lightweight processing of the purely mobile application providers.

Years ago we published a technical vision consisting of four cornerstone technologies. It still resides in this blogs history however it is not on the wiki. The four technologies that make up the technical vision are Java, what we call Asynchronous Process Management, IPv6 and Wireless. These technologies operate together to change the dynamic in any industry toward a new and more pronounced Information Technology infrastructure in the cloud computing era. They operate on the following basis. Java is a highly “typed” language. That means it is able to discern the differences in many objects. IPv6 is the next generation Internet addressing scheme. Capable of providing Internet addressing for anything and everything that we can think of. Or providing Internet access for a variety of different objects. Wireless Internet access providing the mobility aspect of the technical vision. And Asynchronous Process Management being our term for the ability to break up a process and approach its processing from different perspectives or priorities.

This technical vision fits in with the app marketplace and provides the mobile app marketplace with the ability to grow to its appropriate size and configuration. If we constrained mobile by keeping it within the People, Ideas & Objects domain our focus would otherwise be diverted by these mobile demands of our user community, or alternatively we would miss out providing this important dimension to the producer and user marketplace. By providing a division of labor through establishing the app marketplace we can have the best of both worlds for the users and producer firms.

The Preliminary Specification and user community provides the oil and gas producer with the most profitable means of oil and gas operations. People, Ideas & Objects Revenue Model specifies the means in which investors can participate in these user defined software developments. Users are welcome to join me here. Together we can begin to meet the future demands for energy. And don't forget to join our network on Twitter @piobiz anyone can contact me at 403-200-2302 or email here. 

Leaderless, Changeless Bureaucrats

One thing you can count on, is a bureaucrat will always do the same thing over and over. It would seem that they have been carrying on in the oil and gas industry without a hint of thought or consideration to the natural gas marketplace. Producing at capacity, to cover the overheads is the only game in town and that is what they do best. Reliable and destructive. What we can be assured of now is this. As a result of last winters prayer for a long, cold, hard winter the bureaucrats do not have a plan for the natural gas business. When the cold winter arrived they assumed all was good and continued on as if that was the end of the difficult days. Consideration that any tactical change to their operating strategy was not necessary. I suggested that with low natural gas inventories they had an opportunity to establish the price maker strategy by scaling back production by 15%. They didn’t think that was a good idea. They didn’t think. Now storage is filling at a faster rate than what was anticipated thanks to an additional 3 bcf in incremental production. A good bureaucrat is a reliable, destructive bureaucrat.

The natural gas prices will remain depressed for the remainder of the shale reserves life. That’s not a prediction, that is a fact. When you have an industry hoping and praying as opposed to planning and changing their ways through a difficult time. And the difficulties are creating losses of such magnitude on natural gas production. Then no amount of losses will influence a change in the ways and means of the current bureaucratic thinking. Therefore we are destined to continue to produce the remainder of the shale gas reserves at a loss. Besides there's always cash flow. Take the investors money, swish it through a drilling operation, presto chango you have discretionary cash flow that you can use to do with as you please. Consideration that the investor, or any of the other investors from prior years, might want to have some earnings or their investment back doesn't permeate one's mind when you cover your ears and talk louder than them.

Life will continue as it was and the bureaucrats can blame the investment community that they don't understand how sophisticated and difficult the business has become. So difficult that making profits are not really possible, I guess. The problem with these arguments are that the investors have been hearing a lot of comments from the bureaucrats for the past decade or more. The run up in commodity prices has not seen any enhanced profitability in the producer firms. The costs in the business quickly became as dramatic in terms of increases as the commodity prices. There was no commensurate increase in profitability. However there was that time, prior to 2008 where the compensation for the bureaucrats in terms of options and bonuses certainly did become dramatic. I'll bet the bureaucrats still have dreams of their vested options prior to 2008.

And it is too bad about the financial crisis. Times just aren't the same for our friends the bureaucrats. Certainly they still have their jobs and their pensions. But no one has lost their jobs. And absolutely nothing, other than fantastic losses on natural gas, have occurred. Again I would assert, what would possibly come along and make the necessary changes to remove these bureaucrats and implement a plan to deal with these natural gas losses? Everyone knows what needs to be done. All they need is a plan and a method to implement that plan. If only.

The Preliminary Specification and specifically the decentralized production model deals with these issues. However, the bureaucracy doesn’t want any part of People, Ideas & Objects to see the light of day. Therefore we are offering the investment community the choice to have their assets operated by our solution which includes the People, Ideas & Objects software, the user community, the service providers and app marketplace. Its interesting that the bureaucracy haven't done anything other than pray for a cold winter, even though there have been alternatives for them to choose from.

The Preliminary Specification and user community provides the oil and gas producer with the most profitable means of oil and gas operations. People, Ideas & Objects Revenue Model specifies the means in which investors can participate in these user defined software developments. Users are welcome to join me here. Together we can begin to meet the future demands for energy. And don't forget to join our network on Twitter @piobiz anyone can contact me at 403-200-2302 or email here.