A Solution for the Oil and Gas Investor
Who will be the ones to invest in the oil and gas producers in the years to come? The oil and gas investor had declared they were unsatisfied and went on strike in 2008. The banks and credit markets were balking as a result of 2008 as well. Leaving only the junk bond and cash flows as the sole sources of financing of any oil and gas capital investment. With the declines in commodity prices, the ability to fund investment with cash flows no longer exists. The junk bond marketplace is now aware that they are the mark and that will cause them to cease funding the producers. Therefore, suddenly the oil and gas producers will find that they have few options in the next six months. As normal operations demand cash just to operate.
These next six to nine months maybe the darkest days that have ever been faced in the oil and gas industry. Certainly that I have experienced in my 38 years of working in the industry. Banks will be taking over the weakest of the industry and will attempt to flip them quickly out of their portfolio. The need for banks to be involved in the oil and gas business is about as logical as they need to be holding synthetic CDO’s at this time. Not going to happen. This will be the time for the investors to begin to rebuild their portfolios from the remnants of the firms that were once theirs. They will repurchase them at fire sale prices and recapitalize them on the basis of some new investments. These investments will be made with the expressed intent of firing the bureaucracy. It is after all they who brought the industry to these dark ages.
This is where the People, Ideas & Objects Preliminary Specification, our user community and the service providers will provide the alternative means of oil and gas operations. One in which we provide the oil and gas producers with the most profitable means of oil and gas operations. But that is not going to happen until we are funded to the full extent of our budget. We are expecting to be capitalized at the $4 billion level as the costs, time and deliverables will all be “expected” in a scenario such as we are discussing here. And this can’t be a pay as you go situation either. I don’t need our organization being subject to funding disruptions at critical times when the stakes are as critical as they are. We have a job to do, lets get it done. Our failure, on top of the failure of the industry, is not something that we want to contemplate.
Our time frame is dictated by the events on the ground. The Saudis seem to think that their situation will be rectified in the next three years. Add a few more years for bank, legal and administrative processes and our time requirements come into focus. The natural gas situation will not be remedied in that time frame, in my opinion. The only remedy I think that will correct that marketplace is that producers begin to remove the unprofitable production from the marketplace. Which imputes that People, Ideas & Objects is operational in the marketplace. When you have fundamentally destroyed the pricing structure from 6 to 1 on oil to 20 to 1, you need to physically take control of the market again. That will take a new dynamic in order to recreate the old structure.
The Preliminary Specification and user community provides the oil and gas producer with the most dynamic, innovative and 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.