Still Under the Weather
Need a few more days to heal.
Monday, November 20, 2017
Monday, November 13, 2017
Friday, November 10, 2017
Thursday, November 09, 2017
Bright, Shiney Object
Successful implementation of shale technologies in China and Argentina are the news of the day. Other areas of the world such as Africa are also pursuing the technology. There is little in the way of each country accessing these technologies to develop their shale reserves. The United States holds 17% of the world's shale reservoirs. Just the initial phase of the implementation of the technology has had the effect of destroying the global oil and gas commodity prices and the financial health of the North American producers. The real question to ask is what will be Saudi Arabia’s strategy when the world is awash in shale based production. Will they continue to forgo their low cost production in order to support a price that somewhat covers the high costs of shale? Or will they, as it is suspected, soon after their IPO of Saudi Aramco, just produce their low cost fields for whatever price they can and at least obtain some value from them? Leaving the price issue in the hands of the shale producers. What then is the logical strategy for each side to pursue?
What we may see is a continuation of the low price environment that we’ve all come to know and love. With continued and increasing unconstrained production of everything all of the time the oil and gas industry is destined never to be a commercial enterprise again. This must be what the investors see for the business and can only find verification of these facts with each of the producers quarterly financial statements. Where is the mid to long term logic and strategy for shale? A technology that has in as little as ten years increased the global oil reserves to the point where we have double what we need for the next fifty years. And why is it that the only strategy being pursued is full production everywhere and always? Is oil and gas still a scarce commodity or did shale change the business of oil and gas exploration and production?
North American producers have not resolved this issue in the first phase of shales implementation. As shales technology goes global it will be beyond their scope to deal with as countries such as China may satisfy their own internal markets. Reducing the global demand in the supply - demand equation. People, Ideas & Objects are currently focused on the North American producers however there is no reason that once our technologies are developed they can’t be deployed globally. Maintaining a global discipline where all production of oil and gas is profitably produced.
Of course all of this is as clear to anyone who’s familiar with the industry. Why producers don’t hedge their bets and pursue two opposing ideas at the same time, that is continue with their current strategy but also develop the Preliminary Specification is beyond me. Maybe they know something that I’m unaware of. If they’re unable to implement a dual track strategy now how will they do it when shale is produced globally? Maybe we should see this as evidence of the terminal nature of their approach and their business.
All of this can be attributed in large part to the deferral of recognition of the producer's property, plant and equipment. As I should have noted yesterday this makes a young producer look very profitable as they have flush production and can defer most of their costs. Causing investors to rush into what appears to be a highly profitable enterprise. Creating the overproduction of the commodities that appear, even today, to be profitable. As producers age to the level the industry is today the buildup of property, plant and equipment conspires against the producer. As time passes, they begin to recognize more of those deferred costs while their production curves decline steeply downwards, in a marginal enterprise where investors are frustrated with performance. In a capital intensive business it makes no sense to defer the recognition of your capital. A business competes by turning over its capital quicker than other businesses and other industries. Why oil and gas is permitted to defer the recognition of its capital for decades is a unique situation that should never have happened. Accountants should have known better that accounting is about performance. Competition for capital is why we assess performance in the accounting that is produced. Therefore why would you defer the recognition of capital assets for decades? Of course this argument is rendered mute due to the fact that oil is up 1.5% on the day.
The Preliminary Specification, our user community and service providers provide for a dynamic, innovative, accountable and profitable oil and gas industry with the most profitable means of oil and gas operations. Setting the foundation for North America’s energy independence. People, Ideas & Objects Revenue Model specifies the means in which investors can participate in our future Initial Coin Offering (ICO) that will fund these user defined software developments. It is through the process of issuing our ICO that we are leading the way in which creative destruction can be implemented within the oil and gas industry. 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.
What we may see is a continuation of the low price environment that we’ve all come to know and love. With continued and increasing unconstrained production of everything all of the time the oil and gas industry is destined never to be a commercial enterprise again. This must be what the investors see for the business and can only find verification of these facts with each of the producers quarterly financial statements. Where is the mid to long term logic and strategy for shale? A technology that has in as little as ten years increased the global oil reserves to the point where we have double what we need for the next fifty years. And why is it that the only strategy being pursued is full production everywhere and always? Is oil and gas still a scarce commodity or did shale change the business of oil and gas exploration and production?
North American producers have not resolved this issue in the first phase of shales implementation. As shales technology goes global it will be beyond their scope to deal with as countries such as China may satisfy their own internal markets. Reducing the global demand in the supply - demand equation. People, Ideas & Objects are currently focused on the North American producers however there is no reason that once our technologies are developed they can’t be deployed globally. Maintaining a global discipline where all production of oil and gas is profitably produced.
Of course all of this is as clear to anyone who’s familiar with the industry. Why producers don’t hedge their bets and pursue two opposing ideas at the same time, that is continue with their current strategy but also develop the Preliminary Specification is beyond me. Maybe they know something that I’m unaware of. If they’re unable to implement a dual track strategy now how will they do it when shale is produced globally? Maybe we should see this as evidence of the terminal nature of their approach and their business.
All of this can be attributed in large part to the deferral of recognition of the producer's property, plant and equipment. As I should have noted yesterday this makes a young producer look very profitable as they have flush production and can defer most of their costs. Causing investors to rush into what appears to be a highly profitable enterprise. Creating the overproduction of the commodities that appear, even today, to be profitable. As producers age to the level the industry is today the buildup of property, plant and equipment conspires against the producer. As time passes, they begin to recognize more of those deferred costs while their production curves decline steeply downwards, in a marginal enterprise where investors are frustrated with performance. In a capital intensive business it makes no sense to defer the recognition of your capital. A business competes by turning over its capital quicker than other businesses and other industries. Why oil and gas is permitted to defer the recognition of its capital for decades is a unique situation that should never have happened. Accountants should have known better that accounting is about performance. Competition for capital is why we assess performance in the accounting that is produced. Therefore why would you defer the recognition of capital assets for decades? Of course this argument is rendered mute due to the fact that oil is up 1.5% on the day.
The Preliminary Specification, our user community and service providers provide for a dynamic, innovative, accountable and profitable oil and gas industry with the most profitable means of oil and gas operations. Setting the foundation for North America’s energy independence. People, Ideas & Objects Revenue Model specifies the means in which investors can participate in our future Initial Coin Offering (ICO) that will fund these user defined software developments. It is through the process of issuing our ICO that we are leading the way in which creative destruction can be implemented within the oil and gas industry. 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.
Posted by Paul Cox at 6:00 AM 0 comments
Wednesday, November 08, 2017
Industry Update
I’ll have a full report based on the third quarter financial statements of our sample of 23 producer firms on Monday. I’ve been pretty sour on the oil and gas industry for the issues that I identified on this blog and the solutions that the Preliminary Specification resolves. Suggesting that these issues will be terminal should the producers attempt to “muddle along” much further. Although not all the producers have reported at this time, what we do know is that there is a tragic cash crisis accelerating in the industry. Working capital is evaporating at a much faster rate. Earnings are down substantially from the second quarter. It appears that the third quarter may have generated no earnings even though oil prices were up 12%. That includes a decrease in the amount of property, plant and equipment being recognized for depletion in the third quarter. Operations are consuming more of the revenues. And the volume of cash being consumed is epic. The volume of short term liabilities has also grown disproportionately to the rest of these firms accounts. Producers are now pushing their suppliers for extensions on their payments. The amount of cash is becoming dangerously low and I would express my concern that there is little being expressed by the producers concerning their cash balances. They are either unaware of their situation or fundamentally do not care.
What we do know is that these producers can’t, won’t and will not ever subscribe to the Preliminary Specification as the resolution of their issues. Which wouldn’t matter anymore anyways. We are of the belief that they’ve moved beyond the point where we’d be able to help them. We have chosen to pursue other methods of implementing our solution in the oil and gas marketplace and believe fundamentally that these financial statements are the beginning of a meltdown in the industry. Who will jump in to support them? Both the investors and bankers have been absent and unwilling to participate for years. They too can see that the amount of capital necessary to fix this problem is well beyond the capacities of the investment and banking communities. Even if they did re-invest the producers would only regress to their old behaviors, resume their typical operations and be back at this same spot in as little as five years, wasting the trillions that were given to them now. They are beyond hope.
Prospective members of our user community must realize the time for them to act is upon us. It will be our collective action that will be looked upon as the method that the industry is able to rebuild itself. There is no shortage of hard, difficult work in which we need to do. Preparation of your application to the user community should be your first priority with an understanding that action may be called upon us much sooner than we’re prepared. Our preparation as a community is the most effective thing we can be doing. It begins the process of software development and brings us closer to the day we deliver our software.
These excessively bloated balances of property, plant and equipment are dead weight that will pull these producers down faster than in a normal environment. If an investor were to look at a producer with the prospect of investing they would see those bloated assets supporting the large number of shares outstanding and prior capital raised. Demanding the new investors spend large amounts of capital for half and quarter percentages of the outstanding number of shares. Exciting. Investors know that these bloated numbers represent the unrecognized capital costs of prior production and their investment dollars are in essence only providing working capital for the producer to keep the lights on for a few more quarters. Very exciting. If the producers attempt to eliminate these bloated balances they’ll only show the world how spendthrift they’ve been and end up recording losses that exceed the entire capital structure of the company. The only thing I think they can do is keep going until people’s paychecks bounce and then move on to another industry.
This is a very tragic situation. I am unaware of any industry that has so destroyed capital in this fashion. For four decades money has been raised and spent with no respect to value or understanding of profits. It may become obvious to most what has been going on for many decades now. But I’m happy to have been the thorn in the side of the industry for these past 14 years. They knew what I was talking about and instead of doing anything about it they did everything they could to silence me. My point is that all of this was unnecessary.
The Preliminary Specification, our user community and service providers provide for a dynamic, innovative, accountable and profitable oil and gas industry with the most profitable means of oil and gas operations. Setting the foundation for North America’s energy independence. People, Ideas & Objects Revenue Model specifies the means in which investors can participate in our future Initial Coin Offering (ICO) that will fund these user defined software developments. It is through the process of issuing our ICO that we are leading the way in which creative destruction can be implemented within the oil and gas industry. 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.
What we do know is that these producers can’t, won’t and will not ever subscribe to the Preliminary Specification as the resolution of their issues. Which wouldn’t matter anymore anyways. We are of the belief that they’ve moved beyond the point where we’d be able to help them. We have chosen to pursue other methods of implementing our solution in the oil and gas marketplace and believe fundamentally that these financial statements are the beginning of a meltdown in the industry. Who will jump in to support them? Both the investors and bankers have been absent and unwilling to participate for years. They too can see that the amount of capital necessary to fix this problem is well beyond the capacities of the investment and banking communities. Even if they did re-invest the producers would only regress to their old behaviors, resume their typical operations and be back at this same spot in as little as five years, wasting the trillions that were given to them now. They are beyond hope.
Prospective members of our user community must realize the time for them to act is upon us. It will be our collective action that will be looked upon as the method that the industry is able to rebuild itself. There is no shortage of hard, difficult work in which we need to do. Preparation of your application to the user community should be your first priority with an understanding that action may be called upon us much sooner than we’re prepared. Our preparation as a community is the most effective thing we can be doing. It begins the process of software development and brings us closer to the day we deliver our software.
These excessively bloated balances of property, plant and equipment are dead weight that will pull these producers down faster than in a normal environment. If an investor were to look at a producer with the prospect of investing they would see those bloated assets supporting the large number of shares outstanding and prior capital raised. Demanding the new investors spend large amounts of capital for half and quarter percentages of the outstanding number of shares. Exciting. Investors know that these bloated numbers represent the unrecognized capital costs of prior production and their investment dollars are in essence only providing working capital for the producer to keep the lights on for a few more quarters. Very exciting. If the producers attempt to eliminate these bloated balances they’ll only show the world how spendthrift they’ve been and end up recording losses that exceed the entire capital structure of the company. The only thing I think they can do is keep going until people’s paychecks bounce and then move on to another industry.
This is a very tragic situation. I am unaware of any industry that has so destroyed capital in this fashion. For four decades money has been raised and spent with no respect to value or understanding of profits. It may become obvious to most what has been going on for many decades now. But I’m happy to have been the thorn in the side of the industry for these past 14 years. They knew what I was talking about and instead of doing anything about it they did everything they could to silence me. My point is that all of this was unnecessary.
The Preliminary Specification, our user community and service providers provide for a dynamic, innovative, accountable and profitable oil and gas industry with the most profitable means of oil and gas operations. Setting the foundation for North America’s energy independence. People, Ideas & Objects Revenue Model specifies the means in which investors can participate in our future Initial Coin Offering (ICO) that will fund these user defined software developments. It is through the process of issuing our ICO that we are leading the way in which creative destruction can be implemented within the oil and gas industry. 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.
Posted by Paul Cox at 6:00 AM 0 comments
Tuesday, November 07, 2017
Starting a Successful Oil and Gas Industry
People, Ideas & Objects primary focus will always be on our user community. There is no purpose or reason for anyone to develop a system such as the Preliminary Specification without the involvement of the user. User community based developments are the only means in which to provide the quality systems that the users want and need. Development of our user community began as soon as the Preliminary Specification was published in its final form in December 2013. We then began seeking out users to join the community and published our user community vision. Providing it with the power and capabilities necessary to drive the transition in the oil and gas industry. Our commitment to user community based developments is uncompromising.
With all that has happened in the last quarter with People, Ideas & Objects. The cancellation of the project's software development start date in late September most particularly. Our focus has not changed. And neither has the user communities. We don’t currently have any software development plans however there are many things that the user community can be doing. Those that are interested in participating with these software developments should continue with their applications and prepare as if we’re moving forward imminently. Preparation is the key to success. If we wait until our ducks are all in a row then we’re unnecessarily wasting time now by not proceeding with the user communities development.
Our commitment to our user community requires us to have it developed before we begin software development. The more time and energy that we spend on the user community at this point the sooner we’ll be able to deliver our systems. The key determinant to our quality and our delivery date is the development of our user community. Something that we’ve been doing since December 2013 and continue to do. We will not begin developing software without the direction of the user community. Therefore this is our focus and priority. If ever you wanted to have systems that meet your needs, they’ll only happen with your involvement.
We may at anytime find the resources to proceed with developments. That’s not the point we should be looking towards. We should be asking ourselves what is the state of affairs in the oil and gas industry? What is its future for the next 25 years? Its issues and opportunities and how will these be met by the current producer organizations? Can we get there from here? If you believe the current producers can fulfill this future then our user community is of no interest to you. If you believe that changes are necessary and that the current course of destruction is terminal then the user community may be what you can do to make the industry dynamic, innovative, accountable and most important of all profitable. Real profits, ones that will generate value outside of accountings financial statements.
If you see a future for yourself in the oil and gas industry then the user community may be the ideal vehicle for you. There will be plenty of very hard work for everyone to get through. Overproduction and oversupply are unquestionably the biggest issues oil and gas has ever had to face. How it handles these from this point forward is purely a function of the user communities success and dedication. We are not losing any time in terms of the delivery of the Preliminary Specification to market if the user community continues to be developed. We are the first element that needs to be put in place and we can organize ourselves here and now in anticipation of the time that we’ll be needed. If we don’t prepare in this manner then the oil and gas industry will never be successful again, its that simple.
The Preliminary Specification, our user community and service providers provide for a dynamic, innovative, accountable and profitable oil and gas industry with the most profitable means of oil and gas operations. Setting the foundation for North America’s energy independence. People, Ideas & Objects Revenue Model specifies the means in which investors can participate in our future Initial Coin Offering (ICO) that will fund these user defined software developments. It is through the process of issuing our ICO that we are leading the way in which creative destruction can be implemented within the oil and gas industry. 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.
With all that has happened in the last quarter with People, Ideas & Objects. The cancellation of the project's software development start date in late September most particularly. Our focus has not changed. And neither has the user communities. We don’t currently have any software development plans however there are many things that the user community can be doing. Those that are interested in participating with these software developments should continue with their applications and prepare as if we’re moving forward imminently. Preparation is the key to success. If we wait until our ducks are all in a row then we’re unnecessarily wasting time now by not proceeding with the user communities development.
Our commitment to our user community requires us to have it developed before we begin software development. The more time and energy that we spend on the user community at this point the sooner we’ll be able to deliver our systems. The key determinant to our quality and our delivery date is the development of our user community. Something that we’ve been doing since December 2013 and continue to do. We will not begin developing software without the direction of the user community. Therefore this is our focus and priority. If ever you wanted to have systems that meet your needs, they’ll only happen with your involvement.
We may at anytime find the resources to proceed with developments. That’s not the point we should be looking towards. We should be asking ourselves what is the state of affairs in the oil and gas industry? What is its future for the next 25 years? Its issues and opportunities and how will these be met by the current producer organizations? Can we get there from here? If you believe the current producers can fulfill this future then our user community is of no interest to you. If you believe that changes are necessary and that the current course of destruction is terminal then the user community may be what you can do to make the industry dynamic, innovative, accountable and most important of all profitable. Real profits, ones that will generate value outside of accountings financial statements.
If you see a future for yourself in the oil and gas industry then the user community may be the ideal vehicle for you. There will be plenty of very hard work for everyone to get through. Overproduction and oversupply are unquestionably the biggest issues oil and gas has ever had to face. How it handles these from this point forward is purely a function of the user communities success and dedication. We are not losing any time in terms of the delivery of the Preliminary Specification to market if the user community continues to be developed. We are the first element that needs to be put in place and we can organize ourselves here and now in anticipation of the time that we’ll be needed. If we don’t prepare in this manner then the oil and gas industry will never be successful again, its that simple.
The Preliminary Specification, our user community and service providers provide for a dynamic, innovative, accountable and profitable oil and gas industry with the most profitable means of oil and gas operations. Setting the foundation for North America’s energy independence. People, Ideas & Objects Revenue Model specifies the means in which investors can participate in our future Initial Coin Offering (ICO) that will fund these user defined software developments. It is through the process of issuing our ICO that we are leading the way in which creative destruction can be implemented within the oil and gas industry. 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.
Posted by Paul Cox at 6:00 AM 0 comments
Monday, November 06, 2017
The Dynamic Nature of our Coin Holders
Organizations are defined and supported by the ERP software that they use. Any change in the organization must be made through the software first, before it can be implemented in the organization. Otherwise with the software unchanged any attempt to change the organization will cause it to subsequently regress to its former state. This is the reason that People, Ideas & Objects and our user community provide a software development capability to the oil and gas industry that is so critical for today’s business environment and for the long term. In order to make the changes in the behavior of the producers they’ll need to change the software first. Now as a result of the inability of the producers to support our September 25, 2017 software development start date, issues such as their chronic overproduction and oversupply will continue.
There have been a number of new dynamics introduced into the oil and gas industry. We have indicated the state of affairs in the ERP marketplace in terms of choices the oil and gas producers could make. Without People, Ideas & Objects there are no systems developments being undertaken as a result of the history and past behavior of the producers. Everyone has left. I would seriously question the producers ability to raise the attention of any vendor at this time. The market is small in terms of the number of producers and their habit of abuse in the past is legendary. With People, Ideas & Objects efforts over the past fourteen years of promoting our solution which uses the Joint Operating Committee, who will come up with a more competitive offering that solves today’s issues, in a reasonable period of time and will continue to pursue that solution on behalf of the producers for potentially decades? It would seem that the bureaucrats who run these producer firms would rather run their companies into the ground than solve their problems.
The opportunity for producers to participate in our September 25, 2017 developments would have enabled them to acquire that software development capability and move forward with resolving their issues which include the chronic overproduction and oversupply that plagues them. As a result they will not have this capability made available anytime soon. And therefore the issues and opportunities that the industry faces in the short, mid and long term will not be resolved or realized by any known current method. They will be stuck in this current state until such time as some alternative and unknown ERP software enables the industry to implement the changes that are necessary.
At the same time People, Ideas & Objects are focused on our true customers, the coin holders from the Initial Coin Offering (ICO) that we are preparing. These are the disgruntled oil and gas investors who have been on strike for over two years. We feel we offer a highly competitive offering in terms of return for these investors to consider. Especially in comparison to what the producers have been able to provide these past decades. What our coin holders will do will be to negotiate with the producers for a share of our trillion dollar value proposition that we provide the industry. More can be understood about our free money strategy here. This also provides our coin holders with the means in which to begin the much needed transition of the industry, through creative destruction, into a dynamic, innovative, accountable and profitable industry.
It will be our coin holders that will have the means in which to make the changes to the oil and gas industry that they want and need. They will have the exclusive software development capability of People, Ideas & Objects and user community available to them. They will also have the service providers which provide the administrative and accounting capabilities in which to operate the industry. We have always believed that the level of change that is introduced in the Preliminary Specification is too dramatic for the existing producer organizations to undertake. Rebuilding the industry brick by brick and stick by stick has been what we have stated all along, even as far back as 2007. The financial damage to the current producer firms has been catastrophic. A rebuilding would seem to be necessary. Will these organizations be able to deal with the future of the industry? We do not believe they will ever be able to approach North American energy independence. They will need to establish themselves as profitable organizations before they can expand their throughput. Profits, real substantial profits, not the accounting profits they’ve reported for decades, have never been part of their culture. And as we’ve noted, they won’t have the software development capabilities to reconfigure themselves in order to begin to earn real profits.
The Preliminary Specification, our user community and service providers provide for a dynamic, innovative, accountable and profitable oil and gas industry with the most profitable means of oil and gas operations. Setting the foundation for North America’s energy independence. People, Ideas & Objects Revenue Model specifies the means in which investors can participate in our future Initial Coin Offering (ICO) that will fund these user defined software developments. It is through the process of issuing our ICO that we are leading the way in which creative destruction can be implemented within the oil and gas industry. 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.
There have been a number of new dynamics introduced into the oil and gas industry. We have indicated the state of affairs in the ERP marketplace in terms of choices the oil and gas producers could make. Without People, Ideas & Objects there are no systems developments being undertaken as a result of the history and past behavior of the producers. Everyone has left. I would seriously question the producers ability to raise the attention of any vendor at this time. The market is small in terms of the number of producers and their habit of abuse in the past is legendary. With People, Ideas & Objects efforts over the past fourteen years of promoting our solution which uses the Joint Operating Committee, who will come up with a more competitive offering that solves today’s issues, in a reasonable period of time and will continue to pursue that solution on behalf of the producers for potentially decades? It would seem that the bureaucrats who run these producer firms would rather run their companies into the ground than solve their problems.
The opportunity for producers to participate in our September 25, 2017 developments would have enabled them to acquire that software development capability and move forward with resolving their issues which include the chronic overproduction and oversupply that plagues them. As a result they will not have this capability made available anytime soon. And therefore the issues and opportunities that the industry faces in the short, mid and long term will not be resolved or realized by any known current method. They will be stuck in this current state until such time as some alternative and unknown ERP software enables the industry to implement the changes that are necessary.
At the same time People, Ideas & Objects are focused on our true customers, the coin holders from the Initial Coin Offering (ICO) that we are preparing. These are the disgruntled oil and gas investors who have been on strike for over two years. We feel we offer a highly competitive offering in terms of return for these investors to consider. Especially in comparison to what the producers have been able to provide these past decades. What our coin holders will do will be to negotiate with the producers for a share of our trillion dollar value proposition that we provide the industry. More can be understood about our free money strategy here. This also provides our coin holders with the means in which to begin the much needed transition of the industry, through creative destruction, into a dynamic, innovative, accountable and profitable industry.
It will be our coin holders that will have the means in which to make the changes to the oil and gas industry that they want and need. They will have the exclusive software development capability of People, Ideas & Objects and user community available to them. They will also have the service providers which provide the administrative and accounting capabilities in which to operate the industry. We have always believed that the level of change that is introduced in the Preliminary Specification is too dramatic for the existing producer organizations to undertake. Rebuilding the industry brick by brick and stick by stick has been what we have stated all along, even as far back as 2007. The financial damage to the current producer firms has been catastrophic. A rebuilding would seem to be necessary. Will these organizations be able to deal with the future of the industry? We do not believe they will ever be able to approach North American energy independence. They will need to establish themselves as profitable organizations before they can expand their throughput. Profits, real substantial profits, not the accounting profits they’ve reported for decades, have never been part of their culture. And as we’ve noted, they won’t have the software development capabilities to reconfigure themselves in order to begin to earn real profits.
The Preliminary Specification, our user community and service providers provide for a dynamic, innovative, accountable and profitable oil and gas industry with the most profitable means of oil and gas operations. Setting the foundation for North America’s energy independence. People, Ideas & Objects Revenue Model specifies the means in which investors can participate in our future Initial Coin Offering (ICO) that will fund these user defined software developments. It is through the process of issuing our ICO that we are leading the way in which creative destruction can be implemented within the oil and gas industry. 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.
Posted by Paul Cox at 6:00 AM 0 comments
Friday, November 03, 2017
Thursday, November 02, 2017
Oil Prices, Again
People, Ideas & Objects have proven that oil and gas producers can’t, won’t and will not ever develop any ERP systems on their own. After a decade of losses they did not participate in the proposed development of the Preliminary Specification starting September 25, 2017. We use this as evidence, upon the history, culture and behavior of the producers over the past decades in terms of dealing with ERP providers. That our coin holders will not face any competition as a result of any industry sponsored ERP software developments. We can also state that for Oracle and IBM to return to the market would require that same change in behavior of the producers that we know is missing today, and that these vendors identified earlier this century which prompted their exit. We can also assure our coin holders that no alternative ERP software developments will be sponsored based on the Intellectual Property inherent in the Preliminary Specification. The Permission Rights the coin holders earn are exclusive.
I have been highly critical and sarcastic towards the oil and gas producers throughout the last decade on this blog. The tone has been consistent and establishes a level of conflict between People, Ideas & Objects and the producers. It’s never wise to criticize your customers publicly. Based on the producers past behavior towards ERP providers I don’t think I ever saw them as customers. I’ve been told a hundred times that they’ll never get involved in this project, something that I agreed to quietly. I think I always knew the producers weren’t customers but were more the source of the issue and that was how they were treated here. Our customers were the investors in the oil and gas producers who we share a frustration and anger with. They now have the opportunity to participate in the transformation of the industry, and their interests in oil and gas, by participating in the ICO we are preparing. Choosing to invest in the coins as opposed to the producer firms themselves.
What we need to do now is to prove that the oil and gas producers, during a period of rising oil prices, have a flawed business model that is the source of low oil and gas commodity prices. We certainly don’t see any investors or bankers stepping over each other financing any of the producers. This should be relatively easy for us to prove that the overproduction and oversupply is inherent in the business model and nothing has changed since the late 1980’s and 1990’s when I first began to study and resolve why producers don’t just shut-in some of their production to raise prices to the level where their profitable.
That the Preliminary Specifications decentralized production model’s price maker strategy resolves low commodity prices is irrelevant to the producers. They see it as collusion and will not be involved in it. They prefer to spend decades where they lose money as a result of a fundamental change in their business, driven by prolific shale reservoirs. Ending up losing the investors, banks, service industries, their employees and all the others interests instead. Where a common understanding of business would dictate that the market provides one thing and that is the price it is willing to pay. If they as a producer can earn a profit at that price then they should produce, if not they should shut-in their production. That is not collusion as they suggest but good business practice. Producers will allege that this is what they’re doing.
One look at the disjointed nature of their financial statements will find that none of the capital costs of past production has been recognized. And the real costs of oil and gas exploration and production are fundamentally unknown. By capitalizing everything including the receptionists Post-it-Notes and the service charges for the phone they use. Only to be recognized over a twenty year period. One mans profits are another mans accounting fraud. Producers have ignored our commentary about this point. Primarily I think because it’s something that has formed a cornerstone of their legacy of destruction. You can’t profitably retire these balances in the short or mid term, therefore why admit it’s an issue. It is the albatross around their neck that makes investors unwilling to dilute their future investments against past costs of a questionable nature that have never performed. That goes for banks too. And the outsized nature of these balances can only be reduced through long term profitable operations. Something that these organizations were never structured to provide. They were spending machines. The money comes in and then goes out. Only to be replenished next year by newer, more naive investors. As an oil and gas investor it's the continuous, annual dilution of your interests that’s the prize!
We see today that the Saudi’s and Russia are committed to extending their production sharing agreement throughout 2018. This is having upward pressure on the price of oil. This is also good for the Saudi IPO of Saudi Aramco which will also occur in 2018. What happens when that is complete? As the low cost producer they will have a number of different strategies to chose from. Elimination of the high cost producers through low commodity prices is the most probable one that I see them employing. Already in the 12% increase in prices during 2017’s third quarter and the 5% increase in October 2017 producers are found to be racing to get more production on line to secure more cash. The U.S. is projected to be producing over 9.9 million barrels of oil per day in 2018. A record volume that was previously established in 1970, in comparison to the approximately 8.9 million barrels per day when OPEC first put their production sharing agreement into place.
How many times are we to believe the “market rebalancing” story? It is just the cover story for a complacent and satisfied bureaucracy. It also reflects the lack of thinking in the industry as “market rebalancing” has been the only commentary since the decline in natural gas prices in 2008. I am very satisfied that I have a decade or more of critical commentary about the producer's business. Their business is flawed and has no future. That will soon be proven again as they overwhelm the market with surplus production. We now have our customers clearly defined and are able to provide them with substantial business value. And just to show the trend is our friend, the CME Group are experimenting with BitCoin to see if they are able to begin trading in cryptocurrencies. Establishing a possibility that our coin holders could trade on the Chicago Mercantile Exchange.
The Preliminary Specification, our user community and service providers provide for a dynamic, innovative, accountable and profitable oil and gas industry with the most profitable means of oil and gas operations. Setting the foundation for North America’s energy independence. People, Ideas & Objects Revenue Model specifies the means in which investors can participate in our future Initial Coin Offering (ICO) that will fund these user defined software developments. It is through the process of issuing our ICO that we are leading the way in which creative destruction can be implemented within the oil and gas industry. 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.
I have been highly critical and sarcastic towards the oil and gas producers throughout the last decade on this blog. The tone has been consistent and establishes a level of conflict between People, Ideas & Objects and the producers. It’s never wise to criticize your customers publicly. Based on the producers past behavior towards ERP providers I don’t think I ever saw them as customers. I’ve been told a hundred times that they’ll never get involved in this project, something that I agreed to quietly. I think I always knew the producers weren’t customers but were more the source of the issue and that was how they were treated here. Our customers were the investors in the oil and gas producers who we share a frustration and anger with. They now have the opportunity to participate in the transformation of the industry, and their interests in oil and gas, by participating in the ICO we are preparing. Choosing to invest in the coins as opposed to the producer firms themselves.
What we need to do now is to prove that the oil and gas producers, during a period of rising oil prices, have a flawed business model that is the source of low oil and gas commodity prices. We certainly don’t see any investors or bankers stepping over each other financing any of the producers. This should be relatively easy for us to prove that the overproduction and oversupply is inherent in the business model and nothing has changed since the late 1980’s and 1990’s when I first began to study and resolve why producers don’t just shut-in some of their production to raise prices to the level where their profitable.
That the Preliminary Specifications decentralized production model’s price maker strategy resolves low commodity prices is irrelevant to the producers. They see it as collusion and will not be involved in it. They prefer to spend decades where they lose money as a result of a fundamental change in their business, driven by prolific shale reservoirs. Ending up losing the investors, banks, service industries, their employees and all the others interests instead. Where a common understanding of business would dictate that the market provides one thing and that is the price it is willing to pay. If they as a producer can earn a profit at that price then they should produce, if not they should shut-in their production. That is not collusion as they suggest but good business practice. Producers will allege that this is what they’re doing.
One look at the disjointed nature of their financial statements will find that none of the capital costs of past production has been recognized. And the real costs of oil and gas exploration and production are fundamentally unknown. By capitalizing everything including the receptionists Post-it-Notes and the service charges for the phone they use. Only to be recognized over a twenty year period. One mans profits are another mans accounting fraud. Producers have ignored our commentary about this point. Primarily I think because it’s something that has formed a cornerstone of their legacy of destruction. You can’t profitably retire these balances in the short or mid term, therefore why admit it’s an issue. It is the albatross around their neck that makes investors unwilling to dilute their future investments against past costs of a questionable nature that have never performed. That goes for banks too. And the outsized nature of these balances can only be reduced through long term profitable operations. Something that these organizations were never structured to provide. They were spending machines. The money comes in and then goes out. Only to be replenished next year by newer, more naive investors. As an oil and gas investor it's the continuous, annual dilution of your interests that’s the prize!
We see today that the Saudi’s and Russia are committed to extending their production sharing agreement throughout 2018. This is having upward pressure on the price of oil. This is also good for the Saudi IPO of Saudi Aramco which will also occur in 2018. What happens when that is complete? As the low cost producer they will have a number of different strategies to chose from. Elimination of the high cost producers through low commodity prices is the most probable one that I see them employing. Already in the 12% increase in prices during 2017’s third quarter and the 5% increase in October 2017 producers are found to be racing to get more production on line to secure more cash. The U.S. is projected to be producing over 9.9 million barrels of oil per day in 2018. A record volume that was previously established in 1970, in comparison to the approximately 8.9 million barrels per day when OPEC first put their production sharing agreement into place.
How many times are we to believe the “market rebalancing” story? It is just the cover story for a complacent and satisfied bureaucracy. It also reflects the lack of thinking in the industry as “market rebalancing” has been the only commentary since the decline in natural gas prices in 2008. I am very satisfied that I have a decade or more of critical commentary about the producer's business. Their business is flawed and has no future. That will soon be proven again as they overwhelm the market with surplus production. We now have our customers clearly defined and are able to provide them with substantial business value. And just to show the trend is our friend, the CME Group are experimenting with BitCoin to see if they are able to begin trading in cryptocurrencies. Establishing a possibility that our coin holders could trade on the Chicago Mercantile Exchange.
The Preliminary Specification, our user community and service providers provide for a dynamic, innovative, accountable and profitable oil and gas industry with the most profitable means of oil and gas operations. Setting the foundation for North America’s energy independence. People, Ideas & Objects Revenue Model specifies the means in which investors can participate in our future Initial Coin Offering (ICO) that will fund these user defined software developments. It is through the process of issuing our ICO that we are leading the way in which creative destruction can be implemented within the oil and gas industry. 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.
Posted by Paul Cox at 6:00 AM 0 comments
Wednesday, November 01, 2017
Trillions in Free Money, Part IV
The Better Investment?
Nothing has changed in oil and gas since the development of production methods for shale based reservoirs. These developments began in the late 20th century and by 2010 had totally destroyed the natural gas business. That business went through a number of false new beginnings where it was expected that the market would rebalance and prices would recover. Eventually after many iterations of slightly higher prices, leading to a rush of new production, everyone gave up on the natural gas business. No one hears any news about that market anymore. Prices are trading at 18 times the price of oil. Historically natural gas was 6 times. So much damage has occurred as a result of the overproduction and oversupply from shale. Today we remain optimistic that oil prices will recover, just as we did with natural gas almost a decade ago. It’s been a far shorter time that oil prices have been depressed and hope takes time to completely erode. Those that agree with the North American producers that all has been resolved in the commodity markets may be correct. I would ask how many times have we been here before? Then suddenly production increases in North America, and the price collapses again. Nothing has changed in the business to stop the overproduction and oversupply of these commodities. The business model of these producers will continue to overproduce forever.
All that is needed is for each producer to shut-in a small percentage of their properties in order to realize a tripling of the prices and the ability to cover their costs. So simple but it will never happen with the current producers structure. And they can’t, won’t and will not ever change. People, Ideas & Objects have proven that. Producers are giddy with excitement because they have OPEC cutting their production and somewhat supporting the price. Saudi Arabia is planning their IPO of Saudi Aramco in 2018 and when that is complete their desire to have a stable price will no longer exist. Their costs are single digit and in the face of prolific high cost shale they are the low cost producer that will always be able to compete. Therefore they will put all of their production on the market and leave it to others to deal with their costs. Meaning the North American producers have less than a year in which the bottom falls out of the oil market, just as it did so many years ago in the natural gas market. This is not the investment communities nirvana that producers should be giddy about.
It is the inability to address these issues that have concerned the oil and gas investor and banker. They see no discussion or identification of the issue, or resolution being put forward. They now understand that the accounting has been suspect for decades. Where recording every cost as a capital asset has become the art and the science in the industry, and depleting the capital asset over decades has reported false profits that demand the investor's annual cash injection to stem the producers cash shortfall. A few years ago the investors cut the industry off from new capital and have created a severe cash crisis throughout the industry which has motivated no discussion and no change. At the same time People, Ideas & Objects have fought with these same producers over our solution to these issues. Our resolution of this conflict is that we now turn to others to begin the process of turning over the industry through the process of creative destruction.
We have identified a number of groups that we will be targeting in the process of issuing our Initial Coin Offering (ICO). Members of our user community can participate in our ICO and enhance their interests in the ecosystem that is being offered. We have stated that producers may be interested in purchasing adequate coins to have their production profile processed through People, Ideas & Objects software. That however may be a bit of a stretch of logic for them. The one group that would be lucrative for us to recruit for their participation in our ICO would be the overall oil and gas investment and banking communities. We are a proxy to profitable oil and gas production. Therefore it would be in their best interests to participate in the ICO and skip the direct investment in the producer firms. Providing these investors with greater opportunity for returns and a seat at the table in terms of how the oil and gas industry is restructured and reconfigured to ensure real profitability is attained.
The Preliminary Specification, our user community and service providers provide for a dynamic, innovative, accountable and profitable oil and gas industry with the most profitable means of oil and gas operations. Setting the foundation for North America’s energy independence. People, Ideas & Objects Revenue Model specifies the means in which investors can participate in our future Initial Coin Offering (ICO) that will fund these user defined software developments. It is through the process of issuing our ICO that we are leading the way in which creative destruction can be implemented within the oil and gas industry. 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.
Nothing has changed in oil and gas since the development of production methods for shale based reservoirs. These developments began in the late 20th century and by 2010 had totally destroyed the natural gas business. That business went through a number of false new beginnings where it was expected that the market would rebalance and prices would recover. Eventually after many iterations of slightly higher prices, leading to a rush of new production, everyone gave up on the natural gas business. No one hears any news about that market anymore. Prices are trading at 18 times the price of oil. Historically natural gas was 6 times. So much damage has occurred as a result of the overproduction and oversupply from shale. Today we remain optimistic that oil prices will recover, just as we did with natural gas almost a decade ago. It’s been a far shorter time that oil prices have been depressed and hope takes time to completely erode. Those that agree with the North American producers that all has been resolved in the commodity markets may be correct. I would ask how many times have we been here before? Then suddenly production increases in North America, and the price collapses again. Nothing has changed in the business to stop the overproduction and oversupply of these commodities. The business model of these producers will continue to overproduce forever.
All that is needed is for each producer to shut-in a small percentage of their properties in order to realize a tripling of the prices and the ability to cover their costs. So simple but it will never happen with the current producers structure. And they can’t, won’t and will not ever change. People, Ideas & Objects have proven that. Producers are giddy with excitement because they have OPEC cutting their production and somewhat supporting the price. Saudi Arabia is planning their IPO of Saudi Aramco in 2018 and when that is complete their desire to have a stable price will no longer exist. Their costs are single digit and in the face of prolific high cost shale they are the low cost producer that will always be able to compete. Therefore they will put all of their production on the market and leave it to others to deal with their costs. Meaning the North American producers have less than a year in which the bottom falls out of the oil market, just as it did so many years ago in the natural gas market. This is not the investment communities nirvana that producers should be giddy about.
It is the inability to address these issues that have concerned the oil and gas investor and banker. They see no discussion or identification of the issue, or resolution being put forward. They now understand that the accounting has been suspect for decades. Where recording every cost as a capital asset has become the art and the science in the industry, and depleting the capital asset over decades has reported false profits that demand the investor's annual cash injection to stem the producers cash shortfall. A few years ago the investors cut the industry off from new capital and have created a severe cash crisis throughout the industry which has motivated no discussion and no change. At the same time People, Ideas & Objects have fought with these same producers over our solution to these issues. Our resolution of this conflict is that we now turn to others to begin the process of turning over the industry through the process of creative destruction.
We have identified a number of groups that we will be targeting in the process of issuing our Initial Coin Offering (ICO). Members of our user community can participate in our ICO and enhance their interests in the ecosystem that is being offered. We have stated that producers may be interested in purchasing adequate coins to have their production profile processed through People, Ideas & Objects software. That however may be a bit of a stretch of logic for them. The one group that would be lucrative for us to recruit for their participation in our ICO would be the overall oil and gas investment and banking communities. We are a proxy to profitable oil and gas production. Therefore it would be in their best interests to participate in the ICO and skip the direct investment in the producer firms. Providing these investors with greater opportunity for returns and a seat at the table in terms of how the oil and gas industry is restructured and reconfigured to ensure real profitability is attained.
The Preliminary Specification, our user community and service providers provide for a dynamic, innovative, accountable and profitable oil and gas industry with the most profitable means of oil and gas operations. Setting the foundation for North America’s energy independence. People, Ideas & Objects Revenue Model specifies the means in which investors can participate in our future Initial Coin Offering (ICO) that will fund these user defined software developments. It is through the process of issuing our ICO that we are leading the way in which creative destruction can be implemented within the oil and gas industry. 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.
Posted by Paul Cox at 6:00 AM 0 comments
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