These Are Not the Leaders We're Looking For, Part XVI
People, Ideas & Objects have set out an ambitious plan and strategy on how to put the oil & gas industry on a cultural foundation of preservation, performance and profitability. We understand the difficulty we face. The 33 years we have spent working toward this goal underscore the Preliminary Specifications vast scope and scale, highlighting the immense difficulty of the task. We believe that the value we provide industry is substantial and the issues we’ve sought to resolve in the development of the Preliminary Specification are the preeminent difficulties in the marketplace today. Clearly, People, Ideas & Objects have made some correct decisions.
People, Ideas & Objects have earned the copyright and associated Intellectual Property rights from our work. We therefore can state that we’ll be the ones responsible for developing and implementing these technologies in oil & gas. We’ve built value through the implementation of Information Technology in oil & gas through innovative thinking in solving business issues for many decades. Officers and directors may be interested in sponsoring some alternative ideas of their own. However, it's been our experience that it takes the better part of a decade to go from a basic idea to a fully integrated, viable business model. Their difficulty is they’ll have to do so while avoiding the Preliminary Specifications Intellectual Property. What plan do they have?
We are not about to approach this software development, cultural and organizational change on the basis of a slimmed down budget. A task that may have difficulties that must be overcome. And to do so on the basis of the needs of others and specifically the producer officers and directors. People, Ideas & Objects earned the pedigree and heritage associated with knowing and understanding what was necessary decades ago. Built a viable business model, the Preliminary Specification, available since August 2012. Resolving the issues identified, however unresolved by these producers’ officers and directors. The multi-trillion dollar value proposition we asserted decades ago. Are now seen as manifested in actual trillion dollar revenue losses and damages to the industry due to officers and directors willful misconduct and neglect. Now that we’ve suffered and sacrificed to get to this point. Our value proposition is proven, we’re not going to take any water with our wine. The time for producers to have negotiated a better deal was a decade ago.
Tis’ the Season for Action
Now is the time of year when officers and directors speak to their shareholders in a different language. The language that soothes shareholders' anger of their past performance. It has been noted by People, Ideas & Objects that this is a temporary effect that expires quickly after the Annual General Meetings. At which time “muddle through” comes back into full effect. Today’s discussions of better managing the natural gas marketplace is new however. Stung by our presentation of $4 trillion in revenue losses from July 2007 to the end of 2023. They never expected to appear so out of touch and incompetent. A serious and consequential risk to the officers and directors if they do not choose to make the appropriate decisions in the immediate time period. The risk they could be sued for this lack of performance when they should have acted should be their preeminent concern. And therefore the only means in which to mitigate that risk is to develop the Preliminary Specification. Taking the steps necessary to correct the difficulties.
What evidence is there to show shareholders they were duped out of their value and upside by the officers and directors. Should officers and directors have listened to their shareholders after 2015 when they suspended all support for any additional equity investment? What more consequential action could their investors have taken? Just as People, Ideas & Objects were ignored for proposing the Preliminary Specification. Shareholder concerns were disregarded. Assets were wasted when oil & gas sold for well below the market price and actual costs. Creating losses that were papered over by claims of “building balance sheets” and “putting cash in the ground.” As ridiculous as these excuses sound, they're well remembered as the kind of verbiage that spewed out of the producers' boardrooms. Were these claims the cover story for their inaction?
LNG’s export market developed from 2016 forward. Exposing the global natural gas pricing model to the North American market. Did they not realize or care that the opportunity was available. Secondly, if they were aware of the opportunity, they proved in late 2023 that they did not know the basic business understanding necessary to bring about the value from those new markets. If this evidence isn’t disqualifying from the point of view of ending their tenure, I don’t know what would be.
The primary purpose of the reorganization of the producer and industry in the Preliminary Specification is to institute production discipline on the only fair and reasonable method. If the property produces profitably, it produces. Otherwise it’s shut-in for future use. Maintaining its value and maximizing the producers current profitability. The aggravating aspect of this is we published the specification in August 2012 and originally began discussion of the decentralized production model in 2007. People, Ideas & Objects were ridiculed by those that are now responsible for at least $4 trillion in natural gas revenue losses since July 2007. Damages as a result of overproduction of oil & gas commodities. It is unclear how much oil prices have suffered at their hands. If they don’t understand their business to this extent there are few acceptable choices left for them.
And They Call Themselves Leaders
We should collectively do them a favor. It was as little as three years ago they declared shale would never be commercial. Their frontier was clean energy and were transitioning to that. This being the one decision they made unilaterally. Taking the oil & gas revenues developed by their shareholders to fund investments in unrelated industries without the approval of their shareholders. All on the strength of the power of a press release. Those who were committed to shale, the service industry, engineers and geologists were rendered second class. Shale was no longer the future. This is the type of leadership at the helm of the industry?
Only to return when the prices of oil & natural gas were rising and they realized their mistake to pursue consolidation? We’re supposed to forget about these “mistakes.” Mistakes made while trillions of dollars are lost in a business they can’t manage, admit they can’t commercialize and saunter about looking for uncompetitive industries to invest in. What more proof is needed to show they’re incompetence? What more proof is needed to show they’re lack of focus and understanding of their own business? What more proof is needed to show their tenure must end.
If anyone should suggest that producers have learned their lessons and seen the future and therefore will rise to meet these demands with action. I can only suggest getting off the drugs. Their culture of inaction is systemic, chronic, intractable and here to stay. It will not change, it can’t change and for anyone to think otherwise is lunacy. Too many chances have been afforded to the officers and directors and they have now formed an intractable culture around the expectation there will be no expectations of them.
Organizational Dynamics
What we know through centuries of organizational economics is that “organizations don’t change, people do.” There is no future for the producer firms as currently constituted. Other than a slow and painful death. Serendipity, spontaneous order and creative destruction are the principles that brought much of the renewal to corporate America. These three change related forces are no longer valid for primarily two reasons. The role of software in our lives. To organize anything today demands software to define and support the organization in the processes and management. Without these being effectively managed and designed to accommodate organizational changes in a timely manner. Officers and directors such as those in oil & gas are able to maintain a vested interest in the status quo by never changing the software. The second is the legislation that enables firms to declare protection once failed in the form of bankruptcy and receivership reconfiguring their capital structure. As in, investors are kicked to the curb.
Investors need to ask themselves what planning is currently being undertaken by their producer firm. Is it further dilution through consolidation, bankruptcy or solving these issues. I think they’ve acquired a good record of success through the bankruptcy process. Investors should therefore act before the officers and directors relieve them of their financial interests through bankruptcy.
Officers and directors Liability Insurance is null and void if failure can be proven to be a result of Wilful misconduct or even negligence. We’re in a quiet stasis at the moment, I don't expect that to last much longer. Officers and directors are the ones with the tools and the cash in this fight. It will be interesting to see how it all works out. It's not enough to just own the oil & gas asset anymore. It's also necessary to have access to the oil & gas software that makes the oil & gas asset profitable.
Restating Our Call to Action
People, Ideas & Objects presents the Preliminary Specification as the essential framework for revitalizing the North American oil and gas sector, encompassing producer firms, the service industry, and the broader industry infrastructure. The prevailing status quo now threatens the sector's health and prosperity, demanding urgent action to dismantle the entrenched interests that prioritize self-preservation over collective well-being.
Investor Action
Investors must take decisive steps to remove these entrenched interests. The survival of the industry hinges on the willingness to champion change and invest in a future where preservation, performance, and profitability are paramount. It's time to demand accountability and advocate for strategic restructuring to safeguard their investments and the industry’s future.
Role of Officers and Directors
The responsibility also lies with the officers and directors, who must shift from defensive postures to proactive engagement with innovative strategies like the Preliminary Specification. Their historical preference for consolidation, despite regulatory challenges, and bankruptcy as solutions to performance pressures, undermines the industry's potential for genuine growth and profitability.
Shareholder Engagement
Shareholders find themselves at a crossroads, needing to assert their influence and interest in shaping the industry’s direction. The current path, characterized by temporary cash flow maintenance and strategic stagnation, is unsustainable. Shareholders must voice their expectations and demand a comprehensive strategy that aligns with the long-term health and profitability of the oil and gas sector.
In essence, the time for complacency and passive observation is over. All stakeholders, especially investors and shareholders, must actively engage in defining a new trajectory for the oil and gas industry, one that is aligned with the innovative and sustainable principles of the Preliminary Specification. The future of the industry is in their hands, and the actions taken today will determine its legacy for generations to come.