People, Ideas & Objects developed a factor that defines what price engineers and geologists in producer firms will be charged out to the various internal or external Joint Operating Committees. What objective criteria could be used to determine the value of an individual's time while working for a joint account? How representative is that factor of the firm that employs them? Would all resources of that firm be assessed at that same rate? What about start-ups and small producers? What rate would they use? These questions are answered in the Preliminary Specifications Revenue Per Employee as the basis of determining these charge out rates. 

The Preliminary Specification resolves the anticipated shortfall in earth science and engineering resources by eliminating the “operator” role in the industry. People, Ideas & Objects believe that automation, specialization and the division of labor are the only means to approach this limited resource base and the challenging volume of work our future demands. Having each producer firm build its own specialized "operator" level of capabilities and capacities would be too burdensome for any commercial organization. Therefore we used Professor Paul Romers’ non-rival cost approach. Where we’ve made these resources shared and shareable across the Joint Operating Committees the producer firms participate in. Each member of the Joint Operating Committee pools their own specialized expertise to aggregate what the property needs. Consulting firms fill in the lower level capacities and capabilities to complete the overall offering. 

Revenue Per Employee is a unique attribute in oil & gas. It has a wide range of variance between producers and we can draw significant meaning from these values. Although I have not run the numbers lately, it can easily vary between $1 and $4 million per employee. Which denotes an hourly revenue of $571 to $2,285. It is therefore reasonable to assume that each of these individuals would generate the level of value represented by the producer firm that employs them. This value is represented in each producer's employees' individual skills, knowledge and talent but also in the firm's capacities and capabilities. If we assume that an industry agreement is reached in which percentages of those revenues per employee can be assigned to, for example, junior, intermediate and senior engineers at 50, 75 and 90% of the Revenue Per Employee factor then these would form the individuals charge out rate for purposes of the time they spend on any Joint Operating Committee or other activity. Their hours being aggregated in the Work Order, the percentage value of Revenue Per Employee their position is charged out at. In addition, the monthly updated Revenue Per Employee value is contained within the Work Order. The allocation of employee costs and billing to joint accounts will be handled through a Work Order, which is an Accounting Voucher. This is based on the AFE, Lease or internal account the employee assigns their work to. Revenue Per Employee minimum values attained by the lowest 25 producers might be averaged. This is so that start-up and small producers are not adversely affected by their firm's size and its production profile. Establishing a floor for charge-out rates across the industry. 

So what do we have? We’ve run some calculations that “might” prove that one producer is innovative. What does that prove? That depends on what innovation means. Professor Giovanni Dosi states 

In very general terms, technological innovation involves or is the solution to problems. In other words, an innovative solution to a certain problem involves ‘discovery’ (of the problem) and ‘creation’ since no general algorithm can be derived from the information about the problems. Solutions to technological problems involve the use of information derived from experience and formal knowledge. It is the specific and un-codified capabilities, or ‘tacit-ness’ on the part of the inventors who discover the creative solution. pp. 1125 - 1126.

People, Ideas & Objects argue oil & gas has been mismanaged by its officers and directors. The resources available to industry in the fields of earth science and engineering are unparalleled. I’ve never stated otherwise. However, if an architect specifies a building will be built with subgrade materials and poor design, the engineers assigned to correct the consequential issues of those initial poor decisions, half way through the project are limited in what they can do. If People, Ideas & Objects have learned anything from the obstinance and inaction of these officers and directors, it is that engineers and geologists are well aware of the issue. 

Additionally, they know the culture that secures it and the need to eliminate it. Are working constructively within these constraints and dealing with them. People, Ideas & Objects Preliminary Specification attempts to resolve the issue by changing the industry culture to performance. Our goal is to provide the most profitable means of oil & gas operations for dynamic, innovative, accountable, and profitable producers everywhere and always. To fulfill their obligations and duties, engineers and geologists must operate in the current financial environment. In a hostile financial environment, a successful career is unlikely. They are therefore aware that the current culture cannot handle the complex and challenging issues the oil & gas sector faces in the future.