Gas processors adapting to new reality

July 12th, 2010 by

By Pat Hinds,

I am always interested in news articles on topics that I refer to as “2.0” or “new normal” stories. I came across an article in the Calgary Herald called “Gas processors adapting to new reality”. A typical 2.0 story has a problem statement, implication and a solution. Listed below is a summary of the article that speaks to the impact of lower natural gas prices and gas volumes on companies that operate gas plants that clean the gas of impurities such as sulphur and carbon dioxide, or stripped of liquids.

Gas Processors 2.0

Problem – “Production in the province has dropped some 15 per cent in the past three years on low prices and the threat of higher royalties, reducing volumes flowing through processing plants.”

Implication– “Clearly the decline in production and throughput creates the accounting question of “do you have enough in the future to justify the value of these assets on your books?” said Gerry Goobie, analyst with energy consultants Purvin & Gertz Inc. “If you haven’t got enough throughput, maybe you have to take a write-down, and nobody wants to do that.”

Solution– “We are managing the natural decline in the foothills areas through continuous fine tuning and optimization of the producing wells and processing facilities,” Greenberg told the Herald.

The reason for my interest in “2.0” stories is they serve as a good reference to what is happening in the sales industry.

Sales 2.0

Problem – Global recession, increase competition and the change in the customer buying process due to access to information has had a negative impact on companies’ revenue and cash flow.

Implication – Pressure on sales volumes and margins is forcing companies to evaluate cost of acquisition and the role of sales and marketing.

Solution – Sales organizations can manage these challenges by improving sales processes, training sales people, and implementing technology to lower cost of sales and improve sales volumes.

When I see these 2.0 articles and I compare the problem, implication and solution statements to support the fact that the sales industry is not alone with the changes it is facing and the fact the solution resides in focusing on improved processes, people and technology.

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Topics: Sales Consulting