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http://dx.doi.org/10.7842/kigas.2018.22.2.21

Probabilistic Analysis using Economical Evaluation for Shale Gas Development  

Moon, Young-Jun (Dept. of Energy & Resources Engineering, Korea Maritime and Ocean University)
Moon, Seo-Yoon (Dept. of Energy & Resources Engineering, Korea Maritime and Ocean University)
Gil, Seong-Min (Dept. of Energy & Resources Engineering, Korea Maritime and Ocean University)
Shin, Hyo-Jin (Dept. of Energy & Resources Engineering, Korea Maritime and Ocean University)
Lim, Jong-Se (Dept. of Energy & Resources Engineering, Korea Maritime and Ocean University)
Publication Information
Journal of the Korean Institute of Gas / v.22, no.2, 2018 , pp. 21-28 More about this Journal
Abstract
In recent years, payability of shale gas production has worsened due to oil and gas price declines resulting from sharply increasing shale gas production. Reliable economic evaluation in shale gas development has become important. In this study, Monte Carlo simulation of probabilistic analysis technique was applied to analyze the economic feasibility considering the uncertainty involved in shale gas development. For this, the range of major variables is set and a random number is generated to derive the probability distribution of Net Present Value(NPV) and Internal Rate of Return(IRR). Consequently, we estimated the probability that the feasibility of the project is evaluated to be positive when developing shale gas in the study area. In addition, sensitivity analysis of major parameters affecting economic efficiency in shale gas development was carried out, and the effect of major variables in economic evaluation for commercial production was identified. In the future, this study could be used to make decision for shale gas production by presenting the range of variation of economic index and probability value.
Keywords
probabilistic analysis; Monte Carlo simulation; net present value; internal rate of return;
Citations & Related Records
Times Cited By KSCI : 2  (Citation Analysis)
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