A Study On Investment Decision-making Of Coalbed Methane Project Based On Real Options Methord

China has rich coal bed methane (CBM) resources. If we develop and utilize this new type of clean energy, it will make a great significance for optimizing China's energy structure, reducing greenhouse gas emissions, mitigating air pollution and fundamental solution to coal mine safety issues. However, the coal-bed methane project development is a highly complex and large-scale systems engineering, which has features of large investment amounts, long period of investment recovery and complicated technological processes. There are a large number of random factors in the development process, resulting in coal-bed methane project with high degree of risks and uncertainties.Traditional project investment decision-making methods do not take into account the uncertainty from external environment, and management flexibility in advancing the process of project. As a result, they can not modify the project strategy and decision making based on timely information from the outside world. In this case, we often underestimate the investment value of coal-bed methane project.For the faults of the traditional investment decision-making methods, this paper introduces the real options analysis. This paper starts with describing the basic theory of real options, and reviewed its research development and history. Then, this paper integrates of coal-bed methane project practice, analyses the characteristics of coal-bed methane project investment and uncertainty in the process of project operations, while analyses the management flexibility in the process of coal-bed methane project and evaluate the value of abandonment options, expansion options and choose the option in the coal-bed methane project by introducing binary tree method. Again, this paper establishes best investment decision-making time models of coal-bed methane project by partial differential method. Timing of investment decisions will be transformed into quantitative from qualitative. This paper illustrates the applicability and feasibility in coal-bed methane project by specific case of real options method. Finally, this paper analyses sensitive factors of parameters of the best investment decision-making model, and tries to find the degree of influence of the investment decision-making timing model while various factors change.Against the rapid rise of coal-bed methane industry background, this research will help promote the real options theory to apply in investment decision-making areas of coal-bed methane, and this research is conducive to improve the existing coal-bed methane project value assessment methods. This paper makes a great significance for objective assessment of coal-bed methane development project and promoting the rapid development of coal-bed methane industry.