Research On Investment And Financial Risk Issue Accompanied Shale Gas Development

The rapid development of US shale gas industry successfully triggers a global shale gas development boom.As an unconventional energy,shale gas resource has more advantages like a large amount of resources,clean and efficient energy.Despite being an unconventional resources,the realization of economic exploitation of shale gas is more difficult,but with the development of horizontal drilling technology and hydraulic fracturing technology,shale gas industry will have bright prospect for development.In China,the development of shale gas confronts some unfavorable factors compared to the United States,such as big difference in geological resource,geographical remoteness,the key technological backwardness,poor transportations,lack of pipeline equipment and so on.Shale gas development projects possess big risk by large investment.In order to accurately identify the economic benefits of shale gas development projects as well as to minimize the financial risk,government and enterprises need to analyze shale gas development projects' investment analysis risk identification and financial risks to help themselves to make investment decisions.Based on the full analysis of the current situation of shale gas development projects,infrastructure development characteristics,development process and key development technologies,this paper further studies risks which shale gas development projects confronted,investment,costs and income tax,uses improved DCF method to build financial profitability indicators,such as net present value,net present value ratio,internal rate of return,payback period.Under Monte Carlo method,this paper uses Crystal Ball software to analyze financial profitability indicators' probability to calculate financial risk of shale gas development projects.At last,this paper selects a Chinese experimental shale gas case data as sample parameters,using the financial evaluation indicators and Monte Carlo method to analyze financial risk of shale gas projects in China,the results show the financial profitability of the shale gas development project has a good performance,and deserves investment.But by Monte Carlo simulation analysis,it indicates that the standard deviation and coefficient of variation of the shale gas development project's financial profitability indicators is big,which means the financial risk of the shale gas development project is large,it needs to be cautious to invest.Based on the traditional financial evaluation,this paper introduces the Monte Carlo method to analyze the financial risk of shale gas development projects,the analysis results can help government,enterprises and other stakeholders to make investment decisions.