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Economics Sensitivity Module

Economics Sensitivity Module: User Guide

The Economics Sensitivity Module is a high-density stochastic analysis tool designed to evaluate the impact of variable uncertainty on project economics. It allows users to define ranges for critical operational and financial inputs and visualize the resulting distribution of key economic indicators (NPV, IRR, Payback, etc.).

1. Module Overview

The module facilitates Multi-Scenario Comparison by performing a sensitivity sweep across defined parameter spaces. Instead of a single deterministic outcome, the module provides a probabilistic view of the project’s economic health, helping identify the most sensitive variables and the overall risk profile.

Key Components:

  • Sensitivity Setup Panel (Left): Configure input variables, ranges, and simulation steps.
  • Visualization Dashboard (Main): A grid-based interface displaying frequency distributions and cumulative probability (S-curves) for up to 18 indicators.
  • Statistical Engine: Automatically calculates P10 (optimistic), P50 (most likely), and P90 (pessimistic) values for every result set.

2. Typical Workflow

The typical analytical process follows a standard sequence to evaluate project resilience:

  1. Identify Critical Uncertainties: The user selects variables that have the highest potential impact on project value (e.g., Oil Price and CAPEX).
  2. Define Sensitivity Ranges: Plausible minimum and maximum boundaries are set to capture the expected volatility of the market and operations.
  3. Execute Perturbation Matrix: The system calculates every possible combination, creating a multi-dimensional risk map.
  4. Evaluate Risk Thresholds: Analysts review the P90 values to determine the “worst-case” viability and P10 values for upside potential.

3. Step-by-Step Configuration Workflow

Follow these steps to conduct a sensitivity analysis:

Step 1: Define Input Variables

  1. Open the Sensitivity Setup panel on the left sidebar.
  2. Select the variables you wish to include in the sensitivity analysis (e.g., Oil Price, CAPEX, OPEX, Royalty Rates).
  3. For each active variable, choose a Sensitivity Mode:
    • Automatic Mode: Input a Min and Max value. The system will generate linear or logarithmic steps based on the number of steps defined.
    • Manual Mode: Directly input a specific list of discrete values to test.
  4. Monitor the Total Scenarios counter. This live indicator shows the total number of permutations (N×M×...N \times M \times ...) that will be calculated.

Step 2: Trigger Scenario Generation

Once the input space is defined, click the Generate button.

  • The system dispatches a request to the calculation engine.
  • Every scenario is processed simultaneously to generate a full range of economic outcomes for all selected indicators.

Step 3: Analyze Distribution Plots

The results are rendered in the Visualization Dashboard. Each indicator (e.g., NPV, IRR) is presented in a dedicated plot containing:

  • Histogram: Shows the frequency of specific economic outcomes, indicating where results cluster.
  • S-Curve (Cumulative Distribution): A red line representing the probability that the actual result will be less than or equal to a certain value.
  • P-Values (P10/P50/P90): Vertical lines marking critical probability thresholds.
    • P90: There is a 90% probability that the result will exceed this value (Pessimistic).
    • P50: The median result.
    • P10: There is only a 10% probability that the result will exceed this value (Optimistic).

Step 4: Inspect and Export

  1. Maximize Chart: Hover over any plot and click the Maximize icon to open a high-resolution modal for detailed inspection.
  2. Capture Image: Use the Capture icon to download a specific chart as a PNG file for inclusion in technical reports.
  3. Refine: Adjust ranges in the Setup Panel to see how the distributions shift in real-time.

4. Technical Vocabulary Reference

TermDefinition
Sensitivity SweepThe process of varying input parameters within a range to observe the impact on outputs.
Stochastic AnalysisA method of predicting outcomes that accounts for random variables and uncertainty.
S-CurveA graphical representation of cumulative probability distribution.
P-Values (P10/50/90)Standard industry thresholds used to describe the probability of exceeding a specific value.
KPI (Key Performance Indicator)Metric used to evaluate the success of a scenario (e.g., NPV, IRR).
PermutationA unique combination of input variables representing one specific scenario.