Matrix shrinkage in coal-seam gas reservoirs as a result of production, and the resultant impact on absolute permeability, is a current area of intense interest. A number of publications have documented the existence of this phenomenon. The exponential growth behaviour of coal seam permeability with reservoir pressure depletion has been observed previously at the Fairway wells in the San Juan basin. More recently, an exponential trend has also been confirmed for a group of 10 wells in a region northeast of Fairway. An increase in the absolute permeability of coal seam is a result of matrix shrinkage caused by gas desorption, which becomes a dominant factor on cleat permeability over the effective horizontal stress change during production. Bottom hole pressure recovery during shut-in periods can provide valuable data concerning the impact of coal seam gas production on reservoir permeability. Arrow Energy's historical production data, from the MGP field in the Bowen Basin, contains over 60 instances of data on pressure recovery during shut-in. These Time lapse Build-up periods have been analysed using the pseudo-pressure method (Kamal and Six, 1991) in an effort to gain an understanding of the extent and effect of this phenomenon within the company's existing assets. The method is based on a pseudo pressure function that uses the adsorption isotherm and the relative permeability relations of the reservoir. The infinite acting radial flow regime was identified and the gradient was recorded on a semi log plot of the pseudo pressure versus dimensionless time. Results from these tests show multi fold increase in absolute permeability as a function of the estimated reservoir pressure.

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