Coalbed methane has emerged as a significant resource for natural gas production in the United States, with estimates of gas-in-place of 400 trillion cubic feet. In Wyoming the largest coalbed methane resources occur in the Greater Green River, Powder River, and Wind River Basins. Very little of this gas has been exploited. This paper examines the potential of coalbed methane production in the Powder River basin by history matching early production from five gas wells in the Rawhide Butte field using a commercially available coalbed methane simulator, COALGAS. Sensitivity studies showed the most important parameters for establishing production were permeability, initial desorption pressure and drainage area. Langmuir constants, desorption time, porosity, well-bore diameter and skin were comparatively less important for long term production. An economic analysis showed that, based on current capital and operating costs obtained from industrial companies, the development of coalbed methane in the Powder River Basin may be economic if the gas sales price is greater than approximately $1/Mscf.

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