Reserve and formation evaluation are the basis to the development of coalbed methane (CBM) reservoirs. To date, material balance methods and productivity analysis methods are mainly used to estimate the reserve and permeability, respectively. However, there are lack of methods for determining reserve and permeability simultaneously. In this work, the typical characteristics of undersaturated CBM reservoirs during production process, such as permeability variation and expansion effect of immobile gas, are firstly considered to derive a novel flowing material balance equation (FMBE), by which the reserve and permeability can be estimated. Based on the production data at single phase dewatering stage, the control volume and reservoir permeability of the CBM reservoir can be derived by the slope and y-intercept of the fitted straight line. And then the original gas in place (OGIP), initial water reserve, initial adsorbed gas reserve, initial free gas reserve, and initial dissolved gas reserve can be determined. Verification cases show that the errors between the evaluated and actual values are small, regardless of whether there is free gas in CBM reservoirs at the initial condition, indicating that the method is reasonable and accurate. The proposed method has been used in some CBM wells in China. It has been proven to be easy-to-use, time-saving, low-cost, and with high accuracy.

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