An economic evaluation method of coalbed methane resources during the target selection phase of exploration

Because forecasting a development program during the target selection phase of exploration for coalbed methane (CBM) is impossible, the conventional method that relies on a conceptual (or detailed) development program cannot be used during the economic evaluation of CBM resources. Hence, this study focuses on establishing an economic evaluation model based on the characteristics of the target selection phase. The discounted cashflow method is applied to the construction of the model with the assumption that there is a uniform distribution of production wells. The computational error generated by the assumption is corrected by introducing a correction factor based on the production profile of single CBM wells. The case study demonstrates that the blocks lacking economic value can be screened out, and the most advantageous targets can be found by computing the resource values in the best- and worst-case scenarios. This technique can help to reduce wasted investments and improve the quality of decision-making in selecting targets for exploration.