The USGS has estimated the known Coalbed Methane (CBM) gas resource base in the US to be over 700 TCF. In 2007, nine percent of the U.S. gas production was from CBM and nine percent of the U.S. Proved dry gas reserves were CBM. Typically, CBM is a low-risk, yet economically low-margin resource play. Much is known regarding the location and amount of coal present, thus making dry holes virtually non-existent. In many basins, CBM can be found unexploited at very shallow depths and because methane is stored in coal by a different means than conventional gas, more gas per unit volume can be recovered at these shallow depths. The two greatest economic factors in CBM production are time to dewater (time to get peak gas production) and gas peak rate. The time to dewater the reservoir, which is defined as depleting reservoir pressure below gas desorption pressure, is a function of cumulative water produced. Many CBM pilots fail due to lack of understanding of water influx which, from a material balance prospective, offsets water withdrawn (produced), resulting in the inability to reach peak gas rates. The purpose of this paper is to develop a model to evaluate water encroachment, which in turn works against dewatering efforts. Modeling would then assess the cumulative water produced to reduce reservoir pressure to achieve gas desorption, resulting in gas production. The means to achieve this objective is to utilize the classic reservoir engineering method derived by Havlena and Odeh. This paper derives the afore mentioned method for CBM reservoirs and then test the method against field data gathered in a CBM pilot project located in the Illinois Basin.