The development of coalbed methane (CBM) in China poses great difficulties because of high investments, low produc- tion and high risks. So a study of the economic effect of a single well at its preliminary stage is helpful for commercial exploitation of CBM. Affected by wellbore flow pressure, initial reservoir pressure, relative permeability, Langmuir pressure and other factors, the trend of declining production of a single CBM well agrees, by and large, with a hyperbolic pattern of decline. Based on Arps’s equation, nearly 200 wells production with different peak yields and initial rates of were simulated. Given the present cost of drill- ing, gas production and engineering on the ground, the gross investment for the development of a single coalbed methane well was estimated for the Fanzhuang block in central China. Considering the current industrial policies for CBM, we established an eco- nomic assessment model and analyzed economic peaks. The results show the economic benefits with or without government subsi- dies at different peak yields of a single CBM well. The results of the evaluation can be directly applied in the Fanzhuang block. The evaluation method, formulated in our study, can be used to other areas with similar conditions. The development of coalbed methane (CBM) in China poses great difficulty because of high investments, low produc- tion and high risks. So a study of the economic effect of a single well at its preliminary stage is helpful for commercial exploitation of CBM. Affected by wellbore flow pressure, initial reservoir pressure, relative permeability, Langmuir pressure and other factors, the trend of declining production of a single CBM well agrees, by and large, with a hyperbolic pattern of decline. Based on Arps’s equation, nearly 200 wells production with the present cost of drill- ing, gas production and engineering on the ground, the gross investment for the development of a single coalbed methane well was estimated for the Fanzhuang block in central China. Considering the current industrial policies for CBM, we established an eco- nomic assessment model and analyzed economic peaks. The results show the economic benefits with or without government subsi- dies at different peak yields of a single CBM well. The results of the evaluation can be directly applied in the Fanzhuang block. The evaluation method, formulated in our study, can be used to other areas with similar conditions.