During the past 18 years, estimations of reserves of the Palm Valley gas field were the subject of many unpublished studies and one that was published in the Journal of Petroleum Technology by Strobel, Gulati and Ramey in 1976. The unpublished studies relied on standard methods of volumetric and material balance calculations. Because the Palm Valley reservoir is naturally fractured, static reservoir pressure estimates made from pressure buildup tests are erroneous unless a well is closed to a Horner time ratio of 1.5 or less. This was not done at Palm Valley and consequently all material balance estimates of gas-in-place were uneconomically low.The estimates of Stobel et al. (1976) were based on matching interference test data observed in two wells during a constant flow period of 18.75 days, which was followed by a pulse test. However, their model matched the pressure observed at one well and failed to match the pressure observed at the second, more distant well. Their reserve estimates were also very low.In this study, a reservoir simulator was used to formulate a model that matched the observed pressures in both wells. Except for the reservoir area, all of the reservoir parameters derived by Strobel from the interference test data were used. The results show that the Palm Valley reservoir contains between 262 and 356 billion standard cubic feet of gas-in-place in the fracture system and the higher permeability matrix rock. Based on our model and including gas in the tight matrix, it is quite possible that the total gas-in-place ranges between 726 billion standard cubic feet and 1.106 trillion standard cubic feet.