Abstract Natural gas hydrate is a potential source of methane which needs to be extracted from under the sea bed. For the economic recovery of methane from natural gas hydrates, production approaches such as depressurization, thermal stimulation, and inhibitor injection are being investigated. However, studies involving hydrate-bearing clayey sediments and recovery of methane from such reservoirs are rare. This work investigates in detail the potency of hydrate dissociation methods such as depressurization by constant rate gas release, thermal stimulation and the combination of two for energy recovery from hydrate bearing clayey sediments underlying a free gas zone. Pure water and two different mud samples containing 3 and 5 wt% of bentonite were used for methane hydrate formation and dissociation studies. Thermodynamic study of methane hydrate in the presence of bentonite clay was also conducted for the above two concentrations. No considerable effect of clay on the inhibition or promotion of methane hydrate formation was observed. Initially, methane hydrate formation has been investigated using pure water, 3 and 5 wt% bentonite mud at an initial hydrate formation pressure of 8 MPa and at a temperature of 278.15 K. Subsequently, methane hydrate dissociation experiments were carried out using depressurization, thermal stimulation and their combination. The effect of the rate of gas release on hydrate dissociation by depressurization was investigated using two different rates of 10 mL/min and 20 mL/min. Thermal stimulation experiments were carried out for ΔT = 15 K at the rate of 7.5 K/hr and the results on methane recovery were recorded. The detailed investigation shows that the combination of the two methods is more efficient for methane production than the standalone method in clayey hydrate reservoir. This study provides important insights into the hydrate production methodology from clayey hydrate reservoirs.