In theory (perfect combustion process), when natural gas is burned by combining gas with oxygen from air (10 parts of air to 1 part of gas ratio) it will produce three products: heat, Carbon Dioxide (CO₂) and water (H₂O). So, it would be “0”.
However, in reality we don’t use pure oxygen; instead we have 20% of oxygen and 80% of nitrogen. We also don’t burn pure methane, we are burning methane, ethane, and mercaptan.
Therefore we always get that extra Carbon Monoxide.
For gas water heaters max allowable level of carbon monoxide is 100 ppm (parts per million) using “as-measured” method by taking a measurement with a probe in the exhaust vent after 5minutes of combustion.
200 ppm level is a maximum allowable using air-free method / with adjustment for oxygen content.
There might be many reasons for the carbon monoxide levels to be higher than allowable. Not necessarely is the water heater components that require adjustments.
Often is the chimney, combustion air, and other appliances venting into the same chimney that are responsible for elevated levels of Carbon Monoxide in the water heater's flue pipe. Chimney is usually the first thing to evaluate.
Explain your condition in detail (type of water heater, other appliances, chimney, connectors, surrounding area / ventilation) so maybe I can help you with finding a solution.
For more details check this publication (page 44-45) - http://www.waptac.org/data/files/technical_tools/mwbestpracticespart2.pdf