Most shale gas reservoirs have extremely low permeability. Predicting their fluid transport characteristics is extremely difficult due to complex flow mechanisms between hydraulic fractures and the adjacent rock matrix. Recently, studies adopting the dynamic modeling approach have been proposed to investigate the shape of the flow regime between induced and natural fractures. In this study, a production history matching was performed on a shale gas reservoir in Canada’s Horn River basin. Hypocenters and densities of the microseismic signals were used to identify the hydraulic fracture distributions and the stimulated reservoir volume. In addition, the fracture width decreased because of fluid pressure reduction during production, which was integrated with the dynamic permeability change of the hydraulic fractures. We also incorporated the geometric change of hydraulic fractures to the 3D reservoir simulation model and established a new shale gas modeling procedure. Results demonstrate that the accuracy of the predictions for shale gas flow improved. We believe that this technique will enrich the community’s understanding of fluid flows in shale gas reservoirs.