In conventional reservoir simulations, gridblock permeabilities are frequently assigned values larger than those observed in core measurements to obtain reasonable history matches. Even then, accuracy with regard to some aspects of the performance such as water or gas cuts, breakthrough times, and sweep efficiencies may be inadequate. In some cases, this could be caused by the presence of substantial flow through natural fractures unaccounted for in the simulation. In this paper, we present a numerical investigation into the effects of coupled fracture-matrix fluid flow on equivalent permeability.A fracture-mechanics-based crack-growth simulator, rather than a purely stochastic method, was used to generate fracture networks with realistic clustering, spacing, and fracture lengths dependent on Young's modulus, the subcritical crack index, the bed thickness, and the tectonic strain. Coupled fracture-matrix fluid-flow simulations of the resulting fracture patterns were performed with a finite-difference simulator to obtain equivalent permeabilities that can be used in a coarse-scale flow simulation. The effects of diagenetic cements completely filling smaller aperture fractures and partially filling larger aperture fractures were also studied.Fractures were represented in finite-difference simulations both explicitly as grid cells and implicitly using nonneighbor connections (NNCs) between grid cells. The results indicate that even though fracture permeability is highly sensitive to fracture aperture, the computed equivalent permeabilities are more sensitive to fracture patterns and connectivity.