A mathematical model for the gas-water two-phase flow in tight gas reservoirs is elaborated. The model can account for the gas slip effect, stress sensitivity, and high-speed non-Darcy factors. The related equations are solved in the framework of a finite element method. The results are validated against those obtained by using the commercial software CMG (Computer Modeling Group software for advanced recovery process simulation). It is shown that the proposed method is reliable. It can capture the fracture rejection characteristics of tight gas reservoirs better than the CMG. A sensitivity analysis of various control factors (initial water saturation, reservoir parameters, and fracturing parameters) affecting the production in tight gas wells is conducted accordingly. Finally, a series of theoretical arguments are provided for a rational and effective development/exploitation of tight sandstone gas reservoirs.