In this paper, we present the formulation, structure and applications of our recently developed unconventional (tight gas and shale gas) two-phase (gas/water) numerical simulator based on a hybrid approach for representing fractures of different scales. In particular, we use a Discrete Fracture Model (DFM) based on unstructured Voronoi grids, to explicitly represent the large-scale primary (hydraulic) fractures. Our proposed gridding algorithm employed in the simulator, generates high quality unstructured Cen-troidal Voronoi mesh. Specifically, we perform grid optimization based on an iterative strategy to ensure that matrix grid nodes land on the centroids of their corresponding control volumes, while fracture nodes are treated as constraints. Our mesh generation algorithm facilitates Local Grid Refinement (LGR) around fracture stages, allowing for capturing the slow flow transients.To represent small-scale fractures in the Stimulated Reservoir volume (SRV), we formulate a dualporosity/dual-permeability model coupled with the DFM. To compute matrix-fracture transfer function, we define a characteristic parameter consisting of shape factor and geometrical properties of the mesh. We show that the proposed characteristic parameter is almost irrespective of the shape of the grid. Thus, we can predict the shape factor for an arbitrary unstructured Voronoi grid with reasonable accuracy and efficiency.To account for the key features that affect production from unconventional plays, we incorporate several physical models in our simulator, including Langmuir gas adsorption/desorption for shale gas, near wellbore non-Darcy flow of gas, and Klinkenberg permeability model. We present the simulation results for several synthetic examples and investigate the effects of a wide range of key physical and operational parameters on production performance for both tight gas and shale gas reservoirs.