Abstract: As a typical unconventional reservoir, shale gas reservoirs have well-developed natural micro-fractures, in which the pores of matrix are small and the permeability is extremely low. Multi-staged hydraulic fracturing for horizontal well has become a key technology for commercial development. Therefore, in order to accurately simulate the shale gas production, hydraulic fractures and natural fractures should be considered simultaneously. In this paper, the mathematic model is established based on discrete fracture model (DFM) and equivalent continuum model (ECM). The model is solved by Finite Element Method (FEM). According to the model, the effect of different fracture sets with different fracture orientation is investigated. The results show that matrix provides main gas resource for gas production and natural fracture as main passage undertakes a task of transporting gas into hydraulic fracture, and then to wellbore. The characteristic of gas flow in discrete fracture network has an important impact on gas production. According to orientation of natural fracture, corresponding horizontal wellbore azimuth can be optimized. For 2D discrete fracture model, the horizontal well along the angle bisector of two fracture groups is more advantageous to gas production.