Specialization: Petroleum Engineering Degree: Master of Science Abstract: Multi-stage hydraulic fracturing is widely applied in tight reservoir exploitation. Production is enhanced significantly if hydraulic fractures can connect to regions with enhanced permeability due to the presence of micro (and induced) fractures. However, less than 50% of fracturing fluids are typically recovered. This study models the mechanisms of water loss and retention in fracture-matrix system. The effects of capillarity and geomechanics are systematically investigated, and the time scale of water imbibition under different reservoir conditions is tested. During the shut-in (soaking) and flow-back periods, the fracture conductivity decreases as effective stress increases due to imbibition. Previous works have addressed fracture closure during the production phase; however, the coupling of imbibition due to multiphase flow and stress-dependent fracture properties during shut-in is less understood. Numerical simulation results indicate the circumstances under which this phenomenon might be beneficial or detrimental to subsequent on tight oil production. A series of mechanistic simulation models consisting of both hydraulic fractures and stochastically distributed micro fractures are constructed to simulate fluid distribution during shut-in and flow-back. Three systems: matrix, hydraulic fracture and micro fractures are explicitly represented in the computational domain. Fluid loss and retention mechanisms are systematically investigated in this study by subjecting mechanistic model to different reservoir conditions. Water imbibition into the matrix would help to displace hydrocarbons into nearby micro and hydraulic fractures, and this process could lead to an increase in initial rate. Although other water loss mechanisms including water loss in desiccated matrix and water trapping in induced micro fractures were proposed in literature, detailed understanding of the roles of water trapping in these systems is still lacking. Impacts of secondary fracture distributions and properties, matrix permeability, multiphase flow functions, wettability, initial saturation, water injection rate and shut-in duration on fluid retention and the associated time scales are assessed. Increase in short-term oil production as a result of imbibition could be counteracted by the reduction in flow capability due to fracture closure. Therefore, the coupling of stress-dependent fracture conductivity and imbibition are studied next. Our results indicate that fracture compaction can enhance imbibition and water loss, which in turn leads to further reduction in fracture pressure and conductivity. Spatial variability in micro-fracture properties is also modeled probabilistically to investigate whether it is possible for fracturing fluid to be trapped in the micro fractures, or conversely, the micro fractures could provide alternate pathways for fluids to access the hydraulic fracture systems. This work presents a quantitative study of the controlling factors of water retention due to fluid-rock properties and geomechanics. It investigates the roles of multi-scale fractures in flow-back behavior and ensuing recovery performance. The results highlight 1) the crucial interplay between shut-in duration and properties of connected fractures in short- and long-term production performances; 2) the critical interaction between imbibition and geomechanics in short- and long-term production performances. The results would have considerable impacts on understanding and improving current industry practice on fracturing design and assessment of stimulated reservoir volume.