The economic success of the shale boom worldwide is intimately connected to the effective stimulation of the tight (or very low) permeability rock through multistage hydraulic fracturing of horizontal wells. However, the complete understanding of the production mechanisms in shale reservoirs (micro to macro scales) and the closely interaction between natural fractures and the overall production profile at reservoir scales are in the infancy stages of their developments. In this paper we are particularly interested in extending the robustness and computational effectiveness of the Lattice Boltzman Method (LBM) applied to fractured porous media simulation. In this paper we propose a novel approach for modeling of shale reservoirs can seamless integrate rock-fluid behavior at small scales with the well-reservoir interaction at macro scales. This is done by exploring further the advantages of physical-based premises of the LBM by including the recent developed non-uniform induced permeability field concept in order to simulate fracture media, which model variation of permeabiliry around hydraulic fracrures by a function of the distance away from the fracture. In our numerical studies, based on a single well reservoir with a planar fracture, we indicate that this approach is more consistent with the physics of shale production, as it does not rely on such formulas as Langmuir isotherm and Klinkenberg's formula, which have been originally derived for low-density gases.