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This paper discusses the influence of the vertical distribution of horizontal fracture penneability on the waterflood efficiency. The first part presents the analysis of weIl test pressure data from a vertical weIl completed in a naturally fractured reservoir. A dual-porosity simulator, based on a finite difference discretization of the formation is used to generate pressure versus shut-in time during a build-up. It is found that nested fracture networks with different spacings and penneabilities may reconcile the pressure response and core observations, Field examples are presented. In the second part of the paper, dual-porosity simulations of a water injection are run. The main thrust of this paper is to point out that a very different watercut performance may be obtained depending on whether the matrix block size is derived from core observation only, weIl test analysis only, or takes into account both sourees of infonnation. Guidelines are provided to take into account the effect of nested fracture networks in coarse grid. waterflood simulations with dual-porosity simulators.