This paper is the first attempt to simulate the mechanism of N-2 foam flooding in an ultra-high water cut reservoir using the CMG-STARS reservoir simulator with a non-isothermal module. The simulation results showed that N-2 foam flooding had the potential to improve oil recovery in a reservoir with high water cut up to 97.6%. The best strategy was simultaneous injection of N-2 and foaming agent of 0.3-0.4 wt. % concentration at a gas-liquid ratio of 2-2.5 and total porosity volume (PV) of 0.3-0.35. Under these conditions, the recovery was expected to increase by 1.2%. The experimental results indicated that oil recovery could be enhanced by N-2 foam flooding in a medium-permeability light-oil reservoir with an ultra-high water cut.