The feasibility of developing a geothermal heating system in naturally fractured formations of northern Songliao Basin was investigated. The flow conductivity of reservoir natural fractures was analyzed based on fracture orientations and present stress regimes. A 2D discrete fracture network model was established based on the field geological data and Monte Carlo simulation method. The hydraulic properties of the geothermal reservoir were calculated using a self-developed MATLAB code, which is programmed based on graph-theoretic flow network and hydrologic balance theory. The equivalent permeability of the DFN model, representative elementary volume (REV), and permeability tensor were studied based on the model. Finally, the heat production performance of the geothermal reservoir was numerically investigated. Research results show that the production temperature maintains at a stable level during 30 years of heat production. The system shows high energy efficiency due to the low energy consumption of the injection and production pumps. Research results in this work can provide preliminary understanding of hydraulic property and heat production of geothermal reservoir in the research area. The research methodology can also be applied in the analysis of other geothermal reservoirs.