Condensate banking is a major issue in the production operations of gas condensate reservoirs. Increase in liquid saturation in the near-wellbore zone due to pressure decline below dew point, decreases well deliverability and the produced condensate-gas ratio (CGR). This paper investigates the effects of condensate banking on the deliverability of hydraulically fractured wells producing from ultralow permeability (0.001 to 0.1 mD) gas condensate reservoirs. Cases where condensate dropout occurs over a large volume of the reservoir, not only near the fracture face, were examined by a detailed numerical reservoir simulation. A commercial compositional simulator with local grid refinement (LGR) around the fracture was used to quantify condensate dropout as a result of reservoir pressure decline and its impact on well productivity index (PI). The effects of gas production rate and reservoir permeability were investigated. Numerical simulation results showed a significant change in fluid compositions and relative permeability to gas over a large reservoir volume due to pressure decline during reservoir depletion. Results further illustrated the complications in understanding the PI evolution of hydraulically fractured wells in "unconventional" gas condensate reservoirs and illustrate how to correctly evaluate fracture performance in such a situation. The findings of our study and novel approach help to more accurately predict post-fracture performance. They provide a better understanding of the hydrocarbon phase change not only near the wellbore and fracture, but also deep in the reservoir, which is critical in unconventional gas condensate reservoirs. The optimization of both fracture spacing in horizontal wells and well spacing for vertical well developments can be achieved by improving the ability of production engineers to generate more realistic predictions of gas and condensate production over time.