A fully coupled hydro and geomechanical model has been used to predict the transient pressure disturbance, reservoir deformation, and effective stress distribution in both homogeneous and heterogeneous reservoirs. The heterogeneous reservoir is conceptualized by explicitly considering the spatial distributions of porosity and permeability as against assuming it as constant values. The finite element method was used in the coupled model in conjunction with the poroelasticity. Transient pressure disturbance is significantly influenced by the overburden during the production in both homogeneous and heterogeneous reservoirs for all the perforation schemes. Perforation scheme 2 provides the optimum reservoir performance when compared with other three schemes in terms of transient pressure distribution and reservoir subsidence. It also has the ability to overcome both the water and gas coning problems when the reservoir fluid flow is driven by both gas cap and water drive mechanisms. A Biot-Willis coefficient is found to significantly influence both the pressure and stress distribution right from the wellbore to the reservoir boundary. Maximum effective stresses have been generated in the vicinity of the wellbore in the reservoir at a high Biot- Willis coefficient of 0.9. Thus, the present work clearly projects that a Biot-Willis coefficient of 0 cannot be treated to be a homogeneous reservoir by default, while the coupled effect of hydro and geomechanical stresses plays a very critical role. Therefore, the implementation of the coupled hydro and geomechanical numerical models can improve the prediction of transient reservoir behavior efficiently for the simple and complex geological systems effectively. © 2020 by ASME.