Lateral wells increasing, it becomes more and more important to evaluate the pressure performance and formation damage in the heterogeneous reservoirs with lateral drilling. Considering the properties of lateral drilling in the heterogeneous reservoirs, the paper has presented a mathematical model of 3D unsteady flow. Since it is intricate to solve the model by analytical method, the model is solved by boundary element method and regional division technique for the pressure performance of lateral drilling well produced at constant rate or bottom well pressure. By reasonable incorporation of pseudo skin factor, dimensionless damaged radius, dimensionless well storage coefficient, and permeability of damaged region; we can get type curves, which can be used for evaluation of formation damage caused by lateral drilling. The application to well test data of a lateral-drilling well of Liaohe oil field in the East China shows that the model and method are all valid.