With the increase of lateral wells, it becomes more and more 'important to evaluate pressure performance and formation damage in a composite reservoir with lateral drilling. Considering the properties of lateral drilling in a composite reservoir, this paper presents a mathematical model for 3D unsteady flow which is solved using the boundary element method and regional division technique for pressure performance of a lateral drilling well produced at a constant rate or a constant bottom-hole pressure. By the reasonable incorporation of pseudo skin factor, dimensionless damaged radius, dimensionless wellbore storage coefficient, and permeability of damaged region, we can get the type curves which can be used to evaluate formation damage caused by lateral drilling. The application to test data for a lateral drilling well in the Liaohe Oilfield in East China shows that the model is reliable and the analysis is valid.