In Northeastern Alberta, gas pools and oil sands reservoirs exist in which the energy content of the bitumen (or oil sands) is estimated to be 600 times greater than the gas for this region. The sealing layer between the top gas pool and the bitumen reservoir, if it exists, plays a critical role in the optimization of SAGD projects. Gas pool pressures may or may not be in communication with oil sands reservoir pressures. So, although different cases of gas-over-bitumen geometries exist, this paper is focused on the gas-over-bitumen geometries with a mudstone layer between the top gas/water and the oil sands reservoir. The top water zone is assumed to be a thief layer. The SAGD process applies higher thermal stress and induces higher pore pressures inside the mudstone layer. Thus, the mudstone becomes weaker or even fails as a result of shear failure or tensile failure. As a result, the permeability of the mudstone layer may be increased significantly and more heat loss to the gas sands and top thief water zone can result in a poor SAGD production performance. This paper discusses the SAGD production performance of the gas-over-bitumen geometries with varying mudstone permeability. The effect of steam injection pressure is also studied. The research was conducted based on both a conventional reservoir simulation and a coupled reservoir geomechanical simulation. Prior to the simulation study, the geomechanical properties of oil sands and mudstones are briefly discussed.