Large volumes of water are used for hydraulic fracturing of low permeability shale reservoirs to stimulate gas production, with most of the water remaining unrecovered and distributed in a poorly understood manner within stimulated regions. Because water partitioning into shale pores controls gas release, we measured the water saturation dependence on relative humidity (rh) and capillary pressure (P-c) for imbibition (adsorption) as well as drainage (desorption) on samples of Woodford Shale. Experiments and modeling of water vapor adsorption into shale laminae at rh=0.31 demonstrated that long times are needed to characterize equilibrium in larger (5 mm thick) pieces of shales, and yielded effective diffusion coefficients from 9 x 10(-9) to 3 x 10(-8) m(2) s(-1), similar in magnitude to the literature values for typical low porosity and low permeability rocks. Most of the experiments, conducted at 50 degrees C on crushed shale grains in order to facilitate rapid equilibration, showed significant saturation hysteresis, and that very large P-c (approximate to 1 MPa) are required to drain the shales. These results quantify the severity of the water blocking problem, and suggest that gas production from unconventional reservoirs is largely associated with stimulated regions that have had little or no exposure to injected water. Gravity drainage of water from fractures residing above horizontal wells reconciles gas production in the presence of largely unrecovered injected water, and is discussed in the broader context of unsaturated flow in fractures. Plain Language Summary Large volumes of water are used for hydraulic fracturing of low permeability shale reservoirs to stimulate gas production. While most of the water remains unrecovered, gas production is commonly surprisingly high, despite blocking of gas flow by water. In order to understand the energetics of water saturation, we measured saturation dependence on water potential in samples of Woodford Shale. Experiments and modeling of water vapor diffusion into 5 mm thick shale laminae yielded effective diffusion coefficients similar in magnitude to the literature values for typical low porosity and low permeability rocks. Most of the experiments showed significant saturation hysteresis, and that very large capillary pressure (approximate to 1 MPa) are required to drain the shales. These results quantify the severity of the water-blocking problem, and suggest that gas production from unconventional reservoirs is largely associated with stimulated regions that have had little or no exposure to injected water. A conceptual model based on gravity drainage of water from fractures residing above horizontal wells is discussed that reconciles gas production despite the large volumes of unrecovered injected water. Thus, the potential advantages of waterless hydraulic fracturing techniques in improving gas production are further supported.