Gas-producing mudrock systems are playing an important role in the volatile energy industry in North America and will soon play an equally important role in Europe. Mudrocks are composed of very fine grained particles, and their pores are very small, at the scale of nanometers. Gas production from these strata is much greater than what is anticipated given their very low Darcy permeability. In this paper, images of nanopores obtained by Atomic Force Microscopy (AFM) are presented for the first time. Gas flow in nanopores cannot be described simply by the Darcy equation. Processes such as Knudsen diffusion and slip flow at the solid matrix separate gas flow behaviour from Darcy-type flow. We present a formulation for gas flow in the nanopores of mudrocks based on Knudsen diffusion and slip flow. By comparing this new gas flow formulation and Darcy flow for compressible gas, we introduce an apparent permeability term that includes the complexity of flow in nanopores, and it takes the form of the Darcy equation so that it can easily be implemented in reservoir simulators. Results show that the ratio of apparent permeability to Darcy permeability increases sharply as pore sizes reduce to smaller than 100 nm. Also, Knudsen diffusion's contributions to flow increase as pores become smaller. Unlike Darcy permeability, which is a characteristic of the rock only, permeation of gas in nanopores of mudrocks; depends on rock, gas type and operating conditions.