Dezhou City is located in northwestern Shandong Province, China, and is rich in geothermal resources. Approximately 30% of the geothermal wells and geothermal heating areas of Shandong Province are located in Dezhou. A doublet-well layout geothermal system was completed by the Lubei Geo-engineering Exploration Institute for local winter heating, which has been in operation for 4 years. The wellbores penetrated the Guantao Formation with a well spacing of 180 m. This study aims to assess the heat extraction performance of the current well layout and predict the temperature evolution and lifespan. Furthermore, larger well spacing schemes were used in a simulation to test the heat supply potential and sustainability. In this study, the thermal conductivity and permeability were calibrated using in situ measured data from a field production test. A relatively high permeability layer was found between the depths of 1468 and 1536 m. The temperature remained stable in the first 6 years and then started to decrease. The recharging (injection) water tended to concentrate along the bottom highly permeable layer and accounted for over 64% of the outflow in the 100th year of the simulation test. The outflow temperature decreased from 53.9°C to 50°C in the 32nd year, making it less viable for subsequent sustainable exploitation. Hence, a larger well spacing is required for long-term operation based on the same geothermal reservoir. It was found that a spacing of 400 m could guarantee an outflow temperature above 50°C over a 100-year lifespan with an 80 m3/h pumping (production) rate. Moreover, the sustainability of the 600-m spacing was almost 2.5 times that of the 400 m case. The modeling and analysis method can be useful for the development and optimization of a doublet-well geothermal system under similar conditions.