Due to increasing concerns over the potential impact of shale gas and coalbed methane (CBM) development on groundwater resources, it has become necessary to develop reliable tools to detect any potential pollution associated with hydrocarbon exploitation from unconventional reservoirs. One of the key concepts for such monitoring approaches is the establishment of a geochemical baseline of the considered groundwater systems. However, the detection of methane is not enough to assess potential impact from CBM and shale gas exploitation since methane in low concentrations has been found to be naturally ubiquitous in many groundwater systems. The objective of this study was to determine the methane sources, the extent of potential methane oxidation, and gas-water-rock-interactions in shallow aquifers by integrating chemical and isotopic monitoring data of dissolved gases and aqueous species into a geochemical PHREEQC model. Using data from a regional groundwater observation network in Alberta (Canada), the model was designed to describe the evolution of the concentrations of methane, sulfate and dissolved inorganic carbon (DIC) as well as their isotopic compositions (δ34SSO4, δ13CCH4 and δ13CDIC) in groundwater subjected to different scenarios of migration, oxidation and in situ generation of methane. Model results show that methane migration and subsequent methane oxidation in anaerobic environments can strongly affect its concentration and isotopic fingerprint and potentially compromise the accurate identification of the methane source. For example elevated δ13CCH4 values can be the result of oxidation of microbial methane and may be misinterpreted as methane of thermogenic origin. Hence, quantification of the extent of methane oxidation is essential for determining the origin of methane in groundwater. The application of this model to aquifers in Alberta shows that some cases of elevated δ13CCH4 values were due to methane oxidation resulting in pseudo-thermogenic isotopic fingerprints of methane. The model indicated no contamination of shallow aquifers by deep thermogenic methane from conventional and unconventional hydrocarbon reservoirs under baseline conditions. The developed geochemical and multi-isotopic model describing the sources and fate of methane in groundwater is a promising tool for groundwater assessment purposes in areas with shale gas and coalbed methane development.