A subterranean, viscous oil-containing formation is penetrated by at least one injection well extending to the lower portion thereof. A cavity not greater than 0.10 pore volume is formed in the lower portion of the formation through the injection well. At least one spaced-apart production well penetrates the formation in fluid communication with the upper two-thirds or less of the formation. A slug of steam, about 0.35 to 0.45 pore volume, is injected into the injection well and fluids including oil are recovered from the formation via the production well. The injection well is shut-in for a predetermined period of time while continuing production of oil. Thereafter, a predetermined amount, about 0.03 to 0.10 pore volume, of hot water or low quality steam is injected into the injection well and production is continued until there is an unfavorable amount of water or steam in the fluids recovered.