A method for improving the productivity of a well by separating and disposing of at least a portion of the water which is produced from a subterranean producing formation. The water is allowed to separate from the produced fluids under the influence of gravity while in the wellbore. The separated water is then disposed without removing it from the wellbore by flowing it into a subterranean disposal formation which has a pressure less than that of said producing formation. Preferably, the well is completed with an inclined wellbore which significantly aids in the gravity separation of the water from the produced fluids (e.g. hydrocarbons).