extending into a hot subterranean hydrocarbon-bearing formation containing water at greater than 100.degree. C. The wellbore is divided into three co-extensive passageways; an annulus, and first and second conduits. The annulus is formed within the wellbore between a block at its bottom above the completion intervals and an outlet at the wellhead. The first conduit extends from the formation, through the bottom of the annulus and to an outlet at an elevation intermediate up the annulus. The first conduit is insulated between the bottom of the annulus and its outlet. A second conduit extends between the bottom of the annulus and an outlet at the wellhead. In operation, by producing fluid from the annulus and the second conduit outlets at the wellhead, formation fluid is induced to rise up the first conduit. While the fluid rises, contained water flashes providing steam-enhanced lift. The now-cooled fluid flows out of the first conduit's outlet and into the annulus, separating into substantially gas-phase and liquid phase fluids which flow up and down the annulus respectively. The gas phase fluid is produced from the top of the annulus. Liquid-phase fluid pools in the bottom of the annulus may be artificially lifted through the second conduit using gas-lift or pumps for production at the wellhead outlet.