Abstract: High efficiency heat transfer from hot gases produced by combustion of fuel and oxygen in a burner to usably heat is provided in a simple and effective manner. A burner within a water-tight casing is mounted submerged within a pool of condensate within a boiler casing. Hot gases from the burner are passed into direct heat exchange contact with condensate in the pool, and then flow in a turbulent manner into contact with a wet solid material heat exchange surface, such as pieces of limestone mounted on a perforated plate above the pool of liquid. The hot gases give up heat directly to the liquid wetting the heat transfer surface, and then are exhausted out the top of the boiler, passing through a secondary heat exchanger. Condensate is drained from the boiler to prevent excessive buildup. Liquid from the pool is circulated through a primary heat exchanger into heat exchange relationship with a heat exchange fluid, and then reintroduced into the boiler casing above the heat transfer surface (e.g.