Abstract: A method for producing a gas and a liquid in a subterranean well includes the step directing a gas flow in a well annulus through one or more baffle plates to separate at least some of the liquid from the gas. The method can also include the steps of directing the separated liquid down the annulus towards a producing formation of the well, dehydrating the gas flow proximate to a surface of the well, and then directing the dehydrated gas flow to the surface. A system for performing the method includes a set of baffle plates located proximate to the producing formation configured to provide a tortuous path for the gas flow through the annulus, and a single baffle plate located proximate to the surface configured to dehydrate the gas flow. In addition to separating the liquid from the gas flow, the set of baffle plates maintains a single phase wet gas above the baffle plates, and a liquid phase below the baffle plates.