Abstract: A system for hydrocarbon production and water disposal utilizing a displacement liquid having a specific gravity less than that of water and immiscible with water. One embodiment of the apparatus comprises an outer well casing having an inlet for reservoir fluid, an outlet for water disposal, and an outlet for produced hydrocarbon fluid; and a tube disposed within the casing having an upper passageway for connection with a supply of a displacement liquid and an inlet having a one-way valve for allowing entry of reservoir fluid from within the casing, and a lower outlet having a one-way valve for allowing egress of water. One embodiment incorporates a downhole separator to allow a higher production rate.