Abstract: In producing shale oil from a water-productive leached zone of a subterranean oil shale the reservoir pressure is counterbalanced to restrict water production. A generally vertical heated channel is formed by injecting steam into a lower location while producing fluid from an upper location until a steam zone extends substantially between the locations. Oil shale is pyrolyzed within the heated channel by flowing gaseous fluid, which contains noncondensable components and is heated to an oil shale pyrolyzing temperature, upward through the channel. Shale oil is recovered from the fluid flowing upward through the channel while the composition, pressure and rate of flow of that fluid are adjusted to maintain a selected ratio between its oil phase and aqueous phase components.