King Yukon;
The well that you referenced blowing out oil and condensate for days and then going dry never flowing again sounds crazy, but cases such as this are the nature of our industry...
1] The uncontrolled Blow-out producing 20,000 bbls of oil and condensate would have caused a significant drawdown in reservoir pressure.
2] The drawdown in reservoir pressure would have caused surrounding fluids to flow into the pay-zone and ultimately toward the reservoir. Because of water's low viscosity, it would have preferentially migrated (or channeled) toward the well first.
3] Once channeled water actually reaches the perforations and began traveling up the well-bore, the bottom-hole pressure would increase as the water column climbed higher & higher, as water is more dense than oil or condensate.
4] At some point the hydrostatic pressure from the climbing water overcame the reservoir pressure which initiated the blowout or flow of hydrocarbons, and the well killed.
As long as oil was in the well-bore, the bottom-hole pressure was less than the reservoir pressure and the well flowed. This could have been maintained for long periods of time with controlled production rates designed to guard against 'water channeling' (a.k.a. Water-Coning). Unfortunately the blowout was not a controlled production rate and water channeling took place. Had the water column (hydrostatic pressure) not been enough to kill the well, it would have made little difference as once a well begins channeling water, water is all that the well will produce
It is possible to re-enter these wells and squeeze cement into the pay-zone hoping to seal off the source of the water, then perforate the cement into the oil-bearing formation, but these attempts have low success rates.
The highest producing oil well in Alabama (on land) made 6,000 bbls/day at one time. A geologist that the well was capable of 10,000 bbls/day and opened the choke to accommodate such a flow rate. Within a matter of days water was channelled into the well-bore and the well was lost. Attempts to re-drill the well were also unsuccessful.
It is ironic that Greed, good in small quantities, built this industry; and it is also Greed, bad in higher doses, that has often hindered the very industry that it built...