An efficient high-temperature water vapor generator is used to heat heavy oil located in an underground cavity, thereby reducing the viscosity of the oil and enabling the oil to be pumped to the surface. The vapor generator includes a combustion chamber and a surrounding structure, wherein a cavity is located therebetween. Water is routed through the cavity and into the combustion chamber, where water vapor and heat are generated in the presence of fuel, ignition and air. The generated heat pre-heats the water in the cavity, thereby creating an efficient system. The water vapor is forced into the underground cavity, thereby heating the oil located in the cavity.