The development of the SAGD process has been facilitated by the ability to predict performance from theory. Analytical and, numerical methods have given results similar to those obtained in the field and in laboratory- scaled models. It was realized, before any field projects were undertaken that horizontal wells, would be required and that production rates of hundreds, or even a thousand or more, barrels per day of bitumen production were possible. There was also success in predicting the quantities of steam required. In early analyses, the permeability of the reservoir was assumed constant and non-condensible gas was ignored. The effects of reservoir layering are discussed and it is proposed that, in layered reservoirs, with permeability ratios less than about 2, the height average permeability should be used in the Lindrain equation. Several authors have pointed out that when dissolved gas is included in their numerical simulation models, it tends to accumulate in the steam chamber, particularly towards the top, and inhibit the process by lowering the dew point of the steam. In some cases, this appears to choke the process and severely limit production and recovery. On the other hand, it has been appreciated that the accumulation of gas, and even its intentional addition to the steam, can be desirable because the lowering of the temperature of the steam chamber at the top reduces the heat, and hence the steam, requirement. The SOR is improved. The role of gas is discussed and it is shown that gas can move relatively easily, in small fingers, through the reservoir beyond, the steam chamber. This allows the purging of gas from the chamber and also the pressure support of the chamber by gas flowing from the exterior. The intrusion of gas into the region above a rising chamber raises the pressure and tends to push oil downwards-the "Steam and Gas Push." Varying the steam injection rate can control pressure and allow the optimization of, the gas content of the chamber. Results from a new computer program, "HOTSTEAM," are discussed. Unlike its predecessor "HOTWELL," the new program allows the injection rate of the steam to be scheduled and it also provides for the support of the chamber pressure by gas-either from the reservoir or from injection. The program includes a continuing analysis of the production well hydraulics and predicts the WHP as a function of time for natural lift.