The water at that depth/pressure and temp will remain as a liquid until the pressure is reduced. It will then flash off as steam.
At atmospheric pressure ~100kpa water boils @ 100c. As pressure increases so does the boiling/flashoff point. This is why the cooling system of you car is under pressure - to increase the boiling point.
As your report says, by the time the water/gas/oil solution has traveled ~4000m to the surface the temp and pressure have reduced allowing the water to remain as water rather than flash off.
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