A modified toe-to-heel waterflooding (TTHW) process is provided for recovering oil from a reservoir in an underground formation. After establishing the conventional TTHW waterflood, the process includes placing a chemical blocking agent at the watered out producing toe portion of the horizontal leg of the production well to create a blockage in the producing toe portion and to create a new producing toe portion in an open portion of the horizontal leg adjacent the blockage through which most of the production takes place. Production is then continued through the new producing toe portion and the open portion of the horizontal leg of the production well. These blocking and producing steps can be continued to progressively block producing toe portions in a direction toward the vertical pilot portion of the production well.