Water Loading in Oil Well

Dear sir,
I need your help, to guide me understand my final assingment.

I'm petroleum engineering student and now I'm dealing with my final assignment.
It is about how to make the well back online by installing the artificial lift system, especially ESP.

Main characteristics of my reservoir are:
- Pi = 2200 psia
- API = 44
- Pb = 89.7 psia
- GOR total = 28.89 scf/STB

the problem is, the rate of the well suddenly decrease from 300 STB/day become 4 STB/day, along with THP from 300 psi to 140 psi, in just 100 days of production. And the well production performance cannot increase even the choke has fully open. The water production history showing spike curve.

SGS had been run to check the pressure gradient inside the tubing. The SGS data analysis indicate that the gradient presure of the fluid from the surface untill 1600 ft is 0.35 psi/ft, and the rest of it (1600 untill 6000 ft) is 0.42 psi/ft.
So, by this analysis the problem is indicated as water loading inside the tubing.

My Questions are:
1. Since the liquid loading commonly happen in gas well, is that problem in oil well make sense?
2. is there any similar problems have occurred before?If there is, can anyone share me the case?

Thank you for your kind help.
Regards