We present a theoretical and experimental treatment of three-phase flow in water-wet porous media from the molecular level upwards. Many three-phase systems in polluted soil and oil reservoirs have a positive initial spreading coefficient, which means that oil spontaneously spreads as a layer between water and gas. We compute the thickness and stability of this oil layer and show that appreciable recovery of oil by drainage only occurs when the oil layer occupies crevices or roughness in the pore space. We then analyze the distribution of oil, water and gas in vertical equilibrium for a spreading system, which is governed by alpha = gamma(ow) (rho(o) -rho(g))/gamma(go)(rho(w) - rho(o)), where gamma(ow) and gamma(go) are the oil/water and gas/oil interfacial tensions respectively, and rho(g), rho(o) and rho(w) are the gas, oil and water densities respectively. If alpha > 1, there is a height above the oil/water contact, beyond which connected oil only exists as a molecular film, with a negligible saturation. This height is independent of the structure of the porous medium. When alpha < 1, large quantities of oil remain in the pore space and gravity drainage is not efficient. If the initial spreading coefficient is negative, oil can be trapped and the recovery is also poor. We performed gravity drainage experiments in sand columns and capillary tubes which confirmed our predictions.