Depressurization gives rise to complex sediment–well interactions that may cause the failure of wells. The situation is aggravated when high depressurization is imposed on sediments subjected to an initially low effective stress, such as in gas production from hydrate accumulations in marine sediments. Sediment–well interaction is examined using a nonlinear finite element simulator. The hydro-mechanically coupled model represents the sediment as a Cam-Clay material, uses a continuous function to capture compressibility from low to high effective stress, and recognizes the dependency of hydraulic conductivity on void ratio. Results highlight the critical effect of hydro-mechanical coupling as compared to constant permeability models: A compact sediment shell develops against the screen, the depressurization zone is significantly smaller than the volume anticipated assuming constant permeability, settlement decreases, and the axial load on the well decreases; in the case of hydrates, gas production will be a small fraction of the mass estimated using a constant permeability model. High compressive axial forces develop in the casing within the production horizon, and the peak force can exceed the yield capacity of the casing and cause its collapse. Also tensile axial forces may develop in the casing above the production horizon as the sediment compacts in the depressurized zone and pulls down from the well. Well engineering should consider: slip joints to accommodate extensional displacement above the production zone, soft telescopic/sliding screen design to minimize the buildup of compressive axial force within the production horizon, and enlarged gravel pack to extend the size of the depressurized zone.