Oil and gas gathering systems can experience flow instabilities characterized by cyclic pressure variations and liquid or free water surges out of the flowlines that typically cause liquid or gas handling problems in receiving facilities and dynamic external loads in elbows and T-junctions. This study describes a new mechanism of instability of gas-liquid flow in a well-flowline-receiving facility system referred to in other industrial applications as the density or liquid holdup wave oscillations (DWO). Unlike instability phenomena related to hydrodynamic slugs, terrain-induced slugs or riser-induced severe slugging, this type of instability is a result of multiple feedback effects between the flow rate, pressure drop, and liquid inventory (the total volume) in the flowline. The specific DWO instability mechanism proposed in the present study is related to generation and propagation of a liquid holdup wave with a large amplitude and wavelength several times greater than the length of a hydrodynamic or terrain-induced liquid slug. A new stability criterion to predict the DWO onset is proposed based on Ultra-High Definition (UHD) simulations of three-phase gas-oil-water flow to accurately predict the liquid inventory. Field data showing a transition from unstable to stable operation in an offshore oil production system are presented. The system is used to transport produced fluids from a satellite platform with naturally flowing and gas-lifted wells to a central platform with processing facilities, via a 30-in. diameter flowline. The stability criterion was used to identify the root cause of large-amplitude oscillations of pressure and flow rate in the flowline. Thus, proposed dynamic two-phase flow instability mechanism and criterion are a cost-effective and practical method for predicting instability onset conditions and developing mitigation strategies in existing and new-built production facilities.