FORM 8
[As last amended September 26, 1949]
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C 20549
AMENDMENT TO APPLICATION OR REPORT
Filed pursuant to Section 12, 13, or 15(d) of THE SECURITIES
EXCHANGE ACT OF 1934
GULFWEST OIL COMPANY
(Exact name of registrant as specified in charter)
AMENDMENT NO. 1
The undersigned registrant hereby amends the following items, financial
statements, exhibits or other portions of its Current Report for December 5,
1996 on Form 8-K as set forth in the pages attached hereto:
Item 7(a) Financial Statements of Businesses Acquired
Item 7(b) Pro Forma Financial Information
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this amendment to be signed on its behalf by the
undersigned, thereunto duly authorized.
GulfWest Oil Company
By /s/Jim C. Bigham
Jim C. Bigham, Secretary
Date: February 19, 1997
<PAGE>
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
On December 5, 1996, GulfWest Permian Company, a wholly owned subsidiary of
Gulf West Oil Company (collectively, the "Company"), purchased substantially all
of the working interests in four of the five oil fields it agreed to purchase
from Pharaoh Oil & Gas, Inc., Taylor Link Operating Co. and Gary O. Bolen,
Individually and d/b/a Badger Oil Company (collectively, "Pharaoh"), pursuant to
a Purchase and Sale Agreement dated November 6, 1996 with an Addendum dated
December 5, 1996 (the "Agreement"). The five oil fields are located on
approximately 5,000 acres in Pecos, Howard, Sterling and Lynn Counties, Texas
and have estimated proved reserves totaling 3.1 million barrels of oil.
This purchase represents the second phase of the company's expansion into
the West Texas area, following a $3.1 million acquisition which was completed in
October 1996. With the addition of these properties, the company's total proved
reserves will have increased from 1.6 million to 6 million barrels of oil
equivalent (BOE) since the end of 1995.
The four fields were acquired for a purchase price of $7,654,000.00 and the
purchase of the fifth field, which is scheduled for closing no later than March
31, 1997, will bring the total purchase price for the five field acquisition to
$11 million. Terms of the purchase include $150,000.00 cash at closing and the
balance financed by the seller in the form of two term notes:
1) A promissory note in the principal amount of $5.9 million, together
with interest thereon at a variable rate of interest equal to the
Prime Rate of the Texas Commerce Bank National Association of Midland,
Texas plus 1.5% per annum. The note is due and payable in thirty six
(36) monthly installments with the first thirty five (35) in the
amount of $49,249.05, plus accrued interest and the final installment
in the amount of the unpaid balance plus accrued and unpaid interest
due on or before December 22, 1999, unless extended. The properties
are encumbered by a first mortgage held by the Texas Commerce Bank,
who has agreed to release the mortgage upon receipt of $5.9 million in
principal, plus accrued interest.
2) A promissory note in the principal amount of $1,604,000.00 without
interest, payable in four installments as follows:
a) First installment of $250,000.00 due and payable on or before
December 20, 1996.
b) Second installment of $141,000.00 due and payable on or before
January 20, 1997.
c) Third installment of $281,000.00 due and payable on or before
February 10, 1997.
<PAGE>
d) Balance of principal of $932,000.00 due and payable on or before
March 31, 1997, unless extended as provided for therein.
The seller has an option up to the close of business at March 31,
1997 to accept up to $1 million in the Company's Common Stock as a
principal reduction on the note due that date. The Company currently
plans to obtain the funds to meet the financing commitment through a
public offering of its Common Stock during the first quarter of 1997.
Management of the Company negotiated the purchase price based
upon an independent third party engineering report on the properties.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statements of Businesses Acquired
(b) Pro Forma Financial Information
<PAGE>
<TABLE>
THE ACQUIRED PROPERTIES
UNAUDITED STATEMENT OF REVENUES
AND DIRECT OPERATING EXPENSES
For the Year Ended December 31, 1995
and for the Nine Months Ended September 30, 1996
<CAPTION>
Nine Months
Year Ended Ended
Dec. 31, 1995 Sept. 30, 1996
<S> <C> <C>
Revenues:
Oil and Gas Production $ 2,079,000 $ 1,701,000
Expenses:
Direct Operating Expenses 790,020 646,400
Revenues Less Operating Expenses $ 1,288,980 $ 1,054,600
</TABLE>
<PAGE>
<TABLE>
GULFWEST OIL COMPANY
UNAUDITED PRO FORMA STATEMENT OF OPERATIONS
For the Year Ended December 31, 1995
<CAPTION>
Historical
The Company Adjustments Pro Forma
<S> <C> <C> <C>
REVENUES:
Oil and Gas Production $ 551,355 $ 2,880,000 (a) $ 3,431,355
Pipeline Income 32,385 32,385
Management Fees 85,627 85,627
Total Revenues 669,367 2,880,000 3,549,367
EXPENSES:
Lease Operating Expenses 416,103 1,080,000 (a) 1,496,103
Lease Abandonment Expense 51,618 51,618
Depreciation and Depletion 331,315 720,000 (b) 1,051,315
General and Administrative 912,322 912,322
Total Expenses 1,711,358 1,800,000 3,511,358
INCOME (LOSS) FROM
CONTINUING OPERATIONS (1,041,991) 1,080,000 38,009
OTHER INCOME AND EXPENSE:
Interest Income 27,708 27,708
Interest Expense (172,560) (600,000)(c) (772,560)
Total Other Income and Expense (144,852) (600,000) (744,852)
NET INCOME (LOSS) BEFORE TAXES
FROM CONTINUING OPERATIONS (1,186,843) 480,000 (706,843)
PROVISION FOR INCOME TAXES 0 0 0
NET INCOME (LOSS) FROM
CONTINUING OPERATIONS $(1,186,843) $ 480,000 $ (706,843)
</TABLE>
See accompanying notes to the unaudited pro forma statements.
<PAGE>
<TABLE>
GULFWEST OIL COMPANY
UNAUDITED PRO FORMA STATEMENT OF OPERATIONS
For the Nine Months Ended September 30, 1996
<CAPTION>
Historical
The Company Adjustments Pro Forma
<S> <C> <C> <C>
REVENUES:
Oil and Gas Production $ 757,937 $ 2,160,000 (a) $ 2,917,937
Pipeline Income 5,373 5,373
Management Fees 136,536 136,536
Total Revenues 899,846 2,160,000 3,059,846
EXPENSES:
Lease Operating Expenses 387,888 810,000 (a) 1,197,888
Lease Abandonment Expense 85,696 85,696
Depreciation and Depletion 281,565 540,000 (b) 821,565
General and Administrative 719,779 719,779
Total Expenses 1,474,928 1,350,000 2,824,928
INCOME (LOSS) FROM
CONTINUING OPERATIONS (575,082) 810,000 234,918
OTHER INCOME AND EXPENSE:
Interest Income 26,827 26,827
Interest Expense (172,671) (450,000)(c) (622,671)
Total Other Income and Expense (145,844) (450,000) (595,844)
NET INCOME (LOSS) BEFORE TAXES
FROM CONTINUING OPERATIONS (720,926) 360,000 (360,926)
PROVISION FOR INCOME TAXES 0 0 0
NET INCOME (LOSS) FROM
CONTINUING OPERATIONS $ (720,926) $ 360,000 $ (360,926)
</TABLE>
See accompanying notes to the unaudited pro forma statements.
<PAGE>
GULFWEST OIL COMPANY
NOTES TO UNAUDITED PRO FORMA FINANCIAL STATEMENTS
1. Basis of Presentation
The accompanying unaudited pro forma statements of
operations present the results of operations of the Company for
the year ended December 31, 1995 and for the nine months ended
September 30, 1996, as if the purchase of the acquired properties
had occurred as of the beginning of 1995.
The unaudited pro forma information has been prepared and
all calculations have been made by the Company based upon
assumptions deemed appropriate by the Company. Certain of these
assumptions are set forth in the notes below. The accompanying
unaudited pro forma financial statements have been prepared
pursuant to the rules and regulations of the Securities and
Exchange Commission. Certain information prepared in accordance
with generally accepted accounting principles has been condensed
or omitted pursuant to those rules and regulations. The financial
statements of the Company and the related notes thereto presented
in the Annual Report on form 10-K should be read in conjunction
with these pro forma statements.
2. Pro Forma Adjustments
The accompanying unaudited pro forma statements of operations reflect
the following adjustments:
(a) To adjust oil and gas production revenues as a result of the
acquisition of the acquired properties.
(b) To adjust depreciation and depletion as a result of the
acquisition of the acquired properties.
(c) To adjust interest expense for loan used to purchase the
properties.
