FORM 10-Q
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1999
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
for the transition period from to
Commission file number 1-12108
GULFWEST OIL COMPANY
(Exact name of Registrant as specified in its charter)
Texas 87-0444770
(State or other jurisdiction (IRS Employer
of incorporation) Identification No.)
397 N. Sam Houston Parkway E.
Suite 375
Houston, Texas 77060
(Address of principle executive offices) (zip code)
(281) 820-1919
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(D) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
YES X NO
The number of shares outstanding of each of the issuer's classes of common
stock, as of the latest practicable date, November 10, 1999, was 15,154,394
shares of Class A Common Stock, $.001 par value.
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GULFWEST OIL COMPANY
FORM 10-Q FOR THE QUARTER ENDED
SEPTEMBER 30, 1999
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Page of
Form 10-Q
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Part I: Financial Information
Item 1. Financial Statements
Consolidated Balance Sheets, September 30, 1999,
and December 31, 1998 3
Consolidated Statements of Operations-for the
three months and nine months ended September 30, 1999,
and 1998 5
Consolidated Statements of Cash Flows-for the nine
months ended September 30, 1999, and 1998 6
Notes to Consolidated Financial Statements 7
Item 2. Management's Discussion and Analysis
of Financial Condition and Results
of Operations 8
Part II: Other Information
Item 4. Submission of Matters to a Vote of Security Holders 12
Item 5. Other Information 12
Item 6. Exhibits and Reports on 8-K 12
Signatures 13
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PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS.
GULFWEST OIL COMPANY
CONSOLIDATED BALANCE SHEETS
SEPTEMBER 30, 1999 AND DECEMBER 31, 1998
(UNAUDITED)
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ASSETS
September 30, December 31,
1999 1998
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CURRENT ASSETS:
Cash and cash equivalents $ 442,561 $ 204,307
Accounts Receivable - trade, net of allowance for doubtful
accounts of -0- in 1999 and 1998 948,233 527,791
Stock subscriptions receivable 1,000,000
Prepaid expenses 104,830 74,961
Inventory 9,513 13,925
Total current assets 2,505,137 820,984
OIL AND GAS PROPERTIES,
using the successful efforts method of accounting:
Undeveloped Properties 321,073 750,628
Developed Properties 8,874,833 7,283,205
9,195,906 8,033,833
OTHER PROPERTY AND EQUIPMENT 1,385,532 1,406,987
Less accumulated depreciation, depletion,
and amortization (2,705,422) (2,411,755)
Net oil and gas properties and
other property and equipment 7,876,016 7,029,065
DEPOSITS 27,638 17,300
INVESTMENTS 191,478 191,478
TOTAL ASSETS $ 10,600,269 $8,058,827
</TABLE>
The Notes to Consolidated Financial Statements are an integral part of
these statements.
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GULFWEST OIL COMPANY
CONSOLIDATED BALANCE SHEETS
SEPTEMBER 30, 1999 AND DECEMBER 31, 1998
(UNAUDITED)
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LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
September 30, December 31,
1999 1998
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CURRENT LIABILITIES
Notes payable $ 475,000 $ 487,000
Notes payable - related parties 1,050,000 950,000
Current portion of long-term debt 4,981,879 2,972,731
Current portion of long-term debt - related parties 233,032 300,914
Accounts payable - trade 1,163,914 1,406,131
Accrued expenses 534,169 442,617
Total current liabilities 8,437,994 6,559,393
LONG-TERM DEBT, net of current portion 1,509,703 3,120,245
LONG-TERM DEBT - RELATED PARTIES 280,149 281,126
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY (DEFICIT)
Preferred stock 21 130
Common stock 14,775 3,113
Additional paid-in capital 17,183,027 12,763,936
Retained deficit (16,672,926) (14,516,642)
Long-term accounts and notes receivable -
related parties, net of allowance for doubtful accounts
of $700,230 in 1999 and 1998 (152,474) (152,474)
Total stockholders' equity (deficit) 372,423 (1,901,937)
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY (DEFICIT) $10,600,269 $8,058,827
</TABLE>
The Notes to Consolidated Financial Statements are an integral part of
these statements.
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GULFWEST OIL COMPANY
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS AND NINE MONTHS ENDED
SEPTEMBER 30, 1999 AND 1998
(UNAUDITED)
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Three Months Nine Months
Ended September 30, Ended September 30,
1999 1998 1999 1998
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OPERATING REVENUES
Oil and gas sales $ 792,190 $ 439,614 $1,365,860 $ 1,592,747
Marketing and Transportation (13,089) (6,599)
Well servicing revenues 32,621 169,605 76,112 477,127
Operating overhead and other income 37,765 18,973 94,743 107,572
849,487 628,192 1,530,116 2,177,446
Lease operating expenses 411,443 403,458 894,241 1,306,767
Cost of well servicing operations 55,393 162,964 139,650 451,805
Depreciation, depletion and amortization 162,772 221,444 386,280 783,707
General and administrative 406,933 341,646 1,450,869 1,125,713
1,036,541 1,129,512 2,871,040 3,667,992
LOSS FROM OPERATIONS (187,054) (501,320) (1,340,924) (1,490,546)
OTHER INCOME AND EXPENSE
Interest income 19 2,550 192 9,075
Interest expense (231,354) (406,998) (650,979) (1,109,130)
Gain (loss) on sale of assets 44,349 15,000 49,431 9,678
LOSS BEFORE INCOME TAXES (374,040) (890,768) (1,942,280) (2,580,923)
INCOME TAXES
NET GAIN (LOSS) (374,040) (890,768) (1,942,280) (2,580,923)
DIVIDENDS ON PREFERRED STOCK
(PAID 1999 - $0; 1998 - $94,301) (61,955) ( 61,375) (423,843) (183,410)
NET GAIN (LOSS) AVAILABLE TO COMMON
SHAREHOLDERS $ (435,995) $(952,143) $2,366,123) $2,764,333)
GAIN (LOSS) PER COMMON SHARE -
BASIC AND DILUTED $ (.04) $ (.32) $ (.42) $ (1.26)
</TABLE>
The Notes to Consolidated Financial Statements are an integral part of
these statements.
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GULFWEST OIL COMPANY
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1999 AND 1998
(UNAUDITED)
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1999 1998
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CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $(1,942,280) $(2,580,923)
Adjustments to reconcile net loss to net cash
provided by (used in) operating activities:
Depreciation, depletion, and amortization 386,280 783,707
Common stock and warrants issued and charged to operations 224,650 22,856
(Gain) on sale of assets (49,431)
(Increase) decrease in accounts receivable - trade, net (420,442) 201,086
(Increase) decrease in inventory 4,412
(Increase) decrease in prepaid expenses (29,869) (96,887)
Increase (decrease) in accounts payable
and accrued expenses 36,708 831,567
Increase (decrease) in deposits (10,338)
Net cash provided by (used in) operating activities (1,800,310) (838,594)
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sale of property and equipment 150,370 60,000
Purchase of property and equipment (1,050,888) (1,837,436)
(Increase) in accounts and notes receivable - related party ___________ (102,000)
Net cash used in investing activities (900,518) (1,879,436)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from sale of common stock, net 2,000,000 148,872
Payments on debt (512,118) (8,905,383)
Proceeds from debt issuance 1,451,200 10,900,489
Dividends paid __________ (94,301)
Net cash provided by financing activities 2,939,082 2,049,677
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 238,254 (668,353)
CASH AND CASH EQUIVALENTS, beginning of period 204,307 626,519
CASH AND CASH EQUIVALENTS, end of period $ 442,561 $ (41,834)
CASH PAID FOR INTEREST $ 376,896 $ 730,330
</TABLE>
The Notes to Consolidated Financial Statements are an integral part of
these statements.
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GULFWEST OIL COMPANY
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 1999 AND 1998
(UNAUDITED)
1. During interim periods, GulfWest Oil Company ("the Company") follows the
accounting policies set forth in its Annual Report on Form 10-K filed with the
Securities and Exchange Commission. Users of financial information produced for
interim periods are encouraged to refer to the footnotes contained in the Annual
Report when reviewing interim financial results.
2. The accompanying financial statements include the Company and its
wholly-owned subsidiaries: VanCo Well Service, Inc. ("VanCo"), GulfWest Texas
Company ("GWT") both formed in 1996; DutchWest Oil Company("DutchWest") formed
in 1997; Southeast Texas Oil and Gas Company, L.L.C.("Setex LLC") acquired
September 1, 1998; SETEX Oil and Gas Company ("SETEX") formed August 11, 1998;
GulfWest Gas Marketing & Transportation, Inc. ("GWG") formed February 18, 1999;
and, LTW Pipeline Co. ("LTW") formed April 19, 1999. All material intercompany
transactions and balances are eliminated upon consolidation. The financial
statements also include the results of operations for the first nine months of
1998 for the Company's former wholly-owned subsidiaries: WestCo Oil Company
("WestCo"), formed in 1995 and sold October 1, 1998; and GulfWest Permian
("GulfWest Permian") formed in 1996 and sold October 1, 1998.
3. In management's opinion, the accompanying interim financial statements
contain all material adjustments, consisting only of normal recurring
adjustments necessary to present fairly the financial condition, the results of
operations, and the statements of cash flows of GulfWest Oil Company for the
interim periods.
4. Non-cash Investing and Financing Activities
During the nine month period ended September 30, 1999, the Company
exchanged equipment for the assumption of $7,975 of debt, converted deferred
compensation of $47,883 to debt, and converted debt of $700,000 and accounts
payable of $10,000, along with $108,465 in accrued interest, to common stock. In
addition, the Company issued a note payable for $138,757, along with 300,000
shares of common stock valued at $150,000, for the acquisition of properties.
Common stock was also issued for the exercise of warrants by converting $21,025
in deferred compensation and the conversion of 12,165 shares of preferred stock,
plus $214,005 in unpaid dividends, to 6,725,781 shares of common stock. The
Company also entered into a subscription agreement with a director for the sale
of 4,000,000 shares of common stock for $3,000,000, of which $2,000,000 had been
received at September 30, 1999. The balance of $1,000,000 was subsequently
received in the fourth quarter of 1999.
During the nine month period ended September 30, 1998, the Company acquired
oil and gas properties through the issuance of debt totaling $2,830,429, and
other property and equipment through the issuance of debt totaling $130,380. The
Company issued 1,009,424 shares of Common Stock to retire notes payable of
$50,000, current portion of long-term debt - related parties of $105,000,
accounts payable of $311,500,accrued expenses of $100,091 and long-term debt -
related parties of $1,000,000. Additionally, 200 shares of the Company's Class
AAA Preferred Stock, along with accumulated and unpaid dividends in the amount
of $540, were converted to 77,988 shares of Common Stock. On September 1, 1998,
the Company acquired 100% of the membership interests of Setex, L.L.C. by
issuing 4,000 shares of Series C Preferred Stock with an aggregate value of
$630,134.
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Overview
GulfWest is primarily engaged in the acquisition, development,
exploitation, exploration and production of oil and natural gas. The Company is
focused on the acquisition of interests in wells and leases that are currently
producing crude oil and natural gas and that have the potential for increased
production revenue and reserve value through further exploitation, exploration
and development. The Company's gross revenues are derived from the following
sources:
1. Oil and gas sales that are proceeds from the sale of oil and natural gas
production to midstream purchasers;
2. Marketing and gathering system revenue consisting of income earned
through the ownership and operation of gathering systems and pipelines, which
(1) gather and transport natural gas for a fixed fee, and (2) purchase and
resell natural gas from properties operated by other producers;
3. Operating overhead consisting of fees earned from other Working Interest
owners for operating oil and natural gas properties; and,
4. Well servicing revenues that are earnings from the operation of well
servicing equipment under contracts to third party operators.
Results of Operations
Effective October 1, 1998, the Company sold its stock ownership in a wholly
owned subsidiary, GulfWest Permian. GulfWest Permian's assets included Working
Interests in certain oil properties located on approximately 5,000 acres in five
(5) fields in Pecos, Howard, Sterling and Lynn Counties, Texas with estimated
Proved Reserves of approximately 1.26 million barrels of oil. The properties
were burdened by short-term debt of approximately $9 million. The sale of
GulfWest Permian relieved the Company of negative cash flow of approximately
$75,000 per month, after payment of lease operating expenses, capital expenses
and interest on the debt.
The factors which most significantly affect the Company's results of
operations are (1) the sales price of crude oil and natural gas, (2) the level
of total sales volumes of crude oil and natural gas, (3) the level of and
interest rates on borrowings and, (4) the level and success of new acquisitions
and development of existing properties.
Comparative results of operations for the periods indicated are discussed
below.
Three Month Period Ended September 30, 1999 compared to Three Month Period
Ended September 30, 1998.
Revenues
Oil and Gas Sales. Revenues from oil and gas sales for the third quarter
increased 80% from $439,600 in 1998 to $792,200 in 1999. This increase was
attributable to higher sales volumes as a result of workover and development
efforts which began in the second quarter of 1999 and higher product sales
prices. The average prices received for production during the period increased
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for oil from $13.05 per Bbl in 1998 to $19.07 per Bbl in 1999 and for
natural gas from an average of $1.78 per Mcf for 1998 to $2.55 per Mcf in 1999.
Well Servicing Revenues. Revenues from well servicing operations for third
parties decreased 81% from $169,600 for the period in 1998 to $32,600 for 1999.
This decrease was due to management's decision to cease operating under contract
to third parties as a result of lower demand and increased costs of operating
the rigs.
Operating Overhead and Other Income. Revenues from the operating of
properties increased 99% from $19,000 in 1998 to $37,800 in 1999, due to fees
earned by Setex LLC for the management of third party properties.
Costs and Expenses
Lease Operating Expenses. Expenses for the period increased 2% from
$403,500 in 1998 to $411,400 in 1999. Management continues to emphasize reducing
costs and is encouraged by the limited growth in expenses when compared to
current production volumes.
Cost of Well Servicing Operations. Well servicing expenses decreased 66%
from $163,000 in 1998 to $55,400 in 1999, due to the reduced utilization of the
Company's equipment under contract to third parties.
Depreciation, Depletion and Amortization (DD&A). DD&A decreased 26% from
$221,400 in 1998 to $162,800 in 1999, due to the sale of GulfWest Permian and
the reduction in net book value at the end of 1998 as a result of then lower oil
prices.
General and Administrative (G&A) Expenses. G&A expenses for the period
increased 19% from $341,600 in 1998 to $407,000 in 1999, due primarily to
increases in technical staff necessary to identify, evaluate and execute
development and acquisition projects.
Interest Expense. Interest expense decreased 43% from $407,000 in 1998 to
$231,400 in 1999 due to the sale of GulfWest Permian and the elimination of its
related debt.
Nine-Month Period Ended September 30, 1999 compared to Nine Month Period
Ended September 30, 1998.
Revenues
Oil and Gas Sales. Revenues from oil and gas sales for the period decreased
14% from $1,592,700 in 1998 to $1,365,900 in 1999. This decrease was
attributable to lower sales volumes during the first and second quarters of
1999, as a result of the sale of GulfWest Permian and its oil assets, effective
October 1, 1998. The average prices received for production during the period
increased for oil from $11.93 per Bbl in 1998 to $15.60 per Bbl in 1999 and for
natural gas from an average of $1.86 per Mcf for 1998 to $2.25 per Mcf in 1999.
Well Servicing Revenues. Revenues from well servicing operations for third
parties decreased 84% from $477,100 for the period in 1998 to $76,100 in 1999.
This decrease was due to management's decision to cease operating under contract
to third parties as a result of lower demand and increased costs of operating
the rigs.
Operating Overhead and Other Income. Revenues from the operation of
properties decreased 12% from $107,600 in 1998 to $94,700 in 1999, due to the
sale of GulfWest Permian and the discontinuation of operations in certain
fields.
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Costs and Expenses
Lease Operating Expenses. Expenses decreased 32% from $1,306,800 in 1998 to
$894,200 in 1999, due to the sale of GulfWest Permian and the Company's emphasis
on reducing operating expenses.
Cost of Well Servicing Operations. Well servicing expenses decreased 69%
from $451,800 in 1998 to $139,700 in 1999, due to the reduced utilization of the
Company's equipment under contract to third parties.
Depreciation, Depletion and Amortization (DD&A). DD&A decreased 51% from
$783,700 in 1998 to $386,300 in 1999, due to the sale of GulfWest Permian and
the reduction in net book value at the end of 1998 as a result of then lower oil
prices.
General and Administrative (G&A) Expenses. G&A expenses increased 29% for
the period from $1,125,700 in 1998 to $1,450,900 in 1999, due to a one-time
non-cash expense of $225,000 charged to earnings, as a result of the issuance of
employee and director stock incentives and 60,000 shares of common stock to
redeem warrants to purchase 684,000 shares of common stock; costs of
consolidating the Company's offices from Dallas, Texas and Baton Rouge,
Louisiana to Houston, Texas ; and, increases in technical staff necessary to
identify, evaluate and execute development and acquisition projects.
Interest Expense. Interest expense decreased 41% from $1,109,100 in 1998 to
$651,000 in 1999 due to the sale of GulfWest Permian and the elimination of its
related debt.
Financial Condition and Capital Resources
At September 30, 1999, the Company's current liabilities exceeded its
current assets by $6,932,857 and the Company was either past due or in default
of certain of its debt agreements. Further, the Company has experienced
significant recurring net losses. Following are steps management has taken and
are proceeding with to move the Company to profitability and cure any remaining
defaults on debt agreements:
- First, the Company sold its subsidiary, GulfWest Permian; this sale
eliminated a very significant portion of its debt which was tied to older,
higher cost oil production. The Company is now proceeding to restructure its
long term and short term debt.
- Second, at the same time GulfWest Permian was sold, management decided to
sell the old operating company, WestCo, bring in a new operating team, SETEX,
with consolidated offices in Houston, and focus more on natural gas reserves and
production.
- Third, since December 31, 1998, the Company has raised working capital to
meet its immediate obligations and began to enhance production. A director of
the Company purchased $635,000 of Series BB Preferred Stock and subscribed to
purchase $3,000,000 of Common Stock, $2,000,000 of which the Company had
received at September 30, 1999. The balance of $1,000,000 was subsequently
received in the fourth quarter of 1999. The funds from these equity offerings
are being used specifically to reduce current liabilities and increase
production through workovers and installation of production equipment.
- Fourth, with the operating capital commitment and a consolidated office
in Houston, the Company focused on evaluating and acquiring natural gas assets
to achieve a more balanced cash flow from oil and natural gas.
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- Fifth, the near-term operating focus of SETEX was to turn each remaining
oil and gas asset of the Company into a positive cash flow property, even at
lower oil and gas prices. This was to be done by significantly lowering expenses
and increasing production.
- Sixth, the Company brought in key technical staff to focus on the
evaluation of existing properties and pipelines, and to continue with efforts to
increase production and revenue from the Company's existing core assets.
- Seventh, the Company defined a tactical and strategic business plan to
use existing assets to achieve a positive corporate cash flow and to identify
and evaluate additional development and acquisition opportunities to further
grow the Company. Specifically, the Company's staff has identified and continues
to evaluate workover and drilling projects on its existing oil and gas
properties. If successful, these "in-hand" opportunities are projected to
provide the Company with sufficient revenue to become profitable. In addition,
the Company has identified, and is evaluating and negotiating the acquisition of
additional oil and gas properties in its core areas.
Although management believes the above actions will ultimately provide the
Company with the means to become profitable, there is no guarantee these actions
can be effectively implemented. Adverse changes in prices of oil and gas and/or
the inability of the Company to continue to raise the money necessary to develop
existing reserves or acquire new reserves would have a severe impact on the
Company.
On July 1, 1999, the Company purchased an average 45% Working Interest in
the Skidmore Properties, consisting of fourteen (14) producing wells and 2,500
acres for development. The Company also acquired the right to participate in a
total of thirty (30) drilling Prospects identified by Skidmore in the Serpentine
Trend area of South Texas.
At September 30, 1999, the Company had 14,775,090 shares of common stock
outstanding, including 541,101 shares that were subsequently issued. During the
third quarter 1999, the Company issued 11,313,992 shares of common stock as
follows: 2,475,781 for the conversion of preferred stock and unpaid dividends,
244,622 for the conversion of debt by a director, and 8,250,000 to Mr. J. Virgil
Waggoner, a director and significant shareholder, as discussed below. The
541,101 shares subsequently issued were as follows: 300,000 shares for the
acquisition of oil and gas properties, 200,000 shares for the conversion of
preferred stock and 41,101 shares for the exercise of warrants by three
directors.
Mr. Waggoner converted $635,000 in outstanding principal and interest of
loans made to the Company in 1999 to Series BB Preferred Stock on May 28, 1999.
On July 15, 1999, Mr. Waggoner subscribed to purchase 4,000,000 shares of the
Company's Common Stock in a private offering at $.75 per share for a total
purchase price of $3,000,000 and on August 16, 1999 converted $2,550,000 of
Series BB Convertible Preferred Stock to Common Stock at $.60 per share. As a
result of and giving effect to the transactions described above, at November 10,
1999, Mr. Waggoner beneficially owns and has sole voting and dispositive power
for 9,121,829 shares (including 20,000 shares subject to presently exercisable
options), representing 60% of the Company's outstanding Common Stock.
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PART II. OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
No matter was submitted to a vote of security holders of the Company during
the third quarter.
ITEM 5. OTHER INFORMATION
Year 2000 Issue
The Company is working to resolve the potential impact of the year 2000 on
the ability of the Company's computerized information systems to accurately
process information that may be date sensitive. Any of the Company's programs
that recognize a date using "00" as the year 1900 rather than the year 2000
could result in errors or system failures. The Company utilizes a number of
computer programs across its entire operation.
The Company has not completed its assessment, particularly related to
outside customers or vendors. The Company has received notification from its
general ledger vendor that its current system is compliant. The Company intends
to complete its outside customer/vendor assessment in the fourth quarter of
1999. If the Company and/or third parties upon which it relies are unable to
address this issue in a timely manner, it could result in a material financial
risk to the Company, possibly delaying receipts from sales of oil and natural
gas.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits -
Number Description
*3.1 Articles of Incorporation of the Registrant and Amendments
thereto.
*3.2 Bylaws of the Registrant.
@4.1 Statement of Resolution Establishing and Designating the
Company's Class AA Preferred Stock, filed with the
Secretary of State of Texas as an amendment to the Company's
Articles of Incorporation on September 23, 1996.
@4.2 Statement of Resolution Establishing and Designating the
Company's Class AAA Preferred Stock, filed with the
Secretary of State of Texas as an amendment to the Company's
Articles of Incorporation on September 23, 1996.
&4.7 Statement of Resolution Establishing and Designating the Company's
Class C Preferred Stock, filed with the Secretary of State of
Texas as an amendment to the Company's Articles of Incorporation
on September 15, 1998.
#4.8 Statement of Resolution Establishing and Designating the
Company's Class BB Preferred Stock, filed with the Secretary
of State of Texas as an amendment to the Company's Articles of
Incorporation on January 27, 1999, filed herewith.
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#22.1 Subsidiaries of the Registrant.
_____________________________
* Previously filed with the Company's Registration Statement (on Form S-1,
Reg. No. 33-53526), filed with the Commission on October 21, 1992.
@ Previously filed with the Company's Form 8-K, Current Report dated
October 10, 1996, filed with the Commission on October 25, 1996.
& Previously filed with the Company's Form 8-K, Current Report dated
September 15, 1998, filed with the Commission on September 24, 1998.
# Filed herewith.
____________________________
(b) Form 8-K -
Current Report on Form 8-K, dated July 15, 1999, filed with the Commission
on July 23, 1999.
SIGNATURES
Pursuant to the requirements of Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
GULFWEST OIL COMPANY
(Registrant)
Date: November 11, 1999 By: /s/ Thomas R. Kaetzer
Thomas R. Kaetzer
President
Date: November 11, 1999 By: /s/ Jim C. Bigham
Jim C. Bigham
Executive Vice President and
Secretary
Date: November 11, 1999 By: /s/ Richard L. Creel
Richard L. Creel
Vice President of Finance
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Exhibit 22.1
Subsidiaries of the Registrant
GulfWest Oil Company has seven wholly-owned subsidiaries, all Texas
corporations or companies:
1. GulfWest Texas Company was organized September 23, 1996 and is the owner
of record of interests in certain properties located in the Vaughn Field,
Crockett County Texas.
2. DutchWest Oil Company was organized July 28, 1997 and is the owner of
record of interests in certain oil and natural gas properties located in Hardin
and Polk Counties, Texas.
3. VanCo Well Service, Inc. was organized September 5, 1996 and operates
well servicing equipment for the Company and under contracts with third parties.
4. SETEX Oil and Gas Company was organized August 11, 1998 and operates oil
and natural gas properties in which the Company owns majority Working Interests.
5. Southeast Texas Oil and Gas Company, L.L.C. was acquired September 1,
1998 and is the owner of record of interests in certain oil and natural gas
properties located in eight counties in South and East Texas.
6. GulfWest Gas Marketing & Transportation, Inc. was organized February 18,
1999 to be the owner and operator of natural gas gathering systems and
pipelines, and to market the natural gas produced by the Company's properties.
7. LTW Pipeline Co. ("LTW") was organized April 19, 1999 and will replace
GulfWest Gas Marketing & Transportation, Inc.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE GULFWEST
OIL COMPANY'S QUARTERLY REPORT FILED ON FORM 10-Q FOR THE QUARTER ENDED
SEPTEMBER 30, 1999 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0000813779
<NAME> 0
<MULTIPLIER> 1
<CURRENCY> 0
<S> <C>
<PERIOD-TYPE> 9-mos
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1999
<PERIOD-END> SEP-30-1999
<EXCHANGE-RATE> 1
<CASH> 442,561
<SECURITIES> 0
<RECEIVABLES> 1,948,233
<ALLOWANCES> 0
<INVENTORY> 9,513
<CURRENT-ASSETS> 2,505,137
<PP&E> 10,581,438
<DEPRECIATION> 2,705,422
<TOTAL-ASSETS> 10,600,269
<CURRENT-LIABILITIES> 8,437,994
<BONDS> 0
0
21
<COMMON> 14,775
<OTHER-SE> 357,627
<TOTAL-LIABILITY-AND-EQUITY> 10,600,269
<SALES> 1,435,373
<TOTAL-REVENUES> 1,530,116
<CGS> 0
<TOTAL-COSTS> 2,871,040
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 650,979
<INCOME-PRETAX> (1,942,280)
<INCOME-TAX> 0
<INCOME-CONTINUING> (1,942,280)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,942,280)
<EPS-BASIC> (.42)
<EPS-DILUTED> (.42)
</TABLE>
