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, 2002
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 ENERGY INC.
--------------------
(Exact name of Registrant as specified in its charter)
Texas 87-0444770
(State or other jurisdiction (IRS Employer
of incorporation) Identification No.)
480 North Sam Houston Parkway East
Suite 300
Houston, Texas 77060
(Address of principal 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 18, 2002, was 18,492,541
shares of Class A Common Stock, $.001 par value.
GULFWEST ENERGY INC.
FORM 10-Q FOR THE QUARTER ENDED
SEPTEMBER 30, 2002
Page of
Form 10-Q
---------
Part I: Financial Information
Item 1. Financial Statements
Consolidated Balance Sheets, September 30, 2002
and December 31, 2001 3
Consolidated Statements of Operations for the three months
and nine months ended September 30, 2002 and 2001 5
Consolidated Statements of Cash Flows for the nine
months ended September 30, 2002 and 2001 6
Notes to Consolidated Financial Statements 7
Item 2. Management's Discussion and Analysis
of Financial Condition and Results of Operations 8
Item 3. Quantitative and Qualitative Disclosures about Market Risk 11
Item 4. Procedures and Controls 11
Part II: Other Information
Item 6. Exhibits and Reports on 8-K 12
Signatures 13
2
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS.
------- ---------------------
GULFWEST ENERGY INC.
CONSOLIDATED BALANCE SHEETS
SEPTEMBER 30, 2002 AND DECEMBER 31, 2001
ASSETS
September 30, December 31,
2002 2001
(Unaudited) (Audited)
---------------------- ---------------------
---------------------- ---------------------
CURRENT ASSETS:
Cash and cash equivalents $ 803,394 $ 689,030
Accounts Receivable - trade, net of allowance for
doubtful accounts of -0- in 2002 and 2001 1,418,700 1,392,751
Prepaid expenses 144,703 124,081
---------------------- ---------------------
Total current assets 2,366,797 2,205,862
---------------------- ---------------------
OIL AND GAS PROPERTIES
Using the successful efforts method of accounting 57,035,291 52,045,178
OTHER PROPERTY AND EQUIPMENT 2,337,559 2,352,166
Less accumulated depreciation, depletion
and amortization (7,885,233) (6,235,251)
---------------------- ---------------------
Net oil and gas properties, and
other property and equipment 51,487,617 48,162,093
---------------------- ---------------------
OTHER ASSETS:
Deposits 37,442 37,442
Debt issue cost, net 343,264 506,230
Derivative instruments 467,582
---------------------- ---------------------
Total other assets 380,706 1,011,754
---------------------- ---------------------
TOTAL ASSETS $ 54,235,120 $ 51,379,209
====================== =====================
The Notes to Consolidated Financial Statements are an integral part of these statements.
3
GULFWEST ENERGY INC.
CONSOLIDATED BALANCE SHEETS
SEPTEMBER 30, 2002 AND DECEMBER 31, 2001
LIABILITIES AND STOCKHOLDERS' EQUITY
September 30, December 31,
2002 2001
---------------------- ---------------------
---------------------- ---------------------
(Unaudited) (Audited)
---------------------- ---------------------
CURRENT LIABILITIES
Notes payable $ 4,876,938 $ 2,821,020
Notes payable - related parties 90,000 40,000
Current portion of long-term debt 4,602,829 6,065,588
Current portion of long-term debt - related parties 159,030 222,687
Accounts payable - trade 4,593,194 3,099,399
Accrued expenses 449,977 243,671
---------------------- ---------------------
Total current liabilities 14,771,968 12,492,365
---------------------- ---------------------
NONCURRENT LIABILITIES
Long-term debt, net of current portion 28,939,713 26,330,589
Long-term debt, related parties 131,680 211,368
---------------------- ---------------------
Total noncurrent liabilities 29,071,393 26,541,957
---------------------- ---------------------
OTHER LIABILITIES
Derivative instruments 1,225,692
---------------------- ---------------------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY
Preferred stock 170 170
Common stock 18,493 18,493
Additional paid-in capital 28,179,712 28,164,712
Retained deficit (19,032,308) (15,838,488)
---------------------- ---------------------
Total stockholders' equity 9,166,067 12,344,887
---------------------- ---------------------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 54,235,120 $ 51,379,209
====================== =====================
The Notes to Consolidated Financial Statements are an integral part of these statements.
4
GULFWEST ENERGY INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS AND NINE MONTHS ENDED
SEPTEMBER 30, 2002 AND 2001
(UNAUDITED)
Three Months Nine Months
Ended September 30, Ended September 30,
2002 2001 2002 2001
----------------- ----------------- ------------------ --------------
OPERATING REVENUES
Oil and gas sales $ 2,555,526 $ 3,457,920 $ 7,895,544 $ 9,722,585
Well servicing revenues 11,535 54,108 24,143 136,072
Operating overhead and other income 74,565 157,175 322,610 324,167
----------------- ----------------- ------------------ --------------
Total Operating Revenues 2,641,626 3,669,203 8,242,297 10,182,824
----------------- ----------------- ------------------ --------------
OPERATING EXPENSES
Lease operating expenses 1,461,001 1,309,206 4,181,229 3,740,632
Cost of well servicing operations 10,445 53,555 45,041 136,911
Depreciation, depletion and amortization 625,382 795,298 1,912,344 1,838,371
General and administrative 444,271 427,355 1,312,989 1,233,335
----------------- ----------------- ------------------ -------------
Total Operating Expenses 2,541,099 2,585,414 7,451,603 6,949,249
----------------- ----------------- ------------------ -------------
INCOME FROM OPERATIONS 100,527 1,083,789 790,694 3,233,575
----------------- ----------------- ------------------ -------------
OTHER INCOME AND EXPENSE
Interest expense (793,017) (707,244) (2,236,087) (1,993,452)
Gain (loss) on sale of assets (9,964) (9,626) 1,09 (118,254)
Unrealized gain (loss) on derivative
instruments (222,296) 1,305,075 (1,693,274) 3,807,728
----------------- ----------------- ------------------ -------------
Total Other Income and Expense (1,025,277) 588,205 (3,928,264) 1,696,022
----------------- ----------------- ------------------ -------------
INCOME (LOSS) BEFORE INCOME TAXES AND
CUMULATIVE EFFECT OF CHANGE IN
ACCOUNTING PRINCIPLE (924,750) 1,671,994 (3,137,570) 4,929,597
INCOME TAXES ----------------- ----------------- ------------------ -------------
INCOME BEFORE CUMULATIVE EFFECT OF
CHANGE IN ACCOUNTING PRINCIPLE (924,750) 1,671,994 (3,137,570) 4,929,597
CUMULATIVE EFFECT OF CHANGE IN
ACCOUNTING PRINCIPLE (3,747,435)
----------------- ----------------- ------------------ -------------
NET INCOME (LOSS) (924,750) 1,671,994 (3,137,570) 1,182,162
DIVIDENDS ON PREFERRED STOCK (56,250)
----------------- ----------------- ------------------ -------------
NET INCOME (LOSS) AVAILABLE TO COMMON
SHAREHOLDERS $ (924,750) $ 1,671,994 $ (3,193,820) $ 1,182,162
================= ================= ================== =============
NET INCOME PER SHARE, BASIC, BEFORE
CUMULATIVE EFFECT OF CHANGE IN
ACCOUNTING PRINCIPLE $ (.05) $ .09 (.17) $ .26
CUMULATIVE EFFECT OF CHANGE IN
ACCOUNTING PRINCIPLE (.20)
----------------- ----------------- ------------------ -------------
NET INCOME (LOSS) PER COMMON SHARE, BASIC $ (.05) $ .09 $ (.17) $ .06
================= ================= ================== =============
NET INCOME PER SHARE, DILUTED, BEFORE
CUMULATIVE EFFECT OF CHANGE IN
ACCOUNTING PRINCIPLE $ (.05) $ .08 $ (.17) $ .24
CUMULATIVE EFFECT OF CHANGE IN
ACCOUNTING PRINCIPLE (.18)
----------------- ----------------- ------------------ -------------
INCOME (LOSS) PER COMMON SHARE - DILUTED $ (.05) $ .08 $ (.17) $ .06
================= ================= ================== =============
The Notes to Consolidated Financial Statements are an integral part of these statements.
5
GULFWEST ENERGY INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2002 AND 2001
(UNAUDITED)
2002 2001
------------------ ----------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ (3,137,570) $ 1,182,162
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation, depletion, and amortization 1,912,344 1,838,371
Common stock warrants issued and charged to operations 15,000
(Gain) Loss on sale of assets (1,097) 118,254
Unrealized (gain) loss on derivate instruments 1,693,274 (3,807,728)
Cumulative effect of accounting change 3,747,435
(Increase) decrease in accounts receivable - trade, net (208,691) 457,087
(Increase) in prepaid expenses (20,622) (131,881)
Increase in accounts payable and accrued expenses 1,700,101 1,031,227
------------------ -----------------
Net cash provided by operating activities 1,952,739 4,434,927
------------------ -----------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sale and disposition of property and equipment 675,440 394,423
Purchase of property and equipment (5,491,848) (5,573,502)
------------------ -----------------
Net cash used in investing activities (4,816,408) (5,179,079)
------------------ -----------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Payments on debt (3,100,748) (4,958,995)
Proceeds from debt issuance 6,135,031 5,710,801
Debt issue cost (9,080)
Dividends paid (56,250)
------------------ -----------------
Net cash provided by financing activities 2,978,033 742,726
------------------ -----------------
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 114,364 (1,426)
CASH AND CASH EQUIVALENTS, beginning of period 689,030 663,032
------------------ ----------------
CASH AND CASH EQUIVALENTS, end of period 803,384 $ 661,606
================== ================
CASH PAID FOR INTEREST $ 2,009,793 $ 672,028
================== =================
The Notes to Consolidated Financial Statements are an integral part of these statements.
6
GULFWEST ENERGY INC. AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2002 AND 2001
(UNAUDITED)
1. During interim periods, we follow the accounting policies set forth in our
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: RigWest Well Service, Inc. formed September 5,
1996; GulfWest Texas Company formed September 23, 1996; DutchWest Oil
Company formed July 28, 1997; Southeast Texas Oil and Gas Company, L.L.C.
acquired September 1, 1998; SETEX Oil and Gas Company formed August 11,
1998; GulfWest Oil & Gas Company formed February 8, 1999; LTW Pipeline
Co. formed April 19, 1999; GulfWest Development Company formed November 9,
2000; and, GulfWest Oil & Gas Company (Louisiana) LLC formed July 31,
2001. All material intercompany transactions and balances are eliminated
upon consolidation.
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 Energy
Inc. for the interim periods.
4. Non-cash Investing and Financing
During the nine month period ended September 30, 2002, we acquired $74,653
in property and equipment through notes payable to financial institutions.
We also acquired $182,742 of oil producing properties in exchange of
accounts receivable from a related party.
5. As a result of a financing agreement with an energy lender, we were
required to enter into an oil and gas hedging agreement with the lender. It
has been determined this agreement meets the definition of SFAS 133
"Accounting for Derivative Instruments and Hedging Activities" and is
accounted for as a derivative instrument.
We entered into the agreement, commencing in May 2000, to hedge a portion
of our oil and gas sales for the period of May 2000 through April 2004. The
agreement calls for initial volumes of 7,900 barrels of oil and 52,400 Mcf
of gas per month, declining monthly thereafter. We entered into a second
agreement with the energy lender, commencing September 2001, to hedge an
additional portion of our oil and gas sales for the periods of September
2001 through July 2004 and September 2001 through December 2002,
respectively. The agreement calls for initial volumes of 15,000 barrels of
oil and 50,000 Mmbtu of gas per month, declining monthly thereafter. As a
result of these agreements, we realized a reduction in revenues of $111,229
for the nine-month period ended September 30, 2002, which is included in
oil and gas sales.
The estimated change in fair value of the derivatives is reported in Other
Income and Expense as unrealized (gain) loss on derivative instruments. The
estimated fair value of the derivatives is reported in Other Assets (or
Other Liabilities) as derivative instruments.
7
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
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OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
------------------------------------------------
Overview
--------
We are engaged primarily in the acquisition, development, exploitation,
exploration and production of crude oil and natural gas. Our focus is on
increasing production from our existing crude oil and natural gas properties
through the further exploitation, development and optimization of those
properties, and on acquiring additional crude oil and natural gas properties.
Our gross revenues are derived from the following sources:
1. Oil and gas sales that are proceeds from the sale of crude oil and
natural gas production to midstream purchasers;
2. Operating overhead and other income that consists of earnings from
operating crude oil and natural gas properties for other working
interest owners, and marketing and transporting natural gas. This also
includes earnings from other miscellaneous activities.
3. Well servicing revenues that are earnings from the operation of well
servicing equipment under contract to third party operators.
Results of Operations
---------------------
The factors which most significantly affect our 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, 2002 compared to Three Month Period Ended
September 30, 2001.
Revenues
Oil and Gas Sales. Revenues from the sale of crude oil and natural gas for
the quarter decreased 26% from $3,457,900 in 2001 to $2,555,500 in 2002,
primarily due to the natural decline in production from horizontal wells in the
Madisonville Field, Texas and other Gulf Coast wells, as well as a slight
decrease in average commodity sales prices.
Well Servicing Revenues. Revenues from well servicing operations decreased
79% from $54,100 in 2001 to $11,500 in 2002, due to higher rig utilization on
the properties we operate and less on working for third parties.
Operating Overhead and Other Income. Revenues from these activities
decreased 53% from $157,200 in 2001 to $74,600 in 2002. This was due to a fee
received for the farm-out of exploration rights on one of our undeveloped
properties in 2001.
8
Costs and Expenses
Lease Operating Expenses. Lease operating expenses increased 12% from
$1,309,200 in 2001 to $1,461,000 in 2002. This was due to costs for surface
equipment and lease road repairs on several of our Gulf Coast properties, as
well as higher vendor, contractor and gas compression charges.
Cost of Well Servicing Operations. Well servicing expenses decreased 81%
from $53,600 in 2001 to $10,400 in 2002 due to higher rig utilization on the
properties we operate and less on working for third parties.
Depreciation, Depletion and Amortization (DD&A). DD&A decreased 21%
from $795,300 in 2001 to $625,400 in 2002, due to lower commodity sales volumes.
General and Administrative (G&A) Expenses. G&A expenses increased
slightly for the period from $427,400 in 2001 to $444,300 in 2002.
Interest Expense. Interest expense increased 12% from $707,200 in 2001 to
$793,000 in 2002, primarily due to increased debt for funding of capital
development projects.
Nine-Month Period Ended September 30, 2002 compared to Nine-Month Period Ended
September 30, 2001.
Revenues
Oil and Gas Sales. Revenues from the sale of crude oil and natural gas for
the period decreased 19% from $9,722,600 in 2001 to $7,895,500 in 2002. This was
due to the decrease in commodity prices, since sales volumes remained at the
same level for the period.
Well Servicing Revenues. Revenues from well servicing operations decreased
by 82% from $136,100 in 2001 to $24,100 in 2002. We had greater utilization of
our rigs in the development of our properties rather than working for third
parties in 2002 compared to 2001.
Operating Overhead and Other Income. Revenues from these activities
decreased slightly from $324,200 in 2001 to $322,600 in 2002.
Costs and Expenses
Lease Operating Expenses. Lease operating expenses increased 12% from
$3,740,600 in 2001 to $4,181,200 in 2002, due to costs for surface equipment and
lease road repairs on several of our Gulf Coast properties, as well as higher
vendor, contractor and gas compression charges.
Cost of Well Servicing Operations. Well servicing expenses decreased by 67%
from $137,000 in 2001 to $45,000 in 2002. This was due to higher rig utilization
on the properties we operate and less on working for third parties.
Depreciation, Depletion and Amortization (DD&A). DD&A increased 4%
from $1,838,400 in 2001 to $1,912,300 in 2002, due to a slight increase in
capital costs associated with our development program.
General and Administrative (G&A) Expenses. G&A expenses increased
6% for the period from $1,233,300 in 2001 to $1,313,000 in 2002, due to expenses
related to financial efforts we conducted.
Interest Expense. Interest expense increased 12% from $1,993,500 in 2001 to
$2,236,100 in 2002, primarily due to increased debt for funding of capital
development projects. New Line Item Added to Statement of Operations
9
New Line Item Added to Statement of Operations
----------------------------------------------
We have started reporting "Unrealized gain (loss) on derivative
instruments", as a new line item in the Statement of Operations. This is a
non-cash, gain (loss) estimate of the change in the future liability or asset of
the existing fixed price oil and gas hedge the company currently has in place
with an energy lender. This is not a reporting of a past gain (loss) of the
hedge agreement, but rather an estimate using September 30, 2002, future oil and
gas price forecasts, applied to the current hedged volumes at the current fixed
hedge prices.
The company entered into its current oil and gas hedge as a result of the
financing agreement with the lender. We entered into the agreement, commencing
in May 2000, to hedge a potion of our oil and gas sales for the period of May
2000 through April 2004. It has been determined this agreement meets the
definition of SFAS 133 " According for Derivative Instruments and Hedging
Activities" and is accounted for as a derivative instrument. This required that
we amend the financials in our quarterly reports on the form 10Q and annual
report on the Form 10-K for the year 2001, and the quarterly reports on the Form
10-Q for the first two Quarters of 2002 to reflect the change in the accounting
principle. There was an unrealized loss of $1,693,274 for the nine month period
ended September 30, 2002, due to the change in the fair value of the derivative
instrument.
We would like to emphasize that the addition to the Statement of Operations
is a non-cash item and is an estimate of future gain (loss) as a result of us
locking in a portion of our current production at a fixed price. Actual, past
impact of the hedge agreement have been and will be continued to be, reported
for in the actual oil and gas revenue we report in the Statement of Operations.
While we do not necessarily agree with this new, non-cash reporting requirement,
which significantly distorts our net income, we have made every attempt, to
properly meet the changing reporting requirements of the controlling regulatory
agencies.
Financial Condition and Capital Resources
-----------------------------------------
At September 30, 2002, our current liabilities exceeded our current assets
by $12,405,171. We had a loss of $924,750 for the quarter compared to a profit
of $1,672,000 for the period in 2001.
During the third quarter of 2002, we sold 68,136 barrels of crude oil and
382,705 Mcf of natural gas compared to 89,808 barrels of crude oil and 445,227
Mcf of natural gas in the third quarter of 2001. Revenue for crude oil sales for
the quarter was $1,457,469 in 2002 compared to $2,088,104 in 2001 and for
natural gas sales was $1,098,060 in 2002 compared to $1,369,816 in 2001.
During the nine-month period ended September 30, 2002 our production
volumes were 214,685 barrels of oil and 1,170,386 Mcf of natural gas compared to
214,631 barrels of oil and 1,169,597 Mcf of natural gas for the period in 2001.
Revenue for crude oil sales for the period was $4,433,898 in 2002 compared to
$5,101,950 in 2001 and for natural gas sales was $3,481,646 in 2002 compared to
$4,620,635 in 2001.
10
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
------- ----------------------------------------------------------
The following market rate disclosures should be read in conjunction with
the quantitative disclosures about market risk contained in the Company's 2001
annual report on Form 10-K, as well as with the consolidated financial
statements and notes thereto included in this quarterly report on Form 10-Q.
All of the Company's financial instruments are for purposes other than
trading. The Company only enters derivative financial instruments in conjunction
with its oil and gas hedging activities.
Hypothetical changes in interest rates and prices chosen for the following
stimulated sensitivity effects are considered to be reasonably possible
near-term changes generally based on consideration of past fluctuations for each
risk category. It is not possible to accurately predict future changes in
interest rates and product prices. Accordingly, these hypothetical changes may
not be an indicator of probable future fluctuations.
Interest Rate Risk
The Company is exposed to interest rate risk on debt with variable interest
rates. At September 30, 2002, the Company carried variable rate debt of
$36,661,120. Assuming a one percentage point change at September 30, 2002 on the
Company's variable rate debt, the annual pretax income would change by $366,611.
Commodity Price Risk
The Company hedges a portion of its price risks associated with its oil and
natural gas sales which are classified as derivative instruments. As of
September 30, 2002, these derivative instruments' liabilities had a fair value
of $1,225,692. A hypothetical change in oil and gas prices could have an effect
on oil and gas futures prices, which are used to estimate the fair value of our
derivative instrument. However, it is not practicable to estimate the resultant
change, in any, in the fair value of our derivative instrument.
ITEM 4. PROCEDURES AND CONTROLS
------- -----------------------
As of September 30, 2002, an evaluation was performed under the supervision
and with the participation of the Company's management, including the CEO and
Vice President of Finance, of the effectiveness of the design and operation of
the Company's disclosure controls and procedures. Based on that evaluation, the
Company's management, including the CEO and Vice President of Finance, concluded
that the Company's disclosure controls and procedures were effective as of
September 30, 2002. There have been no significant changes in the Company's
internal controls or in other factors that could significantly affect internal
controls subsequent to September 30, 2002
11
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
------- ---------------------------------
(a) Exhibits -
Number Description
------ -----------
*3.1 Articles of Incorporation of the Registrant and Amendments
thereto.
&3.3 Amendment to the Company's Articles of Incorporation to
increase the number of shares of Class A Common Stock that the
Company will have authority to issue from 20,000,000 to
40,000,000 shares, approved by the Shareholders on November 19,
1999and filed with the Secretary of State of Texas on December 3,
1999.
#3.2 Amendment to the Articles of Incorporation of the Registrant
changing the name of the Registrant to "GulfWest Energy Inc.",
approved by the Shareholders on May 18, 2001 and filed with the
Secretary of Texas on May 21, 2001.
*3.4 Bylaws of the Registrant.
#10.1GulfWest Oil Company 1994 Stock Option and Compensation Plan,
amended and restated as of April 1, 2001, and approved by the
shareholders on May 18, 2001.
---------------
* Previously filed with the Registrant's Registration Statement (on
Form S-1, Reg. No. 33-53526), filed with the Commission on
October 21, 1992.
&Previously filed with the Registrant's Definitive Proxy
Statement, filed with the Commission on October 18, 1999.
# Previously filed with the Registrant's Definitive Proxy
Statement, filed with the Commission on April 16, 2001.
(b) Form 8-K - None.
12
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 ENERGY INC.
(Registrant)
Date: November 18, 2002 by: /s/ Thomas R. Kaetzer
--------------------------------
Thomas R. Kaetzer
President
Date: November 18, 2002 by: /s/ Jim C. Bigham
-----------------------------------------
Jim C. Bigham
Executive Vice President and Secretary
Date: November 18, 2002 By: /s/ Richard L. Creel
-----------------------------------------
Richard L. Creel
Vice President of Finance
13
CERTIFICATIONS
I, Thomas R. Kaetzer, certify that:
1. I have reviewed this quarterly report on Form 10-Q of GulfWest Energy
Inc.;
2. Based on my knowledge, this quarterly report does not contain any
untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances
under which such statements were made, not misleading with respect to
the period covered by this quarterly report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and
cash flows of the registrant as of, and for, the periods presented in
this quarterly report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant
and have:
a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within
those entities, particularly during the period in which this
quarterly report is being prepared;
b) evaluated the effectiveness of the registrant's disclosure
controls and procedures as of a date within 90 days prior to the
filing date of this quarterly report (the "Evaluation Date"); and
c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on
our evaluation as of the Evaluation Date.
5. The registrant's other certifying officers and I have disclosed, based
on our most recent evaluation, to the registrant's auditors and the
audit committee of registrant's board of directors (or persons
performing the equivalent functions):
a) all significant deficiencies in the design or operation of
internal controls which could adversely affect the registrant's
ability to record, process, summarize and report financial data
and have identified for the registrant's auditors any material
weaknesses in internal controls; and
b) any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's
internal controls; and
6. The registrant's other certifying officers and I have indicated in
this quarterly report whether there were significant changes in
internal controls or in other factors that could significantly affect
internal controls subsequent to the date of our most recent
evaluation, including any corrective actions with regard to
significant deficiencies and material weaknesses.
Date: November 18, 2002
/s/ Thomas R. Kaetzer
-------------------------
Thomas R. Kaetzer
President and Chief Executive Officer
CERTIFICATIONS
I, Richard L. Creel, certify that:
1. I have reviewed this quarterly report on Form 10-Q of GulfWest Energy
Inc.;
2. Based on my knowledge, this quarterly report does not contain any
untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances
under which such statements were made, not misleading with respect to
the period covered by this quarterly report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and
cash flows of the registrant as of, and for, the periods presented in
this quarterly report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant
and have:
a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within
those entities, particularly during the period in which this
quarterly report is being prepared;
b) evaluated the effectiveness of the registrant's disclosure
controls and procedures as of a date within 90 days prior to the
filing date of this quarterly report (the "Evaluation Date"); and
c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on
our evaluation as of the Evaluation Date.
5. The registrant's other certifying officers and I have disclosed, based
on our most recent evaluation, to the registrant's auditors and the
audit committee of registrant's board of directors (or persons
performing the equivalent functions):
a) all significant deficiencies in the design or operation of
internal controls which could adversely affect the registrant's
ability to record, process, summarize and report financial data
and have identified for the registrant's auditors any material
weaknesses in internal controls; and
b) any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's
internal controls; and
6. The registrant's other certifying officers and I have indicated in
this quarterly report whether there were significant changes in
internal controls or in other factors that could significantly affect
internal controls subsequent to the date of our most recent
evaluation, including any corrective actions with regard to
significant deficiencies and material weaknesses.
Date: November 18, 2002
/s/ Richard L. Creel
---------------------------
Richard L. Creel
Vice President of Finance
November 18, 2002
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: Certification Required Under Section 906 of Sarbanes-Oxley Act of 2002
In connection with the accompanying report on Form 10-Q for the period ended
September 30, 2002, and filed with the Securities and Exchange Commission on the
date hereof (the "Report"), We, Thomas R. Kaetzer, President and CEO of GulfWest
Energy Inc. (the "Company"), and Richard L. Creel, Vice President of Finance of
the Company hereby certify that:
1. The report fully complies with the requirements of Section 13(a) or
15(d) of the Securities Exchange Act of 1934; and
2. The information contained in the Report fairly presents, in all
material respects, the financial condition and results of operations
of the Company.
GulfWest Energy Inc.
/s/ Thomas R. Kaetzer
------------------------------------
By: Thomas R. Kaetzer
President and Chief Executive Officer
/s/ Richard L. Creel
------------------------------------
By: Richard L. Creel
Vice President of Finance