Edgar Filing: GULFWEST ENERGY INC

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GULFWEST ENERGY INC.
(Name of Registrant as Specified In Its Charter)

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GULFWEST ENERGY INC.
480 N. Sam Houston Parkway E.
Suite 300
Houston, Texas 77060

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS

To Be Held on July 8, 2004

NOTICE IS HEREBY GIVEN that the annual meeting of shareholders of GulfWest
Energy Inc. will be held on Thursday, July 8, 2004 at 10:30 a.m. local time , at
480 N. Sam Houston Parkway E., Suite 300, Houston, Texas 77060, (281) 820-1919,
for the following purposes:

(1) To elect five directors to hold office until the next annual meeting
of shareholders and until their successors are duly elected and
qualified.

(2) To approve the amendment of the Company's Articles of Incorporation to
increase the number of shares of Class A Common Stock, par value $.001
per share ("Common Stock") that the Company will have authority to
issue from 40,000,000 to 80,000,000 shares.

(3) To consider and act upon such other business as may properly come
before the meeting or any adjournments or postponement thereof.

The close of business on May 21, 2004 has been fixed as the record date for
determining shareholders entitled to notice of, and to vote at, the meeting or
any adjournments or postponement thereof. For a period of at least 10 days prior
to the meeting, a complete list of shareholders entitled to vote at the meeting
will be open to the examination of any shareholder during ordinary business
hours at the our offices at 480 N. Sam Houston Parkway E., Suite 300, Houston,
Texas 77060

A proxy for the meeting and a proxy statement with information concerning
the matters to be acted upon is enclosed herewith.

By Order of the Board of Directors

/s/ Jim C. Bigham
Jim C. Bigham
Secretary

Houston, Texas
June 1 , 2004

YOUR VOTE IS IMPORTANT NO MATTER HOW LARGE OR SMALL YOUR HOLDINGS MAY BE. IF YOU
DO NOT EXPECT TO BE PRESENT AT THE MEETING IN PERSON, YOU ARE URGED TO
IMMEDIATELY COMPLETE, DATE, SIGN, DETACH AND RETURN THE ENCLOSED PROXY IN THE
ACCOMPANYING ENVELOPE, WHICH REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES.

GULFWEST ENERGY INC.
480 N. Sam Houston Parkway E.
Suite 300
Houston, Texas 77060

PROXY STATEMENT

For

ANNUAL MEETING OF SHAREHOLDERS
To Be Held on July 8, 2004

This proxy statement is being furnished to shareholders by the Board of
Directors (the "Board")of GulfWest Energy Inc. beginning on or about June 1 ,
2004 in connection with a solicitation of proxies by the Board for use at the
annual meeting of shareholders to be held on Thursday, July 8, 2004, at 10:30
a.m. local time, to be held at 480 N. Sam Houston Parkway E., Suite 300,
Houston, Texas 77060, (281) 820-1919, and at all adjournments or postponements
thereof (the Annual Meeting") for the purposes set forth in the attached Notice
of Annual Meeting of Shareholders.

All shares represented by a valid proxy, properly executed, duly returned
to us and not revoked will be voted in accordance with the instructions
contained therein. The shares represented by executed but unmarked proxies will
be voted (i) FOR the five nominees for election as directors named herein under
"Election of Directors", (ii) FOR the amendment to our Articles of Incorporation
to increase the number of shares of our Class A Common Stock, par value $.001
per share ("Common Stock") that we will have authority to issue from 40,000,000
to 80,000,000 shares and (iii) at the discretion of the person named as proxy
with regard to any other matter that may properly come before the Annual
Meeting.

Execution of a proxy given in response to this solicitation will not affect
a shareholder's right to attend the Annual Meeting and to vote in person.
Presence at the Annual Meeting of a shareholder who has signed a proxy does in
itself revoke a proxy. Any shareholder giving a proxy may revoke it at any time
by giving written notice thereof to GulfWest Energy Inc., 480 N. Sam Houston
Parkway E., Suite 300, Houston, Texas 77060, Attention: Jim C. Bigham.

RECORD DATE AND VOTING SECURITIES

The record date for determining the shareholders entitled to vote at the
Annual Meeting is the close of business on May 21, 2004 (the "Record Date"). On
that date, 18,492,541 shares of our Common Stock were outstanding and entitled
to vote. In deciding all questions and other matters, a holder of Common Stock
on the Record Date shall be entitled to cast one vote for each share of Common
Stock registered in his or her name. Our Common Stock is the only class of
outstanding voting securities.

QUORUM AND VOTING

In order to be validly approved by the shareholders, each proposal
described herein must be approved by the affirmative vote of a majority of the
shares represented and voting at the Annual Meeting for which a quorum is
present. The presence at the Annual Meeting, in person or by Proxy, of the
holders of one-third of the issued and outstanding shares of Common Stock is
necessary to constitute a quorum to transact business. Each share represented at
the Annual Meeting in person or by Proxy will be counted toward a quorum.
1

PROPOSAL 1

ELECTION OF DIRECTORS

The Board will consist of five directors, all of whom have been nominated
by the Board for re-election, to serve until the next Annual Meeting of
Shareholders and until their successors have been elected and qualified.

It is expected that the nominees named below will be able to accept such
nominations. If any of the below nominees for any reason is unable or is
unwilling to serve at the time of the Meeting, the Proxy holders will have
discretionary authority to vote the Proxy for a substitute nominee or nominees.
The following sets forth information as to the nominees for election at the
Meeting, including their ages, present principal occupations, other business
experience during the last five years, memberships on committees of the Board
and directorships in other publicly-held companies.

THE BOARD RECOMMENDS THE SHAREHOLDERS VOTE "FOR" THE ELECTION OF EACH OF THE
NOMINEES LISTED BELOW.

NOMINEES

Year First Elected
Name Age Position Director or Officer
---- --- -------- -------------------

J. Virgil Waggoner(1)(2) 76 Chairman of the Board 1997

Thomas R. Kaetzer 45 President,
Chief Operating Officer, 1998
and Director

John E. Loehr(1)(2) 58 Cheif Executive Officer
and Director 1992

Marshall A. Smith III 56 Director 1989

M. Scott Manolis(1)(2) 50 Director 2003

(1) Member of the Audit Committee.
(2) Member of the Compensation Committee.
2

J. Virgil Waggoner has served as a director of GulfWest since December 1,
1997 and was elected Chairman of the Board in May, 2002. Mr. Waggoner's career
in the petrochemical industry began in 1950 and included senior management
positions with Monsanto Company and El Paso Products Company, the petrochemical
and plastics unit of El Paso Company. He served as president and chief executive
officer of Sterling Chemicals, Inc. from the firm's inception in 1986 until its
sale and his retirement in 1996. He is currently chief executive officer of JVW
Investments, Ltd., a private company.

Thomas R. Kaetzer was appointed senior vice president and chief operating
officer of GulfWest on September 15, 1998 and on December 21, 1998 became
president and a director. On March 20, 2001, he was appointed chief executive
officer a position he held until May 12, 2004. Prior to joining GulfWest, Mr.
Kaetzer had 17 years experience in the oil and gas industry, including 14 years
with Texaco Inc., which involved the evaluation, exploitation and management of
oil and gas assets. He has both onshore and offshore experience in operations
and production management, asset acquisition, development, drilling and
workovers in the continental U.S., Gulf of Mexico, North Sea, Colombia, Saudi
Arabia, China and West Africa. Mr. Kaetzer has a Masters Degree in Petroleum
Engineering from Tulane University and a Bachelor of Science Degree in Civil
Engineering from the University of Illinois.

John E. Loehr was appointed to cheif executive officer on May 12, 2004. He
has served as a director of GulfWest since 1992, was chairman of the board from
September 1, 1993 to July 8, 1998 and was chief financial officer from November
22, 1996 to May 28, 1998. He is also currently president and sole shareholder of
ST Advisory Corporation, an investment company, and vice-president of Star-Tex
Trading Company, also an investment company. He was formerly president of
Star-Tex Asset Management, a commodity-trading advisor, and a position he held
from 1988 until 1992 when he sold his ownership interest. Mr. Loehr is a CPA and
a member of the American Institute of Certified Public Accountants.

Marshall A. Smith III founded GulfWest and served as an officer in various
capacities, including president, chief executive officer and chairman of the
board, from July 1989 until his resignation in May 2002. He is currently a paid
consultant and remains a director.

M. Scott Manolis is newly nominated to the board. He is the chairman and
chief executive officer of Intermarket Management, LLC and Intermarket
Brokerage, LLC. He has over twenty years experience in commodity risk
management, commodity finance and commodity-based investments. Prior to founding
Intermarket, Mr. Manolis concurrently served as managing director of Commodity
Strategies for Refco Group, LTD. and Managing Director of Global Derivatives
Strategies for Forstmann-Leff International (an asset management firm wholly
owned by Refco Group, LTD), where he directed commodity-based investments. Prior
to that, he served as a vice president and director of the Commodity Portfolio
Management Group at Jefferies and Company. He received a B. S. in Economics from
the University of South Dakota in 1979.

Directors are elected annually and hold office until the next annual
meeting or until their successors are duly elected and qualified. The Board met
4 times during 2003.

Code of Ethical Conduct

The Board recently adopted a Code of Ethical Conduct (the "Code of
Conduct"), which requires that all employees, directors and officers, including
our Chief Executive Officer and Chief Financial Officer, adhere to the Code of
Conduct in addressing legal and ethical issues encountered in conducting their
work. The Code of Conduct requires that these individuals avoid conflict of
interests, comply with all laws and other legal requirements, conduct business
in an honest and ethical manner and otherwise act with integrity and in our best
interest. The Code of Conduct contains additional provisions that apply
specifically to our Chief Financial Officer and other financial officers with
respect to full and accurate reporting.
3

BOARD MEETINGS AND COMMITTEES

Our board of directors has established an audit committee and a
compensation committee. The functions of these committees, their members and the
number of meetings held during 2003 are described below.

The audit committee was established to review and appraise the audit
efforts of our independent auditors, and monitor our accounts, procedures and
internal controls. The committee was comprised of Mr. John E. Loehr (Chairman),
Mr. J. Virgil Waggoner, and Mr. M. Scott Manolis. The committee met twice in
2003.

The function of the compensation committee is to fix the annual salaries
and other compensation for our officers and key employees. The committee was
comprised of Mr. J. Virgil Waggoner (Chairman), Mr. John E. Loehr and Mr. M.
Scott Manolis. The committee met twice in 2003.

COMPENSATION OF DIRECTORS

The shareholders approved an amended and restated Employee Stock Option
Plan on May 28, 1998, which included a provision for the payment of reasonable
fees in cash or stock to directors. No fees were paid to directors in 2003.

EXECUTIVE COMPENSATION

Summary Compensation Table

The following table sets forth information regarding compensation paid to
our executive officers whose total annual compensation is $100,000 or more
during each of the last three years.

Long Term
Compensation
Annual Compensation Awards
---------------------------- --------------------------------
Other All
Annual Restricted Other
Year Compen- Stock Compen-
Name and Principal Position End Salary($) Bonus($) sation($) Awards($) Options(#) sation($)
--------------------------- --- ---------- -------- --------- -------- ---------- ---------

Thomas R. Kaetzer (1) 2003 150,000 - 25,000 - - -
President and 2002 144,167 - 25,000 - 100,000 -
Chief Executive Officer 2001 131,249 - 25,000 - 135,000 -

Marshall A. Smith III (2) 2001 150,000 - - - - -
Chairman of the Board

(1) Mr. Kaetzer joined us as chief operating officer in September, 1998, was
elected president in December, 1998 and chief executive officer on March
20, 2001. He receives a base annual salary $150,000, plus a $25,000 annual
contribution to a life insurance savings account paid monthly. He was also
awarded 5-year options to purchase 300,000 shares of common stock to be
issued 100,000 each year over a three year period.

(2) Mr. Smith served as chief executive officer until March 20, 2001 and as
chairman of the board until his resignation on May 11, 2002. As chairman of
the board, Mr. Smith devoted full time to the business . Effective June
1,2002, he resigned as an executive officer and became a paid consultant at
an annual fee of $150,000 plus a $25,000 annual contribution to a life
insurance savings account to be paid monthly. His consulting agreement
expires September 30, 2004.
4

Option Grants During 2003

There were no options granted during 2003..

Option Exercises During 2003 and
Year End Option Values (1)

Number of Securities Value of Unexercised
Underlying Unexercised Options In-the-Money Options
at FY-End (#) at FY-End ($)
Exercisable/ Exercisable/
Name Unexercisable Unexercisable
-------------------- ------------------------------- ---------------------

Thomas R. Kaetzer 335,000 -0-
-0- -0-

(1) No shares were acquired or value realized upon the exercise of options
since no options were exercised by Mr. Kaetzer in 2003.

Employment Agreements

Effective October 1, 2001, we entered into an Employment Agreement with Mr.
Thomas R. Kaetzer, president and chief executive officer for a period of three
years. Under the Employment Agreement, Mr. Kaetzer receives a base annual salary
of $150,000, plus a $25,000 annual contribution to a life insurance savings
account to be paid monthly. He was also awarded 5-year options to purchase
300,000 shares of common stock to be issued 100,000 each year over a three year
period.

In the event of a change of control, Mr. Kaetzer will have the option to
continue as an employee under the terms of the Employment Agreement or receive
a lump-sum cash severance payment equal to 200% of his annual base salary for
the year following the change of control.

Effective June 1, 2002, we entered into a Consulting Agreement with Mr.
Marshall A. Smith III, which expires September 30, 2004 Under the Consulting
Agreement, Mr. Smith receives an annual consulting fee of $150,000, plus a
$25,000 annual contribution to a life insurance savings account to be paid
monthly.

In the event of a change of control, Mr. Smith will have the option to
continue as a consultant under the terms of the Consulting Agreement or receive
a lump-sum cash severance payment equal to 200% of his annual consulting fee for
the year following the change of control.

Report of the Compensation Committee
of the Board on Executive Compensation

On April 16, 1993, the Board established the Compensation Committee and
authorized it to develop and administer an executive compensation system, which
will enable us to attract and retain qualified executives. Compensation for the
chairman of the board, the president and chief executive officer, and other
executive officers is determined by the Compensation Committee which functions
under the philosophy that compensation of executive officers, specifically
including that of the president and chief executive officer, should be directly
and materially linked to the Company's performance.

On March 20, 2001, the Compensation Committee recommended and the Board
approved an annual salary of $150,000 for Mr. Smith as Chairman of the Board.
Mr. Smith founded the Company and served as president and chief executive
officer from 1989 until December 1998, when he resigned as president. He
continued as chief executive officer until March 20, 2001, when he was elected
chairman of the board, a position he held until May 11, 2002. As chairman of the
board, Mr. Smith devoted full time to our business. Effective June 1, 2002, the
5

Compensation Committee recommended and the Board approved entering into a
consulting agreement with Mr. Smith, which expires September 30, 2004, whereby
he would receive an annual consulting fee of $150,000, plus a $25,000 annual
contribution to a life insurance savings account to be paid monthly.

On September 26, 2001, the Compensation Committee recommended and the Board
approved entering into an Employment Agreement with Mr. Thomas R. Kaetzer,
president and chief executive officer effective October 1, 2001, for a period of
three years. Under the Employment Agreement, Mr. Kaetzer receives a base annual
salary of $150,000, plus a $25,000 annual contribution to a life insurance
savings account to be paid monthly, and 5-year options to purchase 300,000
shares of common stock to be issued 100,000 each year over the three-year
period.

This report is submitted by the members of the Compensation Committee:

Compensation Committee:
----------------------

J. Virgil Waggoner, Chairman John E. Loehr M. Scott Manolis

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

During fiscal year 2003, Messrs. Waggoner, Loehr and Manolis served on the
Compensation Committee. No interlocking relationship exists between any member
of the Board or Compensation Committee and any member of the Board or
Compensation Committee of any other company, nor has any such interlocking
relationship existed in the past.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

On April 26, 2001, we obtained a line of credit of up to $2,500,000 from a
bank for which two directors, Mr. J. Virgil Waggoner and Mr. Marshall A. Smith,
were guarantors. On April 3, 2002, the balance of the line of credit was retired
and a new line of credit of up to $3,000,000 was obtained from the bank for
which Mr. Waggoner and Mr. Smith were guarantors.

On March 5, 2004, we entered into an Option Agreement for the Purchase of
Oil and Gas Leases (the Addison Agreement) with W. L. Addison Investments
L.L.C., a private company owned by Mr. J. Virgil Waggoner and Mr. John E. Loehr,
two of our directors, (Addison). Under the Addison Agreement, Addison agreed to
pay, on our behalf, $1,200,000 in order to retire an agreement, with an
unrelated party. For consideration of such payment, Addison acquired certain oil
and gas leases and wellbores from the unrelated party but agreed to grant us a
180-day redemption option (which may be extended by mutual consent) to purchase
the same for $1,200,000, plus interest at the prime rate plus 2%. We tendered
Addison a promissory note in the amount of $600,000, with interest at the prime
rate plus 2%, to substitute for an account payable to the third party in the
same amount. The note will be considered paid in full if we exercise the
redemption option and pay the $1,200,000, plus interest. In the event we
exercise the redemption option, Addison may, at its sole option, retain up to a
25% working interest in the leases. 6

PROPOSAL 2

AMENDMENT OF THE COMPANY'S
ARTICLES OF INCORPORATION

The shareholders are requested at the Annual Meeting to approve the
amendment of our Articles of Incorporation to increase the number of shares of
Common Stock that we will have authority to issue from 40,000,000 to 80,000,000
shares, a form of which is attached hereto as Exhibit A and incorporated herein
(the "Amendment").

Currently, we are authorized to issue 40,000,000 shares of Common Stock. At
May 18, 2004, the status of our Common Stock was as follows:

Shares authorized 40,000,000

Less:
Total shares issued and outstanding 18,492,541
Shares issuable upon conversion of preferred stock 3,750,000
Shares issuable upon exchange of preferred stock 11,428,571
Shares underlying Employee Stock Option Plan 1,102,000
Shares underlying warrants 3,898,585
-----------
Sub-total of shares outstanding 38,671,697

Authorized shares remaining 1,328,303
===========

Our plan for growth requires further development of our oil and natural gas
properties, as well as acquisitions of additional properties, which may require
funding through additional public or private offerings of Common Stock,
preferred stock convertible to Common Stock or warrants to purchase Common
Stock. The increase in authorized shares is to accommodate those future
issuances. Currently, we have no specific plans for those future issuances. We
will not solicit further authorization for the issuances by a vote of
shareholders, and the authorization and issuances will have no effect on the
rights of existing shareholders.

As of May 18, 2004, there were 18,492,541 shares of Common Stock issued
and outstanding held by approximately 580 beneficial owners. Fidelity Transfer
Company, 1800 South West Temple, Suite 301, Box 53, Salt Lake City, Utah 84115,
(801)484-7222 is the transfer agent for the Common Stock. Our Common Stock is
traded over-the-counter (OTC) under the symbol "GULF".

Holders of our Common Stock are entitled, among other things, to one vote
per share on each matter submitted to a vote of shareholders and, in the event
of liquidation, to share ratably in the distribution of assets remaining after
payment of liabilities (including preferential distribution and dividend rights
of holders of our preferred stock). Holders of our Common Stock have no
cumulative rights, and, accordingly, the holders of a majority of the
outstanding shares of the Common Stock have the ability to elect all of the
directors.

Holders of Common Stock have no preemptive or other rights to subscribe for
shares. They are entitled to such dividends as may be declared by the Board of
Directors out of funds legally available therefor. We have never paid cash
dividends on the Common Stock and do not anticipate paying any cash dividends in
the foreseeable future.

THE BOARD RECOMMENDS THAT THE SHAREHOLDERS VOTE "FOR" THE APPROVAL OF THE
AMENDMENT TO THE ARTICLES OF INCORPORATION.
7

AUDIT COMMITTEE REPORT

The Board adopted a written Audit Committee Charter on March 22, 2001. All
members of the Audit Committee are independent directors as defined in Rule
4200(a)(14) of the National Association of Securities Dealer Inc.'s listing
standards.

The Audit Committee has reviewed and discussed with management, and our
independent auditors, our audited financial statements contained in our Annual
Report on Form 10-K for the year ended December 31, 2003.

The Audit Committee has received and reviewed the written disclosures and
the letter from our Independent auditors required by Independence Standards
Board Standard No. 1 (titled, "Independence Discussions with Audit Committees").
Our independent auditors do not perform any non-audit services for us.

Based on the review and discussions referred to above, the Audit Committee
recommended to the Board that the audited financial statements be included in
our Annual Report on Form 10-K for the fiscal year ended December 31, 2003,
filed with the SEC.

Audit Committee:
----------------

John E. Loehr, Chairman J. Virgil Waggoner M. Scott Manolis
8

9
Stock Performance Chart

The following chart compares the yearly percentage change in the cumulative
total shareholder return on our common stock during the five years ended
December 31, 2003 with the cumulative total return of the Nasdaq Index and the
Dow Jones Oil, Secondary Index. The comparison assumes $100 was invested on
December 31, 1998 in our common stock and in each of the foregoing indices and
assumes reinvestment of dividends. We paid no dividends during such five-year
period.

COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN
AMONG GULFWEST, NASDAQ INDEX AND DOW JONES OIL, SECONDARY INDEX

1998 1999 2000 2001 2002 2003
GulfWest $100.00 $176.00 $240.00 $134.00 $88.00 $84.00
Nasdaq $100.00 $185.40 $111.80 $88.70 $61.30 $91.70
Dow Jones Oil Sector $100.00 $115.40 $184.31 $169.22 $172.88 $225.59
9
Security Ownership of Certain Beneficial Owners and Management

The following table sets forth information as of May 18, 2004 regarding the
beneficial ownership of common stock by each person known to us to own
beneficially 5% or more of the outstanding common stock, each director, certain
named executive officers, and the directors and executive officers as a group.
The persons named in the table have sole voting and investment power with
respect to all shares of common stock owned by them, unless otherwise noted.

Beneficial ownership is determined in accordance with the rules of the SEC.
For the purpose of calculating the number of shares beneficially owned by a
shareholder and the percentage ownership of that shareholder, shares of Common
Stock subject to options that are currently exercisable or exercisable within 60
days of the Record Date by that shareholder are deemed outstanding.

Name and Address of Amount and Nature of Percent
Beneficial Owner Beneficial Ownership
---------------- -------------------- -------
J. Virgil Waggoner 16,157,543 1.2 64.5
Thomas R. Kaetzer 433,852 2.3 2.3
Jim C. Bigham 205,985 2,4 1.1
Richard L. Creel 100,000 2,5 .5
John E. Loehr 417,491 2.6 2.2
Marshall A. Smith III 1,055,759 2,7 5.6

All current directors and officers 8
as a group (8 persons) 18,370,630 8 69.9

1 Includes 4,285,714 shares underlying exchangeable preferred stock,
2,250,000 shares underlying convertible preferred stock and 20,000 shares
subject to currently exercisable options.

2 Shareholder's address is 480 N. Sam Houston Parkway East, Suite 300,
Houston, Texas 77060.

3 Includes 196,226 shares owned directly, 2,626 shares owned by his wife and
235,000 shares subject to currently exercisable warrants and options.

4 Includes 155,000 shares subject to currently exercisable warrants and
options.

5 Includes 80,000 subject to currently exercisable options.

6 Includes 62,653 shares held directly; and 64,838 shares held by ST Advisory
Corporation and 290,000 shares subject to currently exercisable warrants
and options. Mr. Loehr is president and sole shareholder of ST Advisory
Corporation.

7 Includes 596,046 shares owned directly, 2,959 shares owned by his wife and
456,754 shares subject to currently exercisable warrants and options.

8 Includes 1,236,754 shares subject to currently exercisable warrants and
options and 6,535,714 shares underlying convertible or exchangeable
preferred stock.
10

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
our officers and directors, and persons who own more than 10% of a registered
class of our equity securities, to file initial reports of ownership and reports
of changes in ownership with the Securities and Exchange Commission (the "SEC").
Such persons are required by SEC regulation to furnish us with copies of all
Section 16(a) forms they file.

Based solely on its review of the copies of such forms received by us with
respect to 2003, or written representations from certain reporting persons, we
believe that our officers, directors and persons who own more than 10% of a
registered class of our equity securities have complied with all applicable
filing requirements.

Subsequent to the end of the fiscal year 2003, Mr. J. Virgil Waggoner, a
director, filed one late Form 4 reporting two transactions that occurred in
April, 2000. The two transactions involved an April 17, 2000 and an April 24,
2000 sale of 170,000 shares at $1.62 per share and 262,100 shares at $1.375 per
share, respectively, by a brokerage firm of stock Mr. Waggoner had provided
funds to purchase. The shares were to be held in his brokerage account but were
sold without his knowledge or authorization. Mr. Waggoner never had control of
the stock, received no proceeds from the sale, and has since been unable to
recover any amount from the brokerage firm, which he believes is now defunct.

INDEPENDENT AUDITORS

The Board has engaged Weaver and Tidwell, L.L.P., Dallas, Texas, as
independent auditors to examine our accounts. Representatives of Weaver and
Tidwell, L.L.P. are not expected to be present at the Meeting.

PRINCIPAL ACCOUNTING FEES AND SERVICES

Audit Fees

The aggregate fees billed by Weaver and Tidwell for professional services
rendered for the audit of our annual financial statements and reviews of the
financial statements included in our quarterly reports on Form 10-Q for the
fiscal years 2003 and 2002 were $103,149.

Audit-Related Fees, Tax Fees and All Other Fees

There were no additional audit-related, tax or other fees billed by Weaver
and Tidwell in the fiscal years 2003 and 2002.

SHAREHOLDERS' PROPOSALS

Shareholders may submit proposals on matters appropriate for shareholder
action at our subsequent annual meetings consistent with Rule 14a-8 promulgated
under the Securities Exchange Act of 1934, as amended. For such proposals to be
considered in the Proxy Statement and Proxy relating to the 2005 Annual Meeting
of Shareholders they must be received by us not later than January 25, 2005.
Such proposals should be directed to GulfWest Energy Inc., 480 N. Sam Houston
Parkway E., Suite 300, Houston, Texas 77060, Attn: Secretary.
11

OTHER BUSINESS

The Board knows of no matter other than those described herein that will be
presented for consideration at the Meeting. However, should any other matters
properly come before the Meeting or any adjournments thereof, it is the
intention of the persons named in the accompanying Proxy to vote in accordance
with their best judgment in the interest of the Company.

MISCELLANEOUS

We will bear all costs incurred in the solicitation of Proxies. In addition
to solicitation by mail, our officers and employees may solicit Proxies by
telephone, telegraph or personally, without additional compensation. We may also
make arrangements with brokerage houses and other custodians, nominees and
fiduciaries for the forwarding of solicitation materials to the beneficial
owners of shares of Common Stock held of record by such persons, and we may
reimburse such brokerage houses and other custodians, nominees and fiduciaries
for their out-of-pocket expenses incurred in connection therewith. We have not
engaged a proxy solicitor.

Our Annual Report to Shareholders, including financial statements for the
year ended December 31, 2003, accompanies this Proxy Statement. The Annual
Report is not to be deemed part of this Proxy Statement.

Houston, Texas
June 1 , 2004 By Order of the Board of Directors

/s/ Jim C. Bigham
Jim C. Bigham, Secretary
12

GULFWEST ENERGY INC.

PROXY SOLICITED BY THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD JULY 8, 2004

The undersigned hereby appoints Jim C. Bigham proxy of the undersigned,
with power of substitution, to vote all shares of Common Stock of the Company
held by the undersigned which are entitled to be voted at the Annual Meeting of
Shareholders to be held July 8, 2004, and any adjournment(s) thereof as
effectively as the undersigned could do if personally present.

(1) To elect the following persons as directors, each to serve until the
next Annual Meeting of Shareholders, and until his successor is duly
elected and qualified:

J. Virgil Waggoner Thomas R. Kaetzer M. Scott Manolis
John E. Loehr Marshall A. Smith III

FOR all persons listed (except as marked to the contrary below.)
----
Withhold authority to vote for all nominees
----
Withhold authority to vote for nominee(s), named below:
----

(3) In the discretion of the Proxy holder, on any other matter that may
properly come before the meeting or any adjournments thereof.

The shares represented by this Proxy will be voted as directed. WHERE NO
DIRECTION IS GIVEN, THE SHARES WILL BE VOTED FOR MATTER (1) above.

The undersigned hereby revokes any proxy or proxies heretofore given to
vote or act with respect to the Common Stock of the Company and hereby ratifies
and confirms all that the Proxy, or his substitutes, or any of them, may
lawfully do by virtue hereof.

Please sign below, date, detach and return this page promptly in the
enclosed envelope.

Dated:
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IMPORTANT: Please date this Proxy and sign your name exactly as it
--------- appears to the left. When signing on behalf of a
corporation, partnership, estate, trust or in other representative
capacity, please sign name and title. Where there is more than one
owner, each owner must sign.