Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934

Filed by Registrant [X]
Filed by a Party other than the Registrant [  ]

Check the appropriate box:

[  ]      Preliminary Proxy Statement
[X ]     Definitive Proxy Statement
[  ]     Definitive Additional Materials
[  ]     Soliciting Material Pursuant toss.240.1a-11(c) orss.240.1a-12


                              GULFWEST OIL COMPANY
                (Name of Registrant as Specified In Its Charter)


                              GULFWEST OIL COMPANY
                   (Name of Person(s) Filing Proxy Statement)

Payment of Filing Fee (Check the appropriate box):

[X]      Fee $125 per Exchange Act Rule 14-a-6(i)1

[  ]     Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11

         1)  Title of each class of securities to which transaction applies:

         2)  Aggregate number of securities to which transaction applies:

         3)  Per unit price or other underlying value of transaction
             computed pursuant to Exchange Act Rule 0-11:*

         4)  Proposed maximum aggregate value of transaction:

         * Set forth amount on which the filing is  calculated  and state how it
was determined.

[X ]     Check box if any part of the fee is offset as  provided  by  Exchange
         Act Rule  0-11(a)(2)  and identify the filing for which the  offsetting
         fee was paid  previously.  Identify the previous filing by registration
         statement number, or the Form or Schedule and the date of its filing.

         1)       Amount previously paid: $125
         2)       Form, Schedule or Registration Statement No.: PRE 14A

         3)       Filing Party: GulfWest Oil Company

         4)       Date Filed: 04/03/01







                              GULFWEST OIL COMPANY
                          397 N. Sam Houston Parkway E.
                                    Suite 375
                              Houston, Texas 77060

                    NOTICE OF ANNUAL MEETING OF SHAREHOLDERS

                           To Be Held on May 18, 2001

         NOTICE IS HEREBY GIVEN that the Annual Meeting of the  Shareholders  of
GulfWest Oil Company (the  "Company") will be held at the Greenspoint Club,
16925 N.Chase, Houston, (281) 875-0191, Texas 77060, on Friday,
May 18, 2001 at 2:00 p.m., local time, for the following purposes:

         (1) To elect seven members of the Board of Directors,  which  presently
         consists of seven directors, for the term of one year or until the next
         Annual Meeting of Shareholders.

         (2) To approve the amendment of the Company's Articles of Incorporation
         to change the name of the Company to "GulfWest Energy, Inc.".

         (3) To approve the amendment  and  restatement  of the  Company's  1994
         Stock Option and Compensation  Plan to increase the number of shares of
         common stock  available for issuance  pursuant to options granted under
         the plan from 1,000,000 to 2,000,000.

         (4) To transact  such other  business as may  properly  come before the
Meeting or any adjournments thereof.

         The close of  business  on April 3, 2001 has been  fixed as the  record
date for  determining  shareholders  entitled  to  notice  of and to vote at the
Annual Meeting of Shareholders or any adjournments  thereof.  For a period of at
least 10 days  prior to the Annual  Meeting,  a  complete  list of  shareholders
entitled to vote at the Annual  Meeting will be open to the  examination  of any
shareholder  during ordinary business hours at the offices of the Company at 397
N. Sam Houston Parkway E., Suite 375, Houston, Texas 77060

         Information  concerning  the  matters  to be acted  upon at the  Annual
Meeting is set forth in the accompanying Proxy Statement.

         SHAREHOLDERS  WHO DO NOT EXPECT TO BE PRESENT AT THE  MEETING IN PERSON
ARE  URGED  TO  COMPLETE,  DATE,  SIGN  AND  RETURN  THE  ENCLOSED  PROXY IN THE
ACCOMPANYING ENVELOPE, WHICH REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES.

                                             By Order of the Board of Directors


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

Houston, Texas
April 18, 2001









                              GULFWEST OIL COMPANY
                          397 N. Sam Houston Parkway E.
                                    Suite 375
                              Houston, Texas 77060

                                 PROXY STATEMENT

                                       For

                         ANNUAL MEETING OF SHAREHOLDERS
                           To Be Held on May 18, 2001

      This  Proxy  Statement  is being  first  mailed  on April  16,  2001 to
shareholders  of GulfWest Oil Company (the  "Company") by the Board of Directors
(the "Board") to solicit  proxies (the  "Proxies") for use at the Annual Meeting
of Shareholders  (the "Meeting") to be held at the offices of the Company at the
Greenspoint Club, 16925 N. Chase, Houston,  Texas 77060, (281) 875-0191, on
Friday,  May 18, 2001 at 2:00  p.m.,  local  time,  or at such  other time and
place to which the Meeting may be adjourned.

     All shares represented by valid Proxies,  unless the shareholder  otherwise
specifies,  will be voted (i) FOR the election of the persons named herein under
"Election of Directors" as nominees for election as directors of the Company for
the term described therein;  (ii) FOR the amendment of the Company's Articles of
Incorporation  to change the name of the  Company to  "GulfWest  Energy,  Inc.";
(iii) FOR the amendment and  restatement  of the Company's 1994 Stock Option and
Compensation Plan to increase the number of shares of common stock available for
issuance pursuant to options granted under the plan from 1,000,000 to 2,000,000;
and, (iv) at the discretion of the Proxy holders with regard to any other matter
that may properly come before the Meeting or any adjournments thereof.

     Where a shareholder has appropriately specified how a Proxy is to be voted,
it will be voted accordingly.  The Proxy may be revoked at any time by providing
written  notice of such  revocation to GulfWest Oil Company,  397 N. Sam Houston
Parkway E., Suite 375, Houston, Texas 77060, Attention: Jim C. Bigham. If notice
of  revocation  is  not  received  by  the  Meeting  date,  a  shareholder   may
nevertheless  revoke a Proxy if the shareholder  attends the Meeting and desires
to vote in person.

                        RECORD DATE AND VOTING SECURITIES

         The record date for  determining the  shareholders  entitled to vote at
the Meeting is the close of business on April 3, 2001 (the  "Record  Date"),  at
which  time the  Company  had  18,445,041  shares of  Common  Stock  issued  and
outstanding.  Common Stock is the only class of outstanding voting securities of
the Company.

                                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 meeting at which a quorum is present.  The
presence  at the  Annual  Meeting,  in person or by Proxy,  of the  holders of a
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.  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.
                                       1


                                   PROPOSAL 1

                              ELECTION OF DIRECTORS

         The Board presently consists of seven 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


Marshall A. Smith III(3)       53    Chairman of the Board        1989

Thomas R. Kaetzer(3)           42    Chief Executive Officer      1998
                                     President and Director

Jim C. Bigham                  65    Executive Vice President,    1991
                                     Secretary and Director

John E. Loehr(1)(2)(3)         55    Director                     1992


Anthony P. Towell(1)(2)(3)     69    Director                     1997


J. Virgil Waggoner(1)(2)(3)    73    Director                     1997


Steven M. Morris(1)            49    Director                     2000

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

                                       2

     Marshall  A. Smith III has served as an officer  and a director of GulfWest
since July 1989. From July 1989 to November 20, 1992, he served as president and
chairman of the Board.  On November  20,  1992,  he  resigned as  president  but
continued as chief executive  officer and chairman of the board. On September 1,
1993,  Mr. Smith  reassumed  the duties of president and resigned as chairman of
the board.  On December 21, 1998,  he resigned as president  but remained  chief
executive officer. On March 20, 2001, he resigned as chief executive officer and
was elected chairman of the board.

     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.  Mr.  Kaetzer  has 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.

     Jim C. Bigham has served as executive vice president of GulfWest since 1996
and as secretary and a director since 1991. Prior to joining  GulfWest,  he held
management and sales positions in the real estate and printing  industries.  Mr.
Bigham is also a retired  United  States Air Force  Major.  During his  military
career,   he  served  in  both  command  and  staff  officer  positions  in  the
operational, intelligence and planning areas.

     John E. Loehr has served as a director of GulfWest  since 1992, as chairman
of the board  from  September  1,  1993 to July 8,  1998 and as 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 is a member of the American Institute of Certified Public
Accountants and Texas Society of Certified Public Accountants.

     Anthony P. Towell has served as a director of GulfWest  since  November 13,
1997.  From July 1998 to March  2001 he served as  chairman  of the  board.  Mr.
Towell is a director of a number of public companies, both in the United Kingdom
and the  United  States,  in the  safety,  environmental  and  computer  network
industries.  Mr.  Towell has been in the petroleum  business  since 1957 and has
held executive positions with various public oil and gas companies including the
Royal Dutch Shell group companies and Pacific Resources, Inc.

     J. Virgil  Waggoner has served as a director of GulfWest  since December 1,
1997.  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  president and chief  executive  officer of JVW  Investments,  Ltd., a
private  company.  He continues to serve as  non-executive  vice chairman of the
Board of  Directors  of  Sterling  Chemicals,  Inc.  He is also on the  Board of
Directors  of  Kirby  Corporation  and  an  advisory  board  director  of  First
Commercial Bank of Little Rock, Arkansas.

     Steven M.  Morris was  appointed a director of GulfWest on January 6, 2000.
He was the president of Pozo Resources, Inc., an oil and gas production company,
until its asset were sold to GulfWest  on December  31,  1999.  Mr.  Morris is a
certified public accountant and president of Pentad Enterprises, Inc., a private
investment  firm in Houston,  Texas.  He is  currently a director of the Bank of
Tanglewood,  Houston, Texas, and Quicksilver Resources,  Inc., a publicly traded
oil and gas exploration and production company with offices in Ft. Worth, Texas.
                                       3

                          BOARD MEETINGS AND COMMITTEES

     The  Board met four  times in 2000.  The  board  has  established  an audit
committee, a compensation committee and an executive committee. The functions of
these committees,  their current members, and the number of meetings held during
2000 are described below.

     The function of the audit  committee  is to assist the board in  fulfilling
its oversight  responsibilities by reviewing the financial information that will
be provided to the  shareholders  and others,  the systems of internal  controls
that  management  and the board of  directors  have  established,  and the audit
process. The committee is comprised of Mr. John E. Loehr (Chairman), Mr. Anthony
P. Towell,  Mr. J. Virgil  Waggoner and Mr. Steven M. Morris.  The committee met
twice in 2000.

     The function of the compensation  committee is to develop and administer an
executive  compensation  system,  which will  enable the  Company to attract and
retain  qualified  executives.  The  committee  is  comprised  of Mr. J.  Virgil
Waggoner (Chairman), Mr. Anthony P. Towell, and Mr. John E. Loehr. The committee
met twice in 2000.

     The executive  committee was  established  to make  recommendations  to the
board of directors in the areas of financial  planning,  strategies and business
alternatives.  The committee is comprised of Mr.  Anthony P. Towell  (Chairman),
Mr. J. Virgil  Waggoner,  Mr.  Marshall A. Smith III,  Mr. John E. Loehr and Mr.
Thomas R. Kaetzer. The committee met twice in 2000.

                            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 2000.
                                       4

                                   PROPOSAL 2

                           AMENDMENT OF THE COMPANY'S
                            ARTICLES OF INCORPORATION

     The  shareholders  are  requested  at the Annual  Meeting  to  approve  the
amendment of the Company's  Articles of  Incorporation to change the name of the
Company  to  "GulfWest  Energy,  Inc.",  a form of which is  attached  hereto as
Exhibit II and incorporated herein (the "Amendment").

     Currently,  the Company's oil and natural gas reserves are comprised of 52%
oil and 48% natural gas. The Company's  plans are to continue to expand its role
in the domestic  natural gas industry by (i) acquiring  additional  interests in
natural gas  properties,  (ii) increasing the production and reserve base of its
existing natural gas properties,  and (iii) acquiring  ownership of more natural
gas gathering systems and pipelines.  The board recommends  changing the name of
the Company  from  "GulfWest  Oil Company" to  "GulfWest  Energy,  Inc." to more
appropriately reflect the expanding business of the Company.

THE BOARD  RECOMMENDS  THAT THE  SHAREHOLDERS  VOTE  "FOR" THE  APPROVAL  OF THE
AMENDMENT OF THE COMPANY'S ARTICLES OF INCORPORATION.

                                   PROPOSAL 3

                   AMENDMENT AND RESTATEMENT OF THE COMPANY'S
                     1994 STOCK OPTION AND COMPENSATION PLAN

     The  shareholders  are  requested  at the Annual  Meeting  to  approve  the
amendment and  restatement of the Company's  1994 Stock Option and  Compensation
Plan, attached hereto as Exhibit I and incorporated herein (the "Plan"), with an
effective date of April 1, 2001 (the "Effective Date").

     The Company has amended and restated the Plan for the purpose of increasing
the  number of shares of Common  Stock of the  Company  available  for  issuance
pursuant to options granted under the Plan ("Options").  Prior to the amendment,
the Plan  provided  that a maximum  of  1,000,000  shares of Common  Stock  were
available for issuance  pursuant to Options.  Following the amendment,  the Plan
provides  that a maximum of 2,000,000  shares of Common Stock are  available for
issuance pursuant to Options.  Other material provisions of the Plan, which have
not been amended, are as follows: key employees (including  officers),  employee
and nonemployee  directors,  and advisors of the Company are eligible to receive
Options. A committee  appointed by the Board administers the Plan. The committee
has the sole discretion, subject only to the terms of the Plan, to determine the
persons to whom Options are granted,  the terms of Options, and the construction
and  application  of the Plan.  Options  may be either  ISOs,  which  afford the
optionee certain favorable federal income tax consequences,  or options that are
not ISOs.  ISOs may be issued only to employees.  Approval of the Plan amendment
by the  Company's  shareholders  is  necessary  for Options that are intended to
qualify as ISOs to qualify as such.

THE BOARD  RECOMMENDS  THAT THE  SHAREHOLDERS  VOTE  "FOR" THE  APPROVAL  OF THE
AMENDMENT AND  RESTATEMENT OF THE COMPANY'S  1994 STOCK OPTION AND  COMPENSATION
PLAN WITH AN EFFECTIVE DATE OF APRIL 1, 2001.
                                       5


                             EXECUTIVE COMPENSATION

Summary Compensation Table

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




                                                                                          Long Term
                                                                                        Compensation
                                        Annual Compensation (1)                         Awards (2)
                                   ---------------------------------------------     --------------------
                                                                                    
                                                                       Other                                 All
                                                                       Annual      Restricted               Other
                                    Year                               Compen-       Stock                 Compen-
Name and Principal Position         End       Salary($)   Bonus($)    sation($)      Awards($) Options(#)  sation($)
---------------------------         ----      ---------   --------    ----------    ---------  ----------  ---------
Marshall A. Smith III               2000      125,000         -           -            -            -          -
  Chairman of the Board             1999      125,000         -           -            -         20,000        -
                                    1998      125,000         -           -            -            -          -

Thomas R. Kaetzer(3)                2000      125,000         -           -            -         135,000       -
   President and                    1999      125,000         -           -         110,000      100,000       -
Chief                               1998      100,000         -           -            -            -
Executive  Officer


(1)     Includes  deferred  compensation  of $11,458 in 1999 and $50,000 in 1998
        payable to Mr.  Smith.  Mr. Smith served as president until  December
        1998 and as chief  executive  officer  until March 20, 2001,  when he
        was elected  chairman of the board.  As chairman of the board, Mr. Smith
        devotes full time to the business of the Company.

(2)     100,000 shares of common stock issued to Mr. Kaetzer in 1999 as part of
        Employment Agreement.

(3)     Mr. Kaetzer joined the Company as chief operating officer in September,
        1998,  was elected  president  in  December,  1998 and chief  executive
        officer on March 20,  2001.  His base annual  salary was  increased  to
        $125,000 on August 1, 1999 and to $150,000, effective April 1, 2001.

Option Grants During 2000

        Mr.  Kaetzer  received  warrants to purchase  125,000  shares of common
stock and  employee  stock  options to purchase  10,000  shares of common  stock
during 2000.
                                       6

Option Exercises During 2000 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
---------------------          -------------------------------      ----------------------
                                                            
Marshall A. Smith III                    20,000                              -0-
                                          -0-                                -0-

Thomas R. Kaetzer                       110,000                              -0-
                                          -0-                                -0-


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

Employment Agreements

     Effective  December  21,  1998,  the  Company  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 received a
base annual  salary of  $100,000,  increasing a minimum of 15% annually . In the
event of a change of control, Mr. Kaetzer will have the option to continue as an
employee of the Company under the terms of the Employment  Agreements or receive
a lump-sum  cash  severance  payment equal to 300% of his annual base salary for
the year following the change of control.

     A "change of control"  is defined in the  Employment  Agreement  as: (i) an
acquisition  (other than from the Company) by an  individual,  entity or a group
(excluding the Company,  its subsidiaries,  a related employee benefit plan or a
corporation  the voting  stock of which is  beneficially  owned  following  such
acquisition 50% or more by the Company's  stockholders in substantially the same
proportions  as their  holdings in the  Company  prior to such  acquisition)  of
beneficial ownership of 20% or more of the Company's voting stock; (ii) a change
in a majority of the Board (excluding any persons approved by a vote of at least
a  majority  of the  incumbent  Board  other  than  in  connection  with a proxy
contest); (iii) the approval by the stockholders of a reorganization,  merger or
consolidation (other than a reorganization, merger or consolidation in which all
or  substantially  all of the stockholders of the Company receive 50% or more of
the voting stock of the surviving  company);  or (iv) a complete  liquidation or
dissolution  of the  Company or the sale of all,  or  substantially  all, of its
assets.

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 the Company 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.
                                       7


     The Board approved an annual salary for the CEO of $100,000 on July 1, 1991
and it  remained  at that  level  until  April 1,  1997,  when the  Compensation
Committee recommended and the Board approved increasing the annual salary of the
CEO to $125,000.

     On December 21, 1998, the Compensation  Committee recommended and the Board
approved  entering  into an  Employment  Agreement  with Mr.  Thomas R. Kaetzer,
president and chief  operating  officer,  with a base annual salary of $100,000,
which  increased to $125,000 on August 1, 1999 and to $150,000,  effective April
1, 2001. Mr.  Kaetzer was also issued 100,000 shares of restricted  common stock
as part of the Employment Agreement.

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

     Compensation Committee:
     -----------------------
J. Virgil Waggoner, Chairman       Anthony P. Towell         John E. Loehr

           COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

     During fiscal year 2000, Messrs.  Waggoner,  Towell and Loehr served on the
Company's Compensation  Committee.  No interlocking  relationship exists between
any member of the Company's Board of Directors or Compensation Committee and any
member of the Board of Directors or Compensation Committee of any other company,
nor has any such interlocking relationship existed in the past.

                 CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     On March 30,  2000,  Mr. J. Virgil  Waggoner,  a director  of the  Company,
converted a note payable for $750,000 to 500,000 shares of the Company's  common
stock. The closing price of the common stock on that date was $1.50 per share.

     On April 5, 2000,  the Company  obtained  financing  from an energy lender,
which included future development  capital for its oil and gas properties.  This
financing  arrangement  required,  and part of the  proceeds  were used for, the
retirement  of existing debt on the secured  properties.  Such debt included two
loans totaling  $1,565,000 from a financial  institution for which Mr. J. Virgil
Waggoner and Mr. Marshall A. Smith III, directors,  were guarantors;  a loan for
$6,207,403  from a  financial  institution  for which Mr.  Steven M.  Morris,  a
director, was guarantor;  and, a loan for $126,334 from ST Advisory Corp., whose
president is Mr. John E. Loehr, a director.

     On July  31,  2000,  Mr.  John E.  Loehr,  a  director,  agreed  to  accept
receivables due the Company totaling $139,176 as partial payment of payables due
Mr. Loehr from the Company.

     On November 3, 2000, Mr. J. Virgil Waggoner, a director, loaned the Company
$500,000, payable on demand with interest at 10% per annum.

     During 2000, the Company paid $342,597 to Pozo  Resources,  Inc. as part of
the purchase price of oil and gas properties in Colorado.  Mr. Steven M. Morris,
president of Pozo Resources, Inc. became a director of the Company following the
purchase of the properties.

                             AUDIT COMMITTEE REPORT

     The Board of Directors  of the Company  adopted a written  Audit  Committee
Charter on March 22,  2001,  a copy of which is  included  as Appendix A to this
proxy statement. 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.
                                       8


     The Audit Committee has review and discussed with the Company's management,
and the Company's independent auditors,  the audited financial statements of the
Company contained in the Company's Annual Report on Form 10-K for the year ended
December 31, 2000.

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

     Based on the review and discussions  referred to above, the Audit Committee
recommended to the Board of Directors that the audited  financial  statements be
included in the  Company's  Annual Report on Form 10-K for the fiscal year ended
December 31, 2000, filed with the SEC.

Audit Committee:
----------------
John E. Loehr, Chairman  J. Virgil Waggoner Anthony P. Towell Steven M. Morris

Stock Performance Chart

     The following chart compares the yearly percentage change in the cumulative
total  shareholder  return on the  Company's  common stock during the five years
ended  December  31, 2000 with the  cumulative  total return on The Nasdaq Stock
Market Index and The Nasdaq  Non-Financial  Stock Index. The comparison  assumes
$100 was invested on December 31, 1995 in the Company's common stock and in each
of the foregoing indices and assumes reinvestment of dividends. The Company paid
no dividends during such five-year period.



                 COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN
         AMONG COMPANY, NASDAQ INDEX & NASDAQ NON-FINANCIAL STOCK INDEX
                                       
                        1996    1997    1998    1999    2000
                        ----    ----    ----    ----    ----
GulfWest Oil Company    $133    $111    $ 22    $ 39    $ 53

Nasdaq Index            $123    $151    $212    $395    $237

Nasdaq Non-Financial    $121    $142    $209    $409    $238

                                       9

         Security Ownership of Certain Beneficial Owners and Management

     The following  table sets forth  information  as of April 3, 2001 regarding
the beneficial  ownership of common stock by each person known by the Company to
own  beneficially 5% or more of the outstanding  common stock,  each director of
the Company,  certain named executive officers,  and the directors and executive
officers  of the Company 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
          Beneficial Owner             Beneficial Ownership             Percent
          ----------------             --------------------             -------
                                                               

         Marshall A. Smith III          1,055,759        1,2               5.6%

         Thomas R. Kaetzer                367,852        2,3               2.0%

         Jim C. Bigham                    205,985        2,4               1.1%

         Richard L. Creel                  95,000        2,5                .5%

         William T. Winston               160,000        2,6                .9%

         John E. Loehr                    417,491        2,7               2.2%

         Anthony P. Towell                543,542        2,8               2.9%

         J. Virgil Waggoner            10,053,929        2,8              54.4%

         Steven M. Morris                  60,000        2                  .3%

         All current directors and
         officers as a group
        (9 persons)                    12,959,558        9                65.3%


1     Includes  456,754  shares  subject to currently  exercisable  warrants
      and options and 596,046  shares owned  directly,  2,959 shares owned by
      Joyce Smith, the wife of Mr. Smith.

2     Shareholder's address is 397 N. Sam Houston Parkway East, Suite 375,
      Houston, Texas 77060.

3     Includes 235,000 shares subject to currently exercisable options.

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

5     Includes 80,000 subject to currently exercisable options.

6     Includes 150,000 shares subject to currently exercisable warrants and
      options.

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

8     Includes 20,000 shares subject to currently exercisable options.

9     Includes 1,406,754 shares subject to currently exercisable warrants and
      options.
                                       10


                             SECTION 16 REQUIREMENTS

     Section 16(a) of the Securities Exchange Act of 1934, as amended,  requires
the  Company's  officers and  directors,  and persons who own more than 10% of a
registered class of the Company's 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
the Company with copies of all Section 16(a) forms they file.

     Based solely on its review of the copies of such forms  received by it with
respect to 2000, or written  representations from certain reporting persons, the
Company believes that its officers,  directors and persons who own more than 10%
of a registered class of the Company's equity  securities have complied with all
applicable filing requirements,  with the exception of Marshall A. Smith III and
Thomas R. Kaetzer, officers and directors, who were each late filing a Form 4 in
connection with the purchase of Common Stock through their Individual Retirement
Accounts.

                              INDEPENDENT AUDITORS

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

Audit Fees

     The  aggregate  fees billed by Weaver & Tidwell for  professional  services
rendered for the audit of the Company's annual financial  statements and reviews
of the financial  statements included in the Company's quarterly reports on Form
10-Q for the year 2000 were $45,903.

Non-audit Services

     Weaver & Tidwell provided no non-audit  services to the Company in the year
2000.

                             SHAREHOLDERS' PROPOSALS

     Shareholders  may submit  proposals on matters  appropriate for shareholder
action at subsequent  annual meetings of the Company  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 2001
Annual Meeting of  Shareholders,  they must be received by the Company not later
than  December  17,  2001.  Such  proposals  should be directed to GulfWest  Oil
Company,  397 N. Sam Houston Parkway E., Suite 375, Houston,  Texas 77060, Attn:
Secretary.

                                 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.
                                       11

                                  MISCELLANEOUS

     All costs  incurred  in the  solicitation  of Proxies  will be borne by the
Company.  In addition to solicitation by mail, the officers and employees of the
Company may solicit  Proxies by  telephone,  telegraph  or  personally,  without
additional  compensation.  The Company 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 the Company may reimburse such brokerage  houses
and other custodians,  nominees and fiduciaries for their out-of-pocket expenses
incurred in connection therewith. The Company has not engaged a proxy solicitor.

     The Annual  Report to  Shareholders  of the  Company,  including  financial
statements  for the  year  ended  December  31,  2000,  accompanies  this  Proxy
Statement. The Annual Report is not to be deemed part of this Proxy Statement.

Houston, Texas
April 18, 2001                           By Order of the Board of Directors
                                         /s/  Jim C. Bigham
                                             ------------------
                                         Jim C. Bigham, Secretary
                                       12


                                   APPENDIX A

                              GULFWEST OIL COMPANY

                             AUDIT COMMITTEE CHARTER

                                 March 22, 2001

The audit  committee is a committee of the board of directors.  Its primary
function is to assist the board in fulfilling its oversight  responsibilities by
reviewing the financial  information  that will be provided to the  shareholders
and others,  the systems of internal  controls that  management and the board of
directors have established, and the audit process.

In meeting its responsibilities, the audit committee is expected to:

1.  Provide an open avenue of communication between the independent
    accountants and the board of directors.

2.  Review and update the committee's charter annually.

3.  Recommend to the board of directors the independent  accountants to be
    nominated,  approve the compensation of the independent accountant, and
    review and approve the discharge of the independent accountants.

4.  Confirm and assure the  independence  of the  independent  accountants,
    including a review of management  consulting  services and related fees
    provided by the independent accountants, if applicable.

5.  Inquire of management and the independent accountants about significant
    risks or  exposures  and  assess  the  steps  management  has  taken to
    minimize such risk to the Company.

6.  Consider the audit scope and plan with the independent accountants.

7.  Consider with management the rationale for employing audit firms other than
    the independent accountants.

8.  Review  with the  independent  accountants  the  coordination  of audit
    effort to assure  completeness  of  coverage,  reduction  of  redundant
    efforts, and the effective use of audit resources.

9.  Consider and review with the independent accountants:

        a.  The adequacy of the Company's internal controls, including
            computerized information systems controls and security.
        b.  Any related  significant  findings and  recommendations of the
            independent  accountants,  together with management's  response
            thereto.
                                      A-1

10. Review with management and the independent accountants at the completion
     of the annual examination:

        a.  The Company's annual financial statements and related notes.
        b.  The independent accountant's audit of the financial statements and
            report thereon.
        c.  Any significant changes required in the independent accountant's
            audit plan.
        d.  Any serious difficulties or disputes with management encountered
            during the course of the audit.
        e.  Other matters related to the conduct of the audit,  which are to be
            communicated to the committee under generally accepted auditing
            standards.

11. Consider and review with management:

        a.  Significant findings during the year and management's responses
            thereto.
        b.  Any  difficulties  encountered in the course of their audits,
            including any restrictions on the scope of their work or access
            to required information.
        c.  Any changes required in the planned scope of their audit plan.

12. Review  SEC  filings  and  other  published  documents  containing  the
    Company's  financial  statements and consider  whether the  information
    contained  in  these  documents  is  consistent  with  the  information
    contained in the financial statements.

13. Review  the  interim  financial  report  (before  it is filed  with  the
    SEC or  other  regulators)  with  management  and the independent
    accountants.

14. Review  policies  and  procedures  with  respect to  officers'  expense
    accounts and perquisites,  including their use of corporate assets, and
    consider  the results of any review of these  areas by the  independent
    accountants.

15. Review with the independent  accountant the results of their review of the
    Company's monitoring  compliance with the Company's code of conduct.

16. Review legal and regulatory  matters that may have a material impact on
    the financial  statements,  related Company  compliance  policies,  and
    programs and reports received from regulators.

17. Meet  with  the  independent  accountant  and  management  in  separate
    executive  sessions to discuss any matters that the  committee or these
    groups believe should be discussed privately with the audit committee.

18. Report committee actions to the board of directors with such recommendations
    as the committee may deem appropriate.

19. Prepare a letter for inclusion in the annual report that describes the
    committee's composition and responsibilities,  and how they were discharged.

20. The audit  committee  shall  have the  power to  conduct  or  authorize
    investigations  into  any  matters  within  the  committee's  scope  of
    responsibilities.   The   committee   shall  be   empowered  to  retain
    independent counsel, accountants, or others to assist it in the conduct
    of any investigation.
                                      A-2


21. The  committee  shall meet at frequently as  circumstances  require.  The
    committee may ask members of management or others to attend the meetings
    and provide pertinent information as necessary.

22. The committee  will  perform  such other  functions as assigned by law,
    the Company's  articles or bylaws,  or the board of directors.

     The  membership  of the audit  committee  shall  consist of at least  three
     independent  members  of the  board of  directors  who  shall  serve at the
     pleasure  of the  board  of  directors.  Audit  committee  members  and the
     committee  chairman  shall be nominated and designated by the full board of
     directors.

     The duties and  responsibilities  of a member of the audit committee are in
     addition to those duties set out for a member of the board of directors.
                                      A-3

                                                                       EXHIBIT I
                                                                          Page 1
                              GULFWEST OIL COMPANY
                     1994 STOCK OPTION AND COMPENSATION PLAN
                   (Amended and Restated as of April 1, 2001)


                                    ARTICLE I
                                     GENERAL

     1.1 Name.  This plan will be known as the  "GulfWest Oil Company 1994 Stock
Option and  Compensation  Plan."  Capitalized  terms used  herein are defined in
Article V hereof.

     1.2  Purpose.  The purpose of the Plan is to promote the growth and general
prosperity  of the  Company  by  permitting  the  Company  to  grant  to its key
employees,  directors,  and  Advisors  Options to purchase  Common  Stock of the
Company and to pay its directors  fees for their  services as such.  The Plan is
designed to help the Company attract and retain superior personnel for positions
of substantial responsibility and to provide employees,  directors, and Advisors
with an additional incentive to contribute to the success of the Company.

     1.3 Effective  Date.  The Amended and Restated Plan will be effective as of
April 1, 2001.

     1.4  Eligibility  to  Participate.  Any  of  the  Company's  key  employees
(including officers),  directors, or Advisors will be eligible to participate in
the Plan.

     1.5  Maximum  Number of  Shares of Common  Stock  Subject  to  Options  and
Director  Fees.  The  shares of Common  Stock  subject to  Options  granted  and
director  fees paid pursuant to the Plan may be either  authorized  and unissued
shares or shares  issued and  thereafter  acquired  by the  Company.  Subject to
adjustment  pursuant  to the  provisions  of  Section  4.2,  and  subject to any
additional  restrictions  elsewhere in the Plan, the maximum aggregate number of
shares of Common  Stock  that may be issued  from time to time  pursuant  to the
exercise  of  Options  or the  payment of  director  fees  shall be two  million
(2,000,000).  The maximum number of shares of Common Stock with respect to which
Options may be granted and director fees may be paid to any  participant  in the
Plan during the term of the Plan is 500,000.  Plan Shares with  respect to which
an Option has been  exercised or a director fee paid will not again be available
for grant  hereunder.  If Options  terminate for any reason without being wholly
exercised,  new Options  may be granted  hereunder  covering  the number of Plan
Shares to which such Option termination relates.

     1.6  Administration.  The Plan  will be  administered  by the Board or by a
committee of directors (the "Stock Option Committee") appointed by the Board. As
used herein, unless otherwise indicated, "Committee" shall mean the Board or the
duly appointed Stock Option Committee, as applicable.  Subject to the provisions
of the Plan,  the  Committee  will have the sole  discretion  and  authority  to
determine  from  time to time the  employees,  directors  and  Advisors  to whom
Options will be granted and the number of Plan Shares subject to each Option, to
interpret the Plan, to  prescribe,  amend and rescind any rules and  regulations
necessary or appropriate  for the  administration  of the Plan, to determine and
interpret  the details and  provisions  of each Option  Agreement,  to modify or
amend any Option Agreement or waive any conditions or restrictions applicable to
any  Option  or the  exercise  thereof,  and to make  all  other  determinations
necessary  or  advisable  for the  administration  of the Plan.  Except when the
Committee  consists of the entire Board,  the Committee  shall consist solely of
two or more persons who are both  "nonemployee  directors" within the meaning of
Rule 16b-3 under the Exchange Act and "outside  directors" within the meaning of
Section 162(m) of the Code and the regulations promulgated thereunder.



                                                                       EXHIBIT I
                                                                          Page 2

     A majority of the members of the Committee  will  constitute a quorum,  and
any action taken by a majority present at a meeting at which a quorum is present
or any action taken  without a meeting  evidenced  by a writing  executed by all
members of the Committee will constitute the action of the Committee.

     1.7 Conditions Precedent.  The Company will not issue or deliver any Option
Agreement  or any  certificate  for Plan  Shares  pursuant  to the Plan prior to
fulfillment of all of the following conditions:

     (a) The  admission of the Plan Shares to listing on all stock  exchanges on
which the Common Stock is then listed,  unless the  Committee  determines in its
sole discretion that such listing is neither necessary nor advisable;

     (b) The completion of any  registration or other  qualification of the sale
of the Plan  Shares  under any  federal  or state law or under  the  rulings  or
regulations of the Securities and Exchange  Commission or any other governmental
regulatory  body that the Committee in its sole  discretion  deems  necessary or
advisable; and

     (c) The  obtaining of any approval or other  clearance  from any federal or
state governmental  agency that the Committee in its sole discretion  determines
to be necessary or advisable.

     1.8 Reservation of Shares of Common Stock. During the term of the Plan, the
Company will at all times  reserve and keep  available  such number of shares of
Common Stock as may be necessary to satisfy the  requirements  of the Plan as to
the number of Plan Shares.  In addition,  the Company will from time to time, as
is necessary  to  accomplish  the purposes of the Plan,  use its best efforts to
obtain from any regulatory  agency having  jurisdiction any requisite  authority
necessary to issue Plan Shares hereunder. The inability of the Company to obtain
from any  regulatory  agency having  jurisdiction  the  authority  deemed by the
Company's  counsel to be  necessary  for the lawful  issuance of any Plan Shares
will relieve the Company of any liability in respect of the  nonissuance of Plan
Shares as to which the requisite authority has not been obtained.

     1.9 Tax Withholding.

     (a) Condition Precedent. The issuance,  delivery or exercise of any Options
or Plan Shares  under the Plan is subject to the  condition  that if at any time
the  Committee  determines,   in  its  discretion,   that  the  satisfaction  of
withholding tax or other  withholding  liabilities  under any federal,  state or
local law is necessary or desirable as a condition  of, or in  connection  with,
the  issuance,  delivery or exercise  of the  Options or Plan  Shares,  then the
issuance,  delivery  or  exercise  thereof  will  not be  effective  unless  the
withholding  has  been  effected  or  obtained  in a  manner  acceptable  to the
Committee.

     (b) Manner of Satisfying Withholding Obligation.  When a person is required
to pay to the Company an amount required to be withheld under applicable  income
tax laws in  connection  with the  exercise  of an  Option or the  payment  of a
director fee, such payment may be made (i) in cash, (ii) by check, (iii) through
the withholding by the Company ("Company  Withholding") of a portion of the Plan
Shares  acquired  upon the exercise of the Option  having a Fair Market Value on
the date the  amount  of tax to be  withheld  is to be  determined  equal to the
amount required to be withheld or (iv) in any other form of valid consideration,
as permitted by the Committee in its discretion; provided

                                                                      EXHIBIT  I
                                                                          Page 3

that a person  who is  required  to file  reports  under  Section 16 of the
Exchange  Act  shall  not be  permitted  to elect  to  satisfy  his  withholding
obligation  through Company  Withholding;  provided further,  however,  that the
Committee,  in its sole discretion,  may require that such person's  withholding
obligation be satisfied through Company Withholding.

     1.10 Exercise of Options.

     (a) Method of Exercise.  Each Option will be exercisable in accordance with
the terms of the Option Agreement pursuant to which the Option was granted.  Any
Option will be deemed to be  exercised  for  purposes  of the Plan when  written
notice of exercise has been received by the Company at its principal office from
the person  entitled to exercise the Option and payment for the Plan Shares with
respect to which the Option is  exercised  has been  received  by the Company in
accordance  with paragraph (b) below.  No Option may be exercised for a fraction
of a Plan Share.

     (b)  Payment of  Purchase  Price.  The  purchase  price of any Plan  Shares
purchased will be paid at the time of exercise of the Option either (i) in cash,
(ii) by certified or  cashier's  check,  (iii) by cash or certified or cashier's
check  for the par  value  of the Plan  Shares  plus a  promissory  note for the
balance of the purchase price, which note will contain such terms and provisions
as the Committee may permit, including without limitation the right to repay the
note  partially  or wholly  with  Common  Stock,  (iv) by  delivery of a copy of
irrevocable  instructions  from the  Optionee to a broker or dealer,  reasonably
acceptable  to the Company,  to sell certain of the Plan Shares  purchased  upon
exercise of the Option or to pledge them as  collateral  for a loan and promptly
deliver to the Company the amount of sale or loan proceeds necessary to pay such
purchase price or (v) in any other form of valid consideration,  as permitted by
the Committee.  If any portion of the purchase price or a note given at the time
of exercise is paid in shares of Common  Stock,  those  shares will be valued at
the then Fair Market Value.

     1.11 Acceleration of Right of Exercise of Options. In the case of an Option
not  otherwise   exercisable   in  full,   the  Committee  may   accelerate  the
exercisability  of such Option in whole or in part at any time.  Notwithstanding
the  provisions  of any Option  Agreement  regarding the time for exercise of an
Option, the following provisions will apply:

     (a) Mergers and  Reorganizations.  If the Company or its shareholders enter
into an  agreement to dispose of all or  substantially  all of the assets of the
Company  by means of a sale,  merger  or other  reorganization,  liquidation  or
otherwise  in  a  transaction   in  which  the  Company  is  not  the  surviving
corporation,  any Option will become immediately exercisable with respect to the
full number of shares subject to that Option during the period  commencing as of
the date of the agreement to dispose of all or  substantially  all of the assets
of the Company and ending when the  disposition of assets  contemplated  by that
agreement is  consummated  or the Option is otherwise  terminated  in accordance
with its  provisions or the  provisions of the Article  pursuant to which it was
granted,  whichever  occurs first;  provided that no Option will be  immediately
exercisable  under this  section on account of any  agreement of merger or other
reorganization  when the  shareholders  of the  Company  immediately  before the
consummation  of the  transaction  will own at least fifty  percent of the total
combined  voting power of all classes of stock entitled to vote of the surviving
entity  immediately  after the consummation of the transaction.  The Option will
not  become  immediately  exercisable  if the  transaction  contemplated  in the
agreement is a merger or reorganization in which the Company will survive.

                                                                       EXHIBIT I
                                                                          Page 4

     (b) Change in  Control.  In the event of a change in control or  threatened
change in control of the  Company,  all Options  granted  prior to the change in
control or threatened change in control will become immediately exercisable. The
term "change in control" for purposes of this section refers to the  acquisition
of 25% or more of the  voting  securities  of the  Company  by any  person or by
persons acting as a group within the meaning of Section 13(d)(3) of the Exchange
Act (other than an acquisition by a person or group meeting the  requirements of
clauses (i) and (ii) of Rule  13d-1(b)(1)  promulgated  under the Exchange Act);
provided  that no change in control  or  threatened  change in  control  will be
deemed to have occurred if prior to the acquisition of, or offer to acquire, ten
percent  or more of the voting  securities  of the  Company,  the full Board has
adopted by not less than  two-thirds  vote a resolution  specifically  approving
such acquisition or offer. The term "person" for purposes of this section refers
to an  individual  or a  corporation,  partnership,  trust,  association,  joint
venture, pool, syndicate,  sole proprietorship,  unincorporated  organization or
any other form of entity not  specifically  listed  herein.  Whether a change in
control is threatened will be determined solely by the Committee.

     1.12 Compliance  with Securities  Laws. Plan Shares will not be issued with
respect to any Option or  director  fee  unless the  exercise  of the Option (if
applicable)  and the issuance and delivery of the Plan Shares  complies with all
relevant  provisions of federal and state law,  including without limitation the
Securities  Act,  the  rules  and  regulations  promulgated  thereunder  and the
requirements  of any  stock  exchange  upon  which the Plan  Shares  may then be
listed,  and will be further  subject to the approval of counsel for the Company
with respect to such  compliance.  The Committee may also require an Optionee or
director  fee  recipient  to  furnish  evidence  satisfactory  to  the  Company,
including  without  limitation  a written and signed  representation  letter and
consent  to be  bound  by any  transfer  restrictions  imposed  by law,  legend,
condition  or  otherwise,  that the Plan  Shares  are  being  acquired  only for
investment and without any present intention to sell or distribute the shares in
violation  of any  federal  or state  law,  rule or  regulation.  Further,  each
Optionee or director fee recipient will consent to the imposition of a legend on
the  certificate  representing  the Plan Shares  issued upon the exercise of the
Option or the payment of a director fee,  restricting their  transferability  as
required by law or by this section.

     1.13  Employment of Optionee.  Nothing in the Plan or in any Option granted
hereunder will confer upon any Optionee any right to continued employment by the
Company or any of its  subsidiaries or limit in any way the right of the Company
or any  subsidiary  at any  time  to  terminate  or  alter  the  terms  of  that
employment.

     1.14  Transferability  of Options.  The Committee  may, in its  discretion,
provide  in  any  Option  Agreement  that  Options  granted   hereunder  may  be
transferred  by the holder  thereof upon five days prior  written  notice to the
Company,  subject to  compliance  with  applicable  securities  laws;  provided,
however,  that an Incentive Option shall not be transferable  other than by will
or the laws of descent and distribution.

     1.15  Information  to Optionees.  The Company will furnish to each Optionee
copies of annual  reports,  proxy  statements  and all other reports sent to the
Company's  shareholders.  Upon written request, the Company will furnish to each
Optionee a copy of its most recent Annual Report on Form 10-K and each quarterly
report to shareholders  issued since the end of the Company's most recent fiscal
year.

     1.16  Plan  Binding  on  Successors.  The  Plan  will be  binding  upon the
successors and assigns of the Company and any of its subsidiaries that adopt the
Plan.

                                                                       EXHIBIT I
                                                                          Page 5

                                   ARTICLE II
                                TERMS OF OPTIONS

     2.1  Nature  of  Options.  Options  may  be  either  Incentive  Options  or
Nonqualified  Options;  provided,  however, that Incentive Options may be issued
only to persons who are  employees of the Company or a parent or  subsidiary  of
the Company.

     2.2  Duration of Options.  Each Option  granted  under this Article and all
rights thereunder will expire on the date determined by the Committee, but in no
event will any Option  granted  under this  Article  expire later than ten years
after  the  date on which  the  Option  is  granted,  and in no  event  will any
Incentive  Option  granted to a Ten-Percent  Shareholder  expire later than five
years after the date on which the Incentive Option is granted. In addition, each
Option will be subject to early termination as provided elsewhere in the Plan.

     2.3 Rights  Upon  Termination  of  Employment  or Service as a Director  or
Advisor. The Committee shall have discretion to include in each Option Agreement
such provisions regarding exercisability of Options following the termination of
an Optionee's  employment or service as a director or Advisor as the  Committee,
in its sole discretion, deems to be appropriate.

     2.4 Purchase Price. The purchase price for Plan Shares acquired pursuant to
the  exercise,  in whole or in part, of any Option may not be less than the Fair
Market  Value  of the  Plan  Shares  at the  time of the  grant  of the  Option;
provided,  that the  purchase  price for Plan  Shares  acquired  pursuant to the
exercise,  in whole or in part, of an Incentive  Option granted to a Ten-Percent
Shareholder  may not be less than 110  percent of the Fair  Market  Value of the
Plan Shares at the time of the grant of the Incentive Option.

     2.5 Individual Option  Agreements.  Each Optionee will be required to enter
into a written Option Agreement with the Company. In such Option Agreement,  the
Employee will agree to be bound by the terms and conditions of the Plan and such
other matters as the Committee deems appropriate.

     2.6 Maximum  Amount of Incentive  Options First  Exercisable in a Year. The
aggregate Fair Market Value of Plan Shares  (determined at the time an Incentive
Option is granted) with respect to which  Incentive  Options are exercisable for
the first time by a person during any calendar  year under all  incentive  stock
option plans of the Company and its subsidiaries and affiliates shall not exceed
$100,000.  Any portion of an Incentive Option that exceeds this limitation shall
be considered to be a Nonqualified Option.

     2.7 One-Time Grant to Directors.  The Committee  shall issue a Nonqualified
Option to each person who is a member of the Board on April 15, 1998.  Each such
Nonqualified  Option shall be for the purchase of 20,000  shares of Common Stock
at an  exercise  price per share  equal to the Fair  Market  Value of a share of
Common  Stock on April 15, 1998;  shall be  immediately  exercisable;  and shall
expire on April 1, 2008, subject to earlier termination as provided elsewhere in
the Plan.

                                                                       EXHIBIT I
                                                                          Page 6

                                   ARTICLE III
                                  DIRECTOR FEES

     3.1  Provision  for  Payment.  The  Committee  shall have the  authority to
provide for the payment of reasonable fees to directors for their  attendance at
meetings of the Board.  Subject to Section 3.2, the amount of any such fees, the
time when they become payable, and all other terms pertaining to such fees shall
be determined by the Committee in its sole discretion.

     3.2 Form of  Payment.  Upon the  Committee's  providing  for the payment of
director  fees  pursuant to Section 3.1,  the fees shall be payable in cash,  in
Common  Stock,  or in Options,  as elected by each director to whom the fees are
payable.


                                   ARTICLE IV
                      AMENDMENT, TERMINATION AND ADJUSTMENT

     4.1  Amendment  and  Termination.  The Plan will  terminate on February 11,
2004. No Options will be granted under the Plan after that date of  termination.
The Committee  may at any time amend or revise the terms of the Plan,  including
the  form  and  substance  of the  Option  Agreements  to be used in  connection
herewith. No amendment,  suspension, or termination of the Plan may, without the
consent of the Optionee who has  received an Option  hereunder,  alter or impair
any of that Optionee's  rights or obligations under any Option granted under the
Plan prior to that amendment, suspension, or termination.

     4.2 Adjustment.  If the outstanding  Common Stock is increased,  decreased,
changed into or exchanged for a different number or kind of shares or securities
through  merger,   consolidation,   combination,   exchange  of  shares,   other
reorganization, recapitalization,  reclassification, stock dividend, stock split
or reverse stock split, an appropriate and proportionate adjustment will be made
in the maximum number and kind of Plan Shares as to which Options may be granted
and director fees paid under the Plan. A  corresponding  adjustment will be made
in the number or kind of shares allocated to and purchasable  under  unexercised
Options  or  portions  thereof  granted  prior  to any  such  change.  Any  such
adjustment in  outstanding  Options will be made without change in the aggregate
purchase price applicable to the unexercised  portion of the Option,  but with a
corresponding  adjustment  in the price  for each  share  purchasable  under the
Option. The foregoing adjustments and the manner of application of the foregoing
provisions will be determined  solely by the Committee,  and any such adjustment
may provide for the elimination of fractional share interests.

                                    ARTICLE V
                                   DEFINITIONS

     As used herein with initial capital  letters,  the following terms have the
meanings  hereinafter  set forth  unless the context  clearly  indicates  to the
contrary:

     5.1 "Advisor" means any person performing  advisory or consulting  services
for the Company,  with or without  compensation,  to whom the Company chooses to
grant Options in accordance with the Plan,  provide that bona fide services must
be rendered by such person and such services shall not be rendered in connection
with the offer or sale of securities in a capital raising transaction.

                                                                       EXHIBIT I
                                                                          Page 7

     5.2 "Board" means the Board of Directors of the Company.

     5.3 "Code"  means the Internal  Revenue Code of 1986,  as from time to time
amended.

     5.4 "Committee" shall have the meaning set forth in Section 1.6.

     5.5 "Common  Stock"  means the Class A Common  Stock,  par value $0.001 per
share,  of the  Company  or, in the event  that the  outstanding  shares of such
Common Stock are  hereafter  changed into or exchanged for shares of a different
stock or security of the Company or some other corporation,  such other stock or
security.

     5.6 "Company" means Gulfwest Oil Company, a Texas corporation.

     5.7 "ERISA" means the Employee  Retirement  Income Security Act of 1974, as
amended.

     5.8 "Exchange Act" means the Securities Exchange Act of 1934, as amended.

     5.9 "Fair  Market  Value"  means  such value as will be  determined  by the
Committee on the basis of such factors as it deems appropriate; provided that if
the Common Stock is traded on a national  securities exchange or transactions in
the Common Stock are quoted on the NASDAQ  National  Market  System,  such value
will be determined by the Committee on the basis of the last reported sale price
for the Common Stock on the date for which such  determination  is relevant,  as
reported  on the  national  securities  exchange or the NASDAQ  National  Market
System,  as the case may be. If the Common Stock is not listed and traded upon a
recognized  securities  exchange or on the NASDAQ  National  Market System,  the
Committee  will make a  determination  of Fair Market  Value on the basis of the
closing  bid and asked  quotations  for such  stock on the date for  which  such
determination is relevant (as reported by a recognized stock quotation  service)
or, in the event that there will be no bid or asked  quotations  on the date for
which such determination is relevant,  then on the basis of the mean between the
closing bid and asked  quotations  on the date  nearest  preceding  the date for
which such  determination  is relevant  for which such bid and asked  quotations
were available.

     5.10  "Incentive  Option"  means an Option that  qualifies  as an incentive
stock option under Section 422 of the Code.

     5.11 "Nonqualified Option" means an Option that is not an Incentive Option.

     5.12 "Option" means a stock option granted under the Plan.

     5.13  "Optionee"  means an employee,  director or Advisor to whom an Option
has been granted hereunder.

     5.14  "Option  Agreement"  means an  agreement  between  the Company and an
Optionee with respect to one or more Options.

     5.15  "Plan"   means  the  GulfWest  Oil  Company  1994  Stock  Option  and
Compensation Plan, as amended from time to time.

                                                                       EXHIBIT I
                                                                          Page 8

     5.16 "Plan  Shares" means shares of Common Stock  issuable  pursuant to the
Plan.

     5.17 "Securities Act" means the Securities Act of 1933, as amended.

     5.18 "Ten-Percent Shareholder" means a person who, at the time an Option is
granted,  owns  shares of stock  possessing  more than ten  percent of the total
combined  voting power of all classes of stock of the Company or any  subsidiary
or affiliate of the Company within the meaning of Section 422 of the Code.

                                                                      EXHIBIT II
                                     FORM OF
                            CERTIFICATE OF AMENDMENT
                                       OF
                            ARTICLES OF INCORPORATION

     GULFWEST OIL COMPANY,  a  corporation  organized  and existing  under an by
virtue  of the laws of the  State  of Texas  (the  "Corporation"),  does  hereby
certify that:

     1. The name of the corporation is GulfWest Oil Company.

     2. The Board of Directors of the  Corporation  at a Meeting of the Board of
Directors  held in accordance  with the  provisions of Article 2.37 of the Texas
Business  Corporation  Act of the State of Texas adopted a resolution  proposing
and declaring advisable the following amendment to the Articles of Incorporation
of the Corporation:

     a. The first paragraph of Article One of the Articles of  Incorporation  of
the Corporation is hereby amended to read in its entirety as follows:

     The name of the corporation is GulfWest Energy, Inc.

     3. An Annual Meeting of the Stockholders of the Corporation was held on May
18,  2001,  in  accordance  with the  provisions  of  Article  2.24 of the Texas
Business  Corporation Act of the State of Texas, at which meeting the holders of
more than a majority of the  Corporation's  outstanding  shares of Common  Stock
approved the foregoing amendment to the Corporation's Articles of Incorporation.

     4. The foregoing  amendment to the Corporation's  Articles of Incorporation
was duly  adopted in  accordance  with the  applicable  provisions  of the Texas
Business Corporation Act of the State of Texas.

     5. The number of shares  outstanding  and entitled to vote on the amendment
was 18,445,041.

     6. The number of shares voted for the  amendment was  ________________  and
the number voted against (or abstaining) was _____________shares.

     IN WITNESS  WHEREOF,  the  Corporation  has caused this  certificate  to be
signed by Thomas R. Kaetzer, its President, this 18th day of May, 2001.


                                GULFWEST ENERGY, INC.

                                By: /s/  Thomas R. Kaetzer
                                -------------------------------
                                Thomas R. Kaetzer
                                President



                              GULFWEST OIL COMPANY

                    PROXY SOLICITED BY THE BOARD OF DIRECTORS
                     FOR THE ANNUAL MEETING OF SHAREHOLDERS
                             TO BE HELD MAY 18, 2001

     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  May  18,  2001,  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:

Marshall A. Smith III    Thomas R. Kaetzer    Jim C. Bigham   J. Virgil Waggoner
John E. Loehr            Anthony P. Towell    Steven M. Morris

     ____     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:

--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
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     (2) FOR the amendment of the Company's  Articles of  Incorporation to
         change the name of the Company to "GulfWest Energy, Inc."

     (3) FOR the amendment and  restatement  of the Company's  1994 Stock Option
and Compensation Plan.

     (4) 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 MATTERS (1), (2) and (3) 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, and return promptly in the enclosed envelope.

Dated:                 , 2001
      -----------------          ----------------------------------------
                                 ----------------------------------------

                                 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.