GulfWest Energy Inc. Completes Recapitalization Plan; Adds to Senior Management Team; Converts Preferred Stock to Common.HOUSTON -- GulfWest Energy Inc. (OTCBB OTCBB See OTC Bulletin Board (OTCBB). :GULF) today announced that, pursuant to its recapitalization Recapitalization Restructuring a company's debt and equity mixture often with the aim of making a company's capital structure more stable. Notes: Companies often want to diversify their debt-to-equity ratio to improve liquidity. plan, it has completed additions to its senior management team and has converted shares of its Series A and Series F Convertible Preferred Stock Convertible Preferred Stock Preferred stock that includes an option for the holder to convert the preferred shares into a fixed number of common shares, usually anytime after a predetermined date. Also known as "convertible preferred shares". to common stock. Senior Management Team Allan D. Keel keel 1. the ventrally directed large surface of the bird's sternum, the site of attachment of the major muscles of flight. Called also carina. 2. the prominent area over the sternum in Dachshunds. , the company's recently elected President/CEO, is pleased to announce the election of the following officers to the GulfWest team: Tracy Price - Senior Vice President - Land/Business Development Tommy Atkins Tom´my At´kins prop. n. 1. Any white regular soldier of the British army; also, such soldiers collectively; - said to be fictitious name inserted in the models given to soldiers to guide them in filling out account blanks, etc. - Senior Vice President - Exploration Steven Mengle - Senior Vice President - Engineering Mr. Price joins GulfWest with responsibility for finding and developing new prospect and joint venture opportunities for GulfWest. Mr. Price joins GulfWest after serving as the Senior Vice President - Land/Business Development for The Houston Exploration Company from 2001 until joining GulfWest. Prior to his tenure at The Houston Exploration Company, Mr. Price served as Manager of Land and Business Development for Newfield Exploration Company between 1990 and 2001. From 1986 to 1990 Mr. Price was Land Manager for Apache Apache (əpăch`ē), Native North Americans of the Southwest composed of six culturally related groups. They speak a language that has various dialects and belongs to the Athabascan branch of the Nadene linguistic stock (see Native American Corporation. Prior to Apache, Mr. Price has also served in similar land management capacities at Challenger Minerals Inc. and Phillips Petroleum Company Phillips Petroleum Company was founded in 1917 by L.E. Phillips and Frank Phillips, of Bartlesville, Oklahoma. Their younger brother, Waite Phillips was the benefactor of Philmont Scout Ranch. Phillips Petroleum was headquartered in Bartlesville, Oklahoma. . Mr. Price received his BBA BBA abbr. Bachelor of Business Administration in Petroleum Land Management from the University of Texas. Mr. Atkins joins GulfWest with responsibility for generating new exploitation and exploration opportunities for GulfWest, both internally and through industry partners. Mr. Atkins joins GulfWest after serving as the General Manager - Gulf of Mexico Noun 1. Gulf of Mexico - an arm of the Atlantic to the south of the United States and to the east of Mexico Golfo de Mexico Atlantic, Atlantic Ocean - the 2nd largest ocean; separates North and South America on the west from Europe and Africa on the east for Newfield Exploration Company where he was employed from 1998 until joining GulfWest. Prior to his tenure at Newfield, Mr. Atkins served in various exploration capacities with EOG Resources EOG Resources NYSE: EOG is a Fortune 600 company based in Houston, Texas. This company is one of the largest independent oil and natural gas companies in the United States. History 1999
Mr. Mengle joins GulfWest with responsibility for the technical evaluation The study and investigations by a developing agency to determine the technical suitability of material, equipment, or a system for use in the Military Services. See also operational evaluation. , review and reserve maximization of GulfWest's existing reserve base, a large portion of which is proved, developed, non-producing or proved undeveloped, as well as for evaluating the reserves on prospects and acquisitions that GulfWest may pursue in the future. Mr. Mengle joins GulfWest after serving as the Shelf Asset Manager - Gulf of Mexico, for Kerr McGee Corporation subsequent to the 2004 merger with Westport Resources. Mr. Mengle was with Westport Resources from 1998 to 2004, where he started Westport's Gulf Coast/Gulf of Mexico drilling and production operations and where he worked with Mr. Keel. Prior to joining Westport, Mr. Mengle also served in various drilling, production and marketing management capacities at Norcen Energy Resources, Kirby Exploration and Mobil Oil Corp. Mr. Mengle received his BS in Petroleum Engineering from the University of Texas. Mr. Keel commented, "GulfWest Energy is very fortunate to be able to attract this talented group of industry executives, which combined with Tom Kaetzer, our Senior Vice President of Operations, and Joe Grady Joe Grady (1918 - October 10, 2000) was an American radio personality. He was born in Philadelphia, Pennsylvania and grew up in Broomall, Pennsylvania. He hosted the 950 Club, with Ed Hurst, on WPEN, a Philadelphia radio station. , our Senior Vice President & Chief Financial Officer, forms a strong industry management team that I very much look forward to working with at GulfWest. Starting out with this team and our strong equity sponsor in Oaktree Capital, combined with a well-defined development program, positive cash flow and new financial flexibility, gives us the opportunity to pursue a balanced strategy of quickly developing proved reserves proved reserves The quantity of minerals expected to be recoverable under current economic and operating conditions. The amount of proved reserves is important in valuing the stock of a company with significant holdings in natural resources. in this high commodity price environment and the ability to identify and pursue new opportunities in the exploration and production arena." Conversion of Series A and Series F Preferred Stock Stock shares that have preferential rights to dividends or to amounts distributable on liquidation, or to both, ahead of common shareholders. Preferred stock is given preference over common stock. Holders of preferred stock receive dividends at a fixed annual rate. to Common Stock GulfWest is also pleased to report that as part of the recent recapitalization of the Company, holders of 3,250 shares of the Company's Series A Preferred Stock (liquidation The collection of assets belonging to a debtor to be applied to the discharge of his or her outstanding debts. A type of proceeding pursuant to federal Bankruptcy preference of $1,625,000) have converted that stock into 4,642,859 shares of common stock, based on a conversion price of $0.35 per common share. The conversion of the Series A into common, combined with the conversion of the Series F Preferred Stock into 170,000 shares of common stock also in conjunction with the recapitalization, results in a post-recapitalization of approximately 24.9 million shares of outstanding common stock. The holders of the remaining 6,700 shares of the Series A Preferred Stock elected to convert their holdings into 6,700 shares of a new Series H Preferred Stock (liquidation preference of approximately $3.4 million), which is junior in priority to the Series G Preferred Stock, but senior to all other series of preferred stock of the Company. On an "as converted" basis, assuming the conversion of all convertible securities to common stock and the exercise of all warrants and options granted and outstanding, the fully diluted shares outstanding after the February 28, 2005 recapitalization would be approximately 103.8 million shares. Completion of Recapitalization Plan With the completion of the sale of the Series G Preferred Stock to Oaktree Capital Management Oaktree Capital Management LLC is a US investment management corporation which operates a number of investment entities commonly known as hedge funds of approximately $40 Billion. affiliates, the use of proceeds to pay down substantially all outstanding debt of the Company, the conversion of a portion of the Series A Preferred Stock and the Series F Preferred Stock to common stock, price-protecting future estimated production from producing properties in this high commodity price environment and the completion of the new management team substantially completes the Company's recapitalization plan. GulfWest is also soliciting proposals for a new senior revolving credit Revolving Credit A line of credit where the customer pays a commitment fee and is then allowed to use the funds when they are needed. It is usually used for operating purposes, fluctuating each month depending on the customers current cash flow needs. facility to further enhance its financial flexibility for general corporate purposes as well as for pursuing acquisition opportunities. Below is a summary of the audited December 31, 2004 balance sheet of the Company, adjusted to reflect proforma balances assuming that the sale of the Series G Preferred Stock sale to Oaktree Capital, and all other transactions related to that sale, had happened on December 31, 2004.
12/31/04 Proforma 12/31/04
Actual Adjustments Proforma
------------ ------------ ------------
Cash $411 $1,636 $2,047
Other Current Assets 1,803 1,803
Property, Plant & Equipment,
net 50,123 1,169 51,292
Other Assets 5,364 (1,757) 3,607
------------ ------------ ------------
Total Assets 57,701 1,048 58,749
------------ ------------ ------------
Notes Payable $29,855 (29,726) 129
Accounts Payable & Accrued
Expenses 5,596 (3,519) 2,077
Income Taxes Payable 118 118
Long-term Debt 805 (743) 62
Asset Retirement Obligations 1,145 1,145
Derivative Instruments 1,505 1,505
Equity 18,677 35,036 53,713
------------ ------------ ------------
Total Liabilities &
Stockholders' Equity $57,701 $1,048 $58,749
------------ ------------ ------------
This press release includes "forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. " as defined by the Securities and Exchange Commission ("SEC"). Such statements include those concerning GulfWest's strategic plans, expectations and objectives for future operations. All statements included in this press release that address activities, events or developments that GulfWest expects, believes or anticipates will or may occur in the future are forward-looking statements. These statements are based on certain assumptions GulfWest made based on its experience and perception of historical trends, current conditions, expected future developments and other factors it believes are appropriate under the circumstances. Such statements are subject to a number of assumptions, risks and uncertainties, many of which are beyond GulfWest's control. Statements regarding future production are subject to all of the risks and uncertainties normal incident to the exploration for and development and production of oil and gas. These risks include, but are not limited to, inflation or lack of availability of goods and services In economics, economic output is divided into physical goods and intangible services. Consumption of goods and services is assumed to produce utility (unless the "good" is a "bad"). It is often used when referring to a Goods and Services Tax. , environmental risks, drilling risks and regulatory changes. Investors are cautioned that any such statements are not guarantees of future performance and that actual results or developments may differ materially from those projected in the forward-looking statements. Please refer to our filings with the SEC, including our Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. for the year ended December 31, 2004 for a further discussion of these risks. |
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