FORM 10-Q

                                  UNITED STATES

                       SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

             (X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
                       THE SECURITIES EXCHANGE ACT OF 1934

                For the quarterly period ended September 30, 1996

                                       OR

            ( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
                       THE SECURITIES EXCHANGE ACT OF 1934
                 for the transition period from ______ to ______

                         Commission file number 1-12108

                              GULFWEST OIL COMPANY
              (Exact name of Registrant as specified in its charter)

                          Texas                           87-0444770
                   (State or other jurisdiction         (IRS Employer
                      of incorporation)                Identification No.)

                2644 Sherwood Forest Plaza
                        Suite 229
                  Baton Rouge, Louisiana                       70816
              (Address of principal executive offices)      (zip code)

                                 (504) 293-1100
              (Registrant's telephone number, including area code)


Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(D) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing require-
ments for the past 90 days.

                           NO ___                  YES  X  

The number of shares outstanding of each of the issuer's classes of common
stock, as of the latest practicable date, November 14, 1996, was 1,521,154
shares of Class A Common Stock, $.001 par value.






<PAGE>


<TABLE>
                              GULFWEST OIL COMPANY

                         FORM 10-Q FOR THE QUARTER ENDED
                               SEPTEMBER 30, 1996
<CAPTION>
                                                                                                  Page of
                                                                                                 Form 10-Q
<S>                                                                                                 <C>    
                  
Part I:           Financial Statements

Item 1.           Financial Statements
                  Balance Sheets, September 30, 1996,                                                 
                   and December 31, 1995                                                             3
                  Statements of Operations-for the three months
                    and nine months ended September 30, 1996, and 1995                               5
                  Statements of Cash Flows-for the nine
                    months ended September 30, 1996, and 1995                                        6
                  Notes to Financial Statements                                                      7

Item 2.           Management's Discussion and Analysis
                    of Financial Condition and Results
                    of Operations                                                                   10

Part II:          Other Information

Item 4.           Submission of Matters to a Vote of Security Holders                               13

Item 6.           Exhibits and Reports on 8-K                                                       13

Signatures                                                                                          14
</TABLE>


















                                        2
<PAGE>

                          PART I. FINANCIAL INFORMATION

ITEM 1.           FINANCIAL STATEMENTS.
<TABLE>

                      GULFWEST OIL COMPANY AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                    SEPTEMBER 30, 1996 AND DECEMBER 31, 1995
                                   (UNAUDITED)


<CAPTION>
 
                                                                                              September 30,    December 31,
                                                                                                  1996             1995       
                                     ASSETS
<S>                                                                                            <C>              <C> 
                                                                                               
Current Assets:
  Cash and Cash Equivalents                                                                    $   138,907       $   10,548
  Accounts Receivable - Trade                                                                      265,772          153,619
  Accounts and Notes Receivable - Related Parties                                                   14,900           15,100
  Prepaid Expenses                                                                                  14,567           37,592
                                                                                               -----------       ----------

    Total Current Assets                                                                           434,146          216,859

Oil & Gas Properties, Using the Successful Efforts Method of Accounting:
  Undeveloped Properties                                                                            37,910           37,910
  Developed Properties                                                                           4,017,359        3,340,419
  Gathering Systems                                                                                 20,048           20,048

Other Property and Equipment                                                                       339,274          278,864

Less - Accumulated Depreciation, Depletion,
    and Amortization                                                                            (1,064,939)        (783,375)
                                                                                                -----------        --------

    Net Oil and Gas Properties and
      Other Property and Equipment                                                               3,349,652        2,893,866

Long-Term Notes Receivable - Related Party, Net of Current Portion                                 168,453           98,675
                                                                                                 ---------        ---------

    Total Assets                                                                               $ 3,952,251       $3,209,400
                                                                                               ===========       ==========
</TABLE>
  





       The accompanying notes are an integral part of these consolidated
                              financial statements.

                                        3
<PAGE>

<TABLE>

                      GULFWEST OIL COMPANY AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                    SEPTEMBER 30, 1996 AND DECEMBER 31, 1995
                                   (UNAUDITED)

<CAPTION>


                                                                                             September 30,     December 31,
                                                                                                 1996              1995      

                      LIABILITIES AND STOCKHOLDERS' EQUITY
<S>                                                                                           <C>               <C>    

Current Liabilities:
  Current Portion of Long-Term Debt                                                           $    478,115      $    59,906
  Current Portion of Long-Term Debt - Related Parties                                              306,863            -
  Notes Payable                                                                                    203,189           87,675
  Accounts Payable - Trade                                                                         416,792          329,495
  Accrued Expenses                                                                                  59,697           66,489
                                                                                               -----------      -----------

    Total Current Liabilities                                                                    1,464,656          543,565

Long-Term Debt, Net of Current Portion                                                             907,087        1,451,938
Long-Term Debt, Related Parties                                                                       -             226,101

Commitments and Contingencies                                                                         -                -

Stockholders' Equity:
  Preferred Stock, Par Value at $.01, 10,000,000 Shares
    Authorized, 900 and -0- Shares Issued and Outstanding
    In 1996 and 1995, respectively                                                                 402,103             -
  Common Stock, Par Value at $.001, 20,000,000 Shares
     Authorized, 1,517,904 and 1,086,125 Shares Issued and Outstanding
     in 1996 and 1995, respectively                                                                  1,518            1,086
  Additional Paid-in Capital                                                                     4,525,288        3,596,514
  Retained Deficit                                                                              (3,348,401)      (2,609,804)
                                                                                                ----------       ----------

    Total Stockholders' Equity                                                                   1,580,508          987,796
                                                                                                 ---------       ----------   

    Total Liabilities and Stockholders'
      Equity                                                                                   $ 3,952,251       $3,209,400
                                                                                               ===========       ==========
</TABLE>










        The accompanying notes are an integral part of these consolidated
                             financial statements.

                                        4
<PAGE>

<TABLE>

                      GULFWEST OIL COMPANY AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                   FOR THE THREE MONTHS AND NINE MONTHS ENDED
                           SEPTEMBER 30, 1996 AND 1995
                                   (UNAUDITED)
<CAPTION>

                                                                    Three Months                       Nine Months
                                                                   Ended Sept. 30,                   Ended Sept. 30,
                                                                  1996              1995              1996             1995    
<S>                                                          <C>                <C>              <C>               <C>  
                                                             ------------------------------      -----------------------------

Revenues:
  Oil and Gas Sales                                           $   283,340       $   102,653      $   757,937       $   340,505
  Gathering System Income                                           2,402             6,662            5,373            25,605
  Prospect Generation Fees                                           -                 -                -               30,000
  Management Fees                                                  54,095            24,000          136,536            24,000
                                                              -----------       -----------      -----------       -----------
    Total Revenues                                                339,837           133,315          899,846           420,110
                                                              -----------       -----------      -----------       -----------
Costs and Expenses:
  Lease Operating Expenses                                        176,711            88,724          387,888           256,904
  Lease Abandonments                                                 -                 -              85,696              -
  Depreciation and Depletion                                       99,813            93,279          281,565           228,242
  General and Administrative                                      261,271           227,935          719,779           671,797
                                                              -----------       -----------       ----------       -----------
    Total Costs and Expenses                                      537,795           409,938        1,474,928         1,156,943
                                                              -----------       -----------       ----------       -----------
Income (Loss) From Operations                                    (197,958)         (276,623)        (575,082)         (736,833)

Other Income and Expense:
  Interest Income                                                  11,210             8,389           26,827            42,665
  Interest Expense                                                (57,108)          (44,069)        (172,671)          (79,352)
                                                              -----------       -----------       ----------       -----------
    Total Other Income and Expense                                (45,898)          (35,680)        (145,844)          (36,687)
                                                              -----------       -----------       ----------       -----------
Net Income (Loss) Before Taxes                                   (243,856)         (312,303)        (720,926)         (773,520)

Income Tax Provision                                                 -                 -                -                 -    
                                                              -----------       -----------      -----------       -----------
Net Income (Loss)                                             $  (243,856)      $  (312,303)     $  (720,926)      $  (773,520)
                                                              ===========       ===========      ===========       ===========

Earnings Per Share and Common Stock
  Equivalents                                                 $      (.18)      $      (.31)     $      (.61)      $      (.77)

Weighted Average Number of Shares                               1,360,931         1,000,000        1,184,393         1,000,000
                                                              ===========       ===========      ===========       ===========
</TABLE>



        The accompanying notes are an integral part of these consolidated
                             financial statements.

                                        5
<PAGE>

<TABLE>

                      GULFWEST OIL COMPANY AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
              FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995
                                   (UNAUDITED)
<CAPTION>


                                                                                                  1996              1995   
                                                                                              ------------       ----------
<S>                                                                                           <C>               <C>    
                               
Cash Flows Provided (Used) By Operating Activities:
  Net Income (Loss)                                                                            $  (720,926)      $ (773,520)

  Adjustments to Reconcile Net Income (Loss) to Net
     Cash Provided (Used) by Operating Activities:
      Depreciation, Depletion, and Amortization                                                    281,564          228,242
      Lease Abandonments                                                                            85,696             -
      (Increase) Decrease in Accounts Receivable - Other, Net                                     (112,153)        (153,851)
      (Increase) Decrease in Prepaid Expenses                                                       23,025           (4,489)
      Increase (Decrease) in Accounts Payable - Trade                                               87,297          138,012
      Increase (Decrease) in Accrued Expenses                                                       (6,792)          76,000
                                                                                               -----------       ----------
        Net Cash Provided (Used) By Operating Activities                                          (362,289)        (489,606)
                                                                                               -----------       ----------
Cash Flows Provided (Used) By Investing Activities:
  Purchase of Oil and Gas Properties                                                              (762,636)        (948,888)
  Sale of Oil and Gas Properties                                                                      -              35,125
  Sale of Gathering System                                                                            -             166,338
  Purchase of Other Equipment                                                                      (60,410)         (29,720)
                                                                                               -----------       -----------
        Net Cash Provided (Used) By Investing Activities                                          (823,046)        (777,145)
                                                                                               -----------       ----------
Cash Provided (Used) By Financing Activities:
  Amortization Prepaid Interest                                                                     25,002            -
  (Payments) on Notes Payable -Related Parties                                                    (119,238)           -
  (Increase) Decrease in Notes Receivable - Related Party                                          (69,578)         121,042
  (Increase) Decrease in Other Assets                                                                 -             (42,139)
  Proceeds From Long-Term Debt                                                                      49,344          657,507
  (Payments) on Long-Term Debt                                                                        -              (5,098)
  Proceeds From Notes Payable - Related Parties                                                    200,000           75,000
  Proceeds From Notes Payable - Other                                                              109,000          459,000
  (Payment) on Notes Payable - Other                                                              (185,474)            -
   Proceeds From Sale of Common Stock                                                              402,535             -
   Proceeds From Sale of Preferred Stock                                                           902,103             -      
                                                                                               -----------        ---------- 
        Net Cash Provided (Used) By Financing Activities                                         1,313,694         1,265,312
                                                                                               -----------        ----------     
Increase (Decrease) in Cash and Cash Equivalents                                                   128,359            (1,439)

Cash and Cash Equivalents, Beginning of Period                                                      10,548            30,861
                                                                                               -----------        ----------
Cash and Cash Equivalents, End of Period                                                       $   138,907        $   29,422
                                                                                               ===========        ==========

Cash Interest Paid                                                                             $   168,911        $   49,748

                                                                                               ===========        ==========
</TABLE>


        The accompanying notes are an integral part of these consolidated
                             financial statements.

                                        6
<PAGE>

                      GULFWEST OIL COMPANY AND SUBSIDIARIES
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                           SEPTEMBER 30, 1996 AND 1995
                                   (UNAUDITED)

1.   During interim  periods,  GulfWest Oil Company ("the Company")  follows the
     accounting  policies set forth in its Annual Report on Form 10-K filed with
     the  Securities  and Exchange  Commission.  Users of financial  information
     produced  for interim  periods  are  encouraged  to refer to the  footnotes
     contained in the Annual Report when reviewing interim financial results.

     In management's  opinion,  the accompanying  interim  financial  statements
     contain  all  material  adjustments,  consisting  only of normal  recurring
     adjustments  necessary  to present  fairly  the  financial  condition,  the
     results of  operations,  and the  statements  of cash flows of GulfWest Oil
     Company for the interim periods.

     The Company has two wholly-owned  subsidiaries,  WestCo  Producing  Company
     ("WestCo")  and  GulfWest  Texas  Company  ("GulfWest  Texas"),  both Texas
     corporations. WestCo was organized July 14, 1995 and operates properties in
     which the Company  owns working  interests.  GulfWest  Texas was  organized
     September  23,  1996 and is the  owner of  record  for  certain  properties
     acquired on October 10, 1996. WestCo has one wholly-owned subsidiary, VanCo
     Well Service,  Inc.  ("VanCo")  which was  organized  September 5, 1996 and
     operates well servicing  equipment  under contract to the Company and third
     parties. All material intercompany transactions and balances are eliminated
     upon consolidation.

2.   As of September  30, 1996,  the Company had two note  receivables  from The
     Holifield Companies ("Holifield") in the gross amount of $184,000 and a net
     amount of $13,000,  after reserves for bad debt. Management is currently in
     negotiations  with Holifield to settle these notes for cash or the transfer
     of assets.

3.   On January 23, 1996,  the Company  received  $100,000 as final funding of a
     $150,000  note  payable  to an  individual  due in July 1997.  The  initial
     funding of $50,000 was received in December  1995. At the completion of the
     funding,  the  individual  received  warrants to purchase  15,000 shares of
     Common  Stock at a price of $1.00 per share.  The warrants  were  exercised
     during March 1996.

4.   On January 25, 1996, the Company issued  warrants to purchase up to 175,000
     shares  of  Common  Stock at $1.50 per  share to a  financial  advisor  for
     assistance  in arranging  additional  financing  for the Company.  Also, on
     February  5, 1996,  the  Company  issued  warrants to purchase up to 40,000
     shares of Common Stock at $2.25 per share to a public relations consultant.
     None of these warrants has been exercised to date.


                                       7
<PAGE>

5.   On March 1, 1996,  the Company  completed a Private  Offering of Cumulative
     Convertible  Class A Preferred  Stock with a stated dividend rate of 10% of
     purchase price per share,  payable quarterly as declared.  During the first
     quarter,  1,000 shares of the Preferred  Stock were sold for  $500,000.  In
     August 1996, the Preferred  Stock was converted to 142,857 shares of Common
     Stock.  On August 22, 1996,  the Board of Directors  declared a dividend on
     the Class A Preferred Stock for the period during which the Preferred Stock
     was  outstanding  and authorized  the issuance of Common Stock,  with a set
     value of $1.75 per share,  as payment of the dividend.  On August 31, 1996,
     the Company  issued 10,097 shares of Restricted  Common Stock to the holder
     of the Class A Preferred  Stock in lieu of cash for  declared  dividends of
     $17,671.23. (See "Item 2. Management's Discussion and Analysis of Financial
     Condition  and  Results  of  Operations-Financial   Condition  and  Capital
     Resources".)

6.   On March 27,  1996,  the Company  entered into  agreements  with two of its
     officers to convert deferred compensation in the amount of $47,340 to notes
     payable due April 1, 1997.  Additionally,  it entered into  agreements with
     ten existing note holders to extend the due date on their notes to April 1,
     1997 and pay accrued interest of $28,450 on that date.

7.   During the second and third  quarters,  the Company sold 30,000 and 176,000
     shares, respectively,  of Common Stock at a net price of $1.58 per share in
     a private offering.  The holders were also issued a warrant to purchase one
     share of Common Stock at an exercise  price of $1.75 for each two shares of
     Common Stock purchased. The Company also issued warrants to purchase 75,000
     shares  of  Common  Stock at an  exercise  price of  $1.75  per  share to a
     financial advisor for assistance in this offering.

8.   In a Private  Placement to a group of investors  completed in May 1996, the
     Company sold 2,000 shares of Cumulative Convertible  Participating Class AA
     Preferred  Stock,  with a stated dividend rate of 10% of purchase price per
     share,  payable annually on a cumulative basis as declared.  Each shares of
     the Preferred  Stock is convertible to 100 shares of Common Stock,  subject
     to  antidilution  provisions.  In  addition  to  dividends,  the  Class  AA
     Preferred  Stockholders  are entitled to a distribution of up to 25% of the
     Company's net profits from the properties  purchased with their funds, with
     the combined return on their investment not to exceed 20%. The holders were
     also issued  warrants to  purchase up to 50,000  shares of Common  Stock at
     $5.75  per  share.  Funding  of  $450,000  has been  drawn  and was used to
     purchase  interests in oil and gas  properties.  The remainder of the funds
     will be drawn as needed to purchase additional oil and gas interests, or to
     enhance properties the Company currently owns.

9.   During the second quarter, the Company issued 11,000 shares of Common Stock
     and warrants to purchase up to 175,000  shares of Common Stock at $1.50 per
     share,  75,000 shares of Common Stock at $2.00 per share, and 50,000 shares
     of Common  Stock at $5.00 per share to various  financial  consultants  for
     assistance in raising additional capital.

10.  During the  second  quarter,  the  Company  entered  into an  agreement  to
     purchase  working  interests in a group of oil properties in West Texas for
     $3,100,000 and tendered a non- refundable deposit of $200,000. The purchase
     of this property was completed on October 10, 1996, with the Company paying
     $1,600,000 in cash and giving the seller a note for $1,500,000.

     To fund the  $1,600,000  in cash,  the  Company  used the net  proceeds  at
     October 10, 1996 from the Company's Private Offering of Class AAA Preferred
     Stock and  warrants.  The  Preferred  Stock and warrants  were sold in $500
     units,  each unit consisting of one share of Preferred  Stock, a warrant to
     purchase  up to 50 shares of Common  Stock at $1.75 per share and a warrant
     to purchase up to 50 shares of Common Stock at $4.50 per share. The holders
     of the  Preferred  Stock are entitled to receive  dividends on a cumulative
     basis,  as  declared,  at the rate of 9% per  annum of  purchase  price per
     share.  The Preferred Stock is convertible,  in whole or in part, to Common
     Stock at a conversion rate equal to the aggregate liquidation price of $500
     per share, plus accrued and unpaid  dividends,  divided by a price which is
     the lesser of 70% of the average closing bid price of the Company's  Common
     Stock, as reported by the Nasdaq,  for the fifteen trading days that end on
     the third day preceding the date of the  conversion or $3.50 per share.  If
     the  Preferred  Stock  has not  been  converted  to  Common  Stock  and the
     dividends  are in  arrears  for more than four  quarters,  on any  dividend
     payment  date after  January 1, 1998,  the holder may elect to exchange the
     Preferred Stock on a prorata basis for Common Stock of GulfWest Texas,  the
     subsidiary  which owns the  properties  acquired  with the  proceeds of the
     offering.

11.  On September 4, 1996,  the Company  received  $200,000 from a company whose
     president  is a  director  of  GulfWest  and issued a 60-day  note  bearing
     interest  at the rate of 10% per annum.  The note  proceeds  were used as a
     non-refundable deposit on the West Texas properties and the note was repaid
     subsequent  to September  30, 1996 from proceeds of the Class AAA Preferred
     Stock Offering (See Note 10 above).

12.  On September 30, 1996, the Company's  principal financial advisor exercised
     warrants it had previously  been issued to purchase 45,625 shares of Common
     Stock at the purchase  price of $.50 per share.  The financial  advisor had
     been issued warrants to purchase 20,625 shares as a commission for the sale
     of units of the  Company's  1995  Private  Offering of  Debentures  and the
     remaining  warrants  for  25,000  shares  were  issued  for  the  advisor's
     assistance in raising additional capital.




                                        8
<PAGE>

ITEM 2.           MANAGEMENT'S DISCUSSION AND ANALYSIS
                  OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Overview

     GulfWest Oil Company  ("GulfWest" or the  "Company") is an independent  oil
and gas company  primarily  engaged in the  acquisition of producing oil and gas
properties  with proved  reserves  which have the potential for increased  value
through continued development and enhanced recovery technology. Its objective is
to significantly increase the production of such properties through workovers of
the wells, horizontal drilling from existing wellbores,  development drilling or
other enhancement  operations.  At September 30, 1996, the Company owned working
interests  in 65 gross  producing  oil and gas wells and royalty  interests in 2
additional wells.

     The Company's  subsidiary,  WestCo Producing Company ("WestCo"),  currently
operates  approximately  one-half of the  properties  in which the Company  owns
interests. As the Company continues to grow through acquisitions,  it intends to
purchase a  significant  working  interest  in each  property so that WestCo can
become the operator.

     On July 17, 1995, the Company acquired from Sikes Producing,  Inc. ("SPI"),
beneficial  ownership  of an  additional  42.5% of the working  interests  in 31
proved  producing  oil and gas  properties  located in the  Madisonville  Field,
Texas. Under a Restructuring Agreement, GulfWest contributed its 37.5% ownership
in a gas pipeline  gathering  system and assumed a $640,000  nonrecourse note as
payment for the working  interests.  GulfWest also purchased certain  additional
working  interests in  Madisonville  from SPI for a purchase  price of $100,000,
with $20,000 paid in cash at closing and a promissory note for $80,000 which was
subsequently  paid in full in  1996.  It was  also  agreed  that  the  Company's
subsidiary,  WestCo would assume operations of the 31 wells, effective August 1,
1995. These actions increased the Company's proved reserves by 44% over December
31, 1994 and provided  additional  operating  income to the subsidiary,  in that
WestCo receives a management fee of $500 per month per producing well.

     On June 6, 1996, the Company bought a 70% working interest in two fields in
Polk and Hardin  Counties,  Texas that had 16 producing wells for  approximately
$120,000  and  purchased a 50% working  interest in a field in Brazoria  County,
Texas  containing  6 wells  for  approximately  $90,000.  The  Company's  WestCo
subsidiary  is managing the wells in Polk and Hardin  Counties for a fee of $250
per well.

     Subsequent  to  September  30, 1996,  the Company  purchased a 100% working
interest in a field in Crockett County, Texas (the Vaughn Field) for $3,100,000.
This acquisition includes  approximately 280 oil wells on 5,100 acres. Currently
82 of the wells are active,  producing  an aggregate of 230 barrels per day. The
Company plans to place 80 of the inactive wells back in production by the end of
the first  quarter of 1997 through  enhancement  and  recompletions,  increasing
production  to  approximately  420 barrels of oil per day. The  properties  have
proved  developed  producing  and  non-producing  oil reserves  estimated at 1.3
million barrels.

                                        9
<PAGE>

Results of Operations

Comparative results of operations for the periods indicated are discussed below.

Three-Month Period Ended September 30, 1996 compared to Three Month Period Ended
September 30, 1995.

     Oil and gas sales for the third quarter  increased from $102,653 in 1995 to
$283,340 in 1996, due primarily to the  acquisition  of the  additional  working
interests from SPI discussed above and increases in the price of oil from $17 to
$22 per  barrel and the price of  natural  gas from  $1.26 to $1.85 per Mcf.  In
1996,  WestCo  received  $54,095 in management  fees for operating the producing
wells compared to $24,000 in 1995. The increase is due to a full quarter in 1996
versus two months in 1995 and the additional wells being managed in 1996.

     Lease  operating  expenses  for the period in 1996  increased  by 100% over
1995, while revenues  increased 180%. The increase in operating expenses for the
newly acquired interests was offset by decreases due to 1) certain  unproductive
wells  being  plugged  and  abandoned  in  1995;  2)  successful  workovers  and
recompletions  on certain  wells in 1995;  and, 3) cost  control  and  reduction
measures  implemented by WestCo following the assumption of operations of August
1, 1995.

     Depreciation and depletion  increased for the period due to the acquisition
of the additional working interests from SPI and other smaller acquisitions.

     Interest  expense for the third quarter of 1996 compared to 1995  increased
due to the issuance of $500,000 in debentures  with an annual interest rate of 9
1/2%, a $150,000 note payable to an individual  with an annual  interest rate of
7%, and the assumption of a $640,000  nonrecourse  note with an annual  interest
rate of 8% in conjunction with the purchase of the interests from SPI.


     Nine-Month  Period Ended  September  30, 1996 compared to Nine Month Period
Ended September 30, 1995.

     Oil and gas revenues increased by $474,597 in the first nine months of 1996
compared to the same  period in 1995 due to the  acquisition  of the  additional
working  interests  and the  increase  in oil and gas  prices  discussed  above.
Gathering  system  income  declined  by  $19,000  as a result  of the  Company's
contributing  its interest in the pipeline in exchange for working  interests in
the Madisonville wells.

     The Company recorded $30,000 of prospect generation fees from the sale of a
partial interest in three producing  properties  during the first nine months of
1995.  During  1996,  the  Company  received  $136,536  in  management  fees for
operating the  producing  wells  compared to $24,000  during the period in 1995.
Operations did not commence until August 1, 1995.

                                       10
<PAGE>

     Lease operating expenses,  depreciation and depletion all increased for the
period  in 1996  compared  to  1995,  due to the  additional  working  interests
acquired  effective August 1, 1995. The increase in lease operating expenses was
offset by decreases due to factors  discussed above.  Interest expense increased
for the reasons cited above.


Financial Conditions and Capital Resources

     During the first nine months of 1996,  the cash needs of the  Company  have
been met by the receipt of $1,663,000 in net proceeds,  including  $358,000 from
notes payable,  $902,000 from the sale of Preferred  Stock and $403,000 from the
sale of Common Stock. Of these proceeds, the Company used approximately $362,000
to offset  negative  operating  cash  flow,  $175,000  to pay off note  holders,
$763,000 for the acquisition and enhancement of oil and gas properties,  and the
remainder  is to be used as a cash  reserve  while  the  Company  continues  its
efforts to increase  cash flow.  At September  30,  1996,  the Company had total
assets of $3,952,251,  negative working capital of $1,030,510 and  shareholders'
equity of  $1,392,401,  compared to December 31, 1995 when the Company had total
assets of $3,209,400,  negative  working  capital of $326,706 and  shareholders'
equity of $987,796. (See "Notes to the Consolidated Financial Statements").

     Management's  plans for growth and  profitability  during the  remainder of
1996  include  taking  several  measures to increase  production  and  operating
revenues:  1) acquiring  ownership  and  operations  of  additional  oil and gas
properties;   2)  increasing  cash  flow  from  properties  currently  owned  by
recompleting and enhancing  certain wells;  and, 3) drilling  horizontally  from
existing wellbores to develop proved reserves.  The Company intends to raise the
necessary  capital for these projects  through the sale of additional  shares of
preferred  and/or Common Stock,  the  arrangement of joint ventures with outside
investors,  and the securing of nonrecourse financing.  The Company's ability to
succeed in these goals is subject to a number of variables, including production
levels,  oil and gas market prices,  and the availability of funds. There can be
no  assurances  that  operations  and  other  capital  resources  will  increase
sufficiently to allow the Company to become cash flow positive in 1996.



                                       11
<PAGE>

                           PART II. OTHER INFORMATION


ITEM 4.           SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

     The  Company's  annual  meeting  was held on July 2, 1996.  The only matter
submitted to a vote of the shareholders was the election of directors.  All 5 of
the serving directors were re- elected.


ITEM 6.           EXHIBITS AND REPORTS ON FORM 8-K.

         (a)      Exhibits -

                  None


         (b)      Form 8-K -

                  None

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<PAGE>


                                   SIGNATURES


     Pursuant  to the  requirements  of  Securities  Exchange  Act of 1934,  the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.



                                                     GULFWEST OIL COMPANY
                                                         (Registrant)

                                                   
Date: November 14, 1996                           By: /s/ Jim C. Bigham
                                                      -----------------------
                                                      Jim C. Bigham
                                                      Executive Vice President
                                                      and Secretary

                                                           
Date:  November 14, 1996                          By: /s/ John F. Bendure  
                                                      -----------------------
                                                      John F. Bendure
                                                      Vice President of Finance
                                                      and Treasurer




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