Here's two ways to drill into subfolders:

1. Requires a reference to MS Scriptiong Runtime:

Option Compare Text

Sub ListXLFiles()
   Dim FilesCollection As New Collection, Counter As Long
   FindFiles "c:\excel", "*.xls", FilesCollection, True
   Sheet1.Columns(1).Clear
   For Counter = 1 To FilesCollection.Count
       Sheet1.Cells(Counter, 1).Value = FilesCollection(Counter)
   Next
End Sub

Sub FindFiles(FolderName As String, FileSpec As String, Col As Collection,
Recurs As Boolean)
   Dim fso As Scripting.FileSystemObject
   Dim fld As Scripting.Folder
   Dim fldSub As Scripting.Folder
   Dim fle As Scripting.file
   Set fso = New Scripting.FileSystemObject
   Set fld = fso.GetFolder(FolderName)
   For Each fle In fld.Files
       If fle.Name Like FileSpec Then Col.Add fle.Path
   Next
   If Recurs Then
       For Each fldSub In fld.SubFolders
           FindFiles fldSub.Path, FileSpec, Col, True
       Next
   End If
   Set fso = Nothing
End Sub

2. Uses FileSearch which I believe is not in Excel 2007.

Sub FileSearchList()
   Dim i As Integer
   Sheet1.Columns(2).Clear
   With Application.FileSearch
       .NewSearch
       .LookIn = "c:\excel"
       .SearchSubFolders = True
       .Filename = "*.xls"
       .FileType = msoFileTypeExcelWorkbooks
       If .Execute() > 0 Then
           For i = 1 To .FoundFiles.Count
               Sheet1.Cells(i, 2).Value = .FoundFiles(i)
           Next i
       Else
           MsgBox "There were no files found."
       End If
   End With
End Sub

Hi

As Jim said at the beginning of his post, put your Path in cell A1 of
the sheet.
A1  G1\Gulf

As for where you enter the code, Right click on the sheet tab.
Choose View Code, which will open up the Visual Basic Editor.
Choose Insert>Module
Copy Jim's code and paste into this module
Go back to the Excel sheet, View tab>Macros dropdown>View>Highlight
macro "a">Run

For more information on getting started with macros then

David McRitchie has lots of useful help on his site at
http://www.mvps.org/dmcritchie/excel/install.htm
http://www.mvps.org/dmcritchie/excel/getstarted.htm