SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
                                (Amendment No. )

Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only
    (as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to ss.240.14a-11(c) or ss.240.14a-12

                     Coastal Caribbean Oils & Minerals, Ltd.
 ................................................................................
                (Name of Registrant as Specified In Its Charter)


 ................................................................................
     (Name of Person(s) Filing Proxy Statement if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):
[X]   No fee required.
[ ]   Fee computed on table below per Exchange Act Rules 14a-6(i)(4) 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 (Set forth the amount on which the
         filing fee is calculated and state how it was determined):


      ..........................................................................
      4) Proposed maximum aggregate value of transaction:


      ..........................................................................
      5) Total fee paid:


      ..........................................................................
[ ]   Fee paid previously with preliminary materials.
[ ]   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:


      ..........................................................................
      2)  Form, Schedule or Registration Statement No.:


      ..........................................................................
      3)  Filing Party:


      ..........................................................................
      4)  Date Filed:


      ..........................................................................


<PAGE>







                     Annual General Meeting of Shareholders
                                  May 20, 1998

Dear Shareholder:

         It's a pleasure for us to extend to you a cordial  invitation to attend
the 1998 Annual  General  Meeting of  Shareholders  of Coastal  Caribbean Oils &
Minerals,  Ltd.  at the  offices of Conyers,  Dill & Pearman,  Clarendon  House,
Church Street, Hamilton, Bermuda on Wednesday, May 20, 1998 at 9:00 A.M.

         While we are aware that most of our shareholders are unable  personally
to attend the Annual Meeting, proxies are solicited so that each shareholder has
an  opportunity  to vote on all matters  that are  scheduled  to come before the
meeting.  Whether or not you plan to attend,  please  take a few  minutes now to
vote,  sign, date and return your proxy in the enclosed  postage-paid  envelope.
Regardless of the number of shares you own, your vote is important.

         In addition to helping us conduct business at the annual meeting, there
is another  reason for you to return your proxy vote card.  Under the  abandoned
property law of some states,  a shareholder may be considered  "missing" if that
stockholder  has failed to  communicate  with us in writing.  The return of your
proxy vote card qualifies as written communication with us.

         The Notice of Annual General Meeting and Proxy  Statement  accompanying
this letter describe the business to be acted on at the meeting.

         As in the  past,  members  of  management  will  review  with  you  the
Company's  results  and will be  available  to respond to  questions  during the
meeting.  For those of you who will not be able to attend,  your  Annual  Report
contains current information on the status of the Florida litigation and related
matters.

         We look forward to seeing you at the meeting.

                                                           Sincerely,



                                                           Benjamin W. Heath
April 15, 1998                                             President



<PAGE>


                     COASTAL CARIBBEAN OILS & MINERALS, LTD.
                         Clarendon House, Church Street
                                Hamilton, Bermuda
                NOTICE OF ANNUAL GENERAL MEETING OF SHAREHOLDERS
                                  May 20, 1998

         NOTICE IS HEREBY GIVEN that the Annual General  Meeting of Shareholders
of COASTAL  CARIBBEAN  OILS & MINERALS,  LTD.  (the  "Company")  will be held on
Wednesday,  May 20, 1998,  at 9:00 A.M.,  local time, at the offices of Conyers,
Dill & Pearman,  Clarendon  House,  Church Street,  Hamilton,  Bermuda,  for the
following purposes:

         To receive the report of the  independent  auditors  and the  financial
statements for the year ended December 31, 1997 and to vote on the following:

         1.       To elect one member of the Board of Directors;

         2.       To ratify  the  appointment  of  independent  auditors  of the
                  Company for the year ending December 31, 1998 and to authorize
                  the  Board  of  Directors  to fix  the  remuneration  of  such
                  auditors;

         3.       To transact  such other  business as may properly  come before
                  the meeting or any adjournment or postponement thereof.

         This  notice and proxy  statement  and the  enclosed  form of proxy are
being sent to shareholders of record as of April 15, 1998 to enable such holders
to state their instructions with respect to the voting of their shares.  Proxies
should be returned  to the  American  Stock  Transfer & Trust  Company,  40 Wall
Street, 46th Floor, New York, NY 10005 in the reply envelope enclosed.

                                             By Order of the Board of Directors,



                                             James R. Joyce
                                             Assistant Secretary


Dated:  April 15, 1998

--------------------------------------------------------------------------------
                                RETURN OF PROXIES

         SHAREHOLDERS  WHO ARE UNABLE TO ATTEND THE ANNUAL  GENERAL  MEETING ARE
URGED TO VOTE BY PROMPTLY SIGNING,  DATING, AND RETURNING THE ACCOMPANYING PROXY
IN THE REPLY ENVELOPE PROVIDED.
--------------------------------------------------------------------------------



<PAGE>




                     COASTAL CARIBBEAN OILS & MINERALS, LTD.
                         Clarendon House, Church Street
                                Hamilton, Bermuda
                                 ---------------

                                 PROXY STATEMENT
                                 ---------------

                               GENERAL INFORMATION

         This  proxy  statement  is  furnished  to the  shareholders  of Coastal
Caribbean  Oils  &  Minerals,  Ltd.,  a  Bermuda  company  (the  "Company"),  in
connection with the  solicitation of proxies on behalf of the Board of Directors
for use at the 1998 Annual  General  Meeting of  Shareholders  to be held at the
offices of Conyers,  Dill & Pearman,  Clarendon House, Church Street,  Hamilton,
Bermuda,  on  Wednesday,  May 20,  1998 at 9:00  A.M.,  local  time,  and at any
adjournments or postponements  thereof.  The notice of meeting,  proxy statement
and proxy are being mailed on or about April 15, 1998. A proxy may be revoked at
any time before it is voted by (1) so  notifying  the  Company in  writing;  (2)
signing and dating a new and different  proxy card; or (3) voting your shares in
person or by your duly appointed agent at the meeting.

         The Company expects to solicit proxies primarily by mail. To the extent
necessary to assure sufficient  representation of shares at the meeting, proxies
may be solicited by telephone and in person.  The Company will request  brokers,
banks and other  nominees  to forward  copies of proxy  material  to  beneficial
owners or other persons for whom they hold common stock and to obtain  authority
for the execution and delivery of proxies. In addition, the Company has retained
Morrow & Co.  Inc.,  to assist in the  distribution  and  solicitation  of proxy
materials for an estimated fee of $6,500 plus out-of-pocket  expenses.  The only
other expenses anticipated are the ordinary expenses incurred in connection with
the preparation, assembling, mailing and other distribution of the material. All
costs of the solicitation will be borne by the Company.

         The record  date for the  determination  of  shareholders  entitled  to
notice of and to vote at the meeting has been fixed by the Board of Directors as
the close of  business  on April 15,  1998.  On that date there were  40,056,358
shares of common  stock  outstanding,  which were held by  approximately  13,000
shareholders of record.  The holders of twenty-five  percent of the total number
of shares  entitled to be voted at the  meeting,  present in person or by proxy,
shall  constitute a quorum for the  transaction  of business.  Each  outstanding
share is entitled to one vote at the meeting.  Abstentions and broker votes will
be counted  neither as votes in favor of nor as votes opposed to any proposition
brought before the meeting.

<PAGE>

         Bye-Law 1 provides in part that:

                  A resolution  passed by both (i) simple majority of votes cast
                  by such  Members as,  being  entitled so to do, vote in person
                  or, in the case of any Member being a corporation, by its duly
                  authorised  representative  or, where proxies are allowed,  by
                  proxy and (ii) a simple  majority  in  number  of the  Members
                  present  in  person  or in the  case  of any  Member  being  a
                  corporation  by its duly  authorised  representative  or where
                  proxies are allowed,  by proxy,  at a general meeting of which
                  not less than  fourteen  (14) clear days' Notice (save where a
                  longer  period is  required by these  Bye-laws)  has been duly
                  given PROVIDED THAT when shares are held by members of another
                  company,   firm,   partnership,   association  or  other  body
                  corporate or unincorporate and such persons act in concert, or
                  when  shares are held by or for a group of Members  who act in
                  concert, such persons shall be deemed to be one Member.

         The Company will determine whether  shareholders have acted in concert,
depending on the circumstances and the evidence,  if any, that shareholders were
in fact so acting and should therefore be treated as one shareholder.

         Bye-Law 1 provides in part that:

                  The term "person acting in concert" includes:

                  (i) persons  who,  pursuant to an  agreement,  arrangement  or
                  understanding (whether formal or informal), actively cooperate
                  either in the acquisition or  holding by any of them of shares
                  or the beneficial ownership of shares,  or rights over shares,
                  carrying voting rights in the Company,  or in the  exercise of
                  voting rights with respect to shares in the Company;

                  (ii) a company with any of its  directors  (or their  spouses,
                  minor children, nominees, related trusts or companies in which
                  any director holds or  beneficially  owns ten percent (10%) or
                  more of the shares,  or rights over  shares,  carrying  voting
                  rights);

                  (iii) a company  with the  trustees  or managers of any of its
                  pension,  provident  or employee  benefit  funds or any of its
                  employee stock option schemes;

                  (iv) a  person  who  is a fund  manager,  with  an  investment
                  company,  unit trust or other  person whose  investments  such
                  person  manages on a  discretionary  basis,  in respect of the
                  relevant investment accounts;


<PAGE>


                  (v) a  company  with   its  parent  company   or  any  of  its
                  subsidiaries; and

                  (vi) a  company,  in which  ten  percent  (10%) or more of the
                  shares, or rights over shares, carrying voting rights are held
                  or beneficially  owned by a person,  with any other company in
                  which ten percent (10%) or more of the shares,  or rights over
                  shares,  carrying voting rights are held or beneficially owned
                  by the same person.

         The Company  may  require  brokers,  banks and other  nominees  holding
shares  for  beneficial  owners to  furnish  information  with  respect  to such
beneficial  owners  for the  purpose  of  applying  this  provision.  The  proxy
delivered with this proxy statement  includes a  representation  that the person
signing the proxy is not acting in concert as described above.

         SHAREHOLDERS  MAY OBTAIN  WITHOUT  CHARGE A COPY OF THE COMPANY'S  MOST
RECENT ANNUAL REPORT ON FORM 10-K FILED WITH THE UNITED  STATES  SECURITIES  AND
EXCHANGE  COMMISSION UPON WRITTEN REQUEST TO COASTAL  CARIBBEAN OILS & MINERALS,
LTD., C/O G&O'D INC, 149 DURHAM ROAD, OAK PARK - UNIT 31,  MADISON,  CONNECTICUT
06443.

                                 PROPOSAL NO. 1

                              ELECTION OF DIRECTORS

Nominees

         One  director  is to be elected  for a three year term  expiring at the
2001 Annual  Meeting of  Shareholders,  pursuant to the  Bye-laws of the Company
which  established  three classes of directors to be elected on a rotating basis
at each successive Annual Meeting of Shareholders,  and in each case until their
respective successors shall have been elected and duly qualified.

         The nominee is currently a director of the Company.  The named  Proxies
will  vote  all  properly  executed  proxies  for  the  election  of the  person
hereinafter named in the following table unless directed otherwise.


<PAGE>


         The following table sets forth  information  concerning the nominee for
election  and those  directors  whose terms of office are to continue  after the
meeting:

<TABLE>
<CAPTION>
                        MANAGEMENT RECOMMENDS THAT SHAREHOLDERS VOTE FOR THE ELECTION OF THE NOMINEE.

                                                  Other Offices
                               Director           Held Company                         Age and Business Experience
           Name                  Since              Company                              For the Past Five Years

Nominee For Three Year Term Expiring at the 2001 Annual Meeting
<S>                              <C>                  <C>            <C>
Nicholas B. Dill                 1997                 None            Mr.  Nicholas  B. Dill is a member of the law firm of Conyers,
                                                                      Dill &  Pearman,  Hamilton,  Bermuda,  the  Company's  Bermuda
                                                                      counsel.  Mr.  Dill  is a  director  of  Worldwide  Securities
                                                                      Ltd.,  First Olsen Tankers Ltd.,  Bermuda  Electric  Light Co.
                                                                      Ltd., Watlington Waterworks Ltd. and SAL Ltd.  Age sixty-five.

Directors Continuing in Office With Terms to Expire at the 1999 Annual Meeting
Benjamin W. Heath                1962               President         Mr.  Heath is  Chairman  and a director  of Coastal  Petroleum
                                                                      Company ("Coastal  Petroleum"),  the Company's  subsidiary,  a
                                                                      director  of Magellan  Petroleum  Corporation  ("MPC"),  and a
                                                                      director   of  Canada   Southern   Petroleum   Ltd.   ("Canada
                                                                      Southern").  Age eighty-three.

Phillip W. Ware                  1985            Vice President       Mr.  Ware,  a  geologist,   has  been   President  of  Coastal
                                                                      Petroleum  since April 1985.  He is also a director of Coastal
                                                                      Petroleum.  Age forty-eight.

Directors Continuing in Office With Terms to Expire at the 2000 Annual Meeting
Graham B. Collis                 1998               Secretary         Mr.  Collis  is a member  of the law firm of  Conyers,  Dill &
                                                 Audit Committee      Pearman,  Hamilton,  Bermuda,  the Company's  Bermuda counsel.
                                                                      Mr.  Graham  Collis was  elected on February 6, 1998 to fill a
                                                                      vacancy  created by the death of Charles T.  Collis on January
                                                                      26, 1998.  Age thirty-eight.

John D. Monroe                   1981            Audit Committee      Mr. Monroe is a real estate broker and was formerly  President
                                                                      of  Monroe-Buman  Real Estate,  Inc., a real estate  brokerage
                                                                      and development  firm in Naples,  Florida.  Mr. Monroe is also
                                                                      a director of Coastal Petroleum.  Age seventy-one.
</TABLE>


<PAGE>



         The Company is not aware of any arrangements or understandings  between
any of the individuals named above and any other person pursuant to which any of
the individuals named above was selected as a director and/or executive officer.
The  Company  is not aware of any family  relationship  among the  officers  and
directors of the Company or its subsidiary.

Board of Directors; Committees; Attendance

         The only standing committee of the Board is the Audit Committee.

         The principal  functions of the Audit  Committee  are: (1) to recommend
the particular  persons or firm to be employed by the Company as its independent
auditors;  (2)  to  consult  with  the  persons  or  firm  so  chosen  to be the
independent  auditors  with  regard  to the plan of  audit;  (3) to  review,  in
consultation with the independent  auditors,  their report of audit, or proposed
report of audit,  and the  accompanying  management  letter,  if any; and (4) to
consult with the independent auditors (periodically,  as appropriate, out of the
presence of management) with regard to the adequacy of internal controls. During
1997, the Audit Committee,  which was comprised of Mr. Charles T. Collis and Mr.
John D. Monroe, met twice.

         The Company does not presently have standing nominating or compensation
committees of the Board of Directors.  The functions  that would be performed by
such  committees  are  performed  by the  Board  of  Directors.  A stock  option
committee is appointed periodically.

         There were seven meetings of the Board of Directors of the Company held
during  1997.  Only Mr.  Dill  attended  less than  seventy-five  percent of the
aggregate  number of meetings of the Board of Directors  and the  committees  on
which they served.


<PAGE>


            ADDITIONAL INFORMATION CONCERNING DIRECTORS AND OFFICERS

Executive Compensation

         The following table sets forth certain summary  information  concerning
the compensation of Mr. Benjamin W. Heath, President and Chief Executive Officer
of the  Company.  No  executive  officers  of the  Company  earned  in excess of
$100,000 during the year 1997.

<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------------------
                                             Summary Compensation Table
---------------------------------------------------------------------------------------------------------------------
                                           Annual Compensation               Long Term
                                                                            Compensation
             Name and                                                          Award                All Other
        Principal Position               Year            Salary ($)       Options/SARs(#)      Compensation ($)(1)
---------------------------------------------------------------------------------------------------------------------
<S>                                      <C>               <C>                 <C>                   <C>
Benjamin W. Heath, President             1997              40,000                -                   12,000
and Chief Executive Officer              1996              40,000                -                   12,000
                                         1995              40,000              60,000                12,000
---------------------------------------------------------------------------------------------------------------------
</TABLE>

(1)  Reimbursement  for office  expense $6,000 in 1997,  1996 and 1995.  Payment
to SEP-IRA  pension plan $6,000 in 1997,  1996, and 1995.

Compensation of Directors

         John D. Monroe  received a director's fee of $15,000 for the year 1997.
Mr. Charles Collis and Mr. Nicholas Dill each received $7,500 in directors' fees
in 1997.  Mr. C. Dean Reasoner,  a director  until his  resignation on March 20,
1997,  received  $3,750 in  directors'  fees in 1997.  In 1998,  Messrs.  Graham
Collis,  Dill and Monroe will receive  directors'  fees currently at the rate of
$15,000 per year.

Compensation Committee Interlocks and Insider Participation

         The entire board of directors  constitutes the compensation  committee.
Benjamin  W.  Heath  and  Phillip  W.  Ware are  directors  and the  Presidents,
respectively,  of Coastal Caribbean and Coastal Petroleum. Mr. Heath also serves
as a director of MPC and Canada Southern Petroleum Ltd. ("CSP").


<PAGE>


Compensation Committee Report on Executive Compensation

         The  Compensation   Committee,   consisting  of  the  entire  board  of
directors, submits the following report for 1997.

         The Board of Directors does not maintain specific compensation policies
applicable to the Company's executive officers, and the Board has established no
specific relationship between corporate performance and executive  compensation.
Compensation has been determined based on the skills,  experience and leadership
executive officers have brought to the performance of their duties, and on their
ability to protect,  defend and pursue the Company's ability to realize value on
the Company's exploration leases.

         Nicholas B. Dill
         Benjamin W. Heath
         John D. Monroe
         Phillip W. Ware

Tax Deductibility of Compensation

         Because it is not likely that compensation to any executive will exceed
$1 million,  and because the Company is a Bermuda corporation not subject to the
tax laws of the United  States,  the  Company  does not  expect  that it will be
required  to  comply  with  the  Omnibus  Reconciliation  Act of 1993  regarding
executive compensation.

Stock Options

         The following table provides  information about stock options exercised
during fiscal 1997.

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------------
                            Aggregated Option/SAR Exercises in 1997 and December 31, 1997
                                                  Option/SAR Values
-----------------------------------------------------------------------------------------------------------------------
                          Shares                          Number of Unexercised      Value of Unexercised In-The-Money
                         Acquired          Value             Options/SARs (#)                Options/SARs ($)
                      On Exercise (#)  Realized ($)        at December 31, 1997            at December 31, 1997
-----------------------------------------------------------------------------------------------------------------------
        Name                                           Exercisable    Unexercisable    Exercisable     Unexercisable
-----------------------------------------------------------------------------------------------------------------------

<S>                         <C>             <C>           <C>               <C>             <C>              <C>
Benjamin W. Heath           -0-             -0-           72,000            -            171,000             -
-----------------------------------------------------------------------------------------------------------------------
</TABLE>


<PAGE>


                                PERFORMANCE GRAPH

         The graph  below  compares  the  cumulative  total  returns,  including
reinvestment of dividends, if applicable, of Company Stock with the companies in
the NASDAQ Index and an Industry Group Index (Media  General's Oil,  Natural Gas
Production Industry Group).

         The  chart   displayed  below  is  presented  in  accordance  with  SEC
requirements.  Shareholders  are cautioned  against drawing any conclusions from
the data contained  therein,  as past results are not necessarily  indicative of
future performance.

                 COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN

                         1992      1993      1994      1995      1996      1997

Coastal Caribbean       100.00    56.52     113.04    182.60    486.92    304.33
NASDAQ Stock Index      100.00    119.76    134.47    142.87    179.78    180.11
Industry Group          100.00    119.95    125.94    163.35    202.99    248.30



<PAGE>


Certain Business Relationships

G&O'D INC

         During the year 1997,  $172,160 was paid or accrued for  accounting and
administrative  services,  office  facilities  and support staff provided to the
Company by G&O'D INC, a firm that is owned by Mr. James R. Joyce,  Treasurer and
Assistant  Secretary.  The services rendered by G&O'D INC to the Company include
the  following:  preparation  and filing of all reports  required by Federal and
State governments,  preparations of reports and registration statements required
under the Federal  securities laws;  preparation and filing of interim,  special
and annual reports to shareholders;  maintaining  corporate ledgers and records;
furnishing office facilities and record retention. G&O'D is also responsible for
the investment of the Company's  available funds and other banking relations and
securing adequate insurance to protect the Company. G&O'D is responsible for the
preparation   and   maintenance  of  all  the  minutes  of  any  directors'  and
shareholders'  meetings,  arranging all meetings of directors and  shareholders,
coordinating  the activities  and services of all companies and firms  rendering
services to the Company,  responding to  stockholder  inquiries,  and such other
services as may be  requested  by the  Company.  G&O'D  maintains  and  provides
current information about the Company's  activities so that the directors of the
Company may keep  themselves  informed as to the Company's  activities.  G&O'D's
fees are based on the time spent in performing these services to the Company.

Royalty Interests

         The State of  Florida  oil,  gas and  mineral  leases  held by  Coastal
Petroleum on  approximately  3,700,000  acres of submerged  lands along the Gulf
Coast and  certain  inland  lakes and rivers are  subject to certain  overriding
royalties  aggregating  1/16th as to oil, gas and sulphur,  and  13/600ths as to
minerals other than oil, gas and sulphur. Of the overriding royalties as to oil,
gas and sulphur, a 1/90th overriding royalty, and of the overriding royalties on
minerals other than oil, gas and sulphur, a 1/60th overriding  royalty,  is held
by Johnson & Company,  a Connecticut  partnership  which is used as a nominee by
the members of the family of the late William F. Buckley.  A trust, in which Mr.
Heath has a 54.4% beneficial interest, has a beneficial interest in such royalty
interest  held by Johnson &  Company.  No  payments  have been made to Johnson &
Company (or to the  beneficial  owners of such royalty  interests)  in more than
thirty years.



<PAGE>


         In 1990, Coastal Petroleum granted to officers 3.4% of any net recovery
from execution on or  satisfaction of judgment or from settlement of the lawsuit
against the State of Florida as follows:

                                                           Relationship to
                                   Percent of             Coastal Petroleum
         Name                     Net Recovery            at Date of Grant

         Benjamin W. Heath            1.25          Chairman of Board
         Phillip W. Ware              1.25          President
         Arthur B. O'Donnell          0.30          Vice President and Treasurer
         James R. Joyce               0.30          Assistant Treasurer
         James J. Gaughran            0.30          Secretary

         SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

         The following  table sets forth  information as to the number of shares
of the Company's Stock owned  beneficially by each person who is known to be the
beneficial  owner of more than 5% of the  outstanding  shares of common stock of
the Company.

                                   Amount and Nature of
                                   Beneficial Ownership
   Name and Address of         Shares Held    Shares Subject
   Beneficial Owner             Directly         to Option      Percent of Class

Leon S. Gross                   4,190,031            -                10.46
3900 Ford Road
Philadelphia, PA  19131

Lykes Minerals Corp.                -           7,800,000*            16.3**
111 East Madison Street
P.O. Box 1690
Tampa, FL  33601
------------------------
*   Lykes Minerals Corp. has purchased a total of 78 shares of Coastal Petroleum
which are convertible into 7,800,000 shares of the Company.

**  Assumes all outstanding options are exercised to acquire shares of the
Company.


<PAGE>


         The following  table sets forth  information as to the number of shares
of the  Company's  common  stock  owned  beneficially  at April 1,  1998 by each
director of the Company and by all directors and executive officers as a group:

                                            Amount and Nature of
            Name of                         Beneficial Ownership
          Individual                     Shares Held                  Percent of
           or Group                       Directly         Options       Class

Graham B. Collis                                  -              -         *
Nicholas B. Dill                           3,355(1)              -         *
Benjamin W. Heath                            20,000         72,000         *
John D. Monroe                                  400         60,000         *
Phillip W. Ware                               3,791        120,000         *
Directors and executive officers
  as a group (a total of 6 persons)          37,691        302,000         *
------------------------
*        Less than 1%.
(1)      Beneficiary of an estate holding these shares.

                                 PROPOSAL NO. 2

               RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS

         The Board of Directors has appointed Ernst & Young LLP as the Company's
independent  auditors for the year ending December 31, 1998.  Representatives of
Ernst & Young LLP are not  expected  to be  present  at the  meeting.  The proxy
permits voting for or against,  or abstaining from voting for, the  ratification
of the appointment of auditors.  Unless otherwise indicated,  the shares will be
voted  in  favor  of  ratifying  the  appointment  of  Ernst & Young  LLP and to
authorize the Board of Directors to fix the remuneration of such auditors.

                MANAGEMENT RECOMMENDS A VOTE FOR PROPOSAL NO. 2.

                                  OTHER MATTERS

         The Board of Directors knows of no other matters that will be presented
for  consideration at the meeting,  other than those matters referred to in this
Proxy Statement.


<PAGE>


                              STOCKHOLDER PROPOSALS

         Notice of Business to be Brought Before a Shareholders' Meeting

         Bye-Law 61 provides in part as follows:

                      (2)  The  annual  general  meeting  of the  Company  shall
                  consider   the   election  of   Directors,   the  receipt  and
                  consideration  of the profit  and loss  account,  the  balance
                  sheet,  the notes thereto and the reports of the Directors and
                  Auditors  thereon,  the  appointment  of the Auditors and such
                  other business as the Board  considers may properly be brought
                  before the meeting and shall be held on such date as the Board
                  shall each year fix.  The day,  place and hour of each  annual
                  general meeting shall be specified in the notice of the annual
                  general  meeting.  The meeting may be  postponed  or adjourned
                  from time to time and place to place at the  discretion of the
                  Chairman until its business is completed.

                           To be properly  brought before any general meeting by
                  Members,  business  must be (a) specified in the notice of the
                  meeting  (or  any  supplement  thereto)  given  by or  at  the
                  direction of the Board, (b) otherwise  properly brought before
                  the  meeting  by or at  the  direction  of the  Board,  or (c)
                  specified  in a notice  or  requisition  given by  Members  in
                  accordance  with  the  Act  and  delivered  to or  mailed  and
                  received at the registered office of the Company not less than
                  ninety (90) days before the  anniversary  date of the previous
                  annual  general  meeting of the  Company  or ninety  (90) days
                  before  any  other  general  meeting  of the  Company  is held
                  specifying:

                           (a) a  description  of  the  business  to be  brought
                  before  the  annual  general   meeting  and  the  reasons  for
                  conducting such business at the annual general meeting;

                           (b) the name and address of the Member  intending  to
                  propose such business;

                           (c) the  class and  number  of shares of the  Company
                  which are beneficially owned by the Member;

                           (d)  a   representation   that  the   Member  is  the
                  registered  holder of  sufficient  shares  required by the Act
                  entitled  to vote at such  meeting  and  intends  to appear in
                  person or by proxy at the  meeting to present  such  business;
                  and

                           (e)  any  material  interest  of  the  Member in such
                  business.


<PAGE>


          Nominations of Persons for Election to the Board of Directors

         Bye-Law 62 provides in part as follows:

                           (2) Only persons who are nominated in accordance with
                  the  procedures  set forth in these Bye-laws shall be eligible
                  for election as Directors. Nominations of persons for election
                  to the Board of Directors of the Company shall only be made at
                  an annual  general  meeting  of the  Company  (a) by or at the
                  direction  of the Board of  Directors  or (b) by any Member of
                  the Company  entitled to vote for the election of Directors at
                  the meeting who complies with the notice  procedures set forth
                  in this Section. Nominations by Members shall be made pursuant
                  to timely  notice in writing to the  Secretary of the Company.
                  To be  timely,  a Member's  notice  shall be  delivered  to or
                  mailed and received at the principal  executive offices of the
                  Company  not less than  sixty  (60) days nor more than  ninety
                  (90) days prior to the meeting; provided, however, that in the
                  event that less than seventy (70) days' notice or prior public
                  disclosure  of the  date of the  meeting  is  given or made to
                  Members, notice by the Member to be timely must be so received
                  not later than the close of business on the 10th day following
                  the day on which such  notice of the date of the  meeting  was
                  mailed or such public  disclosure  was made.  For  purposes of
                  this Section,  public  disclosure shall be deemed to have been
                  made to Members when  disclosure of the date of the meeting is
                  first made in a press  release  reported by the Dow Jones news
                  Services, Associated Press, Reuters Information Services, Inc.
                  or comparable  national news service or in a document publicly
                  filed by the Company with  Securities and Exchange  Commission
                  pursuant  to  Sections  13,  14 or  15(d)  of  the  Securities
                  Exchange Act of 1934, as amended.

                      Each such notice shall set forth:

                      (a) the name and address of the Member who intends to make
                  the nomination and of the person or persons to be nominated;

                      (b) a representation that the Member is a holder of record
                  of stock of the Company  entitled to vote at such  meeting and
                  intends  to appear in  person  or by proxy at the  meeting  to
                  nominate the person or persons specified in the notice;

                      (c) a description of all  arrangements  or  understandings
                  between the Member and each  nominee  and any other  person or
                  persons  (naming  such  person or  persons)  pursuant to which
                  nomination or nominations are to be made by the Member; and


<PAGE>


                      (d) such other information regarding each nominee proposed
                  by such  Member as would be required to be included in a proxy
                  statement  filed pursuant to the proxy rules of the Securities
                  and Exchange  Commission,  had the nominee been nominated,  or
                  intended to be nominated, by the Board of Directors.

                      To  be  effective,   each  notice  of  intent  to  make  a
                  nomination given hereunder shall be accompanied by the written
                  consent of each  nominee to being  named in a proxy  statement
                  and to serve as a Director of the Company if elected.

                      No person  shall be eligible for election as a Director of
                  the Company unless nominated in accordance with the procedures
                  set forth in these  Bye-laws.  The  presiding  officer  of the
                  meeting shall, if the facts warrant,  determine and declare to
                  the meeting that  nomination  was not made in accordance  with
                  the procedures prescribed by these Bye-laws,  and if he should
                  so  determine,  he shall so  declare  to the  meeting  and the
                  defective nomination shall be disregarded.

         Shareholder  proposals relating to the Company's Annual General Meeting
of Shareholders for the fiscal year ending December 31, 1998 must be received by
the  Company  at its  office,  c/o  Conyers,  Dill & Pearman,  Clarendon  House,
Hamilton, Bermuda, by December 16, 1998. The fact that a shareholder proposal is
received in a timely manner does not insure its inclusion in the Company's proxy
materials.  The Company  reserves the right to omit any proposals from its Proxy
Statement and Form of Proxy where such omission is permitted by the rules of the
Securities and Exchange Commission.

         The contents and the sending of this Proxy Statement have been approved
by the directors of the Company.

         IT  IS  IMPORTANT  THAT  PROXIES  BE  RETURNED   PROMPTLY.   THEREFORE,
SHAREHOLDERS  WHO DO NOT  EXPECT TO ATTEND  THE  MEETING  IN PERSON ARE URGED TO
SIGN, DATE, AND RETURN THE ENCLOSED PROXY IN THE REPLY ENVELOPE PROVIDED.

                                             By Order of the Board of Directors,

                                             James R. Joyce
                                             Assistant Secretary

Dated:  April 15, 1998