UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                                    FORM 10-Q

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

For the quarterly period ended             June 30, 1998
                               --------------------------------------

[   ]    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     1-4668

                     COASTAL CARIBBEAN OILS & MINERALS, LTD.
 ................................................................................
             (Exact name of registrant as specified in its charter)

               BERMUDA                                              NONE
 ................................................................................
 (State or other jurisdiction of                              (I.R.S. Employer
 incorporation or organization)                              Identification No.)

Clarendon House, Church Street, Hamilton, Bermuda                   NONE
 ................................................................................
     (Address of principal executive offices)                    (Zip Code)

                                  441-295-1422
 ................................................................................
              (Registrant's telephone number, including area code)


 ................................................................................
              (Former name, former address and former fiscal year,
                         if changed since last report)

         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
l934  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 requirements for the past 90 days.

                                                            |X|  Yes     |_|  No

         The number of shares outstanding of the issuer's single class of common
stock as of July 17, 1998 was 40,056,358.



<PAGE>


                                                        
                         PART I - FINANCIAL INFORMATION

                          ITEM 1 - FINANCIAL STATEMENTS

                     COASTAL CARIBBEAN OILS & MINERALS, LTD.
                             (A Bermuda Corporation)
                           A Development Stage Company

                           CONSOLIDATED BALANCE SHEET
                           (Expressed in U.S. dollars)
                                   (unaudited)

<TABLE>
<CAPTION>
                                                                                June 30,          December 31,
                                                                                  1998                1997
                                                                              ------------        ------------
                                 ASSETS

Current assets:
<S>                                                                           <C>                 <C>         
  Cash and cash equivalents                                                   $    528,431        $    316,333
  Accounts and interest receivable                                                  90,214              77,302
  U.S. Government securities                                                     2,446,786           3,433,035
  Prepaid insurance                                                                239,107             213,840
                                                                              ------------        ------------
          Total current assets                                                   3,304,538           4,040,510
                                                                              ------------        ------------

Unproved oil, gas and mineral properties (full cost method)                      4,614,194           4,395,132

Other                                                                               28,006              26,765
                                                                              ------------        ------------
Total assets                                                                  $  7,946,738        $  8,462,407
                                                                              ============        ============

                  LIABILITIES, MINORITY INTERESTS AND
                          SHAREHOLDERS' EQUITY

Current liabilities:
  Accounts payable and accrued liabilities                                    $    153,765        $     63,975
                                                                              ------------        ------------

Minority interests                                                                       -                   -

Shareholders' equity:
  Common stock, par value 12(cent) per share:
  Authorized  - 250,000,000 shares
  Outstanding - 40,056, 358 shares                                               4,806,763           4,806,763
  Capital in excess of par value                                                28,693,033          28,693,033
                                                                              ------------        ------------
                                                                                33,499,796          33,499,796
  Deficit accumulated during development stage                                 (25,706,823)        (25,101,364)
                                                                              ------------        ------------
  Total shareholders' equity                                                     7,792,973           8,398,432
                                                                              ------------        ------------

Total liabilities, minority interests and shareholders' equity                $  7,946,738        $  8,462,407
                                                                              ============        ============
</TABLE>


<PAGE>


                         PART I - FINANCIAL INFORMATION

                          ITEM 1 - FINANCIAL STATEMENTS

                     COASTAL CARIBBEAN OILS & MINERALS, LTD.
                             (A Bermuda Corporation)
                           A Development Stage Company

                      CONSOLIDATED STATEMENT OF OPERATIONS
                           (Expressed in U.S. dollars)
                                   (unaudited)



<TABLE>
<CAPTION>
                                                                                                                     From inception
                                                   Three months ended                     Six months ended           (Jan. 31, 1953)
                                                        June 30,                              June 30,                  to June 30,
                                                1998               1997              1998                1997              1998
                                               -------            -------           -------             -------      ---------------


<S>                                            <C>                <C>               <C>                <C>             <C>        
Interest and other income                      $46,807            $72,159           $98,781            $154,617         $3,604,907
                                               -------            -------           -------            --------         ----------

Expenses:
  Legal fees and costs                         149,005            162,939           262,944             321,151         11,732,847
  Administrative expenses                      123,588            103,021           256,878             226,411          6,626,027
  Salaries                                      41,500             39,000            80,500              78,000          2,830,778
  Shareholder communications                    56,697             93,934            90,957             128,733          3,526,988
  Exploration costs                              5,480              2,503            12,961              10,055            765,555
  Lawsuit judgments                                  -                  -                 -                   -          1,941,916
  Minority interests                                 -                  -                 -                   -           (632,974)
  Other                                              -                  -                 -                   -            364,865
  Contractual services                               -                  -                 -                   -          2,155,728
                                               -------            -------           -------             -------         ----------
                                               376,270            401,397           704,240             764,350         29,311,730
                                               -------            -------           -------             -------         ----------

Net loss                                     $(329,463)         $(329,238)        $(605,459)          $(609,733)
                                             ==========         ==========        ==========          ==========

Deficit accumulated during
  development stage                                                                                                   $(25,706,823)
                                                                                                                      =============

Average number of shares
  Outstanding (Basic & Diluted)             40,056,358         40,056,358        40,056,358          40,054,929
                                            ==========         ==========        ==========          ==========

Net loss per share (Basic & Diluted)          $(.01)             $(.01)            $(.02)              $(.02)
                                              ======             ======            ======              ======
</TABLE>





<PAGE>



                         PART I - FINANCIAL INFORMATION

                          ITEM 1 - FINANCIAL STATEMENTS

                     COASTAL CARIBBEAN OILS & MINERALS, LTD.
                             (A Bermuda Corporation)
                           A Development Stage Company
                      CONSOLIDATED STATEMENT OF CASH FLOWS
                           (Expressed in U.S. Dollars)
                                   (unaudited)


<TABLE>
<CAPTION>
                                                                                                    From inception
                                                                    Six months ended                (Jan. 31, 1953)
                                                                        June 30,                      to June 30,
                                                               1998                 1997                 1998
                                                            ----------           ----------         --------------
Operating activities:
<S>                                                         <C>                  <C>                 <C>          
Net loss                                                    $ (605,459)          $ (609,733)         $(25,706,823)
Adjustments to reconcile net loss
  to net cash used for operating activities:
    Minority interest                                                                     -              (632,974)
    Exploration and other                                                                 -               755,974
    Net change in:
       Accounts receivable                                     (12,912)             (33,966)              (90,214)
       U.S. Government securities                              986,249              669,209               986,249
       Prepaid insurance                                       (25,267)              44,480              (239,107)
       Current liabilities                                      89,790             (196,729)              153,764
       Other                                                    (1,241)                (859)              470,900
                                                            ----------           ----------          ------------
Net cash provided by (used for) operating                      431,160             (127,598)          (24,302,231)
                                                            ----------           ----------          ------------
  activities

Investing activities:
  Additions to oil, gas, and mineral
    Properties net of assets acquired
    for common stock                                          (219,062)            (330,359)           (4,614,194)
  Reimbursement of lease rentals and
    other expenses                                                   -                    -             1,243,086
  U.S. Government securities sold (purchased)                        -                1,095            (3,433,035)
  Purchase of fixed assets                                           -                    -               (61,649)
                                                            ----------           ----------          ------------
Net cash provided by (used for) investing
  Activities                                                  (219,062)            (329,264)           (6,865,792)
                                                            ----------           ----------          ------------

Financing activities:
  Cash proceeds from sale of
    common stock less expenses                                       -                    -            26,342,205
  Shares issued upon exercise of
    options                                                          -               11,250               884,249
  Sale of shares by subsidiary                                       -                    -               750,000
  Sale of subsidiary shares                                          -              240,000             3,720,000
                                                            ----------           ----------          ------------
Net cash provided by financing activities                            -              251,250            31,696,454
                                                            ----------           ----------          ------------
Net increase (decrease) in cash
  and cash equivalents                                         212,098             (205,612)
Cash and cash equivalents at
  beginning of period                                          316,333              424,330
                                                            ----------           ----------
Cash and cash equivalents at
  end of period                                             $  528,431           $  218,718          $    528,431
                                                            ==========           ==========          ============
</TABLE>



<PAGE>



                         PART I - FINANCIAL INFORMATION

                     COASTAL CARIBBEAN OILS & MINERALS LTD.

                                  June 30, 1998

ITEM 1   -    Financial Statements

         The information for the three and six month periods ended June 30, 1998
and 1997 is unaudited, but includes all adjustments which Coastal Caribbean Oils
& Minerals, Ltd. (the "Company") considers necessary for a fair statement of the
results of operations for those periods.  The consolidated  financial statements
include  the  Company's  59.25%  owned  subsidiary,  Coastal  Petroleum  Company
("Coastal Petroleum").

         Statements   included  in  Management's   Discussion  and  Analysis  of
Financial Condition and Results of Operations which are not historical in nature
are intended to be, and are hereby  identified as "forward  looking  statements"
for  purposes  of the  "Safe  Harbor"  Statement  under the  Private  Securities
Litigation Reform Act of 1995. The Company cautions readers that forward looking
statements  are  subject to certain  risks and  uncertainties  that could  cause
actual results to differ  materially from those indicated in the forward looking
statements.

         The Company's  principal  assets are oil, gas, and mineral leases,  the
costs of which  total $4.6  million at June 30,  1998.  The Company has been and
continues  to be  involved  in several  legal  proceedings  against the State of
Florida  which  have  limited  the  Company's  ability to  commence  development
activities on its unproved oil and gas properties.  These consolidated financial
statements do not include any adjustments to reflect the possible future effects
on the recoverability and classification of assets or amounts and classification
of liabilities that may result from the outcome of this uncertainty.

ITEM 2   -    Management's Discussion and Analysis of Financial Condition and
              Results of Operation

Liquidity and Capital Resources

                              Short Term Liquidity

         At June  30,  1998,  Coastal  Caribbean  had  cash  and  securities  of
approximately  $3.1  million.  These  funds are  expected to be used for general
corporate  purposes,  including  exploration and development and to continue the
litigation against the State of Florida.


<PAGE>


                         PART I - FINANCIAL INFORMATION

                     COASTAL CARIBBEAN OILS & MINERALS LTD.

                                  June 30, 1998

ITEM 2   -    Management's Discussion and Analysis of Financial Condition and
              Results of Operation (Cont'd)

                               Long Term Liquidity

         The Company estimates that as much as $500,000 per year may be required
in connection with the Florida litigation.  The Company expects that the Florida
litigation  will  continue at least  through March 1999,  although the State may
take actions  that could  shorten or  lengthen that  period.  The  Company has a
program  to  evaluate   the   Company's   leases  which  is  estimated  to  cost
approximately $1 million for the 1998-1999 period, and is subject to the outcome
of the Florida  litigation.  During the quarter ended June 30, 1998, the Company
spent approximately $219,000  under its continuing program to identify potential
drilling prospects.

         The  Company's  oil and  gas  properties  are  currently  unproved  and
undeveloped.  The Company  has  applied for a drilling  permit from the State of
Florida to drill an exploratory  well in the water near  Apalachicola,  Florida.
The State of Florida has  resisted  the  issuance of a drilling  permit.  If the
Company is successful  in obtaining a state  drilling  permit,  then the Company
must also do the following:

         1.       Obtain a federal permit.

         2.       Finance  drilling  of the  well  (including  the  cost  of the
                  recommended surety),  which is estimated to cost approximately
                  $5.5 million.

         3.       Begin drilling the well within  one year of the date the state
                  permit is issued.

         The Company does not  currently  have assets  sufficient  to fund these
expenditures  to drill the  exploration  well, if a permit were granted.  If oil
and/or gas is discovered in commercial  quantities,  a production  program would
require  additional  permitting  and  construction  of  production,  storage and
delivery systems.  The Company would be required to seek additional financing or
partners to fund these expenditures.



<PAGE>


ITEM 2   -    Management's Discussion and Analysis of Financial Condition and
              Results of Operation (Cont'd)

Results of Operations

Three month period ended June 30, 1998 vs. June 30, 1997

         The Company incurred a loss of $329,000 for the 1998 quarter,  compared
to a loss of $329,000 for the comparable 1997 quarter.

         Interest income and other income  decreased 35% from $72,000 in 1997 to
$47,000 in 1998 because less funds were available for investment during the 1997
period and interest rates were lower.

         Legal fees and costs  decreased  9% to $149,000  for the 1998  quarter,
compared to $163,000 in the prior  period.  In the 1997 period,  the Company had
been involved in various appeals  and hearings in connection with the opposition
by the State and others  to the issuance of a  drilling permit.  During the 1998
period, the level of expenditures decreased.

         Administrative expenses increased 20% to $124,000 in 1998 from $103,000
in the prior quarter. The primary reason for the increase was an increase in the
amount of directors' and officers' liability insurance in 1998.

Six month period ended June 30, 1998 vs. June 30, 1997

         The Company incurred a loss of $605,000  for the 1998 period,  compared
to a loss of $610,000 for the comparable 1997 period.

         Interest income and other income decreased 36% from $155,000 in 1997 to
$99,000 in 1998 because less funds were available for investment during 1998 and
interest rates were lower.

         Legal fees and costs  decreased  18% to $263,000  for the 1998  period,
compared to $321,000 in the prior  period.  In the 1997 period,  the Company had
been involved in various appeals  and hearings in connection with the opposition
by the State and others  to the issuance of a  drilling permit.  During the 1998
period, the level of expenditures decreased.


<PAGE>


ITEM 2   -    Management's Discussion and Analysis of Financial Condition and
              Results of Operation (Cont'd)

         Administrative expenses increased 14% to $257,000 in 1998 from $226,000
in the prior period.  The primary reason for the increase was an increase in the
amount of directors' and officers' liability insurance in 1998.

         Shareholder  communications  decreased  29%  from  $129,000  in 1997 to
$91,000 in 1998.  The cost of printing and mailing  increased in 1997 because of
the size of the  documents  and the  number  of  mailings  compared  to the 1998
period.

         Exploration  costs increased from $10,000 in 1997 to $13,000 in 1998 in
connection with the Company's continuing  program to identify potential drilling
prospects.



<PAGE>



                           PART II - OTHER INFORMATION

                     COASTAL CARIBBEAN OILS & MINERALS LTD.

                                  June 30, 1998

ITEM 4   -    Submission of Matters to a Vote of Security Holders

         (a)  On  May  20,  1998,   the  Company  held  its  Annual  Meeting  of
Shareholders.

         (b)  Director  Nicholas  B. Dill was  reelected  for a three  year term
expiring at the 2001 Annual  General  Meeting.  The results of the votes cast by
the Company's shareholders were as follows:

                      Number of Shares Voted       Number of Shareholders Voting
                        For          Withheld          For            Withheld

Nicholas B. Dill     33,964,680       401,022         3,012              152

         (c) The  firm  of  Ernst & Young  LLP  was  approved  as the  Company's
independent  auditors for the fiscal year ending  December 31, 1998. The results
of the votes cast by the Company's shareholders were as follows:

       Number of Shares Voted                     Number of Shareholders Voting
    For         Against      Abstain             For        Against      Abstain

34,106,848      65,892       192,962            3,043         36            85

ITEM 5   -    Other Information

         On April 8,  1998,  a Florida  Administrative  Judge  recommended  that
Coastal  Petroleum  Company  ("CPC") was entitled to a drilling  permit with the
requirement  of  $225  million  surety.  On May  13,  1998,  the  Administration
Commission of the State of Florida rejected the $225 million surety and remanded
the proceedings to the Administrative Judge with instructions to recalculate the
surety  amount  based on a maximum  oil spill  using a daily  flow rate of 5,984
barrels of oil and a  maximum time to drill  a relief well of 120 days.  On July
10, 1998, the Florida  Administrative  Law Judge ordered that Coastal  Petroleum
Company and the other parties confer on the specific issue of the 120 day period
and utilize the services of CPC's  experts to provide the  requested  data.  CPC
will appeal this order to Florida's First District Court of Appeal.


<PAGE>


                           PART II - OTHER INFORMATION

                     COASTAL CARIBBEAN OILS & MINERALS LTD.

                                  June 30, 1998

ITEM 6   -    Exhibits and Reports on Form 8-K

         On April 8, 1998,  the  Company  filed a Current  Report on Form 8-K to
report that a Florida  Administrative  Law Judge recommended that the Company is
entitled to an offshore  drilling permit for its St.  George's Island  prospect,
with a recommended surety of $225 million.

         On May 13,  1998,  the  Company  filed a Current  Report on Form 8-K to
report  that  the  State  of  Florida  Administration  Commission  rejected  the
recommended  $225 million surety amount and remanded the proceeding  back to the
Division of Administrative Hearings.

         On May 26,  1998,  the  Company  filed a Current  Report on Form 8-K to
report that the Florida Department of Environmental  Protection refused to issue
a permit to its  subsidiary,  Coastal  Petroleum  Company  ("CPC"),  to drill an
offshore  exploration  well near St. George's  Island  and that CPC  intended to
appeal the agency's ruling to Florida's First District Court of Appeal.

         On June 29,  1998,  the Company  filed a Current  Report on Form 8-K to
report that the U.S. Supreme Court declined to review a Florida  appellate court
ruling against Coastal Petroleum in its royalty interest claim against the State
of Florida.



<PAGE>








                                   SIGNATURES



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




                                         COASTAL CARIBBEAN OILS & MINERALS, LTD.
                                                       Registrant




Date:  July 28, 1998                     By  /s/ James R. Joyce
                                             -----------------------------------
                                             James R. Joyce
                                             Treasurer and Chief Accounting and
                                             Financial Officer