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                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                                    FORM 10-Q

(Mark One)
[X]    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
              SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1995
                                                        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 1-7176



                             THE COASTAL CORPORATION
             (Exact name of registrant as specified in its charter)



           Delaware                                    74-1734212
(State or other jurisdiction of           (I.R.S. Employer Identification No.)
incorporation or organization)


              Coastal Tower
           Nine Greenway Plaza
             Houston, Texas                             77046-0995
(Address of principal executive offices)                (Zip Code)



       Registrant's telephone number, including area code: (713) 877-1400



                           ---------------------------





     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, and (2) has been subject to such filing
requirements for the past 90 days. Yes X No _____

     As of October 31, 1995, there were outstanding 104,608,188 shares of Common
Stock, 33-1/3 cents par value per share, and 406,911 shares of Class A Common
Stock, 33-1/3 cents par value per share, of the Registrant.

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<PAGE>



                                     PART I

                              FINANCIAL INFORMATION

Item 1.    Financial Statements.

      The financial statements of The Coastal Corporation and its subsidiaries
(the "Company" or "Coastal") are presented herein and are unaudited, except for
balances as of December 31, 1994, and therefore are subject to year-end
adjustments; however, all adjustments which are, in the opinion of management,
necessary for a fair statement of the results of operations for the periods
covered have been made. The adjustments which have been made are of a normal
recurring nature. Such results are not necessarily indicative of results to be
expected for the year due to seasonal variations and market conditions affecting
sales of natural gas and petroleum products.



                    THE COASTAL CORPORATION AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEET
                              (Millions of Dollars)


<TABLE>
<CAPTION>
                                                                                 September 30,      December 31,
                                     ASSETS                                         1995                1994
                                                                                  -----------        -----------
                                                                                  (Unaudited)

<S>                                                                               <C>                <C>        
Current Assets:
   Cash and cash equivalents...............................................       $      64.6        $      73.5
   Receivables, less allowance for doubtful accounts of $22.7 million
      (1995) and $18.8 million (1994)......................................           1,186.7            1,306.0
   Inventories.............................................................             796.4              818.1
   Prepaid expenses and other..............................................             230.4              230.3
                                                                                  -----------        -----------
      Total Current Assets.................................................           2,278.1            2,427.9
                                                                                  -----------        -----------

Property, Plant and Equipment - at cost:
   Natural gas systems.....................................................           5,814.8            5,763.7
   Refining, crude oil and chemical facilities.............................           2,000.2            2,005.7
   Gas and oil properties - at full-cost...................................           1,413.4            1,283.7
   Other...................................................................             771.7              722.8
                                                                                  -----------        -----------
                                                                                     10,000.1            9,775.9
   Accumulated depreciation, depletion and amortization....................           3,584.2            3,441.2
                                                                                  -----------        -----------
                                                                                      6,415.9            6,334.7
                                                                                  -----------        -----------

Other Assets:
   Goodwill................................................................             530.4              544.5
   Investments - equity method.............................................             431.5              378.3
   Other...................................................................             813.1              849.2
                                                                                  -----------        -----------
                                                                                      1,775.0            1,772.0
                                                                                  -----------        -----------
                                                                                  $  10,469.0        $  10,534.6
                                                                                  ===========        ===========
</TABLE>



                 See Notes to Consolidated Financial Statements.


                                      - 1 -

<PAGE>



                    THE COASTAL CORPORATION AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEET
                              (Millions of Dollars)


<TABLE>
<CAPTION>
                                                                                 September 30,      December 31,
                      LIABILITIES AND STOCKHOLDERS' EQUITY                          1995                1994
                                                                                  ----------         -----------
                                                                                  (Unaudited)

<S>                                                                               <C>                <C>        
Current Liabilities:
   Notes payable...........................................................       $    424.5         $      57.2
   Accounts payable........................................................          1,387.8             1,942.0
   Accrued expenses........................................................            374.8               329.1
   Current maturities on long-term debt....................................            111.3               185.3
                                                                                  ----------         -----------
      Total Current Liabilities............................................          2,298.4             2,513.6
                                                                                  ----------         -----------

Debt:
   Long-term debt, excluding current maturities............................          3,516.3             3,520.5
   Subordinated long-term debt.............................................                -               199.7
                                                                                  ----------         -----------
                                                                                     3,516.3             3,720.2
                                                                                  ----------         -----------

Deferred Credits and Other:
   Deferred income taxes...................................................          1,442.9             1,473.9
   Other deferred credits..................................................            634.2               369.1
                                                                                  ----------         -----------
                                                                                     2,077.1             1,843.0
                                                                                  ----------         -----------

Mandatory Redemption Preferred Stock:
   Issued by subsidiaries..................................................               .6                  .6
                                                                                  ----------         -----------

Common Stock and Other Stockholders' Equity:
   Cumulative preferred stock (with aggregate liquidation preference
      of $209.4 million)...................................................              2.7                 2.7
   Class A common stock....................................................               .1                  .1
   Common stock............................................................             36.3                36.2
   Additional paid-in capital..............................................          1,219.4             1,214.7
   Retained earnings.......................................................          1,450.6             1,336.0
                                                                                  ----------         -----------
                                                                                     2,709.1             2,589.7
   Less common stock in treasury - at cost.................................            132.5               132.5
                                                                                  ----------         -----------
                                                                                     2,576.6             2,457.2
                                                                                  ----------         -----------
                                                                                  $ 10,469.0         $  10,534.6
                                                                                  ==========         ===========
</TABLE>



                 See Notes to Consolidated Financial Statements.


                                      - 2 -

<PAGE>



                    THE COASTAL CORPORATION AND SUBSIDIARIES
                      STATEMENT OF CONSOLIDATED OPERATIONS
                     (Millions of Dollars, Except Per Share)


<TABLE>
<CAPTION>
                                                                    Three Months Ended         Nine Months Ended
                                                                       September 30,             September 30,
                                                                  ----------------------    ---------------------
                                                                     1995        1994         1995         1994
                                                                  ---------   ----------    ---------   ---------
                                                                        (Unaudited)               (Unaudited)

<S>                                                               <C>         <C>           <C>         <C>      
Operating Revenues............................................    $ 2,546.2   $  2,675.5    $ 7,778.0   $ 7,863.2
                                                                  ---------   ----------    ---------   ---------

Operating Costs and Expenses:
   Purchases..................................................      1,862.2      2,012.0      5,640.0     5,733.0
   Operating expenses.........................................        440.7        440.5      1,337.4     1,346.0
   Depreciation, depletion and
      amortization............................................         91.9         90.7        279.2       272.9
                                                                  ---------   ----------    ---------   ---------
                                                                    2,394.8      2,543.2      7,256.6     7,351.9
                                                                  ---------   ----------    ---------   ---------

Operating Profit..............................................        151.4        132.3        521.4       511.3
                                                                  ---------   ----------    ---------   ---------

Other Income - net............................................         11.6         14.1         35.9        50.5
                                                                  ---------   ----------    ---------   ---------

Other Expenses:
   General and administrative.................................         13.6         12.9         41.5        39.3
   Interest and debt expense, less $1.4 million (1995)
      and $2.4 million (1994) three months and $4.6
      million (1995) and $6.5 million (1994) nine
      months capitalized......................................        102.4         99.6        314.9       299.1
   Taxes on income............................................          2.8          7.3         41.9        72.6
                                                                  ---------   ----------    ---------   ---------
                                                                      118.8        119.8        398.3       411.0
                                                                  ---------   ----------    ---------   ---------

Net Earnings..................................................         44.2         26.6        159.0       150.8

Dividends on Preferred Stock..................................          4.3          4.4         13.0        13.1
                                                                  ---------   ----------    ---------   ---------

Net Earnings Available
   to Common Stockholders.....................................    $    39.9   $     22.2    $   146.0   $   137.7
                                                                  =========   ==========    =========   =========

Net Earnings Per Common
   and Common Equivalent Share................................    $     .38   $      .21    $    1.39   $    1.31
                                                                  =========   ==========    =========   =========

Cash Dividends Per Common Share...............................    $     .10   $      .10    $     .30   $     .30
                                                                  =========   ==========    =========   =========

</TABLE>


                 See Notes to Consolidated Financial Statements.


                                      - 3 -

<PAGE>



                    THE COASTAL CORPORATION AND SUBSIDIARIES
      STATEMENT OF CONSOLIDATED COMMON STOCK AND OTHER STOCKHOLDERS' EQUITY
                  (Millions of Dollars and Thousands of Shares)


<TABLE>
<CAPTION>
                                                                       Nine Months Ended September 30,
                                                               --------------------------------------------------
                                                                      1995                          1994
                                                               --------------------          --------------------
                                                               Shares      Amount            Shares      Amount
                                                               -------   ----------          -------   ----------
                                                                                 (Unaudited)

<S>                                                            <C>       <C>                 <C>       <C>       
Preferred stock, par value 33-1/3 cents per share, authorized
 50,000,000 shares:
      Cumulative convertible preferred:
      $1.19, Series A, redemption or liquidation
         amount of $33 per share:
           Beginning balance...........................             63   $        -               65   $        -
           Converted to common.........................             (1)           -               (1)           -
                                                               -------   ----------          -------   ----------
           Ending balance..............................             62            -               64            -
                                                               =======   ----------          =======   ----------

      $1.83, Series B, redemption or liquidation
         amount of $50 per share:
           Beginning balance...........................             84           .1               89           .1
           Converted to common.........................             (4)           -               (4)           -
                                                               -------   ----------          -------   ----------
           Ending balance..............................             80           .1               85           .1
                                                               =======   ----------          =======   ----------

      $5.00, Series C, redemption or liquidation
         amount of $100 per share:
           Beginning balance...........................             34            -               35            -
           Converted to common.........................              -            -                -            -
                                                               -------   ----------          -------   ----------
           Ending balance..............................             34            -               35            -
                                                               =======   ----------          =======   ----------

      Cumulative preferred:
      $2.125, Series H, liquidation amount
         of $25 per share:
           Beginning and ending balance................          8,000          2.6            8,000          2.6
                                                               =======   ----------          =======   ----------

Class A common stock, par value 33-1/3 cents per share,
   authorized 2,700,000 shares:
      Beginning balance................................            416           .1              423           .1
      Converted to common..............................            (15)           -              (21)           -
      Conversion of preferred stock and
         exercise of stock options.....................              7            -               17            -
                                                               -------   ----------          -------   ----------
      Ending balance...................................            408           .1              419           .1
                                                               =======   ----------          =======   ----------

Common stock, par value 33-1/3 cents per share, authorized
   250,000,000 shares:
      Beginning balance................................        108,726         36.2          108,512         36.2
      Conversion of preferred stock....................             24            -               23            -
      Conversion of Class A common stock...............             15            -               21            -
      Exercise of stock options........................            207           .1              159            -
                                                               -------   ----------          -------   ----------
      Ending balance...................................        108,972   $     36.3          108,715   $     36.2
                                                               =======   ----------          =======   ----------

</TABLE>


                 See Notes to Consolidated Financial Statements.


                                      - 4 -

<PAGE>



                    THE COASTAL CORPORATION AND SUBSIDIARIES
      STATEMENT OF CONSOLIDATED COMMON STOCK AND OTHER STOCKHOLDERS' EQUITY
                  (Millions of Dollars and Thousands of Shares)
                                   (Continued)


<TABLE>
<CAPTION>
                                                                       Nine Months Ended September 30,
                                                               --------------------------------------------------
                                                                      1995                          1994
                                                               --------------------          --------------------
                                                               Shares      Amount            Shares      Amount
                                                               -------   ----------          -------   ----------
                                                                                 (Unaudited)

<S>                                                            <C>       <C>                 <C>       <C>       
Additional paid-in capital:
   Beginning balance...................................                  $  1,214.7                    $  1,209.3
   Exercise of stock options...........................                         4.7                           4.8
                                                                         ----------                    ----------
   Ending balance......................................                     1,219.4                       1,214.1
                                                                         ----------                    ----------

Retained earnings:
   Beginning balance...................................                     1,336.0                       1,162.7
   Net earnings for period.............................                       159.0                         150.8
   Dividends on preferred stock........................                       (13.0)                        (13.1)
   Dividends on common stock...........................                       (31.4)                        (31.4)
                                                                         ----------                    ----------
   Ending balance......................................                     1,450.6                       1,269.0
                                                                         ----------                    ----------
Less treasury stock - at cost..........................          4,395       (132.5)           4,395       (132.5)
                                                               =======   ----------          =======   ----------

Total..................................................                  $  2,576.6                    $  2,389.6
                                                                         ==========                    ==========
</TABLE>



                 See Notes to Consolidated Financial Statements.


                                      - 5 -

<PAGE>



                    THE COASTAL CORPORATION AND SUBSIDIARIES
                      STATEMENT OF CONSOLIDATED CASH FLOWS
                              (Millions of Dollars)


<TABLE>
<CAPTION>
                                                                                        Nine Months Ended
                                                                                          September 30,
                                                                                      1995            1994
                                                                                      ----            ----
                                                                                           (Unaudited)

<S>                                                                                <C>              <C>     
Net Cash Flow From Operating Activities:
   Net earnings ...............................................................    $   159.0        $  150.8
   Add (subtract) items not requiring (providing) cash:
      Depreciation, depletion and amortization.................................        282.1           276.2
      Deferred income taxes....................................................          5.7            21.4
      Amortization of producer contract reformation costs......................         22.4            25.5
      Distributed (undistributed) earnings from equity method investments......         18.8            (9.3)

   Working capital and other changes, excluding changes relating to cash and
      non-operating activities:
         Accounts receivable...................................................        110.9            65.3
         Inventories...........................................................         21.7          (150.7)
         Prepaid expenses and other............................................         (5.1)           16.0
         Accounts payable......................................................       (343.0)          (43.0)
         Accrued expenses......................................................         30.1            24.8
         Other.................................................................         35.3           (20.7)
                                                                                   ---------        --------
                                                                                       337.9           356.3
                                                                                   ---------        --------

Cash Flow From Investing Activities:
   Purchases of property, plant and equipment..................................       (449.7)         (385.9)
   Proceeds from sale of property, plant and equipment.........................         98.1            21.2
   Additions to investments....................................................        (77.2)           (9.5)
   Proceeds from investments...................................................         32.3            86.7
   Recovery of gas supply prepayments..........................................           .4              .6
                                                                                   ---------        --------
                                                                                      (396.1)         (286.9)
                                                                                   ---------        --------

Cash Flow From Financing Activities:
   Increase (decrease) in short-term notes ....................................        367.3          (109.5)
   Redemption of mandatory redemption preferred stock..........................            -           (33.7)
   Proceeds from issuing common stock..........................................          4.8             5.2
   Proceeds from issuing long-term debt........................................         98.1           137.3
   Payments to retire long-term debt...........................................       (376.5)         (121.6)
   Dividends paid..............................................................        (44.4)          (44.5)
                                                                                   ---------        --------
                                                                                        49.3          (166.8)
                                                                                   ---------        --------

Net Decrease in Cash and Cash Equivalents......................................         (8.9)          (97.4)

Cash and Cash Equivalents at Beginning of Period...............................         73.5           159.2
                                                                                   ---------        --------

Cash and Cash Equivalents at End of Period.....................................    $    64.6        $   61.8
                                                                                   =========        ========
</TABLE>



                 See Notes to Consolidated Financial Statements.


                                      - 6 -

<PAGE>



                    THE COASTAL CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


1.    Summary of Significant Accounting Policies

      For additional information relative to operations and financial position,
reference is made to the Company's Annual Report on Form 10-K for the fiscal
year ended December 31, 1994.

      Supplemental information relative to the Statement of Consolidated Cash
Flows includes the following: The Company made cash payments for interest and
financing fees, net of amounts capitalized, of $301.6 million and $285.9 million
for the nine months ended September 30, 1995 and 1994, respectively. Cash
payments for income taxes amounted to $31.7 million and $70.2 million for the
nine months ended September 30, 1995 and 1994, respectively.

      The Financial Accounting Standards Board has issued Statement of Financial
Accounting Standards No. 121, "Accounting for the Impairment of Long-Lived
Assets and for Long-Lived Assets to Be Disposed Of" ("FAS No. 121"), to be
effective in 1996. The provisions of this statement will require the Company to
review long-lived assets and certain identifiable intangibles for impairment
whenever events or changes in circumstances indicate that the carrying amount of
an asset may not be recoverable. FAS No. 121 also requires that a rate-regulated
enterprise recognize an impairment for the amount of costs that a regulator
excludes from the enterprise's allowable costs. If it is determined that an
impairment has occurred, the amount of the impairment should be charged to
earnings. The Company is in the process of reviewing the effects of FAS No. 121.

2.    Inventories

      Inventories were as follows (millions of dollars):

<TABLE>
<CAPTION>
                                                                                 September 30,      December 31,
                                                                                    1995                1994
                                                                                 -----------         ----------
                                                                                 (Unaudited)

<S>                                                                              <C>                 <C>       
   Refined products, crude oil and chemicals...............................      $     572.2         $    596.5
   Natural gas in underground storage......................................             45.7               34.8
   Coal, materials and supplies............................................            178.5              186.8
                                                                                 -----------         ----------
                                                                                 $     796.4         $    818.1
                                                                                 ===========         ==========
</TABLE>

      The excess of replacement cost over the carrying value of natural gas in
underground storage carried by the last-in, first-out method was approximately
$20.6 million at September 30, 1995 and $31.2 million at December 31, 1994.

3.    Common Stock

      On September 30, 1995, 3,892,269 shares of Common Stock of the Company
were reserved for employee stock option plans, 752,765 shares were reserved for
conversion of the Series A, B, and C Preferred Stocks, 407,942 shares were
reserved for conversion of outstanding Class A Common Stock and 36,809 shares
were reserved for conversion of Class A Common Stock subject to future issuance.
The Class A Common Stock reserved for future issuance consists of 15,971 shares
reserved for employee stock option plans and 20,838 shares reserved for
conversion of the Series A, B, and C Preferred Stocks.



                                     - 7 -

<PAGE>



4.    Income Taxes

      Provisions for federal and state income taxes were as follows (millions of
dollars):

<TABLE>
<CAPTION>
                                                                    Three Months Ended         Nine Months Ended
                                                                       September 30,             September 30,
                                                                  ----------------------    ---------------------
                                                                     1995        1994         1995         1994
                                                                  ---------   ----------    ---------   ---------
                                                                        (Unaudited)               (Unaudited)

<S>                                                               <C>         <C>           <C>         <C>      
   Current Income Taxes:
      Federal.................................................    $     8.6   $     (1.0)   $    31.9   $    45.5
      State...................................................          1.9          2.8          4.3         5.7
                                                                  ---------   ----------    ---------   ---------
                                                                       10.5          1.8         36.2        51.2
                                                                  ---------   ----------    ---------   ---------
   Deferred Income Taxes:
      Federal.................................................         (7.2)         7.1          7.8        19.1
      State...................................................          (.5)        (1.6)        (2.1)        2.3
                                                                  ---------   ----------    ---------   ---------
                                                                       (7.7)         5.5          5.7        21.4
                                                                  ---------   ----------    ---------   ---------

                                                                  $     2.8   $      7.3    $    41.9   $    72.6
                                                                  =========   ==========    =========   =========
</TABLE>

      Interim period provisions for federal income taxes are based on estimated
effective annual income tax rates.

5.    Litigation, Regulatory and Environmental Matters

      Litigation

      A subsidiary of Coastal initiated a suit against TransAmerican Natural Gas
Corporation ("TransAmerican") in the District Court of Webb County, Texas for
breach of two gas purchase agreements. In February 1993, TransAmerican filed a
Third Party Complaint and a Counterclaim in this action against Coastal and
certain subsidiaries. TransAmerican alleged breach of contract, fraud,
conspiracy, duress, tortious interference and violations of the Texas Free
Enterprises and Anti-trust Act arising out of the gas purchase agreements. Final
judgment in this matter was entered April 22, 1994. The subsidiary was awarded
approximately $2.0 million, including pre-judgment interest and attorney fees.
All of TransAmerican's claims and causes of action were denied. The judgment has
been appealed by TransAmerican and the case is presently pending before the
Court of Appeals for the Fourth Judicial District at San Antonio, Texas.

      In December 1992, certain of Colorado Interstate Gas Company's ("CIG")
natural gas lessors in the West Panhandle Field filed a complaint in the U.S.
District Court for the Northern District of Texas claiming underpayment, breach
of fiduciary duty, fraud and negligent misrepresentation. Management believes
that CIG has numerous defenses to the lessors' claims, including (i) that the
royalties were properly paid, (ii) that the majority of the claims were released
by written agreement and (iii) that the majority of the claims are barred by the
statute of limitations. In March of 1995, the Trial Court granted a partial
summary judgment in favor of CIG, holding that the four-year statute of
limitations had not been tolled, that the releases are valid, and dismissing all
tort claims and claims for breach of any duty of disclosure. The remaining claim
for underpayment of royalties was tried to a jury which, in May 1995, made
findings favorable to CIG. On June 7, 1995, the Trial Court entered a judgment
that the lessors recover no monetary damages from CIG and permanently estopping
the lessors from asserting any claim based on an interpretation of the contract
different than that asserted by CIG in the litigation. The lessors' motion for a
new trial is pending.

      Numerous other lawsuits and other proceedings which have arisen in the
ordinary course of business are pending or threatened against the Company or its
subsidiaries.

      Although no assurances can be given and no determination can be made at
this time as to the outcome of any particular lawsuit or proceeding, the Company
believes there are meritorious defenses to substantially all of the above claims
and that any liability which may finally be determined should not have a
material adverse effect on the Company's consolidated financial position or
results of operations.


                                      - 8 -

<PAGE>



      Regulatory Matters

      On April 8, 1992, the Federal Energy Regulatory Commission ("FERC") issued
Order No. 636 ("Order 636"), which required significant changes in the services
provided by interstate natural gas pipelines. Subsidiaries of the Company and
numerous other parties have sought judicial review of aspects of Order 636. The
case is currently in the briefing phase before the United States Court of
Appeals for the D.C. Circuit.

      On November 1, 1993, ANR Pipeline Company ("ANR Pipeline") placed its
Order 636 restructured services and rates into effect. Several persons,
including ANR Pipeline, have sought judicial review of aspects of the FERC's
orders approving ANR Pipeline's restructuring filings. Those appeals have been
held in abeyance by the United States Court of Appeals for the D.C. Circuit,
pending further order. On March 24, 1994, the FERC issued its "Fourth Order on
Compliance Filing and Third Order on Rehearing," which addressed numerous
rehearing issues and confirmed that after minor required tariff modifications,
ANR Pipeline is now fully in compliance with Order 636 and the requirements of
the orders on its restructuring filings. The FERC issued a further order
regarding certain compliance issues on July 1, 1994. In accordance with this
order, ANR Pipeline filed revised tariff sheets on July 18, 1994, which were
accepted by order issued April 12, 1995.

      On March 10, 1992, ANR Pipeline submitted to the FERC a comprehensive
Interim Settlement designed to resolve all outstanding issues resulting from its
1989 rate case and its 1990 proposed service restructuring proceeding. The
Interim Settlement became effective November 1, 1992 and expired with ANR
Pipeline's implementation of Order 636 on November 1, 1993. Under the Interim
Settlement, gas inventory demand charges were collected from ANR Pipeline's
resale customers for the period November 1, 1992 through October 31, 1993. This
method of gas cost recovery required refunds for any over-collections and placed
ANR Pipeline at risk for under-collections. As required by the Interim
Settlement, ANR Pipeline filed with the FERC on April 29, 1994, a reconciliation
report showing over-collections and, therefore, proposed refunds totaling $45.1
million. Certain customers have disputed the level of those refunds. By an order
issued February 27, 1995, the FERC approved ANR Pipeline's refund allocation
methodology, and directed ANR Pipeline to make immediate refunds of $45.1
million, together with applicable interest, subject to further investigation of
the claims which the customers have made. On May 2, 1995, the FERC issued a
further order setting these issues for an evidentiary hearing. Initial testimony
has been filed, and the parties are conducting discovery. The hearing is set to
commence in May 1996. Undisputed refunds, including interest, were paid on March
29, 1995. Certain customers have also sought judicial review before the United
States Court of Appeals for the D.C. Circuit of the FERC's approval of the
refund allocation methodology.

     On November 1, 1993, ANR Pipeline filed a general rate increase with the
FERC under Docket No. RP94-43. The increase represents the effects of higher
plant investment, Order 636 restructuring costs, rate of return and tax rate
changes and increased costs related to the required adoption of recent
accounting rule changes, i.e., Statement of Financial Accounting Standards No.
106, "Employers' Accounting for Postretirement Benefits Other Than Pensions" and
Statement of Financial Accounting Standards No. 112, "Employers' Accounting for
Postemployment Benefits." On March 23, 1994, the FERC issued an order granting
and denying various requests for summary disposition and establishing hearing
procedures for issues remaining to be investigated in this proceeding. The order
required the reduction or elimination of certain costs which resulted in revised
rates that reflect an $85.7 million increase in the cost of service from that
approved in the Interim Settlement and a $182.8 million increase over ANR
Pipeline's approved rates for its restructured services under Order 636. ANR
Pipeline sought rehearing of various aspects of the order. Further, on April 29,
1994, ANR Pipeline filed a motion with the FERC that placed the new rates into
effect May 1, 1994, subject to refund. On September 21, 1994, the FERC accepted
ANR Pipeline's filing in compliance with the March 23, 1994 order, subject to
further modifications including an additional reduction in cost of service of
approximately $5 million. ANR Pipeline submitted its compliance filing to the
FERC on October 6, 1994, which the FERC accepted by order issued February 8,
1995, subject to a further compliance filing requirement. This compliance filing
was submitted by ANR Pipeline on March 10, 1995, and was accepted by order
issued May 3, 1995, subject to one additional compliance filing requirement,
which ANR Pipeline filed on May 18, 1995 and which was accepted by order issued
on June 30, 1995. Further, on December 8, 1994, the FERC issued its order
denying rehearing of the March 23, 1994 order. On January 26, 1995, ANR Pipeline
sought judicial review of these orders before the U.S. Court of Appeals for the
D.C. Circuit, which the Court dismissed as premature. The FERC has also issued a
series of orders and orders on rehearing in ANR Pipeline's rate proceeding that
apply a new policy governing the order of attribution


                                      - 9 -

<PAGE>



of revenues received by ANR Pipeline related to transition costs under
Order 636. Under that new policy, ANR Pipeline is required to first attribute
the revenues it receives for its services to the recovery of its transition
costs under Order 636. In its rate proceeding, the revenues ANR Pipeline
receives for its services in its pending rate proceeding were first attributed
to the recovery of its base cost of service. The FERC's change in its revenue
attribution policy has the effect of understating its currently effective
maximum rates and has accelerated ANR Pipeline's amortization of transition
costs. In light of the Commission's policy, ANR Pipeline intends to file with
the FERC to increase its discount recovery adjustment in its pending rate
proceeding. ANR Pipeline has also sought judicial review of these orders before
the United States Court of Appeals for the D.C. Circuit.

      ANR Pipeline has executed a Settlement Agreement (the "Settlement
Agreement") with Dakota Gasification Company ("Dakota") and the Department of
Energy which resolves litigation concerning purchases of synthetic gas by ANR
Pipeline from the Great Plains Coal Gasification Plant (the "Plant"). That
litigation, originally filed in 1990 in the United States District Court in
North Dakota, involved claims regarding ANR Pipeline's obligations under certain
gas purchase and transportation contracts with the Plant. The Settlement
Agreement resolves all disputes between the parties, amends the gas purchase
agreement between ANR Pipeline and Dakota and terminates the transportation
contract. The Settlement Agreement is subject to final FERC approval, including
an approval for ANR Pipeline to recover the settlement costs from its customers.
On August 3, 1994, ANR Pipeline filed a petition with the FERC requesting: (a)
that the Settlement Agreement be approved; (b) an order approving ANR Pipeline's
proposed tariff mechanism for the recovery of the costs incurred to implement
the Settlement Agreement; and (c) an order dismissing a proceeding currently
pending before the FERC, wherein certain of ANR Pipeline's customers have
challenged Dakota's pricing under the original gas supply contract. On October
18, 1994, the FERC issued an order consolidating ANR Pipeline's petition with
similar petitions of three other pipeline companies and setting the Settlement
Agreement and other Dakota-related proceedings for limited hearing before an
Administrative Law Judge who must render an initial decision by December 31,
1995. On December 20, 1994, ANR Pipeline filed its testimony, and has responded
to numerous discovery requests. Intervenors from the ratepayer group submitted
their answering testimony on March 28, 1995. The hearing was conducted from June
20, 1995 to July 14, 1995, and briefs have been submitted to the Administrative
Law Judge.

      Order 636 provides mechanisms for recovery of transition costs associated
with compliance with that Order. ANR Pipeline has estimated that its transition
costs will amount to approximately $150 million, which will consist primarily of
gas supply realignment costs, pricing differential costs and the Dakota costs
described above. As of September 30, 1995, ANR Pipeline has incurred transition
costs in the amount of $51.7 million. ANR Pipeline has filed for recovery of
approximately $43.9 million of these transition costs, which have been accepted
and made effective by the FERC, subject to refund and further proceedings. In
addition, ANR Pipeline has filed for recovery of approximately $90 million of
costs associated with the Settlement Agreement, as discussed above. Additional
transition cost filings will be made by ANR Pipeline in the future.

      On March 31, 1993, CIG filed with the FERC under Docket RP93-99 to
increase its rates and such filing became effective subject to refund on October
1, 1993. On November 10, 1994, the FERC approved a settlement offer submitted by
CIG which resolved all of the issues in the proceeding. CIG has implemented the
rates established in the settlement for prospective application and was required
to make refunds as a result of the approval of the settlement. Such refunds were
distributed in March and April 1995 and totalled approximately $22 million,
inclusive of interest. CIG had fully accrued for these refunds and, therefore,
such refunds did not have an adverse effect on its consolidated financial
position or results of operations.

     On October 31, 1995, CIG filed an application with the FERC seeking
authority to transfer to CIG Field Services Company ("CFS"), a subsidiary of
CIG, certain facilities presently used for the gathering of natural gas that are
subject to certificates of public convenience and necessity. In that filing, CIG
requested that the FERC declare that in the hands of CFS the transferred
facilities will be considered "non-jurisdictional" gathering facilities. The
transferred facilities have a net book value of approximately $36 million. CIG
has requested that the FERC issue an order approving the application to be
effective on September 30, 1996. Following receipt of authorizations, CIG will
transfer the certificated facilities along with certain noncertificated
gathering facilities to CFS. The facilities to be transferred comprise most but
not all of CIG's current gathering assets. Once the facilities are transferred
to CFS, the terms and conditions of service performed by those facilities will
cease to be subject to the FERC's general jurisdiction under the Natural Gas


                                     - 10 -

<PAGE>



Act of 1938 as amended (although the FERC has indicated in other cases
that, in certain very narrow circumstances, it will assert regulatory authority
over gathering by affiliates of interstate pipelines such as CFS).

      CIG, ANR Pipeline, ANR Storage Company and Wyoming Interstate Company,
Ltd., subsidiaries of the Company, are regulated by the FERC. Certain of the
above regulatory matters and other regulatory issues remain unresolved among
these companies, their customers, their suppliers and the FERC. The Company has
made provisions which represent management's assessment of the ultimate
resolution of these issues. As a result, the Company anticipates that these
regulatory matters will not have a material adverse effect on its consolidated
financial position or results of operations. While the Company estimates the
provisions to be adequate to cover potential adverse rulings on these and other
issues, it cannot estimate when each of these issues will be resolved.

      Environmental Matters

      The Company's operations are subject to extensive and evolving federal,
state and local environmental laws and regulations. The Company estimates
capital expenditures of $70 million in 1995 to comply with such laws and
regulations. The majority of the 1995 expenditures is attributable to
construction projects on the sulfur recovery units at two of the Company's
refineries. The Company currently anticipates capital expenditures for
environmental compliance for the years 1996 through 1998 of $20 to $40 million
per year. Additionally, appropriate governmental authorities may enforce the
laws and regulations with a variety of civil and criminal enforcement measures,
including monetary penalties and remediation requirements.

      The Comprehensive Environmental Response, Compensation and Liability Act,
also known as "Superfund," as reauthorized, imposes liability, without regard to
fault or the legality of the original act, for disposal of a "hazardous
substance." Certain subsidiaries of the Company have been named as a potentially
responsible party ("PRP") in several "Superfund" waste disposal sites. At
sixteen sites for which the Environmental Protection Agency ("EPA") has
developed sufficient information to estimate total clean-up costs of
approximately $350 million, the Company estimates its pro-rata exposure, to be
paid over a period of several years, is approximately $4.7 million and has made
appropriate provisions. At six other sites, the EPA is currently unable to
provide the Company with an estimate of total clean-up costs and, accordingly,
the Company is unable to calculate its share of those costs. Finally, at eight
other sites, the Company has paid amounts to other PRPs or to the EPA as its
proportional share of associated clean-up costs. As to these latter sites, the
Company believes that its activities were de minimis.

      There are additional areas of environmental remediation responsibilities
which may fall on the Company. The states have regulatory programs that mandate
waste clean-up. The Clean Air Act Amendments of 1990 include new permitting
regulations which will result in increased operating expenditures. Coastal is
also supplying reduced-emission reformulated gasoline in all markets where it is
required or optionally requested.

      Future information and developments will require the Company to
continually reassess the expected impact of these environmental matters.
However, the Company has evaluated its total environmental exposure based on
currently available data, including its potential joint and several liability,
and believes that compliance with all applicable laws and regulations will not
have a material adverse impact on the Company's liquidity, financial position or
results of operations.




                                     - 11 -

<PAGE>



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

      The Notes to Consolidated Financial Statements contain information that is
pertinent to the following analysis.

                         Liquidity and Capital Resources

      The Company uses the following consolidated ratios to measure liquidity
and its ability to meet future funding needs and debt service requirements.

<TABLE>
<CAPTION>
                                                                               Twelve Months Ended
                                                                         ------------------------------
                                                                         September 30,     December 31,
                                                                             1995              1994
                                                                         -------------     ------------
                                                                          (Unaudited)

<S>                                                                          <C>               <C>  
      Net return on average common stockholders' equity..............         9.8%             10.0%
      Cash flow from operating activities to long-term debt..........        18.5%             18.0%
      Total debt to total capitalization.............................        61.1%             61.7%
      Times interest earned (before tax).............................          1.7               1.8
</TABLE>

      The reduction in the net return on average common stockholders' equity
ratio results primarily from increased equity. The increase in the cash flow
from operating activities to long-term debt ratio is due to a reduction in
long-term debt. An increase in equity accounts for the change in the total debt
to total capitalization ratio.

      In October 1995, the Company completed a public offering of $150 million
of 7.75% Senior Debentures due in October 2035. The net proceeds from the sale
will be used for the repayment of certain outstanding debt in the fourth quarter
of 1995.

      In June 1995, ANR Pipeline, a subsidiary of the Company, completed an
offering of $75 million of 7% Debentures due in June 2025. The net proceeds from
the sale were used for the repayment of certain outstanding debt which matured
in October 1995 and for general corporate purposes.

      Financing for capital expansion, mandatory debt retirements and other
expenditures will be provided by internally generated funds, existing credit
lines and other new financings.

      Funding for certain proposed projects is anticipated to be provided
through non-recourse project financing in which the projects' assets and
contracts will be pledged as collateral. Equity participation by other entities
will be considered. To the extent required, cash for equity contributions to
projects will be from general corporate funds.

      The Company continues to maintain a financial position that will enable it
to generate and obtain capital for financing needs in the foreseeable future.
Unused lines of credit at September 30, 1995 were as follows (millions of
dollars):

         Short-term.....................................$  499.4
         Long-term*.....................................   662.3
                                                        --------
                                                        $1,161.7
                                                        ========

      * $235 million of unused long-term credit lines is dedicated to a specific
use.

      The Financial Accounting Standards Board has issued FAS No. 121 to be
effective in 1996. The provisions of this statement will require the Company to
review long-lived assets and certain identifiable intangibles for impairment
whenever events or changes in circumstances indicate that the carrying amount of
an asset may not be recoverable. FAS No. 121 also requires that a rate-regulated
enterprise recognize an impairment for the amount of costs that a regulator
excludes from the enterprise's allowable costs. If it is determined that an
impairment has occurred, the amount of the impairment should be charged to
earnings. The Company is in the process of reviewing the effects of FAS No. 121.


                                     - 12 -

<PAGE>



                              Results of Operations

      The changes in the Company's earnings for the three and nine month periods
ended September 30, 1995 in comparison to the same periods in 1994 are a result
of the following:

     Operating Revenues. The operating revenues by segment were as follows
(millions of dollars):

<TABLE>
<CAPTION>
                                                                    Three Months Ended         Nine Months Ended
                                                                       September 30,             September 30,
                                                                  ----------------------    ---------   ---------
                                                                     1995        1994         1995         1994
                                                                  ---------   ----------    ---------   ---------
                                                                        (Unaudited)               (Unaudited)

<S>                                                               <C>         <C>           <C>         <C>      
      Natural gas.............................................    $   713.5   $    792.3    $ 2,222.6   $ 2,476.0
      Refining and marketing..................................      1,661.9      1,701.8      5,020.6     4,884.8
      Exploration and production..............................         64.0         66.8        194.7       224.6
      Coal....................................................        115.3        120.0        341.0       340.2
      Other...................................................         53.9         56.0        150.9       163.6
      Adjustments and eliminations............................        (62.4)       (61.4)      (151.8)     (226.0)
                                                                  ---------   ----------    ---------   ---------
                                                                  $ 2,546.2   $  2,675.5    $ 7,778.0   $ 7,863.2
                                                                  =========   ==========    =========   =========
</TABLE>

     Operating Profit. The operating profit by segment was as follows (millions
of dollars):

<TABLE>
<CAPTION>
                                                                    Three Months Ended         Nine Months Ended
                                                                       September 30,             September 30,
                                                                  ----------------------    ---------------------
                                                                     1995        1994         1995         1994
                                                                  ---------   ----------    ---------   ---------
                                                                        (Unaudited)               (Unaudited)

<S>                                                               <C>         <C>           <C>         <C>      
      Natural gas.............................................    $    86.7   $     89.8    $   302.5   $   321.2
      Refining and marketing..................................         29.2          2.9        125.3        87.7
      Exploration and production..............................          5.8          7.4         13.2        20.2
      Coal ...................................................         25.4         25.3         75.4        75.0
      Other...................................................          4.3          6.9          5.0         7.2
                                                                  ---------   ----------    ---------   ---------
                                                                  $   151.4   $    132.3    $   521.4   $   511.3
                                                                  =========   ==========    =========   =========
</TABLE>

      Natural Gas. The decreases in operating revenues of $78.8 million for the
three month period and $253.4 million for the nine month period ended September
30, 1995 can be primarily attributed to decreased prices more than offsetting
increased volumes for the unregulated gas marketing companies. Also contributing
to the revenue decreases was a reduction in the volumes of gas auctioned by ANR
Pipeline on the open market. Transportation and storage revenues increased in
both periods. The natural gas revenue decreases reflect increased competition in
the natural gas industry, magnified by last winter's warm weather.

      Purchases decreased $86.1 million and $238.9 million in the three month
and nine month periods, respectively, as reduced prices more than offset
increased volumes for the unregulated gas marketing companies. Gross profit
increased $7.3 million in the third quarter and decreased $14.5 million in the
nine month period ended September 30, 1995.

      Operating profit decreased in both periods, as regulated operations
improved, but margins narrowed in the unregulated natural gas marketing
industry, reflecting increased competition. The operating profit decrease of
$3.1 million in the third quarter of 1995 results from reduced margins of $23.8
million and increased operating expenses of $9.3 million offset by increased
sales volumes of $5.9 million, increased transportation and storage revenues of
$18.7 million, and other increases of $5.4 million. Operating profit decreased
by $18.7 million in the nine month period as reduced margins of $32.2 million
and increased operating expenses of $3.2 million were partially offset by
increased sales volumes of $11.2 million, increased transportation and storage
revenues of $3.7 million and other of $1.8 million. The operating expense
increase in the third quarter results from increased transportation expenses.
The $3.2 million


                                     - 13 -

<PAGE>



increase for the nine month period results from non-recurring 1994 expense
reductions of $8.3 million related primarily to revisions of certain estimated
costs partially offset by decreases for transportation expenses, gas used in
operations and taxes.

      Refining and Marketing. Operating revenues decreased by $39.9 million in
the third quarter as decreased volumes were partially offset by increased
prices. For the nine months ended September 30, 1995, revenues increased by
$135.8 million over the prior year nine month period as increased prices more
than offset reduced volumes. Purchases decreased by $72.6 million and increased
by $97.1 million in the three month and nine month periods, respectively,
resulting in gross profit increases of $32.7 million for the third quarter and
$38.7 million for the nine month period.

      Expanded petrochemical operations, primarily at the Company's paraxylene
facility in Montreal East, Quebec, and enhanced petrochemical yields at its
refineries enabled this segment to report increased operating profit for both
periods. The operating profit increase of $26.3 million in the third quarter
results from increased margins of $28.3 million and other increases of $2.8
million, offset by increased operating expenses of $4.8 million. For the nine
months ended September 30, 1995, operating profit increased by $37.6 million as
increased margins of $5.7 million, volume increases of $13.6 million, a gain of
$17.0 million from the sale of interests in certain liquid pipeline assets,
reduced operating expenses of $5.9 million and other increases of $2.4 million
were offset by increased depreciation, depletion and amortization of $7.0
million. The operating expense increase for the third quarter results from
increased petrochemical and retail operations. Operating expense decreased in
the nine month period as decreased operating expenses for the refineries more
than offset the increases for the petrochemical and retail operations. The
increased depreciation, depletion and amortization results from plant expansion
and the purchase of additional convenience stores.

      Exploration and Production. Operating revenues decreased by $2.8 million
in the three months and $29.9 million in the nine months ended September 30,
1995, respectively, as decreased natural gas prices and decreased revenues from
natural gas marketing activities were partially offset by increased volumes and
higher prices for crude oil and condensate.

      Operating profit decreased by $1.6 million in the three months ended
September 30, 1995 as lower natural gas prices of $3.5 million, increased
operating expenses of $1.3 million, reduced gross profit from natural gas
marketing activities of $1.0 million and other decreases of $.9 million were
partially offset by increased volumes of $5.1 million. The decrease in operating
profit for the nine months of $7.0 million results from lower natural gas prices
of $22.2 million; increased operating expenses of $4.8 million and reduced gross
profit from natural gas marketing activities of $2.7 million partially offset by
increased volumes of $8.5 million; increased crude oil, condensate and plant
product prices of $10.1 million and decreased depreciation, depletion and
amortization of $4.1 million. The increased operating expenses for both periods
result from increased expenses for producing wells. Even with up to 25% of
natural gas production shut in earlier in the year because of unsatisfactory
prices, average production of natural gas increased by 3% in the nine month
period. Net production of crude oil and condensate increased by 11% over the
prior year nine month period.

      Coal. Operating revenues decreased by $4.7 million and increased by $.8
million in the three month and nine month periods ended September 30, 1995,
respectively. The decrease in the third quarter results from decreased volumes
partially offset by increased prices, and the nine month increase results from
increased volumes and higher prices. Operating profit increased by $.1 million
in the three month period as increased prices of $1.9 million and decreased
operating expenses of $5.4 million were partially offset by reduced volumes of
$5.0 million; increased depreciation, depletion and amortization of $.7 million
and other decreases of $1.5 million. The increase in operating profit of $.4
million for the nine month period can be attributed to increased volumes of $4.0
million; higher prices of $.6 million and decreased operating expenses of $1.5
million offset by increased depreciation, depletion and amortization of $1.9
million and other decreases of $3.8 million. The other decreases in the nine
month period primarily result from the Company's royalty and brokerage
operations.

      Other. The operating revenue decreases of $2.1 million for the three month
period and $12.7 million for the nine month period ended September 30, 1995
resulted primarily from decreased rates and volumes for the trucking operations
partially offset by increases from power production operations. Operating profit
decreased by $2.6 million in the three


                                     - 14 -

<PAGE>



month period as the trucking and other decreases of $5.9 million were partially
offset by increased power production operating profit of $3.3 million. For the
nine month period, operating profit decreased by $2.2 million as trucking and
other decreases of $4.6 million were partially offset by power production
increases of $2.4 million. The increases in operating profit for the power
production operations result primarily from a new power plant in El Salvador
beginning operations during the third quarter.

      Other Income-Net. The decrease of $2.5 million in the third quarter
results from certain non-recurring 1994 income adjustments of $1.8 million.
Other income-net decreased by $14.6 million in the nine month period as a result
of a $10.0 million provision for suspension of operations at the 50% owned
Pacific Refining Company refinery and a non-recurring 1994 gain of $9.4 million
related to the disposition of investments in oil and gas properties in Argentina
offset by increased equity income from unconsolidated subsidiaries.

      Interest and Debt Expense. Interest and debt expense increased by $2.8
million in the third quarter and $15.8 million in the nine months ended
September 30, 1995 as higher rates on variable rate debt were partially offset
by lower debt levels.

      Taxes on Income. Federal income taxes decreased by $4.7 million in the
1995 third quarter as the result a lower effective income tax rate partially
offset by increased earnings; while the nine month decrease of $24.9 million is
due to a lower effective tax rate and decreased earnings. State income taxes
increased by $.2 million and decreased by $5.8 million in the three and nine
month periods, respectively.

                              Environmental Matters

      The Company's operations are subject to extensive and evolving federal,
state and local environmental laws and regulations. The Company estimates
capital expenditures of $70 million in 1995 to comply with such laws and
regulations. The majority of the 1995 expenditures is attributable to
construction projects on the sulfur recovery units at two of the Company's
refineries. The Company currently anticipates capital expenditures for
environmental compliance for the years 1996 through 1998 of $20 to $40 million
per year. Additionally, appropriate governmental authorities may enforce the
laws and regulations with a variety of civil and criminal enforcement measures,
including monetary penalties and remediation requirements.

      The Comprehensive Environmental Response, Compensation and Liability Act,
also known as "Superfund," as reauthorized, imposes liability, without regard to
fault or the legality of the original act, for disposal of a "hazardous
substance." Certain subsidiaries of the Company have been named as a PRP in
several "Superfund" waste disposal sites. At sixteen sites for which the EPA has
developed sufficient information to estimate total clean-up costs of
approximately $350 million, the Company estimates its pro-rata exposure, to be
paid over a period of several years, is approximately $4.7 million and has made
appropriate provisions. At six other sites, the EPA is currently unable to
provide the Company with an estimate of total clean-up costs and, accordingly,
the Company is unable to calculate its share of those costs. Finally, at eight
other sites, the Company has paid amounts to other PRPs or to the EPA as its
proportional share of associated clean-up costs. As to these latter sites, the
Company believes that its activities were de minimis.

      There are additional areas of environmental remediation responsibilities
which may fall on the Company. The states have regulatory programs that mandate
waste clean-up. The Clean Air Act Amendments of 1990 include new permitting
regulations which will result in increased operating expenditures. Coastal is
also supplying reduced-emission reformulated gasoline in all markets where it is
required or optionally requested.

      Future information and developments will require the Company to
continually reassess the expected impact of these environmental matters.
However, the Company has evaluated its total environmental exposure based on
currently available data, including its potential joint and several liability,
and believes that compliance with all applicable laws and regulations will not
have a material adverse impact on the Company's liquidity, financial position or
results of operations.



                                     - 15 -

<PAGE>



Item 2.B.  Other Developments

      On November 3, 1995, Advance Transportation Company ("Advance") merged
into the Company's trucking subsidiary, ANR Freight System, Inc. Under the terms
of the merger, the surviving company has changed its name to ANR Advance
Transportation Company, Inc. and is owned by a holding company, ANR Advance
Holdings, Inc., which is in turn owned 50% by a subsidiary of Coastal and 50% by
certain principal stockholders of Advance. The combined company has a fleet of
7,100 pieces of revenue equipment and will serve an area including 16 states as
well as Canada and Mexico.

      In October, an affiliate of Coastal Power Company ("CPC"), a subsidiary of
the Company, signed a joint venture contract for the development, construction
and operation of a 58 megawatt power plant in the industrial city of Suzhou in
the People's Republic of China. CPC's affiliate will own 60% of the project.
This project will cost approximately $29 million and construction activities are
scheduled to begin in December 1995.

      In October, Coastal Refining & Marketing, Inc., a subsidiary of the
Company, entered into negotiations with Chevron Chemical Company to purchase
Chevron's chemical production facilities at St. Helens, Oregon. The facilities
include a 360-ton-per-day urea plant, a 275-ton-per-day ammonia plant, a
185-ton-per-day urea ammonium-nitrate plant, and a 65-ton-per-day carbon dioxide
plant. The sale is expected to close in early 1996.

      In September, Coastal Aruba Refining Company, N.V., a subsidiary of
Coastal, announced that it purchased the marketing assets of Esso Petrolera,
S.A., the Aruban subsidiary of Exxon Corporation. The purchased assets include
the airport fueling facility at Reina Beatrix International Airport, a
refined-products marketing terminal, and six retail service stations, as well as
other assets and wholesale fuels and lubricants supply contracts related to
Esso's former petroleum marketing activities in Aruba.

      In August, Coastal's subsidiary, Coastal Oil & Gas Corporation ("CO&G"),
acquired, through an affiliate, Tesoro Petroleum Corporation's 70% working
interest in more than 1,700 acres in the Bob West Field in South Texas, which
gives Coastal subsidiaries 100% working interest in this acreage. The
transaction was completed in September 1995 at a purchase price of approximately
$74 million.

      Also in August, CO&G signed a contract with the Republic of Hungary
granting CO&G a 100% working interest in a concession to explore and develop
568,000 acres in central Hungary.

      In June 1995, Pacific Refining Company ("PRC") suspended processing
operations at its California refinery. Coastal has an indirect 50% interest in
PRC through a joint venture with Sinochem, a state-owned corporation of the
People's Republic of China. PRC is in the process of mothballing the refinery
and is considering the sale of the facility. No current commercial operations
are occuring at the refinery and none are contemplated at this time.




                                     - 16 -

<PAGE>



                                     PART II

                                OTHER INFORMATION

Item 1.   Legal Proceedings.

          The information required hereunder is incorporated by reference into
Part II of this Report from Note 5 of the Notes to Consolidated Financial
Statements and from Item 2.A., "Management's Discussion and Analysis of
Financial Condition and Results of Operations - Environmental Matters" set forth
in Part I of this Report.

Item 2.   Changes in Securities.

          None.

Item 3.   Defaults Upon Senior Securities.

          None.

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

          None.

Item 5.   Other Information.

          On October 5, 1995, David A. Arledge, President of the Registrant, was
elected to the post of Chief Executive Officer. Oscar S. Wyatt, Jr. will remain
Chairman of the Board of Directors and Chairman of the Executive Committee.

Item 6.   Exhibits and Reports on Form 8-K.

          (a) Exhibits.

              11 - Statement re Computation of Per Share Earnings.
              27 - Financial Data Schedule.

          (b) Reports on Form 8-K.

              A report on Form 8-K was filed on October 17, 1995. The item
reported was:

                  Item 7.  Financial Statements and Exhibits.

                  (c) Exhibits

                      (12)   Ratio of Earnings to Fixed Charges


                                   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.

                                             THE COASTAL CORPORATION
                                                  (Registrant)

Date:  November 9, 1995       By:                 COBY C. HESSE
                                  ---------------------------------------------
                                                  Coby C. Hesse
                                              Senior Vice President
                                                 and Controller
                                           (As Authorized Officer and
                                            Chief Accounting Officer)


                                     - 17 -

<PAGE>

                                INDEX TO EXHIBITS


Exhibit
Number                                Description

   11                Statement Re Computation of Per Share Earnings

   27                Financial Data Schedule



                                     - 18 -

<PAGE>



                                                                EXHIBIT 11


                    THE COASTAL CORPORATION AND SUBSIDIARIES
                 STATEMENT RE COMPUTATION OF PER SHARE EARNINGS
                 (Millions of Dollars, Except Per Share Amounts,
                            and Thousands of Shares)


<TABLE>
<CAPTION>
                                                                    Three Months Ended         Nine Months Ended
                                                                       September 30,             September 30,
                                                                  ----------------------    ---------------------
                                                                     1995        1994         1995         1994
                                                                  ---------   ----------    ---------   ---------
                                                                        (Unaudited)               (Unaudited)

<S>                                                               <C>         <C>           <C>         <C>      
COMMON STOCK AND EQUIVALENTS:
Net earnings applicable to common stock and
   common stock equivalents...................................    $    39.9   $     22.2    $   146.0   $   137.7
                                                                  =========   ==========    =========   =========

Average number of common shares outstanding...................      104,499      104,313      104,422     104,246
Class A common shares.........................................          413          420          412         423
Common share equivalents:
   $1.19 Cumulative Convertible Preferred, Series A...........          231          237          231         237
Dilutive effect of outstanding stock options after
   application of treasury stock method.......................          371          298          288         322
                                                                  ---------   ----------    ---------   ---------
Average common and common equivalent shares...................      105,514      105,268      105,353     105,228
                                                                  =========   ==========    =========   =========

Net earnings per average common and common
   equivalent share outstanding...............................    $     .38   $      .21    $    1.39   $    1.31
                                                                  =========   ==========    =========   =========

ASSUMING FULL DILUTION:
Net earnings applicable to common stock and
   common stock equivalents...................................    $    39.9   $     22.2    $   146.0   $   137.7
Dividends applicable to dilutive preferred stock:
   Series B...................................................            -            -           .1          .1
   Series C...................................................            -           .1           .1          .2
                                                                  ---------   ----------    ---------   ---------
Adjusted net earnings assuming full dilution..................    $    39.9   $     22.3    $   146.2   $   138.0
                                                                  =========   ==========    =========   =========

Average number of common shares outstanding...................      104,499      104,313      104,422     104,246
Class A common shares.........................................          413          420          412         423
Common share equivalents:
   Series A preferred stock...................................          231          237          231         237
Equivalent common shares from
   Series B and C Preferred Stock.............................          543          570          543         570
Dilutive effect of outstanding stock options after
   application of treasury stock method.......................          456          298          456         332
                                                                  ---------   ----------    ---------   ---------
Fully diluted shares..........................................      106,142      105,838      106,064     105,808
                                                                  =========   ==========    =========   =========

Fully diluted earnings per share..............................    $     .38   $      .21    $    1.38   $    1.30
                                                                  =========   ==========    =========   =========

</TABLE>