EXHIBIT
10(h)

Memorandum
of Agreement by and between Coastal Petroleum
Company, et al and the State of Florida Dated June 1, 2005.

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Exhibit 10(h)

MEMORANDUM OF SETTLEMENT

June 1, 2005

The
purpose of this memorandum is to set forth the essential terms of the agreement
between and among Coastal Petroleum Company (Coastal), and Coastal Caribbean
Oils & Minerals, Ltd. and certain individuals who claim royalty interests
in, to and under the Coastal Leases (the Royalty Holders), and the State of
Florida, the State of Florida Department of Environmental Protection and Board
of Trustees of the Internal Improvement Trust Fund of the State of Florida
(collectively the State) to finally settle and resolve all claims between and
among them arising out of Coastals Leases Nos. 224-A, 224-B and 248 (the
Coastal Leases).  The Royalty Holders
included in this agreement are Coastal Caribbean Oils & Minerals, Ltd. and
members of two groups of individuals, one represented by Susan W. Fox, Esquire,
and the other by Robert W. Clark, who are obtaining individual consents.  This transaction is consistent with public
policy regarding offshore oil and gas drilling as expressed in Sections 377.06,
377.24 and 377.242, Florida Statutes.

The
closing of this settlement transaction, including payment of the settlement
proceeds and delivery of the required settlement documents, shall take place in
Tallahassee, Florida within 30 days after approval of the funding of this
settlement by the Florida Legislature and such funds are made available to the
Department of Environmental Protection, and this settlement is expressly
conditioned and contingent upon approval of the funding by the Florida
Legislature.  Current annual rentals for
the Coastal Leases will be held in abeyance pending the closing of this
settlement transaction at which time the settlement will take effect and the
rentals will no longer be due.

At
the closing, the following payment and documents shall be delivered:

| |    |                                                                                                                                                                                                                                                   
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 1. | The State
  shall pay to Ausley & McMullen Escrow Account, for and on behalf of
  Coastal and the Royalty Holders, the total sum of $12,500,000.                                                                                                  
| | 2. | Coastal and
  the Royalty Holders shall release and transfer to the Board of Trustees of
  the Internal Improvement Trust Fund of the State of Florida all of their
  right, title and interest in, to and under the Coastal Leases.              
| | 3. | Each party
  shall dismiss with prejudice all pending litigation brought by any of them
  against the other with respect to the Coastal Leases or their alleged royalty
  interests in, to or under such leases, each party to bear its own costs.

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| |    |                                                                                                                                                                                                                                                                               
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 4. | The parties
  shall exchange General Releases, declarations, certificates, legal opinions
  and affidavits in form and content acceptable to the State; including, but
  not limited to, those listed on Exhibit A attached hereto and by this
  reference made a part hereof.

|                                                                                                |                                                                                        |                         
|----------------------------------------------------------------------------------------------- | -------------------------------------------------------------------------------------- | ------------------------
|                                                                                                | BOARD OF
  TRUSTEES OF THE
  INTERNAL IMPROVEMENT TRUST FUND
  OF THE STATE OF FLORIDA
|                                                                                                |                                                                                       
|(SEAL)
  BOARD OF TRUSTEES OF THE
  INTERNAL IMPROVEMENT
  TRUST FUND OF THE STATE
  OF FLORIDA | /S/  Jeb Bush                                                                         
|JEB BUSH
  GOVERNOR                                                                            
|                                                                                                |                                                                                       
|                                                                                                | /S/
  Charlie Crist                                                                   
|                                                                                                |                                                                                       
|                                                                                                | CHARLIE
  CRIST
  ATTORNEY GENERAL                                                    
|                                                                                                |                                                                                       
|                                                                                                | /S/
  Tom Gallagher                                                                   
|                                                                                                |                                                                                       
|                                                                                                | TOM
  GALLAGHER
  CHIEF FINANCIAL OFFICER                                             
|                                                                                                |                                                                                       
|                                                                                                | /S/
  Charles H. Bronson                                                              
|                                                                                                |                                                                                       
|                                                                                                | CHARLES H.
  BRONSON
  COMMISSIONER OF AGRICULTURE                                    
|                                                                                                |                                                                                       
|                                                                                                | STATE OF
  FLORIDA DEPARTMENT OF
  ENVIRONMENTAL PROTECTION                           
|                                                                                                |                                                                                       
|                                                                                                | By:                                                                                    | /S/  Colleen M. Castille
|                                                                                                |                                                                                        |                         
|                                                                                                | COLLEEN M.
  CASTILLE, Secretary                                                      
|                                                                                                |                                                                                        |                         
|                                                                                                |                                                                                        | /S/ John K.
  Aurell    
|                                                                                                |                                                                                        |                         
|                                                                                                | JOHN K.
  AURELL,
  On behalf of Coastal Petroleum Company and
  The Royalty Holders  

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EXHIBIT A
To Memorandum of Settlement

The boards of
directors and officers of Coastal and Coastal Caribbean Oil and Minerals shall
provide the following schedules, certifications, declarations and legal
opinions at closing:

| |    |                                                                                                                                                                                                                                                                                                                           
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 1. | A schedule
  of creditors and holders of interests or grants of Coastal and Coastal
  Caribbean (the Schedule.)                                                                                                                                                                                                         
| |    |                                                                                                                                                                                                                                                                                                                           
| | 2. | Certifications
  that the Schedule is complete and accurate to the best of the knowledge and
  belief of the officers of the company and of the independent auditors of the
  companies, regardless of whether the claims or interests are contingent,
  disputed or liquidated.                                          
| |    |                                                                                                                                                                                                                                                                                                                           
| | 3. | A
  declaration by the companies to prepare and submit to the Escrow Agent and to
  the State an amendment to the schedule of creditors to include any creditor
  of the companies not appearing on previously furnished lists upon demand for
  payment by an alleged creditor or discovery of a claim (the Amendment.)
| |    |                                                                                                                                                                                                                                                                                                                           
| | 4. | A
  declaration authorizing the State to pay the funds from the settlement
  directly to the Ausley & McMullen Escrow Account referenced in the
  Memorandum of Settlement.                                                                                                                                               
| |    |                                                                                                                                                                                                                                                                                                                           
| | 5. | Escrow instructions
  for the Escrow which include an irrevocable provision that the escrowed funds
  be used first to satisfy all of the creditors of Coastal and Coastal
  Caribbean in full, whether included on the Schedule or subsequently
  discovered and added to the Amendment.                                 
| |    |                                                                                                                                                                                                                                                                                                                           
| | 6. | A
  certification that all of the issued and outstanding stock of Coastal is
  accounted for and represented among parties who will execute a release and
  satisfaction of interest to the State as part of this settlement.                                                                                             
| |    |                                                                                                                                                                                                                                                                                                                           
| | 7. | A
  certification that following the contemplated transfers, Coastal will be a
  wholly owned subsidiary of Coastal Caribbean.                                                                                                                                                                                            
| |    |                                                                                                                                                                                                                                                                                                                           
| | 8. | A
  certification that all guarantors of the debts or obligations of Coastal and
  Coastal Caribbean have been disclosed and will execute a release and
  satisfaction of claim in connection with the settlement.                                                                                                        
| |    |                                                                                                                                                                                                                                                                                                                           
| | 9. | A
  certification that all creditors, contingency holders of interests or grants,
  and parties who are to receive distributions from the Escrow have executed
  and delivered to the Escrow Agent releases and satisfactions of claims to be
  delivered to the State at closing.                                        

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| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 10. | Resolution
  of the Board of Directors for each of the companies at properly noticed
  meetings approving the settlement transaction; specifically finding as follows:
  i) the Boards find the consideration given by the State in exchange for all
  consideration to be given by the companies and parties to be fair, for
  reasonably equivalent value and not a product of duress, adhesion or sharp
  practices; ii) the Boards have disclosed all compensation to be received by
  the officers and directors of the companies and all distributions to be made
  under the escrow agreement, and iii) the Boards have found that the companies
  will receive sufficient compensation from the settlement, after paying all
  creditors in full, to remain solvent thereafter.
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | 11. | Resolution
  from the Board of Directors of Coastal at a properly noticed meeting
  specifically authorizing its president to execute the Surrender of Leases and
  Release of Claims releasing and surrendering to the Board of Trustees all of
  Coastals right, title and interest in and to the Leases and any interest it
  may have in the lands described in the Leases.                                                                                                                                                                                                                                                                                                                                                                                                       
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | 12. | Legal
  opinions of Florida and Bermuda counsel to the companies and the State that
  the settlement transaction will not result in either an avoidable fraudulent
  transfer or preferential transfer with regard to any creditor or guarantor
  under the laws of the United States or Bermuda.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | 13. | Estoppel
  certificate from Coastal in which Coastal certifies that it has not assigned,
  transferred, encumbered or hypothecated its interests in or under the Leases
  or any interest it may have in the lands described in the Leases.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            

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