**UNITED
      STATES**


**SECURITIES
      AND EXCHANGE COMMISSION**


**WASHINGTON,
      D.C. 20549**





**FORM
      10-Q**





x
            QUARTERLY
                REPORT PURSUANT TO SECTION 13 OR 15(d) OF THESECURITIES
                EXCHANGE ACT OF 1934




For
      the
      quarterly period ended  **March
      31,
      2008**




 ̈
            TRANSITION
                REPORT PURSUANT TO SECTION 13 OR 15(d) OF THESECURITIES
                EXCHANGE ACT OF 1934





For
      the
      transition period from ________________ to _________________





Commission
      file number 1-4668





**COASTAL
      CARIBBEAN OILS & MINERALS LTD.**





(Exact
      name of registrant as specified in its charter)





BERMUDA
            
            NONE(State
                or other jurisdiction of
            
            (I.R.S.
                Employerincorporation
                or organization)
            
            Identification
                No.)Clarendon
                House, Church Street, Hamilton, Bermuda
            
            HM
                11(Address
                of principal executive offices)
            
            (Zip
                Code)




(850)
      653-2732





(Registrant's
      telephone number, including area code)







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





Indicate
      by check mark whether the registrant (1) has filed all reports required to
      be
      filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during
      the
      preceding 12 months (or for such shorter period that the registrant was required
      to file such reports), and (2) has been subject to such filing requirements
      for
      the past 90 days. x Yes  ̈ No




Indicate
      by check mark whether the registrant is a large accelerated filer, an
      accelerated filer, a non-accelerated filer or a smaller reporting company.
      See
      definitions of “large accelerated filer,” “accelerated filer” and “smaller
      reporting company” in Rule 12b-2 of the Exchange Act. (Check one):


Large
                  accelerated filer ̈
              Accelerated
                  filer ̈Non-accelerated
                  filer ̈(Do
                  not check if smaller reporting company)
              Smaller
                  reporting companyx





Indicate
      by check mark whether the registrant is a shell company (as defined in Rule
      12b-2 of the Exchange Act).  ̈ Yes x No





The
      number of shares outstanding of the issuer's single class of common stock as
      of
      May 13, 2008 was 46,261,604.











**COASTAL
      CARIBBEAN OILS & MINERALS, LTD.**





**FORM
      10-Q**





**March 31,
      2008**





**Table
      of Contents**


Page**PART
                    I - FINANCIAL INFORMATION**ITEM
                    1
                Financial
                    StatementsConsolidated
                    balance sheets at March 31, 2008 and December 31, 2007
                
                3Consolidated
                    statements of operations for the three month periods ended March 31,
                    2008 and 2007 and for the period from January 31, 1953 (inception)
                    to
                    March 31, 2008
                
                4Consolidated
                    statements of cash flows for the three month periods ended March
                    31, 2008
                    and 2007 and for the period from January 31, 1953 (inception)
                    to
                    March 31, 2008
                
                5Notes
                    to consolidated financial statements
                
                6ITEM
                    2
                Management's
                    Discussion and Analysis of Financial Condition and Results of
                    Operations
                
                10ITEM
                    3
                Quantitative
                    and Qualitative Disclosure About Market Risk
                
                14ITEM
                    4
                Controls
                    and Procedures
                
                15**PART
                    II - OTHER INFORMATION**ITEM
                    5
                Other
                    Information
                
                16ITEM
                    6
                Exhibits
                
                17Signatures
                
                18




2





**COASTAL
      CARIBBEAN OILS & MINERALS, LTD.**





**FORM
      10-Q**





**PART
      I - FINANCIAL INFORMATION**





**ITEM
                1 -**
              **Financial
                  Statements**





**CONSOLIDATED
      BALANCE SHEETS**


(Expressed
      in U.S. dollars)





(A
      Bermuda Corporation)


A
      Development Stage Company


March 31,
                
                December 31,2008
                
                2007(Unaudited)
                
                (Note)**Assets**Current
                    assets:Cash
                    and cash equivalents
                
                $
                -
                
                $
                30,264Prepaid
                    expenses and other
                
                
                20,027
                
                
                30,040Total
                    current assets
                
                
                20,027
                
                
                60,304Certificates
                    of deposit
                
                
                136,604
                
                
                135,364Petroleum
                    leases
                
                
                2,200,644
                
                
                2,168,293Equipment,
                    net
                
                
                8,305
                
                
                8,935Total
                    assets
                
                $
                2,365,580
                
                $
                2,372,896**Liabilities
                    and Shareholders’ Equity**Current
                    liabilities:Accounts
                    payable and accrued liabilities
                
                $
                55,708
                
                $
                11,125Amounts
                    due to related parties
                
                
                453,786
                
                
                348,208Total
                    current liabilities
                
                
                509,494
                
                
                359,333Shareholders'
                    equityCommon
                    stock, par value $.12 per share:Authorized
                    - 250,000,000 sharesOutstanding –
                    46,261,604 and 46,211,604 shares, respectively
                
                
                5,551,392
                
                
                5,545,392Capital
                    in excess of par value
                
                
                32,139,311
                
                
                32,137,81137,690,703
                
                
                37,683,203Deficit
                    accumulated during the development stage
                
                
                (35,834,617
                )
                
                (35,669,640
                )Total
                    shareholders’ equity
                
                
                1,856,086
                
                
                2,013,563Total
                    liabilities and shareholders’ equity
                
                $
                2,365,580
                
                $
                2,372,896





Note:
      The
      balance sheet at December 31, 2007 has been derived from


the
      audited consolidated financial statements at that date.





See
      accompanying notes .





3





**COASTAL
      CARIBBEAN OILS & MINERALS, LTD.**





**FORM
      10-Q**





**PART
      I - FINANCIAL INFORMATION**





**ITEM
              1 -**
            **Financial
                Statements**





**CONSOLIDATED
      STATEMENTS OF OPERATIONS**


(Expressed
      in U.S. dollars)





(A
      Bermuda Corporation)


A
      Development Stage Company





(Unaudited)





For theperiod fromJan. 31, 1953Three months ended
            
            (inception)March 31,
            
            to March 31,2008
            
            2007
            
            2008**Interest
                and other income**
            
            $
            1,240
            
            $
            1,194
            
            $
            3,981,154**Gain
                on settlement**
            
            
            -
            
            
            -
            
            
            8,124,0161,240
            
            
            1,194
            
            
            12,105,170**Expenses:**Legal
                fees and costs
            
            
            40,413
            
            
            52,691
            
            
            17,459,308Administrative
                expenses
            
            
            88,193
            
            
            66,913
            
            
            10,670,414Salaries
            
            
            31,250
            
            
            39,050
            
            
            4,177,681Shareholder
                communications
            
            
            6,361
            
            
            9,580
            
            
            4,122,056Goodwill
                impairment
            
            
            -
            
            
            -
            
            
            801,823Write
                off of unproved properties
            
            
            -
            
            
            -
            
            
            6,631,505Exploration
                costs
            
            
            -
            
            
            -
            
            
            247,465Lawsuit
                judgments
            
            
            -
            
            
            -
            
            
            1,941,916Minority
                interests
            
            
            -
            
            
            -
            
            
            (632,974
            )Other
            
            
            -
            
            
            -
            
            
            364,865Contractual
                services
            
            
            -
            
            
            -
            
            
            2,155,728166,217
            
            
            168,234
            
            
            47,939,787**Net
                loss**
            
            $
            (164,977
            )
            $
            (167,040
            )Deficit
                accumulated during the development stage
            
            
            
            
            
            
            
            $
            (35,834,617
            )Average
                number of shares outstanding (basic & diluted)
            
            
            46,214,351
            
            
            46,211,604Net
                loss per share (basic & diluted)
            
            $
            (.004
            )
            $
            (.004
            )




See
      accompanying notes.





4





**COASTAL
      CARIBBEAN OILS & MINERALS, LTD.**


**FORM
      10-Q**


**PART
      I - FINANCIAL INFORMATION**





**ITEM
              1 -**
            **Financial
                Statements**





**CONSOLIDATED
      STATEMENTS OF CASH FLOWS**


(Expressed
      in U.S. Dollars)





(A
      Bermuda Corporation)


A
      Development Stage Company


(Unaudited)





For the period fromJan. 31, 1953Three months ended
            
            (inception)March 31,
            
            To2008
            
            2007
            
            March 31, 2008**Operating
                activities:**Net
                loss
            
            $
            (164,977
            )
            $
            (167,040
            )
            $
            (35,834,617
            )Adjustments
                  to reconcile net loss to net cashused
                  in operating activities:Gain
                on settlement
            
            
            -
            
            
            -
            
            
            (8,124,016
            )Goodwill
                impairment
            
            
            -
            
            
            -
            
            
            801,823Minority
                interest
            
            
            -
            
            
            -
            
            
            (632,974
            )Depreciation
            
            
            630
            
            
            630
            
            
            4,668Write
                off of unproved properties
            
            
            -
            
            
            -
            
            
            6,690,752Common
                stock issued for services
            
            
            -
            
            
            -
            
            
            119,500Compensation
                recognized for stock option grant
            
            
            -
            
            
            -
            
            
            75,000Recoveries
                from previously written off properties
            
            
            -
            
            
            -
            
            
            252,173Net
                change in:Prepaid
                expenses and other
            
            
            10,013
            
            
            9,751
            
            
            (20,028
            )Accrued
                liabilities
            
            
            50,161
            
            
            38,819
            
            
            509,496Net
                cash used in operating activities
            
            
            (4,173
            )
            
            (117,840
            )
            
            (36,158,223
            )**Investing
                activities:**Additions
                  to oil, gas, and mineral propertiesnet
                  of assets acquired for common stock and
                  reimbursements
            
            
            (57,351
            )
            
            (68,861
            )
            
            (6,260,440
            )Well
                drilling costs
            
            
            -
            
            
            -
            
            
            (1,071,011
            )Sale
                of unproved nonoperating interests
            
            
            25,000
            
            
            -
            
            
            319,614Net
                proceeds from settlement
            
            
            -
            
            
            -
            
            
            8,124,016Proceeds
                from relinquishment of surface rights
            
            
            -
            
            
            -
            
            
            246,733Purchase
                of certificate of deposit
            
            
            (1,240
            )
            
            -
            
            
            (136,604
            )Purchase
                of minority interest in CPC
            
            
            -
            
            
            -
            
            
            (801,823
            )Purchase
                of fixed assets
            
            
            -
            
            
            -
            
            
            (74,623
            )Net
                cash provided by (used in) investing activities
            
            
            (33,591
            )
            
            (68,861
            )
            
            345,862**Financing
                activities:**Loans
                from officers
            
            
            -
            
            
            -
            
            
            111,790Repayment
                of loans from officers
            
            
            -
            
            
            -
            
            
            (111,790
            )Sale
                of common stock net of expenses
            
            
            -
            
            
            -
            
            
            30,380,612Shares
                issued upon exercise of options
            
            
            7,500
            
            
            -
            
            
            891,749Sale
                of shares by subsidiary
            
            
            -
            
            
            -
            
            
            820,000Sale
                of subsidiary shares
            
            
            -
            
            
            -
            
            
            3,720,000Net
                cash provided by financing activities
            
            
            7,500
            
            
            -
            
            
            35,812,361Net
                decrease in cash and cash equivalents
            
            
            (30,264
            )
            
            (186,701
            )
            
            -Cash
                and cash equivalents at beginning of period
            
            
            30,264
            
            
            342,541
            
            
            -Cash
                and cash equivalents at end of period
            
            $
            -
            
            $
            155,840
            
            $
            -




See
      accompanying notes.





5





**COASTAL
      CARIBBEAN OILS & MINERALS, LTD.**





**FORM
      10-Q**





**PART
      I - FINANCIAL INFORMATION**





**ITEM
              1**
            **Financial
                Statements**





Note
      1.  Basis
      of Presentation





The
      accompanying unaudited consolidated financial statements include Coastal
      Caribbean Oils & Minerals, Ltd. (“the Company”) and its wholly owned
      subsidiary, Coastal Petroleum Company (“Coastal Petroleum”) and have been
      prepared in accordance with generally accepted accounting principles for interim
      financial information and with the instructions to Form 10-Q and Rule 10-01
      of
      Regulation S-X. Accordingly, they do not include all of the information and
      footnotes required by generally accepted accounting principles for complete
      financial statements. In the opinion of management, all adjustments considered
      necessary for a fair presentation have been included. All such adjustments
      are
      of a normal recurring nature. Operating results for the three month period
      ended
      March 31, 2008 are not necessarily indicative of the results that may be
      expected for the year ending December 31, 2008. For further information, refer
      to the consolidated financial statements and footnotes thereto included in
      the
      Company’s Annual Report on Form 10-K for the year ended December 31,
      2007.




Note
      2.  Going
      Concern





As
      of
      March 31, 2008, the Company had no revenues, had recurring losses from
      operations and has had an accumulated deficit during the development
      stage.  The Company's current cash position is not adequate to fund
      existing operations or exploration and development of its oil and gas
      properties. Management currently has in place an agreement with a party covering
      part of our leases under which the party will drill a test well and have the
      option to purchase a 50% working interest in the leases covered by the
      agreement. If the party exercised the option, the Company would receive
      approximately $1,000,000, although there is no assurance drilling will be
      successful or the option will be exercised. These situations raise substantial
      doubt about the Company's ability to continue as a going concern. These
      consolidated financial statements do not include any adjustments to reflect
      the
      possible future effects on the recoverability and classification of assets
      or
      amounts and classification of liabilities, which may result from the outcome
      of
      this uncertainty.





Note
      3. Net
      income (loss) per share





Net
      income (loss) per share is based upon the weighted average number of common
      and
      common equivalent shares outstanding during the period. The Company’s basic and
      diluted calculations of EPS are the same because the exercise of options is
      not
      assumed in calculating diluted EPS, as the result would be
      anti-dilutive.





Note
      4. Oil
      & Gas Development Activity





***Montana
      Leases***





The
      Company’s primary presence in Montana is in Valley County, where it holds leases
      covering approximately 124,882 net acres, which the Company acquired in three
      separate acquisitions between July 2005 and February 2006. The leases acquired
      in those acquisitions are contiguous to each other and are referred to
      collectively as “the Valley County Leases.”





6





**COASTAL
      CARIBBEAN OILS & MINERALS, LTD.**





**FORM
      10-Q**





**PART
      I - FINANCIAL INFORMATION**





**ITEM
              1**
            **Financial
                Statements******(Continued)





Note 
      4.  Oil
      & Gas Development Activity (Continued)





The
      Valley County Leases are subject to various overriding royalty interests to
      others ranging up to 19.5%. These leases expire in years from 2011 to
      2016.





The
      Company has an agreement with a consultant entity, controlled by one of the
      Company’s Directors, to identify Mississippian Lodgepole Reef prospects to be
      drilled on and near its Valley County Leases. Previously under the agreement,
      the Company was required to drill a test well on an identified Lodgepole Reef
      prospect by a certain deadline, however, there is no longer a drilling
      obligation under the agreement.





In
      August
      2007, the Company entered into a farm-out agreement with Western Standard Energy
      Corp. (“Western Standard”) Under the agreement Western Standard paid $40,000 up
      front to Coastal and then paid an additional $255,000 to cover the costs of
      drilling the first well to test a shallow natural gas prospect in Valley County,
      Montana and $129,000 to cover associated lease rentals. Western Standard will
      have a 100% working interest in the well until payout when it will be reduced
      to
      80% with Coastal receiving the remaining 20% working interest.





The
      first
      well under this agreement was drilled during October 2007, to test a shallow
      natural gas prospect near the middle of the Company’s Valley County Leases. The
      well reached a total depth of 1,126 feet, and confirmed the structural high
      that
      was targeted. The well also had gas shows in two zones. Casing was run into
      the
      hole and operations to complete and test the well were scheduled to begin at
      the
      end of November, but were delayed by equipment repairs. The well is located
      on
      Federal land and the Bureau of Land Management will not allow the completion
      and
      testing operations or any further drilling to begin until July, so operations
      have been suspended until that time. The Company also received an
      additional $29,000 from Western Standard to cover additional drilling and other
      costs associated with the delay in well completion, which has been recorded
      as a
      reduction in capitalized petroleum lease costs. Western Standard has agreed
      in
      writing to pay the estimated well completion costs of $65,000 and the parties
      have verbally agreed to extend the time to send the funds until no later than
      July 1, 2008, so that funds will be in place once operations are allowed to
      begin.





Once
      operations resume and within 30 days after the test well is completed, Western
      Standard has the option to purchase a 50% interest in approximately 42,000
      acres
      near the well location (referred to as “Valley County Shallow Gas Assembly”).
      The cost to exercise the option would be $1,000,000, payable in $200,000
      installments based on certain milestones related to drilling step-out wells.
      The
      Company currently has permits to drill two of the step-out wells and is in
      the
      permitting process for permits to drill two additional step-out wells.





In
      September 2007, the Company received $50,000 from F-Cross Resources, LLC (“F-
      Cross”) when the two parties entered into a farm-out agreement covering
      approximately 64,000 acres (now 62,000 after some leases expired) on the
      northwest part of the Company’s Valley County Leases. Under the agreement,
      F-Cross has the option to drill a Lodgepole test well within six months and
      after drilling that well has the further option to acquire an interest in
      surrounding acreage. F-Cross is to pay for the cost of drilling the initial
      well
      and will receive a 100%
      working interest in the well until payout and an 80% working interest subsequent
      to payout. The first Lodgepole test well under the agreement was spudded on
      November 3, 2007 and drilling has finished, but the well is awaiting completion
      and testing of several zones which have potential for both oil and gas. Unlike
      the shallow gas well on Federal land, this well is located on State land and
      provided that there is no State objection, the Company expects F-Cross will
      resume operations to complete and test the well once the weather and regulators
      permit it.




7





**COASTAL
      CARIBBEAN OILS & MINERALS, LTD.**





**FORM
      10-Q**





**PART
      I - FINANCIAL INFORMATION**





**ITEM
              1**
            **Financial
                Statements******(Continued)





Note
      4.  Oil
      & Gas Development Activity (Continued)





Under
      the
      terms of the agreement, F-Cross had an option to acquire a 50% working interest
      in the approximately 62,000 acres covered by the agreement for $25 per acre
      after completion of the first well. However, F-Cross did not meet the
      requirements in the agreement and in late March the option to acquire an
      interest in additional acreage expired. F-Cross will retain the interest in
      the
      well it has drilled and which is awaiting completion. The Company is currently
      talking with others that are interested in entering a similar agreement on
      this
      acreage.





The
      Company still holds approximately 21,000 acres under lease in its Valley County
      Leases that are not subject to an agreement with a third party and the Company
      is not currently looking for other entities to team with to explore that
      acreage.





***North
      Dakota Leases***





In
      July
      2005, the Company acquired leases to the deeper rights in approximately 21,688
      net acres in and near Slope County, North Dakota for a one time fee of $50,000
      from an entity controlled by one of the Company’s Directors and the Company has
      invested some additional funds to geochemically test and high-grade these and
      other prospects on the leases. Since that time, some of the leases have expired
      and the Company currently holds leases on approximately 8,510 net acres in
      North
      Dakota. The Company is obligated to drill a test well on the original leases
      totaling 7,031 acres before June 1, 2008, and has the option to drill the
      remaining Lodgepole Reef prospects on these leases. That deadline has been
      extended in the past and may be extended again. The Company had intended to
      team
      with other entities to share the cost of the initial 9,700 foot test well,
      the
      total estimated drilling cost of which is estimated to be $1,500,000, however,
      it is unlikely that the Company will be able to identify and contract with
      a
      team prospect prior to the expiration date. The leases making up the remaining
      acreage were leased by the Company and have no obligation associated with them.
      The Company still intends to team with other entities.





In
      an
      effort to explore the North Dakota leases, in December of 2007 the Company
      entered a new farm-out agreement with Western Standard. Under the agreement,
      the
      Company assigned leases over four of its high-graded Lodgepole Reef prospects
      to
      Western Standard in return for $80,000. The Company received $40,000 in November
      2007, $25,000 in February 2008 and $15,000 in April 2008, which was recorded
      as
      a reduction in capitalized petroleum lease costs. The Company will also retain
      a
      back-in working interest of 20% in the leases after payout. Oil For America
      has
      agreed to waive the drilling obligation on these four prospects.
      The Company still retains additional Lodgepole reef prospects on its North
      Dakota leases that are not covered by this farm-out agreement.




8





**COASTAL
      CARIBBEAN OILS & MINERALS, LTD.**





**FORM
      10-Q**





**PART
      I - FINANCIAL INFORMATION**





**ITEM
              1**
            **Financial
                Statements******(Continued)




Note
      5.  Income
      Taxes





For
      the
      three months period ending March 31, 2008 and 2007, the Company reported a
      loss
      for both financial statement reporting and income tax purposes. The Company
      has
      provided a 100% valuation allowance on its deferred tax asset as a result of
      its
      net operating loss carryforwards. The Company has approximately $10,000,000
      in
      net operating loss carryforwards at December 31, 2007.





Note
      6. Related
      Party Transactions





Pursuant
      to a written agreement with respect to the Valley County Leases, the Company
      uses an entity controlled by an individual who is a shareholder, officer and
      director of the Company to perform geotechnical analysis of potential drilling
      sites at a cost of $1,000 per site. The Company paid no amounts to this entity
      for the three months ended March 31, 2008, and 2007, respectively.





The
      Company pays a monthly retainer to the law firm of Angerer & Angerer which
      has been litigation counsel to the Company for more than twenty-five years
      and
      continues to serve the Company in that capacity as well as others including
      general counsel services, management services, public relations, shareholder
      relations and representing the Company before state and federal agencies for
      permitting. The principals of the law firm include two individuals who are
      collectively shareholders, officers and a director of the Company. The Company
      expensed $36,000 and $36,000 in legal fees for the three months ended March
      31,
      2008 and 2007, respectively. The Company owes $132,000 in accrued legal fees
      to
      Angerer & Angerer as of March 31, 2008.





The
      Company has retained the law firm of Igler & Dougherty, P.A. as securities
      counsel. One of the Company’s directors is a shareholder in the law firm. The
      Company has expensed $3,974 and $4,038 in legal fees and costs for the three
      months ended March 31, 2008 and 2007, respectively.





Note
      7.    Note
      Payable





The
      Company borrowed $126,000 in May 2007 to pay lease obligations that were due
      in
      June 2007. The note required the loan to be repaid prior to the spudding of
      the
      first well on any of the approximately 42,000 acres its leases covered by the
      loan agreement. Coastal assigned a 5% overriding royalty interest (before all
      expenses) in 8/8ths of the oil or natural gas produced from those Valley County
      Montana leases to the lender. The loan was repaid on October 15, 2007, prior
      to
      the spudding of the first well on the acreage, out of the money advanced by
      Western Standard Energy Corp. to drill the first well under their agreement
      with
      the Company.





9





**COASTAL
      CARIBBEAN OILS & MINERALS, LTD.**





**FORM
      10-Q**





**PART
      I - FINANCIAL INFORMATION**





Note
      8. Stock
      Transactions





In
      March
      2008, the Company received $7,500 from the exercise of outstanding stock options
      for 50,000 shares from Robert J. Angerer, Sr., a vice president and a director
      of the Company.





**ITEM
              2**
            **Management's
                Discussion and Analysis of Financial Condition
                and****Results
                of Operations**





**Forward
      Looking Statements**





Statements
      included in Management’s Discussion and Analysis of Financial Condition and
      Results of Operations, which are not historical in nature are intended to be
      forward looking statements. The Company cautions readers that forward looking
      statements are subject to certain risks and uncertainties that could cause
      actual results to differ materially from those indicated in the forward looking
      statements. Among the risks and uncertainties are: the uncertainty of securing
      additional financing through the sale of shares of Coastal Petroleum and/or
      Coastal Caribbean; changes in the income tax laws relating to tax loss carry
      forwards; the failure of the Company’s test wells to locate oil or gas reserves
      or the failure to locate oil or gas reserves which are economically feasible
      to
      recover; reductions in world wide oil or gas prices; adverse weather conditions;
      or mechanical failures of equipment used to explore the Company’s
      leases.





**Critical
      Accounting Policies**





The
      Company follows the full cost method of accounting for its oil and gas
      properties. All costs associated with property acquisition, exploration and
      development activities whether successful or unsuccessful are
      capitalized





The
      capitalized costs are subject to a ceiling test which basically limits such
      costs to the aggregate of the estimated present value discounted at a 10% rate
      of future net revenues from proved reserves, based on current economic and
      operating conditions, plus the lower of cost or fair market value of unproved
      properties.





The
      Company assesses whether its unproved properties are impaired on a periodic
      basis. This assessment is based upon work completed on the properties to date,
      the expiration date of its leases and technical data from the properties and
      adjacent areas.





**Liquidity and Capital Resources**


**Liquidity**





The
      Company has no available cash, excluding certificate of deposits pledged for
      drilling permits, at March 31, 2008, compared to $30,000 at December 31,
      2007. Our current liabilities exceed our current assets by $489,000 at March
      31,
      2008. We have suspended payments to our directors, general legal counsel, and
      employee since the second quarter of 2007 and have accrued $454,000 in expenses
      as of March 31, 2008. We received $7,500 in March 2008 from the exercise of
      outstanding stock options from Robert J. Angerer, Sr., our vice president and
      a
      director of the Company.





10





**COASTAL
      CARIBBEAN OILS & MINERALS, LTD.**





**FORM
      10-Q**





**PART
      I - FINANCIAL INFORMATION**





**ITEM
              2**
            **Management's
                Discussion and Analysis of Financial Condition an****d
                R****esults
                of Operations******(Continued)





During
      first quarter of 2008, we received $25,000 and we received an additional $15,000
      in April 2008 under a farm-out agreement for lease and drilling rights on our
      North Dakota leases. During 2007, we received approximately $309,000 under
      this
      and other agreements for lease and drilling rights and the options to acquire
      additional rights. Also during 2007, we received $255,000 that was used to
      drill
      one of the wells on our leases.





During
      the first quarter of 2008, we paid lease rentals of $57,000 for payments due
      in
      the first quarter of 2008 and $110,000 in lease payments are due in the second
      quarter of 2008. Lease payments in the amount of $16,000 were made in April
      and
      we have additional lease payments of approximately $94,000 due in June 2008.
      We
      may need to sell additional lease rights to obtain the cash to make these
      payments, although there is no guarantee we will be able to sell additional
      lease rights. Western Standard has committed to pay for estimated gas well
      completion costs of $65,000 no later than July 1, 2008 when operations may
      begin.





As
      of March
      31,
      2008 ,
      we had
      no revenues, had recurring losses prior to 2005
      and
      since 2005, and had an accumulated deficit during the development stage. Our
      current cash position is not adequate to fund existing operations or exploration
      and development of its oil and gas properties. We
      currently have in place an agreement with a party covering part of our leases
      under which the party will drill a test well and have the option to purchase
      a
      50% working interest in the leases covered by the agreement. If the party
      exercised the option, we would receive approximately $1,000,000, although there
      is no assurance drilling will be successful or the option will be exercised. These
      situations raise substantial doubt about our ability to continue as a going
      concern.





**Capital
      Resources**





In
      Montana, we have obtained the rights to explore for oil and gas in one area
      which will be our primary area of focus. This primary area is a large assembly
      of leases covering approximately 124,882 net acres in Valley County, located
      in
      northeastern Montana close to known production from a Lodgepole reef. This
      area
      of Montana has a number of other producing formations in addition to the
      Lodgepole, including the Eagle sands. Currently we have two agreements with
      two
      different entities covering separate areas of the leases and exploration has
      begun under those agreements. During 2006, we drilled two wells on lands outside
      these leases and they did not find economic quantities of oil or gas and were
      abandoned. We also hold leases in southwestern North Dakota and have an
      agreement covering four Lodgepole prospects on those leases.





The
      first
      of the two agreements we entered into was a farm-out agreement with Western
      Standard Energy Corp. (“Western Standard”) in August 2007. Under the agreement,
      Western Standard paid us $40,000 at execution and then paid an additional
      $384,000. From the $384,000, $255,000 was paid to cover the costs of drilling
      the first well to test a shallow natural gas prospect in Valley County, Montana
      and $129,000 was paid to cover associated lease rentals. Western Standard will
      have a 100% working interest in the first well until payout when it will be
      reduced to 80% and we will receive the other 20% working interest. Upon
      receiving the funds to cover lease rentals, we repaid in full our loan of
      $126,000. Under the loan agreement, the individual that loaned us the money
      continues to hold a 5% overriding royalty on the same approximately 42,000
      acres
      that are covered in the Western Standard farm-out agreement.




11




**COASTAL
        CARIBBEAN OILS & MINERALS, LTD.**
 
 **FORM
        10-Q**
 
 **PART
        I - FINANCIAL INFORMATION**




**ITEM
              2**
            **Management's
                Discussion and Analysis of Financial Condition and Results of
                Operations******(Continued)




The
      first
      well under this agreement was drilled during October 2007, to test a shallow
      natural gas prospect near the middle of our Valley County Leases. The well
      reached a total depth of 1,126 feet, and confirmed the structural high that
      we
      believed to be there. The well also had gas shows in two zones. Casing was
      run
      into the hole and operations to complete and test the well were scheduled to
      begin at the end of November, but were delayed by equipment repairs. The well
      is
      located on Federal land and the Bureau of Land Management would not allow the
      completion and testing operations or any further drilling to begin between
      December 1st and July 1st, so operations have been suspended until July. In
      December, we entered a Memorandum of Understanding with Western Standard which
      led to a farm-out agreement on our North Dakota Leases discussed below, but
      also
      allowed us to use $29,000 of the funds from Western Standard originally sent
      to
      cover completion to now cover lease rental and other costs associated with
      the
      delay in well completion. Western Standard has committed to send additional
      funds to pay the estimated well completion costs of $65,000 no later than July
      1, 2008 so that funds will be in place once operations are allowed to
      begin.





Once
      operations resume, and within 30 days after the test well is completed, Western
      Standard has the option to purchase a 50% interest in approximately 42,000
      acres
      near the well location (referred to as “Valley County Shallow Gas Assembly”).
      The cost to exercise the option would be $1,000,000, payable in $200,000
      installments based on certain milestones related to drilling step-out wells.
      We
      have received permits to drill two step-out wells and are currently in the
      permitting process for two more.





Under
      the
      second agreement, which we entered in September 2007, we received $50,000 from
      F-Cross Resources, LLC (“F-Cross”) when the two parties executed a farm-out
      agreement covering approximately 64,000 acres (now 62,000 after some leases
      expired) on the northwest part of our Valley County Leases. Under the agreement,
      F-Cross has the option to drill a Lodgepole test well within six months and
      after drilling that well has the further option to acquire an interest in
      surrounding acreage. F-Cross is to pay for the cost of drilling the initial
      well
      and will receive a 100% working interest in the well until payout and an 80%
      working interest subsequent to payout. F-Cross exercised its option and the
      first Lodgepole test well was spudded on November 3, 2007. Drilling has
      finished, but the well is awaiting completion and testing of several zones
      which
      have potential for both oil and gas. Unlike the shallow gas well on Federal
      land, this well is located on State land and provided that there is no State
      objection, we expect that F-Cross will resume operations to complete and test
      the well once the weather and state regulators permit it.




Under
      the
      terms of the agreement, F-Cross had an option to acquire a 50% working interest
      in the approximately 62,000 acres covered by the agreement for $25 per acre
      after completion of the first well. However, F-Cross did not meet the
      requirements in the agreement and in late March the option to acquire an
      interest in additional acreage expired. F-Cross will retain the interest in
      the
      well it has drilled and which is awaiting completion. We are currently talking
      with others that are interested in entering a similar agreement on this
      acreage.




12




**COASTAL
        CARIBBEAN OILS & MINERALS, LTD.**
 
 **FORM
        10-Q**
 
 **PART
        I - FINANCIAL INFORMATION**




**ITEM
              2**
            **Management's
                Discussion and Analysis of Financial Condition and Results of
                Operations******(Continued)




We
      still
      hold approximately 21,000 acres under our Valley County Leases that are not
      under agreement with any third party and we are not currently looking for other
      entities to team with to explore that acreage.





The
      two
      wells we were involved with drilling during 2006 and that were abandoned during
      2007 were drilled in Montana, but in areas outside of and as far as 130 miles
      from our Valley County Leases. Both of those wells reached the targeted
      Lodgepole reefs, but no gas or oil was present in economic quantities. We will
      not pursue any further drilling in these areas. The second of these wells was
      drilled with partners and t here
      are
      approximately $115,000 in unpaid expenses related to this well that are
      collectively the responsibility of the various partners. This amount is not
      reflected as a liability in the accompanying financial statements.





In
      North
      Dakota, we control the working interest on approximately 8,510 net acres in
      Slope, Billings, and Stark Counties, on which a number of drillable prospects
      have been mapped to date. The depth of wells here is greater than in Montana
      (approximately 9,500 feet versus approximately 5,000 feet), and so the cost
      of
      drilling is higher. A typical North Dakota wildcat well costs about $1.5 million
      to drill. We intend to bring in others to share the risk and investment in
      wells
      we drill in North Dakota until the we are in a stronger financial
      position





Through
      our efforts to bring in others to explore our North Dakota leases, in December
      of 2007 we entered a new farm-out agreement with Western Standard. Under the
      agreement, we assigned leases over four of our high-graded Lodgepole Reef
      prospects to Western Standard in return for $80,000. We received $40,000 in
      November 2007, $25,000 in February 2008 and expect to receive the other $15,000
      in the first quarter of 2008. We will also retain a back-in working interest
      of
      20% in the leases after payout. The leases cover all rights below the Tyler
      formation, including the Lodgepole formation, with an 80% net revenue interest.
      We acquired these and other leases in the area in 2005 from Oil For America
      for
      $50,000 and we have invested some additional funds to geochemically test and
      high-grade these and other prospects on the leases. Oil For America has agreed
      to waive the drilling obligation on these four prospects. We will still retain
      additional Lodgepole reef prospects on our North Dakota leases that are not
      covered by this farm-out agreement.





As
      briefly described above, in the Memorandum of Understanding which gave rise
      to
      the new farm-out agreement, Western Standard also agreed that we could use
      the
      more than $29,000 originally forwarded to be used for completion of the first
      shallow gas well to cover the costs associated with the delay in operations,
      including annual rentals. This amount combined with the $80,000 paid for the
      four reef prospects will help cover our operations during the first half of
      2008.




13




**COASTAL
        CARIBBEAN OILS & MINERALS, LTD.**
 
 **FORM
        10-Q**
 
 **PART
        I - FINANCIAL INFORMATION**


**ITEM
                2**
              **Management's
                  Discussion and Analysis of Financial Condition and Results of
                  Operations******(Continued)


**Results of Operations**





**Three
      months ended March 31, 2008 vs. March 31, 2007**





We
      did
      not conduct drilling activities in the first quarter of 2008 or 2007, due to
      weather and/or landowner access restrictions on our leases from January
      1 st to July
      1 st .
      We
      expect to resume
      drilling operations at the end of the 2 nd quarter
      of 2008. Substantially all the drilling activity on our leases for 2007 was
      financed under farm-out agreements with other entities, and we expect that
      to
      continue in 2008. Therefore, our expenses are primarily administrative and
      our
      2008 expenses remained consistent with 2007 amounts.





Our
      interest income decreased in 2008 from 2007 due to lower cash
      balances.





**ITEM
              3**
            **Quantitative
                and Qualitative Disclosure About Market
                Risk**





The
      Company does not have any significant exposure to market risk as there were
      no
      investments in marketable securities at March 31, 2008.





14




**ITEM
              4**
            **Controls
                and Procedures**




**a.**
            **Management’s
                annual report on internal control over financial
                reporting.**





We
      maintain controls and procedures designed to ensure that information required
      to
      be disclosed in the reports that the Company files or submits under the
      Securities Exchange Act of 1934 is recorded, processed, summarized and reported
      within the time periods specified in the rules and forms of the Securities
      and
      Exchange Commission. Our Chief Executive Officer and our Chief Financial
      Officer, after evaluating the effectiveness of our “disclosure controls and
      procedures” (as defined in the Securities Exchange Act of 1934 (the “Exchange
      Act”) Rules 13a-15(e) or 15d-15(e)) as of the end of the period covered by this
      quarterly report, have concluded that our disclosure controls and procedures
      are
      effective based on their evaluation of these controls and procedures required
      by
      paragraph (b) of Exchange Act Rules 13a-15 or 15d-15.





**b.**
            
            **Changes
                in internal controls.**The Company made no changes in its internal control over financial
                reporting that occurred during the Company’s first fiscal quarter that has
                materially affected, or which is reasonably likely to materially
                affect
                the Company’s internal control over financial
                reporting.





**c.**
            **Limitations
                on the Effectiveness of Controls********Our management, including our ChiefExecutive
                and Chief Financial Officer, does not expect that our disclosure
                controls
                and internal controls will prevent all error and all fraud. A control
                system, no matter how well conceived and operated, can provide only
                reasonable, not absolute, assurance that the objectives of the control
                system are met. Further, the design of a control system must reflect
                the
                fact that there are resource constraints, and the benefits of controls
                must be considered relative to their costs. Because of the inherent
                limitations in all control systems, no evaluation of controls can
                provide
                absolute assurance that all control issues and instances of fraud,
                if any,
                within the Company have been detected. These inherent limitations
                include
                the realities that judgments in decision-making can be faulty, and
                that
                breakdowns can occur because of simple error or mistake. Additionally,
                controls can be circumvented by the individual acts of some persons,
                by
                collusion of two or more people, or by management override of the
                control.




The
      design of any system of controls also is based in part upon certain assumptions
      about the likelihood of future events, and there can be no assurance that any
      design will succeed in achieving its stated goals under all potential future
      conditions; over time, controls may become inadequate because of changes in
      conditions, or the degree of compliance with the policies or procedures may
      deteriorate. Because of the inherent limitations in a cost-effective control
      system, misstatements due to error or fraud may occur and not be
      detected.




15




**COASTAL
      CARIBBEAN OILS & MINERALS, LTD.**


**FORM
      10-Q**


**PART
      II - OTHER INFORMATION**





**March
      31, 2008**





**ITEM
              5**
            **Other
                Information**




The
      Internal Revenue Code of 1986, as amended, provides special rules for
      distributions received by U.S. holders on stock of a passive foreign investment
      company (PFIC), as well as amounts received from the sale or other disposition
      of PFIC stock. Under the PFIC rules, a non-U.S. corporation will be classified
      as a PFIC for U.S. federal income tax purposes in any taxable year in which,
      after applying certain look-through rules, either (1) at least 75 percent of
      its
      gross income is passive income or (2) at least 50 percent of the gross value
      of
      its assets is attributable to assets that produce passive income or are held
      for
      the production of passive income.





The
      Company believes that it would not be classified as a PFIC for the year 2007,
      because it derived the majority of its gross income in 2007 from the sale of
      interests in parts of its leases to other companies through farm-out agreements,
      and received a relatively small amount of interest the Company. However, the
      Company may have
      been considered a PFIC in previous years, which could result in negative tax
      consequences to a shareholder. . The
      determination of whether the Company will be considered a PFIC for United States
      federal income tax purposes is an annual determination that cannot be made
      until
      the close of the fiscal year. Also, how the Company was classified last year
      does not affect how it will be classified this year.





If,
      for
      any taxable year, the Company’s passive income or assets that produce passive
      income exceed levels provided by U.S. law, the Company would be a "passive
      foreign investment company," or PFIC, for U.S. federal income tax purposes.
      For
      the years 1987 through 2004 and in 2006, Coastal Caribbean's passive income
      and
      assets that produce passive income exceeded those levels and for those years
      Coastal Caribbean constituted a PFIC. If Coastal Caribbean is a PFIC for any
      taxable year, then the Company’s U.S. shareholders potentially would be subject
      to adverse U.S. tax consequences of holding and disposing of shares of our
      common stock for that year and for future tax years. Any gain from the sale
      of,
      and certain distributions with respect to, shares of the Company’s common stock,
      would cause a U.S. holder to become liable for U.S. federal income tax under
      section 1291 of the Internal Revenue Code (the interest charge regime). The
      tax
      is computed by allocating the amount of the gain on the sale or the amount
      of
      the distribution, as the case may be, to each day in the U.S. shareholder’s
      holding period. To the extent that the amount is allocated to a year, other
      than
      the year of the disposition or distribution, in which the corporation was
      treated as a PFIC with respect to the U.S. holder, the income will be taxed
      as
      ordinary income at the highest rate in effect for that year, plus an interest
      charge.





For
      further information, refer to the consolidated financial statements and
      footnotes thereto included in the Company’s Annual Report on Form 10-K for the
      year ended December 31, 2007.





16




**COASTAL
      CARIBBEAN OILS & MINERALS, LTD.**


**FORM
      10-Q**


**PART
      II - OTHER INFORMATION**





**March
      31, 2008**





**ITEM
              6**
            **Exhibits**


31.1
              
              Certification
                  pursuant to Rule 13a-14 by Phillip W. Ware32.1
              
              Certification
                  pursuant to Section 906 by Phillip W.
                  Ware




17




**COASTAL
      CARIBBEAN OILS & MINERALS, LTD.**


**FORM
      10-Q**


**March
      31, 2008**




**SIGNATURES**





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





**COASTAL
              CARIBBEAN OILS & MINERALS, LTD.**RegistrantDate:
                May 13, 2008
            By
            /s/
                Phillip W.
                WarePhillip
                W. WareChief
                Executive Officer,President
                and Treasurer




18