---

---

UNITED STATES
SECURITIES AND EXCHANGE COMMISSIONWASHINGTON, D.C. 20549

FORM 10-Q

|                                               |                                                                                           
|---------------------------------------------- | ------------------------------------------------------------------------------------------
|x                                              | QUARTERLY
  REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 
|                                               |                                                                                           
|For the quarterly period
  endedMarch 31, 2005
|                                               |                                                                                           
|o                                              | TRANSITION
  REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from
________________ to _________________

Commission file number 1-4668

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

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

|                                                    |  |             
|--------------------------------------------------- |  | ------------
|Clarendon
  House, Church Street, Hamilton, Bermuda |  | HM
  11     
|                                                   
|(Address
  of principal executive offices)          |  | (Zip
  Code)

|                                                                                    
|------------------------------------------------------------------------------------
|(850)
  653-9165                                                                    
|                                                                                    
|(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 (l) has filed all reports required to be
filed by Section 13 or 15 (d) of the Securities Exchange Act of l934 during the
preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.  T  Yes   ̈  No

Indicate
by check mark whether the registrant is an accelerated filer (as defined in
Rule 12b-2 of the Exchange Act).   ̈  Yes  T  No

The
number of shares outstanding of the issuers single class of common stock as of
June 30, 2005 was 46,211,604.

---

---



COASTAL
CARIBBEAN OILS & MINERALS, LTD.

FORM 10-Q

MARCH 31, 2005

Table of
Contents

PART
I - FINANCIAL INFORMATION

|                            |                                                                                                                                                                            |  |     
|--------------------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ----
|                            |                                                                                                                                                                            |  | Page
|                            |                                                                                                                                                                            |  |     
|ITEM 1                      | Financial Statements                                                                                                                                                       |  |     
|                            |                                                                                                                                                                            |  |     
|                            | Consolidated
  balance sheets at March 31, 2005 and December 31, 2004                                                                                                      |  | 3   
|                            |                                                                                                                                                                            |  |     
|                            | Consolidated
  statements of operations for the three month periods ended March 31, 2005 and
  2004 and for the period from January 31, 1953 (inception) to March 31, 2005 |  | 4   
|                            |                                                                                                                                                                            |  |     
|                            | Consolidated
  statements of cash flows for the three month periods ended March 31, 2005 and
  2004 and for the period from January 31, 1953 (inception) to March 31, 2005 |  | 5   
|                            |                                                                                                                                                                            |  |     
|                            | Notes to consolidated
  financial statements                                                                                                                               |  | 6   
|                            |                                                                                                                                                                            |  |     
|ITEM 2                      | Managements
  Discussion and Analysis of Financial Condition and Results of Operations                                                                                    |  | 10  
|                            |                                                                                                                                                                            |  |     
|ITEM 3                      | Quantitative
  and Qualitative Disclosure About Market Risk                                                                                                                |  | 12  
|                            |                                                                                                                                                                            |  |     
|ITEM 4                      | Controls and
  Procedures                                                                                                                                                  |  | 12  
|                            |                                                                                                                                                                            |  |     
|PART II - OTHER INFORMATION
|                            |                                                                                                                                                                            |  |     
|ITEM 5                      | Other
  Information                                                                                                                                                        |  | 13  
|                            |                                                                                                                                                                            |  |     
|ITEM 6                      | Exhibits                                                                                                                                                                   |  | 14  
|                            |                                                                                                                                                                            |  |     
|                            | Signatures                                                                                                                                                                 |  | 15  

2

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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, |  
|                                                       |  |             |             |              |  
|                                                       |  | 2005        |             | 2004         |  
|                                                       |  |             |             |              |  
|                                                       |  | (Unaudited) |             | (Note)       |  
|Assets                                                 |  |             |             |              |   |             |  
|Current assets:                                        |  |             |             |              |   |             |  
|Cash and cash equivalents                              |  | $           | 85          |              | $ | 179         |  
|                                                       |  |             |             |              |   |             |  
|Prepaid expenses and other                             |  |             | 7,289       |              |   | 16,322      |  
|                                                       |  |             |             |              |   |             |  
|Total current assets                                   |  |             | 7,374       |              |   | 16,501      |  
|                                                       |  |             |             |              |   |             |  
|                                                       |  |             |             |              |   |             |  
|Contingent litigation claim
  (Note 4)                 |  |             | -           |              |   | -           |  
|                                                       |  |             |             |              |   |             |  
|                                                       |  |             |             |              |   |             |  
|Total assets                                           |  | $           | 7,374       |              | $ | 16,501      |  
|                                                       |  |             |             |              |   |             |  
|                                                       |  |             |             |              |   |             |  
|Liabilities
  and Shareholders (Deficit) Equity       |  |             |             |              |   |             |  
|                                                       |  |             |             |              |   |             |  
|Current liabilities:                                   |  |             |             |              |   |             |  
|Accounts payable and accrued
liabilities               |  | $           | 912,931     |              | $ | 863,127     |  
|Amounts due to related parties                         |  |             | 1,623,424   |              |   | 1,594,369   |  
|                                                       |  |             |             |              |   |             |  
|Total current liabilities                              |  |             | 2,536,355   |              |   | 2,457,496   |  
|                                                       |  |             |             |              |   |             |  
|                                                       |  |             |             |              |   |             |  
|Minority interests                                     |  |             | -           |              |   | -           |  
|                                                       |  |             |             |              |   |             |  
|Shareholders (deficit) equity                         |  |             |             |              |   |             |  
|Common stock, par value $.12 per
share:                |  |             |             |              |   |             |  
|Authorized - 250,000,000 shares                        |  |             |             |              |   |             |  
|Outstanding  46,211,604,
respectively                 |  |             | 5,545,392   |              |   | 5,545,392   |  
|Capital in excess of par value                         |  |             | 32,137,811  |              |   | 32,137,811  |  
|                                                       |  |             |             |              |   |             |  
|                                                       |  |             | 37,683,203  |              |   | 37,683,203  |  
|Deficit accumulated during the development
stage       |  |             | (40,212,184 | )            |   | (40,124,198 | )
|                                                       |  |             |             |              |   |             |  
|Total shareholders (deficit)
  equity                 |  |             | (2,528,981  | )            |   | (2,440,995  | )
|                                                       |  |             |             |              |   |             |  
|Total liabilities and
  shareholders (deficit) equity |  | $           | 7,374       |              | $ | 16,501      |  
|                                                       |  |             |             |              |   |             |  

|                                                                                                                                  |  | 
|--------------------------------------------------------------------------------------------------------------------------------- |  | 
|Note: The balance sheet at
  December 31, 2004 has been derived fromthe audited consolidated financial
  statements at that date.

See accompanying notes.

3

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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 the
  period from
  Jan. 31, 1953
  (inception)
  to March 31, |  
|                                                       |  |                    |            |                                                                   
|                                                       |  |                    |            |                                                                   
|                                                       |  |                    |            |                                                                   
|                                                       |  | Three months ended |            |                                                                   
|                                                       |  |                    |            |                                                                   
|                                                       |  | March 31,          |            | 2005                                                               |  
|                                                       |  |                    |            |                                                                    |  
|                                                       |  | 2005               |            | 2004                                                               |   |            |   |  
|                                                       |  |                    |            |                                                                    |   |            |   |  
|Interest and other income                              |  | $                  | 0          |                                                                    | $ | 0          |   | $ | 3,877,571   |  
|                                                       |  |                    |            |                                                                    |   |            |   |   |             |  
|                                                       |  |                    |            |                                                                    |   |            |   |   |             |  
|Expenses:                                              |  |                    |            |                                                                    |   |            |   |   |             |  
|Legal fees and costs                                   |  |                    | 9,033      |                                                                    |   | 84,389     |   |   | 16,908,711  |  
|Administrative expenses                                |  |                    | 48,133     |                                                                    |   | 75,917     |   |   | 9,783,826   |  
|Salaries                                               |  |                    | 24,760     |                                                                    |   | 24,760     |   |   | 3,780,571   |  
|Shareholder communications                             |  |                    | 6,060      |                                                                    |   | 6,565      |   |   | 3,979,152   |  
|Write off of unproved properties                       |  |                    | -          |                                                                    |   | -          |   |   | 5,560,494   |  
|Exploration costs                                      |  |                    | -          |                                                                    |   | -          |   |   | 247,465     |  
|Lawsuit judgments                                      |  |                    | -          |                                                                    |   | -          |   |   | 1,941,916   |  
|Minority interests                                     |  |                    | -          |                                                                    |   | -          |   |   | (632,974    | )
|Other                                                  |  |                    | -          |                                                                    |   | -          |   |   | 364,865     |  
|Contractual services                                   |  |                    | -          |                                                                    |   | -          |   |   | 2,155,728   |  
|                                                       |  |                    |            |                                                                    |   |            |   |   |             |  
|                                                       |  |                    | 87,986     |                                                                    |   | 191,631    |   |   | 44,089,754  |  
|                                                       |  |                    |            |                                                                    |   |            |   |   |             |  
|                                                       |  |                    |            |                                                                    |   |            |   |   |             |  
|Net loss                                               |  | $                  | (87,986    | )                                                                  | $ | (191,631   | ) |   |             |  
|                                                       |  |                    |            |                                                                    |   |            |   |   |             |  
|                                                       |  |                    |            |                                                                    |   |            |   |   |             |  
|Deficit accumulated during the development
stage       |  |                    |            |                                                                    |   |            |   | $ | (40,212,184 | )
|                                                       |  |                    |            |                                                                    |   |            |   |   |             |  
|                                                       |  |                    |            |                                                                    |   |            |   |   |             |  
|Average number of shares outstanding (basic &
diluted) |  |                    | 46,211,604 |                                                                    |   | 46,211,604 |   |   |             |  
|                                                       |  |                    |            |                                                                    |   |            |   |   |             |  
|                                                       |  |                    |            |                                                                    |   |            |   |   |             |  
|Net loss per share (basic & diluted)                   |  | $                  | (.01       | )                                                                  | $ | (.01       | ) |   |             |  
|                                                       |  |                    |            |                                                                    |   |            |   |   |             |  

See accompanying notes.

4

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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, 1953
  (inception)To |  
|                                                                                                           |  | Three months ended
  March 31, |         |     
|                                                                                                           |  |                                |         |      |  
|                                                                                                           |  | 2005                           |         | 2004 |   | March 31, 2005                                   |  
|                                                                                                           |  |                                |         |      |   |                                                  |  
|Operating activities:                                                                                      |  |                                |         |      |   |                                                  |  
|Net loss                                                                                                   |  | $                              | (87,986 | )    | $ | (191,631                                         | ) | $ | (40,212,185
|Adjustments to reconcile net
  loss to net cash used in operating activities:                              |  |                                |         |      |   |                                                  |   |   |            
|Minority interest                                                                                          |  |                                | -       |      |   | -                                                |   |   | (632,974   
|Write off of unproved
  properties                                                                         |  |                                | -       |      |   | -                                                |   |   | 5,619,741  
|Common stock issued for
  services                                                                         |  |                                | -       |      |   | -                                                |   |   | 119,500    
|Compensation recognized for
  stock option grant                                                           |  |                                | -       |      |   | -                                                |   |   | 75,000     
|Recoveries from previously
  written off properties                                                        |  |                                | -       |      |   | -                                                |   |   | 252,173    
|Net change in:                                                                                             |  |                                |         |      |   |                                                  |   |   |            
|Prepaid expenses and other                                                                                 |  |                                | 9,033   |      |   | 31,410                                           |   |   | (7,290     
|Accrued liabilities                                                                                        |  |                                | 65,359  |      |   | 141,616                                          |   |   | 2,442,567  
|                                                                                                           |  |                                |         |      |   |                                                  |   |   |            
|Net cash used in operating
  activities                                                                    |  |                                | (13,594 | )    |   | (18,605                                          | ) |   | (32,343,468
|                                                                                                           |  |                                |         |      |   |                                                  |   |   |            
|                                                                                                           |  |                                |         |      |   |                                                  |   |   |            
|Investing activities:                                                                                      |  |                                |         |      |   |                                                  |   |   |            
|Additions to oil, gas, and
  mineral properties net of assets acquired for common stock and reimbursements |  |                                | -       |      |   | -                                                |   |   | (3,740,182 
|Proceeds from relinquishment
  of surface rights                                                           |  |                                | -       |      |   | -                                                |   |   | 246,733    
|Purchase of fixed assets                                                                                   |  |                                | -       |      |   | -                                                |   |   | (61,649    
|                                                                                                           |  |                                |         |      |   |                                                  |   |   |            
|Net cash used in investing
  activities                                                                    |  |                                | -       |      |   | -                                                |   |   | (3,555,098 
|                                                                                                           |  |                                |         |      |   |                                                  |   |   |            
|                                                                                                           |  |                                |         |      |   |                                                  |   |   |            
|Financing activities:                                                                                      |  |                                |         |      |   |                                                  |   |   |            
|Loans from officers                                                                                        |  |                                | 13,500  |      |   | 17,000                                           |   |   | 93,790     
|Sale of common stock net of
  expenses                                                                     |  |                                | -       |      |   | -                                                |   |   | 30,380,612 
|Shares issued upon exercise
  of options                                                                   |  |                                | -       |      |   | -                                                |   |   | 884,249    
|Sale of shares by subsidiary                                                                               |  |                                | -       |      |   | -                                                |   |   | 820,000    
|Sale of subsidiary shares                                                                                  |  |                                | -       |      |   | -                                                |   |   | 3,720,000  
|                                                                                                           |  |                                |         |      |   |                                                  |   |   |            
|Net cash provided by
  financing activities                                                                |  |                                | 13,500  |      |   | 17,000                                           |   |   | 35,898,651 
|                                                                                                           |  |                                |         |      |   |                                                  |   |   |            
|Net (decrease) increase in
  cash and cash equivalents                                                     |  |                                | (94     | )    |   | (1,605                                           | ) |   | 85         
|Cash and cash equivalents at
  beginning of period                                                         |  |                                | 179     |      |   | 2,875                                            |   |   | -          
|                                                                                                           |  |                                |         |      |   |                                                  |   |   |            
|Cash and cash equivalents at
  end of period                                                               |  | $                              | 85      |      | $ | 1,270                                            |   | $ | 85         
|                                                                                                           |  |                                |         |      |   |                                                  |   |   |            

See accompanying
notes.

5

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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s) and its 58.45% 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, 2005 are not necessarily
indicative of the results that may be expected for the year ending December 31,
2005.  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, 2004.

|        |                
|------- | ---------------
|Note 2. | Going
  Concern

The Company
has a working capital deficiency, has a limited amount of cash, has incurred
recurring losses and has a deficit accumulated during the development
stage.   We have been involved in
several legal proceedings against the State of Florida  (the State) which has limited our ability to
commence development activities on our unproven oil and gas properties or
obtain compensation for certain property rights we believe have been
taken.  The cost of that litigation has
been substantial.  The Company entered
into a settlement agreement with the State as described in Note 3.  Management expects to receive the net
proceeds in July 2005 and believes the proceeds to be sufficient to fund the
future operations of the Company.

The Company
has received a commitment from some of its Officers to loan the Company funds
until the settlement proceeds are received from the State, provided that
payments to the Companys litigation counsel and to the Companys salaried
employee are deferred and provided further that payments to other Company
counsel are also deferred.  These loans
totaled approximately $138,000 through June 30, 2005.  Should the settlement with the State be unsuccessful, the Company
may have to suspend or cease operations and may have to wind up the Company or
be forced into insolvent liquidation under the laws of Bermuda unless and until
the Company can secure additional capital or financing.

These
situations raise substantial doubt about the Companys ability to continue as a
going concern.  The 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.

6

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COASTAL CARIBBEAN OILS & MINERALS, LTD.

FORM 10-Q

PART I - FINANCIAL INFORMATION

|        |                     
|------- | --------------------
|ITEM 1  | Financial Statements
|        |                     
|Note 3. | Litigation          

Florida Case

The
Company and the State of Florida (the State) have agreed to a final settlement
of all claims and rights between the parties including the Company, its
subsidiary Coastal Petroleum, and royalty holders that have intervened in
Coastal Petroleums recent litigation and includes the cancellation of all
property lease rights for a lump sum payment by the State of $12.5 million (the
Agreement).

The
royalty holders who intervened in the Coastal Petroleum litigation would
receive $2.225 million for their interests, and Lykes Minerals Corp. would
tender its Coastal Petroleum common shares and transfer any interest in the
Florida leases to Coastal Petroleum for $1.39 million.  Under the Agreement with the State, the
Company will receive and distribute the following:

| |                                               |  |   |            | 
| | --------------------------------------------- |  | - | ---------- | 
| | Agreement
  with the State                    |  | $ | 12,500,000 | 
| |                                               |  |   |            | 
| | To Lykes
  Mineral Corporation                |  |   | 1,390,000  | 
| | To Outside
  Royalty Holders                  |  |   | 2,225,000  | 
| |                                               |  |   |            | 
| | To the
  Company and its Subsidiary           |  |   | 8,885,000  | 
| |                                               |  |   |            | 
| | To
  Settlement Consultant                    |  |   | 465,000    | 
| | To Company
  Creditors (as of April 30, 2005) |  |   |            | 
| | CCO                                           |  |   | 230,000    | 
| | CPC                                           |  |   | 2,265,000  | 
| |                                               |  |   |            | 
| | Amount to
  Company and Subsidiary            |  |   |            | 
| | After payment to Creditors                    |  | $ | 5,925,000  | 

The
other shareholders of Coastal Petroleum have agreed to sell their shares back
to Coastal Petroleum for a total of $801,923 out of the remaining funds in the
subsidiary.  Coastal Caribbean would own
100% of Coastal Petroleum Company.

The
Florida Legislature addressed the funding of this settlement Agreement in its
recent legislative session which began in March of this year.  Both the Legislative Budget Commission and
the Governor and Cabinet sitting as the Board of Trustees of the Internal
Improvement Trust Fund have approved the Agreement, and the Company expects to
receive the funds after July 1 of this year.
The payment of funds is contingent upon the exchange of proper releases
and other documents from all parties as set out in the Agreement.

7

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COASTAL CARIBBEAN OILS & MINERALS, LTD.

FORM 10-Q

PART I - FINANCIAL INFORMATION

|       |                     
|------ | --------------------
|ITEM 1 | Financial Statements

Lease Taking
Case (Lease 224-A)

There has
been no material change in these proceedings during this quarter.

Royalty
Taking Case

There has
been no material change in these proceedings during this quarter.

Lease Taking
Case (Lease 224-B)

A
case management hearing in this case was held on June 30, 2005, at which time
the parties agreed that a stay of the action before the trial court was
appropriate pending the consummation of the Agreement.  In the event the Agreement is not
consummated, the court would continue to consider its ruling on the States
motion for summary judgment.

|        |                 
|------- | ----------------
|Note 4. | Loss per
  share

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 (the Company has continuing losses).



8

---



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

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; the uncertainty of any decision favorable to Coastal Petroleum in
its litigation against the State of Florida; and the substantial cost of
continuing the litigation.

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.
Since the Companys properties were undeveloped and nonproducing and the
subject of litigation, capitalized costs were not being amortized.

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. These properties are subject to extensive litigation with the
State of Florida and all costs to date have been expensed for impairment.

9

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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 Operation (Contd)

Liquidity and Capital Resources

Liquidity

The Company
currently has a working capital deficiency, has a limited amount of cash, has
incurred recurring losses and has a deficit accumulated during the development
stage.  We have been involved in several
legal proceedings against the State of Florida which has limited our ability to
commence development activities on our unproven oil and gas properties or
obtain compensation for certain property rights we believe have been taken. The
cost of that litigation has been substantial. Management expects to receive the
net proceeds in July 2005 and believes the proceeds to be sufficient to fund
future operations of the Company.

At
March 31, 2005, Coastal Caribbean had no cash available. The Company has
received a commitment from some of its Officers to loan the Company funds until the settlement proceeds are received
from the State, provided that payments to the Companys litigation
counsel and to the Companys salaried employee are deferred and provided
further that payments to other Company counsel are also deferred. These loans
totaled approximately $138,000 through June 30, 2005.

Certain
directors, officers, legal counsel and administrative consultants have agreed
to defer the payment of their salaries and fees. At March 31, 2005 the amount
of salaries and fees being deferred totaled approximately $1,623,000. The
payment due dates for the Companys annual rental payments on its Florida
leases of approximately $59,000 have been extended during the time the State
and Coastal have been in discussions and they are currently not due.  No amounts have been accrued related to
these leases in the current year. Should the settlement with the State be
unsuccessful, the Company may have to suspend or cease operations and may have
to wind up the company or be forced into insolvent liquidation under the laws
of Bermuda unless and until the Company can secure additional funds for
operations.

These situations raise substantial doubt
about the Companys ability to continue as a going concern. The 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.

10

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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 Operation (Contd)

Results of Operations

Three months ended March 31, 2005 vs. March
31, 2004

The
Company incurred a loss of $88,000 for the 2005 quarter, compared to a loss of
$192,000 for the comparable 2004 quarter.

Interest income and other income remained flat from $-0- in the 2004 quarter to $-0- in the 2005 quarter because of lack of
available funds to invest.

Legal fees and costs decreased 89% to
$9,000 for the 2005 quarter, compared to $84,000 in the prior period. Legal
fees and costs decreased in 2005 compared with 2004 due to reduction in
expenditures for legal fees and experts related to Coastal Petroleum Companys
lawsuit against the State of Florida seeking compensation for the States
taking of its property rights to explore for oil and gas within its state Lease
224-A.

Administrative
expenses decreased 37% during the 2005 period to
$48,000 compared to $76,000 in the 2004 period. This was primarily related to
Directors and Officers liability insurance which decreased from $27,000 in
2004 to $-0- in the 2005 quarter.

Salaries
remained flat during
the 2005 quarter at $25,000.

Shareholder communications remained flat during the 2005 quarter at $6,000.

11

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COASTAL
CARIBBEAN OILS & MINERALS, LTD.

FORM
10-Q

PART
I - FINANCIAL INFORMATION

|       |                                                            
|------ | -----------------------------------------------------------
|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, 2005.

|       |                        
|------ | -----------------------
|ITEM 4 | Controls and Procedures

We,
Phillip W. Ware, the principal executive officer and Kenneth M. Cornell, the
principal financial officer, have evaluated the Companys disclosure
controls and procedures (as defined in Rules 13a-14(c) and 15d-14(c) adopted
under the Securities Act of 1934) within the ninety (90) day period prior to
the date of this report and have concluded:

| |                                                                                                                                                                                                                                                                                                                                                                                    
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 1.          That
  the Companys disclosure controls and procedures are adequately designed to
  ensure that material information relating to the Company, including its
  consolidated subsidiary, is timely made known to such officers by others
  within the Company and its subsidiary, particularly during the period in
  which this quarterly report is being prepared; and
| |                                                                                                                                                                                                                                                                                                                                                                                    
| | 2.          That
  there were no significant changes in the Companys internal controls or in
  other factors that could materially affect or are reasonably likely to
  materially affect these controls subsequent to the date of their evaluation,
  including any corrective actions with regard to significant deficiencies and
  material weaknesses.                        

12

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COASTAL
CARIBBEAN OILS & MINERALS, LTD.FORM
10-QPART II - OTHER INFORMATION

March
31, 2005

|            |                  
|----------- | -----------------
|ITEM 5    - | Other Information

Coastal
Caribbean is currently a passive foreign investment company, or PFIC, for
United States federal income tax purposes, which could result in negative tax
consequences to a shareholder. 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
2001, 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, 2004.

13

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COASTAL
CARIBBEAN OILS & MINERALS, LTD.

FORM
10-Q

PART
II - OTHER INFORMATION

March
31, 2005

|        |         
|------- | --------
|ITEM 6- | Exhibits

|     |  |                                                              
|---- |  | -------------------------------------------------------------
|31.1 |  | Certification pursuant to Rule 13a-14 by Phillip W.
  Ware   
|     |  |                                                              
|31.2 |  | Certification pursuant to Rule 13a-14 by Kenneth M.
  Cornell
|     |  |                                                              
|32.1 |  | Certification pursuant to Section 906 by Phillip W.
  Ware   
|     |  |                                                              
|32.2 |  | Certification pursuant to Section 906 by Kenneth M.
  Cornell

14

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COASTAL
CARIBBEAN OILS & MINERALS, LTD.

FORM
10-Q

March
31, 2005

SIGNATURES

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

| |                                          
| | -----------------------------------------
| | COASTAL
  CARIBBEAN OILS & MINERALS, LTD.
| |                                          
| | Registrant                               

|                   |  |                              |                                                           | 
|------------------ |  | ---------------------------- | --------------------------------------------------------- | 
|Date: July 5, 2005 |  | By  /s/
  Phillip W. Ware   
|                   |  |                              |                                                           | 
|                   |  |                              | Phillip W. Ware                                           | 
|                   |  |                              | Chief Executive Officer,                                  | 
|                   |  |                              | President and Treasurer                                   | 
|                   |  |                             
|                   |  | By  /s/
  Kenneth M. Cornell
|                   |  |                              |                                                           | 
|                   |  |                              | Kenneth M. Cornell                                        | 
|                   |  |                              | Chief Financial Officer
  and Principal Financial Officer | 

15

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