---

---

UNITED STATESSECURITIES 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
ended June 30, 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
  incorporation or organization) |  | (I.R.S.
  Employer
  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.  x  Yes  o  No

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

The
number of shares outstanding of the issuers single class of common stock as of
July 18, 2005 was 46,211,604.

---

---



COASTAL
CARIBBEAN OILS & MINERALS, LTD.

FORM 10-Q

JUNE 30, 2005

Table of
Contents

|       |                                                                                                                                                                                    |  |     
|------ | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ----
|       |                                                                                                                                                                                    |  | Page
|       |                                                                                                                                                                                    |  |     
|       |                                                                                                                                                                                    |  |     
|       | PART I - FINANCIAL INFORMATION                                                                                                                                                     |  |     
|       |                                                                                                                                                                                    |  |     
|ITEM 1 | Financial Statements                                                                                                                                                               |  |     
|       |                                                                                                                                                                                    |  |     
|       | Consolidated
  balance sheets at June 30, 2005 and December 31, 2004                                                                                                               |  | 3   
|       |                                                                                                                                                                                    |  |     
|       | Consolidated
  statements of operations for the three and six month periods ended June 30,
  2005 and 2004 and for the period from
  January 31, 1953 (inception) to June 30, 2005 |  | 4   
|       |                                                                                                                                                                                    |  |     
|       | Consolidated
  statements of cash flows for the six month periods ended June 30, 2005 and
  2004 and for the period from January 31, 1953 (inception) to June 30, 2005             |  | 5   
|       |                                                                                                                                                                                    |  |     
|       | Notes to
  consolidated financial statements                                                                                                                                       |  | 6   
|       |                                                                                                                                                                                    |  |     
|ITEM 2 | Managements
  Discussion and Analysis of Financial Condition and Results of Operations                                                                                            |  | 9   
|       |                                                                                                                                                                                    |  |     
|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

---



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

|                                                       |  |             |             |              |   |             |  
|------------------------------------------------------ |  | ----------- | ----------- | ------------ | - | ----------- | -
|                                                       |  | June 30,    |             | December 31, |  
|                                                       |  |             |             |              |  
|                                                       |  | 2005        |             | 2004         |  
|                                                       |  |             |             |              |  
|                                                       |  | (Unaudited) |             | (Note)       |  
|Assets                                                 |  |             |             |              |  
|Current assets:                                        |  |             |             |              |   |             |  
|Cash and cash equivalents                              |  | $           | 90          |              | $ | 179         |  
|                                                       |  |             |             |              |   |             |  
|Prepaid expenses and other                             |  |             | 2,264       |              |   | 16,322      |  
|                                                       |  |             |             |              |   |             |  
|Total current assets                                   |  |             | 2,354       |              |   | 16,501      |  
|                                                       |  |             |             |              |   |             |  
|                                                       |  |             |             |              |   |             |  
|Contingent litigation claim
  (Note 4)                 |  |             |            |              |   |            |  
|                                                       |  |             |             |              |   |             |  
|                                                       |  |             |             |              |   |             |  
|Total assets                                           |  | $           | 2,354       |              | $ | 16,501      |  
|                                                       |  |             |             |              |   |             |  
|                                                       |  |             |             |              |   |             |  
|Liabilities
  and Shareholders (Deficit) Equity       |  |             |             |              |   |             |  
|                                                       |  |             |             |              |   |             |  
|Current liabilities:                                   |  |             |             |              |   |             |  
|Accounts payable and accrued
liabilities               |  | $           | 891,040     |              | $ | 863,127     |  
|Amounts due to related parties                         |  |             | 1,706,437   |              |   | 1,594,369   |  
|                                                       |  |             |             |              |   |             |  
|Total current liabilities                              |  |             | 2,597,477   |              |   | 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       |  |             | (40,278,326 | )            |   | (40,124,198 | )
|                                                       |  |             |             |              |   |             |  
|Total shareholders (deficit)
  equity                 |  |             | (2,595,123  | )            |   | (2,440,995  | )
|                                                       |  |             |             |              |   |             |  
|Total liabilities and
  shareholders (deficit) equity |  | $           | 2,354       |              | $ | 16,501      |  
|                                                       |  |             |             |              |   |             |  

Note: The balance sheet at December 31, 2004 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)

|                                                                |  |                             |            |                           |   |                                                                          |   |      |            |   |   |            |   |   |             |  
|--------------------------------------------------------------- |  | --------------------------- | ---------- | ------------------------- | - | ------------------------------------------------------------------------ | - | ---- | ---------- | - | - | ---------- | - | - | ----------- | -
|                                                                |  | Three months ended June 30, |            | Six months ended June 30, |   | For the
  period from
  Jan. 31, 1953
  (inception)
  to June 30,
  2005 |  
|                                                                |  |                             |            |                           |   |                                                                         
|                                                                |  | 2005                        |            | 2004                      |   | 2005                                                                     |   | 2004 |            |  
|                                                                |  |                             |            |                           |   |                                                                          |   |      |            |   |  
|Interest and other income                                       |  | $                           | 0          |                           | $ | 0                                                                        |   | $    | 0          |   | $ | 0          |   | $ | 3,877,570   |  
|                                                                |  |                             |            |                           |   |                                                                          |   |      |            |   |   |            |   |   |             |  
|                                                                |  |                             |            |                           |   |                                                                          |   |      |            |   |   |            |   |   |             |  
|Expenses:                                                       |  |                             |            |                           |   |                                                                          |   |      |            |   |   |            |   |   |             |  
|Legal fees and costs                                            |  |                             | 5,024      |                           |   | 77,890                                                                   |   |      | 14,057     |   |   | 162,279    |   |   | 16,913,737  |  
|Administrative expenses                                         |  |                             | 30,358     |                           |   | 62,183                                                                   |   |      | 78,491     |   |   | 138,100    |   |   | 9,814,184   |  
|Salaries                                                        |  |                             | 24,759     |                           |   | 24,758                                                                   |   |      | 49,519     |   |   | 49,518     |   |   | 3,805,330   |  
|Shareholder communications                                      |  |                             | 6,000      |                           |   | 6,000                                                                    |   |      | 12,060     |   |   | 12,565     |   |   | 3,985,152   |  
|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   |  
|                                                                |  |                             |            |                           |   |                                                                          |   |      |            |   |   |            |   |   |             |  
|                                                                |  |                             | 66,141     |                           |   | 170,831                                                                  |   |      | 154,127    |   |   | 362,462    |   |   | 44,155,896  |  
|                                                                |  |                             |            |                           |   |                                                                          |   |      |            |   |   |            |   |   |             |  
|                                                                |  |                             |            |                           |   |                                                                          |   |      |            |   |   |            |   |   |             |  
|Net loss                                                        |  | $                           | (66,141    | )                         | $ | (170,831                                                                 | ) | $    | (154,127   | ) | $ | (362,462   | ) |   |             |  
|                                                                |  |                             |            |                           |   |                                                                          |   |      |            |   |   |            |   |   |             |  
|                                                                |  |                             |            |                           |   |                                                                          |   |      |            |   |   |            |   |   |             |  
|Deficit accumulated during the development stage                |  |                             |            |                           |   |                                                                          |   |      |            |   |   |            |   | $ | (40,278,325 | )
|                                                                |  |                             |            |                           |   |                                                                          |   |      |            |   |   |            |   |   |             |  
|                                                                |  |                             |            |                           |   |                                                                          |   |      |            |   |   |            |   |   |             |  
|Weighted average number of shares outstanding (basic
& diluted) |  |                             | 46,221,604 |                           |   | 46,221,604                                                               |   |      | 46,221,604 |   |   | 46,221,604 |   |   |             |  
|                                                                |  |                             |            |                           |   |                                                                          |   |      |            |   |   |            |   |   |             |  
|                                                                |  |                             |            |                           |   |                                                                          |   |      |            |   |   |            |   |   |             |  
|Net loss per share (basic & diluted)                            |  | $                           | (.01       | )                         | $ | (.01                                                                     | ) | $    | (.01       | ) | $ | (.01       | ) |   |             |  
|                                                                |  |                             |            |                           |   |                                                                          |   |      |            |   |   |            |   |   |             |  

See accompanying notes.

4

---



COASTAL
CARIBBEAN OILS & MINERALS, LTD.FORM 10-QPART 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)

|                                                                                                           |  |                             |          |                                                                      |   |          |   |   |             |  
|---------------------------------------------------------------------------------------------------------- |  | --------------------------- | -------- | -------------------------------------------------------------------- | - | -------- | - | - | ----------- | -
|                                                                                                           |  | Six months ended
  June 30, |          | For the period from Jan. 31, 1953 
  (inception)
  ToJune 30,
  2005 |  
|                                                                                                           |  |                             |          |                                                                     
|                                                                                                           |  | 2005                        |          | 2004                                                                 |   |         
|                                                                                                           |  |                             |          |                                                                      |   |          |  
|Operating activities:                                                                                      |  |                             |          |                                                                      |   |          |   |   |             |  
|Net loss                                                                                                   |  | $                           | (154,127 | )                                                                    | $ | (362,462 | ) | $ | (40,278,326 | )
|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                                                                                 |  |                             | 14,057   |                                                                      |   | 62,821   |   |   | (2,266      | )
|Accrued liabilities                                                                                        |  |                             | 108,481  |                                                                      |   | 256,073  |   |   | 2,485,689   |  
|                                                                                                           |  |                             |          |                                                                      |   |          |   |   |             |  
|Net cash used in operating activities                                                                      |  |                             | (31,589  | )                                                                    |   | (43,568  | ) |   | (32,361,463 | )
|                                                                                                           |  |                             |          |                                                                      |   |          |   |   |             |  
|                                                                                                           |  |                             |          |                                                                      |   |          |   |   |             |  
|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                                                                                        |  |                             | 31,500   |                                                                      |   | 40,942   |   |   | 111,790     |  
|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                                                                |  |                             | 31,500   |                                                                      |   | 40,942   |   |   | 35,916,651  |  
|                                                                                                           |  |                             |          |                                                                      |   |          |   |   |             |  
|Net (decrease) increase in
  cash and cash equivalents                                                     |  |                             | (89      | )                                                                    |   | (2,626   | ) |   | 90          |  
|Cash and cash equivalents at
  beginning of period                                                         |  |                             | 179      |                                                                      |   | 2,875    |   |   |            |  
|                                                                                                           |  |                             |          |                                                                      |   |          |   |   |             |  
|Cash and cash equivalents at
  end of period                                                               |  | $                           | 90       |                                                                      | $ | 249      |   | $ | 90          |  
|                                                                                                           |  |                             |          |                                                                      |   |          |   |   |             |  

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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 and six month periods ended June 30, 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

As of June 30, 2005, 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 and has received the net
proceeds in July 2005 as described in Note 5.
Management believes the proceeds to be sufficient to fund the future
operations of the Company.

The
Company plans to become immediately current with all of its present
obligations, to acquire the rights to drill and produce low cost, but highly
potential oil and gas prospects, and to partner with others in higher cost
prospects. As with any prospective oil and gas well drilled, there is no
assurance that such wells will produce, but based upon the low cost to drill
these wells and the success of wells drilled nearby these properties,
Management believes the potential returns justify the wells.

Note 3. Litigation

Florida Case

In
June 2005, the Company and the State of Florida (the State) 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).

6

---



COASTAL
CARIBBEAN OILS & MINERALS, LTD.

FORM 10-Q

PART I -
FINANCIAL INFORMATION

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

In
July 2005, the Company received the net proceeds due it under the
Agreement.  The royalty holders
who intervened in the Coastal Petroleum litigation received $2.54 million for
their interests, and Lykes Minerals Corp. tendered its Coastal Petroleum common
shares and transferred 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       |  |   | 2,540,000  | 
| | Purchase of CPC shares           |  |   | 802,000    | 
| | To Settlement Consultant         |  |   | 465,000    | 
| | To Company Creditors             |  |   | 2,431,000  | 
| |                                  |  |   |            | 
| |                                  |  |   |            | 
| | Amount to Company and Subsidiary |  | $ | 4,872,000  | 

Coastal
Caribbean now owns 100% of Coastal Petroleum Company.

Lease Taking Case (Lease
224-A)

This
proceeding has been dismissed as part of the Agreement with the State.

Royalty Taking Case

This
proceeding has been dismissed as part of the Agreement with the State.

Lease Taking Case (Lease 224-B)

This
proceeding has been dismissed as part of the Agreement with the State.

7

---



COASTAL
CARIBBEAN OILS & MINERALS, LTD.

FORM 10-Q

PART I -
FINANCIAL INFORMATION

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

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).

Note 5. Subsequent
Events

On
July 21, 2005, the Company announced it had concluded the agreement with the
State of Florida surrendering its offshore Florida Leases, ending all
litigation with the State of Florida and has, along with Coastal Petroleum,
received cash, after payment of all expenses, in the amount of approximately
$4.9 million. The conclusion of the agreement results in the Company owning all
of the outstanding stock of Coastal Petroleum Company with its tax loss carry
forwards estimated to be approximately $14 Million.

In
July 2005, Coastal Petroleum acquired the rights to drill two 6,500 foot wells
to test a Mississippian Lodgepole Reef in Valley County, in northeast Montana
for a one time fee of $50,000 from an entity controlled by one of the Companys
Directors.  The Company is obligated to
drill these test wells before the end of October 2005 and has the option to
drill for additional prospects in the Valley County area.  The Company estimates the cost to drill each
of these test wells to be approximately $500,000.

Also
in July 2005, Coastal Petroleum acquired leases to the deeper rights in 25,000
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. The Company is
obligated to drill a test well before the end of 2005 and has the option to
drill the remaining Lodgepole Reef prospects on these leases. The Company plans
to partner with other entities to share the cost of the initial 9,700 foot test
well at an estimated drilling cost of approximately $600,000.

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; 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.  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. The Company entered into a settlement
agreement with the State of Florida on June 1, 2005 in order to resolve the
disputes regarding the Companys Florida leases.  In July 2005, the Company received the net proceeds due it under
the Agreement.  Management believes the
proceeds to be sufficient to fund the future operations of the Company.

At
June 30, 2005, Coastal Caribbean had no cash available.  The Company had 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
June 30, 2005 the amount of salaries and fees being deferred totaled
approximately $1,706,000.  The payment due dates for the Companys
annual rental payments on its Florida leases of approximately $59,000 were
extended during the time the State and Coastal have been in discussions and no
amounts are due under the settlement.   No amounts have been accrued related to these
leases in the current year.

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 June 30, 2005 vs.
June 30, 2004

The
Company incurred a loss of $66,000 for the 2005 quarter, compared to a loss of
$171,000 for the comparable 2004 quarter.

Legal
fees and costs decreased 94% to $5,000 for the 2005 quarter,
compared to $78,000 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 51%during
the 2005 period to $30,000 compared to $62,000 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 flatduring the 2005 quarter at
$25,000.

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

Six
months ended June 30, 2005 vs. June 30, 2004

The
Company incurred a loss of $154,000 for the six months ended June 30, 2005
compared to a loss of $362,000 for the comparable 2004 period.

Legal
fees and costs decreased 91% to $14,000 for the 2005 period,
compared to $162,000 in the 2004 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 43%during
the 2005 period to $78,000 compared to $138,000 in the 2004 period.  This was primarily related to Directors and
Officers liability insurance which decreased from $54,000 in the 2004 period
to $-0- in the 2005 period.

Salaries
remained flatduring the 2005 period at
$50,000.

Shareholder
communications remained constantat $12,000 during the 2005 period.

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 June 30, 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) as of the end of the period covered by this
report and have concluded:

| |                                                                                                                                                                                                                                                                                                                                                                                                   
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 1.          That
  the Companys disclosure controls and procedures are effective  and 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

June 30, 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-QPART II - OTHER INFORMATION

June 30, 2005

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

| |       |                                                                                                                                                                       
| | ----- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 10(i) | Agreement
  with Oil For America assigning Oil For Americas interest in 25,000 acres of
  its Slope County North Dakota Assembly acreage to Coastal Petroleum Company
| |       |                                                                                                                                                                       
| | 10(j) | Agreement
  with Oil For America to provide two Lodgepole Reef drilling locations in
  Valley County, Montana.                                                        
| |       |                                                                                                                                                                       
| | 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

June 30, 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 29, 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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