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

[X]      QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
         SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended            September 30, 1998
                               -------------------------------------------

[  ]     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                   NONE
 ................................................................................
    (Address of principal executive offices)                     (Zip Code)

                                  441-295-1422
 ................................................................................
              (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     |_|  No

         The number of shares outstanding of the issuer's single class of common
stock as of October 20, 1998 was 40,056,358.



<PAGE>


                                                       
                         PART I - FINANCIAL INFORMATION

                          ITEM 1 - FINANCIAL STATEMENTS

                     COASTAL CARIBBEAN OILS & MINERALS, LTD.
                             (A Bermuda Corporation)
                           A Development Stage Company

                           CONSOLIDATED BALANCE SHEET
                           (Expressed in U.S. dollars)
                                   (unaudited)

<TABLE>
<CAPTION>
                                                                              September 30,       December 31,
                                                                                  1998                1997

                                                                              ------------        ------------
                                 ASSETS

Current assets:
<S>                                                                           <C>                 <C>         
  Cash and cash equivalents                                                   $    585,686        $    316,333
  Accounts and interest receivable                                                  24,664              77,302
  Marketable securities                                                            633,513           3,433,035
  Prepaid insurance                                                                328,338             213,840
                                                                              ------------        ------------
          Total current assets                                                   1,572,201           4,040,510
                                                                              ------------        ------------

Marketable securities                                                            1,300,000                   -

Unproved oil, gas and mineral properties (full cost method)                      4,694,793           4,395,132

Other                                                                               27,107              26,765
                                                                              ------------        ------------
Total assets                                                                  $  7,594,101        $  8,462,407
                                                                              ============        ============



                  LIABILITIES, MINORITY INTERESTS AND
                          SHAREHOLDERS' EQUITY

Current liabilities:
  Accounts payable and accrued liabilities                                    $     52,103        $     63,975
                                                                              ------------        ------------

Minority interests
                                                                                         -                   -
                                                                              ------------        ------------

Shareholders' equity:
  Common stock, par value 12(cent) per share:
  Authorized  - 250,000,000 shares
  Outstanding - 40,056,358 shares                                                4,806,763           4,806,763
  Capital in excess of par value                                                28,693,033          28,693,033
                                                                              ------------        ------------
    Total capital                                                               33,499,796          33,499,796
  Deficit accumulated during development stage                                 (25,957,798)        (25,101,364)
                                                                              ------------        ------------
  Total shareholders' equity                                                     7,541,998           8,398,432
                                                                              ------------        ------------
Total liabilities, minority interests and shareholders' equity                $  7,594,101        $  8,462,407
                                                                              ============        ============

</TABLE>

<PAGE>




                         PART I - FINANCIAL INFORMATION

                          ITEM 1 - FINANCIAL STATEMENTS

                     COASTAL CARIBBEAN OILS & MINERALS, LTD.
                             (A Bermuda Corporation)
                           A Development Stage Company

                      CONSOLIDATED STATEMENT OF OPERATIONS
                           (Expressed in U.S. dollars)
                                   (unaudited)



<TABLE>
<CAPTION>
                                                                                                                     From inception
                                                    Three months ended                  Nine months ended            (Jan. 31, 1953)
                                                       September 30,                       September 30,               to Sept. 30,
                                                   1998            1997                1998             1997              1998
                                                ---------       ---------           ---------       -----------      ---------------


<S>                                             <C>             <C>                 <C>             <C>                 <C>       
  Interest and other income                     $  37,300       $  66,713           $ 136,081       $   221,330         $3,642,207
                                                ---------       ---------           ---------       -----------         ----------

  Expenses:
    Legal fees and costs                           93,425         329,379             356,369           650,530         11,826,272
    Administrative expenses                       123,214         107,684             376,178           334,095          6,745,327
    Salaries                                       40,250          39,000             120,750           117,000          2,871,028
    Shareholder communications                     29,873          40,298             120,830           169,031          3,556,861
    Exploration costs                               1,512          28,935              18,387            38,990            770,981
    Lawsuit judgments                                   -               -                   -                 -          1,941,916
    Minority interests                                  -               -                   -                 -           (632,974)
    Other                                               -               -                   -                 -            364,866
    Contractual services                                -               -                   -                 -          2,155,728
                                                ---------       ---------           ---------       -----------         ----------
                                                                                                              -
                                                  288,274         545,296             992,514         1,309,646         29,600,005
                                                ---------       ---------           ---------       -----------         ----------

  Net loss                                      $(250,974)      $(478,583)          $(856,433)      $(1,088,316)
                                                ==========      ==========          ==========      ============

  Deficit accumulated during
    development stage                                                                                                 $(25,957,798)
                                                                                                                      =============

  Average number of shares
    Outstanding                                40,056,358      40,056,358          40,056,358        40,055,358
                                               ==========      ==========          ==========        ==========

  Net loss per share (basic & diluted)            $(.01)          $(.01)              $(.02)            $(.03)
                                                  ======          ======              ======            ======
</TABLE>



<PAGE>



                         PART I - FINANCIAL INFORMATION

                          ITEM 1 - FINANCIAL STATEMENTS

                     COASTAL CARIBBEAN OILS & MINERALS, LTD.
                             (A Bermuda Corporation)
                           A Development Stage Company
                      CONSOLIDATED STATEMENT OF CASH FLOWS
                           (Expressed in U.S. Dollars)
                                   (unaudited)


<TABLE>
<CAPTION>
                                                                                                   From inception
                                                                    Nine months ended              (Jan. 31, 1953)
                                                                      September 30,                  to Sept. 30,
                                                                1998                1997                1998
                                                            -----------         ------------        -------------
Operating activities:
<S>                                                         <C>                 <C>                 <C>          
Net loss                                                    $ (856,433)         $(1,088,316)        $(25,957,798)
Adjustments to reconcile net loss
  to net cash used for operating activities:
    Minority interest                                                                     -             (632,974)
    Exploration and other                                                                 -              755,974
    Net change in:
       Accounts receivable                                      52,638               51,465              (24,664)
       Marketable securities                                 1,499,522            1,129,304            2,799,522
       Prepaid insurance                                      (114,498)             (49,122)            (328,338)
       Current liabilities                                     (11,872)            (151,703)              52,102
       Other                                                      (343)                (991)             471,799
                                                            ----------          -----------         ------------
Net cash used for operating activities                         569,014             (109,363)         (22,864,377)
                                                            ----------          -----------         ------------

Investing activities:
  Additions to oil, gas, and mineral
    properties net of assets acquired
    for common stock                                          (299,661)            (442,026)          (4,694,793)
  Reimbursement of lease rentals and
    Other expenses                                                   -                    -            1,243,086
  Marketable securities purchased                                    -                    -              (61,649)
  Purchase of fixed assets                                           -                1,649           (4,733,035)
                                                            ----------          -----------         ------------
Net cash provided by (used for) investing activities
                                                              (299,661)            (440,377)          (8,246,391)
                                                            ----------          -----------         ------------

Financing activities:
  Cash proceeds from sale of
    common stock less expenses                                       -                    -           26,342,205
  Shares issued upon exercise of options                             -               11,250              884,249
  Sale of shares by subsidiary                                       -                    -              750,000
  Sale of subsidiary shares                                          -              240,000            3,720,000
                                                            ----------          -----------         ------------
Net cash provided by financing activities                            -              251,250           31,696,454
                                                            ----------          -----------         ------------
Net increase (decrease) in cash
  and cash equivalents                                         269,353             (298,490)             585,686
Cash and cash equivalents at
  beginning of period                                          316,333              424,330                    -
                                                            ----------          -----------         ------------

Cash and cash equivalents at
  end of period                                             $  585,686          $   125,840         $    585,686
                                                            ==========          ===========         ============
</TABLE>



<PAGE>



                         PART I - FINANCIAL INFORMATION

                     COASTAL CARIBBEAN OILS & MINERALS LTD.

                               September 30, 1998

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

         The  information  for the three and nine month periods ended  September
30, 1998 and 1997 is  unaudited,  but includes  all  adjustments  which  Coastal
Caribbean Oils & Minerals,  Ltd. (the "Company")  considers necessary for a fair
statement  of the results of  operations  for those  periods.  The  consolidated
financial  statements  include the Company's  59.25% owned  subsidiary,  Coastal
Petroleum Company ("Coastal Petroleum").

         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, and are hereby  identified as "forward  looking  statements"
for  purposes  of the  "Safe  Harbor"  Statement  under the  Private  Securities
Litigation Reform Act of 1995. 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.

         The Company's  principal  assets are oil, gas, and mineral leases,  the
costs of which totaled $4.7 million at September 30, 1998.  The Company has been
and continues to be involved in several legal  proceedings  against the State of
Florida  which  have  limited  the  Company's  ability to  commence  development
activities on its unproved oil and gas properties.  These consolidated financial
statements do not include any adjustments to reflect the possible future effects
on the recoverability and classification of assets or amounts and classification
of liabilities that may result from the outcome of this uncertainty.

ITEM 2   -    Management's Discussion and Analysis of Financial Condition and
              ---------------------------------------------------------------
              Results of Operation
              --------------------

Liquidity and Capital Resources

                              Short Term Liquidity

         At September 30, 1998,  Coastal  Caribbean  had cash and  securities of
approximately  $2.5  million.  These  funds are  expected to be used for general
corporate  purposes,  including  exploration and development and to continue the
litigation against the State of Florida.


<PAGE>


                         PART I - FINANCIAL INFORMATION

                     COASTAL CARIBBEAN OILS & MINERALS LTD.

                               September 30, 1998

ITEM 2   -    Management's Discussion and Analysis of Financial Condition and
              ---------------------------------------------------------------
              Results of Operation (Cont'd)
              -----------------------------

                               Long Term Liquidity

         The Company estimates that as much as $500,000 per year may be required
in connection with the Florida litigation.  The Company expects that the Florida
litigation  will  continue at least  through  1999,  although the State may take
actions that could shorten or lengthen that period. The Company has a program to
evaluate  the  Company's  leases which is  estimated  to cost  approximately  $1
million for the 1998-1999  period,  and is subject to the outcome of the Florida
litigation.  During the quarter  ended  September  30, 1998,  the Company  spent
approximately   $300,000  under  its  program  to  identify  potential  drilling
prospects.

         The  Company's  oil and  gas  properties  are  currently  unproved  and
undeveloped.  In 1992, the Company  applied for a drilling permit from the State
of Florida to drill an exploratory  well (the St. George Island prospect) in the
water near Apalachicola, Florida. The State of Florida has resisted the issuance
of the drilling  permit.  If the Company is  successful  in obtaining  the state
drilling permit, then the Company must also do the following:

         1.       Obtain a federal permit.

         2.       Finance  drilling  of the  well  (including  the  cost  of the
                  recommended surety),  which is estimated to cost approximately
                  $5.5 million.

         3.       Begin drilling the well within  one year of the date the state
                  permit is issued.

         The Company does not  currently  have assets  sufficient  to fund these
expenditures  to drill the  exploration  well, if a permit were granted.  If oil
and/or gas is discovered in commercial  quantities,  a production  program would
require  additional  permitting  and  construction  of  production,  storage and
delivery systems.  The Company would be required to seek additional financing or
partners to fund these  expenditures.  During the recent quarterly  period,  the
Company  has been  meeting  with  various oil and gas  companies  to present its
drilling prospects.



<PAGE>


ITEM 2   -    Management's Discussion and Analysis of Financial Condition and
              ---------------------------------------------------------------
              Results of Operation (Cont'd)
              -----------------------------

Results of Operations

Three month period ended September 30, 1998 vs. September 30, 1997

         The Company  incurred a loss of $251,000 for the 1998 quarter, compared
to a loss of $479,000 for the comparable 1997 quarter.

         Interest income and other income  decreased 44% from $67,000 in 1997 to
$37,000 in 1998 because less funds were available for investment during the 1998
period and interest rates were lower.

         Legal fees and costs  decreased  72% to $93,000  for the 1998  quarter,
compared to $329,000 in the prior  period.  In the 1997 period,  the Company had
been involved in various  appeals and hearings in connection with the opposition
by the state and others to the  issuance of a drilling  permit.  During the 1998
period, the level of expenditures decreased.

         Administrative expenses increased 14% to $123,000 in 1998 from $108,000
in the prior quarter. The primary reason for the increase was an increase in the
amount of directors' and officers' liability insurance in 1998.

         Shareholder  communications  decreased  26%  from  $40,000  in  1997 to
$30,000 in 1998. In 1997, the cost of printing and mailing was higher because of
the size of the  documents  and the  number  of  mailings  compared  to the 1998
period.

         Exploration  costs  decreased from $29,000 in 1997 to $1,512 in 1998 in
connection with the Company's project to identify potential drilling  prospects.
During 1998, the project was substantially completed.


<PAGE>


ITEM 2   -    Management's Discussion and Analysis of Financial Condition and
              ---------------------------------------------------------------
              Results of Operation (Cont'd)
              -----------------------------

Nine month period ended September 30, 1998 vs. September 30, 1997

         The Company  incurred a loss of $856,000 for the 1998 period,  compared
to a loss of $1,088,000 for the comparable 1997 period.

         Interest income and other income decreased 39% from $221,000 in 1997 to
$136,000 in 1998  because less funds  were available for  investment during 1998
and interest rates were lower.

         Legal fees and costs  decreased  45% to $356,000  for the 1998  period,
compared to $651,000 in the prior  period.  In the 1997 period,  the Company had
been involved in various  appeals and hearings in connection with the opposition
by the State and others to the  issuance of a drilling  permit.  During the 1998
period, the level of expenditures decreased.

         Administrative expenses increased 13% to $376,000 in 1998 from $335,000
in the prior period.  The primary reason for the increase was an increase in the
amount of directors' and officers' liability insurance in 1998.

         Shareholder  communications  decreased  29%  from  $169,000  in 1997 to
$121,000 in 1998. In 1997,  the cost of printing and mailing was higher  because
of the size of the  documents  and the number of  mailings  compared to the 1998
period.

         Exploration costs decreased 53% from $39,000 in 1997 to $18,000 in 1998
in  connection  with  the  Company's  project  to  identify  potential  drilling
prospects.  During 1998, the project was substantially  completed.  In addition,
the Company  also  capitalized  $300,000 of  exploration  costs  during the 1998
period compared to $442,000 during the 1997 period.



<PAGE>



                           PART II - OTHER INFORMATION

                     COASTAL CARIBBEAN OILS & MINERALS LTD.

                               September 30, 1998

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

         A  hearing  before  the State of  Florida  Division  of  Administrative
Hearings  regarding  Coastal  Petroleum  Company's  12  permit  applications  is
scheduled for January 4-12, 1999.

         On September 29, 1998,  Coastal  Petroleum Company filed its brief with
Florida's  First  District  Court of Appeal  regarding  the denial of its permit
application  for an exploration  well near  Apalachicola  (the St. George Island
prospect).

ITEM 6   -    Exhibits and Reports on Form 8-K
              --------------------------------

         None.



<PAGE>








                                   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:  October 26, 1998                   By  /s/ James R. Joyce
                                              ----------------------------------
                                              James R. Joyce
                                              Treasurer and Chief Accounting and
                                              Financial Officer