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

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

         For the quarterly period ended   March 31, 2005

                               or

[   ] 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                            1-12527

                     BAYCORP HOLDINGS, LTD.
     (Exact name of registrant as specified in its charter)
      ----------------------------------------------------

               Delaware                        02-0488443
   (State or other jurisdiction of          (I.R.S. Employer
    incorporation or organization)         Identification No.)

  1 New Hampshire Avenue, Suite 125               03801
      Portsmouth, New Hampshire
   (Address of principal executive             (Zip Code)
               offices)

       Registrant's telephone number, including area code:
                         (603) 766-4990


     Indicate by check mark whether the registrant (1) has  filed
all  reports required to be filed by Section 13 or 15(d)  of  the
Securities  Exchange Act of 1934 during the preceding  12  months
(or  for such shorter period that the registrant was required  to
file  such  reports),  and (2) has been subject  to  such  filing
requirements for the past 90 days.

Yes   X     No
     ---        ---

     Indicate by check mark whether the registrant is an
accelerated filer (as defined in Rule 12b-2 of the Exchange Act.)

Yes         No   X
     ---        ---

              Class                Outstanding at April 30, 2005
 ------------------------------     ---------------------------
  Common Stock, $0.01 Par Value               557,945
            per Share


<Page>

<Table>

<Caption>



                                          INDEX

PART I - FINANCIAL INFORMATION:
<S>  <C>                                                                             <C>
     Item 1 - Financial Statements:

     Consolidated Statements of Operations -
       Three Months Ended March 31, 2005 and 2004 . . . . . . . . . . . . . . . .     3

     Consolidated Balance Sheets at March 31, 2005
       and December 31, 2004  . . . . . . . . . . . . . . . . . . . . . . . . . .     4

     Consolidated Statements of Cash Flows -
       Three Months Ended March 31, 2005 and 2004 . . . . . . . . . . . . . . . .     5

     Notes to Financial Statements  . . . . . . . . . . . . . . . . . . . . . . .     6

     Item 2 - Management's Discussion and Analysis of Financial Condition
       and Results of Operations  . . . . . . . . . . . . . . . . . . . . . . . .    15

     Item 3 - Quantitative and Qualitative Disclosures About Market Risk  . . . .    27

     Item 4 - Controls and Procedures . . . . . . . . . . . . . . . . . . . . . .    28

PART II - OTHER INFORMATION:

     Item 2 - Unregistered Sales of Equity Securities and Use of Proceeds  . . .     29

     Item 6 - Exhibits . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     29

     Signatures  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     30

     Exhibit Index . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     31

</Table>

                                        2

<Page>


PART I - FINANCIAL INFORMATION

Item 1. Financial Statements
----------------------------


<Table>
<Caption>
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (UNAUDITED)
                  (Dollars in thousands except per share data)

                                                           Three Months Ended
                                                                March 31,
                                                         2005              2004
                                                         ----              ----
<S>                                                     <C>                <C>
Operating Revenues                                       $2,360             $1,034


Operating Expenses
  Purchased Power                                         1,198              1,131
  Unrealized Loss on Energy Contracts                     1,989              1,637
  Production and Transmission                               211                  0
  Administrative & General                                  727                415
  Depreciation, Depletion and Amortization                  270                  0
  Taxes Other Than Income                                    60                 13
                                                        -------            -------
      Total Operating Expenses                            4,455              3,196
Operating Loss                                           (2,095)            (2,162)


Other Income
  Interest and Dividend Income                               42                 55
  Other Income                                               44                  9
                                                        -------            -------
      Total Other Income                                     86                 64

                                                        -------            -------
Loss Before Income Taxes and Minority Interest           (2,009)            (2,098)
Income Taxes                                                225                  0
Minority Interest                                           (20)                 0
                                                        -------            -------
Net Loss                                                ($1,804)           ($2,098)
                                                        =======            =======


Weighted  Average Shares Outstanding -  Basic  and      557,945            629,353
Diluted
Net Loss Per Share - Basic and Diluted                   ($3.23)            ($3.33)

</Table>
 (The accompanying notes are an integral part of these consolidated statements.)

                                        3

<Page>

<Table>
<Caption>
                           CONSOLIDATED BALANCE SHEETS
                                   (UNAUDITED)
                  (Dollars in thousands except per share data)

                                                       March 31,       December 31,
                                                          2005             2004
                                                        --------         --------
<S>                                                       <C>               <C>
ASSETS
Current Assets:
  Cash & Cash Equivalents                                $8,093             $9,627
  Accounts Receivable, net                                1,284                639
  Prepayments & Other Assets                                 49                 83
                                                        -------            -------
      Total Current Assets                                9,426             10,349

Other Long Term Assets:
  Restricted Cash - Escrow                                2,936              2,500
  Intangible Asset                                           45                 45
  Gas and Oil Properties, Net                             9,305                670
  Property, Plant and Equipment, net                      2,129                  0
  Other Long Term Assets                                    520                518
                                                        -------            -------
      Total Other Assets                                 14,935              3,733

TOTAL ASSETS                                            $24,361            $14,082
                                                        =======            =======

LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
  Accounts Payable and Accrued Expenses                    $705               $769
  Accrued Taxes                                              89                 92
  Note Payable                                           10,286                  0
  Other Current Liabilities                                 552                741
                                                        -------            -------
          Total Current Liabilities                      11,632              1,602


Deferred Gain on Energy Contract                          1,469              1,534
Unrealized Loss on Energy Contract - at market            5,478              3,424
Long Term Liability                                       2,480              2,479
Minority Interest in Subsidiary                             239                219
Commitments & Contingencies

Stockholders' Equity:
  Preferred stock, $.01 par value
    Authorized - 1,000,000 shares                             -                  -
     Issued and Outstanding - 0 shares
  Common stock, $.01 par value
    Authorized - 4,000,000 shares
    Issued and Outstanding - 557,945 shares                   6                  6
   Additional Paid-in Capital                           (21,431)           (21,475)
   Accumulated Earnings                                  24,488             26,293
                                                        -------            -------
          Total Stockholders' Equity                      3,063              4,824

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY              $24,361            $14,082
                                                        =======            =======

</Table>
 (The accompanying notes are an integral part of these consolidated statements.)

                                        4

<Page>

<Table>
<Caption>

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)
                             (Dollars in thousands)
                                                                  Three Months Ended
                                                                      March 31,
                                                                  2005         2004
                                                                  ----         ----
<S>                                                                <C>          <C>
Net cash flow from operating activities:
    Net loss                                                      ($1,804)    ($2,098)
    Adjustments to reconcile net loss to net
    cash used in operating activities:
         Minority interest expense                                     20           0
         Unrealized loss on the mark-to-market
          of energy contract                                        2,054       1,703
         Amortization of deferred gain on energy contract             (65)        (66)
         Non-cash compensation expense                                 43          43
         Depreciation, depletion and amortization                     270           0
         Increase in accounts receivable                             (642)          0
         Increase in prepaids and other assets                       (404)        (98)
         Decrease in accounts payable and accrued expenses            (66)        (97)
         Decrease in taxes accrued                                     (3)        (13)
         Decrease in miscellaneous and other liabilities             (153)        (16)
                                                                  -------     -------
      Net cash used in operating activities                          (750)       (642)


Net cash provided by investing activities:
          Increase in fixed assets                                 (2,129)          0
          Investment in oil and gas properties                     (8,905)          0
                                                                  -------     -------
      Net cash used in investing activities                       (11,034)          0

Net cash used in financing activities:
         Convertible note                                          10,250           0
         Reacquired capital stock and options                           0        (395)
                                                                  -------     -------
      Net cash provided by (used in) financing activities          10,250        (395)


Net decrease in cash and cash equivalents                          (1,534)     (1,037)
Cash and cash equivalents, beginning of period                      9,627       7,469
                                                                  -------     -------
Cash and cash equivalents, end of period                           $8,093      $6,432
                                                                  =======     =======
Supplemental disclosure of cash flow information:
  Cash paid during the period for income taxes                     $   27      $   12
                                                                  -------     -------

</Table>
 (The accompanying notes are an integral part of these consolidated statements.)

                                        5


<Page>

                  NOTES TO FINANCIAL STATEMENTS

NOTE A - THE COMPANY

  BayCorp  Holdings,  Ltd. ("BayCorp" or  the  "Company")  is  an
unregulated holding company incorporated in Delaware in 1996.  As
of  March  31,  2005,  BayCorp had six wholly owned  subsidiaries
including  Great  Bay  Power Marketing,  Inc.,  Great  Bay  Hydro
Corporation, Nacogdoches Power, LLC, Nacogdoches Gas, LLC,  Great
Bay  Hydro  Maine, LLC. and BayCorp Ventures, LLC.  BayCorp  also
held  a majority interest in HoustonStreet Exchange, Inc.  as  of
March 31, 2005.

  Until  January  1,  2003, BayCorp had two  principal  operating
subsidiaries  that  generated and traded  wholesale  electricity,
Great  Bay  Power Corporation ("Great Bay") and Little Bay  Power
Corporation ("Little Bay").  Their principal asset was a combined
15%  joint  ownership  interest in  the  Seabrook  Nuclear  Power
Project  in  Seabrook, New Hampshire (the "Seabrook  Project"  or
"Seabrook") until November 1, 2002, when BayCorp sold Great Bay's
and  Little Bay's interest in Seabrook.  That ownership  interest
entitled  Great Bay and Little Bay to approximately 174 megawatts
("MWs")  of  the  Seabrook Project's power output.   In  December
2002, BayCorp dissolved Great Bay and Little Bay.

  Great  Bay Power Marketing, Inc. ("Great Bay Power Marketing"),
incorporated in Maine as a wholly owned subsidiary,  was  created
to  hold  the purchased power agreement that Great Bay  had  with
Unitil Power Corporation ("Unitil") and to arrange for the  power
supply  to  satisfy the agreement.  Effective  January  1,  2003,
Great  Bay Power Marketing assumed the Unitil contract and  holds
the  letter  of  credit  established to secure  Great  Bay  Power
Marketing's  obligations  under  the  Unitil  contract.   BayCorp
formed BayCorp Ventures, a Delaware limited liability company, as
a  wholly  owned subsidiary, to serve as a vehicle through  which
the Company can make investments.

  In  September 2003, BayCorp formed Great Bay Hydro  Corporation
("Great  Bay  Hydro"), a New Hampshire corporation, as  a  wholly
owned  subsidiary.  Great Bay Hydro entered into a  purchase  and
sale  agreement,  dated  as of October 30,  2003,  with  Citizens
Communications  Company  ("Citizens") to acquire  the  generating
facilities  in Vermont owned by the Vermont Electric Division  of
Citizens.  Great Bay Hydro completed the acquisition and  assumed
operating responsibility of the generating facilities on April 1,
2004.    The   generating   facilities   include   an   operating
hydroelectric  facility of approximately 4 megawatts  located  in
Newport, Vermont, diesel engine generators totaling approximately
7   megawatts  located  in  Newport,  Vermont  and  non-operating
hydroelectric facilities in Troy and West Charleston, Vermont.

  In   October  2004,  BayCorp  formed  Nacogdoches  Power,   LLC
("Nacogdoches Power"), a New Hampshire limited liability company,
as  a  wholly owned subsidiary.  On October 19, 2004, Nacogdoches
Power  acquired the development rights to an approximate 1000  MW
natural  gas-fired  power plant project  in  Nacogdoches  County,
Texas,  located  in  east Texas.  The project  received  its  air
quality  permit  and  its  wastewater discharge  permit  and  has
options  to  acquire the land and a number of easements  for  the
plant.   The  proposed plant site is located  near  the  Electric
Reliability  Council of Texas ("ERCOT") and the  Southwest  Power
Pool  high  voltage transmission lines as well  as  a  source  of
cooling  water  and  natural  gas lines.   Nacogdoches  Power  is
pursuing the development of this project with an initial focus on
securing gas supply and power offtake contracts.

  In   November  2004,  BayCorp  formed  Nacogdoches   Gas,   LLC
("Nacogdoches  Gas"), a New Hampshire limited liability  company,
as  a  wholly  owned subsidiary.  In the fourth quarter  of  2004
Nacogdoches  Gas  entered into agreements with Sonerra  Resources
Corporation  ("Sonerra"), an independent oil and gas exploration,
development  and  operating company, under which Nacogdoches  Gas
acquired  an  approximate 10% working  interest  (of  a  77%  net
revenue  interest)  in two natural gas and oil  producing  wells.
Nacogdoches Gas entered into an agreement, dated January 7,  2005
with   Sonerra,  under  which  Nacogdoches  Gas  will  fund   the
development  of  three natural gas and oil wells. This  agreement
was  amended as of March 14, 2005, increasing the number of wells
from  three to four.  In addition, Nacogdoches Gas has an  option
to  participate in Sonerra's continued development of  up  to  15
additional  natural gas and oil wells over the  next  two  years.
Under the agreement with Sonerra, Nacogdoches Gas will receive  a
priority  return  until  its aggregate investment  is  recovered.
Since  entering  the  January  7, 2005  agreement  with  Sonerra,
Nacogdoches Gas has

                                6

  <Page>

funded  the development of four wells.  The net revenue  interest
in  each of these four wells being funded by Nacogdoches  Gas  is
77% with the remaining 23% of the net revenues paid to the lessor
and other royalty interests.  Nacogdoches Gas has a 90% ownership
percentage  in  each of these wells and a 100%  cost  percentage.
This means that Nacogdoches Gas has a working interest that bears
100%  of  the operating costs of the wells and receives 69.3%  of
the net revenues from the wells.  The first of those wells, Round
Mountain,  a  James  Lime  horizontal  natural  gas  well,  began
production in January 2005 and through the end of March 2005  has
produced 134 million cubic feet of natural gas.  The second well,
Wicked  Wolf,  a  James Lime horizontal natural gas  well,  began
production in early March 2005 and through the end of march  2005
has  produced approximately 73 million cubic feet of natural gas.
The  third  and  fourth wells, Painted Horse, a Rodessa  vertical
natural  gas well, and Whirlwind, a James Lime horizontal natural
gas well, are being developed.

  In  April  2005,  Nacogdoches Gas  funded  the  acquisition  of
certain  natural  gas  production assets in  Nacogdoches  County,
Texas  formerly  owned by SunStone Corporation  ("SunStone")  for
approximately $3.4 million. The assets include:



  <Table>
  <Caption>

                               Working       Net Revenue          Overriding
Well Name                      Interest        Interest        Royalty Interest
---------                      --------      -----------        ---------------
<S>                         <C>            <C>                        <C>
Kendrick #1-H                   25.1 %           19.3 %              1.7 %
Sitting Bull #1                 25.1 %           19.3 %              1.3 %
Crazy Horse #1                   0.0 %            0.0 %              1.5 %
Soaring Eagle #1                29.2 %           22.4 %              1.1 %
Ten Bears #1                    37.8 %           29.1 %              0.4 %
Ten Bears #2                     0.0 %            0.0 %              0.9 %
Sky Chief #1                    25.1 %*          19.3 %*             2.4 %

*This is a back in interest that will be acquired after the recovery of a 300% non-
consent penalty.

  </Table>


   -  A  75.6% ownership interest in 3D seismic survey data  that
      covers   approximately  49  square  miles  in   Nacogdoches
      County.

   -  A  37.8%  undivided  leasehold  interest  in  approximately
      3,800  acres  within the area covered  by  the  3D  seismic
      survey data.

   -  Undivided  interests in the Melrose Gas Gathering  Pipeline
      System  (the "Melrose System"), located within the Kendrick
      (James  Lime) Field, Nacogdoches County, Texas,  consisting
      of:  (i)  an undivided 25% interest in the section  of  the
      Melrose System originating at mile-post 207.68 marker as  a
      6"  tap  in  the  Texas Eastern line,  and  extending  West
      through  a  6"  pipeline to the Sonerra, Kendrick  No.  1-H
      well,  (ii)  an undivided 29.1552% interest in the  section
      of  the  Melrose  System occurring from the  Kendrick  No.1
      well  and  extending  as  a  6" pipeline  to  the  Sonerra,
      Soaring Eagle No.1 well and (iii) an undivided interest  in
      all rights of way, equipment and appurtenances relating  to
      such  segments, and including all facilities and  equipment
      presently  existing  at  and  associated  with  the   Texas
      Eastern tap site and facility.

                                7

<Page>

  Nacogdoches  Gas acquired these assets in accordance  with  the
terms  of  the  January 7, 2005 agreement with  Sonerra  and  the
Acquisition  Agreement dated as of March 22, 2005 among  Sonerra,
Pinnacle  Energy  Group,  L.C. and Nacogdoches  Gas.   Under  its
agreement with Sonerra, Nacogdoches Gas will have a 90%  interest
and  Sonerra will have a 10% interest in these assets until  110%
of the $3.4 million purchase price of the SunStone assets and all
of  the  funding  provided by Nacogdoches Gas for  wells  drilled
under   the  January  7,  2005  agreement  is  recovered.    Once
Nacogdoches  Gas  recovers  its investment  and  other  operating
costs,  its  interest in all assets will become 50%  and  Sonerra
will own the other 50%.

  In  March 2005, BayCorp formed Great Bay Hydro Maine, LLC ("GBH
Maine"),  a  Maine limited liability company, as a  wholly  owned
subsidiary,  and  formed  Great  Bay  Hydro  Benton,  LLC   ("GBH
Benton"),  also a Maine limited liability company,  as  a  wholly
owned subsidiary of GBH Maine.  On March 16, 2005, GBH Maine  and
GBH  Benton  acquired Benton Falls Associates,  L.P.,  a  limited
partnership  that  owns  a 4.3 megawatt hydroelectric  generation
plant  in  Benton,  Maine  ("Benton  Falls"),  from  The  Arcadia
Companies for approximately $2.2 million.  The purchase of Benton
Falls  was  accounted for under the purchase method of accounting
and  the  purchase  price was allocated  to  fixed  assets.   The
Company  assumed operating responsibility for Benton  Falls,  the
output  of  which  is  sold  to Central Maine  Power  Corporation
("CMP") under a power purchase agreement ("CMP PPA") that expires
in  December  2007.  The rates under the CMP PPA are  indexed  to
CMP's   standard   rates  for  energy  and   capacity   purchases
established  annually  by the Maine Public Utilities  Commission.
The  estimated average rate for April 2005 through December  2005
(based  on projected monthly generation) is approximately  $59.12
per  megawatt hour ("MWh".)  The results of operations of  Benton
Falls  are included in the Company's financial statements  as  of
the date of acquisition.

  BayCorp  also owns shares representing approximately  59.7%  of
the  outstanding  common shares of HoustonStreet  Exchange,  Inc.
("HoustonStreet"), which was incorporated in  Delaware  in  1999.
HoustonStreet   developed  and  operates  HoustonStreet.com,   an
Internet-based independent crude oil and refined products trading
exchange   in   the   United  States.   A   recapitalization   of
HoustonStreet was completed in the second quarter of 2004, and as
a result, BayCorp's ownership interest in HoustonStreet increased
above   50%   and  BayCorp  began  consolidating  its   financial
statements with HoustonStreet as of May 1, 2004.  Prior to May 1,
2004,  BayCorp  held  a  minority interest in  HoustonStreet  and
accounted for HoustonStreet under the equity method.

Sale of Seabrook Ownership
--------------------------

  In   April   2002,  FPL  Energy  Seabrook,  LLC  ("FPL   Energy
Seabrook"),  a subsidiary of FPL Group, Inc., agreed to  purchase
88.2%  of  the  1,161  MW  Unit  1 and  88.2%  of  the  partially
constructed  Unit  2  of  Seabrook,  for  $836.6  million,  which
included  Great Bay's and Little Bay's approximate aggregate  15%
ownership  share,  subject to certain adjustments,  with  payment
deliverable  fully  in  cash  at closing.   FPL  Energy  Seabrook
assumed   nearly  all  of  the  Company's  Seabrook   liabilities
including the decommissioning liability for the acquired  portion
of Seabrook.  On November 1, 2002, the Company closed the sale of
its interests in Seabrook and received approximately $113 million
in  cash for its interests in the Seabrook Project (the "Seabrook
Closing").

NOTE B - DEBT FINANCING

  On  March  15,  2005, the Company and all of its  wholly  owned
subsidiaries  entered  into a $10,250,000 Convertible  Note  (the
"Note")  and  a  Pledge Agreement (the "Pledge  Agreement")  with
Sloan Group Ltd., a Bahamas corporation (the "Sloan Group").  The
debt,  which  accrues interest at 8% per annum  and  is  due  and
payable in full on December 15, 2005, is convertible by

                                8

<Page>

the  Sloan  Group  at  any time between  November  15,  2005  and
December  15, 2005 (or any time after the occurrence  and  during
the  continuance of a material event of default under  the  Note)
into  shares of BayCorp's common stock, $.01 par value at a price
of  $14.04 per share.  The Note does not allow BayCorp to  prepay
the  debt and provides for a 2% premium on the interest  rate  in
the  event  of a default.  Payment of the Note may be accelerated
in the event of a material event of default.

  In  addition  to BayCorp, the borrowers under the Note  include
the  following  subsidiaries of BayCorp: GBH Maine,  GBH  Benton,
Great  Bay  Power  Marketing, Great Bay Hydro, BayCorp  Ventures,
Nacogdoches Power and Nacogdoches Gas.  As security for the Note,
the  borrowers entered into the Pledge Agreement with  the  Sloan
Group.   Under the Pledge Agreement, BayCorp pledged  its  equity
interests  in  GBH Maine and Nacogdoches Gas to the Sloan  Group,
GBH  Maine pledged its equity interests in GBH Benton and  Benton
Falls to the Sloan Group, GBH Benton pledged its equity interests
in  Benton  Falls  to the Sloan Group, and Nacogdoches  Gas,  GBH
Maine  and  GBH  Benton  pledged to the Sloan  Group  any  equity
interest that they may obtain in other entities while the debt is
outstanding.

NOTE C - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

  The  unaudited financial statements included herein  have  been
prepared  on  behalf of the Company pursuant  to  the  rules  and
regulations of the Securities and Exchange Commission ("SEC") and
include,   in   the  opinion  of  management,  all   adjustments,
consisting of normal recurring adjustments, necessary for a  fair
presentation of interim period results.  Certain information  and
footnote  disclosures  normally included in financial  statements
prepared   in  accordance  with  generally  accepted   accounting
principles have been omitted or condensed pursuant to such  rules
and  regulations.  The Company believes, however, its disclosures
herein,  when  read  in  conjunction with the  Company's  audited
financial  statements  for the year ended December  31,  2004  as
filed  in  Form 10-K on March 31, 2005, are adequate to make  the
information  presented not misleading.  The Company's significant
accounting  policies  are  described  in  Note  1  of  Notes   to
Consolidated Financial Statements included in the Company's 10-K.
The   results   for  the  interim  periods  are  not  necessarily
indicative  of  the results to be expected for  the  full  fiscal
year.

  Principles of Consolidation

  BayCorp's   Consolidated  Financial  Statements   include   the
accounts  of  the Company and all its subsidiaries.  In  November
2004,   BayCorp  formed  Nacogdoches  Gas,  which   acquired   an
approximate  10%  working interest in two  natural  gas  and  oil
producing  wells  in  the fourth quarter of  2004.   The  Company
records  in  its financial statements its proportional  share  of
well  revenues  and  expenses.   The  Company  consolidates   all
majority-owned and controlled subsidiaries and applies the equity
method  of accounting for investments between 20% and  50%.   All
significant intercompany transactions have been eliminated.   All
sales   of   subsidiary  stock  are  accounted  for  as   capital
transactions in the consolidated financial statements.

  In January 2003, the FASB issued Interpretation No. ("FIN") 46,
Consolidation  of Variable Interest Entities - An  Interpretation
of  ARB  No.  51,  as  amended by FIN  46R.   The  interpretation
requires  that a company consolidate the financial statements  of
an  entity  that  cannot finance its activities  without  outside
financial  support,  and  for which  that  company  provides  the
majority  of  support.  The Company deemed that  its  investment,
HoustonStreet  , was not a variable interest entity.   Therefore,
prior to May 1, 2004 and when BayCorp held a minority interest in
HoustonStreet, the Company accounted for HoustonStreet under  the
equity method.  A recapitalization of HoustonStreet was completed
effective  May  1,  2004,  and as a result,  BayCorp's  ownership
interest  in HoustonStreet increased above 50%.  As a  result  of
this  recapitalization, BayCorp began consolidating HoustonStreet
as of May 1, 2004.

                                9

<Page>

  Energy Marketing

  Forward  contracts  (including  the  Unitil  PPA)  meeting  the
definition of a derivative and not designated and qualifying  for
the  normal  purchases and normal sales exception or as  a  hedge
under  Statement  of  Financial  Accounting  Standards  No.  133,
Accounting for Derivative Instruments and Hedging

Activities (SFAS No. 133) are recorded at fair value with changes
in  fair  value recorded in earnings.  In accordance with  FASB's
Emerging  Issues Task Force Issue No. 02-03, Issues  Involved  in
Accounting for Derivative Contracts Held for Trading Purposes and
Contracts   Involved  in  Energy  Trading  and  Risk   Management
Activities (EITF Issue No. 02-03), revenues related to derivative
instruments  classified as trading are reported  net  of  related
cost of sales.

  Stock Based Compensation

  The  Company accounts for its stock option plans in  accordance
with  SFAS  No.  123, "Accounting for Stock Based  Compensation."
Awards  under the Company's plans vest over periods ranging  from
one to three years.  The Company recorded compensation expense of
$43,000  in the three months ended March 31, 2005 and 2004  based
on  the fair value of options granted determined using the Black-
Scholes option pricing model.

  Depletion of Oil and Gas Properties

  The Company follows the successful efforts method of accounting
for  its  natural gas and oil activities.  Under  the  successful
efforts method, lease acquisition costs and all development costs
are  capitalized.  Unproved properties are reviewed quarterly  to
determine if there has been an impairment of the carrying  value,
and  any  such  impairment is charged to expense in that  period.
Exploratory drilling costs are capitalized until the results  are
determined.    If   proved  reserves  are  not  discovered,   the
exploratory  drilling  costs  are  expensed.   Other  exploratory
costs,  such  as  seismic  costs and geological  and  geophysical
expenses,  are expensed as incurred.  The provision for depletion
is based upon the units of production method.

  Asset Retirement Obligation

  The  Company  has  adopted  the  provisions  of  Statement   of
Financial  Accounting  Standards No. 143, "Accounting  for  Asset
Retirement Obligations" ("SFAS 143").  SFAS 143 requires entities
to  record  the fair value of a liability for an asset retirement
obligation  in the period in which it is incurred if a reasonable
estimate of fair value can be made, and the corresponding cost is
capitalized  as part of the carrying amount of the related  long-
lived asset.  The liability is accreted to its present value each
period,  and the capitalized cost is depreciated over the  useful
life  of the related asset.  If the liability is settled  for  an
amount  other  than  the  recorded amount,  a  gain  or  loss  is
recognized.    The  Company  has  asset  retirement   obligations
associated  with  the future plugging and abandonment  of  proved
properties  and related facilities.  The estimated  liability  is
based  upon  historical  experience in  plugging  and  abandoning
wells, estimated remaining lives of those wells, estimates as  to
the cost to plug and abandon the wells in the future, and federal
and  state  regulatory requirements.  The liability is discounted
using   an  assumed  credit-adjusted  risk-free  interest   rate.
Revisions  to  the  liability  could  occur  due  to  changes  in
estimates of plugging and abandonment costs, changes in the risk-
free interest rate or remaining lives of the wells, or if federal
of   state   regulators  enact  new  plugging   and   abandonment
requirements.

NOTE D - COMMITMENTS AND CONTINGENCIES

                               10

<Page>

Purchased Power Agreements
--------------------------

  Great Bay was party to a purchased power contract, dated as  of
April  1,  1993,  (the "Unitil PPA" or "PPA"), with  Unitil  that
provided  for Great Bay to sell to Unitil 0.8696% of  the  energy
and  capacity of Seabrook, or approximately 10 MWs.   The  Unitil
PPA commenced on May 1, 1993 and continues

through  October 31, 2010.  On November first of  each  year  the
purchase  price is subject to increase at the rate  of  inflation
less four percent.

  In  anticipation  of  the Seabrook sale,  the  Unitil  PPA  was
amended as of November 1, 2002.  The amendment primarily modified
the  existing Unitil PPA to reduce the amount of power  delivered
to  9.06  MWs and the price that Unitil pays for power to  $50.34
per  MW  hour,  subject  to an annual increase  at  the  rate  of
inflation  less four percent, and provided that Great  Bay  would
supply the power regardless of whether Seabrook is providing  the
power.

  The  amendment also provided alternative security for  Unitil's
benefit,  to replace and discharge the mortgage on Seabrook  that
secured Great Bay's performance of the Unitil PPA.  In connection
with  the amended Unitil PPA, the Company was required to deposit
$2.5  million into a restricted account for the benefit of Unitil
should  Great Bay default.  The amount is reflected as restricted
cash  in  the accompanying balance sheet.  The amendment received
FERC  approval.  Great Bay assigned the Unitil PPA to  Great  Bay
Power Marketing as of January 1, 2003.

  Unitil has an option, expiring November 1, 2005, to extend  the
Unitil  PPA for up to 12 years, until 2022.  If Unitil  exercises
its  option to extend the PPA, the purchase price for  power  for
the  first year of the extended term, beginning November 1, 2010,
will  be  $65.00  per MW hour (in 1992 dollars) multiplied  by  a
factor  that  equals the cumulative inflation from  October  1992
through  October 2010.  For the remaining term of the  extension,
the  purchase  price will be increased annually by  the  rate  of
inflation over the previous year.

  Forward  contracts  (including  the  Unitil  PPA)  meeting  the
definition of a derivative and not designated and qualifying  for
the  normal purchases and normal sales exception under  Statement
of   Financial  Accounting  Standards  No.  133,  Accounting  for
Derivative Instruments and Hedging Activities (SFAS No. 133)  are
recorded at fair value.  In accordance with the FASB's EITF issue
no.  02-03 the inception gain (initial value of $2.1 million)  on
the  Unitil PPA has been deferred and will be recognized over the
life  of  the  contract.  The fair value of the  contract  was  a
negative $5.5 million as of March 31, 2005 and was negative  $3.4
million  as  of  December 31, 2004.  The  deferred  gain  on  the
contract was $1.5 million as of March 31, 2005 and as of December
31,  2004.  These amounts are reflected in the Company's  balance
sheet.

  On  March 17, 2003, Unitil announced the approval of a contract
with  Mirant  Americas  Energy Marketing,  LP  ("Mirant"),  which
provided   for  the  sale  of  Unitil's  existing  power   supply
entitlements,  including the PPA with Great Bay Power  Marketing,
effective on May 1, 2003.  Great Bay Power Marketing's  PPA  with
Unitil  has  not  been assigned to Mirant.   Rather,  Unitil  has
appointed Mirant as their agent for purposes of administering the
PPA  with  Great  Bay  Power Marketing and Mirant  is  purchasing
Unitil's entitlement under the PPA.

NOTE E - OIL AND GAS ACTIVITIES

  The  following summarizes selected information with respect  to
oil and gas producing activities.

                               11

<Page>



                                             Quarter ended
                                             March 31, 2005
                                            ---------------
                                            ( in thousands)
   Oil and Gas properties:
   Properties subject to depletion               $6,447
   Unproved properties                            2,260
                                                 ------
     Total                                        8,707
   Accumulated depletion                            290
                                                 ------
     Net                                         $8,417
                                                 ======

  The  Company's proved oil and gas reserves are located  in  the
United States.  The following schedule is presented in accordance
with  SFAS  No. 69 ("SFAS 69"), "Disclosures about  Oil  and  Gas
Producing  Activities," to provide users with a common  base  for
preparing  estimates of future cash flows and comparing  reserves
among companies.

  Reserves  of  crude oil, condensate, natural  gas  liquids  and
natural  gas  are  estimated by engineering consultants  and  are
adjusted  to reflect contractual agreements and royalty rates  in
effect  at the end of each year.  Many assumptions and judgmental
decisions are required to estimate reserves.  Reported quantities
are   subject  to  future  revisions,  some  of  which   may   be
substantial,  as  additional information becomes  available  from
reservoir  performance,  new  geological  and  geophysical  data,
additional  drilling, technological advancements,  price  changes
and other economic factors.

  The  SEC defines proved reserves as those volumes of crude oil,
condensate,  natural gas liquids and natural gas that  geological
and  engineering data demonstrate with reasonable  certainty  are
recoverable  from  known reservoirs under existing  economic  and
operating conditions.  Proved developed reserves are those proved
reserves  which  can  be expected to be recovered  from  existing
wells  with  existing  equipment and operating  methods.   Proved
undeveloped  reserves are volumes expected to be recovered  as  a
result of additional investments for drilling new wells to offset
productive  units, recompleting existing wells, and/or installing
facilities to collect and transport production.

  Production  quantities  shown are net  volumes  withdrawn  from
reservoirs.   These  may  differ from  sales  quantities  due  to
inventory  changes, and especially in the case  of  natural  gas,
volumes  consumed  for fuel and/or shrinkage from  extraction  of
natural gas liquids.

  Quantities of Proved Natural Gas Reserves (Mmcf):

Balance December 31, 2004                              149
  Revisions                                              0
  Extensions, discoveries and additions                  0
  Purchases                                          3,580
  Sales                                                  0
  Production                                          (152)
                                                  --------
Balance, March 31, 2005                              3,577

NOTE F -  INVESTMENT IN HOUSTONSTREET

  BayCorp  owns  shares representing approximately 59.7%  of  the
voting  power  of all outstanding common shares of HoustonStreet.
HoustonStreet   developed  and  operates  HoustonStreet.com,   an
Internet-based,  independent  crude  oil  and  refined   products
trading exchange in the United States.

                               12

<Page>

  Prior to April 30, 2004, in addition to its equity interest  in
HoustonStreet, the Company held an $8.4 million secured  note  in
HoustonStreet.   In  March 2001, HoustonStreet raised  additional
funding  by  selling senior secured notes to  BayCorp  and  other
investors.   Collectively, these notes were referred  to  as  the
"HoustonStreet  Series C Units."  The outstanding  principal  and
interest  of  the  note  to BayCorp as  of  April  30,  2004  was
approximately  $11  million.  The Company had written  this  note
down  to zero as of December 31, 2000.  The notes were originally
due  and  payable  in December 2001, and the  maturity  date  was
subsequently  extended to January 15, 2004.  The notes  were  not
paid  when due, and in February 2004, HoustonStreet was  formally
notified  of  the payment default.  BayCorp and the other  senior
secured   noteholders  reserved  their  rights  and  proposed   a
recapitalization of HoustonStreet that would potentially  provide
effective  control  of  HoustonStreet to  the  noteholders.   The
recapitalization  was  approved by  the  Board  of  Directors  of
HoustonStreet  in  March 2004 and was approved  by  HoustonStreet
shareholders in April 2004.

  The   effect   of   the   recapitalization   was   to   convert
HoustonStreet's secured debt into equity and convert  outstanding
preferred stock in HoustonStreet into either the right to receive
nominal  cash  consideration or a nominal amount of HoustonStreet
common  stock.   All  outstanding shares of HoustonStreet  common
stock prior to the restructuring were cancelled.  As a result  of
the  restructuring, as of May 1, 2004, holders of senior  secured
promissory  notes held common stock of HoustonStreet representing
approximately  ninety-nine  percent of  the  outstanding  capital
stock   of  HoustonStreet.   Holders  of  preferred  stock   held
approximately one percent of the outstanding capital stock  as  a
result of the restructuring.

  This  recapitalization at HoustonStreet was  completed  in  the
second  quarter  of  2004 and as a result,  BayCorp  owns  shares
representing approximately 59.7% of the outstanding common shares
of  HoustonStreet    In  accordance with  EITF  Topic  D-84,  the
Company  followed  step  acquisition  accounting  to  consolidate
HoustonStreet.   The  fair  value  of  current  assets   exceeded
BayCorp's  net investment in HoustonStreet by $278,000  resulting
in   negative  goodwill  upon  application  of  step  acquisition
accounting.  As a result, the Company recognized an extraordinary
gain of $278,000 in the second quarter of 2004 in accordance with
SFAS No. 141 "Business Combinations."

  Prior   to   the  recapitalization,  BayCorp  held  a  minority
ownership   interest   in   HoustonStreet   and   accounted   for
HoustonStreet  under  the  equity method.   Summarized  financial
information  for  HoustonStreet, prior to  consolidation,  is  as
follows:

     HoustonStreet:                          March 31, 2004
     --------------                          --------------
     Total Assets                               $     564
     Total Liabilities                             13,835
     Net Sales                                        168
     Net Income (Loss)                               (342)
     Company's equity in Net Income                  (170)


NOTE G - EQUITY

  On  January 31, 2003, BayCorp commenced an issuer tender  offer
to purchase up to 8,500,000 shares of its common stock at a price
of  $14.85  per  share (the "Tender Offer" or "Offer").   At  the
extended  Tender  Offer  expiration  date  of  March  18,   2003,
9,207,508  shares  had been properly tendered and  not  withdrawn
(including  options surrendered for repurchase and cancellation.)
The  Company  exercised  its discretion  to  purchase  up  to  an
additional  2%  of  outstanding shares,  purchasing  a  total  of
8,673,887 shares (and surrendered options) at a purchase price of
$14.85,  representing  approximately 94.3%  of  the  shares  (and
options)  tendered,  excluding odd  lots,  which  were  purchased
without  proration.  Payment for all such shares and options  was
completed by March 24, 2003.  The

                               13

<Page>


Company   distributed  approximately  $123,622,000  to  tendering
stockholders and option holders.

  As  of March 31, 2005 there were 557,945 shares outstanding and
options  to  purchase  212,538  shares,  170,038  of  which  were
exercisable.

  BayCorp has never paid cash dividends on its common stock.  Any
future  dividends depend on future earnings, BayCorp's  financial
condition and other factors.

NOTE H - SEGMENT INFORMATION

     The  Company  has  adopted SFAS No. 131, "Disclosures  about
Segments of an Enterprise and Related Information."  SFAS No. 131
establishes  standards  for the reporting  of  information  about
operating  segments  in annual and interim financial  statements.
Operating segments are defined as components of an enterprise for
which  separate  financial  information  is  available  that   is
evaluated  regularly by the chief operating decision maker(s)  in
deciding  how to allocate resources and in assessing performance.
SFAS  No.  131  also  requires  disclosures  about  products  and
services, geographic areas and major customers.

     BayCorp  is a holding company for Great Bay Power Marketing,
Great Bay Hydro, BayCorp Ventures, Nacogdoches Power, Nacogdoches
Gas,  Great  Bay  Hydro  Maine  and HoustonStreet.   The  Company
operates  primarily in three segments, each of which  is  managed
separately  because  each  segment sells  distinct  products  and
services.   Great Bay Power Marketing, Great Bay Hydro and  Great
Bay Hydro Maine constitute the electricity generation and trading
business segment, whose principal assets are the Unitil  PPA  and
hydroelectric facilities of approximately 4 megawatts located  in
Newport, Vermont, diesel engine generators totaling approximately
7   megawatts  located  in  Newport,  Vermont  and  non-operating
hydroelectric facilities in Troy and West Charleston, Vermont and
a  4.3  megawatt hydroelectric generation plant in Benton, Maine.
Nacogdoches Gas constitutes the oil and gas production and  sales
segment, whose principal assets are its interests in oil and  gas
wells  in East Texas.  HoustonStreet, representing the crude  oil
and  refined  products  trading exchange segment,  developed  and
operates  HoustonStreet.com, an Internet-based independent  crude
oil and refined products trading exchange in the United States.

  Management  utilizes  more  than one measurement  and  multiple
views  of  data  to measure segment performance and  to  allocate
resources  to  the segments.  However, the dominant  measurements
are   consistent   with  the  company's  consolidated   financial
statements  and,  accordingly, are reported  on  the  same  basis
herein.  Management evaluates the performance of its segments and
allocates  resources to them primarily based on  cash  flows  and
overall economic returns.

                               14


<Page>

<Table>
<Caption>




 BayCorp Holdings, Ltd
   As of and for the        Electricity    Oil and
   three months ended       Generation       Gas      Houston-               Inter-
        March 31                and        Produc-     Street                company
        ($000's)              Trading       tion        (1)        Other      Elim       Total
<S>                          <C>          <C>       <C>           <C>       <C>       <C>
-----------------------------------------------------------------------------------------------
2005
----
Revenues                     $1,186          $931        $243          $0         $0     $2,360
Operating Expenses            3,514           534         201         485       (279)     4,455
Segment Net Income (Loss)    (2,319)          398          31         117        (31)    (1,804)
Total Assets                 10,603         9,944         629      25,098    (21,914)    24,360
 -----------------------------------------------------------------------------------------------
2004
----
Revenues                     $1,034           -           -           -         -        $1,034
Operating Expenses            2,880           -           -           451       (135)     3,196
Segment Net Loss             (1,844)          -           -          (254)      -        (2,098)
Total Assets                  4,740           -           -        11,266     (4,043)    11,963
 -----------------------------------------------------------------------------------------------

</Table>

(1) Includes HoustonStreet. BayCorp began consolidating HoustonStreet as of May
1, 2004.  See "Note A. The Company."

NOTE I - NEW ACCOUNTING PRONOUNCEMENTS

  FASB  Statement  No.  123 (Revised 2004),  Share-Based  Payment
(SFAS 123R) was issued in December 2004.  SFAS 123R replaces SFAS
No.  123, Accounting for Stock-Based Compensation (SFAS 123), and
supersedes  APB  Opinion No. 25, Accounting for Stock  Issued  to
Employees.   SFAS  123R requires companies to  recognize  in  the
financial statements the compensation cost related to share-based
payment  transactions with employees.  The compensation  cost  is
measured  based  upon  the fair value of the  instrument  issued.
Share-based  compensation  transactions  with  employees  covered
within  SFAS 123R include share options, restricted share  plans,
performance-based awards, share appreciation rights, and employee
share purchase plans.

  SFAS  123R  will be effective as of the first annual  reporting
period that begins after December 15, 2005.  Since January  2003,
the  Company  used  the  fair value based method  recognition  of
compensation  expense  and  is required  to  apply  the  modified
prospective application transition method under SFAS  123R.   The
modified  prospective application transition method requires  the
application of this standard to all new awards issued  after  the
effective  date, all modifications, repurchased or  cancellations
of  existing awards after the effective date, and unvested awards
at the effective date.

  For  unvested  awards, the compensation  cost  related  to  the
remaining  service  period  that has not  been  rendered  at  the
effective  date  will  be  determined by  the  compensation  cost
calculated  currently  under  SFAS  123.   The  Company  will  be
adopting  the  modified  prospective application  of  SFAS  123R.
Based on the current options outstanding, the Company anticipates
the  adoption of this statement to not result in the  recognition
of any incremental compensation cost to be recognized in the year
of adoption.

Item 2.  Management's Discussion and Analysis of Financial
Condition and Results of Operations.
----------------------------------------------------------

Overview

                               15

<Page>

  BayCorp  derived  its revenues primarily through  energy  sales
activities  by Great Bay Power Marketing, Great Bay Hydro,  Great
Bay  Hydro Maine and Nacogdoches Gas in the first quarter of 2005
and from Great Bay Power Marketing in the first quarter of 2004.

  Great  Bay Power Marketing currently holds one purchased  power
contract  with  Unitil.   On  April  1,  2004,  Great  Bay  Hydro
completed  an  acquisition of generating facilities including  an
operating  hydroelectric  facility of approximately  4  megawatts
located  in  Newport, Vermont, diesel engine generators  totaling
approximately  7 megawatts located in Newport, Vermont  and  non-
operating  hydroelectric facilities in Troy and West  Charleston,
Vermont.  Great Bay Hydro assumed operating responsibility of the
generating facilities on April 1, 2004.  Great Bay Hydro uses the
output  of  the Newport plant as a physical hedge for  meeting  a
portion of the Company's contractual obligations under the Unitil
PPA.

  On  March  16,  2005, GBH Maine and GBH Benton acquired  Benton
Falls  Associates, L.P., a limited partnership that  owns  a  4.3
megawatt hydroelectric generation plant in Benton, Maine ("Benton
Falls"),  from  The  Arcadia  Companies  for  approximately  $2.2
million.  The Company assumed operating responsibility for Benton
Falls,  the output of which is sold to CMP under a power purchase
agreement that expires in December 2007.  The rates under the CMP
PPA  are  indexed to CMP's standard rates for energy and capacity
purchases  established  annually by the  Maine  Public  Utilities
Commission.

  In  the  fourth quarter of 2004, Nacogdoches Gas  entered  into
agreements  with Sonerra under which Nacogdoches Gas acquired  an
approximate  10%  working interest in two  natural  gas  and  oil
producing wells.  Nacogdoches Gas entered into an agreement dated
January  7, 2005 with Sonerra, under which Nacogdoches  Gas  will
fund  the  development of three natural gas and oil wells.   This
agreement was amended as of March 14, 2005, increasing the number
of wells from three to four.  In addition, Nacogdoches Gas has an
option to participate in Sonerra's continued development of up to
15  additional natural gas and oil wells over the next two years.
Under  the agreement with Sonerra, Nacogdoches Gas will fund  the
total cost of the new wells (with the provision that up to 25% of
the working interest may be funded and acquired by other parties)
and will receive a priority return of 90% of the working interest
funded  until  its  aggregate  investment  is  recovered.    Once
Nacogdoches Gas has recovered all of its investment in the  wells
from  the  net proceeds of all wells and any other revenues  from
the  assets acquired under the development agreement, Sonerra and
Nacogdoches  Gas will own equal amounts of the working  interests
funded.    The  working  interests  include  undivided  leasehold
interests  in  the  gas  units and the production  and  gathering
equipment.

  Since  entering  the  January 7, 2005 agreement  with  Sonerra,
Nacogdoches  Gas has funded the development of four  wells.   The
net revenue interest in each of these four wells being funded  by
Nacogdoches Gas is 77% with the remaining 23% of the net revenues
paid to the lessor and other royalty interests.  Nacogdoches  Gas
has  a 90% ownership percentage in each of these wells and a 100%
cost  percentage.  This means that Nacogdoches Gas has a  working
interest that bears 100% of the operating costs of the wells  and
receives 69.3% of the net revenues from the wells.  The first  of
those wells, Round Mountain, a James Lime horizontal natural  gas
well,  began production in January 2005 and through  the  end  of
March  2005 has produced approximately 134 million cubic feet  of
natural  gas.   The  second  well,  Wicked  Wolf,  a  James  Lime
horizontal natural gas well, began production in early March 2005
and  through  the end of March 2005 as produced approximately  73
million  cubic feet of natural gas.  The third and fourth  wells,
Painted  Horse,  a  Rodessa  vertical  natural  gas  well  ,  and
Whirlwind, a James Lime horizontal natural gas well,  are   being
developed.

  Expenses  for  the  first quarter of 2004  and  2003  primarily
consisted of the cost of purchased power, production, general and
administrative costs and unrealized losses for the mark to market
of the Company's energy contract.

                               16

<Page>

  As  of  May  1, 2004, BayCorp began consolidating HoustonStreet
for  financial reporting purposes and HoustonStreet revenues  and
expenses  are reflected in the Company's financials  as  of  that
date.  See "Note E.  Investment in HoustonStreet."

  The  following discussion focuses solely on operating  revenues
and  operating  expenses  and  is presented  in  a  substantially
consistent manner for all of the periods presented.

Results of Operations: First Quarter of 2005 Compared to the
First Quarter of 2004
------------------------------------------------------------

Operating Revenues

  BayCorp's   operating  revenues  increased   by   approximately
$1,326,000 to $2,360,000 in the first quarter of 2005 as compared
to  $1,034,000 in the first quarter of 2004.  Total revenues  for
the   first  quarter  of  2005  included  approximately  $985,000
generated from Great Bay Power Marketing's long-term power  sales
contract  with Unitil and approximately $25,000 in  net  revenues
from   Great  Bay  Power  Marketing's  energy  commodity  trading
activity.   The  gross  retail sales volume of  energy  commodity
trading activity was approximately $513,000 and the related  cost
of  sales  was approximately $488,000.  Great Bay Hydro generated
revenues  in the first quarter of 2005 of approximately  $148,000
from  the  sale  of  electricity and  Nacogdoches  Gas  generated
revenues of approximately $931,000 from the sale of natural  gas.
HoustonStreet  generated  revenues  of  approximately   $243,000.
Consolidated   operating  revenues  in  2004  were  approximately
$1,034,000  and  were  derived  solely  from  Great   Bay   Power
Marketing's long-term power sales contract with Unitil.

  The  Company  realized an average selling price for electricity
sold  under the Unitil sales contract of 5.03 cents per  kilowatt
hour  ("kWh") for the first quarters of both 2005 and 2004.   The
cost of power purchased to supply this contract was approximately
6.12   cents  per  kWh  for  the  first  quarter  of   2005   and
approximately 5.78 cents per kWh for the first quarter  of  2004.
For  the  first quarter of 2005, the Company realized an  average
selling  price for electricity generated and sold  by  Great  Bay
Hydro  of approximately 6.18 cents per kWh and Great Bay  Hydro's
cost  of generating power (determined by dividing total operating
expenses   by  kWhs  sold  during  the  applicable  period)   was
approximately 12.06 cents per kWh.

Expenses

  Great  Bay Power Marketing purchases power to satisfy its power
supply  obligation  under the Unitil contract.   Purchased  power
expenses   increased  by  approximately  $67,000,  or  5.9%,   to
$1,198,000 in the first quarter of 2005 as compared to $1,131,000
in the first quarter of 2004.

  The  Company recorded a non-cash charge for an unrealized  loss
on  the mark-to-market of its long term energy sales contract and
recorded the amortization of the deferred inception gain on  this
contract  for  a  total  net  unrealized  loss  of  approximately
$1,989,000  in  the first quarter of 2005 as compared  to  a  net
unrealized loss of approximately $1,637,000 in the first  quarter
of  2004.  The mark-to-market value of this long-term contract is
based on current projections of power prices over the life of the
contract.   Forward  power  prices  increased  during  the  first
quarter of 2004 and have continued to rise into the first quarter
of  2005  primarily  due to increases in  the  forward  price  of
natural  gas.   In  the New England Power Pool ("NEPOOL"),  power
generating  plants  are  usually  dispatched  in  the  order   of
increasing  variable costs.  The plants that are called  upon  to
supply  the  last amount of demand are considered to  be  on  the
margin and set the price of power for all plants selling into the
market.  Since the completion of a significant amount of new gas-
fired  generation  in NEPOOL, plants that use natural  gas  as  a
fuel  source are frequently on the margin and therefore  set  the
price of power in NEPOOL.

                               17

<Page>

Accordingly, the price of power in NEPOOL is highly influenced by
the price of natural gas.

  Production   and   transmission  expenses  were   approximately
$211,000 in the first quarter of 2005 and reflect plant operating
expenses  Great  Bay Hydro and at Benton Falls.   There  were  no
production  and  transmission expenses in the  first  quarter  of
2004.

  Administrative  and  general expenses  increased  approximately
$312,000, or 75.2%, to $727,000 in the first quarter of  2005  as
compared to $415,000 in the first quarter of 2004.  This increase
is  primarily attributable to administrative and general expenses
associated  with  the Company's operations at  Great  Bay  Hydro,
Great Bay Hydro Maine, Nacogdoches Gas, Nacogdoches Power and  at
HoustonStreet.   There  were no expenses  associated  with  these
operations in the first quarter of 2004.

  Depreciation,  depletion  and  amortization  was  approximately
$270,000 in the first quarter of 2005 and represents depletion of
Nacogdoches lease acquisition costs and development costs for the
first  quarter  of  2005.  Under the successful  efforts  method,
lease   acquisition   costs  and  all   development   costs   are
capitalized.  The provision for depletion is based upon the units
of  production  method.  There were no similar  expenses  in  the
first quarter of 2004.

  Taxes  other  than income increased approximately  $47,000,  to
$60,000  in  the first quarter of 2005 as compared to $13,000  in
the  first  quarter  of 2004 primarily due  to  Great  Bay  Hydro
property  taxes.  There was no property tax expense in the  first
quarter of 2004.

  Total   other  income  increased  approximately  $247,000,   to
$311,000  in the first quarter of 2005 as compared to $64,000  in
the   first   quarter  of  2004.   This  increase  was  primarily
attributable  to  a  refund of $225,000 from  the  State  of  New
Hampshire for overpayment of prior year state income taxes.

Net Loss

  As  a  result  of the above factors, for the first  quarter  of
2005,   the   Company  recorded  a  net  loss  of   approximately
$1,804,000,  or $3.23 per share, as compared to  a  net  loss  of
approximately  $2,098,000, or $3.33  per  share,  for  the  first
quarter of 2004.

Liquidity and Capital Resources

  As  of March 31, 2005, BayCorp had approximately $8,093,000  in
cash   and  cash  equivalents.   The  Company  had  approximately
$2,500,000  in restricted cash as required by the  terms  of  the
Unitil  PPA  and  approximately $436,000 in  restricted  cash  as
required  by  the  terms of the CMP PPA  The restricted  cash  is
reflected  as  a  long  term  asset in  the  Company's  financial
statement.  The Company also had approximately $520,000 in a cash
deposit  at ISO New England ("ISO NE").  The Company purchases  a
portion  of  its power needed for resale from ISO NE and  ISO  NE
requires financial assurance to protect NEPOOL against a  payment
default  of  one of its participants.  The amount  of  collateral
needed is calculated based upon formulas developed by ISO NE  and
NEPOOL.  This deposit is reflected as an Other Long Term Asset in
the  Company's  financial statements.  The Company believes  that
such  cash, together with the anticipated proceeds from the  sale
of  electricity by Great Bay Power Marketing, Great Bay Hydro and
Benton  Falls,  and  from  the sale of natural  gas  and  oil  by
Nacogdoches Gas, will be sufficient to enable the Company and its
wholly  owned  subsidiaries to meet their cash  requirements  for
operations in 2005.

                               18

<Page>

  On  March  15,  2005, the Company and all of its  wholly  owned
subsidiaries entered into a $10,250,000 Convertible  Note  and  a
Pledge  Agreement  with Sloan Group Ltd., a Bahamas  corporation.
The  debt, which accrues interest at 8% per annum and is due  and
payable in full on December 15, 2005, is convertible by the Sloan
Group at any time between November 15, 2005 and December 15, 2005
(or any time after the occurrence and during the continuance of a
material  event  of  default  under  the  Note)  into  shares  of
BayCorp's  common stock, $.01 par value at a price of $14.04  per
share.   The Note does not allow BayCorp to prepay the  debt  and
provides for a 2% premium on the interest rate in the event of  a
default.  Payment of the Note may be accelerated in the event  of
a  material event of default, which is customary for this type of
financing.    See  "Note B. Debt Financing."  If payment  on  the
Note  is  required  on December 15, 2005, the  Company  may  seek
additional financing.

  The  Company  had a net loss in the first quarter  of  2005  of
approximately  $1,804,000.  There was a non-cash  charge  for  an
unrealized  loss  on  the mark-to-market of  the  Unitil  PPA  of
approximately $2,054,000 and a non-cash recognition  of  deferred
gain  on  the Unitil PPA of approximately $65,000.  The value  of
this  contract  is based on current projections of  power  prices
over  the  life of the contract.  Forward power prices  increased
during  the  first quarter of 2005 primarily due to increases  in
the  forward price of natural gas.  Power generating plants  that
use  natural gas as a fuel source are increasingly on the  margin
and  therefore are setting the forward price of power in  NEPOOL.
Accordingly, the price of power in NEPOOL is highly dependent  on
the  price  of  natural  gas.   Other non-cash  charges  included
compensation  expense of approximately $43,000 for  the  variable
accounting of certain employee stock options, $36,000 in interest
expense  on  the  convertible  note,  approximately  $20,000  for
minority  interest  and approximately $270,000 for  depreciation,
depletion and amortization.

  An increase in accounts receivable in the first quarter of 2005
of  approximately $642,000 was primarily attributable to accounts
receivable  at  Nacogdoches  Gas.  An increase  of  approximately
$404,000  in prepaids and other assets was primarily attributable
to  $436,000 that has been escrowed as required by the  terms  of
the CMP PPA with Benton Falls.

  A   decrease  in  accounts  payable  and  accrued  expenses  of
approximately $66,000 was primarily attributable to  a  reduction
in accounts payable as of March 31, 2005.

     Cash   flows   from  investing  activities   included   cash
expenditures of approximately $2,129,000 for fixed assets as part
of  the  Benton  Falls  purchase.  See  "Note  A.  The  Company."
Investing  activities in the first quarter of 2005 also  included
investments by Nacogdoches Gas of approximately $8.9 million  for
interests  in four oil and natural gas wells.  See "Note  A.  The
Company."

  The Company's contractual obligations as of March 31, 2005 were
as follows:

                                                         More
  Contractual             Less Than    1-3     3-5      Than 5
  Obligations    Total    One Year    Years   Years      Years
  -----------    -----    --------    -----   -----      -----
  Office Space  $26,400    $26,400      0       0          0
  Lease

  Following  the sale of Seabrook in the fourth quarter  of  2002
and  the  completion of the Company's Tender Offer in  the  first
quarter of 2003, the Company evaluated and pursued energy-related
investment opportunities.  The Company continues to focus on  the
acquisition of energy-related assets.

  BayCorp  has  continued to seek to acquire either  complete  or
partial  ownership  interests in electric generating  facilities.
This  is an area where BayCorp has a solid understanding  of  the
market and the value of and risks related to those assets.  There
are  also  a  large number of generating assets  that  have  been
offered or are currently being offered for sale.  These plants

                               19

<Page>

consist  of  both  merchant  and contracted  facilities  using  a
variety   of   fuels   and   located   both   domestically    and
internationally.  There is, however, substantial competition  for
the   acquisition  of  these  assets,  with  a  number   of   new
participants entering the market, including private equity funds,
hedge  funds,  insurance  companies, Canadian  income  funds  and
investment  banks.   The  Company  remains  focused  on  pursuing
opportunities and assets that it believes will provide  a  return
to stockholders commensurate with the risks.

  Generally,   BayCorp  has  targeted  the  following   operating
assets:  (1) merchant plants in regions with developed  wholesale
power  markets such as New England, New York, PJM and Texas,  (2)
international   assets  that  have  stable,  long-term   off-take
contracts,  and  (3)  merchant  or contracted  renewable  assets.
BayCorp   is   also  pursuing  other  energy-related  investments
including  development  of  new power generation  facilities  and
hydrocarbon  (natural  gas  and oil)  reserves  and  the  further
development of HoustonStreet, its online trading platform.

  BayCorp's  first  acquisition following its  sale  of  Seabrook
was  the  acquisition  through Great Bay  Hydro  of  the  Vermont
generating  plants  owned  by the Vermont  Electric  Division  of
Citizens.    The  generating  facilities  include  an   operating
hydroelectric facility of approximately 4 MWs located in Newport,
Vermont,  diesel engine generators totaling approximately  7  MWs
located  in  Newport,  Vermont  and  non-operating  hydroelectric
facilities in Troy and West Charleston, Vermont.  Great Bay Hydro
assumed operating responsibility for these facilities on April 1,
2004  and  is using the output of the Newport plant as a physical
hedge for a portion of BayCorp's contractual obligation to supply
9.06 megawatts to Unitil through 2010.

  Great  Bay Hydro paid a nominal purchase price to Citizens  for
the   generating  facilities  and  650  acres  of  real  property
associated  with the generating facilities, and  this  amount  is
reflected  in  the Company's financial statements.  In  addition,
Citizens  agreed to indemnify Great Bay Hydro for the  reasonably
anticipated costs of complying with the requirements of  the  new
operating  license issued by the FERC on November 21,  2003.   On
September 28, 2004, Great Bay Hydro agreed to terminate Citizens'
indemnification requirements in exchange for Citizens' payment to
Great   Bay  Hydro  of  approximately  $4.4  million   for   FERC
compliance.   The Company's balance sheet as of  March  31,  2005
reflects  short-term and long-term liabilities  of  $532,000  and
$2,479,000,  respectively, for the estimated  remaining  cost  of
FERC   compliance.    The  Company  expects   to   complete   the
requirements of FERC license within those amounts.

  The  Company formed Nacogdoches Power in 2004, and through this
subsidiary,  acquired the development rights to the Sterne  Power
project  in the town of Sacul in Nacogdoches County, Texas.   The
Sterne project was initially designed and has been permitted as a
nominal  1000  MW  plant.  The project received its  air  quality
permit in December 2002, and the air quality permit currently  is
effective through December 7, 2005.  An additional eighteen-month
extension  to  the permit may be requested by Nacogdoches  Power.
The  wastewater  discharge permit is currently effective  through
August  1, 2006.  The project has an option to purchase the  land
for the project and options to acquire easements for transmission
lines   and/or   gas  pipelines.   Those  options  have   varying
expiration  dates in 2005 and 2006 and are either being  extended
or  exercised.   Nacogdoches Power is  currently  evaluating  the
plant  configuration.  Further, Nacogdoches Power is  seeking  to
enter into power offtake contracts, although

                               20

<Page>

none  have been executed.  A schedule for the development of  the
project  has not been established.  The total cost of the  Sterne
project  will  depend on the final plant design and will  require
substantial  additional financing.  The amount and  type  of  any
such financing has not been determined.

  As  part of its efforts to secure a natural gas supply for  the
Sterne  Power  project, the Company determined  that  significant
natural  gas  and oil exploration and production activities  were
being  carried out in Nacogdoches County, Texas near the location
of  the  Sterne Power project.  It was through this process  that
the  Company  identified the oil and gas development  opportunity
with Sonerra.

  The  Company formed Nacogdoches Gas in 2004, and in the  fourth
quarter  of  2004, Nacogdoches Gas entered into  agreements  with
Sonerra  under which Nacogdoches Gas acquired an approximate  10%
working  interest (of a 77% net revenue interest) in two  natural
gas  and  oil producing wells.  Nacogdoches Gas entered  into  an
agreement  dated  January  7,  2005  with  Sonerra,  under  which
Nacogdoches  Gas will fund the development of three  natural  gas
and  oil wells.  This agreement was amended as of March 14, 2005,
increasing  the  number  of  wells from  three  to  four.   Since
entering  the January 7, 2005 agreement with Sonerra, Nacogdoches
Gas  has  funded the development of four wells.  The net  revenue
interest  in each of these four wells being funded by Nacogdoches
Gas is 77% with the remaining 23% of the net revenues paid to the
lessor  and other royalty interests.  Nacogdoches Gas has  a  90%
ownership  percentage  in each of these wells  and  a  100%  cost
percentage.   This  means  that Nacogdoches  Gas  has  a  working
interest that bears 100% of the operating costs of the wells  and
receives 69.3% of the net revenues from the wells.  The first  of
those wells, Round Mountain, a James Lime horizontal natural  gas
well,  began production in January 2005 and through  the  end  of
March  2005  has produced 134 million cubic feet of natural  gas.
The second well, Wicked Wolf, a James Lime horizontal natural gas
well, began production in early March 2005 and through the end of
March  2005 has produced approximately 73 million cubic  feet  of
natural  gas.   The  third  and fourth wells,  Painted  Horse,  a
Rodessa  vertical natural gas well, and Whirlwind, a  James  Lime
horizontal natural gas well, are being developed.

  In  addition,  Nacogdoches Gas has an option to participate  in
Sonerra's  continued development of up to 15  additional  natural
gas  and  oil wells over the next two years.  Under the agreement
with Sonerra, Nacogdoches Gas will fund the total cost of the new
wells  (with the provision that up to 25% of the working interest
may  be funded and acquired by other parties) and will receive  a
priority  return of 90% of the working interest funded until  its
aggregate  investment  is recovered.  Once  Nacogdoches  Gas  has
recovered  all  of  its  investment in the  wells  from  the  net
proceeds  of  all  wells and any other revenues from  the  assets
acquired under the development agreement, Sonerra and Nacogdoches
Gas  will own equal amounts of the working interests funded.  The
working  interests include undivided leasehold interests  in  the
gas units and the production and gathering equipment.

  Sonerra  directly  or indirectly controls approximately  36,000
acres  either through leases or as land held by production within
a project area in Nacogdoches County in east Texas.  Sonerra also
has  acquired 3D seismic data covering approximately 31,000 acres
within the project area, of which 24,000 acres are under lease or
held by production directly or indirectly by Sonerra.

  Under  the  terms of the January 7, 2005 agreement as  amended,
Sonerra  will sequentially present five additional sets of  three
well  prospects to Nacogdoches Gas.  Upon the presentation  of  a
set  of three well prospects, Nacogdoches Gas, at its option, may
proceed  with  the  development of those  three  well  prospects.
Should Nacogdoches Gas decide not to proceed with the development
of   any  given  set  of  three  well  prospects,  its  right  to
participate in future well sets terminates.

  The total cost of an individual well typically ranges from $2.0
million  to $3.5 million and includes the acquisition  of  leases
for  the  land, the drilling and completion of the wells and  the
construction  of  extensions of the gas  gathering  system.   The
total  cost  depends  on the type of well,  the  amount  of  land
required  for  the production unit, the length of  gas  gathering
pipeline  and  the  completion  technique.   If  Nacogdoches  Gas
exercises its option to participate in additional well prospects,
it will need to raise additional capital to do so.


                               21

<Page>

  Other  exploration and production companies  are  operating  in
Nacogdoches  County and may seek to acquire land in or  near  the
project  area  being  developed by Sonerra and  Nacogdoches  Gas.
Nacogdoches Gas has no employees.

  Various federal, state and local laws relating to the discharge
of  materials into the environment, or otherwise relating to  the
protection of the environment, directly impact the development of
oil  and  gas  wells and their costs.  These laws and regulations
govern,   among  other  things,  emissions  to  the   atmosphere,
discharges  of  pollutants into the waters of the United  States,
underground  injection of waste water, the  generation,  storage,
transportation and disposal of waste materials and the protection
of   public   health,  natural  resources  and   wildlife.    The
anticipated costs of development of oil and natural gas wells  by
Nacogdoches  Gas  and Sonerra includes funding for  the  measures
necessary  to meet environmental compliance requirements  and  no
additional environmental compliance costs are anticipated.

  In  April  2005,  Nacogdoches Gas  funded  the  acquisition  of
certain  natural  gas  production assets in  Nacogdoches  County,
Texas  formerly  owned by SunStone Corporation  ("SunStone")  for
approximately $3.4 million. The assets include:

                                         Net         Overriding
                          Working      Revenue        Royalty
Well Name                 Interest     Interest       Interest
---------                 --------     --------       --------

Kendrick #1-H             25.1 %         19.3 %        1.7 %
Sitting Bull #1           25.1 %         19.3 %        1.3 %
Crazy Horse #1             0.0 %          0.0 %        1.5 %
Soaring Eagle #1          29.2 %         22.4 %        1.1 %
Ten Bears #1              37.8 %         29.1 %        0.4 %
Ten Bears #2               0.0 %          0.0 %        0.9 %
Sky Chief #1              25.1 %*        19.3 %*       2.4 %

*This is a back in interest that will be acquired after the
recovery of a 300% non-consent penalty.

  -   A  75.6% ownership interest in 3D seismic survey data  that
      covers   approximately  49  square  miles  in   Nacogdoches
      County.

  -   A  37.8%  undivided  leasehold  interest  in  approximately
      3,800  acres  within the area covered  by  the  3D  seismic
      survey data.

  -   Undivided  interests in the Melrose Gas Gathering  Pipeline
      System  (the "Melrose System"), located within the Kendrick
      (James  Lime) Field, Nacogdoches County, Texas,  consisting
      of:  (i)  an undivided 25% interest in the section  of  the
      Melrose System originating at mile-post 207.68 marker as  a
      6"  tap  in  the  Texas Eastern line,  and  extending  West
      through  a  6"  pipeline to the Sonerra, Kendrick  No.  1-H
      well,  (ii)  an undivided 29.1552% interest in the  section
      of  the  Melrose  System occurring from the  Kendrick  No.1
      well  and  extending  as  a  6" pipeline  to  the  Sonerra,
      Soaring Eagle No.1 well and (iii) an undivided interest  in
      all rights of way, equipment and appurtenances relating  to
      such  segments, and including all facilities and  equipment
      presently  existing  at  and  associated  with  the   Texas
      Eastern tap site and facility.

  Nacogdoches  Gas acquired these assets in accordance  with  the
terms  of  the  January 7, 2005 agreement with  Sonerra  and  the
Acquisition  Agreement dated as of March 22, 2005 among  Sonerra,
Pinnacle  Energy  Group,  L.C. and Nacogdoches  Gas.   Under  its
agreement with Sonerra, Nacogdoches Gas will have a 90%  interest
and  Sonerra will have a 10% interest in these assets until  110%
of the $3.4 million purchase price of the SunStone assets and all
of  the  funding  provided by Nacogdoches Gas for  wells  drilled
under   the  January  7,  2005  agreement  is  recovered.    Once
Nacogdoches Gas recovers its investment and

                               22

<Page>

other operating costs, its interest in all assets will become 50%
and Sonerra will own the other 50%.

  In  March  2005, BayCorp formed GBH Maine and GBH  Benton.   On
March  16,  2005, GBH Maine and GBH Benton acquired Benton  Falls
Associates,  a  limited  partnership that  owns  a  4.3  megawatt
hydroelectric generation plant in Benton, Maine from The  Arcadia
Companies  for approximately $2.2 million.   The Company  assumed
operating responsibility for Benton Falls, the output of which is
sold  to  CMP  under a power purchase agreement that  expires  in
December 2007.  The rates under the CMP PPA are indexed to  CMP's
standard  rates  for  energy and capacity  purchases  established
annually by the Maine Public Utilities Commission.

  The  Company  intends to pursue investments that  will  require
additional  equity or debt financing.  The Company believes  that
such  financing is available, but there can be no assurance  that
the Company would be successful in obtaining such financing.   If
the  Company is not successful in obtaining additional financing,
the  Company  may  not  be  able  to  pursue  certain  investment
alternatives.   In  such a case, the Company may  be  limited  to
opportunities  that  it can pursue given its  current  resources.
The  Company  believes that its current cash, together  with  the
anticipated  proceeds from the sale of electricity by  Great  Bay
Power  Marketing,  Great  Bay Hydro and  Benton  Falls,  and  the
proceeds from the sale of natural gas by Nacogdoches Gas, will be
sufficient  to  enable the Company to meet the  anticipated  cash
requirements of its current operations in 2005.  If  the  Company
is unsuccessful in identifying and making additional investments,
the Company may pursue alternative strategies, including sale  of
the Company or its assets, or deregistration.

Critical Accounting Policies

  Preparation of the Company's financial statements in accordance
with generally accepted accounting principles requires management
to  make  estimates  and  assumptions that  affect  the  reported
amounts  of assets and liabilities, the disclosures of contingent
assets and liabilities and revenues and expenses.  Note 1 to  the
Consolidated  Financial Statements in the  Company's  Form  10-K,
filed  March 31 2005, is a summary of the significant  accounting
policies  used  in  the  preparation of the  Company's  financial
statements.   The following is a discussion of the most  critical
accounting policies used historically by the Company.

Stock Options

  The  Company accounts for its stock option plans in  accordance
with  SFAS  No.  123, "Accounting for Stock Based  Compensation."
Awards  under the Company's plans vest over periods ranging  from
one to three years.

Principles of Consolidation

  The  Company  consolidates  all majority-owned  and  controlled
subsidiaries  and  applies the equity method  of  accounting  for
investments between 20% and 50%.

All  significant intercompany transactions have been  eliminated.
All  sales  of  subsidiary  stock are accounted  for  as  capital
transactions in the consolidated financial statements.

 The  Company  began consolidating its subsidiary, HoustonStreet,
as  a  result of the recapitalization that occurred on April  30,
2004.   As  a  result  of  the  recapitalization,  the  Company's
ownership in HoustonStreet increased from 46.4% to 59.7%.

Energy Marketing
                               23

<Page>


  Forward  contracts  (including  the  Unitil  PPA)  meeting  the
definition of a derivative and not designated and qualifying  for
the  normal purchases and normal sales exception under  Statement
of   Financial  Accounting  Standards  No.  133,  Accounting  for
Derivative Instruments and Hedging Activities (SFAS No. 133)  are
recorded  at  fair  value.  In accordance  with  FASB's  Emerging
Issues  Task Force Issue No. 02-03, Issues Involved in Accounting
for  Derivative Contracts Held for Trading Purposes and Contracts
Involved  in Energy Trading and Risk Management Activities  (EITF
Issue  No.  02-03),  revenues related to  derivative  instruments
classified as trading are reported net of related cost of sales.

Depletion of Oil and Gas Properties

  The Company follows the successful efforts method of accounting
for  its  natural gas and oil activities.  Under  the  successful
efforts method, lease acquisition costs and all development costs
are  capitalized.  Unproved properties are reviewed quarterly  to
determine if there has been an impairment of the carrying  value,
and  any  such  impairment is charged to expense in that  period.
Exploratory drilling costs are capitalized until the results  are
determined.    If   proved  reserves  are  not  discovered,   the
exploratory  drilling  costs  are  expensed.   Other  exploratory
costs,  such  as  seismic  costs and geological  and  geophysical
expenses,  are expensed as incurred.  The provision for depletion
is based upon the units of production method.

Asset Retirement Obligation

  The  Company  has  adopted  the  provisions  of  Statement   of
Financial  Accounting  Standards No. 143, "Accounting  for  Asset
Retirement Obligations" ("SFAS 143").  SFAS 143 requires entities
to  record  the fair value of a liability for an asset retirement
obligation  in the period in which it is incurred if a reasonable
estimate of fair value can be made, and the corresponding cost is
capitalized  as part of the carrying amount of the related  long-
lived asset.  The liability is accreted to its present value each
period,  and the capitalized cost is depreciated over the  useful
life  of the related asset.  If the liability is settled  for  an
amount  other  than  the  recorded amount,  a  gain  or  loss  is
recognized.    The  Company  has  asset  retirement   obligations
associated  with  the future plugging and abandonment  of  proved
properties  and related facilities.  The estimated  liability  is
based  upon  historical  experience in  plugging  and  abandoning
wells, estimated remaining lives of those wells, estimates as  to
the cost to plug and abandon the wells in the future, and federal
and  state  regulatory requirements.  The liability is discounted
using   an  assumed  credit-adjusted  risk-free  interest   rate.
Revisions  to  the  liability  could  occur  due  to  changes  in
estimates of plugging and abandonment costs, changes in the risk-
free interest rate or remaining lives of the wells, or if federal
of   state   regulators  enact  new  plugging   and   abandonment
requirements.

Forward Looking Statements and Certain Factors That May Affect
Future Results
--------------------------------------------------------------

  This Quarterly Report contains forward-looking statements.  For
this  purpose, any statements contained in this report  that  are
not statements of

historical  fact may be deemed to be forward-looking  statements.
Without   limiting   the   foregoing,   the   words   "believes,"
"anticipates,"   "plans,"  "expects,"   "intends"   and   similar
expressions  are intended to identify forward-looking statements.
There  are  a  number of important factors that could  cause  the
results  of  BayCorp and/or its subsidiaries to differ materially
from  those indicated by such forward-looking statements.   These
factors  include, without limitation, those set forth  below  and
elsewhere in this report.

  Business  Opportunities  and  Development.   As  described   in
"Management's Discussion and Analysis of Financial Condition  and
Results  of  Operations - Liquidity and Capital  Resources,"  the
Company  has  evaluated  and  pursued  energy-related  investment
opportunities, has focused on the acquisition of

                               24

<Page>

natural gas and oil, electric generating assets and other energy-
related investments and is considering the further development of
HoustonStreet.  There can be no assurance that the  Company  will
be able to identify business opportunities that it believes to be
attractive,  or that it will be successful in pursuing  any  such
opportunities,  in view of factors that include  competition  for
the  acquisition  of  assets, the fact that  many  energy-related
activities are subject to government regulatory requirements, the
Company's limited resources and the need to obtain debt or equity
financing in order to pursue certain opportunities.

  History  of Losses. BayCorp reported operating losses  in  2004
and  in  2003  and reported operating income for 2002  and  2001.
Prior to 2001, BayCorp had never reported an operating profit for
any year since its incorporation.

  Liquidity   Need.    As  of  March  31,   2005,   BayCorp   had
approximately  $11.0  million  in  cash  and  cash   equivalents,
restricted cash and short-term investments.  On March  15,  2005,
BayCorp  closed a $10.25 million convertible debt financing  with
Sloan  Group Ltd.  The debt, which accrues interest at 8% and  is
due  on  December  15, 2005, is convertible at any  time  between
November  15,  2005  and December 15, 2005  into  shares  of  the
Company's  common stock at a price of $14.04 per share.   BayCorp
used  proceeds  from the financing to finance the acquisition  of
Benton  Falls  by  GBH Maine and GBH Benton and  intends  to  use
proceeds  from  the  financing  to continue  the  development  of
natural  gas  and  oil  wells in East  Texas  under  its  Project
Development  Agreement with Sonerra and for other  strategic  and
general corporate purposes.  The Company believes that such cash,
together  with  the  anticipated  proceeds  from  the   sale   of
electricity  by Great Bay Power Marketing, Great  Bay  Hydro  and
Benton  Falls,  and  from  the sale of natural  gas  and  oil  by
Nacogdoches Gas, will be sufficient to enable the Company and its
wholly  owned  subsidiaries to meet their cash  requirements  for
operations in 2005.  The direction of the Company's business  and
circumstances,   foreseen   or   unforeseen,   may   cause   cash
requirements  to  be materially higher than anticipated  and  the
Company or its wholly-owned subsidiaries may be required to raise
additional capital, either through a debt financing or an  equity
financing,  to  meet  ongoing cash  requirements.   There  is  no
assurance that the Company or its subsidiaries would be  able  to
raise  such  capital  or that the terms on which  any  additional
capital   is  available  would  be  acceptable.   Moreover,   the
Company's  need  to raise additional capital in order  to  pursue
certain   opportunities  may  affect  the  Company's  competitive
position with respect to such opportunities.  If additional funds
are  raised  by  issuing  equity  securities,  dilution  to  then
existing stockholders will result.

  Purchased  Power  Price  Risk.  The  price  of  electricity  is
subject  to  fluctuations resulting from changes  in  supply  and
demand.  The Company is party to a purchased power contract  with
Unitil  that provides for Great Bay Power Marketing  to  sell  to
Unitil  9.06  MWs  at $50.34 per MWh.  The Unitil  PPA  continues
through  October  31,  2010, and Unitil has an  option,  expiring
November  1,  2005, to extend the Unitil PPA for up to  12  years
until  2022.   The  Company  must  purchase  power  to  meet  its
obligation  under the PPA.  The prices at which Great  Bay  Power
Marketing   must   purchase  its  power  supply  could   increase
significantly from current levels.

  Extensive  Government Regulation of Electric  Energy  Industry.
The  electric energy industry is subject to extensive  regulation
by  federal and state agencies.  Great Bay Power Marketing, Great
Bay Hydro and Benton Falls are subject to the jurisdiction of the
FERC  and,  as  a  result, are required to  file  with  FERC  all
contracts for the sale of electricity.  FERC's jurisdiction  also
includes,   among   other  things,  the  sale,   lease,   merger,
consolidation or other disposition of facilities, interconnection
of  certain  facilities, accounts, service and property  records.
The  Sterne  Power  project  is  subject  to  the  terms  of  its
environmental permits.  The Sterne Power project currently has an
air  quality permit and wastewater discharge permit issued by the
Texas   Commission   on   Environmental   Quality.     Additional
environmental permits will

                               25

<Page>

be  required prior to the start of operation of the project.   In
addition,  prior  to  operation  of  the  Sterne  Power  project,
Nacogdoches Power will seek designation by FERC as an EWG.

  Extensive Government Regulation of Oil and Gas Industry.  There
are numerous federal and state laws and regulations governing the
oil  and gas industry that are often changed in response  to  the
current political or economic environment.  Compliance with  this
regulatory  burden is often difficult and costly  and  may  carry
substantial penalties for noncompliance.  The following are  some
specific regulations that may affect oil and gas activities.  The
impact  of  these or future legislative or regulatory initiatives
cannot be predicted.

  Federal  Energy  Bill.   After failing to pass  legislation  in
2003  and  2004, Congress is currently considering a  new  energy
bill.   The potential effect of this legislation is unknown,  but
it  may  include certain tax incentives for oil and gas producers
and changes in the federal regulatory framework.

  Federal    Regulation   of   Natural   Gas.    The   interstate
transportation  and  certain sales for  resale  of  natural  gas,
including transportation rates charged and various other matters,
is subject to federal regulation by FERC.  Federal wellhead price
controls on all domestic gas were terminated on January 1,  1993,
so   gathering  systems  are  currently  not  subject   to   FERC
regulation.   The impact of future government regulation  on  any
natural  gas  facilities  cannot be predicted.   Although  FERC's
regulations should generally facilitate the transportation of gas
produced from producing properties and the direct access to  end-
user markets, the future impact of these regulations on marketing
production or on gas transportation business cannot be predicted.
BayCorp  and  its subsidiaries, however, should not  be  affected
differently than competing producers and marketers.

  Federal Regulation of Oil.  Sales of crude oil, condensate  and
natural  gas liquids are not currently regulated and are made  at
market  prices.  The net price received from the  sale  of  these
products is affected by market transportation costs.  Under rules
adopted  by FERC effective January 1995, interstate oil pipelines
can  change rates based on an inflation index, though other  rate
mechanisms may be used in specific circumstances.

  State  Regulation.   Oil  and  gas operations  are  subject  to
various types of regulation at the state and local levels.   Such
regulation includes requirements for drilling permits, the method
of  developing new fields, the spacing and operations  of  wells,
and  waste prevention.  The production rate may be regulated  and
the maximum daily production allowable from oil and gas wells may
be  established on a market demand or conservation  basis.  These
regulations may limit production by well and the number of  wells
that  can  be drilled.  To the extent that such gas is  produced,
transported and consumed wholly within one state, such operations
may,   in   certain  instances,  be  subject   to   the   state's
administrative authority charged with regulating pipelines.   The
rates that can be charged for gas, the transportation of gas, and
the construction and operation of such pipelines would be subject
to  the regulations governing such matters.  Certain states  have
recently  adopted regulations with respect to gathering  systems,
and  other  states are considering similar regulations.   Whether
new  regulations will be adopted or, if adopted, the effect these
rules may have on gathering systems cannot be predicted.

  Federal,  State  or  Native  American  Leases.   Operations  on
federal, state or Native American oil and gas leases are  subject
to  numerous restrictions, including nondiscrimination  statutes.
Such  operations  must be conducted pursuant to  certain  on-site
security regulations and other permits and authorizations  issued
by the Bureau of Land Management, Minerals Management Service and
other agencies.

                               26

<Page>

  Environmental  Regulations.  Various federal, state  and  local
laws  regulating the discharge of materials into the environment,
or  otherwise  relating  to the protection  of  the  environment,
directly   impact  oil  and  gas  exploration,  development   and
production operations, and consequently may impact operations and
costs.   These  laws and regulations govern, among other  things,
emissions to the atmosphere, discharges of pollutants into waters
of  the United States, underground injection of waste water,  the
generation,  storage,  transportation  and  disposal   of   waste
materials,  and  protection of public health, natural  resources,
and  wildlife.  These laws and regulations may impose substantial
liabilities for noncompliance and for any contamination resulting
from  operations and may require the suspension or  cessation  of
operations in affected areas.  To date, BayCorp has not  expended
any  material  amounts  to  comply  with  such  regulations,  and
management  does not currently anticipate that future  compliance
will  have  a materially adverse effect on BayCorp's consolidated
financial   position  or  results  of  operations.   BayCorp   is
committed to environmental protection and believes that it is  in
substantial  compliance  with applicable environmental  laws  and
regulations.   There are no known issues that have a  significant
adverse  effect  on  the permitting process or permit  compliance
status  of any of its facilities or operations.  BayCorp  expects
that  it  will  make  expenditures  in  efforts  to  comply  with
environmental  regulations  and requirements.   These  costs  are
considered a normal, recurring cost of ongoing operations and not
an extraordinary cost of compliance with government regulations.

  Risks   Related  to  HoustonStreet.   HoustonStreet's  revenues
depend  on continued and expanded use of Internet-based wholesale
energy trading platforms.  Electronic trading of wholesale energy
may  not  achieve widespread market acceptance  or  emerge  as  a
sustainable  business.  In addition, HoustonStreet will  need  to
enhance  trading  liquidity  in order  to  increase  and  sustain
revenues.   As  a  technology dependent business, HoustonStreet's
business  could suffer due to computer or communications  systems
interruptions  or  failures,  technological  change  or   adverse
competitive   developments.   Further,  as  electronic   commerce
evolves,   federal,  state  and  foreign  agencies  could   adopt
regulations  covering  issues such as user privacy,  content  and
taxation  of  products  and  services.   If  enacted,  government
regulations  could  materially adversely  affect  HoustonStreet's
business.  Although HoustonStreet currently is not aware that  it
infringes  any other patents, it is possible that HoustonStreet's
technology   infringes  patents  held  by  third   parties.    If
HoustonStreet  were  to be found infringing,  the  owner  of  the
patent could sue HoustonStreet for damages, prevent HoustonStreet
from making, selling or using the owner's patented technology  or
could  impose substantial royalty fees for those privileges.   If
any  of  the foregoing risks materialize, or other risks  develop
that adversely affect HoustonStreet, or if HoustonStreet fails to
grow  its revenues and net income, BayCorp could lose all of  the
value of its investment in HoustonStreet.

Item 3.  Quantitative and Qualitative Disclosures About Market
Risk
--------------------------------------------------------------

Commodity Price Risk

  Great  Bay Power Marketing is a party to the Unitil PPA,  which
as  amended, provides for the sale of 9.06 MWs of power to Unitil
at  $50.34  MWh through October 31, 2010.  Unitil has an  option,
which  expires November 1, 2005, to extend the Unitil PPA for  up
to  12  years,  from November 1, 2010 through October  30,  2022.
Great  Bay Power Marketing purchases power to meet its obligation
under  this  contract and, as such, is exposed  to  market  price
fluctuations for the price of power.

  The Unitil PPA was entered into for purposes other than trading
and   is  subject  to  commodity  price  risk.   The  prices   of
electricity are subject to fluctuations resulting from changes in
supply  and  demand.   Great Bay Power  Marketing  tracks  market
exposure  on its forward firm energy contract in a mark-to-market
model  that  is updated daily with current market prices  and  is
reflected  in  the  Company's balance sheet.   The  positive,  or
negative,  value of the forward firm power commitment  represents
an  estimation  of  the  gain,  or loss,  that  Great  Bay  Power
Marketing  would  have experienced if open firm commitments  were
covered at then-current market prices.  Great Bay Power Marketing
had  net unrealized losses in the first quarters of 2005 and 2004
of  approximately $1,989,000 and $1,637,000, respectively, on its
forward firm energy contract.

                               27

<Page>

  The  Company does not purchase derivative commodity instruments
to  hedge  its exposure to commodity price risk.  The  generation
and  sale  of  electricity by Great Bay Hydro of approximately  4
megawatts  functions  as a physical hedge against  the  commodity
risk.

  The  following  table provides information about the  Company's
forward  firm  energy  contract that is  subject  to  changes  in
commodity  prices, showing the fair value of the contract  as  of
March  31,  2005  and  2004  and the unrealized  loss  for  those
periods.

                          March 31,      March 31,
                             2005           2004
                          ---------      ---------
                             (Dollars in thousands)

Fair Value (3/31)          ($5,479)       ($1,699)
Unrealized Gain (Loss)     ($2,054)       ($1,703)

Item 4. Controls and Procedures
-------------------------------

 Evaluation of Disclosure Controls and Procedures

  The  Chairman,  CEO, and President and the  Vice  President  of
Finance   of   the  Company  have  reviewed  and  evaluated   the
effectiveness of disclosure controls and procedures  (as  defined
in the Securities Exchange Act of 1934 (the "Exchange Act") Rules
240.13a and 15(e)) as of the end of the fiscal quarter covered by
this  Quarterly Report.  Based on that evaluation, the  Chairman,
CEO,  and  President  and  the Vice  President  of  Finance  have
concluded  that their current disclosure controls and  procedures
are,  in  all material respects, effective and timely,  providing
them  with material information relating to that required  to  be
disclosed  in the reports the Company files or submits under  the
Exchange Act.

  The  Company's  management, including  the  Chairman,  CEO  and
President and the Vice President of Finance, does not expect that
the  Company's disclosure controls and procedures or its internal
controls will prevent all error and all fraud.  A control system,
no  matter  how well conceived and operated, provides reasonable,
not absolute, assurance that the objectives of the control system
are  met.   The  design  of  a control system  reflects  resource
constraints; the benefits of controls must be considered relative
to  their  costs. Because there are inherent limitations  in  all
control  systems, no evaluation of controls can provide  absolute
assurance that all control issues and instances of fraud, if any,
within the Company have been or will be detected.  These inherent
limitations  include  the realities that judgments  in  decision-
making  can be faulty and that breakdowns occur because of simple
error or mistake.  Controls can be circumvented by the individual
acts  of some persons, by collusion of two or more people, or  by
management override of the control.  The design of any system  of
controls  is  based  in part upon certain assumptions  about  the
likelihood of future events.  There can be no assurance that  any
design  will  succeed  in achieving its stated  goals  under  all
future  conditions;  over time, controls  may  become  inadequate
because  of changes in conditions or deterioration in the  degree
of  compliance with the policies or procedures.  Because  of  the
inherent   limitations  in  a  cost-effective   control   system,
misstatements  due  to  error  or fraud  may  occur  and  not  be
detected.

Changes in Internal Controls

 There  have  not been any significant changes in  the  Company's
internal  controls  or, to its knowledge, in other  factors  that
have  materially affected, or are reasonably likely to materially
affect,   these  controls  subsequent  to  the  date   of   their
evaluation.    The  Company  is  not  aware  of  any  significant
deficiencies or material weaknesses and, therefore, no corrective
actions were taken.

                               28

<Page>

Part II - OTHER INFORMATION

Item 2 - Unregistered Sales of Equity Securities and Use of
Proceeds
-----------------------------------------------------------

Share Repurchase Plan.

     The following table summarizes repurchases of BayCorp stock
during the fiscal quarter ended March 31, 2005:

     <Table>
     <Caption>


                                                                          Maximum Number
                                              Total Number of Shares    of Shares that May
                                               Purchased as Part of      Yet Be Purchased
                                             Publicly Announced Plans   Under the Plans or
   Period       Shares       Average Price         or Programs             Programs (1)
   ------     Repurchased      Per Share     ------------------------    ----------------
<S>                 <C>           <C>                  <C>                     <C>
Quarter 1 -
2005                0             --                    --                   100,024

</Table>


(1)   On September 29, 2003, the Company announced that its Board
  of Directors had authorized the repurchase of up to ten percent
  of  its  fully  diluted common stock on the open market  or  in
  negotiated  transactions.  On September 15,  2004  the  Company
  announced  that  its  Board  of Directors  had  authorized  the
  repurchase of up to an additional 100,000 shares of its  common
  stock  on  the open market or in negotiated transactions.   The
  Board of Directors did not establish expiration dates for either
  of these plans.

Item 6.  Exhibits
-----------------

  (a)  See Exhibit Index.

                               29

<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.




                      BayCorp Holdings, Ltd.


May 16, 2005            /s/  Frank W. Getman Jr.
                      -------------------------------------
                        Frank W. Getman Jr.
                        President and Chief Executive Officer and
                        Principal Financial Officer


                               30



                          EXHIBIT INDEX


..





Exhibit No   Description
----------   -----------
31.1         Certification of President and Chief Executive
             Officer (principal executive officer) pursuant to
             Exchange Act Rules 13a-14 and 15d-14.

31.2         Certification of President and Chief Executive
             Officer (principal financial officer) pursuant to
             Exchange Act Rules 13a-14 and 15d-14.

31.3         Certification of Vice President of Finance and
             Treasurer (chief accounting officer) pursuant to
             Exchange Act Rules 13a-14 and 15d-14.

32.1         Certification of Chief Executive Officer and Chief
             Financial Officer pursuant to 18 U.S.C. Section
             1350, as adopted pursuant to Section 906 of the
             Sarbanes-Oxley Act of 2002.

32.2         Certification of Vice President of Finance and
             Treasurer pursuant to 18 U.S.C. Section 1350, as
             adopted pursuant to Section 906 of the Sarbanes-
             Oxley Act of 2002.

99           BayCorp Holdings, Ltd. Earnings Release for the
             quarter ended March 31, 2005.



                               31