As filed with the Securities and Exchange Commission on January 10, 2002
                              Registration No. 333
                             ----------------------

                                  United States
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                                    FORM S-1
                             REGISTRATION STATEMENT
                                    UNDER THE
                             SECURITIES ACT OF 1933

                     COASTAL CARIBBEAN OILS & MINERALS, LTD.
             (Exact name of registrant as specified in its charter)
                                    BERMUDA
         (State or other jurisdiction of incorporation or organization)
                                      1330
            (Primary Standard Industrial Classification Code Number)
                                      NONE
                      (I.R.S. Employer Identification No.)
             Clarendon House, Church Street, Hamilton, Bermuda HM CX
                            Telephone (441) 295-1422
        -----------------------------------------------------------------
               (Address including zip code, and telephone number,
        including area code of registrant's principal executive offices)
                         -------------------------------
                             Timothy L. Largay, Esq.
                               MURTHA CULLINA LLP
                              CityPlace, 29th Floor
                                185 Asylum Street
                           Hartford, Connecticut 06103
                            Telephone (860) 240-6017
         ---------------------------------------------------------------
                       (Name, address, including zip code,
        and telephone number, including area code, of agent for service)

Approximate date of commencement of proposed sale to the public: As soon after
the effective date as practicable.

If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. [ X ]

If this Form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, please check the following box and list
the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
<TABLE>
<CAPTION>

                         CALCULATION OF REGISTRATION FEE

      -------------------------- -------------------------- ----------------- ------------------------ -----------------
       Title of each class of     Amount to be registered       Proposed         Proposed maximum         Amount of
          securities to be                                      maximum         aggregate offering     registration fee
             registered                                      offering price            price
                                                               per share
      -------------------------- -------------------------- ----------------- ------------------------ -----------------
      -------------------------- -------------------------- ----------------- ------------------------ -----------------

      <C>                          <C>                         <C>                  <C>                   <C>
      Common stock,                6,520,249 shares (1)        $1.00 (1)            $6,520,249            $1,558.34
      $.12 per share

      -------------------------- -------------------------- ----------------- ------------------------ -----------------
</TABLE>

(1)   Estimated in accordance with Rule 457(c) under the Securities Act of 1933,
      solely for the purpose of calculating the registration fee.


The Registrant hereby amends this registration statement on such date or dates
as may be necessary to delay its effective date until the registrant shall file
a further amendment which specifically states that this registration statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the registration statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.


<PAGE>




                               P R O S P E C T U S

                       ________ Shares of Common Stock of
                     Coastal Caribbean Oils & Minerals, Ltd.


         This is an offering of shares of our common stock by subscription right
to our existing shareholders. For every___ shares of common stock held as of
________, 2002, each shareholder will be entitled to purchase __ shares at a
price of $____ per share. In addition, each shareholder who purchases his/her
full allotment of shares will be entitled to purchase additional shares which
are unsubscribed by other shareholders.

The Offering
------------
                                                            Proceeds to
                   Your Price         Commission         Coastal Caribbean
                   ----------         ----------         -----------------

 Per Share            $ 0                $ 0                    $ 0
 ---------            ---                ----                   ---

 Total                $ 0                $ 0                    $ 0
 -----                ---                ----                   ---

         Our common stock is traded on the Boston Stock Exchange under the
  symbol CCO. On January 9, 2002, the last reported sale price of our common
  stock as reported on the Boston Stock Exchange was $ per share.

         The shares of common stock offered hereby involve a high degree of
risk. You should purchase shares only if you can afford a complete loss. See
"Risk Factors" beginning at page 5 for a discussion of certain factors that you
should consider before you purchase any shares of our common stock.

         Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if this
prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.



                  The date of this prospectus is _____________,
2002.

<PAGE>


                                        1
                                TABLE OF CONTENTS
                                                                            PAGE
Prospectus Summary............................................................2
Summary Financial Data........................................................4
Risk Factors..................................................................5
Cautionary Statement About Forward-Looking Statements........................11
Use of Proceeds..............................................................11
Capitalization...............................................................12
Dilution 13
Management's Discussion and Analysis of Financial
Condition And Results of Operations..........................................13
Market Risk Disclosures......................................................16
Our Business and Properties..................................................17
Legal Proceedings............................................................23
Our Management...............................................................29
Certain Business Relationships...............................................32
Principal Shareholders.......................................................33
Description of Our Common Stock..............................................34
Price Range of Our Common Stock..............................................39
Performance Graph............................................................40
Terms of the Offering........................................................41
United States Tax Consequences of the Offering...............................43
Legal Matters................................................................44
Experts......................................................................45
Where You Can Find More Information..........................................45
Index to Consolidated Financial Statements..................................F-1

                                    * * * * *

         Coastal Caribbean is incorporated in Bermuda and our principal
executive office is located at Clarendon House, Church Street, Hamilton, Bermuda
HM CX. Our telephone number at that address is (441) 295-1422. Our internet web
address is http://www.coastalcarib.com. The contents of our web site are not
incorporated into this prospectus. In this prospectus, "Coastal Caribbean,"
"we," "us," and "our" refer to Coastal Caribbean Oils & Minerals, Ltd. and its
majority owned subsidiary, Coastal Petroleum Company, unless the context
otherwise dictates. References to "dollars" or "$" are to United States dollars.

         You should rely only on the information contained or incorporated by
reference in this prospectus. We have not authorized anyone (including any
broker or salesman) to provide you with information different from that
contained in this prospectus. If anyone provides you with different or
inconsistent information, you should not rely on it. We are offering to sell and
seeking offers to buy shares of our common stock only in jurisdictions where
offers and sales are permitted. You should assume that the information contained
in this prospectus is accurate only as of __________, 2002. You should not
assume that this prospectus is accurate as of any other date.


<PAGE>


                               PROSPECTUS SUMMARY

This summary highlights some of the information in this prospectus. The summary
may not contain all of the information that is important to you. This prospectus
and the documents we incorporate by reference contain forward-looking statements
which involve risks and uncertainties. You should carefully read the entire
prospectus, including the risk factors which begin at page 5 and the financial
statements, before deciding whether to invest in our common stock.


The Company                      o Coastal Caribbean Oils & Minerals
                                 Ltd., a Bermuda corporation, was founded in
                                 1953. Our principal asset is our majority owned
                                 subsidiary Coastal Petroleum Company. Coastal
                                 Petroleum's principal assets are its
                                 nonproducing oil, gas and mineral leases and
                                 royalty interests in the State of Florida. To
                                 date, Coastal Petroleum has made no commercial
                                 discoveries on the lands covered by these
                                 leases.


Our Operating History            o Although we have been in
                                 business for many years, we are still a
                                 development stage company because our
                                 exploration for oil, gas and minerals has not
                                 yielded any significant revenues or reserves.
                                 We incurred a loss of $1,778,000 for the nine
                                 months ended September 30, 2001, a loss of
                                 $1,386,000 for the year 2000, a loss of
                                 $1,105,000 for the year 1999 and a loss of
                                 $1,155,000 for the year 1998. We had an
                                 accumulated deficit of $30,525,000 at September
                                 30, 2001. You should also see Note 10 of our
                                 financial statements regarding the uncertainty
                                 as to our ability to continue as a going
                                 concern.


The Offering                     o            shares of our common stock, par
                                   ---------- value $.12 per share.


Subscription Privilege           o Each shareholder will be entitled
                                 to purchase _ shares for every ___ shares of
                                 common stock held on the record date at a price
                                 of $ per share.


Over subscription                o Each shareholder who purchases the entire
                                 guaranteed allotment of shares will be
                                 permitted to Privilege subscribe pro rata for
                                 additional shares not purchased by other
                                 shareholders prior to the expiration date. The
                                 number of shares available for purchase by each
                                 individual shareholder pursuant to the over
                                 subscription privilege will be limited to the
                                 aggregate number of shares available after
                                 completion of all shareholders' basic
                                 subscription purchases and will be subject to
                                 the allocation rules described at page 41 under
                                 the heading "Terms of the Offering - How the
                                 Over-Subscription Privilege Operates."

                                 o If you wish to purchase shares, you should
                                 complete the subscription card and deliver it,
                                 accompanied by full payment of the subscription
                                 price, prior to the expiration date to our
                                 subscription agent.


Our Subscription Agent           o American Stock Transfer & Trust Co.,
                                 59 Maiden Lane, New York, NY 10007, Telephone:
                                 (800)937-5449.


Common Stock Outstanding         o We had 43,468,329 shares of common stock
                                 outstanding at September 30, 2001.  If all
                                 shares offered are sold, there will be shares
                                 outstanding.

Dividends                        o We have never declared or paid dividends on
                                 our common stock and do not anticipate
                                 declaring or paying any dividends in the
                                 foreseeable future. We plan to retain any
                                 future earnings to reduce our accumulated
                                 deficit of $30,525,000 at September 30, 2001
                                 and to finance our operations.


Use of Proceeds                  o The proceeds of the offering will be used for
                                 general corporate purposes, including working
                                 capital and to continue the litigation against
                                 the State of Florida.


Litigation                       o Coastal Petroleum is currently involved in
                                 litigation with the State of Florida with
                                 regard to whether the State's offshore drilling
                                 policy and its denial of Coastal Petroleum's
                                 application for an oil and gas exploration
                                 drilling permit constitute a taking of Coastal
                                 Petroleum's property for which the State must
                                 compensate Coastal Petroleum. We are also
                                 involved in litigation with the State of
                                 Florida seeking compensation for confiscation
                                 of certain royalty interest acreage off the
                                 Florida coast.  See "Legal Proceedings" at
                                 page 23.




<PAGE>


                             SUMMARY FINANCIAL DATA

The following summary financial data for the three years in the period ended
December 31, 2000 are derived from the audited consolidated financial statements
of Coastal Caribbean Oils & Minerals, Ltd. The data should be read in
conjunction with the consolidated financial statements, related notes and other
financial information included in this prospectus. The summary financial data
for the years ended December 31, 1997 and 1996 have been derived from the
consolidated financial statements which are not included in this prospectus. The
information for the nine month periods ended September 30, 2001 and 2000 is
unaudited but includes all adjustments which Coastal Caribbean considers
necessary for a fair presentation of the results of operations for those
periods.

<TABLE>
<CAPTION>

                                       Nine months ended                                Years ended December 31,
                                        September 30,                                   ------------------------
                                        -------------
                                      2001          2000         2000      1999           1998            1997          1996
                                      ----          ----         ----      ----           ----            ----          ----
                                      ($)            ($)          ($)       ($)            ($)            ($)            ($)

<S>                                 <C>          <C>          <C>          <C>           <C>           <C>            <C>
Net loss                            (1,778,000)  (1,005,000)  (1,386,000)  (1,105,000)   (1,155,000)   (1,611,000)    (1,148,000)
                                    ===========  ===========  ===========  ===========   ===========    ===========    ===========


Net loss per share
(Basic and Diluted)                       (.04)        (.03)        (.03)        (.03)         (.03)         (.04)          (.03)
                                          =====        =====        =====        =====         =====         =====          =====


Common stock shares outstanding     43,468,000   40,056,000   43,468,000   40,056,000    40,056,000    40,056,000     37,487,000
                                    ==========   ==========   ==========   ==========    ==========    ==========     ==========


 Cash and cash equivalents and
    marketable securities            1,204,000      189,000    2,959,000    1,042,000     2,181,000     3,749,000      5,789,000
                                      ========       =======   =========    =========     =========    ==========     ==========




Unproved oil, gas and mineral        4,865,000    4,814,000    4,808,000    4,760,000     4,736,000     4,395,000      3,944,000
    properties                       =========    =========    =========    =========     =========    ==========     ==========



Total assets                         6,468,000    5,575,000    8,160,000    6,207,000     7,311,000     8,462,000     10,021,000
                                     =========    =========    =========    =========     =========    ==========     ==========


Shareholders' equity:
  Common stock                       5,216,000    4,807,000    5,216,000    4,807,000     4,807,000     4,807,000      4,805,000
  Capital in excess of par value    31,497,000   28,768,000   31,498,000   28,693,000    28,693,000    28,693,000     28,443,000
  Deficit accumulated during
    the development stage          (30,525,000)  (28,367,000) (28,747,000) (27,362,000)  (26,256,000)  (25,102,000)   (23,490,000)
                                  ------------  ------------ ------------ ------------  ------------  ------------   ------------
Total shareholders' equity           6,188,000    5,208,000    7,967,000    6,138,000     7,244,000     8,398,000      9,758,000
                                ==============  ===========  ============   =========   ============  ============   ============
</TABLE>





<PAGE>


                                  RISK FACTORS

An investment in our common stock involves a high degree of risk. You should
carefully consider the following risk factors and other information in this
prospectus and the documents we incorporate by reference in evaluating our
company before you purchase any shares of our common stock. If any of the
following risks actually occur, our business, financial condition or results of
operations could be materially adversely affected. In this case, the trading
price of the common stock could decline and you may lose all or part of your
investment.

RISKS RELATED TO OUR BUSINESS AND THE LITIGATION

         We have a history of losses and anticipate further losses, which could
         cause us to discontinue our business.

         Our business has never had substantial revenues and has operated at a
loss in each year since our inception in 1953. We recorded a loss of $1,778,000
for the nine months ended September 30, 2001, a loss of $1,386,000 for the year
2000, a loss of $1,105,000 for the year 1999 and a loss of $1,155,000 in the
year 1998. If we continue to sustain losses and are unable to achieve
profitability, we may not be able to continue our business and may have to
curtail, suspend or cease operations. You should also see Note 10 to our
financial statements regarding the uncertainty as to our ability to continue as
a going concern.

         During the three years ended December 31, 2000, we spent approximately
$1.6 million on expenses incurred in the lawsuits against the State of Florida
relating to drilling permits and royalty interests. During the nine months ended
September 30, 2001, the Company spent approximately $1,237,000 on legal
expenses. If we continue to incur significant expenses and are unable to raise
additional funds to meet these expenses, we may have to cease or suspend our
lawsuits and/or cease operations entirely.

         In the unlikely event that we were to receive drilling permits related
to the St. George Island prospect or other exploratory wells, we would be
required to incur a significant amount of operating expenditures to commence
drilling operations and would need to generate significant revenues to achieve
profitability. We cannot assure you that we will be able to achieve or sustain
revenues, profitability or positive cash flow or that profitability, if
achieved, will be sustained.

         Without additional financing, we only have enough liquid assets on hand
         to continue to operate the Company for part of the year 2002.

         We believe that our funds on hand will be sufficient to permit us to
continue to operate through the second quarter of 2002 and to pay the expenses
related to this offering which are estimated to be approximately $250,000. After
that time, we may have to suspend or cease operations unless and until we can
secure additional financing. Effective January 1, 2002, our directors, officers
and legal counsel have agreed to defer the payment of 50% of their salaries and
fees until our financial position improves. We may seek to raise additional
funds through the issuance of debt or equity securities to investors other than
our shareholders. We currently do not have any commitments for additional
financing. We cannot be certain that additional financing will be available in
the future on acceptable terms or at all.

         If ultimately the courts rule that the State of Florida may deny us a
         permit and not compensate us for the taking of our property, we may be
         unable to continue our business.

         In the event that the courts determine that the State of Florida is
entitled to deny Coastal Petroleum a permit without compensation, it is likely
that we would be unable to continue our business and that shareholders would
suffer a complete loss of their investment.

         We may be unable to raise the additional financing needed to cover the
         substantial litigation costs of proving our properties have been taken
         and their value.

         Coastal Petroleum has filed a claim with the Florida Circuit Court that
its property has been taken by the State of Florida, and that Coastal Petroleum
is owed compensation by the State of Florida. We will need to secure additional
financing to cover the costs of this litigation, which we estimate will be
substantial. If we are unable to secure the additional financing adequate to
fund the costs of such litigation for a lengthy period of time, we might not be
able to conclude the litigation and might have to cease the lawsuits against the
State of Florida without any meaningful recovery.

         The State of Florida has far greater resources than we do to prosecute
the litigation.

         The State of Florida utilizes lawyers from the Florida Attorney
General's Office, the Department of Environmental Protection and at least two
private law firms to represent its interests in the litigation. In view of the
magnitude of Coastal Petroleum's claim, we expect that the State will attempt to
conduct the litigation in a way intended to make the litigation very costly to
us. In the event that our funds are exhausted before the conclusion of the
litigation, we may be unable to conclude the litigation and might be required to
cease business which could result in the complete loss of your investment.

         If the amount of money we recover from the State of Florida is
         inadequate to cover our costs, we may suffer additional losses.

         Coastal Petroleum's lawsuits against the State of Florida involve
highly specialized technical engineering and legal judgments. Any recovery that
Coastal Petroleum may receive as a result of a court judgment against the State
of Florida may be insufficient to cover the costs of prosecuting the claims at
trial. If this occurs, we may be forced to cease operations, the value of your
investment in our common stock could decline significantly, and you may realize
a total loss of your investment.

RISKS RELATED TO OUR INDUSTRY

         The State of Florida has stated that its policy is not to permit oil
         and gas drilling offshore Florida and the State has denied Coastal
         Petroleum a permit with respect to its St. George's Island prospect.
         Consequently, we do not believe that the State of Florida will grant
         drilling permits to Coastal Petroleum with respect to its leases. In
         the unlikely event that the State ever does grant Coastal Petroleum a
         drilling permit, Coastal Petroleum would have to contend with other
         risks.


After obtaining a state drilling permit, Coastal Petroleum would have to do the
following:

        o obtain a federal drilling permit;

        o finance drilling of the well (including the cost of the
          recommended surety), which is currently estimated to cost
          approximately $5.5 million; and

        o begin drilling the well within one year of the date the state permit
          is issued.

         We cannot assure you that we would be able to successfully obtain the
necessary federal permits or that we would be able to finance and commence
drilling operations in a timely manner.

         If we fail to discover and develop sufficient oil and gas reserves, we
would be unable to generate sufficient revenues to cover our costs and might
have to curtail, suspend or cease our business operations.

         Drilling activities involve numerous risks, including the risk that no
commercially productive natural gas or oil reservoirs will be discovered. The
cost of drilling, completing and operating wells is often uncertain, and
drilling operations may be curtailed, delayed or canceled as a result of adverse
conditions beyond our control. Poor results from our exploration and drilling
activities could prevent us from developing sufficient oil and gas reserves at a
commercially acceptable cost.

         Compliance with environmental and other governmental regulations could
be costly.

         Our operations and right to obtain interests in and hold properties or
to conduct our business might be affected to an unpredictable extent by
limitations imposed by the laws and regulations which are now in effect or which
might be adopted by the jurisdictions in which we carry on our business. We
cannot predict the nature of any further legislation or regulation that might
ultimately be adopted or its effects upon our operations.

         Further measures that have been or might be imposed include increased
bond requirements, conservation, proration, curtailment, cessation or other
forms of limiting or controlling production of hydrocarbons or minerals, as well
as price controls or rationing or other similar restrictions. In particular,
environmental control and energy conservation laws and regulations adopted by
federal, state and local authorities may have to be complied with by
leaseholders such as Coastal Petroleum.

         We face strong competition from larger oil and gas companies that may
impair our ability to carry on operations.

         If we receive the necessary state and federal permits to conduct
operations, we will operate in the highly competitive areas of oil and gas
exploration, development and production. We might not be able to compete with,
or enter into cooperative relationships with, our potential competitors, which
include major integrated oil companies, substantial independent energy
companies, affiliates of major interstate and intrastate pipelines and national
and local gas gatherers. If we were unable to establish and maintain
competitiveness, our business would be threatened.

         Many of our competitors possess greater financial, technical and other
resources than we do. Factors which affect our ability to successfully compete
in the marketplace include:

        o the financial resources of our competitors;

        o the availability of alternate fuel sources; and

        o the costs related to the extraction and transportation of oil and gas.

RISKS RELATED TO THE OFFERING

         The price of our common stock is volatile, which could hinder your
         ability to sell your stock and avoid a loss on your investment.

         Our common stock has been quoted and traded in the over-the-counter
market on the "Electronic Bulletin Board" of the National Association of
Securities Dealers, Inc. under the symbol COCBF.OB and on the Boston Stock
Exchange under the symbol CCO. The market price of our common stock has
fluctuated in the past and may continue to be volatile in the future. As a
result of this volatility, you may find it more difficult to sell our stock in a
declining market and avoid a loss on your investment. This volatility is a
result of a variety of factors, including our current and anticipated results of
operations, and the anticipated outcome of our litigation with the State of
Florida.

         If you do not exercise all of your subscription rights, you may suffer
         significant dilution of your percentage ownership of our common stock.

         This rights offering is designed to enable us to raise capital while
allowing all shareholders on the record date to maintain their relative
proportionate voting and economic interests. To the extent that you do not
exercise your subscription rights and other shareholders in the rights offering
purchase shares, your proportionate voting interest will be reduced, and the
percentage that your original shares represent of our expanded equity after
exercise of the subscription rights will be disproportionately diluted. For
example, if you own 100,000 shares of our common stock before the rights
offering, or __% of our equity, and you exercise none of your subscription
rights while all other subscription rights are exercised by other shareholders
through their basic and over-subscription privileges, then your percentage
ownership will be reduced to ____%.

         If you exercise your rights, you may be unable to sell any shares you
         purchase at a profit and your ability to sell may be delayed by the
         time required to deliver the stock certificates.

         The public trading market price of our common stock may decline after
you elect to exercise your subscription rights. If that occurs, you will have
committed to buy shares of common stock at a price above the prevailing market
price and you will have an immediate unrealized loss. Moreover, we cannot assure
you that following the exercise of subscription rights you will be able to sell
your shares of common stock at a price equal to or greater than the subscription
price. Until shares are delivered upon expiration of the rights offering, you
may not be able to sell the shares of our common stock that you purchase in the
rights offering. Certificates representing shares of our common stock purchased
will be delivered as soon as practicable after expiration of the rights
offering. We will not pay you interest on funds delivered to the Subscription
Agent pursuant to the exercise of rights.

         Purchasers in this offering will experience immediate net tangible
         asset dilution and may experience further dilution from the future
         exercise of stock options or from future stock offerings.

         We expect that the offering price of our common stock in this offering
will be substantially higher than the net tangible book value per share of our
outstanding common stock. Accordingly, if the offering is successful, purchasers
of common stock in the offering will experience immediate and substantial
dilution of approximately $. in net tangible book value per share, or
approximately % of the assumed public offering price of $ per share. Investors
will incur additional dilution upon the exercise of outstanding stock options
and warrants. See "Dilution" at page 13 for further discussion of the dilution
that new investors will incur.

         Finally, if we raise additional funds by issuing equity or convertible
debt securities, your percentage ownership may be further diluted. Any
securities issued could have rights, preferences and privileges senior to our
common stock.

         Our Bye-laws contain provisions which may limit a shareholder's efforts
         to influence our policies and prevent or delay a change in control of
         our Company.

         Bye-Law 1 provides that any matter to be voted on at any meeting of
shareholders must be approved not only by a simple majority of the shares voted
at such meeting, but also by a majority of the shareholders present in person or
by proxy and entitled to vote at the meeting. This provision may have the effect
of making it more difficult to take corporate action than customary "one share
one vote" provisions, because it may not be possible to obtain the necessary
majority of both votes. As a consequence, Bye-Law 1 may make it more difficult
that a takeover of the company will be consummated, which could prevent the
company's shareholders from receiving a premium for their shares. In addition,
an owner of a substantial number of shares of our common stock may be unable to
influence our policies and operations through the shareholder voting process
(e.g., to elect directors).

         Our Bye-Laws also require the approval of 75% of the voting
shareholders and of the voting shares for the consummation of any business
combination (such as a merger, amalgamation or acquisition proposal) involving
our company. This higher vote requirement may deter business combination
proposals which shareholders may consider favorable.



<PAGE>


         You may face obstacles to bringing suit in Bermuda against our officers
and directors.

         We are a Bermuda company and certain of our directors and officers are
residents of Bermuda and are not citizens of the United States. As a result, it
may be difficult for investors to effect service of process on us or on these
directors and officers within the United States or to enforce against these
directors and officers judgments of U. S. courts predicated on the civil
liabilities under the federal securities laws. If investors are unable to bring
such suits, they may be unable to recover a loss on their investment resulting
from any violations of the federal securities laws.

         There is no precedent for, and therefore no assurance  that, the courts
in Bermuda  would  enforce  civil  liabilities,  whether in original  actions in
Bermuda or in the form of final  judgments  of U. S. courts,  arising  under the
federal  securities  laws against us or the persons  signing  this  registration
statement.  In  addition,  there is no treaty in  effect  between  the U. S. and
Bermuda providing for the enforcement of civil liabilities and there are grounds
upon  which  Bermuda  Courts  may not  enforce  judgments  of U. S.  courts.  In
addition,  some  remedies  available  under  the  laws of U.  S.  jurisdictions,
including some remedies  available  under the United States  federal  securities
laws, may not be allowed in Bermuda  courts as contrary to that nation's  public
policy.

         Our dividend policy could depress our stock price.

         We have never declared or paid dividends on our common stock and do not
anticipate declaring or paying any dividends in the foreseeable future. We plan
to retain any future earnings to reduce our accumulated deficit of $30,525,000
at September 30, 2001 and to finance our operations. As a result, our dividend
policy could depress the market price for our common stock.

         We are a Bermuda corporation. Bermuda currently imposes no taxes on
corporate income or capital gains realized outside of Bermuda. However, any
dividends we receive from Coastal Petroleum are subject to a 30% United States
withholding tax. As a result, our investors may realize a smaller rate of return
on their investment in our common stock.


<PAGE>


              CAUTIONARY STATEMENT ABOUT FORWARD-LOOKING STATEMENTS

         In this prospectus and the documents that we incorporate by reference,
we make statements that relate to our future plans, objectives, expectations and
intentions that involve risks and uncertainties. We have based these statements
on our current expectations and projections about future events. These
statements may be identified by the use of words such as "expect," "anticipate,"
"intend," "plan," "believe" and "estimate" and similar expressions. Any
statements that refer to expectations, projections or other characterizations of
future events or circumstances are forward-looking statements within the meaning
of the Private Securities Litigation Reform Act of 1995, and are subject to the
safe harbor created by that Act.

         Forward-looking statements necessarily involve risks and uncertainties.
Our actual results could differ materially from those discussed in, or implied
by, these forward-looking statements. Factors that could contribute to such
differences include, but are not limited to, those discussed in the "Risk
Factors" section at page 5 and elsewhere in this prospectus. The factors set
forth in the Risk Factors section and other cautionary statements made in this
prospectus should be read and understood as being applicable to all related
forward-looking statements wherever they appear in this prospectus.

         All subsequent written and oral forward-looking statements attributable
to us are expressly qualified in their entirety by the cautionary statements.
You are cautioned not to place undue reliance on these forward-looking
statements, which speak only as of their dates. We undertake no obligation to
publicly update or revise any forward-looking statements, whether as a result of
new information, future events or otherwise.

                                 USE OF PROCEEDS

         The proceeds will be used for general corporate purposes, including
working capital and continuation of the Florida litigation. See "Legal
Proceedings" and "Our Business and Properties." Assuming all of the shares
offered by this prospectus are sold at a price of $ per share, we will realize
net proceeds (after estimated expenses of the offering of $250,000) of
approximately $___________. The net proceeds of the offering would be added to
our general funds and would not be expressly designated for any particular
purpose. However, we currently expect that the net proceeds would be used for
the following purposes:

 Litigation (including legal fees and experts' costs)     $
                                                            -------------------

 Administrative, accounting, legal and other expenses     $ -------------------

         Litigation expenses may vary depending on the progress of the cases in
which we are involved. If the net proceeds are substantially less than the
estimated amounts, and if we and Coastal Petroleum are unable to obtain
additional funds, Coastal Petroleum may be unable to pursue the Florida
litigation. If the gross proceeds of the offering do not exceed the costs of
this offering, we would attempt to pay the excess costs over gross proceeds from
our current assets.

         Coastal Caribbean has been making loans to Coastal Petroleum, its
majority owned subsidiary, in order for Coastal Petroleum to continue the
Florida Litigation and pay its operating expenses. At September 30, 2001, the
amount of these loans totaled $20,416,303 and the accumulated interest on the
loans totaled $5,368,055 for a total indebtedness of $25,784,358.

                                 CAPITALIZATION

         The following table shows our cash and cash equivalents, investments
and total capitalization:

        o on an actual basis as of September 30, 2001; and

        o as adjusted to reflect the sale of shares of common stock offered by
          this prospectus at an assumed public offering price of $ per share,
          after deducting the estimated offering expenses of approximately
          $250,000 payable by us.

         You should read this information together with our financial statements
and the notes relating to those statements and "Management's Discussion and
Analysis of Financial Condition and Results of Operations" and "Use of Proceeds"
appearing elsewhere in this prospectus.
<TABLE>
<CAPTION>

                                                             As of September 30, 2001


                                                           Actual               As adjusted

<S>                                                      <C>                    <C>
Cash and cash equivalents                                $1,203,830             $
                                                         ==========             ==============
Marketable Securities                                         -                       -
Short-Term Debt                                               -                       -
Long-Term Debt                                                -                       -
Minority Interests                                            -                       -
Shareholders Equity:
 Common stock, par value $.12 per   share:
   250,000,000 share authorized
   43,468,329 shares outstanding
   49,988,578 shares outstanding as adjusted
 Common stock                                          $  5,216,199
 Capital in excess of par value                          31,497,362
Deficit accumulated during the development stage        (30,525,369)
                                                        ------------
Total Shareholders Equity                                $ 6,188,192            $
                                                         ===========            ===============

</TABLE>

The number of shares as adjusted for this offering excludes:

        o 925,000 shares which may be issued upon the exercise of outstanding
          options held by our directors and officers as of September 30, 2001;
          and
        o 7,800,000 shares which may be issued in the event that Lykes Minerals
          Corp. exercises its rights to exchange Coastal Petroleum shares for
          shares of our common stock.

                                    DILUTION

         You will experience immediate and substantial dilution in net tangible
book value of your common stock as a result of this offering. The following
table illustrates the per share dilution to purchasers of shares giving effect
to the sale of all of the shares in the offering at a price of $ per share:

Offering price attributable to each share of common stock                $_____
Net tangible book value before the offering (1)                 $.____
Increase attributable to payments for shares of common stock     .____
Pro forma net tangible book value per share after the offering           ._____
Dilution to purchasers of the shares (2)(3)                              $
                                                                         ======

(1) We calculate net tangible book value per share by dividing the number of
shares of common stock outstanding into the tangible net worth of Coastal
Caribbean (tangible assets less liabilities and minority interest) outstanding
at September 30, 2001.

(2) We calculate dilution to new investors by subtracting net tangible book
value per share of common stock after the offering from the per share price
attributable to a share of common stock purchased.

(3) This estimate of dilution does not reflect the results of operations since
September 30, 2001 nor does it give any effect to the outstanding options to
purchase shares of our common stock. There are 7,800,000 shares of common stock
reserved which may be issued in exchange for 78 Coastal Petroleum shares. There
are also 980,000 shares reserved for stock options granted to our officers,
directors and consultants. Of these options, 925,000 were exercisable at
September 30, 2001. If the options to acquire the 8,725,000 shares had been
exercised at September 30, 2001, the dilution to purchasers would be $. per
share. The dilution of the 7,800,000 shares does not reflect any value for the
increase in ownership of Coastal Petroleum from approximately 59% to 86%.

                MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                       CONDITION AND RESULTS OF OPERATIONS

Overview

         The following is a discussion of certain factors affecting our results
for the nine months ended September 30, 2001 and 2000 and for the three fiscal
years ending December 31, 2000 and our liquidity and capital resources. This
discussion should be read along with our consolidated financial statements and
their notes, which can be found at page F-1 of this prospectus.



<PAGE>


Liquidity and Capital Resources

         Short Term Liquidity

         At September 30, 2001, Coastal Caribbean had approximately $1.2 million
of cash and cash equivalents available and this amount should be sufficient to
fund the Company's operations through the second quarter of 2002. These funds
are expected to be used for general corporate purposes, including any required
exploration and development and to continue the litigation against the State of
Florida. Effective January 1, 2002,  our directors, officers and legal
counsel have agreed to defer the payment of 50% of their salaries and fees until
our financial position improves.

         Coastal Caribbean has a limited amount of working capital, has incurred
recurring losses and has an accumulated deficit. Furthermore, on January 16,
2001, Coastal Petroleum filed a complaint in the Leon County Circuit Court in
Florida against the State of Florida seeking compensation for the State's taking
of its property rights to explore for oil and gas within its Lease 224-A. The
cost of that litigation has been substantial and will require the Company to
obtain additional capital. There can be no assurances that funds on hand or
realized or realizable on the sales of the Company's shares will be sufficient
to allow the Company to survive until such litigation is concluded.

         Long Term Liquidity

         On January 16, 2001, Coastal Petroleum Company filed a complaint in the
Leon County Circuit Court, Florida against the State of Florida seeking
compensation for the State's taking of its property rights to explore for oil
and gas within its state Lease 224-A. The Company expects that the cost of the
litigation will be substantial.

         Since the Company's inception, it has been financing its operations
primarily from the sale of its common stock and sales of shares of Coastal
Petroleum. Although the Company has successfully financed its operations through
such offerings in the past, there is no assurance that the proposed offering
will be successful. If the offering is successful and net proceeds of $________
are realized, then the Company expects that approximately $_________ would be
used for litigation and $_______ would be used for administrative, accounting,
legal and other expenses.


Results of Operations

         The Company, a development stage enterprise, has never had substantial
revenues and has operated at a loss each year since its inception in 1953. The
Company has been involved in litigation since 1968 and its total Florida
litigation-related expenses have aggregated approximately $1.6 million during
the three years ended December 31, 2000.



<PAGE>


Nine months ended September 30, 2001 vs. September 30, 2000
-----------------------------------------------------------

         The Company incurred a loss of $1,778,000 for the 2001 period, compared
to a loss of $1,005,000 for the comparable 2000 period.

         Interest income and other income increased 217% from $23,000 in 2000 to
$73,000 in 2001 because of the funds realized and invested from the October 2000
sale of common stock to the Company's shareholders.

         Legal fees and costs increased 216% to $1,237,000 for 2001 from
$392,000 in the prior period. Legal fees and costs increased in the 2001 period
in connection with Coastal Petroleum Company's lawsuit against the State of
Florida seeking compensation for the State's taking of its property rights to
explore for oil and gas within its state Lease 224-A. The Company expects that
the cost of the litigation will be substantial.

         Administrative expenses decreased 3% in 2001 to $403,000 from $415,000
in the 2000 period.

         Salaries did not change during the periods and remained at $114,000 in
2001.

         Shareholder communications costs did not change during the periods and
remained at $98,000 in 2001.

         Exploration costs decreased from $8,400 in the 2000 period to $500 in
2001.

2000 vs. 1999
-------------

         The Company recorded a loss of $1,386,000 for 2000, compared to a loss
of $1,105,000 in 1999.

         Interest income and other income increased 13% to $63,000 in 2000 from
$55,000 in 1999 because more funds were available for investment during 2000
after the Company's sale of common stock was completed in October 2000.

         Legal fees and costs increased 56% in 2000 to $634,000 compared to
$405,000 in 1999 because in 2000 the Company prepared its complaint to file in
the Florida Circuit Court to claim that the Company's Lease 224-A had been taken
by the State of Florida. The Company also recorded a noncash charge to legal
expense in the amount of $75,000 in connection with the issuance of a stock
option grant in 2000.

         Administrative expenses increased 13% during 2000 to $535,000 compared
to $474,000 in 1999. During December 1999, the Company increased its Directors
and Officers liability insurance coverage from $6.2 million to $12.2 million
which increased insurance costs.

         Salaries decreased 4% to $152,000 during 2000 compared to $158,000
during 1999. An employee who has not been replaced left the Company during 1999.

         Shareholder communications costs increased 5% from $103,000 in 1999 to
$108,000 in 2000 because of the cost of various listing fees.

         Exploration costs decreased 6% from $21,000 in 1999 to $20,000 in 2000.
These miscellaneous exploration expenses do not include the exploration
expenditures totaling $48,000 that were capitalized in 2000 ($24,000 in 1999).


1999 vs. 1998
-------------

         The Company recorded a loss of $1,105,000 for 1999, compared to a loss
of $1,155,000 in 1998.

         Interest income and other income decreased 67% to $55,000 in 1999 from
$167,000 in 1998 because less funds were available for investment during 1999.

         Legal fees and costs decreased 19% in 1999 to $405,000 compared to
$502,000 in the prior year. In 1998, the Company had been involved in various
appeals and hearings in connection with the opposition by the State of Florida
and others to the issuance of a drilling permit and the taking claim regarding
its royalty interest acreage. During 1999, the level of legal activity
decreased.

         Administrative expenses decreased 4% in 1999 to $474,000 compared to
$495,000 in 1998.

         Salaries decreased 2% to $158,000 during 1999 compared to $161,000
during 1998.

         Shareholder communications costs decreased 23% from $133,000 in 1998 to
$103,000 in 1999. The decrease in costs during 1999 resulted from a reduction in
mailing costs to the Company's shareholders.

         Exploration costs decreased from $31,000 in 1998 to $21,000 in 1999 in
connection with the Company's program to identify potential drilling prospects.
These miscellaneous exploration expenses do not include the exploration
expenditures totaling $24,000 that were capitalized in 1999 ($340,000 in 1998).


                             MARKET RISK DISCLOSURES

         The Company does not have any significant exposure to market risk as
the only market risk sensitive instruments are its investments in marketable
securities which are classified as cash and cash equivalents. At September 30,
2001, the carrying value of such investments was approximately $1.09 million the
fair value was $1.09 million and the face value was $1.1 million.



<PAGE>


                           OUR BUSINESS AND PROPERTIES
General

         Coastal Caribbean is a company organized under the laws of Bermuda,
with its principal executive offices at Clarendon House, Church Street,
Hamilton, Bermuda (telephone number: 441-295-1422). Shares of our common stock
are listed on the Boston Stock Exchange and also are traded over-the-counter on
the "Electronic Bulletin Board" marketplace of the National Association of
Securities Dealers, Inc. We rely heavily on consultants for legal, accounting
and administrative services. Our principal asset is our 59.25% owned subsidiary,
Coastal Petroleum, a Florida corporation.

Operations

         Coastal Petroleum is the lessee under leases with the State of Florida
relating to the exploration for and production of oil, gas and minerals on
approximately 3,700,000 acres of submerged lands along the Gulf Coast and under
certain inland lakes and rivers. The leases provide for a working interest in
approximately 1,250,000 acres and a royalty interest in approximately 2,450,000
acres covered by the leases. Coastal Petroleum has made no commercial
discoveries on its leaseholds.

         Coastal Petroleum is currently involved in litigation with the State of
Florida with regard to whether the State's policy against offshore drilling and
denial of Coastal Petroleum's application for an oil and gas exploration
drilling permit constitutes a taking of Coastal Petroleum's property for which
the State must compensate Coastal Petroleum. In addition, Coastal Caribbean is a
party to one additional action in which Coastal Caribbean claims that certain of
its royalty interests have been confiscated by the State. During 2001, the
Company actively pursued the Florida Litigation. See "Legal Proceedings".

         In 1990, the State of Florida enacted legislation that prohibits
drilling or exploration for oil or gas on Florida's offshore acreage. The law
does not apply to areas where Coastal Petroleum is entitled to conduct
exploration. However, in those areas where Coastal Petroleum has only a royalty
interest, the law effectively prohibits production of oil and gas, rendering it
impossible for Coastal Petroleum to collect royalties from those areas.

Business

         Coastal Caribbean was organized in Bermuda on February 14, 1962. We are
the  successor  to  Coastal  Caribbean  Oils,  Inc.,  a  Panamanian  corporation
organized on January 31, 1953 to be the holding company for Coastal Petroleum.

         We own 59.25% of Coastal Petroleum. We are considered to be a
development stage company since our exploration for oil, gas and minerals has
not yielded any significant revenues. Coastal Petroleum's principal assets are
its nonproducing oil, gas and mineral leases and royalty interests. Coastal
Petroleum believes that its leases have been confiscated by the State of
Florida. Coastal Petroleum also believes the leases or the potential recovery
from the State of Florida are properly considered to be assets.


<PAGE>



Properties

         Coastal Petroleum holds certain working interests in nonproducing oil,
gas and mineral leases covering approximately 1,250,000 acres, and a royalty
interest in approximately 2,450,000 acres, in and offshore the State of Florida.
No commercial oil or gas discoveries have been made on the properties covered by
these leases and Coastal Petroleum has no proved reserves of oil or gas and has
had no significant production. At June 3, 2001, the amount of unproved oil, gas
and mineral properties totaled $4.8 million, which costs the Company expects to
recover.

         In 1941, Arnold Oil Explorations, Inc., renamed Coastal Petroleum
Company in 1947, entered into a contract with the Trustees of the Internal
Improvement Trust Fund of the State of Florida, in whom title to publicly owned
lands in the State of Florida, including bottoms of salt and fresh waters, is
irrevocably vested, for the exploration of oil, gas and minerals on such lands.
The Trustees and Coastal Petroleum entered into three leases in late 1944 and
early 1946. The acreage covered by these leases is located for the most part
along offshore areas on the Gulf Coast of Florida and in submerged lands under
certain bays, inlets, riverbeds and lakes, of which Lake Okeechobee is the
largest.

         In 1968, Coastal Petroleum sued the Secretary of the Army of the United
States in a permitting dispute. In 1969, as part of that litigation, the
Trustees claimed that the leases were invalid and had been forfeited. Coastal
Petroleum and the Trustees settled their disagreement on January 6, 1976.

         Under the terms of the 1976 settlement agreement, the two leases (224-A
and 224-B) bordering the Gulf Coast were divided into three areas, each running
the entire length of the coastline from Apalachicola Bay to the Naples area:

o        The inner area, including rivers, bays, and harbors, extends seaward
         from the Florida shoreline a distance of 4.36 statute miles (5,280
         feet per statute mile) into the Gulf, covers approximately 2.25
         million acres, and is subject to a royalty interest payable to Coastal
         Petroleum. This interest is a 6.25% royalty on the wellhead value of
         all oil and gas, 25 cents per long ton on sulphur, receivable in cash
         or in kind at Coastal Petroleum's option, and a 5% royalty on
         production or the market value of other minerals.

o        The middle area, which was three statute miles wide and contained more
         than 800,000 acres, was released by Coastal Petroleum to the Trustees,
         and Coastal Petroleum has no further interest in the area.

o        Coastal Petroleum presently owns a 100% working interest in the outside
         area, which extends seaward an additional three statute miles and
         borders federal offshore acreage. This area, exceeding 800,000 acres,
         remains subject to royalties payable to the State of Florida of 12.50%
         on oil and gas, $.50 per long ton of sulphur and 10% on other minerals.
         The Florida legislature has enacted statutes designed to protect the
         Big Bend Seagrass Aquatic Preserve, an area covering approximately one
         quarter of Coastal Petroleum's working interest area. However, the
         legislation and legislative history recognize and preserve Coastal
         Petroleum's prior rights as granted by the leases.

         Coastal Petroleum retains a 100% working interest in 450,000 acre Lake
Okeechobee which is a part of Lease 248 and which is also subject to royalties
payable to the State of Florida of 12.50% on oil and gas, $.50 per long ton of
sulphur and 10% on other minerals. Under the settlement with the State of
Florida in 1976, Coastal Petroleum agreed not to conduct exploration, drilling
or mining operations on Lake Okeechobee without the prior approval of the State.
As to the balance of this lease, covering approximately 200,000 acres, Coastal
Petroleum retains royalty interests of 6.25% on oil, gas and sulphur and 5% on
other minerals.

         Under the 1976 settlement agreement with the Trustees, the three leases
have a term of 40 years beginning from January 6, 1976 and require the payment
of an annual rental of $59,247; if oil, gas or minerals are being produced in
economically sustainable quantities at January 6, 2016, these operations will be
allowed to continue until they become uneconomic. Further, the settlement
agreement provides that the drilling requirements shall be governed by Chapter
20680, Laws of Florida, Acts of 1941, and that all other drilling requirements
are waived. Under the 1941 Act, a lessee is required to drill at least one test
well on lands leased in each five year period under the term of the lease.
Coastal Petroleum believes it is current in fulfilling its drilling
requirements. Drilling requirements of Lease 224-A have been satisfied through
the five year obligation period ending August 2, 2004. The State of Florida has
refused Coastal Petroleum the right to drill on Lease 248 since August 10, 1986.
Drilling requirements of Lease 224-B have been satisfied through the five year
obligation period ended October 31, 2000. On July 21, 2000, Coastal Petroleum
filed applications for permits to drill a series of shallow test wells on Lease
224-B which were completed prior to October 31, 2000.

         The following charts reflect the acreage and annual rental obligations
resulting from the 1976 settlement agreement with the Trustees and the
approximate acreage under lease at September 30, 2001:

                      Working                  Royalty                 Annual
                     Interest                 Interest                 Rental
224-A and 224-B       800,000                2,250,000                $39,261
248                   450,000                  200,000                 19,986
                   ----------               ----------               --------
                    1,250,000                2,450,000                $59,247
                    =========                =========                =======


<TABLE>
<CAPTION>

                                                 Acreage under lease at September 30, 2001
                            -------------------------------------------------------------------------------
                                          Gross Acres (*)                       Net Acres (**)
                                          ---------------                       -------------
                               Undeveloped             Developed           Undeveloped             Developed

<S>                            <C>                      <C>                <C>                      <C>
Working Interest               1,250,000               -0-                 1,250,000               -0-
Royalty interest               2,450,000               -0-                   153,125               -0-
                               ---------               ---                 ---------               ---
  Total                        3,700,000               -0-                 1,403,125               -0-
                               =========               ===                 =========               ===
</TABLE>



*        A gross acre is an acre in which a working interest is owned.
**       A net acre is when the sum of fractional ownership working interests in
         gross acres equals one. The number of net acres is the sum of the
         fractional working interests owned in gross acres expressed as whole
         numbers and fractions.

Employees

         We currently have only two employees. We rely heavily on consultants
for legal, accounting, geological and administrative services. We use
consultants because it is more cost effective than employing a larger full time
staff.


<PAGE>


The following graphic presentation has been omitted, but the following is a
description of the omitted material:



       Map showing Coastal Petroleum's Lease Areas in the State of Florida



<PAGE>






Disclosure Concerning Oil and Gas

Undeveloped Acreage

         The Company's undeveloped acreage as of September 30, 2001 was as
follows:

                                   Gross Acres                Net Acres
         Working Interest            1,250,000                 1,250,000
         Royalty Interest            2,450,000                   153,125
                                     ---------                  --------
         Total                       3,700,000                 1,403,125
                                     =========                 =========

Drilling Activity

         On July 21, 2000, Coastal Petroleum filed applications for permits to
drill a series of shallow test wells on Lease 224-B Coastal Petroleum which were
completed prior to October 31, 2000.

Royalties and Other Interests

         In addition to royalties payable to the State of Florida as set forth
above, Coastal Petroleum's leases are subject to several royalties and other
interests. The leases are presently subject to overriding royalties aggregating
1/16 as to oil, gas and sulphur and 13/600ths as to minerals other than oil, gas
and sulphur.

         We also have granted to certain officers, directors, counsel and
consultants of Coastal Petroleum and Coastal Caribbean the right to receive a
percentage of the net recoveries from the Florida Litigation. See "Legal
Proceedings" at page 23 and "Certain Business Relationships" at page 33.

Mineral Rights

         Coastal Petroleum's Leases 224-A, 224-B and 248 were determined by a
Florida State court in 1960 to cover not only oil, gas and sulphur, but all
other minerals. Subsequent litigation has held that these other minerals do not
embrace certain deposits of shell accumulated on water bottoms which had not yet
become mineral, and that Lake Hancock is not within the area covered by Lease
224-B. Under the 1976 settlement agreement with the State of Florida, Coastal
Petroleum retains a 5% royalty with respect to mineral production. However, it
cannot conduct mining operations in 450,000-acre Lake Okeechobee without the
prior approval of the State of Florida. Although Coastal Petroleum had conducted
limited mineral exploration activities on its leases, the courts during the
1980's limited its rights to mine minerals. Coastal Petroleum has no independent
knowledge of commercial deposits on its leases. Furthermore, Coastal Petroleum
does not anticipate that the State would allow the open pit mining and heavy
industrial activity that would be necessary to remove any minerals if they were
to be present, given the State's objection to a single bore hole for an
exploratory oil and gas well.


                                LEGAL PROCEEDINGS
Florida Litigation

         Coastal Petroleum has been involved in various lawsuits for many years.
Coastal Petroleum's current litigation now involves one basic claim: whether the
State's offshore drilling policy and its denial of a permit constitute a taking
of its property. In addition, Coastal Caribbean is a party to another action in
which Coastal Caribbean claims that certain of its royalty interests have been
confiscated by the State.

Lease Taking Case

         On January 16, 2001, Coastal Petroleum filed a complaint in the Leon
County Circuit Court, Florida against the State of Florida seeking compensation
for the State's taking of its property rights to explore for oil and gas within
its state Lease 224-A. The lease encompasses more than 400,000 acres off the
West coast of Florida in the Gulf of Mexico.

         Coastal Petroleum claims that the State of Florida has taken Lease
224-A by denying Coastal Petroleum a permit to drill an offshore exploration
well near St. George Island in the Gulf of Mexico. The history of the litigation
between Coastal Petroleum and the State of Florida relating to the denial of the
drilling permit is set forth under the caption "Drilling Permit Litigation."
Coastal Petroleum maintains that the State has effectively taken Coastal
Petroleum's lease by depriving Coastal Petroleum of all or substantially all of
the economically viable use of its constitutionally protected property.

         The State claims that there has been no taking of Coastal Petroleum's
property which justifies compensation. The State asserts several affirmative
defenses, including that:

         (a) Coastal Petroleum is barred from litigating  issues which it has
litigated in prior cases against the State and other parties;

         (b)  Coastal  Petroleum's  leases  are not  constitutionally  protected
property which can be the subject of an inverse  condemnation claim,  relying in
part on earlier litigation;

         (c) Coastal Petroleum's claim that its property has been taken is not
ripe for legal consideration because Coastal Petroleum has not applied to drill
on other locations on its leaseholds;

         (d) The statute of limitations bars any allegation by Coastal Petroleum
that an action taken by any state entity prior to January 16, 1997 constitutes a
taking of Coastal Petroleum's alleged property interest;

         (e) Coastal Petroleum has no right to drill for oil on Lease 224-A
which can be taken because it does not have the permit which it agreed to obtain
pursuant to the 1976 Memorandum of Settlement.

         On March 5, 2001, the State filed a Motion to Dismiss Coastal
Petroleum's complaint, which was denied by the Court on April 26, 2001. After
the Motion was denied, discovery, which had been suspended pending the outcome
of the Motion to Dismiss, resumed. Some depositions have now been taken,
documents have been exchanged and discovery is expected to continue until the
court mandated cutoff date of August 25, 2002.

         On November 27, 2001, the Leon County Circuit Court set a trial date of
September 30, 2002. The Court has set aside two weeks for the trial on the issue
of whether the State has taken Coastal Petroleum's lease. If the Court rules in
Coastal Petroleum's favor, there will then be a second trial before a jury to
determine the amount of compensation to be awarded. Both the decision of the
Court and any decision of a jury are subject to appeals by any of the parties to
the litigation. At the trial Coastal Petroleum expects to present expert
testimony to the effect that Coastal is entitled to compensation for the taking
of Lease 224-A in the amount of at least $1 billion.

Ancillary Matters to Lease Taking Case

         On February 13, 2001, certain holders of royalties pertaining to Lease
224-A filed a Motion to Intervene as Additional Plaintiffs. On April 24, 2001,
the Leon County Circuit trial judge granted certain royalty holders with
overriding royalties, which aggregate approximately 4% on State Lease 224-A, the
right to intervene on a limited basis in the takings lawsuit. On May 22, 2001,
the royalty holders appealed the Circuit Court's order granting them limited
intervention to the First District Court of Appeal, claiming the order denied
them the right to fully participate in the case until after final judgment and
that the court erroneously found that the royalty holders lack an ownership
interest in Coastal Petroleum's lease. On June 12, 2001, the Court of Appeal
ordered the royalty holders to show cause why the appeal should not be dismissed
for lack of jurisdiction. The royalty holders filed a response to the Court of
Appeal on June 21, 2001, Coastal Petroleum filed its reply on July 2, 2001 and
the State of Florida filed its reply on July 5, 2001. The Court of Appeal is
currently considering the matter.

         Counsel for the appealing royalty holders has advised Coastal Petroleum
that the royalty holders' position is that their interest is worth substantially
more than 4% of whatever judgment may be awarded to Coastal Petroleum in the
litigation and that they intend to make a claim against any recovery Coastal
Petroleum may obtain in the litigation. Coastal Petroleum has informed the
Circuit Court and counsel for the royalty holders that Coastal Petroleum is not
making any claim in the litigation on behalf of any interest the royalty holders
may have.

No Assurances

         There is no assurance that Coastal Petroleum will be successful on the
merits of its claims, which the State of Florida is vigorously defending. There
is also no assurance that Coastal Petroleum will receive a ruling that its Lease
224-A has been taken or that if compensation is awarded it will be awarded in
the amount sought by Coastal Petroleum.



<PAGE>


Drilling Permit Litigation

         In 1992, Coastal Petroleum applied to the Florida Department of
Environmental Protection (the "DEP") for a permit to drill an exploratory oil
and gas well off Apalachicola, Florida. The proposed well would be located in an
area included within Lease 224-A. The DEP subsequently denied the application
for issuance of a drilling permit for various reasons and imposed a $1.9 billion
bond. Coastal Petroleum appealed the actions of the DEP to the Florida First
District Court of Appeal ("Court of Appeal"). After two decisions by the Court
of Appeal in favor of Coastal Petroleum, the Florida Supreme Court in July 1996
denied the DEP's petition to review an April 1996 Court of Appeal decision. The
Florida Supreme Court had also refused to review an earlier Court of Appeal
decision.

         On August 16, 1996, the DEP notified Coastal Petroleum that it was
prepared to issue the drilling permit subject to Coastal Petroleum publishing a
Notice of Intent to Issue ("Notice") the permit. The Notice allowed interested
parties to request administrative hearings on the permit.

         On May 28, 1997, the Oil and Gas Drilling Bill (SB550) was enacted in
Florida. The legislation requires that a surety be based on the projected
cleanup costs and possible natural resource damage associated with offshore
drilling as estimated by the DEP and as established by the Administration
Commission (the "Commission") which is comprised of the Governor of Florida and
the Cabinet. Previously, the required surety was satisfied by a payment of
$4,000 to the Mineral Trust Fund in the first year, with a maximum $30,000 per
year and a payment of $1,500 per well for each subsequent year. On September 9,
1997, the State of Florida set a new surety amount of $4.25 billion as a
precondition for the issuance of the drilling permit.

         On October 20, 1997, a public hearing on the permit application
convened and concluded on November 6, 1997. The hearing included the Company's
appeal of the $4.25 billion surety requirement. On April 8, 1998, a Florida
Administrative Law Judge recommended that Coastal Petroleum was entitled to a
drilling permit with the requirement of a $225 million surety. On May 13, 1998,
the Commission rejected the $225 million surety and remanded the proceedings to
the Administrative Law Judge with instructions to recalculate the surety amount.

         On May 22, 1998, the DEP denied the permit to Coastal Petroleum to
drill an offshore exploration well near St. George's Island. Coastal Petroleum
appealed both the denial of the permit by the DEP and the imposition of the
surety to the Court of Appeal.

         On October 6, 1999, the Court of Appeal ruled that the DEP has the
authority to deny Coastal Petroleum's drilling permit for its St. George Island
prospect, provided that Coastal Petroleum receives just compensation for what
has been taken. The State of Florida and certain Florida environmental groups
filed on November 1, 1999 a joint motion for clarification, rehearing, or
certification with respect to that decision, asking the Court of Appeal, among
other things, to clarify that the question of whether there has been a taking of
Coastal Petroleum's leases should be determined in the Circuit Court. On June
26, 2000, the Court of Appeal denied all of the State's motions and stated that
the issue of whether the denial of a permit constituted a "taking" was not
before the Court. The Court declined to rule on the merits of the taking issue
and stated that the issue was a matter for the Circuit Court. On January 16,
2001, Coastal Petroleum Company filed a complaint in the Leon County Circuit
Court, Florida against the State of Florida seeking compensation for the State's
taking of its property rights to explore for oil and gas within its state Lease
224-A. That complaint is described above under the caption Coastal Petroleum
Company, Plaintiffs re. State of Florida, Department of Environmental
Protection, and Board of Trustees of the Internal Improvement Fund, Defendants.
Lease Taking Case.

Other Permit Applications

         On February 25, 1997 Coastal Petroleum filed 12 additional applications
for drilling permits. Coastal Petroleum objected to certain requests for
additional data by the Florida DEP. On March 26, 1999, an administrative law
judge upheld the DEP's requirements. The First District Court of Appeal affirmed
the decision of the administrative law judge on February 29, 2000.

         In order to more fully permit the Apalachicola Reef Play, which
includes the St. George Island prospect, on October 29, 1998, Coastal Petroleum
filed four additional permit applications (1310-1313). The DEP also requested
additional data for these applications. Although these applications are still
pending, Coastal Petroleum does not believe the DEP will ever grant these
permits.

Coastal Caribbean Royalty Litigation

         The offshore areas covered by Coastal Petroleum's original leases
(prior to the 1976 Settlement Agreement) are subject to certain other royalty
interests held by third parties, including Coastal Caribbean. Several of those
third parties, including Coastal Caribbean, have instituted a separate lawsuit
against the State. That lawsuit claims that the royalty holders' interests have
been confiscated as a result of the State's actions discussed above and that
they are entitled to compensation for that taking. The royalty holders were not
parties to the 1976 Settlement Agreement, and the royalty holders contend that
the terms of the Settlement Agreement do not protect the State from taking
claims by those royalty holders. The case is currently pending before the
Circuit Court in Tallahassee. On December 2, 1999, the Circuit Court denied the
State's motion to dismiss the plaintiffs' claim of inverse condemnation but
dismissed several other claims.

         On May 10, 2000, the State filed a motion for summary judgment but no
hearing date has been set for the motion. Discovery is proceeding.

         Any recovery made in the royalty holders' lawsuit would be shared among
the various plaintiffs in that lawsuit, including Coastal Caribbean, but not
Coastal Petroleum.

Counsel

         The Tampa, Florida law firm of Gaylord Merlin Ludovici Diaz & Bain is
Coastal Petroleum's principal trial counsel in Coastal Petroleum's inverse
condemnation claim against the State of Florida in Florida Circuit Court. Mr.
Cary Gaylord is the lead attorney for Gaylord Merlin. Mr. Gaylord, age 55, has
extensive experience in eminent domain and property rights matters. He is a 1969
graduate of the United States Military Academy and a 1974 graduate of the
University of Florida Law School.

         In addition, Mr. Robert J. Angerer of Angerer & Angerer of Tallahassee,
Florida is assisting Gaylord Merlin in the litigation. Mr. Angerer, age 55, is a
1969  graduate of the  University  of Michigan  and received his law degree with
high honors from Florida State University in 1974.

Statutory Attorneys' Fees

         Chapter 73 of Florida law provides in eminent domain proceedings (which
would include Coastal Petroleum's taking claim) that, in addition to the award
made to the property owner, the court shall award attorneys' fees based on the
difference between the final judgment or settlement and the first written offer
made to the property owner by the State in accordance with the following
schedule:

         1.       Thirty-three percent of any difference up to $250,000; plus
         2.       Twenty-five percent of any portion of the difference between
                  $250,000 and $1 million; plus
         3.       Twenty percent of any portion of the difference exceeding $1
                  million.

Contingency Fees

         Coastal Petroleum has agreed to pay an aggregate of 8.65% in contingent
fees based on any net recovery from execution on or satisfaction of judgment or
from settlement of the Florida litigation to the following:

               Holder                              Percentage
               ------                              ----------
        Reasoner, Davis & Fox                            2.00
          Robert J. Angerer                              1.50
          Benjamin W. Heath                              1.25
           Phillip W. Ware                               1.25
         Murtha Cullina LLP                              1.00
       Ausley & McMullen, P.A.                            .75
           James R. Joyce                                 .30
         Arthur B. O'Donnell                              .30
          James J. Gaughran                               .30
                                                          ---
                Total                                    8.65
                                                         ====

         In addition, Coastal Petroleum has agreed to pay Gaylord Merlin a
contingent fee equal to the greater of:

         (a)      approximately 90% of the statutory award of attorneys' fees
                  (discussed above), less the hourly fees paid to Gaylord
                  Merlin, or

         (b)      ten percent of the first $100 million or portion thereof of
                  the compensation received by Coastal Petroleum from the State
                  as compensation for the taking of its property, plus five
                  percent of such compensation in excess of $100 million, less
                  the hourly fees paid to Gaylord Merlin and other costs of the
                  litigation.

Uncertainty

         At September 30, 2001, the amount of unproved oil, gas and mineral
properties totaled $4.9 million, which costs the Company expects to recover.
However, no assurances can be given that Coastal Petroleum or Coastal Caribbean
will prevail on any of the issues set forth above, that they will recover
compensation for any of their claims, or that a drilling permit will be granted.
In addition, even if Coastal Petroleum were to prevail on any or all of the
issues to be decided, no assurance can be given that Coastal Caribbean or
Coastal Petroleum will have sufficient financial resources to survive until such
decisions become final or to drill any wells for which permits are received.
There is also no assurance that any wells drilled will be successful and lead to
production of any oil or gas in commercial quantities.


<PAGE>



                                 OUR MANAGEMENT

Our Directors and Executive Officers

         Our board of directors includes six members, two of whom also serve as
executive officers. The board is divided into three classes, with each class
serving a term of office of three years.
<TABLE>
<CAPTION>

             Name                      Position                            Biographical Information
             ----                      --------                            ------------------------

<C>                                    <C>               <C>
Class of 2002

Benjamin W. Heath                      Director          Mr. Heath, a director since 1962, is Chairman and also
                                       President         serves as director of Coastal Petroleum Company and Canada
                                                         Southern Petroleum Ltd.  Age eighty-six.

Phillip W. Ware                        Director          Mr. Ware, a geologist, has been President of Coastal
                                    Vice President       Petroleum since April 1985.  Mr. Ware, a director since
                                                         1985, is also a director of Coastal Petroleum.  Age fifty.
Class of 2003

Graham B. Collis                       Director          Mr. Collis, a director since 1998, is a member of the law
                                       Secretary         firm of Conyers Dill & Pearman, Hamilton, Bermuda, our
                                    Audit Committee      Bermuda counsel.  Age forty-one.

John D. Monroe                         Director          Mr. Monroe is a real estate broker and was formerly
                                    Audit Committee      President of a real estate brokerage and development firm
                                                         in Naples, Florida. Mr. Monroe, a director since 1981, is
                                                         also a director of our subsidiary, Coastal Petroleum.
                                                         Age seventy-five.

Class of 2004

Nicholas B. Dill                       Director          Mr. Dill is a consultant to the law firm of Conyers Dill &
                                                         Pearman, Hamilton, Bermuda, our Bermuda counsel.  Mr. Dill,
                                                         a director since 1997, is also a director of Worldwide
                                                         Securities Ltd, Bermuda Electric Light Co. Ltd., Bermuda
                                                         Waterworks Ltd. and SAL Ltd.  Age sixty-eight.


Timothy L. Largay                      Director          Timothy L. Largay has been a partner in the law firm of
                                Vice President and       Murtha Cullina LLP, Hartford, Connecticut since 1974.  He
                                  Assistant Secretary    was elected a director and Vice President of the Company on
                                                         January 15, 2001.  Mr. Largay is also a director and
                                                         Secretary of Canada Southern Petroleum Ltd. and a director
                                                         of Magellan Petroleum Corporation.  Murtha Cullina has been
                                                         retained by the Company for more than five years and is
                                                         being retained during the current year.  Age fifty-eight.


         Our other executive officer is the Chief Financial Officer. All of the
officers of Coastal Caribbean are elected annually by the board and report
directly to it.

James R. Joyce                   Treasurer, Assistant    Mr. Joyce has been our Treasurer, Assistant Secretary and
                                  Secretary and Chief    Chief Financial Officer since 1994. He is also President,
                                   Financial             Officer Chief Financial Officer and a director
                                                         of Magellan Petroleum Corporation. Mr. Joyce
                                                         is President of G&O'D INC, a firm that provides accounting and
                                                         administrative services, office facilities and support
                                                         to Coastal Caribbean and other clients. Age sixty-one.
</TABLE>

         All of the named companies are engaged in oil, gas or mineral
exploration and/or development except where noted. The business experience
described for each director or executive officer above covers the past five
years.

         We are not aware of any arrangements or understandings between any of
the individuals named above and any other person by which any of the individuals
named above was selected as a director and/or executive officer. We are not
aware of any family relationship among the officers and directors of Coastal
Caribbean or its subsidiary.

Committees of Our Board of Directors

Board of Directors; Committees; Attendance

         The only standing  committee of the Board is the Audit  Committee which
is comprised of Mr. Graham B. Collis and Mr. John D. Monroe. The Audit Committee
is governed by an Audit  Committee  Charter  which  requires  the  committee  to
perform the following functions:

         (1) to  recommend  the  particular  persons or firm to be  employed  by
             Coastal Caribbean as its independent auditors;

         (2) to consult with the persons or firm so chosen to be the independent
             auditors with regard to the plan of audit;

         (3) to review,  in consultation  with the independent  auditors,  their
             report of audit, or proposed report of audit,  and the accompanying
             management letter, if any; and

         (4) to  consult  with  the  independent  auditors  (periodically,   as
             appropriate,  out of the presence of management)  with regard to
             the adequacy of internal controls.

         We do not presently have standing nominating or compensation committees
of the Board of Directors. The Board of Directors performs the functions that
would be performed by such committees. A stock option committee is appointed
periodically.

Compensation Committee Interlocks and Insider Participation

         The entire board of directors constitutes the compensation committee.
Benjamin W. Heath and Phillip W. Ware are directors and the Presidents of
Coastal Caribbean and Coastal Petroleum, respectively.

Compensation of Directors

         For the year 2001, Messrs. Collis, Dill, and Monroe each received
directors' fees of $22,500 and Mr. Largay received $21,262.50 in fees. Effective
January 1, 2002, Messrs. Collis, Dill, Largay and Monroe will defer the payment
of one-half of their directors' fees until our financial position improves.

Executive Compensation

         The following table sets forth certain summary information concerning
the compensation of our two executive officers. No other executive officer
earned compensation in excess of $100,000 during the year 2001.
<TABLE>
<CAPTION>

----------------------------------------------------------------------------------------------------------------------
                                                       Summary Compensation Table
----------------------------------------------------------------------------------------------------------------------
                                              Annual Compensation              Long Term
                                                                              Compensation
               Name and                                                          Award                All Other
          Principal Position                Year          Salary ($)        Options/SARs (#)      Compensation ($)
----------------------------------------------------------------------------------------------------------------------
<S>                                         <C>             <C>                 <C>                   <C>
Benjamin W. Heath, President                2001            40,000                 -                  18,075(1)
                                            2000            40,000              100,000               15,550(1)
and Chief Executive Officer                 1999            40,000                 -                  12,000(1)
----------------------------------------------------------------------------------------------------------------------
Phillip W. Ware, Vice President             2001            92,000                 -                  13,800(2)
                                            2000            92,000              100,000               13,800(2)
                                            1999            92,000                 -                  13,800(2)
----------------------------------------------------------------------------------------------------------------------
 (1) Reimbursement for office expenses $12,075 in 2001, $9,600 in 2000, and
     $9,550 in 1999, and payment to a SEP-IRA pension plan $6,000 in 2001, 2000
     and 1999.
 (2) Payment to SEP-IRA pension plan.
</TABLE>


<PAGE>


Stock Options
         The following table provides information about unexercised stock
options held by the Named Executive Officers at December 31, 2001:
<TABLE>
<CAPTION>

-----------------------------------------------------------------------------------------------------------------------
                            Aggregated Option/SAR Exercises in 2001 and December 31, 2001
                                                     Option/SAR Values
-----------------------------------------------------------------------------------------------------------------------
                           Shares                          Number of Securities             Value of Unexercised
                          Acquired         Value          Underlying Unexercised                In-The-Money
                        On Exercise    Realized ($)          Options/SARs (#)                 Options/SARs ($)
                            (#)                            at December 31, 2001             at December 31, 2001
-----------------------------------------------------------------------------------------------------------------------
         Name                                           Exercisable    Unexercisable    Exercisable    Unexercisable
-----------------------------------------------------------------------------------------------------------------------

<S>                         <C>             <C>           <C>                <C>           <C>               <C>
Benjamin W. Heath           -0-             -0-           100,000            -             9,000             -
Benjamin W. Heath           -0-             -0-            45,000            -              -0-              -
-----------------------------------------------------------------------------------------------------------------------

Phillip W. Ware             -0-             -0-           100,000            -             9,000             -
Phillip W. Ware             -0-             -0-            72,000            -              -0-              -
-----------------------------------------------------------------------------------------------------------------------
</TABLE>


                         Certain Business Relationships

G&O'D INC

         During the year 2000, $155,440 was paid or accrued for accounting and
administrative services, office facilities and support staff provided to the
Company by G&O'D INC, a firm that is owned by Mr. James R. Joyce, the Company's
Treasurer and Assistant Secretary. During the nine months ended September 30,
2001, G&O'D billed fees in the amount of $102,910. G&O'D's fees are based on the
time spent in performing these services to the Company.

Royalty Interests

         The State of Florida oil, gas and mineral leases held by Coastal
Petroleum on approximately 3,700,000 acres of submerged lands along the Gulf
Coast and certain inland lakes and rivers are subject to certain overriding
royalties aggregating 1/16th as to oil, gas and sulphur, and 13/600ths as to
minerals other than oil, gas and sulphur. Of the overriding royalties as to oil,
gas and sulphur, a 1/90th overriding royalty, and of the overriding royalties on
minerals other than oil, gas and sulphur, a 1/60th overriding royalty, is held
by Johnson & Company, a Connecticut partnership which is used as a nominee by
the members of the family of the late William F. Buckley. A trust, in which Mr.
Heath has a 54.4% beneficial interest, has a beneficial interest in such royalty
interest held by Johnson & Company. No payments have been made to Johnson &
Company (or to the beneficial owners of such royalty interests) in more than
forty years.

         In 1990, Coastal Petroleum granted to our current officers the
following percentages of any net recovery from execution on or satisfaction of
judgment or from settlement of the lawsuit against the State of Florida as
follows:




<PAGE>


                                     Percent of              Coastal Petroleum
         Name                        Net Recovery                Position
         ----                        ------------               ----------
         Benjamin W. Heath               1.25                Chairman of Board
         Phillip W. Ware                 1.25                President
         James R. Joyce                  0.30                Treasurer


                             PRINCIPAL SHAREHOLDERS

Security Ownership of Certain Beneficial Owners

         The following table provides information as to the number of shares of
our stock owned beneficially at December 31, 2001 by each person who is known to
be the beneficial owner of more than 5% of the outstanding shares of our common
stock.
<TABLE>
<CAPTION>

                                                    Amount and Nature of
                                                    Beneficial Ownership
                                                    --------------------
     Name and Address of                    Shares Held           Shares Subject
     Beneficial Owner                        Directly                to Option                    Percent of Class
--------------------------                   ---------              -----------                   ----------------

<S>                                          <C>                        <C>                              <C>
Leon S. Gross                                4,499,688                   -                              10.34
3900 Ford Road
Philadelphia, PA  19131

Lykes Minerals Corp.                             -                  7,800,000*                          15.2**
111 East Madison Street
P.O. Box 1690
Tampa, FL  33601
------------------------
</TABLE>

*        Lykes Minerals Corp. has purchased a total of 78 shares of Coastal
         Petroleum which are  convertible  into  7,800,000 of our shares.

**       Assumes all outstanding options held by Lykes Mineral Corp are
         exercised to acquire our shares.


<PAGE>


Security Ownership of Management

         The following table sets forth information as to the number of shares
of the Company's common stock owned beneficially at December 31, 2001 by each
director of the Company and by all directors and executive officers as a group:
<TABLE>
<CAPTION>

                                                         Amount and Nature of Beneficial Ownership
                                                   ------------------------------------------------------
                                                 Shares Held Directly or                        Percent of
Name of Individual or Group                             Indirectly                    Options      Class
---------------------------                     ---------------------------           -------      -----
<S>                                                               <C>                 <C>           <C>
Graham B. Collis                                                  25,000(1)           112,000        *
Nicholas B. Dill                                                     -  (2)           124,000        *
Benjamin W. Heath                                                 20,000              145,000        *
John D. Monroe                                                       400              136,000        *
Timothy L. Largay                                                 49,200              100,000        *
Phillip W. Ware                                                    3,791              172,000        *
Directors and executive officers
  as a group (a total of 7 persons)                              111,579              925,000       2.3%
----------------------
*        Less than 1%.
(1)      Director of a corporation which also owns 17,758 shares.
(2)      Director of a corporation which owns 3,355 shares.
</TABLE>


                         DESCRIPTION OF OUR COMMON STOCK
General

         Our Memorandum of Association provides that we may issue up to
250,000,000 shares of common stock. We only have one class of stock. As of
December 31, 2001, we had approximately 9,000 shareholders of record with a
total of 43,468,329 shares of common stock outstanding. Below is a brief
description of our common stock and the rights of shareholders as determined
under Bermuda law. Neither Bermuda law, nor our Memorandum of Association or
Bye-laws impose any limitations on the rights of non-residents of Bermuda to
vote and hold our shares of common stock. Set forth below is a summary of the
principal terms of our Memorandum and Bye-laws governing our common stock.

Common Stock

         Dividend Rights. The holders of common stock are entitled to receive
dividends, if and when they are declared by the Board of Directors. Each share
outstanding is entitled to share equally with every other share in every
dividend distribution. Current Bermuda law does not restrict the remittance of
dividends to Bermuda non-residents, and any dividends paid to U.S. shareholders
would not be subject to a withholding tax. We have never declared or paid
dividends on our common stock and do not anticipate declaring or paying any
dividends in the foreseeable future. We plan to retain any future earnings to
reduce our accumulated deficit of $30,525,000 at September 30, 2001 and to
finance our operations.

         Classified  Board of  Directors.  Bye-Law 81 provides that the Board of
Directors is divided into three classes. See "Our Management - Our Directors and
Executive Officers" above.

         Liquidation Rights. Subject to the rights of creditors, all rights to
the assets of Coastal Caribbean available for distribution upon liquidation are
vested in the holders of common stock and each share is entitled to participate
equally with every other share in such liquidation.

         Pre-emptive Rights, Conversion Rights, Redemption Provisions, Sinking
Fund and Further Assessments. The holders of common stock have no pre-emptive
rights. There are no conversion rights attached to the common stock and there
are no provisions for sinking funds or redemption of shares. Under Bermuda law
unless authorized by our Memorandum of Association or Bye-Laws, we may not
repurchase our own common stock, and our Memorandum of Association and Bye-Laws
do not permit us to redeem shares of common stock. The holders of outstanding
common stock are not liable to any further calls or assessments by us on their
shares.

         Rights of Appraisal, Derivative Actions. Class actions and derivative
actions are generally not available to shareholders under the laws of Bermuda.
However, the Bermuda courts ordinarily would be expected to follow English case
law precedent, which would permit a shareholder to bring an action in the name
of the company, if the directors or officers are alleged to be acting beyond the
corporate powers of the company, committing illegal acts or violating the
Memorandum of Association or Bye Laws of Coastal Caribbean. In addition,
minority shareholders would probably be able to challenge a corporate action
that allegedly constituted a fraud against them or required the approval of a
greater percentage of the shareholders' vote. The winning party generally would
be able to recover a portion of attorneys' fees incurred in bringing the
lawsuit.

         Taxes.  Bermuda  currently  imposes  no taxes on  corporate  income  or
capital gains realized  outside of Bermuda,  nor is there any withholding tax on
any  dividends  that we might pay to you. Any amounts  received by us from U. S.
sources  as  dividends,  interest,  or other  fixed or  determinable  annual  or
periodic gains,  profits and income,  will be subject to a 30% U. S. withholding
tax. In addition,  any dividends from Coastal Petroleum will not be eligible for
the 100% dividends received deduction, which is allowable in the case of a U. S.
parent  corporation.  U. S. residents or citizens  holding shares are subject to
federal estate and gift and local inheritance  taxation.  Any dividends received
by U. S. resident or citizens  will also be subject to federal,  state and local
income taxation.  These rules are of general application only and reflect law in
force as of the date of this prospectus.  Shareholders  should seek professional
advice for the current rules applicable to their particular circumstances.

         Under current Bermuda law, we are not required to pay any income tax or
capital gains tax. We have obtained from the Bermuda Minister of Finance an
assurance under The Exempted Undertakings Tax Protection Act 1966 of Bermuda, to
the effect that in the event of there being enacted in Bermuda any legislation
imposing tax computed on profits or income, or computed on any capital asset,
gain or appreciation, or any tax in the nature of estate duty or inheritance
tax, then the imposition of any such tax shall not be applicable to us or to any
of our operations, shares, debentures or other obligations until 2016. These
assurances are subject to the condition that they are not interpreted so as to
prevent the application of any tax or duty to such persons as are ordinarily
resident in Bermuda or to prevent the application of any tax payable in
accordance with the provisions of The Land Tax Act 1967 of Bermuda or otherwise
payable in relation to any property we lease. We are required to pay annual
Bermuda government fees.

         Foreign Exchange Control Regulations. We have been designated as a
non-resident for exchange control purposes by the Bermuda Monetary Authority
whose permission for the issue of shares of common stock pursuant to this
Offering has been obtained. This designation allows us to engage in
transactions, or to pay dividends to non-residents of Bermuda who are holders of
our shares, in currencies other than the Bermuda Dollar.

         The transfer of shares between persons regarded as resident outside
Bermuda for exchange control purposes and the issue of shares after the
completion of this offering to or by such persons may take place without
specific consent under the Exchange Control Act 1972. Issues and transfers of
shares involving any person regarded as resident in Bermuda for exchange control
purposes require specific prior approval under the Exchange Control Act 1972.

         Non-Bermuda owners of our shares of common stock are not restricted in
the exercise of the rights to hold or vote their shares. Because we have been
designated as a non-resident for Bermuda exchange control purposes, there are no
restrictions on our ability to transfer funds in and out of Bermuda or to pay
dividends to U. S. residents who are holders of our common stock, other than in
respect of local Bermuda currency.

         Under Bermuda law, share certificates are only issued in the names of
corporations or individuals. In the case of an applicant acting in a special
capacity (for example as a trustee), certificates may, at the request of the
applicant, record the capacity in which the applicant is acting, but we are not
bound to investigate or incur any responsibility in respect of the proper
administration of any such trust. We will take no notice of any trust applicable
to any of our shares whether or not we have notice of the trust.

         As an "exempted company", we are exempt from Bermuda laws which
restrict the percentage of share capital that may be held by non-Bermudans, but
as an exempted company we may not participate in certain business transactions
including: (1) the acquisition or holding of land in Bermuda (except that
required for their business and held by way of lease or tenancy for terms of not
more than 50 years) without the express authorization of the Bermuda
legislature, (2) the taking of mortgages on land in Bermuda to secure an amount
in excess of $50,000 without the consent of the Minister of Finance, (3) the
acquisition of any bonds or debentures secured by any land in Bermuda, other
than certain types of Bermuda government securities or (4) the carrying on of
business of any kind in Bermuda, except in furtherance of their business carried
on outside Bermuda.

         We will be required to comply with the provisions of the Companies Act
regulating the payment of dividends and making distributions from contributed
surplus. Pursuant to the Companies Act, a company shall not declare or pay a
dividend, or make a distribution out of contributed surplus, if there are
reasonable grounds for believing that: (1) the company is, or would after the
payment be, unable to pay its liabilities as they become due; or (2) the
realizable value of the company's assets would thereby be less than the
aggregate of its liabilities and its issued share capital and share premium
accounts.

         Voting Rights. All voting rights are vested in the holders of common
stock, each share voting equally with every other share. The holders of 25% of
the total number of shares entitled to be voted at the meeting, present in
person or by proxy constitutes a quorum for the transaction of business. Bye-Law
1 provides that any matter to be voted upon at any meeting of shareholders must
be approved, not only by a simple majority of the shares voted at such meeting,
but also by a simple majority of the shareholders voting.

                  Bye-Law 1 provides in part that shareholder approval requires:

                  a resolution passed by both (i) simple majority of votes cast
                  by such Members as, being entitled so to do, vote in person
                  or, in the case of any Member being a corporation, by its duly
                  authorized representative or, where proxies are allowed, by
                  proxy and (ii) a simple majority in number of the Members
                  present in person or in the case of any Member being a
                  corporation by its duly authorized representative or where
                  proxies are allowed, by proxy, at a general meeting of which
                  not less than fourteen (14) clear days' Notice (save where a
                  longer period is required by these Bye-laws) has been duly
                  given PROVIDED THAT when shares are held by members of another
                  company, firm, partnership, association or other body
                  corporate or unincorporated and such persons act in concert,
                  or when shares are held by or for a group of Members who act
                  in concert, such persons shall be deemed to be one Member.

         Bye-Law 163 requires that a resolution adopted by the holders of 75% or
more of the outstanding common stock and adopted by not less than 75% of the
shareholders is required to approve any business combination (defined as any
"arrangement, reconstruction, amalgamation, takeover, or similar business
combination") involving the Company and any other person.

Limitation of Director Liability and Indemnification

         Director liability. The Companies Act imposes two basic duties on each
director and officer:

         Duty of loyalty. A director or officer must act honestly and in good
         faith with a view to the best interests of the company. This means that
         in conflict of interest situations, a director must place the best
         interests of the company above his own personal interests. It also
         means that a director may not use his position as a director to make a
         personal profit from opportunities that rightfully belong to the
         company.



<PAGE>


         Duty of care. A director or officer must exercise the care, diligence
         and skill that a reasonably prudent person would exercise in comparable
         circumstances. Based on English case law precedent, this means that a
         director must act reasonably in accordance with the level of skill
         expected from a person of his knowledge and experience. A director must
         attend diligently to the company's affairs, but is permitted to do so
         on an intermittent rather than a continuous basis. A director may
         delegate management functions to suitably qualified persons, although
         he will not avoid his duty by delegation to others.

         A Bermuda court is unlikely to interfere with decisions of directors
unless one of these two duties is breached. The court must find that the
directors acted in bad faith or that no reasonable board of directors could have
come to the decision that was reached.

         Director indemnification. We may under Bermuda law indemnify our
directors and officers for any loss or liability that they may incur in their
capacity as our directors and officers. The loss or liability may result from
any law that finds them guilty of negligence, default, breach of duty or breach
of trust. A director or officer may not be indemnified for his own fraud or
dishonesty.

         Legal expenses. We are required to pay all expenses, including
attorney's fees, incurred by a director in defending any legal proceeding as
they are incurred in advance of final disposition if the director agrees to
repay those amounts if it is proved by clear and convincing evidence that the
director's action or omission was undertaken with deliberate intent to cause
injury to the company or with reckless disregard for our best interests and if
the director reasonably cooperates with the corporation during the proceeding.

         Bye-Laws. Our Bye-Laws provide for indemnification of our director and
officers which is coextensive with that permitted under Bermuda law.

         D&O Insurance. Coastal Caribbean has directors' and officers' liability
insurance coverage in the amount of $12,200,000 at an annual cost of $208,000.

Transfer Agent and Registrar

         Our transfer  agent and registrar is American  Stock Transfer and Trust
Company, 59 Maiden Lane, New York, New York 10007. Telephone:  800-937-5449,  or
718-921-8200. Website: http://www.amstock.com.



<PAGE>


                         Price Range of Our Common Stock

         The principal market for our common stock is the Boston Stock Exchange
under the symbol CCO. Our common stock is also traded in the over-the-counter
market on the "Electronic Bulletin Board" of the National Association of
Securities Dealers, Inc. under the symbol COCBF.OB. The quarterly high and low
closing prices on the Boston Stock Exchange were as follows:
<TABLE>
<CAPTION>

----------------------------------------------------------------------------------------------------------------
2001                1st quarter                 2nd quarter                 3rd quarter              4th quarter
----                -----------                 -----------                 -----------              -----------

<S>                    <C>                         <C>                         <C>                      <C>
High                   1.81                        1.75                        1.32                     1.05
Low                     .85                         .90                         .85                      .80
----------------------------------------------------------------------------------------------------------------
2000                1st quarter                 2nd quarter                 3rd quarter              4th quarter
----                -----------                 -----------                 -----------              -----------

High                   1.19                        1.19                        2.50                     1.13
Low                    0.88                        0.53                        1.00                     0.69
----------------------------------------------------------------------------------------------------------------
1999                1st quarter                 2nd quarter                 3rd quarter              4th quarter
----                -----------                 -----------                 -----------              -----------

High                   1.88                        2.00                        1.81                     2.06
Low                    1.00                        1.50                        1.31                     1.06
----------------------------------------------------------------------------------------------------------------
</TABLE>

         On December 31, 2001, the closing price of our common stock on the
Boston Stock Exchange was $1.00. On December 31, 2001, approximately 9,000
shareholders of record owned our outstanding common stock.

         The total share trading volume on the Boston Stock Exchange was
1,625,800 for 2001, 3,914,100 for 2000 and 4,279,100 for 1999.


<PAGE>


                                PERFORMANCE GRAPH

         The graph below compares the cumulative total returns, including
reinvestment of dividends, if applicable, of our stock with the companies in the
NASDAQ Market Index Media General's Independent Oil & Gas Industry Group. The
chart displayed below is presented in accordance with SEC requirements.
Shareholders are cautioned against drawing any conclusions from the data
contained therein, as past results are not necessarily indicative of future.

                      COMPARISON OF CUMULATIVE TOTAL RETURN
                      January 1, 1997 to December 31, 2001

                                [OBJECT OMITTED]

<TABLE>
<CAPTION>

----------------------------- -------------- ------------- -------------- -------------- -------------- -------------
<S>                               <C>            <C>           <C>            <C>            <C>            <C>
                                  1996           1997          1998           1999           2000           2001
----------------------------- -------------- ------------- -------------- -------------- -------------- -------------
Coastal Caribbean                  100           62.50         41.07          39.29          30.29          28.57
----------------------------- -------------- ------------- -------------- -------------- -------------- -------------
Independent Oil & Gas              100           93.10         60.30          84.48         122.60         100.19
----------------------------- -------------- ------------- -------------- -------------- -------------- -------------
NASDAQ Market Index                100          122.32        172.52         304.29         191.25         152.46
----------------------------- -------------- ------------- -------------- -------------- -------------- -------------
</TABLE>




<PAGE>


                              TERMS OF THE OFFERING

Basic Subscription Privilege

         We are offering for sale, to our shareholders only, a total of shares
of our common stock. For every shares that you hold on the record date, 2002,
you are guaranteed the right to purchase shares for a purchase price of $ per
share. If you purchase all of the shares that you are guaranteed the right to
buy, you will also have the right to purchase additional shares which are
contingent on the number of shares that are not purchased by the other
shareholders.

         The shares being offered for sale will first be allocated to satisfy
the shareholders' guaranteed right to purchase shares. If there are unsold
shares remaining after these allocations, then any unsold shares will be
allocated in the manner described below among the shareholders who exercised
their contingent right to purchase the unsold shares.

         The subscription right is not transferable. The offering is not subject
to a minimum number of subscriptions.

How the Over-Subscription Privilege Operates

         Subject to the allocation rules described below, each subscription
right also grants each shareholder an over-subscription privilege to purchase
additional shares of common stock, to the extent available and subject to
proration, that are not purchased by other shareholders pursuant to their basic
subscription privileges. If you wish to exercise your over-subscription
privilege, you should indicate the number of additional shares that you would
like to purchase in the space provided on your subscription certificate. When
you send in your subscription certificate, you must also send the full purchase
price for the number of additional shares that you have requested to purchase
(in addition to the payment due for shares purchased through your basic
subscription privilege).

         In the event that our shareholders do not subscribe for all of the
_____________ offered shares pursuant to their exercise of basic subscription
privileges, then shareholders requesting additional shares pursuant to their
over-subscription privileges will be allocated such additional shares on a
pro-rata basis (subject to elimination of fractional shares), based on the ratio
that the number of available shares bears to the total number of shares that are
the subject of all shareholders over-subscription requests. For example, assume
that our shareholders subscribe for a total of shares, shares of which are
guaranteed. Under the terms of the offering shares are being offered for sale,
shares would be issued to shareholders who purchased their guaranteed shares.
The remaining shares offered for sale (_________ minus __________) would be
available for the shareholders who exercised their contingent right to purchase
shares on a pro rata basis. Each shareholder who exercised his contingent right
would receive % ( available divided by contingent rights) of his contingent
amount of available shares.

         As soon as practicable after ______________ __, 2002, The American
Stock Transfer & Trust Company, acting as our Subscription Agent, will determine
the number of shares of common stock that you may purchase pursuant to the
over-subscription privilege. You will receive certificates representing these
shares as soon as practicable after ____________ __, 2002.

         Subject to state securities laws and regulations, we have the
discretion to delay allocation and distribution of any and all shares to
shareholders who are affected by such regulations and elect to participate in
the rights offering, including shares that we issue with respect to your basic
or over-subscription privilege in order to comply with state securities laws. If
you request and pay for more shares than are allocated to you, we will refund
that overpayment, without interest.

Subscription Cards and Termination Date

         Subscription cards, which indicate the number of shares you will be
guaranteed the right to purchase, will be issued in the name and address of the
holders of common stock of record on , 2002 and mailed to holders as soon as
practicable after the record date. The offering will end at 4:30 P.M. New York
City Time, on , 2002. The date and time when the offering expires is herein
referred to as the "expiration date."

         The American Stock Transfer & Trust Company, our subscription agent,
will hold all subscriptions received prior to the expiration date. Prior to the
formal acceptance of the subscriptions, American Stock Transfer will hold all
payments. Subscriptions may be revoked by delivery of written notice of
revocation to us prior to the expiration date. Subscriptions will be accepted,
if at all, promptly after the expiration date by our delivery of written
confirmation of acceptance to American Stock Transfer authorizing the issuance
of the shares and the payment of any refunds, without interest, to the extent
that the offering is oversubscribed. We reserve the right to reject any
subscription, absent proof in writing from you that all terms of the offering
have been complied with on a timely basis. We will notify the subscriber
promptly of any rejection.

         You may not purchase fractional shares, and only whole shares will be
issued. The purchase price will be $ per share for each share and the right to
purchase shares is nontransferable.

Determination of Subscription Price; No Board Recommendation

         In establishing the offering price, our directors considered recent
market prices for our stock. The purchase price is intended by the directors to
be attractive to our shareholders and result in a higher subscription rate. The
purchase price does not reflect our assessment of the actual value of our
assets. Our Board of Directors is not making any recommendation as to whether
you should exercise your subscription rights. You should make your decision
based on your own assessment of your best interests after reading this
prospectus. All interpretations of matters relating to the offering will be made
by our management and will be final.

How to Purchase Shares

         Shares may be purchased by delivering the subscription card, along with
a signed subscription agreement, together with full payment of the purchase
price for both the shareholder's guaranteed and contingent amounts. Payment of
the purchase price must be made by check, bank draft or money order payable to
the order of "American Stock Transfer - AS SUBSCRIPTION AGENT". Any
subscriptions satisfying these conditions will be accepted; however,
subscriptions received after the expiration date will not be honored and we will
not be responsible for subscriptions not delivered by that time. You are advised
to choose a reliable method (e.g., such as overnight courier service) for the
delivery of your subscriptions to American Stock Transfer.

         You may also subscribe by delivering to American Stock Transfer before
the expiration date each of the following:

        o         the full purchase price, together with a signature guarantee
                  in writing or by facsimile from a bank or trust company or a
                  member firm of any U.S. registered stock exchange that a
                  subscription card with respect to shares subscribed for has
                  been or will be promptly delivered to American Stock Transfer
                  within three business days, and

        o         information setting forth the name of the subscriber and the
                  serial number of the subscription card. Subscriptions
                  satisfying these conditions will be accepted subject to prompt
                  receipt by American Stock Transfer of the duly executed
                  subscription card within three business days.

Registration of the Shares You Purchase

         We have made application for the registration of the common stock being
offered under the applicable securities laws of each of the United States which
do not provide an exemption. In the event that the offering is not permitted
under the law of any state or states, or in the event that qualification of the
securities in any state or states would prove to be impracticable in the
judgment of management, we will not issue subscription cards to shareholders in
those states.

                 UNITED STATES TAX CONSEQUENCES OF THE OFFERING

         Your receipt of your subscription rights will have certain federal
income tax consequences. The following discussion is the likely position of the
Internal Revenue Service regarding the tax consequences of the receipt of your
subscription rights. This discussion is not intended to serve as tax advice to
you, and you should consult your personal tax advisor for advice relating to
your personal tax situation.

         The mere receipt of the subscription rights will not result in the
recognition of taxable income. While you will not have to report taxable income
upon the receipt of your subscription rights, you may have to allocate a portion
of the adjusted basis of your original shares to any shares that you purchase in
the offering.

         If you do not exercise your subscription rights, you will not be
allowed to claim a loss, and no adjustment will be made to the tax basis of your
shares. If the subscription rights are exercised, you may be required to
allocate a portion of the basis of your original shares to the shares that you
purchase in the offering, depending on whether the fair market value of the
rights equals or exceeds 15% of the fair market value of your original shares on
the date of distribution of your rights.

         If you exercise your subscription rights and the fair market value of
your subscription rights on the date of distribution is 15% or more of the fair
market value of the shares you own on that date, you must allocate to the
purchased shares that part of the basis of your original shares that is
attributable to each subscription right that you exercise. The basis of your
original shares that is allocated to your subscription rights will equal your
basis in your original shares multiplied by a fraction the numerator of which is
the fair market value of your subscription rights and the denominator of which
is the total of the fair market value of your original shares and the fair
market value of your subscription rights. The basis of your original shares that
is allocated to each subscription right that you exercise will equal the basis
of your original shares that is allocated to your subscription rights divided by
the total number of subscription rights issued to you. Accordingly, the tax
basis of each share that you purchase will equal the basis of your original
shares that is allocated to each subscription right that you exercise plus the
purchase price of each purchased share. The holding period for a share acquired
by exercise of a subscription right will begin from the date the subscription
right is exercised. The basis of your original shares will be correspondingly
reduced by the portion of the basis in your original shares that is allocated to
the purchased shares.

         If you exercise your subscription rights and the fair market value of
the subscription rights on the date of distribution is less than 15% of the fair
market value of the shares you own on that date, you may elect to allocate a
portion of your current tax basis to the shares that you purchase as discussed
above. If you do not elect to allocate your tax basis, then your tax basis in
the purchased shares will be your purchase price of the offered stock.

                                  LEGAL MATTERS

         Murtha Cullina LLP, Hartford, Connecticut, has passed upon legal
matters relating to U. S. law in connection with this offering. Mr. Timothy L.
Largay, a director and officer of the Company, is a partner of Murtha Cullina
LLP. All matters relating to Bermuda law affecting Coastal Caribbean and its
common stock have been passed upon by the firm of Conyers Dill & Pearman,
Hamilton, Bermuda, of which firm Mr. Collis, a director and Secretary of Coastal
Caribbean, is a partner. Mr. Dill, a director, is a consultant to the firm of
Conyers Dill & Pearman. The firm of Angerer & Angerer, Tallahassee, Florida, has
passed upon all matters relating to litigation in which Coastal Petroleum has
been involved until December 31, 2000. The firm of Gaylord Merlin Ludovici Diaz
& Bain, Tampa, Florida, has passed upon all matters relating to litigation filed
in Florida Circuit Court pertaining to the taking case in which Coastal
Petroleum has been involved since January 1, 2001. Murtha Cullina LLP may rely,
insofar as Bermuda law is concerned, on the opinion of Bermuda counsel, and
insofar as Coastal Petroleum's litigation is involved, on the opinions of
Angerer & Angerer and Gaylord Merlin Ludovici Diaz & Bain.


                                     EXPERTS

         The consolidated financial statements of Coastal Caribbean Oils &
Minerals, Ltd. (a development stage company) at December 31, 2000 and 1999 and
for each of the three years in the period ended December 31, 2000, appearing in
this Prospectus and Registration Statement have been audited by Ernst & Young
LLP, independent auditors, as set forth in their report thereon, appearing
elsewhere herein, and are included in reliance upon such report given upon the
authority of such firm as experts in accounting and auditing.

                       WHERE YOU CAN FIND MORE INFORMATION

         We are a public company and file annual, quarterly and special reports
and other information with the SEC. You may read and copy any documents we file
at the SEC's Public Reference Room, 450 Fifth Street, N.W., Washington, D.C.
20549. You may obtain further information on the operation of the Public
Reference Room by calling the SEC at 1-800-SEC-0330. You can obtain copies of
this material from the Public Reference Section of the SEC, Washington, D.C.
20549, at prescribed rates. Our reports, proxy and information statements and
other information are also available to the public at the SEC's web site. The
Internet address of that site is http://www.sec.gov.

         Our common stock is listed on the Boston Stock Exchange and reports,
proxy statements and other information can also be examined at that exchange.

         This prospectus is only part of a registration statement on Form S-1
that we have filed with the SEC under the Securities Act and therefore omits
certain information contained in the registration statement. We have also filed
exhibits and schedules with the registration statement that are excluded from
this prospectus, and you should refer to the applicable exhibit or schedule for
a complete description of any statement referring to any contract or other
document. You may inspect a copy of the registration statement, including the
exhibits and schedules, without charge at the SEC's public reference room or
through its web site.


<PAGE>



F-17

                          INDEX TO FINANCIAL STATEMENTS

<TABLE>
<CAPTION>

                                                                                                       Page
                                                                                                     Reference
                                                                                                     ---------

<S>                                                                                                     <C>
Report of Independent Auditors                                                                          F-2

Consolidated balance sheets at September 30, 2001 (unaudited), December 31,
2000 and 1999.                                                                                          F-3

Consolidated statements of operations for the nine months ended September 30,
2001 and 2000 (unaudited), for the period from January 31, 1953 (inception) to
September 30, 2001 (unaudited) and for each of the three years in the period
ended December 31, 2000.                                                                                F-4

Consolidated statements of cash flows for the nine months ended September 30,
2001 and 2000 (unaudited), for the period from January 31, 1953 (inception) to
September 30, 2001 (unaudited) and for each of the three years in the period
ended December 31, 2000.                                                                                F-5

Consolidated statement of common stock and capital in excess of par value for
the period from January 31, 1953 (inception) to December 31, 2000
and September 30, 2001 (unaudited).                                                                     F-6

Notes to consolidated financial statements.                                                             F-7
</TABLE>



<PAGE>




                         REPORT OF INDEPENDENT AUDITORS

The Board of Directors
Coastal Caribbean Oils & Minerals, Ltd.

We have audited the accompanying consolidated balance sheets of Coastal
Caribbean Oils & Minerals, Ltd. (a development stage company) as of December 31,
2000 and 1999, and the related consolidated statements of operations, cash
flows, and common stock and capital in excess of par value for each of the three
years in the period ended December 31, 2000. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the consolidated financial position of Coastal
Caribbean Oils & Minerals, Ltd. at December 31, 2000 and 1999, and the
consolidated results of its operations and its cash flows for each of the three
years in the period ended December 31, 2000, in conformity with accounting
principles generally accepted in the United States.




                                        /s/ Ernst & Young LLP



Stamford, Connecticut
March 1, 2001


<PAGE>



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

                           CONSOLIDATED BALANCE SHEETS
                           (Expressed in U.S. dollars)
<TABLE>
<CAPTION>


                                                                September 30,                 December 31,
                                                                    2001                2000               1999
                                                                 (unaudited)
                          ASSETS
Current assets:
<S>                                                                   <C>                <C>                 <C>
  Cash and cash equivalents                                           $1,203,830         $2,958,674          $ 651,124
  Interest and accounts receivable                                        12,665             41,520             25,583
  Prepaid expenses                                                       386,609            323,897            352,089
                                                                         -------            -------            -------
          Total current assets                                         1,603,104          3,324,091          1,028,796
                                                                       ---------          ---------          ---------

Marketable securities                                                          -                  -            390,941
Unproved  oil,  gas  and  mineral   properties  (full
 cost method)                                                          4,864,773          4,807,722          4,759,532

Other                                                                          -             27,866             27,445
                                                                      ----------         ----------         ----------
Total assets                                                          $6,467,877         $8,159,679         $6,206,714
                                                                      ==========         ==========         ==========

           LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:
  Accrued liabilities                                                  $ 279,685         $  193,176          $  68,424
                                                                       ---------         ----------          ---------

Minority interests                                                             -                  -                  -

Shareholders' equity:
  Common stock, par value $.12 per share:
    Authorized - 250,000,000 shares
    Outstanding - 43,468,329 (2001-2000)
40,056,358 (1999) shares                                               5,216,199          5,216,199          4,806,763
  Capital in excess of par value                                      31,497,362         31,497,362         28,693,033
                                                                      ----------         ----------         ----------
                                                                      36,713,561         36,713,561         33,499,796
Deficit accumulated during the
  development stage                                                 (30,525,369)        (28,747,058)       (27,361,506)
                                                                    ------------        ------------       ------------
Total shareholders' equity                                             6,188,192          7,966,503          6,138,290
                                                                        --------           ---------          ---------
Total liabilities and shareholders' equity                            $6,467,877         $8,159,679         $6,206,714
                                                                      ==========         ==========         ==========

                                                  See accompanying notes.
</TABLE>


<PAGE>





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

                      CONSOLIDATED STATEMENTS OF OPERATIONS
                           (Expressed in U.S. Dollars)
<TABLE>
<CAPTION>


                                                                                                                         For the
                                                                                                                       period from
                                                                                                                      Jan. 31, 1953
                                     Nine months ended                                                                 (inception)
                                       September 30,                              Years ended December 31,                  to
                                    --------------------          --------------------------------------------------  September 30,
                                    2001           2000                2000              1999               1998           2001
                             -----------   -----------        --------------    --------------     --------------       ----------
                              (unaudited)    (unaudited)                                                                (unaudited)

<S>                              <C>            <C>                 <C>               <C>               <C>              <C>
Interest and other income        $ 73,153       $ 23,094            $62,544           $55,275           $167,178         $3,864,276
                                 --------       --------            -------           -------           --------         ----------
Expenses:
  Legal fees and costs          1,236,604        392,498            633,521           405,380            501,708         14,247,117
  Administrative expenses         402,530        415,373            535,325           474,027            495,161          8,276,191
  Salaries                        113,850        113,851            151,800           157,550            161,000          3,334,478
                                   98,000         97,893            107,852           102,825            132,924          3,877,632
Shareholder
communications
  Exploration costs                   480          8,408             19,598            20,954             31,066            824,692
  Lawsuit judgments                     -              -                  -                 -                  -          1,941,916
  Minority interests                    -              -                  -                 -                  -          (632,974)
  Other                                 -              -                  -                 -                  -            364,865
  Contractual services                                 -                  -                                    -          2,155,728
                             ------------  -------------   ----------------   ---------------   ----------------          ---------
                                        -                                                   -
                                1,851,464      1,028,023          1,448,096         1,160,736          1,321,859         34,389,645
                                ---------      ---------          ---------         ---------          ---------         ----------

Net loss                     $(1,778,311)   $(1,004,929)       $(1,385,552)      $(1,105,461)       $(1,154,681)
                             ============   ============       ============      ============       ============

Deficit accumulated
during the development
  stage                                                                                                               $(30,525,369)
                                                                                                                      ============

Net loss per share based
  on average number of
  shares outstanding
  during the period:
  Basic and diluted EPS            $(.04)         $(.03)             $(.03)            $(.03)             $(.03)
                                   ======         ======             ======            ======             ======

Average number of shares
  outstanding:
  Basic and diluted            43,468,329     40,056,358         40,843,736        40,056,358         40,056,358
                               ==========     ==========         ==========        ==========         ==========


                             See accompanying notes.
</TABLE>

<PAGE>


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

                      CONSOLIDATED STATEMENTS OF CASH FLOWS

                       (Expressed in U.S. Dollars)
<TABLE>
<CAPTION>
                                                                                                                        For the
                                                                                                                       period from
                                                                                                                      Jan. 31, 1953
                                                 Nine months ended                                                     (inception)
                                                   September 30,                    Years ended December 31,                 to
                                                2001           2000         2000          1999           1998       Sept.  30, 2001
                                                ----           ----         ----          ----           ----       ---------------
                                              (unaudited)    (unaudited)                                              (unaudited)
Operating activities:
<S>                                           <C>           <C>          <C>           <C>            <C>           <C>
Net loss                                      $(1,778,311)  $(1,004,929) $(1,385,552)  $(1,105,461)   $(1,154,681)  $(30,525,369)
Adjustments to reconcile net loss to
  net cash used in operating activities:
    Minority interest                                   -             -            -             -              -       (632,974)
    Exploration and other                               -             -            -             -              -        755,974
    Compensation recognized for stock
      option grants                                     -        75,000       75,000             -              -         75,000
    Net change in:
       Interest and accounts receivable            28,855        18,365      (15,937)       27,051         24,668        (12,665)
       Prepaid expenses                           (62,712)       (7,031)      28,192       (37,809)      (100,440)      (386,609)
       Current liabilities                         86,509       298,013      124,752         1,125          3,324        279,685
       Other                                       27,866      (177,683)        (421)         (247)          (433)       498,906
                                                   ------      ---------    ----------    ----------     --------        -------

Net cash used in operating activities         (1,697,793)      (798,265)  (1,173,966)   (1,115,341)    (1,227,562)   (29,948,052)
                                              -----------      ---------  -----------   -----------    -----------   ------------
Investing activities:
  Additions to oil, gas, and mineral
    properties net of assets acquired
    for common stock                             (57,051)      (54,355)     (48,190)      (23,913)      (340,487)    (4,864,773)
  Marketable securities (net)                           -       390,941      390,941     1,737,898      1,304,196              -
  Reimbursement of lease rentals and
    other expenses                                      -             -            -             -              -      1,243,085
  Purchase of fixed assets                                                                                               (61,649)
                                              ------------     --------   -----------   -----------    -----------     ----------
                                                        -              -           -             -              -
Net cash provided by (used in) investing
  activities                                     (57,051)        336,586     342,751     1,713,985        963,709     (3,683,337)
                                                 --------        -------     -------     ---------        -------     -----------

Financing activities:
  Sale of common stock less expenses                    -              -   3,138,765             -              -     29,480,970
  Shares issued upon exercise of options                -              -           -             -              -        884,249
  Sale of shares by subsidiary                          -              -           -             -              -        750,000
  Sale of subsidiary shares                             -              -           -             -              -      3,720,000
                                               -----------    ----------  ----------- -------------     ----------     ---------
Net cash provided by financing activities                                  3,138,765                                  34,835,219
                                               -----------    ----------  ----------- -------------     ----------    ----------
Net increase (decrease) in cash and cash
  equivalents                                  (1,754,844)      (461,679)  2,307,550       598,644       (263,853)     1,203,830
Cash and cash equivalents at beginning of
  period                                        2,958,674        651,124     651,124        52,480        316,333              -
                                                ---------       --------   ----------     --------        -------     -----------
Cash and cash equivalents at end of period     $1,203,830       $189,445   $2,958,674     $651,124        $52,480     $1,203,830
                                               ==========       ========   ==========     ========        =======     ==========
</TABLE>

                             See accompanying notes.


<PAGE>


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

                     CONSOLIDATED STATEMENT OF COMMON STOCK
                       AND CAPITAL IN EXCESS OF PAR VALUE
                           (Expressed in U.S. dollars)
     For the period from January 31, 1953 (inception) to September 30, 2001
           (Information subsequent to December 31, 2000 is unaudited)
<TABLE>
<CAPTION>

                                                                                                               Capital in
                                                                Number of                 Common                  Excess
                                                                  Shares                   Stock               of Par Value
                                                                  ------                   -----               ------------
Shares issued for net assets and unrecovered costs
<S>                                                               <C>                    <C>                    <C>
   at inception                                                   5,790,210              $  579,021             $ 1,542,868
Shares issued upon sales of common stock                         26,829,486               3,224,014              16,818,844
Shares issued upon exercise of stock options                        510,000                  59,739                 799,760
Market value ($2.375 per share) of shares issued in
  1953 to acquire an investment                                      54,538                   5,454                 124,074
Shares issued in 1953 in exchange for 1/3rd of a 1/60th
  overriding royalty (sold in prior year) in nonproducing
  leases of Coastal Petroleum                                        84,210                   8,421                       -
Market value of shares issued for services rendered
  during the period 1954-1966                                        95,188                   9,673                 109,827
Net transfers to restate the par value of common stock
  outstanding in 1962 and 1970 to $0.12 per share                         -                 117,314                (117,314)
Increase in Company's investment (equity) due to
  capital transactions of Coastal Petroleum in 1976                       -                       -                 117,025
                                                                 ----------               ---------              ----------
Balance at December 31, 1990                                     33,363,632               4,003,636              19,395,084
Sale of subsidiary shares                                                 -                       -                 300,000
                                                                 ----------               ---------              ----------
Balance at December 31, 1991                                     33,363,632               4,003,636              19,695,084
Sale of subsidiary shares                                                 -                       -                 390,000
                                                                 ----------               ---------              ----------
Balance at December 31, 1992                                     33,363,632               4,003,636              20,085,084
Sale of subsidiary shares                                                 -                       -               1,080,000
                                                                 ----------               ---------              ----------
Balance at December 31, 1993                                     33,363,632               4,003,636              21,165,084
Sale of subsidiary shares                                                 -                       -                 630,000
                                                                 ----------               ---------              ----------
Balance at December 31, 1994                                     33,363,632               4,003,636              21,795,084
Sale of subsidiary shares                                                 -                       -                 600,000
                                                                 ----------               ---------              ----------
Balance at December 31, 1995                                     33,363,632               4,003,636              22,395,084
Sale of common stock                                              6,672,726                 800,727               5,555,599
Sale of subsidiary shares                                                 -                       -                 480,000
Exercise of stock options                                            10,000                   1,200                  12,300
                                                                 ----------               ---------              ----------
Balance at December 31, 1996                                     40,046,358               4,805,563              28,442,983
Sale of subsidiary shares                                                 -                       -                 240,000
Exercise of stock options                                            10,000                   1,200                  10,050
                                                                 ----------               ---------              ----------
Balance at December 31, 1997, 1998, 1999                         40,056,358               4,806,763              28,693,033
Sale of common stock                                              3,411,971                 409,436               2,729,329
Compensation recognized for stock option grant                            -                       -                  75,000
                                                                 ----------             -----------            ------------
Balance at December 31, 2000 and September 30, 2001              43,468,329             $ 5,216,199            $ 31,497,362
                                                                 ==========             ===========            ============
</TABLE>

                             See accompanying notes.


<PAGE>


                     COASTAL CARIBBEAN OILS & MINERALS, LTD.
                   Notes to Consolidated Financial Statements
                                December 31, 2000

1.       Summary of significant accounting policies
         ------------------------------------------

Consolidation
-------------

         The accompanying consolidated financial statements include the accounts
of Coastal Caribbean Oils & Minerals, Ltd. ("Coastal Caribbean") and its
majority owned subsidiary, Coastal Petroleum Company ("Coastal Petroleum"),
referred to collectively as the Company. The Company, which is engaged in a
single industry and segment, is considered to be a development stage company
since its exploration for oil, gas and minerals has not yielded any significant
revenue or reserves. All intercompany transactions have been eliminated.

Unaudited Information
---------------------

         The information as of September 30, 2001 and for the periods ended
September 30, 2001 and September 30, 2000 is unaudited but includes all
adjustments which the Company considers necessary for a fair statement of the
results for those periods. All adjustments are of a normal recurring nature.

Cash and Cash Equivalents
-------------------------

         The Company considers all highly liquid short-term investments with
maturities of three months or less at the date of acquisition to be cash
equivalents. Cash and cash equivalents are carried at cost which approximates
market value. The components of cash and cash equivalents are as follows:
<TABLE>
<CAPTION>

                           September 30,                         December 31,
                         ----------------         ----------------------------------------
                               2001                      2000                     1999
                         ----------------         ----------------------------------------
<S>                          <C>                      <C>                       <C>
Cash                         $ 112,973                $ 159,834                 $ 59,061
Short term investments       1,090,857                2,798,840                  592,063
                            ----------               ----------                 --------
                            $1,203,830               $2,958,674                 $651,124
                            ==========               ==========                 ========
</TABLE>

Use of Estimates
----------------

         The preparation of consolidated financial statements in conformity with
accounting principles generally accepted in the United States requires
management to make estimates and assumptions that affect the amounts reported in
the financial statements and accompanying notes. The outcome of the litigation
and the ability to develop the Company's oil and gas properties will have a
significant effect on the Company's financial position and results of
operations. Actual results could differ from those estimates.

Unproved Oil and Gas Properties
-------------------------------

         The Company follows the full cost method of accounting for its oil and
gas properties. All costs associated with property acquisition, exploration and
development activities whether successful or unsuccessful are capitalized. Since
the Company's properties are undeveloped and nonproducing and the subject of
litigation, capitalized costs are not being amortized.

1.       Summary of significant accounting policies (Cont'd)
         ---------------------------------------------------

         The Company assesses whether its unproved properties are impaired on a
periodic basis. This assessment is based upon work completed on the properties
to date, the expiration date of its leases and technical data from the
properties and adjacent areas. These properties are subject to extensive
litigation with the State of Florida. Although the property interests may be
impaired by the actions taken by the State, the likelihood of loss with respect
to the recorded costs of the leasehold interests is not probable. (See Note 5
"Litigation".) Based on the exploration activities on the properties completed
to date, the exploration and development activities of others in the Gulf of
Mexico and the laws applicable to the taking of property, the Company expects to
recover its $4.9 million of capitalized costs. However, there can be no
assurance that it will be successful and that costs associated with these
properties will be realized.

Sale of Subsidiary Shares
-------------------------

         All amounts realized from the sale of Coastal Petroleum shares have
been credited to capital in excess of par value.

Earnings (Loss) Per Share
-------------------------

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

Financial Instruments
---------------------

         The carrying value for cash and cash equivalents, accounts receivable,
marketable securities and accounts payable approximates fair value based on
anticipated cash flows and current market conditions.

2.       Coastal Petroleum Company - Minority Interests
         ----------------------------------------------

         In 1992, Coastal Caribbean granted Lykes Minerals Corp. ("Lykes"), a
wholly owned subsidiary of Lykes Bros. Inc., an option to acquire 78 shares of
Coastal Petroleum at $40,000 per share. Lykes exercised all of its options to
purchase Coastal Petroleum shares at a total cost of $3,120,000 and at September
30, 2001, December 31, 2000 and 1999, held 26.7% of Coastal Petroleum.

         The Lykes agreement provides that Lykes is entitled to exchange each
Coastal Petroleum share for 100,000 Coastal Caribbean shares, subject to
adjustment for dilution and other factors. If fully exercised, that entitlement
would leave Lykes with about 15% of Coastal Caribbean's outstanding shares.
Lykes also has the right to exchange Coastal Petroleum shares for overriding
royalty interests in Coastal Petroleum's properties.



<PAGE>


2.       Coastal Petroleum Company - Minority Interests (Cont'd)
         -------------------------------------------------------

          If Lykes were to exchange its 26.7% interest in Coastal Petroleum for
a royalty interest, its overriding royalty interest in Coastal Petroleum's
working-interest acreage would be 3.3%.

         As of September 30, 2001, December 31, 2000 and 1999, Coastal Petroleum
shares were owned as follows:
                                           Shares               %
                                           ------            -------
         Coastal Caribbean                    173              59.3
         Lykes                                 78              26.7
         Others                                41              14.0
                                             ----            ------
                                              292             100.0
                                             ====             =====


3.       Marketable Securities
         ---------------------

         At September 30, 2001 and December 31, 2000, there were no marketable
securities with maturity dates of more than three months. At December 31, 1999,
the following marketable securities were available for sale because of the
Company's capital requirements:
<TABLE>
<CAPTION>

               Security         Par Value    Maturity Date  Carrying Value       Fair Value
               ---------        ---------    -------------  --------------       ----------
                                 <C>        <C>                <C>                <C>
Connecticut   State  Serial  A
Taxable Bond  6.25%              $400,000    July 1, 2003      $390,941           $390,941
                                 ========                      ========           ========
</TABLE>


4.       Unproved oil, gas and mineral properties
         ----------------------------------------

         Coastal Petroleum holds three unproved and nonproducing oil, gas and
mineral leases granted by the Trustees of the Internal Improvement Fund of the
State of Florida (the "Trustees"). These leases cover submerged and unsubmerged
lands, principally along the Florida Gulf Coast, and certain inland lakes and
rivers throughout the State.

         The two leases bordering the Gulf Coast have been divided into three
areas, each running the entire length of the coastline from Apalachicola Bay to
the Naples area. Coastal Petroleum has certain royalty interests in the inner
area, no interest in the middle area and has a 100% working interest in the
outside area.

         Coastal Petroleum also has a 100% working interest in Lake Okeechobee,
and a royalty interest in other areas. Coastal Petroleum has agreed not to
conduct exploration, drilling, or mining operations on said lake, except with
prior approval of the Trustees.




4.  Unproved oil, gas and mineral properties (Cont'd)
    -------------------------------------------------

         The three leases have a term of 40 years from January 6, 1976 and
require the payment of annual lease rentals of $59,247; if oil, gas or minerals
are being produced in economically sustainable quantities at January 6, 2016,
these operations will be allowed to continue until they become uneconomic. The
drilling requirements are governed by Chapter 20680, Laws of Florida, Acts of
1941. The Company believes that it is current in fulfilling its drilling
requirements.

         The working interest areas of the three leases are subject to royalties
payable to the Trustees of 12 1/2% on oil and gas, $.50 per long ton of sulfur
and 10% on other minerals. The leases are subject to additional overriding
royalties which aggregate 1/16th as to oil, gas and sulfur and 13/600th as to
other minerals.

         During 2000, the Company capitalized approximately $48,000 ($24,000 in
1999 and $340,000 in 1998) under a program to identify potential drilling
prospects. The amount of 2001 expenditures, if any, will depend on the outcome
of the Florida litigation.

         The following is a summary of the cost of unproved oil, gas and mineral
properties, accounted for under the full cost method, all of which are located
in Florida:
<TABLE>
<CAPTION>

                                                                                                 December 31,
                                                                 September 30,            -----------------------------
                                                                      2001                  2000                  1999
                                                                      ----                  ----                  ----
<S>                                                                <C>                   <C>                   <C>
Lease acquisition costs                                            $ 914,619             $ 914,619             $ 914,619
Lease and royalty costs (principally legal fees)                     591,616               591,616               591,616
Lease rentals                                                      2,566,267             2,507,020             2,447,774
Dry hole costs                                                       587,987               587,987               587,987
Other exploratory expenses                                         1,227,120             1,229,316             1,240,372
Salaries                                                             466,983               466,983               466,983
                                                                   ---------             ---------             ---------
                                                                   6,354,592             6,297,541             6,249,351
                                                                   ---------             ---------             ---------
Deduct:
  Reimbursement for lease rentals and other expenses               1,243,086             1,243,086             1,243,086
  Proceeds from relinquishment of surface rights                     246,733               246,733               246,733
                                                                    ---------            ---------             ---------
                                                                   1,489,819             1,489,819             1,489,819
                                                                   ----------           ----------            -----------
Total unproved oil, gas and mineral properties                    $4,864,773            $4,807,722            $4,759,532
                                                                  ==========            ==========            ==========
</TABLE>



<PAGE>


5.       Litigation
         ----------

Florida Litigation
------------------

         Coastal Petroleum has been involved in various lawsuits for many years.
Coastal Petroleum's current litigation (the "Florida Litigation") now involves
one basic claim: whether the State's offshore drilling policy and its denial of
a permit constitute a taking of its property. In addition, Coastal Caribbean is
a party to another action in which Coastal Caribbean claims that certain of its
royalty interests have been confiscated by the State.

          In 1990, the State of Florida enacted legislation that prohibits
drilling or exploration for oil or gas on Florida's offshore acreage. Although
the law does not apply to areas where Coastal Petroleum is entitled to conduct
exploration, the State of Florida has effectively prevented any exploratory
drilling by denying the Company's application for drilling permits. In addition,
in those areas where Coastal Petroleum has only a royalty interest, the law also
effectively prohibits production of oil and gas, rendering it impossible for
Coastal Petroleum to collect royalties from those areas. During 1998, Coastal
Petroleum exhausted its legal remedies in its efforts to obtain compensation for
the drilling prohibition on its royalty interest acreage.

Lease Taking Case
-----------------

         On June 26, 2000, the First District Court of Appeal affirmed an
earlier ruling that the Florida Department of Environmental Protection (DEP)
could deny Coastal Petroleum a permit to drill an exploratory well about nine
miles south of St. George Island in the Florida Panhandle. While the appeals
court held that the DEP could take such action on the basis of a compelling
public purpose in not allowing offshore oil and gas drilling in Florida, the
court also found that the DEP's action would be unconstitutional "if just
compensation is not paid for what is taken."

         On January 16, 2001, Coastal Petroleum filed a complaint in the Leon
County Circuit Court in Florida against the State of Florida seeking
compensation for the State's taking of its property rights to explore for oil
and gas within its Lease 224-A.

         On February 13, 2001, certain holders of royalties pertaining to Lease
224-A filed a Motion to Intervene as Additional Plaintiffs. On April 24, 2001,
the Leon County Circuit trial judge granted certain royalty holders with
overriding royalties, which aggregate approximately 4% on State Lease 224-A, the
right to intervene on a limited basis in the takings lawsuit. On May 22, 2001,
the royalty holders appealed the Circuit Court's order granting them limited
intervention to the First District Court of Appeal, claiming the order denied
them the right to fully participate in the case until after final judgment and
that the court erroneously found that the royalty holders lack an ownership
interest in Coastal Petroleum's lease. On June 12, 2001, the Court of Appeal
ordered the royalty holders to show cause why the appeal should not be dismissed
for lack of jurisdiction. The royalty holders filed a response to the Court of
Appeal on June 21, 2001, Coastal Petroleum filed its reply on July 2, 2001 and
the State of Florida filed its reply on July 5, 2001. The Court of Appeal is
currently considering the matter.



<PAGE>


5.       Litigation (Cont'd)
         -------------------

         On March 5, 2001, the State filed a Motion to Dismiss Coastal
Petroleum's complaint, which was denied by the court on April 26, 2001. After
the Motion was denied, discovery, which had been suspended pending the outcome
of the Motion to Dismiss, resumed. Some depositions have now been taken,
documents have been exchanged and discovery is expected to continue until the
cutoff date of August 25, 2002.

         On November 27, 2001, the Leon County Circuit Court set a trial date
for two weeks beginning September 30, 2002 for Coastal's lawsuit against the
State of Florida.

Royalty Taking Case
-------------------

         The offshore areas covered by Coastal Petroleum's original leases
(prior to the 1976 Settlement Agreement) are subject to certain other royalty
interests held by third parties, including Coastal Caribbean. Several of those
third parties, including Coastal Caribbean, have instituted a separate lawsuit
against the State. That lawsuit claims that the royalty holders' interests have
been confiscated as a result of the State's actions discussed above and that
they are entitled to compensation for that taking. The royalty holders were not
parties to the 1976 Settlement Agreement, and the royalty holders contend that
the terms of the Settlement Agreement do not protect the State from taking
claims by those royalty holders. The case is currently pending before the
Circuit Court in Tallahassee. On December 2, 1999, the Circuit Court denied the
State's motion to dismiss the plaintiffs' claim of inverse condemnation but
dismissed several other claims.

         On May 10, 2000, the State filed a motion for summary judgment but no
hearing date has been set for the motion. Discovery is proceeding.

         Any recovery made in the royalty holders' lawsuit would be shared among
the various plaintiffs in that lawsuit, including Coastal Caribbean, but not
Coastal Petroleum.

Counsel

         The Tampa, Florida law firm of Gaylord Merlin Ludovici Diaz & Bain is
Coastal Petroleum's principal trial counsel in Coastal Petroleum's inverse
condemnation claim against the State of Florida in Florida Circuit Court. Mr.
Cary Gaylord is the lead attorney for Gaylord Merlin. In addition, the law firm
of Angerer & Angerer of Tallahassee, Florida is assisting Gaylord Merlin in the
litigation.

Statutory Attorneys' Fees

         Chapter 73 of Florida law provides in eminent domain proceedings (which
would include Coastal Petroleum's taking claim) that, in addition to the award
made to the property owner, the court shall award attorneys' fees based on the
difference between the final judgment or settlement and the first written offer
made to the property owner by the State in accordance with the following
schedule:



<PAGE>


5.       Litigation (Cont'd)
         -------------------

         1.       Thirty-three percent of any difference up to $250,000; plus
         2.       Twenty-five percent of any portion of the difference between
                  $250,000 and $1 million; plus
         3.       Twenty percent of any portion of the difference exceeding
                  $1 million.

Contingency Fees

         Coastal Petroleum has agreed to pay an aggregate of 8.65% in contingent
fees based on any net recovery from execution on or satisfaction of judgment or
from settlement of the Florida litigation to various law firms and current or
former officers of the Company.

         In addition, Coastal Petroleum has agreed to pay Gaylord Merlin a
contingent fee equal to the greater of:

        (a)       approximately 90% of the statutory award of attorneys' fees
                  (discussed above), less the hourly fees paid to Gaylord
                  Merlin, or

         (b)      ten percent of the first $100 million or portion thereof of
                  the compensation received by Coastal Petroleum from the State
                  as compensation for the taking of its property, plus five
                  percent of such compensation in excess of $100 million, less
                  the hourly fees paid to Gaylord Merlin and other costs of the
                  litigation.

Uncertainty

         At September 30, 2001 and December 31, 2000, the amount of unproved
oil, gas and mineral properties totaled $4.9 and $4.8 million respectively,
which costs the Company expects to recover. However, no assurances can be given
that Coastal Petroleum or Coastal Caribbean will prevail on any of the issues
set forth above, that they will recover compensation for any of their claims, or
that a drilling permit will be granted. In addition, even if Coastal Petroleum
were to prevail on any or all of the issues to be decided, no assurance can be
given that Coastal Caribbean or Coastal Petroleum will have sufficient financial
resources to survive until such decisions become final or to drill any wells for
which permits are received. There is also no assurance that any wells drilled
will be successful and lead to production of any oil or gas in commercial
quantities.

6.       Common Stock
         ------------

         The Company's Bye-Law No. 1 provides that any matter to be voted upon
must be approved not only by a majority of the shares voted at such meeting, but
also by a majority in number of the shareholders present in person or by proxy
and entitled to vote thereon.

         The Company has been financing its operations primarily from sales of
its common stock and sales of shares of Coastal Petroleum (See Note 2).


<PAGE>


6.       Common Stock (Cont'd)
         ---------------------

         On October 23, 2000, the Company completed the sale of 3,411,971 shares
of its common stock to its shareholders at $1.00 per share. The net proceeds to
the Company were $3,138,765 after deducting the $273,206 cost of the offering.

         The following represents shares issued upon sales of common stock:

                  Number                      Capital     Capital in Excess
 Year            of Shares                      Stock          of Par Value
 ----            ---------                     ------          ------------
 1953              300,000                   $ 30,000           $   654,000
 1954               53,000                      5,300               114,265
 1955               67,000                      6,700               137,937
 1956               77,100                      7,710               139,548
 1957               95,400                      9,540               152,492
 1958              180,884                     18,088               207,135
 1959              123,011                     12,301               160,751
 1960              134,300                     13,430               131,431
 1961              127,500                     12,750                94,077
 1962                9,900                        990                 8,036
 1963              168,200                     23,548                12,041
 1964              331,800                     46,452                45,044
 1965              435,200                     60,928               442,391
 1966              187,000                     26,180               194,187
 1967              193,954                     27,153               249,608
 1968               67,500                      9,450               127,468
 1969                8,200                      1,148                13,532
 1970              274,600                     32,952               117,154
 1971              299,000                     35,880                99,202
 1972              462,600                     55,512               126,185
 1973              619,800                     74,376               251,202
 1974              398,300                     47,796                60,007
 1975                    -                          -              (52,618)
 1976                    -                          -               (8,200)
 1977              850,000                    102,000             1,682,706
 1978               90,797                     10,896               158,343
 1979            1,065,943                    127,914             4,124,063
 1980              179,831                     21,580               826,763
 1981               30,600                      3,672               159,360
 1983            5,318,862                    638,263             1,814,642
 1985                    -                                         (36,220)
                                                    -
 1986            6,228,143                    747,378             2,178,471
 1987            4,152,095                    498,251             2,407,522
 1990            4,298,966                    515,876                26,319
 1996            6,672,726                    800,727             5,555,599
 2000            3,411,971                    409,436             2,729,329
                 ---------                    -------             ---------
                36,914,183                 $4,434,177           $25,103,772
                ----------                 ----------           -----------



<PAGE>


6.       Common Stock (Cont'd)
         ---------------------

     The following represents shares issued upon exercise of stock options:

                   Number                       Capital     Capital in Excess
 Year            of  Shares                      Stock          of Par Value
 ----            ----------                     ------          ------------
 1955               73,000                    $ 7,300              $175,200
 1978                7,000                        840                 6,160
 1979              213,570                     25,628               265,619
 1980               76,830                      9,219               125,233
 1981              139,600                     16,752               227,548
 1996               10,000                      1,200                12,300
 1997               10,000                      1,200                10,050
                   -------                      -----                ------
                   530,000                    $62,139              $822,110
                   =======                    =======              ========

        Coastal Caribbean has reserved 7,800,000 shares of its common stock
        which may be issued in exchange for Coastal Petroleum shares, as
        described in Note 2.

7.       Stock Option Plan
         -----------------

         The Company has elected to follow Accounting Principles Board Opinion
No. 25, "Accounting for Stock Issued to Employees" (APB No. 25) and related
Interpretations in accounting for its stock options because the alternative fair
value accounting provided under FASB Statement No. 123, "Accounting for Stock
Based Compensation," requires use of option valuation models that were not
developed for use in valuing stock options. Under APB No. 25, because the
exercise price of the Company's stock options equals the market price of the
underlying stock on the date of grant, no compensation expense is recognized.

         During 1995, the Company adopted a Stock Option Plan covering 1,000,000
shares of the Company's common stock. On March 24, 2000, ten year options to
purchase 700,000 shares of the Company's common stock were granted. A charge to
legal expense in the amount of $75,000 for the issuance of 100,000 options to
legal counsel was recorded. Options are normally immediately vested and
exercisable. The following table summarizes stock option activity:
<TABLE>
<CAPTION>

Options outstanding                                                        Number of Shares         Exercise Price ($)
-------------------                                                        ----------------         ------------------
<S>                                                                             <C>                        <C>
Outstanding and exercisable at December 31, 1997                                362,000                    1.13
     Granted                                                                    225,000                    2.625
                                                                                -------
Outstanding and exercisable at December 31, 1998                                587,000                 1.13-2.625
     Expired                                                                   (60,000)                    1.13
                                                                               --------
Outstanding and exercisable at December 31, 1999                                527,000                 1.13-2.625
     Expired                                                                   (302,000)                  . 1.13
     Granted                                                                    700,000                     .91
                                                                                -------
Outstanding and exercisable at December 31, 2000 and Sept. 30, 2001             925,000                 .91 -2.625
                                                                                =======
                                                                                                (1.33 weighted average)

Available for grant at December 31, 2000 and September 2001                    55,000
-----------------------------------------------------------                    ======
</TABLE>




7.       Stock Option Plan (Cont'd)
         --------------------------

Summary of Options Outstanding at December 31, 2000 and September 30, 2001
--------------------------------------------------------------------------

Year Granted  Number of Shares           Expiration Date      Exercise Prices $
------------  ----------------           ---------------      -----------------
Granted 1998      225,000                  May 19, 2003             2.625
Granted 2000      700,000                 Mar. 22, 2010              .91
                  -------
Total             925,000
                  =======

         Pro forma information regarding net income and earnings per share is
required by FASB Statement No. 123, and has been determined as if the Company
had accounted for its stock options under the fair value method of that
Statement. The fair value for these options was estimated at the date of grant
using a Black-Scholes option-pricing model.

         Option valuation models require the input of highly subjective
assumptions including the expected stock price volatility. The assumptions used
in the valuation model were: 1998 risk free interest rate - 5.45%, expected life
- 5 years, expected volatility - .707 and expected dividend - 0 and in 2000 risk
free interest rate - 6.66%, expected life - 10 years, expected volatility - .741
and expected dividend - 0.

         Because the Company's stock options have characteristics significantly
different from those of traded options, and because changes in the subjective
input assumptions can materially affect the fair value estimate, in management's
opinion, the existing models do not necessarily provide a reliable single
measure of the fair value of its stock options.

         For the purpose of pro forma disclosures, the estimated fair value of
the stock options is expensed in the year of grant since the options are
immediately exercisable. The Company's pro forma information follows:

                                                   Amount         Per Share
                                                   ------         ---------
Net loss as reported - December 31, 1998       $(1,154,681)       $(.03)
Stock option expense                              (369,000)        (.01)
                                               -------------       -----
Pro forma net loss                             $(1,523,681)       $(.04)
                                               ============       ======

Net loss as reported - December 31, 2000       $(1,385,552)       $(.03)
Stock option expense                              (450,000)        (.01)
                                               -------------       -----
Pro forma net loss                             $(1,835,552)       $(.04)
                                               ============       ======

8.       Income taxes
         ------------

         Bermuda currently imposes no taxes on corporate income or capital gains
outside of Bermuda. The Company's subsidiary, Coastal Petroleum, has U.S. net
operating loss carry forwards for federal and state income tax purposes, which
may be used to reduce its taxable income, if any, during future years which
aggregated approximately $12,133,000 at December 31, 2000 ($12,077,000 at
December 31, 1999) and expire in varying amounts from 2001 through 2020. For
financial reporting purposes, a valuation allowance has been recognized to



<PAGE>


8.       Income taxes (Cont'd)
         ---------------------

offset the deferred tax assets relating to those carry forwards. Significant
components of the Company's deferred tax assets were as follows:
                                                2000               1999
                                                ----               ----
Net operating losses                         $4,720,000        $4,544,000
Deferred intercompany interest deduction      1,453,000         1,109,000
                                              ---------         ---------
Total deferred tax assets                     6,173,000         5,653,000
Valuation allowance                          (6,173,000)       (5,653,000)
                                             -----------       -----------
Net deferred tax assets                      $        -        $        -
                                             ===========       ===========

9.       Related parties
         ---------------

         G&O'D INC provides accounting and administrative services and office
facilities and support staff to the Company. G&O'D INC is owned by Mr. James R.
Joyce, Treasurer and Assistant Secretary. During 2000, 1999 and 1998, G&O'D
billed fees of $155,440, 144,495, and $160,764, respectively. During the nine
months ended September 30, 2001, G&O'D billed fees in the amount of $102,910.

10.      Going concern
         -------------

         The Company has a limited amount of working capital, has incurred
recurring losses and has an accumulated deficit. Furthermore, as discussed in
Note 5, on January 16, 2001, Coastal Petroleum Company filed a complaint in the
Leon County Circuit Court in Florida against the State of Florida seeking
compensation for the State's taking of its property rights to explore for oil
and gas within its Lease 224-A. On November 27, 2001, the Leon County Circuit
Court set a trial date for two weeks beginning September 30, 2002 for Coastal's
lawsuit against the State of Florida. The cost of that litigation has been
substantial and will require the Company to obtain additional capital. There can
be no assurances that funds on hand or realized or realizable on the sales of
the Company's shares described in Note 6 will be sufficient to allow the Company
to survive until such litigation is concluded. The Company believes the funds on
hand at September 30, 2001 are sufficient to pay the expenses associated with
the proposed rights offering and to fund the Company's operations through the
second quarter of 2002.




<PAGE>











Prospective investors may rely only on the information contained in this
prospectus. Coastal Caribbean Oils & Minerals, Ltd., has not authorized anyone
to provide any other information. This prospectus is not an offer to sell to -
nor is it seeking an offer to buy these securities from - any person in any
jurisdiction where the offer and sale is not permitted. The information here is
accurate only as of the date of this prospectus, regardless of the time of the
delivery of this prospectus or any sale of these securities.

No action is being taken in any jurisdiction outside the United States to permit
a pubic offering of the common stock or possession or distribution of this
prospectus in any such jurisdiction. Persons who come into possession of this
prospectus in jurisdictions outside the United States are required to inform
themselves about and to observe the restrictions of that jurisdiction related to
this offering and the distribution of this prospectus.









                     COASTAL CARIBBEAN OILS & MINERALS, LTD.





                               ___________ SHARES

                                  Common Stock







                               ------------------
                                   PROSPECTUS
                               ------------------








                              ___________ __, 2002



<PAGE>


                                    PART II.

                     INFORMATION NOT REQUIRED IN PROSPECTUS

Item 13. Other Expenses of Issuance and Distribution.

                  The following is an estimate of our expenses in connection
with the issuance and distribution of the securities being registered, subject
to future contingencies:

    Registration Fees                                     $    1,558
    Stock Exchange Listing Fee                                 5,000
    Printing and Engraving Expenses                           40,000
    Transfer Agent's and Registrar's Fees                     60,000
    Blue Sky Qualification Fees and Expenses                   2,000
    Legal and Accounting Fees and Expenses                   120,000
    Miscellaneous                                             21,442
                                                             -------
    Total                                                   $250,000
                                                            =========

Item 14. Indemnification of Directors and Officers.

                  Paragraph 161 of Coastal Caribbean's Bye-Laws contains the
following provisions respecting indemnification:

                  161. (1) The Directors, Secretary and other officers and each
                  person who is or was or had agreed to become a Director or
                  officer of the Company, and each such person who is or was
                  serving or who had agreed to serve at the request of the Board
                  of Directors or an officer of the Company as an employee or
                  agent of the Company or as a Director, officer, employee or
                  agent of another company, corporation, partnership, joint
                  venture, trust or other enterprise and every Auditor for the
                  time being of the Company and the liquidator or trustees (if
                  any) for the time being acting in relation to any of the
                  affairs of the Company and everyone of them, and every one of
                  their heirs, executors, administrators and estates, shall be
                  indemnified and secured harmless out of the assets and profits
                  of the Company from and against all actions, costs, charges,
                  losses, damages and expenses which they or any of them, their
                  or any of their heirs, executors, administrators or estates,
                  shall or may incur or sustain by or by reason of any act done,
                  concurred in or omitted in or about the execution of their
                  duty, or supposed duty, in their respective offices or trusts;
                  and none of them shall be answerable for the acts, receipts,
                  neglects or defaults of the other or others of them or for
                  joining in any receipts for the sake of conformity, or for any
                  bankers or other persons with whom any moneys or effects
                  belonging to the Company shall or may be lodged or deposited
                  for safe custody, or for insufficiency or deficiency of any
                  security upon which any moneys of or belonging to the Company
                  shall be placed out on or invested, or for any other loss,
                  misfortune or damage which may happen in the execution of
                  their respective offices or trusts, or in relation thereto;
                  PROVIDED THAT this indemnity shall not extend to any matter in
                  respect of any fraud or dishonesty which may attach to any of
                  said persons. Subject to the provisions of the Act and without
                  limiting the generality or the effect of the foregoing, the
                  Company may enter into one or more agreements with any person
                  which provide for indemnification greater or different than
                  that provided in this Bye-Law. Any repeal or modification of
                  this Bye-Law shall not adversely affect any right or
                  protection existing hereunder immediately prior to such repeal
                  or modification.

                           (2) Each Member and the Company agree to waive any
                  claim or right of action he or it might have, whether
                  individually or by or in the right of the Company, against any
                  Director on account of any action taken by such Director, or
                  the failure of such Director to take any action, in the
                  performance of his duties, or supposed duties, with or for the
                  Company; PROVIDED THAT such waiver shall not extend to any
                  matter in respect of any fraud or dishonesty which may attach
                  to such Director. Any repeal or modification of this Bye-Law
                  shall not adversely affect any right or protection of a
                  Director of the Company existing immediately prior to such
                  repeal or modification.

         In 1987, we purchased $100,000 of directors' and officers' liability
insurance coverage from an unaffiliated Bermuda company at a cost of $100,000
plus an annual $7,500 service fee during the period of the policy. During June
1997, the amount of the policy was increased from $100,000 to $200,000. We are
credited with investment income from the policy premium during the term of the
policy and all or a portion of such premium will be refunded at the end of the
policy term to the extent that no claims are made. We had been unable to obtain
any other liability coverage for the Company's directors and officers.

         In recent years, the Company has been able to purchase directors' and
officers' insurance coverage. The current amount of its D&O coverage is $12.2
million (including the above policy) at an annual cost of $216,000.

Item 15. Recent Sales of Unregistered Securities.

         None.

Item 16. Exhibits and Financial Statement Schedules.

(a)      Exhibits

         Item

         1.       Underwriting agreement.

                  Not applicable.

         2.       Plan of acquisition, reorganization, arrangement, liquidation
                  or succession.

                  Not applicable.

         3.       (i)      Articles of Incorporation.

                  Memorandum of Association as amended on June 30, 1982, May 14,
                  1985 and April 7, 1988, filed as Exhibit 3(a) to Report on
                  Form 10-K for the year ended December 31, 1998 are
                  incorporated herein by reference.

                  (ii)     Bye-Laws.

                  Bye-Laws of the Company are incorporated by reference to
                  Exhibit A of the Company's Schedule 14(a) Proxy Statement
                  filed on May 13, 1997.

         4.       Instruments defining the rights of security holders, including
                  indentures.

                  None.

         5.       Opinion re legality.

                  Form of Opinion of Conyers Dill & Pearman filed herein.

         8.       Opinion re tax matters.

                  Not applicable.

         9.       Voting trust agreement

                  Not applicable.

         10.      Material contracts.

                  (a) Drilling Lease No. 224-A, as modified, between the
Trustees of the Internal Improvement Fund of the State of Florida and Coastal
Petroleum Company dated February 27, 1947 filed as Exhibit 10(a) to Report on
Form 10-K for the year ended December 31, 1998 is incorporated herein by
reference.

                  (b) Drilling Lease No. 224-B, as modified, between the
Trustees of the Internal Improvement Fund of the State of Florida and Coastal
Petroleum Company dated February 27, 1947 filed as Exhibit 10(b) to Report on
Form 10-K for the year ended December 31, 1998 is incorporated herein by
reference.

                  (c) Drilling Lease No. 248, as modified, between the Trustees
of the Internal Improvement Fund of the State of Florida and Coastal Petroleum
Company dated February 27, 1947 filed as Exhibit 10(c) to Report on Form 10-K
for the year ended December 31, 1998 is incorporated herein by reference.

                  (d) Memorandum of Settlement dated January 6, 1976 between
Coastal Petroleum Company and the State of Florida filed as Exhibit 10(d) to
Report on Form 10-K for the year ended December 31, 1998 is incorporated herein
by reference.

                  (e) Agreement between the Company and Coastal Petroleum dated
December 3, 1991 filed as Exhibit 10(e) to Report on Form 10-K for the year
ended December 31, 1998 is incorporated herein by reference.

                  (f) Agreement between Lykes  Minerals  Corp.  and Coastal
Caribbean and Coastal  Petroleum dated  October  16, 1992 filed as Exhibit 10(f)
to Report on Form 10-K for the year ended  December  31,  1998 is incorporated
herein by reference.

                  (g) Stock Option Plan adopted March 7, 1995 filed as Exhibit
4A to Form S-8 dated July 28, 1995 is incorporated herein by reference.

         11.      Statement re computation of per share earnings.

                  See Consolidated Financial Statements.

         12.      Statement re computation of ratios.

                  None.

         15.      Letter re unaudited interim financial statements.

                  None.

         16.      Letter re change in certifying accountant.

                  Not applicable.

         21.      Subsidiaries of the registrant.

                  The Company has one subsidiary, Coastal Petroleum Company, a
                  Florida corporation which is 59 1/4 % owned.

         23.      Consent of experts and counsel.

                  Ernst & Young LLP - filed herein.
                  Conyers Dill & Pearman - filed herein.
                  Murtha Cullina LLP- filed herein.
                  Angerer & Angerer - filed herein.
                  Gaylord Merlin Ludovici Diaz & Bain - filed herein

         24.      Power of attorney.

                  Powers of attorney of Graham B. Collis, Nicholas B. Dill,
                  Benjamin W. Heath, John D. Monroe, Timothy L. Largay and
                  Phillip W. Ware filed herein.

         25.      Statement of eligibility of trustee.

                  Not applicable.

         26.      Invitations for competitive bids.

                  Not applicable.

         99.      Additional exhibits

                  Rights Offering Documents
                  -------------------------

                  99.1 Form of subscription card - filed herein 99.2
                  Instructions for Purchasing Stock - filed herein 99.3 Offering
                  cover letter - filed herein 99.4 President's cover letter -
                  filed herein

                  Other Documents
                  ---------------

                  99.5     The decision Coastal Petroleum Company v. Florida
                           Wildlife Federation et. al. of the First District
                           Court of Appeal dated October 6, 1999 (St. George
                           Island permit application case), is incorporated by
                           reference to Exhibit 99(a) to the Company's
                           Current Report on Form 8-K filed on October 7, 1999.
                  99.6     Complaint, filed January 16, 2001 in the Leon County
                           Circuit Court, Coastal Petroleum Company, Plaintiff
                           vs. State of Florida, Department of Environmental
                           Protection, and Board of Trustees of the Internal
                           Improvement Fund, Defendants, is incorporated by
                           reference to Exhibit 99(a) to the Company's Current
                           Report on Form 8-K filed on January 18, 2001.


(b)      Financial Statement Schedules

         Not applicable.

Item 17. Undertakings.

         The undersigned registrants hereby undertake:

         (1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this registration statement:

         (i)  To include any prospectus required by section 10(a)(3) of the
Securities Act of 1933;

         (ii) To reflect in the prospectus any facts or events arising after the
effective date of the registration statement (or the most recent post-effective
amendment thereof) which, individually or in the aggregate, represent a
fundamental change in the information set forth in the registration statement;

         (iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement;

         Provided, however, that paragraphs (1)(i) and (1)(ii) do not apply if
the registration statement is on Form S-3 or Form S-8, and the information
required to be included in a post-effective amendment by those paragraphs is
contained in periodic reports filed by either registrant pursuant to section 13
or section 15(d) of the Securities Exchange Act of 1934 that are incorporated by
reference in the registration statement.

         (2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.

         (3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination of
the offering.

         (4) To file a post-effective amendment to the registration statement to
include any financial statements required by Rule 3-19 of Regulation S-X at the
start of any delayed offering or throughout a continuous offering.

         Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the registrants pursuant to the foregoing provisions, or otherwise, the
registrants have been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrants of expenses
incurred or paid by a director, officer or controlling person of the registrants
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrants will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification is against
public policy as expressed in the Act and will be governed by the final
adjudication of such issue.


<PAGE>




                                   SIGNATURES

         Pursuant to the requirements of the Securities Act of 1933, the
registrant has duly caused this registration statement to be signed on its
behalf by the undersigned, thereunto duly authorized in the City of Newport
Beach, in the State of California, on the 10th day of January 2002.

                                         COASTAL CARIBBEAN OILS & MINERALS, LTD.
                                                       (Registrant)


                                         By /s/ Benjamin W. Heath
                                            --------------------------------
                                             Benjamin W. Heath, President


         Pursuant to the requirements of the Securities Act of 1933, this
amendment to this registration statement has been signed below by the following
persons in the capacities and on the dates indicated.
<TABLE>
<CAPTION>

            <S>                                                     <C>                        <C>
            Name                                                    Title                      Date
            ----                                                    -----                      ----

(i) Principal executive officer:


     /s/Benjamin W. Heath                                President and                 January 10, 2002
----------------------------------
        Benjamin W. Heath                                Director


(ii) Principal financial officer:
     and controller or principal
     accounting officer:

     /s/James R. Joyce                                    Treasurer                     January 10, 2002
----------------------------------
        James R. Joyce

(iii) A majority of the Board of
      Directors:

     /s/James R. Joyce                                                                  January 10, 2002
----------------------------------
      James R. Joyce
      Attorney-in-Fact for:

      Graham B. Collis                                    Director
      Nicholas B. Dill                                    Director
      Benjamin W. Heath                                   Director
      John D. Monroe                                      Director
      Timothy L. Largay                                   Director
      Phillip W. Ware                                     Director

        Pursuant to the requirement of the Securities Act of 1933, the
undersigned has signed this registration statement on January 10, 2002.

                              /s/James R. Joyce
                              ------------------------------
                              James R. Joyce
                              Authorized Representative in the
                              United States
</TABLE>


<PAGE>





                                INDEX OF EXHIBITS


Item Number                       Description
-----------                       -----------

     5             Form of Opinion of Counsel - Conyers Dill & Pearman

   23.1            Consent of Ernst & Young LLP
   23.2            Consent of Conyers Dill & Pearman
   23.3            Consent of Murtha Cullina LLP
   23.4            Consent of Angerer & Angerer
   23.5            Consent of Gaylord Merlin Ludovici Diaz & Bain

    24            Powers of attorney of Graham B. Collis,  Nicholas B. Dill,
                  Benjamin W. Heath, John D. Monroe, Timothy L. Largay and
                  Phillip W. Ware

                  Additional Exhibits - Rights Offering Documents

   99.1             Form of subscription card
   99.2             Instructions for Purchasing Stock
   99.3             Offering cover letter to Shareholders
   99.4             President's letter to Shareholders - Reason for Offering












<PAGE>
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As filed with the Securities and Exchange Commission on January 10, 2002
                              Registration No. 333
                             ----------------------

                                  United States
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                                    FORM S-1
                             REGISTRATION STATEMENT
                                    UNDER THE
                             SECURITIES ACT OF 1933

                     COASTAL CARIBBEAN OILS & MINERALS, LTD.
             (Exact name of registrant as specified in its charter)
                                    BERMUDA
         (State or other jurisdiction of incorporation or organization)
                                      1330
            (Primary Standard Industrial Classification Code Number)
                                      NONE
                      (I.R.S. Employer Identification No.)
             Clarendon House, Church Street, Hamilton, Bermuda HM CX
                            Telephone (441) 295-1422
        -----------------------------------------------------------------
               (Address including zip code, and telephone number,
        including area code of registrant's principal executive offices)
                         -------------------------------
                             Timothy L. Largay, Esq.
                               MURTHA CULLINA LLP
                              CityPlace, 29th Floor
                                185 Asylum Street
                           Hartford, Connecticut 06103
                            Telephone (860) 240-6017
         ---------------------------------------------------------------
                       (Name, address, including zip code,
        and telephone number, including area code, of agent for service)

Approximate date of commencement of proposed sale to the public: As soon after
the effective date as practicable.

If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. [ X ]

If this Form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, please check the following box and list
the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
CALCULATION OF REGISTRATION FEE

      -------------------------- -------------------------- ----------------- ------------------------ -----------------
       Title of each class of     Amount to be registered       Proposed         Proposed maximum         Amount of
          securities to be                                      maximum         aggregate offering     registration fee
             registered                                      offering price            price
                                                               per share
      -------------------------- -------------------------- ----------------- ------------------------ -----------------
      -------------------------- -------------------------- ----------------- ------------------------ -----------------
Common stock,                6,520,249 shares (1)        $1.00 (1)            $6,520,249            $1,558.34
      $.12 per share

      -------------------------- -------------------------- ----------------- ------------------------ -----------------
(1)   Estimated in accordance with Rule 457(c) under the Securities Act of 1933,
      solely for the purpose of calculating the registration fee.

The Registrant hereby amends this registration statement on such date or dates
as may be necessary to delay its effective date until the registrant shall file
a further amendment which specifically states that this registration statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the registration statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
P R O S P E C T U S

                       ________ Shares of Common Stock of
                     Coastal Caribbean Oils & Minerals, Ltd.

         This is an offering of shares of our common stock by subscription right
to our existing shareholders. For every___ shares of common stock held as of
________, 2002, each shareholder will be entitled to purchase __ shares at a
price of $____ per share. In addition, each shareholder who purchases his/her
full allotment of shares will be entitled to purchase additional shares which
are unsubscribed by other shareholders.

The Offering
------------
                                                            Proceeds to
                   Your Price         Commission         Coastal Caribbean
                   ----------         ----------         -----------------

 Per Share            $ 0                $ 0                    $ 0
 ---------            ---                ----                   ---

 Total                $ 0                $ 0                    $ 0
 -----                ---                ----                   ---

         Our common stock is traded on the Boston Stock Exchange under the
  symbol CCO. On January 9, 2002, the last reported sale price of our common
  stock as reported on the Boston Stock Exchange was $ per share.

         The shares of common stock offered hereby involve a high degree of
risk. You should purchase shares only if you can afford a complete loss. See
"Risk Factors" beginning at page 5 for a discussion of certain factors that you
should consider before you purchase any shares of our common stock.

         Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if this
prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.

                  The date of this prospectus is _____________,
2002.
1
                                TABLE OF CONTENTS
                                                                            PAGE
Prospectus Summary............................................................2
Summary Financial Data........................................................4
Risk Factors..................................................................5
Cautionary Statement About Forward-Looking Statements........................11
Use of Proceeds..............................................................11
Capitalization...............................................................12
Dilution 13
Management's Discussion and Analysis of Financial
Condition And Results of Operations..........................................13
Market Risk Disclosures......................................................16
Our Business and Properties..................................................17
Legal Proceedings............................................................23
Our Management...............................................................29
Certain Business Relationships...............................................32
Principal Shareholders.......................................................33
Description of Our Common Stock..............................................34
Price Range of Our Common Stock..............................................39
Performance Graph............................................................40
Terms of the Offering........................................................41
United States Tax Consequences of the Offering...............................43
Legal Matters................................................................44
Experts......................................................................45
Where You Can Find More Information..........................................45
Index to Consolidated Financial Statements..................................F-1

                                    * * * * *

         Coastal Caribbean is incorporated in Bermuda and our principal
executive office is located at Clarendon House, Church Street, Hamilton, Bermuda
HM CX. Our telephone number at that address is (441) 295-1422. Our internet web
address is http://www.coastalcarib.com. The contents of our web site are not
incorporated into this prospectus. In this prospectus, "Coastal Caribbean,"
"we," "us," and "our" refer to Coastal Caribbean Oils & Minerals, Ltd. and its
majority owned subsidiary, Coastal Petroleum Company, unless the context
otherwise dictates. References to "dollars" or "$" are to United States dollars.

         You should rely only on the information contained or incorporated by
reference in this prospectus. We have not authorized anyone (including any
broker or salesman) to provide you with information different from that
contained in this prospectus. If anyone provides you with different or
inconsistent information, you should not rely on it. We are offering to sell and
seeking offers to buy shares of our common stock only in jurisdictions where
offers and sales are permitted. You should assume that the information contained
in this prospectus is accurate only as of __________, 2002. You should not
assume that this prospectus is accurate as of any other date.
PROSPECTUS SUMMARY

This summary highlights some of the information in this prospectus. The summary
may not contain all of the information that is important to you. This prospectus
and the documents we incorporate by reference contain forward-looking statements
which involve risks and uncertainties. You should carefully read the entire
prospectus, including the risk factors which begin at page 5 and the financial
statements, before deciding whether to invest in our common stock.

The Company                      o Coastal Caribbean Oils & Minerals
                                 Ltd., a Bermuda corporation, was founded in
                                 1953. Our principal asset is our majority owned
                                 subsidiary Coastal Petroleum Company. Coastal
                                 Petroleum's principal assets are its
                                 nonproducing oil, gas and mineral leases and
                                 royalty interests in the State of Florida. To
                                 date, Coastal Petroleum has made no commercial
                                 discoveries on the lands covered by these
                                 leases.

Our Operating History            o Although we have been in
                                 business for many years, we are still a
                                 development stage company because our
                                 exploration for oil, gas and minerals has not
                                 yielded any significant revenues or reserves.
                                 We incurred a loss of $1,778,000 for the nine
                                 months ended September 30, 2001, a loss of
                                 $1,386,000 for the year 2000, a loss of
                                 $1,105,000 for the year 1999 and a loss of
                                 $1,155,000 for the year 1998. We had an
                                 accumulated deficit of $30,525,000 at September
                                 30, 2001. You should also see Note 10 of our
                                 financial statements regarding the uncertainty
                                 as to our ability to continue as a going
                                 concern.

The Offering                     o            shares of our common stock, par
                                   ---------- value $.12 per share.

Subscription Privilege           o Each shareholder will be entitled
                                 to purchase _ shares for every ___ shares of
                                 common stock held on the record date at a price
                                 of $ per share.

Over subscription                o Each shareholder who purchases the entire
                                 guaranteed allotment of shares will be
                                 permitted to Privilege subscribe pro rata for
                                 additional shares not purchased by other
                                 shareholders prior to the expiration date. The
                                 number of shares available for purchase by each
                                 individual shareholder pursuant to the over
                                 subscription privilege will be limited to the
                                 aggregate number of shares available after
                                 completion of all shareholders' basic
                                 subscription purchases and will be subject to
                                 the allocation rules described at page 41 under
                                 the heading "Terms of the Offering - How the
                                 Over-Subscription Privilege Operates."

                                 o If you wish to purchase shares, you should
                                 complete the subscription card and deliver it,
                                 accompanied by full payment of the subscription
                                 price, prior to the expiration date to our
                                 subscription agent.

Our Subscription Agent           o American Stock Transfer & Trust Co.,
                                 59 Maiden Lane, New York, NY 10007, Telephone:
                                 (800)937-5449.

Common Stock Outstanding         o We had 43,468,329 shares of common stock
                                 outstanding at September 30, 2001.  If all
                                 shares offered are sold, there will be shares
                                 outstanding.

Dividends                        o We have never declared or paid dividends on
                                 our common stock and do not anticipate
                                 declaring or paying any dividends in the
                                 foreseeable future. We plan to retain any
                                 future earnings to reduce our accumulated
                                 deficit of $30,525,000 at September 30, 2001
                                 and to finance our operations.

Use of Proceeds                  o The proceeds of the offering will be used for
                                 general corporate purposes, including working
                                 capital and to continue the litigation against
                                 the State of Florida.

Litigation                       o Coastal Petroleum is currently involved in
                                 litigation with the State of Florida with
                                 regard to whether the State's offshore drilling
                                 policy and its denial of Coastal Petroleum's
                                 application for an oil and gas exploration
                                 drilling permit constitute a taking of Coastal
                                 Petroleum's property for which the State must
                                 compensate Coastal Petroleum. We are also
                                 involved in litigation with the State of
                                 Florida seeking compensation for confiscation
                                 of certain royalty interest acreage off the
                                 Florida coast.  See "Legal Proceedings" at
                                 page 23.
SUMMARY FINANCIAL DATA

The following summary financial data for the three years in the period ended
December 31, 2000 are derived from the audited consolidated financial statements
of Coastal Caribbean Oils & Minerals, Ltd. The data should be read in
conjunction with the consolidated financial statements, related notes and other
financial information included in this prospectus. The summary financial data
for the years ended December 31, 1997 and 1996 have been derived from the
consolidated financial statements which are not included in this prospectus. The
information for the nine month periods ended September 30, 2001 and 2000 is
unaudited but includes all adjustments which Coastal Caribbean considers
necessary for a fair presentation of the results of operations for those
periods.
Nine months ended                                Years ended December 31,
                                        September 30,                                   ------------------------
                                        -------------
                                      2001          2000         2000      1999           1998            1997          1996
                                      ----          ----         ----      ----           ----            ----          ----
                                      ($)            ($)          ($)       ($)            ($)            ($)            ($)
Net loss                            (1,778,000)  (1,005,000)  (1,386,000)  (1,105,000)   (1,155,000)   (1,611,000)    (1,148,000)
                                    ===========  ===========  ===========  ===========   ===========    ===========    ===========

Net loss per share
(Basic and Diluted)                       (.04)        (.03)        (.03)        (.03)         (.03)         (.04)          (.03)
                                          =====        =====        =====        =====         =====         =====          =====

Common stock shares outstanding     43,468,000   40,056,000   43,468,000   40,056,000    40,056,000    40,056,000     37,487,000
                                    ==========   ==========   ==========   ==========    ==========    ==========     ==========

 Cash and cash equivalents and
    marketable securities            1,204,000      189,000    2,959,000    1,042,000     2,181,000     3,749,000      5,789,000
                                      ========       =======   =========    =========     =========    ==========     ==========

Unproved oil, gas and mineral        4,865,000    4,814,000    4,808,000    4,760,000     4,736,000     4,395,000      3,944,000
    properties                       =========    =========    =========    =========     =========    ==========     ==========

Total assets                         6,468,000    5,575,000    8,160,000    6,207,000     7,311,000     8,462,000     10,021,000
                                     =========    =========    =========    =========     =========    ==========     ==========

Shareholders' equity:
  Common stock                       5,216,000    4,807,000    5,216,000    4,807,000     4,807,000     4,807,000      4,805,000
  Capital in excess of par value    31,497,000   28,768,000   31,498,000   28,693,000    28,693,000    28,693,000     28,443,000
  Deficit accumulated during
    the development stage          (30,525,000)  (28,367,000) (28,747,000) (27,362,000)  (26,256,000)  (25,102,000)   (23,490,000)
                                  ------------  ------------ ------------ ------------  ------------  ------------   ------------
Total shareholders' equity           6,188,000    5,208,000    7,967,000    6,138,000     7,244,000     8,398,000      9,758,000
                                ==============  ===========  ============   =========   ============  ============   ============
RISK FACTORS

An investment in our common stock involves a high degree of risk. You should
carefully consider the following risk factors and other information in this
prospectus and the documents we incorporate by reference in evaluating our
company before you purchase any shares of our common stock. If any of the
following risks actually occur, our business, financial condition or results of
operations could be materially adversely affected. In this case, the trading
price of the common stock could decline and you may lose all or part of your
investment.

RISKS RELATED TO OUR BUSINESS AND THE LITIGATION

         We have a history of losses and anticipate further losses, which could
         cause us to discontinue our business.

         Our business has never had substantial revenues and has operated at a
loss in each year since our inception in 1953. We recorded a loss of $1,778,000
for the nine months ended September 30, 2001, a loss of $1,386,000 for the year
2000, a loss of $1,105,000 for the year 1999 and a loss of $1,155,000 in the
year 1998. If we continue to sustain losses and are unable to achieve
profitability, we may not be able to continue our business and may have to
curtail, suspend or cease operations. You should also see Note 10 to our
financial statements regarding the uncertainty as to our ability to continue as
a going concern.

         During the three years ended December 31, 2000, we spent approximately
$1.6 million on expenses incurred in the lawsuits against the State of Florida
relating to drilling permits and royalty interests. During the nine months ended
September 30, 2001, the Company spent approximately $1,237,000 on legal
expenses. If we continue to incur significant expenses and are unable to raise
additional funds to meet these expenses, we may have to cease or suspend our
lawsuits and/or cease operations entirely.

         In the unlikely event that we were to receive drilling permits related
to the St. George Island prospect or other exploratory wells, we would be
required to incur a significant amount of operating expenditures to commence
drilling operations and would need to generate significant revenues to achieve
profitability. We cannot assure you that we will be able to achieve or sustain
revenues, profitability or positive cash flow or that profitability, if
achieved, will be sustained.

         Without additional financing, we only have enough liquid assets on hand
         to continue to operate the Company for part of the year 2002.

         We believe that our funds on hand will be sufficient to permit us to
continue to operate through the second quarter of 2002 and to pay the expenses
related to this offering which are estimated to be approximately $250,000. After
that time, we may have to suspend or cease operations unless and until we can
secure additional financing. Effective January 1, 2002, our directors, officers
and legal counsel have agreed to defer the payment of 50% of their salaries and
fees until our financial position improves. We may seek to raise additional
funds through the issuance of debt or equity securities to investors other than
our shareholders. We currently do not have any commitments for additional
financing. We cannot be certain that additional financing will be available in
the future on acceptable terms or at all.

         If ultimately the courts rule that the State of Florida may deny us a
         permit and not compensate us for the taking of our property, we may be
         unable to continue our business.

         In the event that the courts determine that the State of Florida is
entitled to deny Coastal Petroleum a permit without compensation, it is likely
that we would be unable to continue our business and that shareholders would
suffer a complete loss of their investment.

         We may be unable to raise the additional financing needed to cover the
         substantial litigation costs of proving our properties have been taken
         and their value.

         Coastal Petroleum has filed a claim with the Florida Circuit Court that
its property has been taken by the State of Florida, and that Coastal Petroleum
is owed compensation by the State of Florida. We will need to secure additional
financing to cover the costs of this litigation, which we estimate will be
substantial. If we are unable to secure the additional financing adequate to
fund the costs of such litigation for a lengthy period of time, we might not be
able to conclude the litigation and might have to cease the lawsuits against the
State of Florida without any meaningful recovery.

         The State of Florida has far greater resources than we do to prosecute
the litigation.

         The State of Florida utilizes lawyers from the Florida Attorney
General's Office, the Department of Environmental Protection and at least two
private law firms to represent its interests in the litigation. In view of the
magnitude of Coastal Petroleum's claim, we expect that the State will attempt to
conduct the litigation in a way intended to make the litigation very costly to
us. In the event that our funds are exhausted before the conclusion of the
litigation, we may be unable to conclude the litigation and might be required to
cease business which could result in the complete loss of your investment.

         If the amount of money we recover from the State of Florida is
         inadequate to cover our costs, we may suffer additional losses.

         Coastal Petroleum's lawsuits against the State of Florida involve
highly specialized technical engineering and legal judgments. Any recovery that
Coastal Petroleum may receive as a result of a court judgment against the State
of Florida may be insufficient to cover the costs of prosecuting the claims at
trial. If this occurs, we may be forced to cease operations, the value of your
investment in our common stock could decline significantly, and you may realize
a total loss of your investment.

RISKS RELATED TO OUR INDUSTRY

         The State of Florida has stated that its policy is not to permit oil
         and gas drilling offshore Florida and the State has denied Coastal
         Petroleum a permit with respect to its St. George's Island prospect.
         Consequently, we do not believe that the State of Florida will grant
         drilling permits to Coastal Petroleum with respect to its leases. In
         the unlikely event that the State ever does grant Coastal Petroleum a
         drilling permit, Coastal Petroleum would have to contend with other
         risks.

After obtaining a state drilling permit, Coastal Petroleum would have to do the
following:

        o obtain a federal drilling permit;

        o finance drilling of the well (including the cost of the
          recommended surety), which is currently estimated to cost
          approximately $5.5 million; and

        o begin drilling the well within one year of the date the state permit
          is issued.

         We cannot assure you that we would be able to successfully obtain the
necessary federal permits or that we would be able to finance and commence
drilling operations in a timely manner.

         If we fail to discover and develop sufficient oil and gas reserves, we
would be unable to generate sufficient revenues to cover our costs and might
have to curtail, suspend or cease our business operations.

         Drilling activities involve numerous risks, including the risk that no
commercially productive natural gas or oil reservoirs will be discovered. The
cost of drilling, completing and operating wells is often uncertain, and
drilling operations may be curtailed, delayed or canceled as a result of adverse
conditions beyond our control. Poor results from our exploration and drilling
activities could prevent us from developing sufficient oil and gas reserves at a
commercially acceptable cost.

         Compliance with environmental and other governmental regulations could
be costly.

         Our operations and right to obtain interests in and hold properties or
to conduct our business might be affected to an unpredictable extent by
limitations imposed by the laws and regulations which are now in effect or which
might be adopted by the jurisdictions in which we carry on our business. We
cannot predict the nature of any further legislation or regulation that might
ultimately be adopted or its effects upon our operations.

         Further measures that have been or might be imposed include increased
bond requirements, conservation, proration, curtailment, cessation or other
forms of limiting or controlling production of hydrocarbons or minerals, as well
as price controls or rationing or other similar restrictions. In particular,
environmental control and energy conservation laws and regulations adopted by
federal, state and local authorities may have to be complied with by
leaseholders such as Coastal Petroleum.

         We face strong competition from larger oil and gas companies that may
impair our ability to carry on operations.

         If we receive the necessary state and federal permits to conduct
operations, we will operate in the highly competitive areas of oil and gas
exploration, development and production. We might not be able to compete with,
or enter into cooperative relationships with, our potential competitors, which
include major integrated oil companies, substantial independent energy
companies, affiliates of major interstate and intrastate pipelines and national
and local gas gatherers. If we were unable to establish and maintain
competitiveness, our business would be threatened.

         Many of our competitors possess greater financial, technical and other
resources than we do. Factors which affect our ability to successfully compete
in the marketplace include:

        o the financial resources of our competitors;

        o the availability of alternate fuel sources; and

        o the costs related to the extraction and transportation of oil and gas.

RISKS RELATED TO THE OFFERING

         The price of our common stock is volatile, which could hinder your
         ability to sell your stock and avoid a loss on your investment.

         Our common stock has been quoted and traded in the over-the-counter
market on the "Electronic Bulletin Board" of the National Association of
Securities Dealers, Inc. under the symbol COCBF.OB and on the Boston Stock
Exchange under the symbol CCO. The market price of our common stock has
fluctuated in the past and may continue to be volatile in the future. As a
result of this volatility, you may find it more difficult to sell our stock in a
declining market and avoid a loss on your investment. This volatility is a
result of a variety of factors, including our current and anticipated results of
operations, and the anticipated outcome of our litigation with the State of
Florida.

         If you do not exercise all of your subscription rights, you may suffer
         significant dilution of your percentage ownership of our common stock.

         This rights offering is designed to enable us to raise capital while
allowing all shareholders on the record date to maintain their relative
proportionate voting and economic interests. To the extent that you do not
exercise your subscription rights and other shareholders in the rights offering
purchase shares, your proportionate voting interest will be reduced, and the
percentage that your original shares represent of our expanded equity after
exercise of the subscription rights will be disproportionately diluted. For
example, if you own 100,000 shares of our common stock before the rights
offering, or __% of our equity, and you exercise none of your subscription
rights while all other subscription rights are exercised by other shareholders
through their basic and over-subscription privileges, then your percentage
ownership will be reduced to ____%.

         If you exercise your rights, you may be unable to sell any shares you
         purchase at a profit and your ability to sell may be delayed by the
         time required to deliver the stock certificates.

         The public trading market price of our common stock may decline after
you elect to exercise your subscription rights. If that occurs, you will have
committed to buy shares of common stock at a price above the prevailing market
price and you will have an immediate unrealized loss. Moreover, we cannot assure
you that following the exercise of subscription rights you will be able to sell
your shares of common stock at a price equal to or greater than the subscription
price. Until shares are delivered upon expiration of the rights offering, you
may not be able to sell the shares of our common stock that you purchase in the
rights offering. Certificates representing shares of our common stock purchased
will be delivered as soon as practicable after expiration of the rights
offering. We will not pay you interest on funds delivered to the Subscription
Agent pursuant to the exercise of rights.

         Purchasers in this offering will experience immediate net tangible
         asset dilution and may experience further dilution from the future
         exercise of stock options or from future stock offerings.

         We expect that the offering price of our common stock in this offering
will be substantially higher than the net tangible book value per share of our
outstanding common stock. Accordingly, if the offering is successful, purchasers
of common stock in the offering will experience immediate and substantial
dilution of approximately $. in net tangible book value per share, or
approximately % of the assumed public offering price of $ per share. Investors
will incur additional dilution upon the exercise of outstanding stock options
and warrants. See "Dilution" at page 13 for further discussion of the dilution
that new investors will incur.

         Finally, if we raise additional funds by issuing equity or convertible
debt securities, your percentage ownership may be further diluted. Any
securities issued could have rights, preferences and privileges senior to our
common stock.

         Our Bye-laws contain provisions which may limit a shareholder's efforts
         to influence our policies and prevent or delay a change in control of
         our Company.

         Bye-Law 1 provides that any matter to be voted on at any meeting of
shareholders must be approved not only by a simple majority of the shares voted
at such meeting, but also by a majority of the shareholders present in person or
by proxy and entitled to vote at the meeting. This provision may have the effect
of making it more difficult to take corporate action than customary "one share
one vote" provisions, because it may not be possible to obtain the necessary
majority of both votes. As a consequence, Bye-Law 1 may make it more difficult
that a takeover of the company will be consummated, which could prevent the
company's shareholders from receiving a premium for their shares. In addition,
an owner of a substantial number of shares of our common stock may be unable to
influence our policies and operations through the shareholder voting process
(e.g., to elect directors).

         Our Bye-Laws also require the approval of 75% of the voting
shareholders and of the voting shares for the consummation of any business
combination (such as a merger, amalgamation or acquisition proposal) involving
our company. This higher vote requirement may deter business combination
proposals which shareholders may consider favorable.
You may face obstacles to bringing suit in Bermuda against our officers
and directors.

         We are a Bermuda company and certain of our directors and officers are
residents of Bermuda and are not citizens of the United States. As a result, it
may be difficult for investors to effect service of process on us or on these
directors and officers within the United States or to enforce against these
directors and officers judgments of U. S. courts predicated on the civil
liabilities under the federal securities laws. If investors are unable to bring
such suits, they may be unable to recover a loss on their investment resulting
from any violations of the federal securities laws.

         There is no precedent for, and therefore no assurance  that, the courts
in Bermuda  would  enforce  civil  liabilities,  whether in original  actions in
Bermuda or in the form of final  judgments  of U. S. courts,  arising  under the
federal  securities  laws against us or the persons  signing  this  registration
statement.  In  addition,  there is no treaty in  effect  between  the U. S. and
Bermuda providing for the enforcement of civil liabilities and there are grounds
upon  which  Bermuda  Courts  may not  enforce  judgments  of U. S.  courts.  In
addition,  some  remedies  available  under  the  laws of U.  S.  jurisdictions,
including some remedies  available  under the United States  federal  securities
laws, may not be allowed in Bermuda  courts as contrary to that nation's  public
policy.

         Our dividend policy could depress our stock price.

         We have never declared or paid dividends on our common stock and do not
anticipate declaring or paying any dividends in the foreseeable future. We plan
to retain any future earnings to reduce our accumulated deficit of $30,525,000
at September 30, 2001 and to finance our operations. As a result, our dividend
policy could depress the market price for our common stock.

         We are a Bermuda corporation. Bermuda currently imposes no taxes on
corporate income or capital gains realized outside of Bermuda. However, any
dividends we receive from Coastal Petroleum are subject to a 30% United States
withholding tax. As a result, our investors may realize a smaller rate of return
on their investment in our common stock.
CAUTIONARY STATEMENT ABOUT FORWARD-LOOKING STATEMENTS

         In this prospectus and the documents that we incorporate by reference,
we make statements that relate to our future plans, objectives, expectations and
intentions that involve risks and uncertainties. We have based these statements
on our current expectations and projections about future events. These
statements may be identified by the use of words such as "expect," "anticipate,"
"intend," "plan," "believe" and "estimate" and similar expressions. Any
statements that refer to expectations, projections or other characterizations of
future events or circumstances are forward-looking statements within the meaning
of the Private Securities Litigation Reform Act of 1995, and are subject to the
safe harbor created by that Act.

         Forward-looking statements necessarily involve risks and uncertainties.
Our actual results could differ materially from those discussed in, or implied
by, these forward-looking statements. Factors that could contribute to such
differences include, but are not limited to, those discussed in the "Risk
Factors" section at page 5 and elsewhere in this prospectus. The factors set
forth in the Risk Factors section and other cautionary statements made in this
prospectus should be read and understood as being applicable to all related
forward-looking statements wherever they appear in this prospectus.

         All subsequent written and oral forward-looking statements attributable
to us are expressly qualified in their entirety by the cautionary statements.
You are cautioned not to place undue reliance on these forward-looking
statements, which speak only as of their dates. We undertake no obligation to
publicly update or revise any forward-looking statements, whether as a result of
new information, future events or otherwise.

                                 USE OF PROCEEDS

         The proceeds will be used for general corporate purposes, including
working capital and continuation of the Florida litigation. See "Legal
Proceedings" and "Our Business and Properties." Assuming all of the shares
offered by this prospectus are sold at a price of $ per share, we will realize
net proceeds (after estimated expenses of the offering of $250,000) of
approximately $___________. The net proceeds of the offering would be added to
our general funds and would not be expressly designated for any particular
purpose. However, we currently expect that the net proceeds would be used for
the following purposes:

 Litigation (including legal fees and experts' costs)     $
                                                            -------------------

 Administrative, accounting, legal and other expenses     $ -------------------

         Litigation expenses may vary depending on the progress of the cases in
which we are involved. If the net proceeds are substantially less than the
estimated amounts, and if we and Coastal Petroleum are unable to obtain
additional funds, Coastal Petroleum may be unable to pursue the Florida
litigation. If the gross proceeds of the offering do not exceed the costs of
this offering, we would attempt to pay the excess costs over gross proceeds from
our current assets.

         Coastal Caribbean has been making loans to Coastal Petroleum, its
majority owned subsidiary, in order for Coastal Petroleum to continue the
Florida Litigation and pay its operating expenses. At September 30, 2001, the
amount of these loans totaled $20,416,303 and the accumulated interest on the
loans totaled $5,368,055 for a total indebtedness of $25,784,358.

                                 CAPITALIZATION

         The following table shows our cash and cash equivalents, investments
and total capitalization:

        o on an actual basis as of September 30, 2001; and

        o as adjusted to reflect the sale of shares of common stock offered by
          this prospectus at an assumed public offering price of $ per share,
          after deducting the estimated offering expenses of approximately
          $250,000 payable by us.

         You should read this information together with our financial statements
and the notes relating to those statements and "Management's Discussion and
Analysis of Financial Condition and Results of Operations" and "Use of Proceeds"
appearing elsewhere in this prospectus.
As of September 30, 2001

                                                           Actual               As adjusted
Cash and cash equivalents                                $1,203,830             $
                                                         ==========             ==============
Marketable Securities                                         -                       -
Short-Term Debt                                               -                       -
Long-Term Debt                                                -                       -
Minority Interests                                            -                       -
Shareholders Equity:
 Common stock, par value $.12 per   share:
   250,000,000 share authorized
   43,468,329 shares outstanding
   49,988,578 shares outstanding as adjusted
 Common stock                                          $  5,216,199
 Capital in excess of par value                          31,497,362
Deficit accumulated during the development stage        (30,525,369)
                                                        ------------
Total Shareholders Equity                                $ 6,188,192            $
                                                         ===========            ===============
The number of shares as adjusted for this offering excludes:

        o 925,000 shares which may be issued upon the exercise of outstanding
          options held by our directors and officers as of September 30, 2001;
          and
        o 7,800,000 shares which may be issued in the event that Lykes Minerals
          Corp. exercises its rights to exchange Coastal Petroleum shares for
          shares of our common stock.

                                    DILUTION

         You will experience immediate and substantial dilution in net tangible
book value of your common stock as a result of this offering. The following
table illustrates the per share dilution to purchasers of shares giving effect
to the sale of all of the shares in the offering at a price of $ per share:

Offering price attributable to each share of common stock                $_____
Net tangible book value before the offering (1)                 $.____
Increase attributable to payments for shares of common stock     .____
Pro forma net tangible book value per share after the offering           ._____
Dilution to purchasers of the shares (2)(3)                              $
                                                                         ======

(1) We calculate net tangible book value per share by dividing the number of
shares of common stock outstanding into the tangible net worth of Coastal
Caribbean (tangible assets less liabilities and minority interest) outstanding
at September 30, 2001.

(2) We calculate dilution to new investors by subtracting net tangible book
value per share of common stock after the offering from the per share price
attributable to a share of common stock purchased.

(3) This estimate of dilution does not reflect the results of operations since
September 30, 2001 nor does it give any effect to the outstanding options to
purchase shares of our common stock. There are 7,800,000 shares of common stock
reserved which may be issued in exchange for 78 Coastal Petroleum shares. There
are also 980,000 shares reserved for stock options granted to our officers,
directors and consultants. Of these options, 925,000 were exercisable at
September 30, 2001. If the options to acquire the 8,725,000 shares had been
exercised at September 30, 2001, the dilution to purchasers would be $. per
share. The dilution of the 7,800,000 shares does not reflect any value for the
increase in ownership of Coastal Petroleum from approximately 59% to 86%.

                MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                       CONDITION AND RESULTS OF OPERATIONS

Overview

         The following is a discussion of certain factors affecting our results
for the nine months ended September 30, 2001 and 2000 and for the three fiscal
years ending December 31, 2000 and our liquidity and capital resources. This
discussion should be read along with our consolidated financial statements and
their notes, which can be found at page F-1 of this prospectus.
Liquidity and Capital Resources

         Short Term Liquidity

         At September 30, 2001, Coastal Caribbean had approximately $1.2 million
of cash and cash equivalents available and this amount should be sufficient to
fund the Company's operations through the second quarter of 2002. These funds
are expected to be used for general corporate purposes, including any required
exploration and development and to continue the litigation against the State of
Florida. Effective January 1, 2002,  our directors, officers and legal
counsel have agreed to defer the payment of 50% of their salaries and fees until
our financial position improves.

         Coastal Caribbean has a limited amount of working capital, has incurred
recurring losses and has an accumulated deficit. Furthermore, on January 16,
2001, Coastal Petroleum filed a complaint in the Leon County Circuit Court in
Florida against the State of Florida seeking compensation for the State's taking
of its property rights to explore for oil and gas within its Lease 224-A. The
cost of that litigation has been substantial and will require the Company to
obtain additional capital. There can be no assurances that funds on hand or
realized or realizable on the sales of the Company's shares will be sufficient
to allow the Company to survive until such litigation is concluded.

         Long Term Liquidity

         On January 16, 2001, Coastal Petroleum Company filed a complaint in the
Leon County Circuit Court, Florida against the State of Florida seeking
compensation for the State's taking of its property rights to explore for oil
and gas within its state Lease 224-A. The Company expects that the cost of the
litigation will be substantial.

         Since the Company's inception, it has been financing its operations
primarily from the sale of its common stock and sales of shares of Coastal
Petroleum. Although the Company has successfully financed its operations through
such offerings in the past, there is no assurance that the proposed offering
will be successful. If the offering is successful and net proceeds of $________
are realized, then the Company expects that approximately $_________ would be
used for litigation and $_______ would be used for administrative, accounting,
legal and other expenses.

Results of Operations

         The Company, a development stage enterprise, has never had substantial
revenues and has operated at a loss each year since its inception in 1953. The
Company has been involved in litigation since 1968 and its total Florida
litigation-related expenses have aggregated approximately $1.6 million during
the three years ended December 31, 2000.
Nine months ended September 30, 2001 vs. September 30, 2000
-----------------------------------------------------------

         The Company incurred a loss of $1,778,000 for the 2001 period, compared
to a loss of $1,005,000 for the comparable 2000 period.

         Interest income and other income increased 217% from $23,000 in 2000 to
$73,000 in 2001 because of the funds realized and invested from the October 2000
sale of common stock to the Company's shareholders.

         Legal fees and costs increased 216% to $1,237,000 for 2001 from
$392,000 in the prior period. Legal fees and costs increased in the 2001 period
in connection with Coastal Petroleum Company's lawsuit against the State of
Florida seeking compensation for the State's taking of its property rights to
explore for oil and gas within its state Lease 224-A. The Company expects that
the cost of the litigation will be substantial.

         Administrative expenses decreased 3% in 2001 to $403,000 from $415,000
in the 2000 period.

         Salaries did not change during the periods and remained at $114,000 in
2001.

         Shareholder communications costs did not change during the periods and
remained at $98,000 in 2001.

         Exploration costs decreased from $8,400 in the 2000 period to $500 in
2001.

2000 vs. 1999
-------------

         The Company recorded a loss of $1,386,000 for 2000, compared to a loss
of $1,105,000 in 1999.

         Interest income and other income increased 13% to $63,000 in 2000 from
$55,000 in 1999 because more funds were available for investment during 2000
after the Company's sale of common stock was completed in October 2000.

         Legal fees and costs increased 56% in 2000 to $634,000 compared to
$405,000 in 1999 because in 2000 the Company prepared its complaint to file in
the Florida Circuit Court to claim that the Company's Lease 224-A had been taken
by the State of Florida. The Company also recorded a noncash charge to legal
expense in the amount of $75,000 in connection with the issuance of a stock
option grant in 2000.

         Administrative expenses increased 13% during 2000 to $535,000 compared
to $474,000 in 1999. During December 1999, the Company increased its Directors
and Officers liability insurance coverage from $6.2 million to $12.2 million
which increased insurance costs.

         Salaries decreased 4% to $152,000 during 2000 compared to $158,000
during 1999. An employee who has not been replaced left the Company during 1999.

         Shareholder communications costs increased 5% from $103,000 in 1999 to
$108,000 in 2000 because of the cost of various listing fees.

         Exploration costs decreased 6% from $21,000 in 1999 to $20,000 in 2000.
These miscellaneous exploration expenses do not include the exploration
expenditures totaling $48,000 that were capitalized in 2000 ($24,000 in 1999).

1999 vs. 1998
-------------

         The Company recorded a loss of $1,105,000 for 1999, compared to a loss
of $1,155,000 in 1998.

         Interest income and other income decreased 67% to $55,000 in 1999 from
$167,000 in 1998 because less funds were available for investment during 1999.

         Legal fees and costs decreased 19% in 1999 to $405,000 compared to
$502,000 in the prior year. In 1998, the Company had been involved in various
appeals and hearings in connection with the opposition by the State of Florida
and others to the issuance of a drilling permit and the taking claim regarding
its royalty interest acreage. During 1999, the level of legal activity
decreased.

         Administrative expenses decreased 4% in 1999 to $474,000 compared to
$495,000 in 1998.

         Salaries decreased 2% to $158,000 during 1999 compared to $161,000
during 1998.

         Shareholder communications costs decreased 23% from $133,000 in 1998 to
$103,000 in 1999. The decrease in costs during 1999 resulted from a reduction in
mailing costs to the Company's shareholders.

         Exploration costs decreased from $31,000 in 1998 to $21,000 in 1999 in
connection with the Company's program to identify potential drilling prospects.
These miscellaneous exploration expenses do not include the exploration
expenditures totaling $24,000 that were capitalized in 1999 ($340,000 in 1998).

                             MARKET RISK DISCLOSURES

         The Company does not have any significant exposure to market risk as
the only market risk sensitive instruments are its investments in marketable
securities which are classified as cash and cash equivalents. At September 30,
2001, the carrying value of such investments was approximately $1.09 million the
fair value was $1.09 million and the face value was $1.1 million.
OUR BUSINESS AND PROPERTIES
General

         Coastal Caribbean is a company organized under the laws of Bermuda,
with its principal executive offices at Clarendon House, Church Street,
Hamilton, Bermuda (telephone number: 441-295-1422). Shares of our common stock
are listed on the Boston Stock Exchange and also are traded over-the-counter on
the "Electronic Bulletin Board" marketplace of the National Association of
Securities Dealers, Inc. We rely heavily on consultants for legal, accounting
and administrative services. Our principal asset is our 59.25% owned subsidiary,
Coastal Petroleum, a Florida corporation.

Operations

         Coastal Petroleum is the lessee under leases with the State of Florida
relating to the exploration for and production of oil, gas and minerals on
approximately 3,700,000 acres of submerged lands along the Gulf Coast and under
certain inland lakes and rivers. The leases provide for a working interest in
approximately 1,250,000 acres and a royalty interest in approximately 2,450,000
acres covered by the leases. Coastal Petroleum has made no commercial
discoveries on its leaseholds.

         Coastal Petroleum is currently involved in litigation with the State of
Florida with regard to whether the State's policy against offshore drilling and
denial of Coastal Petroleum's application for an oil and gas exploration
drilling permit constitutes a taking of Coastal Petroleum's property for which
the State must compensate Coastal Petroleum. In addition, Coastal Caribbean is a
party to one additional action in which Coastal Caribbean claims that certain of
its royalty interests have been confiscated by the State. During 2001, the
Company actively pursued the Florida Litigation. See "Legal Proceedings".

         In 1990, the State of Florida enacted legislation that prohibits
drilling or exploration for oil or gas on Florida's offshore acreage. The law
does not apply to areas where Coastal Petroleum is entitled to conduct
exploration. However, in those areas where Coastal Petroleum has only a royalty
interest, the law effectively prohibits production of oil and gas, rendering it
impossible for Coastal Petroleum to collect royalties from those areas.

Business

         Coastal Caribbean was organized in Bermuda on February 14, 1962. We are
the  successor  to  Coastal  Caribbean  Oils,  Inc.,  a  Panamanian  corporation
organized on January 31, 1953 to be the holding company for Coastal Petroleum.

         We own 59.25% of Coastal Petroleum. We are considered to be a
development stage company since our exploration for oil, gas and minerals has
not yielded any significant revenues. Coastal Petroleum's principal assets are
its nonproducing oil, gas and mineral leases and royalty interests. Coastal
Petroleum believes that its leases have been confiscated by the State of
Florida. Coastal Petroleum also believes the leases or the potential recovery
from the State of Florida are properly considered to be assets.
Properties

         Coastal Petroleum holds certain working interests in nonproducing oil,
gas and mineral leases covering approximately 1,250,000 acres, and a royalty
interest in approximately 2,450,000 acres, in and offshore the State of Florida.
No commercial oil or gas discoveries have been made on the properties covered by
these leases and Coastal Petroleum has no proved reserves of oil or gas and has
had no significant production. At June 3, 2001, the amount of unproved oil, gas
and mineral properties totaled $4.8 million, which costs the Company expects to
recover.

         In 1941, Arnold Oil Explorations, Inc., renamed Coastal Petroleum
Company in 1947, entered into a contract with the Trustees of the Internal
Improvement Trust Fund of the State of Florida, in whom title to publicly owned
lands in the State of Florida, including bottoms of salt and fresh waters, is
irrevocably vested, for the exploration of oil, gas and minerals on such lands.
The Trustees and Coastal Petroleum entered into three leases in late 1944 and
early 1946. The acreage covered by these leases is located for the most part
along offshore areas on the Gulf Coast of Florida and in submerged lands under
certain bays, inlets, riverbeds and lakes, of which Lake Okeechobee is the
largest.

         In 1968, Coastal Petroleum sued the Secretary of the Army of the United
States in a permitting dispute. In 1969, as part of that litigation, the
Trustees claimed that the leases were invalid and had been forfeited. Coastal
Petroleum and the Trustees settled their disagreement on January 6, 1976.

         Under the terms of the 1976 settlement agreement, the two leases (224-A
and 224-B) bordering the Gulf Coast were divided into three areas, each running
the entire length of the coastline from Apalachicola Bay to the Naples area:

o        The inner area, including rivers, bays, and harbors, extends seaward
         from the Florida shoreline a distance of 4.36 statute miles (5,280
         feet per statute mile) into the Gulf, covers approximately 2.25
         million acres, and is subject to a royalty interest payable to Coastal
         Petroleum. This interest is a 6.25% royalty on the wellhead value of
         all oil and gas, 25 cents per long ton on sulphur, receivable in cash
         or in kind at Coastal Petroleum's option, and a 5% royalty on
         production or the market value of other minerals.

o        The middle area, which was three statute miles wide and contained more
         than 800,000 acres, was released by Coastal Petroleum to the Trustees,
         and Coastal Petroleum has no further interest in the area.

o        Coastal Petroleum presently owns a 100% working interest in the outside
         area, which extends seaward an additional three statute miles and
         borders federal offshore acreage. This area, exceeding 800,000 acres,
         remains subject to royalties payable to the State of Florida of 12.50%
         on oil and gas, $.50 per long ton of sulphur and 10% on other minerals.
         The Florida legislature has enacted statutes designed to protect the
         Big Bend Seagrass Aquatic Preserve, an area covering approximately one
         quarter of Coastal Petroleum's working interest area. However, the
         legislation and legislative history recognize and preserve Coastal
         Petroleum's prior rights as granted by the leases.

         Coastal Petroleum retains a 100% working interest in 450,000 acre Lake
Okeechobee which is a part of Lease 248 and which is also subject to royalties
payable to the State of Florida of 12.50% on oil and gas, $.50 per long ton of
sulphur and 10% on other minerals. Under the settlement with the State of
Florida in 1976, Coastal Petroleum agreed not to conduct exploration, drilling
or mining operations on Lake Okeechobee without the prior approval of the State.
As to the balance of this lease, covering approximately 200,000 acres, Coastal
Petroleum retains royalty interests of 6.25% on oil, gas and sulphur and 5% on
other minerals.

         Under the 1976 settlement agreement with the Trustees, the three leases
have a term of 40 years beginning from January 6, 1976 and require the payment
of an annual rental of $59,247; if oil, gas or minerals are being produced in
economically sustainable quantities at January 6, 2016, these operations will be
allowed to continue until they become uneconomic. Further, the settlement
agreement provides that the drilling requirements shall be governed by Chapter
20680, Laws of Florida, Acts of 1941, and that all other drilling requirements
are waived. Under the 1941 Act, a lessee is required to drill at least one test
well on lands leased in each five year period under the term of the lease.
Coastal Petroleum believes it is current in fulfilling its drilling
requirements. Drilling requirements of Lease 224-A have been satisfied through
the five year obligation period ending August 2, 2004. The State of Florida has
refused Coastal Petroleum the right to drill on Lease 248 since August 10, 1986.
Drilling requirements of Lease 224-B have been satisfied through the five year
obligation period ended October 31, 2000. On July 21, 2000, Coastal Petroleum
filed applications for permits to drill a series of shallow test wells on Lease
224-B which were completed prior to October 31, 2000.

         The following charts reflect the acreage and annual rental obligations
resulting from the 1976 settlement agreement with the Trustees and the
approximate acreage under lease at September 30, 2001:

                      Working                  Royalty                 Annual
                     Interest                 Interest                 Rental
224-A and 224-B       800,000                2,250,000                $39,261
248                   450,000                  200,000                 19,986
                   ----------               ----------               --------
                    1,250,000                2,450,000                $59,247
                    =========                =========                =======
Acreage under lease at September 30, 2001
                            -------------------------------------------------------------------------------
                                          Gross Acres (*)                       Net Acres (**)
                                          ---------------                       -------------
                               Undeveloped             Developed           Undeveloped             Developed
Working Interest               1,250,000               -0-                 1,250,000               -0-
Royalty interest               2,450,000               -0-                   153,125               -0-
                               ---------               ---                 ---------               ---
  Total                        3,700,000               -0-                 1,403,125               -0-
                               =========               ===                 =========               ===
*        A gross acre is an acre in which a working interest is owned.
**       A net acre is when the sum of fractional ownership working interests in
         gross acres equals one. The number of net acres is the sum of the
         fractional working interests owned in gross acres expressed as whole
         numbers and fractions.

Employees

         We currently have only two employees. We rely heavily on consultants
for legal, accounting, geological and administrative services. We use
consultants because it is more cost effective than employing a larger full time
staff.
The following graphic presentation has been omitted, but the following is a
description of the omitted material:

       Map showing Coastal Petroleum's Lease Areas in the State of Florida
Disclosure Concerning Oil and Gas

Undeveloped Acreage

         The Company's undeveloped acreage as of September 30, 2001 was as
follows:

                                   Gross Acres                Net Acres
         Working Interest            1,250,000                 1,250,000
         Royalty Interest            2,450,000                   153,125
                                     ---------                  --------
         Total                       3,700,000                 1,403,125
                                     =========                 =========

Drilling Activity

         On July 21, 2000, Coastal Petroleum filed applications for permits to
drill a series of shallow test wells on Lease 224-B Coastal Petroleum which were
completed prior to October 31, 2000.

Royalties and Other Interests

         In addition to royalties payable to the State of Florida as set forth
above, Coastal Petroleum's leases are subject to several royalties and other
interests. The leases are presently subject to overriding royalties aggregating
1/16 as to oil, gas and sulphur and 13/600ths as to minerals other than oil, gas
and sulphur.

         We also have granted to certain officers, directors, counsel and
consultants of Coastal Petroleum and Coastal Caribbean the right to receive a
percentage of the net recoveries from the Florida Litigation. See "Legal
Proceedings" at page 23 and "Certain Business Relationships" at page 33.

Mineral Rights

         Coastal Petroleum's Leases 224-A, 224-B and 248 were determined by a
Florida State court in 1960 to cover not only oil, gas and sulphur, but all
other minerals. Subsequent litigation has held that these other minerals do not
embrace certain deposits of shell accumulated on water bottoms which had not yet
become mineral, and that Lake Hancock is not within the area covered by Lease
224-B. Under the 1976 settlement agreement with the State of Florida, Coastal
Petroleum retains a 5% royalty with respect to mineral production. However, it
cannot conduct mining operations in 450,000-acre Lake Okeechobee without the
prior approval of the State of Florida. Although Coastal Petroleum had conducted
limited mineral exploration activities on its leases, the courts during the
1980's limited its rights to mine minerals. Coastal Petroleum has no independent
knowledge of commercial deposits on its leases. Furthermore, Coastal Petroleum
does not anticipate that the State would allow the open pit mining and heavy
industrial activity that would be necessary to remove any minerals if they were
to be present, given the State's objection to a single bore hole for an
exploratory oil and gas well.

                                LEGAL PROCEEDINGS
Florida Litigation

         Coastal Petroleum has been involved in various lawsuits for many years.
Coastal Petroleum's current litigation now involves one basic claim: whether the
State's offshore drilling policy and its denial of a permit constitute a taking
of its property. In addition, Coastal Caribbean is a party to another action in
which Coastal Caribbean claims that certain of its royalty interests have been
confiscated by the State.

Lease Taking Case

         On January 16, 2001, Coastal Petroleum filed a complaint in the Leon
County Circuit Court, Florida against the State of Florida seeking compensation
for the State's taking of its property rights to explore for oil and gas within
its state Lease 224-A. The lease encompasses more than 400,000 acres off the
West coast of Florida in the Gulf of Mexico.

         Coastal Petroleum claims that the State of Florida has taken Lease
224-A by denying Coastal Petroleum a permit to drill an offshore exploration
well near St. George Island in the Gulf of Mexico. The history of the litigation
between Coastal Petroleum and the State of Florida relating to the denial of the
drilling permit is set forth under the caption "Drilling Permit Litigation."
Coastal Petroleum maintains that the State has effectively taken Coastal
Petroleum's lease by depriving Coastal Petroleum of all or substantially all of
the economically viable use of its constitutionally protected property.

         The State claims that there has been no taking of Coastal Petroleum's
property which justifies compensation. The State asserts several affirmative
defenses, including that:

         (a) Coastal Petroleum is barred from litigating  issues which it has
litigated in prior cases against the State and other parties;

         (b)  Coastal  Petroleum's  leases  are not  constitutionally  protected
property which can be the subject of an inverse  condemnation claim,  relying in
part on earlier litigation;

         (c) Coastal Petroleum's claim that its property has been taken is not
ripe for legal consideration because Coastal Petroleum has not applied to drill
on other locations on its leaseholds;

         (d) The statute of limitations bars any allegation by Coastal Petroleum
that an action taken by any state entity prior to January 16, 1997 constitutes a
taking of Coastal Petroleum's alleged property interest;

         (e) Coastal Petroleum has no right to drill for oil on Lease 224-A
which can be taken because it does not have the permit which it agreed to obtain
pursuant to the 1976 Memorandum of Settlement.

         On March 5, 2001, the State filed a Motion to Dismiss Coastal
Petroleum's complaint, which was denied by the Court on April 26, 2001. After
the Motion was denied, discovery, which had been suspended pending the outcome
of the Motion to Dismiss, resumed. Some depositions have now been taken,
documents have been exchanged and discovery is expected to continue until the
court mandated cutoff date of August 25, 2002.

         On November 27, 2001, the Leon County Circuit Court set a trial date of
September 30, 2002. The Court has set aside two weeks for the trial on the issue
of whether the State has taken Coastal Petroleum's lease. If the Court rules in
Coastal Petroleum's favor, there will then be a second trial before a jury to
determine the amount of compensation to be awarded. Both the decision of the
Court and any decision of a jury are subject to appeals by any of the parties to
the litigation. At the trial Coastal Petroleum expects to present expert
testimony to the effect that Coastal is entitled to compensation for the taking
of Lease 224-A in the amount of at least $1 billion.

Ancillary Matters to Lease Taking Case

         On February 13, 2001, certain holders of royalties pertaining to Lease
224-A filed a Motion to Intervene as Additional Plaintiffs. On April 24, 2001,
the Leon County Circuit trial judge granted certain royalty holders with
overriding royalties, which aggregate approximately 4% on State Lease 224-A, the
right to intervene on a limited basis in the takings lawsuit. On May 22, 2001,
the royalty holders appealed the Circuit Court's order granting them limited
intervention to the First District Court of Appeal, claiming the order denied
them the right to fully participate in the case until after final judgment and
that the court erroneously found that the royalty holders lack an ownership
interest in Coastal Petroleum's lease. On June 12, 2001, the Court of Appeal
ordered the royalty holders to show cause why the appeal should not be dismissed
for lack of jurisdiction. The royalty holders filed a response to the Court of
Appeal on June 21, 2001, Coastal Petroleum filed its reply on July 2, 2001 and
the State of Florida filed its reply on July 5, 2001. The Court of Appeal is
currently considering the matter.

         Counsel for the appealing royalty holders has advised Coastal Petroleum
that the royalty holders' position is that their interest is worth substantially
more than 4% of whatever judgment may be awarded to Coastal Petroleum in the
litigation and that they intend to make a claim against any recovery Coastal
Petroleum may obtain in the litigation. Coastal Petroleum has informed the
Circuit Court and counsel for the royalty holders that Coastal Petroleum is not
making any claim in the litigation on behalf of any interest the royalty holders
may have.

No Assurances

         There is no assurance that Coastal Petroleum will be successful on the
merits of its claims, which the State of Florida is vigorously defending. There
is also no assurance that Coastal Petroleum will receive a ruling that its Lease
224-A has been taken or that if compensation is awarded it will be awarded in
the amount sought by Coastal Petroleum.
Drilling Permit Litigation

         In 1992, Coastal Petroleum applied to the Florida Department of
Environmental Protection (the "DEP") for a permit to drill an exploratory oil
and gas well off Apalachicola, Florida. The proposed well would be located in an
area included within Lease 224-A. The DEP subsequently denied the application
for issuance of a drilling permit for various reasons and imposed a $1.9 billion
bond. Coastal Petroleum appealed the actions of the DEP to the Florida First
District Court of Appeal ("Court of Appeal"). After two decisions by the Court
of Appeal in favor of Coastal Petroleum, the Florida Supreme Court in July 1996
denied the DEP's petition to review an April 1996 Court of Appeal decision. The
Florida Supreme Court had also refused to review an earlier Court of Appeal
decision.

         On August 16, 1996, the DEP notified Coastal Petroleum that it was
prepared to issue the drilling permit subject to Coastal Petroleum publishing a
Notice of Intent to Issue ("Notice") the permit. The Notice allowed interested
parties to request administrative hearings on the permit.

         On May 28, 1997, the Oil and Gas Drilling Bill (SB550) was enacted in
Florida. The legislation requires that a surety be based on the projected
cleanup costs and possible natural resource damage associated with offshore
drilling as estimated by the DEP and as established by the Administration
Commission (the "Commission") which is comprised of the Governor of Florida and
the Cabinet. Previously, the required surety was satisfied by a payment of
$4,000 to the Mineral Trust Fund in the first year, with a maximum $30,000 per
year and a payment of $1,500 per well for each subsequent year. On September 9,
1997, the State of Florida set a new surety amount of $4.25 billion as a
precondition for the issuance of the drilling permit.

         On October 20, 1997, a public hearing on the permit application
convened and concluded on November 6, 1997. The hearing included the Company's
appeal of the $4.25 billion surety requirement. On April 8, 1998, a Florida
Administrative Law Judge recommended that Coastal Petroleum was entitled to a
drilling permit with the requirement of a $225 million surety. On May 13, 1998,
the Commission rejected the $225 million surety and remanded the proceedings to
the Administrative Law Judge with instructions to recalculate the surety amount.

         On May 22, 1998, the DEP denied the permit to Coastal Petroleum to
drill an offshore exploration well near St. George's Island. Coastal Petroleum
appealed both the denial of the permit by the DEP and the imposition of the
surety to the Court of Appeal.

         On October 6, 1999, the Court of Appeal ruled that the DEP has the
authority to deny Coastal Petroleum's drilling permit for its St. George Island
prospect, provided that Coastal Petroleum receives just compensation for what
has been taken. The State of Florida and certain Florida environmental groups
filed on November 1, 1999 a joint motion for clarification, rehearing, or
certification with respect to that decision, asking the Court of Appeal, among
other things, to clarify that the question of whether there has been a taking of
Coastal Petroleum's leases should be determined in the Circuit Court. On June
26, 2000, the Court of Appeal denied all of the State's motions and stated that
the issue of whether the denial of a permit constituted a "taking" was not
before the Court. The Court declined to rule on the merits of the taking issue
and stated that the issue was a matter for the Circuit Court. On January 16,
2001, Coastal Petroleum Company filed a complaint in the Leon County Circuit
Court, Florida against the State of Florida seeking compensation for the State's
taking of its property rights to explore for oil and gas within its state Lease
224-A. That complaint is described above under the caption Coastal Petroleum
Company, Plaintiffs re. State of Florida, Department of Environmental
Protection, and Board of Trustees of the Internal Improvement Fund, Defendants.
Lease Taking Case.

Other Permit Applications

         On February 25, 1997 Coastal Petroleum filed 12 additional applications
for drilling permits. Coastal Petroleum objected to certain requests for
additional data by the Florida DEP. On March 26, 1999, an administrative law
judge upheld the DEP's requirements. The First District Court of Appeal affirmed
the decision of the administrative law judge on February 29, 2000.

         In order to more fully permit the Apalachicola Reef Play, which
includes the St. George Island prospect, on October 29, 1998, Coastal Petroleum
filed four additional permit applications (1310-1313). The DEP also requested
additional data for these applications. Although these applications are still
pending, Coastal Petroleum does not believe the DEP will ever grant these
permits.

Coastal Caribbean Royalty Litigation

         The offshore areas covered by Coastal Petroleum's original leases
(prior to the 1976 Settlement Agreement) are subject to certain other royalty
interests held by third parties, including Coastal Caribbean. Several of those
third parties, including Coastal Caribbean, have instituted a separate lawsuit
against the State. That lawsuit claims that the royalty holders' interests have
been confiscated as a result of the State's actions discussed above and that
they are entitled to compensation for that taking. The royalty holders were not
parties to the 1976 Settlement Agreement, and the royalty holders contend that
the terms of the Settlement Agreement do not protect the State from taking
claims by those royalty holders. The case is currently pending before the
Circuit Court in Tallahassee. On December 2, 1999, the Circuit Court denied the
State's motion to dismiss the plaintiffs' claim of inverse condemnation but
dismissed several other claims.

         On May 10, 2000, the State filed a motion for summary judgment but no
hearing date has been set for the motion. Discovery is proceeding.

         Any recovery made in the royalty holders' lawsuit would be shared among
the various plaintiffs in that lawsuit, including Coastal Caribbean, but not
Coastal Petroleum.

Counsel

         The Tampa, Florida law firm of Gaylord Merlin Ludovici Diaz & Bain is
Coastal Petroleum's principal trial counsel in Coastal Petroleum's inverse
condemnation claim against the State of Florida in Florida Circuit Court. Mr.
Cary Gaylord is the lead attorney for Gaylord Merlin. Mr. Gaylord, age 55, has
extensive experience in eminent domain and property rights matters. He is a 1969
graduate of the United States Military Academy and a 1974 graduate of the
University of Florida Law School.

         In addition, Mr. Robert J. Angerer of Angerer & Angerer of Tallahassee,
Florida is assisting Gaylord Merlin in the litigation. Mr. Angerer, age 55, is a
1969  graduate of the  University  of Michigan  and received his law degree with
high honors from Florida State University in 1974.

Statutory Attorneys' Fees

         Chapter 73 of Florida law provides in eminent domain proceedings (which
would include Coastal Petroleum's taking claim) that, in addition to the award
made to the property owner, the court shall award attorneys' fees based on the
difference between the final judgment or settlement and the first written offer
made to the property owner by the State in accordance with the following
schedule:

         1.       Thirty-three percent of any difference up to $250,000; plus
         2.       Twenty-five percent of any portion of the difference between
                  $250,000 and $1 million; plus
         3.       Twenty percent of any portion of the difference exceeding $1
                  million.

Contingency Fees

         Coastal Petroleum has agreed to pay an aggregate of 8.65% in contingent
fees based on any net recovery from execution on or satisfaction of judgment or
from settlement of the Florida litigation to the following:

               Holder                              Percentage
               ------                              ----------
        Reasoner, Davis & Fox                            2.00
          Robert J. Angerer                              1.50
          Benjamin W. Heath                              1.25
           Phillip W. Ware                               1.25
         Murtha Cullina LLP                              1.00
       Ausley & McMullen, P.A.                            .75
           James R. Joyce                                 .30
         Arthur B. O'Donnell                              .30
          James J. Gaughran                               .30
                                                          ---
                Total                                    8.65
                                                         ====

         In addition, Coastal Petroleum has agreed to pay Gaylord Merlin a
contingent fee equal to the greater of:

         (a)      approximately 90% of the statutory award of attorneys' fees
                  (discussed above), less the hourly fees paid to Gaylord
                  Merlin, or

         (b)      ten percent of the first $100 million or portion thereof of
                  the compensation received by Coastal Petroleum from the State
                  as compensation for the taking of its property, plus five
                  percent of such compensation in excess of $100 million, less
                  the hourly fees paid to Gaylord Merlin and other costs of the
                  litigation.

Uncertainty

         At September 30, 2001, the amount of unproved oil, gas and mineral
properties totaled $4.9 million, which costs the Company expects to recover.
However, no assurances can be given that Coastal Petroleum or Coastal Caribbean
will prevail on any of the issues set forth above, that they will recover
compensation for any of their claims, or that a drilling permit will be granted.
In addition, even if Coastal Petroleum were to prevail on any or all of the
issues to be decided, no assurance can be given that Coastal Caribbean or
Coastal Petroleum will have sufficient financial resources to survive until such
decisions become final or to drill any wells for which permits are received.
There is also no assurance that any wells drilled will be successful and lead to
production of any oil or gas in commercial quantities.
OUR MANAGEMENT

Our Directors and Executive Officers

         Our board of directors includes six members, two of whom also serve as
executive officers. The board is divided into three classes, with each class
serving a term of office of three years.
Name                      Position                            Biographical Information
             ----                      --------                            ------------------------
Class of 2002

Benjamin W. Heath                      Director          Mr. Heath, a director since 1962, is Chairman and also
                                       President         serves as director of Coastal Petroleum Company and Canada
                                                         Southern Petroleum Ltd.  Age eighty-six.

Phillip W. Ware                        Director          Mr. Ware, a geologist, has been President of Coastal
                                    Vice President       Petroleum since April 1985.  Mr. Ware, a director since
                                                         1985, is also a director of Coastal Petroleum.  Age fifty.
Class of 2003

Graham B. Collis                       Director          Mr. Collis, a director since 1998, is a member of the law
                                       Secretary         firm of Conyers Dill & Pearman, Hamilton, Bermuda, our
                                    Audit Committee      Bermuda counsel.  Age forty-one.

John D. Monroe                         Director          Mr. Monroe is a real estate broker and was formerly
                                    Audit Committee      President of a real estate brokerage and development firm
                                                         in Naples, Florida. Mr. Monroe, a director since 1981, is
                                                         also a director of our subsidiary, Coastal Petroleum.
                                                         Age seventy-five.

Class of 2004

Nicholas B. Dill                       Director          Mr. Dill is a consultant to the law firm of Conyers Dill &
                                                         Pearman, Hamilton, Bermuda, our Bermuda counsel.  Mr. Dill,
                                                         a director since 1997, is also a director of Worldwide
                                                         Securities Ltd, Bermuda Electric Light Co. Ltd., Bermuda
                                                         Waterworks Ltd. and SAL Ltd.  Age sixty-eight.

Timothy L. Largay                      Director          Timothy L. Largay has been a partner in the law firm of
                                Vice President and       Murtha Cullina LLP, Hartford, Connecticut since 1974.  He
                                  Assistant Secretary    was elected a director and Vice President of the Company on
                                                         January 15, 2001.  Mr. Largay is also a director and
                                                         Secretary of Canada Southern Petroleum Ltd. and a director
                                                         of Magellan Petroleum Corporation.  Murtha Cullina has been
                                                         retained by the Company for more than five years and is
                                                         being retained during the current year.  Age fifty-eight.

         Our other executive officer is the Chief Financial Officer. All of the
officers of Coastal Caribbean are elected annually by the board and report
directly to it.

James R. Joyce                   Treasurer, Assistant    Mr. Joyce has been our Treasurer, Assistant Secretary and
                                  Secretary and Chief    Chief Financial Officer since 1994. He is also President,
                                   Financial             Officer Chief Financial Officer and a director
                                                         of Magellan Petroleum Corporation. Mr. Joyce
                                                         is President of G&O'D INC, a firm that provides accounting and
                                                         administrative services, office facilities and support
                                                         to Coastal Caribbean and other clients. Age sixty-one.
All of the named companies are engaged in oil, gas or mineral
exploration and/or development except where noted. The business experience
described for each director or executive officer above covers the past five
years.

         We are not aware of any arrangements or understandings between any of
the individuals named above and any other person by which any of the individuals
named above was selected as a director and/or executive officer. We are not
aware of any family relationship among the officers and directors of Coastal
Caribbean or its subsidiary.

Committees of Our Board of Directors

Board of Directors; Committees; Attendance

         The only standing  committee of the Board is the Audit  Committee which
is comprised of Mr. Graham B. Collis and Mr. John D. Monroe. The Audit Committee
is governed by an Audit  Committee  Charter  which  requires  the  committee  to
perform the following functions:

         (1) to  recommend  the  particular  persons or firm to be  employed  by
             Coastal Caribbean as its independent auditors;

         (2) to consult with the persons or firm so chosen to be the independent
             auditors with regard to the plan of audit;

         (3) to review,  in consultation  with the independent  auditors,  their
             report of audit, or proposed report of audit,  and the accompanying
             management letter, if any; and

         (4) to  consult  with  the  independent  auditors  (periodically,   as
             appropriate,  out of the presence of management)  with regard to
             the adequacy of internal controls.

         We do not presently have standing nominating or compensation committees
of the Board of Directors. The Board of Directors performs the functions that
would be performed by such committees. A stock option committee is appointed
periodically.

Compensation Committee Interlocks and Insider Participation

         The entire board of directors constitutes the compensation committee.
Benjamin W. Heath and Phillip W. Ware are directors and the Presidents of
Coastal Caribbean and Coastal Petroleum, respectively.

Compensation of Directors

         For the year 2001, Messrs. Collis, Dill, and Monroe each received
directors' fees of $22,500 and Mr. Largay received $21,262.50 in fees. Effective
January 1, 2002, Messrs. Collis, Dill, Largay and Monroe will defer the payment
of one-half of their directors' fees until our financial position improves.

Executive Compensation

         The following table sets forth certain summary information concerning
the compensation of our two executive officers. No other executive officer
earned compensation in excess of $100,000 during the year 2001.
----------------------------------------------------------------------------------------------------------------------
                                                       Summary Compensation Table
----------------------------------------------------------------------------------------------------------------------
                                              Annual Compensation              Long Term
                                                                              Compensation
               Name and                                                          Award                All Other
          Principal Position                Year          Salary ($)        Options/SARs (#)      Compensation ($)
----------------------------------------------------------------------------------------------------------------------
Benjamin W. Heath, President                2001            40,000                 -                  18,075(1)
                                            2000            40,000              100,000               15,550(1)
and Chief Executive Officer                 1999            40,000                 -                  12,000(1)
----------------------------------------------------------------------------------------------------------------------
Phillip W. Ware, Vice President             2001            92,000                 -                  13,800(2)
                                            2000            92,000              100,000               13,800(2)
                                            1999            92,000                 -                  13,800(2)
----------------------------------------------------------------------------------------------------------------------
 (1) Reimbursement for office expenses $12,075 in 2001, $9,600 in 2000, and
     $9,550 in 1999, and payment to a SEP-IRA pension plan $6,000 in 2001, 2000
     and 1999.
 (2) Payment to SEP-IRA pension plan.
Stock Options
         The following table provides information about unexercised stock
options held by the Named Executive Officers at December 31, 2001:
-----------------------------------------------------------------------------------------------------------------------
                            Aggregated Option/SAR Exercises in 2001 and December 31, 2001
                                                     Option/SAR Values
-----------------------------------------------------------------------------------------------------------------------
                           Shares                          Number of Securities             Value of Unexercised
                          Acquired         Value          Underlying Unexercised                In-The-Money
                        On Exercise    Realized ($)          Options/SARs (#)                 Options/SARs ($)
                            (#)                            at December 31, 2001             at December 31, 2001
-----------------------------------------------------------------------------------------------------------------------
         Name                                           Exercisable    Unexercisable    Exercisable    Unexercisable
-----------------------------------------------------------------------------------------------------------------------
Benjamin W. Heath           -0-             -0-           100,000            -             9,000             -
Benjamin W. Heath           -0-             -0-            45,000            -              -0-              -
-----------------------------------------------------------------------------------------------------------------------

Phillip W. Ware             -0-             -0-           100,000            -             9,000             -
Phillip W. Ware             -0-             -0-            72,000            -              -0-              -
-----------------------------------------------------------------------------------------------------------------------
Certain Business Relationships

G&O'D INC

         During the year 2000, $155,440 was paid or accrued for accounting and
administrative services, office facilities and support staff provided to the
Company by G&O'D INC, a firm that is owned by Mr. James R. Joyce, the Company's
Treasurer and Assistant Secretary. During the nine months ended September 30,
2001, G&O'D billed fees in the amount of $102,910. G&O'D's fees are based on the
time spent in performing these services to the Company.

Royalty Interests

         The State of Florida oil, gas and mineral leases held by Coastal
Petroleum on approximately 3,700,000 acres of submerged lands along the Gulf
Coast and certain inland lakes and rivers are subject to certain overriding
royalties aggregating 1/16th as to oil, gas and sulphur, and 13/600ths as to
minerals other than oil, gas and sulphur. Of the overriding royalties as to oil,
gas and sulphur, a 1/90th overriding royalty, and of the overriding royalties on
minerals other than oil, gas and sulphur, a 1/60th overriding royalty, is held
by Johnson & Company, a Connecticut partnership which is used as a nominee by
the members of the family of the late William F. Buckley. A trust, in which Mr.
Heath has a 54.4% beneficial interest, has a beneficial interest in such royalty
interest held by Johnson & Company. No payments have been made to Johnson &
Company (or to the beneficial owners of such royalty interests) in more than
forty years.

         In 1990, Coastal Petroleum granted to our current officers the
following percentages of any net recovery from execution on or satisfaction of
judgment or from settlement of the lawsuit against the State of Florida as
follows:
Percent of              Coastal Petroleum
         Name                        Net Recovery                Position
         ----                        ------------               ----------
         Benjamin W. Heath               1.25                Chairman of Board
         Phillip W. Ware                 1.25                President
         James R. Joyce                  0.30                Treasurer

                             PRINCIPAL SHAREHOLDERS

Security Ownership of Certain Beneficial Owners

         The following table provides information as to the number of shares of
our stock owned beneficially at December 31, 2001 by each person who is known to
be the beneficial owner of more than 5% of the outstanding shares of our common
stock.
Amount and Nature of
                                                    Beneficial Ownership
                                                    --------------------
     Name and Address of                    Shares Held           Shares Subject
     Beneficial Owner                        Directly                to Option                    Percent of Class
--------------------------                   ---------              -----------                   ----------------
Leon S. Gross                                4,499,688                   -                              10.34
3900 Ford Road
Philadelphia, PA  19131

Lykes Minerals Corp.                             -                  7,800,000*                          15.2**
111 East Madison Street
P.O. Box 1690
Tampa, FL  33601
------------------------
*        Lykes Minerals Corp. has purchased a total of 78 shares of Coastal
         Petroleum which are  convertible  into  7,800,000 of our shares.

**       Assumes all outstanding options held by Lykes Mineral Corp are
         exercised to acquire our shares.
Security Ownership of Management

         The following table sets forth information as to the number of shares
of the Company's common stock owned beneficially at December 31, 2001 by each
director of the Company and by all directors and executive officers as a group:
Amount and Nature of Beneficial Ownership
                                                   ------------------------------------------------------
                                                 Shares Held Directly or                        Percent of
Name of Individual or Group                             Indirectly                    Options      Class
---------------------------                     ---------------------------           -------      -----
Graham B. Collis                                                  25,000(1)           112,000        *
Nicholas B. Dill                                                     -  (2)           124,000        *
Benjamin W. Heath                                                 20,000              145,000        *
John D. Monroe                                                       400              136,000        *
Timothy L. Largay                                                 49,200              100,000        *
Phillip W. Ware                                                    3,791              172,000        *
Directors and executive officers
  as a group (a total of 7 persons)                              111,579              925,000       2.3%
----------------------
*        Less than 1%.
(1)      Director of a corporation which also owns 17,758 shares.
(2)      Director of a corporation which owns 3,355 shares.
DESCRIPTION OF OUR COMMON STOCK
General

         Our Memorandum of Association provides that we may issue up to
250,000,000 shares of common stock. We only have one class of stock. As of
December 31, 2001, we had approximately 9,000 shareholders of record with a
total of 43,468,329 shares of common stock outstanding. Below is a brief
description of our common stock and the rights of shareholders as determined
under Bermuda law. Neither Bermuda law, nor our Memorandum of Association or
Bye-laws impose any limitations on the rights of non-residents of Bermuda to
vote and hold our shares of common stock. Set forth below is a summary of the
principal terms of our Memorandum and Bye-laws governing our common stock.

Common Stock

         Dividend Rights. The holders of common stock are entitled to receive
dividends, if and when they are declared by the Board of Directors. Each share
outstanding is entitled to share equally with every other share in every
dividend distribution. Current Bermuda law does not restrict the remittance of
dividends to Bermuda non-residents, and any dividends paid to U.S. shareholders
would not be subject to a withholding tax. We have never declared or paid
dividends on our common stock and do not anticipate declaring or paying any
dividends in the foreseeable future. We plan to retain any future earnings to
reduce our accumulated deficit of $30,525,000 at September 30, 2001 and to
finance our operations.

         Classified  Board of  Directors.  Bye-Law 81 provides that the Board of
Directors is divided into three classes. See "Our Management - Our Directors and
Executive Officers" above.

         Liquidation Rights. Subject to the rights of creditors, all rights to
the assets of Coastal Caribbean available for distribution upon liquidation are
vested in the holders of common stock and each share is entitled to participate
equally with every other share in such liquidation.

         Pre-emptive Rights, Conversion Rights, Redemption Provisions, Sinking
Fund and Further Assessments. The holders of common stock have no pre-emptive
rights. There are no conversion rights attached to the common stock and there
are no provisions for sinking funds or redemption of shares. Under Bermuda law
unless authorized by our Memorandum of Association or Bye-Laws, we may not
repurchase our own common stock, and our Memorandum of Association and Bye-Laws
do not permit us to redeem shares of common stock. The holders of outstanding
common stock are not liable to any further calls or assessments by us on their
shares.

         Rights of Appraisal, Derivative Actions. Class actions and derivative
actions are generally not available to shareholders under the laws of Bermuda.
However, the Bermuda courts ordinarily would be expected to follow English case
law precedent, which would permit a shareholder to bring an action in the name
of the company, if the directors or officers are alleged to be acting beyond the
corporate powers of the company, committing illegal acts or violating the
Memorandum of Association or Bye Laws of Coastal Caribbean. In addition,
minority shareholders would probably be able to challenge a corporate action
that allegedly constituted a fraud against them or required the approval of a
greater percentage of the shareholders' vote. The winning party generally would
be able to recover a portion of attorneys' fees incurred in bringing the
lawsuit.

         Taxes.  Bermuda  currently  imposes  no taxes on  corporate  income  or
capital gains realized  outside of Bermuda,  nor is there any withholding tax on
any  dividends  that we might pay to you. Any amounts  received by us from U. S.
sources  as  dividends,  interest,  or other  fixed or  determinable  annual  or
periodic gains,  profits and income,  will be subject to a 30% U. S. withholding
tax. In addition,  any dividends from Coastal Petroleum will not be eligible for
the 100% dividends received deduction, which is allowable in the case of a U. S.
parent  corporation.  U. S. residents or citizens  holding shares are subject to
federal estate and gift and local inheritance  taxation.  Any dividends received
by U. S. resident or citizens  will also be subject to federal,  state and local
income taxation.  These rules are of general application only and reflect law in
force as of the date of this prospectus.  Shareholders  should seek professional
advice for the current rules applicable to their particular circumstances.

         Under current Bermuda law, we are not required to pay any income tax or
capital gains tax. We have obtained from the Bermuda Minister of Finance an
assurance under The Exempted Undertakings Tax Protection Act 1966 of Bermuda, to
the effect that in the event of there being enacted in Bermuda any legislation
imposing tax computed on profits or income, or computed on any capital asset,
gain or appreciation, or any tax in the nature of estate duty or inheritance
tax, then the imposition of any such tax shall not be applicable to us or to any
of our operations, shares, debentures or other obligations until 2016. These
assurances are subject to the condition that they are not interpreted so as to
prevent the application of any tax or duty to such persons as are ordinarily
resident in Bermuda or to prevent the application of any tax payable in
accordance with the provisions of The Land Tax Act 1967 of Bermuda or otherwise
payable in relation to any property we lease. We are required to pay annual
Bermuda government fees.

         Foreign Exchange Control Regulations. We have been designated as a
non-resident for exchange control purposes by the Bermuda Monetary Authority
whose permission for the issue of shares of common stock pursuant to this
Offering has been obtained. This designation allows us to engage in
transactions, or to pay dividends to non-residents of Bermuda who are holders of
our shares, in currencies other than the Bermuda Dollar.

         The transfer of shares between persons regarded as resident outside
Bermuda for exchange control purposes and the issue of shares after the
completion of this offering to or by such persons may take place without
specific consent under the Exchange Control Act 1972. Issues and transfers of
shares involving any person regarded as resident in Bermuda for exchange control
purposes require specific prior approval under the Exchange Control Act 1972.

         Non-Bermuda owners of our shares of common stock are not restricted in
the exercise of the rights to hold or vote their shares. Because we have been
designated as a non-resident for Bermuda exchange control purposes, there are no
restrictions on our ability to transfer funds in and out of Bermuda or to pay
dividends to U. S. residents who are holders of our common stock, other than in
respect of local Bermuda currency.

         Under Bermuda law, share certificates are only issued in the names of
corporations or individuals. In the case of an applicant acting in a special
capacity (for example as a trustee), certificates may, at the request of the
applicant, record the capacity in which the applicant is acting, but we are not
bound to investigate or incur any responsibility in respect of the proper
administration of any such trust. We will take no notice of any trust applicable
to any of our shares whether or not we have notice of the trust.

         As an "exempted company", we are exempt from Bermuda laws which
restrict the percentage of share capital that may be held by non-Bermudans, but
as an exempted company we may not participate in certain business transactions
including: (1) the acquisition or holding of land in Bermuda (except that
required for their business and held by way of lease or tenancy for terms of not
more than 50 years) without the express authorization of the Bermuda
legislature, (2) the taking of mortgages on land in Bermuda to secure an amount
in excess of $50,000 without the consent of the Minister of Finance, (3) the
acquisition of any bonds or debentures secured by any land in Bermuda, other
than certain types of Bermuda government securities or (4) the carrying on of
business of any kind in Bermuda, except in furtherance of their business carried
on outside Bermuda.

         We will be required to comply with the provisions of the Companies Act
regulating the payment of dividends and making distributions from contributed
surplus. Pursuant to the Companies Act, a company shall not declare or pay a
dividend, or make a distribution out of contributed surplus, if there are
reasonable grounds for believing that: (1) the company is, or would after the
payment be, unable to pay its liabilities as they become due; or (2) the
realizable value of the company's assets would thereby be less than the
aggregate of its liabilities and its issued share capital and share premium
accounts.

         Voting Rights. All voting rights are vested in the holders of common
stock, each share voting equally with every other share. The holders of 25% of
the total number of shares entitled to be voted at the meeting, present in
person or by proxy constitutes a quorum for the transaction of business. Bye-Law
1 provides that any matter to be voted upon at any meeting of shareholders must
be approved, not only by a simple majority of the shares voted at such meeting,
but also by a simple majority of the shareholders voting.

                  Bye-Law 1 provides in part that shareholder approval requires:

                  a resolution passed by both (i) simple majority of votes cast
                  by such Members as, being entitled so to do, vote in person
                  or, in the case of any Member being a corporation, by its duly
                  authorized representative or, where proxies are allowed, by
                  proxy and (ii) a simple majority in number of the Members
                  present in person or in the case of any Member being a
                  corporation by its duly authorized representative or where
                  proxies are allowed, by proxy, at a general meeting of which
                  not less than fourteen (14) clear days' Notice (save where a
                  longer period is required by these Bye-laws) has been duly
                  given PROVIDED THAT when shares are held by members of another
                  company, firm, partnership, association or other body
                  corporate or unincorporated and such persons act in concert,
                  or when shares are held by or for a group of Members who act
                  in concert, such persons shall be deemed to be one Member.

         Bye-Law 163 requires that a resolution adopted by the holders of 75% or
more of the outstanding common stock and adopted by not less than 75% of the
shareholders is required to approve any business combination (defined as any
"arrangement, reconstruction, amalgamation, takeover, or similar business
combination") involving the Company and any other person.

Limitation of Director Liability and Indemnification

         Director liability. The Companies Act imposes two basic duties on each
director and officer:

         Duty of loyalty. A director or officer must act honestly and in good
         faith with a view to the best interests of the company. This means that
         in conflict of interest situations, a director must place the best
         interests of the company above his own personal interests. It also
         means that a director may not use his position as a director to make a
         personal profit from opportunities that rightfully belong to the
         company.
Duty of care. A director or officer must exercise the care, diligence
         and skill that a reasonably prudent person would exercise in comparable
         circumstances. Based on English case law precedent, this means that a
         director must act reasonably in accordance with the level of skill
         expected from a person of his knowledge and experience. A director must
         attend diligently to the company's affairs, but is permitted to do so
         on an intermittent rather than a continuous basis. A director may
         delegate management functions to suitably qualified persons, although
         he will not avoid his duty by delegation to others.

         A Bermuda court is unlikely to interfere with decisions of directors
unless one of these two duties is breached. The court must find that the
directors acted in bad faith or that no reasonable board of directors could have
come to the decision that was reached.

         Director indemnification. We may under Bermuda law indemnify our
directors and officers for any loss or liability that they may incur in their
capacity as our directors and officers. The loss or liability may result from
any law that finds them guilty of negligence, default, breach of duty or breach
of trust. A director or officer may not be indemnified for his own fraud or
dishonesty.

         Legal expenses. We are required to pay all expenses, including
attorney's fees, incurred by a director in defending any legal proceeding as
they are incurred in advance of final disposition if the director agrees to
repay those amounts if it is proved by clear and convincing evidence that the
director's action or omission was undertaken with deliberate intent to cause
injury to the company or with reckless disregard for our best interests and if
the director reasonably cooperates with the corporation during the proceeding.

         Bye-Laws. Our Bye-Laws provide for indemnification of our director and
officers which is coextensive with that permitted under Bermuda law.

         D&O Insurance. Coastal Caribbean has directors' and officers' liability
insurance coverage in the amount of $12,200,000 at an annual cost of $208,000.

Transfer Agent and Registrar

         Our transfer  agent and registrar is American  Stock Transfer and Trust
Company, 59 Maiden Lane, New York, New York 10007. Telephone:  800-937-5449,  or
718-921-8200. Website: http://www.amstock.com.
Price Range of Our Common Stock

         The principal market for our common stock is the Boston Stock Exchange
under the symbol CCO. Our common stock is also traded in the over-the-counter
market on the "Electronic Bulletin Board" of the National Association of
Securities Dealers, Inc. under the symbol COCBF.OB. The quarterly high and low
closing prices on the Boston Stock Exchange were as follows:
----------------------------------------------------------------------------------------------------------------
2001                1st quarter                 2nd quarter                 3rd quarter              4th quarter
----                -----------                 -----------                 -----------              -----------
High                   1.81                        1.75                        1.32                     1.05
Low                     .85                         .90                         .85                      .80
----------------------------------------------------------------------------------------------------------------
2000                1st quarter                 2nd quarter                 3rd quarter              4th quarter
----                -----------                 -----------                 -----------              -----------

High                   1.19                        1.19                        2.50                     1.13
Low                    0.88                        0.53                        1.00                     0.69
----------------------------------------------------------------------------------------------------------------
1999                1st quarter                 2nd quarter                 3rd quarter              4th quarter
----                -----------                 -----------                 -----------              -----------

High                   1.88                        2.00                        1.81                     2.06
Low                    1.00                        1.50                        1.31                     1.06
----------------------------------------------------------------------------------------------------------------
On December 31, 2001, the closing price of our common stock on the
Boston Stock Exchange was $1.00. On December 31, 2001, approximately 9,000
shareholders of record owned our outstanding common stock.

         The total share trading volume on the Boston Stock Exchange was
1,625,800 for 2001, 3,914,100 for 2000 and 4,279,100 for 1999.
PERFORMANCE GRAPH

         The graph below compares the cumulative total returns, including
reinvestment of dividends, if applicable, of our stock with the companies in the
NASDAQ Market Index Media General's Independent Oil & Gas Industry Group. The
chart displayed below is presented in accordance with SEC requirements.
Shareholders are cautioned against drawing any conclusions from the data
contained therein, as past results are not necessarily indicative of future.

                      COMPARISON OF CUMULATIVE TOTAL RETURN
                      January 1, 1997 to December 31, 2001

                                [OBJECT OMITTED]
----------------------------- -------------- ------------- -------------- -------------- -------------- -------------
1996           1997          1998           1999           2000           2001
----------------------------- -------------- ------------- -------------- -------------- -------------- -------------
Coastal Caribbean                  100           62.50         41.07          39.29          30.29          28.57
----------------------------- -------------- ------------- -------------- -------------- -------------- -------------
Independent Oil & Gas              100           93.10         60.30          84.48         122.60         100.19
----------------------------- -------------- ------------- -------------- -------------- -------------- -------------
NASDAQ Market Index                100          122.32        172.52         304.29         191.25         152.46
----------------------------- -------------- ------------- -------------- -------------- -------------- -------------
TERMS OF THE OFFERING

Basic Subscription Privilege

         We are offering for sale, to our shareholders only, a total of shares
of our common stock. For every shares that you hold on the record date, 2002,
you are guaranteed the right to purchase shares for a purchase price of $ per
share. If you purchase all of the shares that you are guaranteed the right to
buy, you will also have the right to purchase additional shares which are
contingent on the number of shares that are not purchased by the other
shareholders.

         The shares being offered for sale will first be allocated to satisfy
the shareholders' guaranteed right to purchase shares. If there are unsold
shares remaining after these allocations, then any unsold shares will be
allocated in the manner described below among the shareholders who exercised
their contingent right to purchase the unsold shares.

         The subscription right is not transferable. The offering is not subject
to a minimum number of subscriptions.

How the Over-Subscription Privilege Operates

         Subject to the allocation rules described below, each subscription
right also grants each shareholder an over-subscription privilege to purchase
additional shares of common stock, to the extent available and subject to
proration, that are not purchased by other shareholders pursuant to their basic
subscription privileges. If you wish to exercise your over-subscription
privilege, you should indicate the number of additional shares that you would
like to purchase in the space provided on your subscription certificate. When
you send in your subscription certificate, you must also send the full purchase
price for the number of additional shares that you have requested to purchase
(in addition to the payment due for shares purchased through your basic
subscription privilege).

         In the event that our shareholders do not subscribe for all of the
_____________ offered shares pursuant to their exercise of basic subscription
privileges, then shareholders requesting additional shares pursuant to their
over-subscription privileges will be allocated such additional shares on a
pro-rata basis (subject to elimination of fractional shares), based on the ratio
that the number of available shares bears to the total number of shares that are
the subject of all shareholders over-subscription requests. For example, assume
that our shareholders subscribe for a total of shares, shares of which are
guaranteed. Under the terms of the offering shares are being offered for sale,
shares would be issued to shareholders who purchased their guaranteed shares.
The remaining shares offered for sale (_________ minus __________) would be
available for the shareholders who exercised their contingent right to purchase
shares on a pro rata basis. Each shareholder who exercised his contingent right
would receive % ( available divided by contingent rights) of his contingent
amount of available shares.

         As soon as practicable after ______________ __, 2002, The American
Stock Transfer & Trust Company, acting as our Subscription Agent, will determine
the number of shares of common stock that you may purchase pursuant to the
over-subscription privilege. You will receive certificates representing these
shares as soon as practicable after ____________ __, 2002.

         Subject to state securities laws and regulations, we have the
discretion to delay allocation and distribution of any and all shares to
shareholders who are affected by such regulations and elect to participate in
the rights offering, including shares that we issue with respect to your basic
or over-subscription privilege in order to comply with state securities laws. If
you request and pay for more shares than are allocated to you, we will refund
that overpayment, without interest.

Subscription Cards and Termination Date

         Subscription cards, which indicate the number of shares you will be
guaranteed the right to purchase, will be issued in the name and address of the
holders of common stock of record on , 2002 and mailed to holders as soon as
practicable after the record date. The offering will end at 4:30 P.M. New York
City Time, on , 2002. The date and time when the offering expires is herein
referred to as the "expiration date."

         The American Stock Transfer & Trust Company, our subscription agent,
will hold all subscriptions received prior to the expiration date. Prior to the
formal acceptance of the subscriptions, American Stock Transfer will hold all
payments. Subscriptions may be revoked by delivery of written notice of
revocation to us prior to the expiration date. Subscriptions will be accepted,
if at all, promptly after the expiration date by our delivery of written
confirmation of acceptance to American Stock Transfer authorizing the issuance
of the shares and the payment of any refunds, without interest, to the extent
that the offering is oversubscribed. We reserve the right to reject any
subscription, absent proof in writing from you that all terms of the offering
have been complied with on a timely basis. We will notify the subscriber
promptly of any rejection.

         You may not purchase fractional shares, and only whole shares will be
issued. The purchase price will be $ per share for each share and the right to
purchase shares is nontransferable.

Determination of Subscription Price; No Board Recommendation

         In establishing the offering price, our directors considered recent
market prices for our stock. The purchase price is intended by the directors to
be attractive to our shareholders and result in a higher subscription rate. The
purchase price does not reflect our assessment of the actual value of our
assets. Our Board of Directors is not making any recommendation as to whether
you should exercise your subscription rights. You should make your decision
based on your own assessment of your best interests after reading this
prospectus. All interpretations of matters relating to the offering will be made
by our management and will be final.

How to Purchase Shares

         Shares may be purchased by delivering the subscription card, along with
a signed subscription agreement, together with full payment of the purchase
price for both the shareholder's guaranteed and contingent amounts. Payment of
the purchase price must be made by check, bank draft or money order payable to
the order of "American Stock Transfer - AS SUBSCRIPTION AGENT". Any
subscriptions satisfying these conditions will be accepted; however,
subscriptions received after the expiration date will not be honored and we will
not be responsible for subscriptions not delivered by that time. You are advised
to choose a reliable method (e.g., such as overnight courier service) for the
delivery of your subscriptions to American Stock Transfer.

         You may also subscribe by delivering to American Stock Transfer before
the expiration date each of the following:

        o         the full purchase price, together with a signature guarantee
                  in writing or by facsimile from a bank or trust company or a
                  member firm of any U.S. registered stock exchange that a
                  subscription card with respect to shares subscribed for has
                  been or will be promptly delivered to American Stock Transfer
                  within three business days, and

        o         information setting forth the name of the subscriber and the
                  serial number of the subscription card. Subscriptions
                  satisfying these conditions will be accepted subject to prompt
                  receipt by American Stock Transfer of the duly executed
                  subscription card within three business days.

Registration of the Shares You Purchase

         We have made application for the registration of the common stock being
offered under the applicable securities laws of each of the United States which
do not provide an exemption. In the event that the offering is not permitted
under the law of any state or states, or in the event that qualification of the
securities in any state or states would prove to be impracticable in the
judgment of management, we will not issue subscription cards to shareholders in
those states.

                 UNITED STATES TAX CONSEQUENCES OF THE OFFERING

         Your receipt of your subscription rights will have certain federal
income tax consequences. The following discussion is the likely position of the
Internal Revenue Service regarding the tax consequences of the receipt of your
subscription rights. This discussion is not intended to serve as tax advice to
you, and you should consult your personal tax advisor for advice relating to
your personal tax situation.

         The mere receipt of the subscription rights will not result in the
recognition of taxable income. While you will not have to report taxable income
upon the receipt of your subscription rights, you may have to allocate a portion
of the adjusted basis of your original shares to any shares that you purchase in
the offering.

         If you do not exercise your subscription rights, you will not be
allowed to claim a loss, and no adjustment will be made to the tax basis of your
shares. If the subscription rights are exercised, you may be required to
allocate a portion of the basis of your original shares to the shares that you
purchase in the offering, depending on whether the fair market value of the
rights equals or exceeds 15% of the fair market value of your original shares on
the date of distribution of your rights.

         If you exercise your subscription rights and the fair market value of
your subscription rights on the date of distribution is 15% or more of the fair
market value of the shares you own on that date, you must allocate to the
purchased shares that part of the basis of your original shares that is
attributable to each subscription right that you exercise. The basis of your
original shares that is allocated to your subscription rights will equal your
basis in your original shares multiplied by a fraction the numerator of which is
the fair market value of your subscription rights and the denominator of which
is the total of the fair market value of your original shares and the fair
market value of your subscription rights. The basis of your original shares that
is allocated to each subscription right that you exercise will equal the basis
of your original shares that is allocated to your subscription rights divided by
the total number of subscription rights issued to you. Accordingly, the tax
basis of each share that you purchase will equal the basis of your original
shares that is allocated to each subscription right that you exercise plus the
purchase price of each purchased share. The holding period for a share acquired
by exercise of a subscription right will begin from the date the subscription
right is exercised. The basis of your original shares will be correspondingly
reduced by the portion of the basis in your original shares that is allocated to
the purchased shares.

         If you exercise your subscription rights and the fair market value of
the subscription rights on the date of distribution is less than 15% of the fair
market value of the shares you own on that date, you may elect to allocate a
portion of your current tax basis to the shares that you purchase as discussed
above. If you do not elect to allocate your tax basis, then your tax basis in
the purchased shares will be your purchase price of the offered stock.

                                  LEGAL MATTERS

         Murtha Cullina LLP, Hartford, Connecticut, has passed upon legal
matters relating to U. S. law in connection with this offering. Mr. Timothy L.
Largay, a director and officer of the Company, is a partner of Murtha Cullina
LLP. All matters relating to Bermuda law affecting Coastal Caribbean and its
common stock have been passed upon by the firm of Conyers Dill & Pearman,
Hamilton, Bermuda, of which firm Mr. Collis, a director and Secretary of Coastal
Caribbean, is a partner. Mr. Dill, a director, is a consultant to the firm of
Conyers Dill & Pearman. The firm of Angerer & Angerer, Tallahassee, Florida, has
passed upon all matters relating to litigation in which Coastal Petroleum has
been involved until December 31, 2000. The firm of Gaylord Merlin Ludovici Diaz
& Bain, Tampa, Florida, has passed upon all matters relating to litigation filed
in Florida Circuit Court pertaining to the taking case in which Coastal
Petroleum has been involved since January 1, 2001. Murtha Cullina LLP may rely,
insofar as Bermuda law is concerned, on the opinion of Bermuda counsel, and
insofar as Coastal Petroleum's litigation is involved, on the opinions of
Angerer & Angerer and Gaylord Merlin Ludovici Diaz & Bain.

                                     EXPERTS

         The consolidated financial statements of Coastal Caribbean Oils &
Minerals, Ltd. (a development stage company) at December 31, 2000 and 1999 and
for each of the three years in the period ended December 31, 2000, appearing in
this Prospectus and Registration Statement have been audited by Ernst & Young
LLP, independent auditors, as set forth in their report thereon, appearing
elsewhere herein, and are included in reliance upon such report given upon the
authority of such firm as experts in accounting and auditing.

                       WHERE YOU CAN FIND MORE INFORMATION

         We are a public company and file annual, quarterly and special reports
and other information with the SEC. You may read and copy any documents we file
at the SEC's Public Reference Room, 450 Fifth Street, N.W., Washington, D.C.
20549. You may obtain further information on the operation of the Public
Reference Room by calling the SEC at 1-800-SEC-0330. You can obtain copies of
this material from the Public Reference Section of the SEC, Washington, D.C.
20549, at prescribed rates. Our reports, proxy and information statements and
other information are also available to the public at the SEC's web site. The
Internet address of that site is http://www.sec.gov.

         Our common stock is listed on the Boston Stock Exchange and reports,
proxy statements and other information can also be examined at that exchange.

         This prospectus is only part of a registration statement on Form S-1
that we have filed with the SEC under the Securities Act and therefore omits
certain information contained in the registration statement. We have also filed
exhibits and schedules with the registration statement that are excluded from
this prospectus, and you should refer to the applicable exhibit or schedule for
a complete description of any statement referring to any contract or other
document. You may inspect a copy of the registration statement, including the
exhibits and schedules, without charge at the SEC's public reference room or
through its web site.
F-17

                          INDEX TO FINANCIAL STATEMENTS
Page
                                                                                                     Reference
                                                                                                     ---------
Report of Independent Auditors                                                                          F-2

Consolidated balance sheets at September 30, 2001 (unaudited), December 31,
2000 and 1999.                                                                                          F-3

Consolidated statements of operations for the nine months ended September 30,
2001 and 2000 (unaudited), for the period from January 31, 1953 (inception) to
September 30, 2001 (unaudited) and for each of the three years in the period
ended December 31, 2000.                                                                                F-4

Consolidated statements of cash flows for the nine months ended September 30,
2001 and 2000 (unaudited), for the period from January 31, 1953 (inception) to
September 30, 2001 (unaudited) and for each of the three years in the period
ended December 31, 2000.                                                                                F-5

Consolidated statement of common stock and capital in excess of par value for
the period from January 31, 1953 (inception) to December 31, 2000
and September 30, 2001 (unaudited).                                                                     F-6

Notes to consolidated financial statements.                                                             F-7
REPORT OF INDEPENDENT AUDITORS

The Board of Directors
Coastal Caribbean Oils & Minerals, Ltd.

We have audited the accompanying consolidated balance sheets of Coastal
Caribbean Oils & Minerals, Ltd. (a development stage company) as of December 31,
2000 and 1999, and the related consolidated statements of operations, cash
flows, and common stock and capital in excess of par value for each of the three
years in the period ended December 31, 2000. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the consolidated financial position of Coastal
Caribbean Oils & Minerals, Ltd. at December 31, 2000 and 1999, and the
consolidated results of its operations and its cash flows for each of the three
years in the period ended December 31, 2000, in conformity with accounting
principles generally accepted in the United States.

                                        /s/ Ernst & Young LLP

Stamford, Connecticut
March 1, 2001
COASTAL CARIBBEAN OILS & MINERALS, LTD.
                             (A Bermuda Corporation)
                           A Development Stage Company

                           CONSOLIDATED BALANCE SHEETS
                           (Expressed in U.S. dollars)
September 30,                 December 31,
                                                                    2001                2000               1999
                                                                 (unaudited)
                          ASSETS
Current assets:
Cash and cash equivalents                                           $1,203,830         $2,958,674          $ 651,124
  Interest and accounts receivable                                        12,665             41,520             25,583
  Prepaid expenses                                                       386,609            323,897            352,089
                                                                         -------            -------            -------
          Total current assets                                         1,603,104          3,324,091          1,028,796
                                                                       ---------          ---------          ---------

Marketable securities                                                          -                  -            390,941
Unproved  oil,  gas  and  mineral   properties  (full
 cost method)                                                          4,864,773          4,807,722          4,759,532

Other                                                                          -             27,866             27,445
                                                                      ----------         ----------         ----------
Total assets                                                          $6,467,877         $8,159,679         $6,206,714
                                                                      ==========         ==========         ==========

           LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:
  Accrued liabilities                                                  $ 279,685         $  193,176          $  68,424
                                                                       ---------         ----------          ---------

Minority interests                                                             -                  -                  -

Shareholders' equity:
  Common stock, par value $.12 per share:
    Authorized - 250,000,000 shares
    Outstanding - 43,468,329 (2001-2000)
40,056,358 (1999) shares                                               5,216,199          5,216,199          4,806,763
  Capital in excess of par value                                      31,497,362         31,497,362         28,693,033
                                                                      ----------         ----------         ----------
                                                                      36,713,561         36,713,561         33,499,796
Deficit accumulated during the
  development stage                                                 (30,525,369)        (28,747,058)       (27,361,506)
                                                                    ------------        ------------       ------------
Total shareholders' equity                                             6,188,192          7,966,503          6,138,290
                                                                        --------           ---------          ---------
Total liabilities and shareholders' equity                            $6,467,877         $8,159,679         $6,206,714
                                                                      ==========         ==========         ==========

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

                      CONSOLIDATED STATEMENTS OF OPERATIONS
                           (Expressed in U.S. Dollars)
For the
                                                                                                                       period from
                                                                                                                      Jan. 31, 1953
                                     Nine months ended                                                                 (inception)
                                       September 30,                              Years ended December 31,                  to
                                    --------------------          --------------------------------------------------  September 30,
                                    2001           2000                2000              1999               1998           2001
                             -----------   -----------        --------------    --------------     --------------       ----------
                              (unaudited)    (unaudited)                                                                (unaudited)
Interest and other income        $ 73,153       $ 23,094            $62,544           $55,275           $167,178         $3,864,276
                                 --------       --------            -------           -------           --------         ----------
Expenses:
  Legal fees and costs          1,236,604        392,498            633,521           405,380            501,708         14,247,117
  Administrative expenses         402,530        415,373            535,325           474,027            495,161          8,276,191
  Salaries                        113,850        113,851            151,800           157,550            161,000          3,334,478
                                   98,000         97,893            107,852           102,825            132,924          3,877,632
Shareholder
communications
  Exploration costs                   480          8,408             19,598            20,954             31,066            824,692
  Lawsuit judgments                     -              -                  -                 -                  -          1,941,916
  Minority interests                    -              -                  -                 -                  -          (632,974)
  Other                                 -              -                  -                 -                  -            364,865
  Contractual services                                 -                  -                                    -          2,155,728
                             ------------  -------------   ----------------   ---------------   ----------------          ---------
                                        -                                                   -
                                1,851,464      1,028,023          1,448,096         1,160,736          1,321,859         34,389,645
                                ---------      ---------          ---------         ---------          ---------         ----------

Net loss                     $(1,778,311)   $(1,004,929)       $(1,385,552)      $(1,105,461)       $(1,154,681)
                             ============   ============       ============      ============       ============

Deficit accumulated
during the development
  stage                                                                                                               $(30,525,369)
                                                                                                                      ============

Net loss per share based
  on average number of
  shares outstanding
  during the period:
  Basic and diluted EPS            $(.04)         $(.03)             $(.03)            $(.03)             $(.03)
                                   ======         ======             ======            ======             ======

Average number of shares
  outstanding:
  Basic and diluted            43,468,329     40,056,358         40,843,736        40,056,358         40,056,358
                               ==========     ==========         ==========        ==========         ==========

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

                      CONSOLIDATED STATEMENTS OF CASH FLOWS

                       (Expressed in U.S. Dollars)
For the
                                                                                                                       period from
                                                                                                                      Jan. 31, 1953
                                                 Nine months ended                                                     (inception)
                                                   September 30,                    Years ended December 31,                 to
                                                2001           2000         2000          1999           1998       Sept.  30, 2001
                                                ----           ----         ----          ----           ----       ---------------
                                              (unaudited)    (unaudited)                                              (unaudited)
Operating activities:
Net loss                                      $(1,778,311)  $(1,004,929) $(1,385,552)  $(1,105,461)   $(1,154,681)  $(30,525,369)
Adjustments to reconcile net loss to
  net cash used in operating activities:
    Minority interest                                   -             -            -             -              -       (632,974)
    Exploration and other                               -             -            -             -              -        755,974
    Compensation recognized for stock
      option grants                                     -        75,000       75,000             -              -         75,000
    Net change in:
       Interest and accounts receivable            28,855        18,365      (15,937)       27,051         24,668        (12,665)
       Prepaid expenses                           (62,712)       (7,031)      28,192       (37,809)      (100,440)      (386,609)
       Current liabilities                         86,509       298,013      124,752         1,125          3,324        279,685
       Other                                       27,866      (177,683)        (421)         (247)          (433)       498,906
                                                   ------      ---------    ----------    ----------     --------        -------

Net cash used in operating activities         (1,697,793)      (798,265)  (1,173,966)   (1,115,341)    (1,227,562)   (29,948,052)
                                              -----------      ---------  -----------   -----------    -----------   ------------
Investing activities:
  Additions to oil, gas, and mineral
    properties net of assets acquired
    for common stock                             (57,051)      (54,355)     (48,190)      (23,913)      (340,487)    (4,864,773)
  Marketable securities (net)                           -       390,941      390,941     1,737,898      1,304,196              -
  Reimbursement of lease rentals and
    other expenses                                      -             -            -             -              -      1,243,085
  Purchase of fixed assets                                                                                               (61,649)
                                              ------------     --------   -----------   -----------    -----------     ----------
                                                        -              -           -             -              -
Net cash provided by (used in) investing
  activities                                     (57,051)        336,586     342,751     1,713,985        963,709     (3,683,337)
                                                 --------        -------     -------     ---------        -------     -----------

Financing activities:
  Sale of common stock less expenses                    -              -   3,138,765             -              -     29,480,970
  Shares issued upon exercise of options                -              -           -             -              -        884,249
  Sale of shares by subsidiary                          -              -           -             -              -        750,000
  Sale of subsidiary shares                             -              -           -             -              -      3,720,000
                                               -----------    ----------  ----------- -------------     ----------     ---------
Net cash provided by financing activities                                  3,138,765                                  34,835,219
                                               -----------    ----------  ----------- -------------     ----------    ----------
Net increase (decrease) in cash and cash
  equivalents                                  (1,754,844)      (461,679)  2,307,550       598,644       (263,853)     1,203,830
Cash and cash equivalents at beginning of
  period                                        2,958,674        651,124     651,124        52,480        316,333              -
                                                ---------       --------   ----------     --------        -------     -----------
Cash and cash equivalents at end of period     $1,203,830       $189,445   $2,958,674     $651,124        $52,480     $1,203,830
                                               ==========       ========   ==========     ========        =======     ==========
See accompanying notes.
COASTAL CARIBBEAN OILS & MINERALS, LTD.
                             (A Bermuda Corporation)
                           A Development Stage Company

                     CONSOLIDATED STATEMENT OF COMMON STOCK
                       AND CAPITAL IN EXCESS OF PAR VALUE
                           (Expressed in U.S. dollars)
     For the period from January 31, 1953 (inception) to September 30, 2001
           (Information subsequent to December 31, 2000 is unaudited)
Capital in
                                                                Number of                 Common                  Excess
                                                                  Shares                   Stock               of Par Value
                                                                  ------                   -----               ------------
Shares issued for net assets and unrecovered costs
at inception                                                   5,790,210              $  579,021             $ 1,542,868
Shares issued upon sales of common stock                         26,829,486               3,224,014              16,818,844
Shares issued upon exercise of stock options                        510,000                  59,739                 799,760
Market value ($2.375 per share) of shares issued in
  1953 to acquire an investment                                      54,538                   5,454                 124,074
Shares issued in 1953 in exchange for 1/3rd of a 1/60th
  overriding royalty (sold in prior year) in nonproducing
  leases of Coastal Petroleum                                        84,210                   8,421                       -
Market value of shares issued for services rendered
  during the period 1954-1966                                        95,188                   9,673                 109,827
Net transfers to restate the par value of common stock
  outstanding in 1962 and 1970 to $0.12 per share                         -                 117,314                (117,314)
Increase in Company's investment (equity) due to
  capital transactions of Coastal Petroleum in 1976                       -                       -                 117,025
                                                                 ----------               ---------              ----------
Balance at December 31, 1990                                     33,363,632               4,003,636              19,395,084
Sale of subsidiary shares                                                 -                       -                 300,000
                                                                 ----------               ---------              ----------
Balance at December 31, 1991                                     33,363,632               4,003,636              19,695,084
Sale of subsidiary shares                                                 -                       -                 390,000
                                                                 ----------               ---------              ----------
Balance at December 31, 1992                                     33,363,632               4,003,636              20,085,084
Sale of subsidiary shares                                                 -                       -               1,080,000
                                                                 ----------               ---------              ----------
Balance at December 31, 1993                                     33,363,632               4,003,636              21,165,084
Sale of subsidiary shares                                                 -                       -                 630,000
                                                                 ----------               ---------              ----------
Balance at December 31, 1994                                     33,363,632               4,003,636              21,795,084
Sale of subsidiary shares                                                 -                       -                 600,000
                                                                 ----------               ---------              ----------
Balance at December 31, 1995                                     33,363,632               4,003,636              22,395,084
Sale of common stock                                              6,672,726                 800,727               5,555,599
Sale of subsidiary shares                                                 -                       -                 480,000
Exercise of stock options                                            10,000                   1,200                  12,300
                                                                 ----------               ---------              ----------
Balance at December 31, 1996                                     40,046,358               4,805,563              28,442,983
Sale of subsidiary shares                                                 -                       -                 240,000
Exercise of stock options                                            10,000                   1,200                  10,050
                                                                 ----------               ---------              ----------
Balance at December 31, 1997, 1998, 1999                         40,056,358               4,806,763              28,693,033
Sale of common stock                                              3,411,971                 409,436               2,729,329
Compensation recognized for stock option grant                            -                       -                  75,000
                                                                 ----------             -----------            ------------
Balance at December 31, 2000 and September 30, 2001              43,468,329             $ 5,216,199            $ 31,497,362
                                                                 ==========             ===========            ============
See accompanying notes.
COASTAL CARIBBEAN OILS & MINERALS, LTD.
                   Notes to Consolidated Financial Statements
                                December 31, 2000

1.       Summary of significant accounting policies
         ------------------------------------------

Consolidation
-------------

         The accompanying consolidated financial statements include the accounts
of Coastal Caribbean Oils & Minerals, Ltd. ("Coastal Caribbean") and its
majority owned subsidiary, Coastal Petroleum Company ("Coastal Petroleum"),
referred to collectively as the Company. The Company, which is engaged in a
single industry and segment, is considered to be a development stage company
since its exploration for oil, gas and minerals has not yielded any significant
revenue or reserves. All intercompany transactions have been eliminated.

Unaudited Information
---------------------

         The information as of September 30, 2001 and for the periods ended
September 30, 2001 and September 30, 2000 is unaudited but includes all
adjustments which the Company considers necessary for a fair statement of the
results for those periods. All adjustments are of a normal recurring nature.

Cash and Cash Equivalents
-------------------------

         The Company considers all highly liquid short-term investments with
maturities of three months or less at the date of acquisition to be cash
equivalents. Cash and cash equivalents are carried at cost which approximates
market value. The components of cash and cash equivalents are as follows:
September 30,                         December 31,
                         ----------------         ----------------------------------------
                               2001                      2000                     1999
                         ----------------         ----------------------------------------
Cash                         $ 112,973                $ 159,834                 $ 59,061
Short term investments       1,090,857                2,798,840                  592,063
                            ----------               ----------                 --------
                            $1,203,830               $2,958,674                 $651,124
                            ==========               ==========                 ========
Use of Estimates
----------------

         The preparation of consolidated financial statements in conformity with
accounting principles generally accepted in the United States requires
management to make estimates and assumptions that affect the amounts reported in
the financial statements and accompanying notes. The outcome of the litigation
and the ability to develop the Company's oil and gas properties will have a
significant effect on the Company's financial position and results of
operations. Actual results could differ from those estimates.

Unproved Oil and Gas Properties
-------------------------------

         The Company follows the full cost method of accounting for its oil and
gas properties. All costs associated with property acquisition, exploration and
development activities whether successful or unsuccessful are capitalized. Since
the Company's properties are undeveloped and nonproducing and the subject of
litigation, capitalized costs are not being amortized.

1.       Summary of significant accounting policies (Cont'd)
         ---------------------------------------------------

         The Company assesses whether its unproved properties are impaired on a
periodic basis. This assessment is based upon work completed on the properties
to date, the expiration date of its leases and technical data from the
properties and adjacent areas. These properties are subject to extensive
litigation with the State of Florida. Although the property interests may be
impaired by the actions taken by the State, the likelihood of loss with respect
to the recorded costs of the leasehold interests is not probable. (See Note 5
"Litigation".) Based on the exploration activities on the properties completed
to date, the exploration and development activities of others in the Gulf of
Mexico and the laws applicable to the taking of property, the Company expects to
recover its $4.9 million of capitalized costs. However, there can be no
assurance that it will be successful and that costs associated with these
properties will be realized.

Sale of Subsidiary Shares
-------------------------

         All amounts realized from the sale of Coastal Petroleum shares have
been credited to capital in excess of par value.

Earnings (Loss) Per Share
-------------------------

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

Financial Instruments
---------------------

         The carrying value for cash and cash equivalents, accounts receivable,
marketable securities and accounts payable approximates fair value based on
anticipated cash flows and current market conditions.

2.       Coastal Petroleum Company - Minority Interests
         ----------------------------------------------

         In 1992, Coastal Caribbean granted Lykes Minerals Corp. ("Lykes"), a
wholly owned subsidiary of Lykes Bros. Inc., an option to acquire 78 shares of
Coastal Petroleum at $40,000 per share. Lykes exercised all of its options to
purchase Coastal Petroleum shares at a total cost of $3,120,000 and at September
30, 2001, December 31, 2000 and 1999, held 26.7% of Coastal Petroleum.

         The Lykes agreement provides that Lykes is entitled to exchange each
Coastal Petroleum share for 100,000 Coastal Caribbean shares, subject to
adjustment for dilution and other factors. If fully exercised, that entitlement
would leave Lykes with about 15% of Coastal Caribbean's outstanding shares.
Lykes also has the right to exchange Coastal Petroleum shares for overriding
royalty interests in Coastal Petroleum's properties.
2.       Coastal Petroleum Company - Minority Interests (Cont'd)
         -------------------------------------------------------

          If Lykes were to exchange its 26.7% interest in Coastal Petroleum for
a royalty interest, its overriding royalty interest in Coastal Petroleum's
working-interest acreage would be 3.3%.

         As of September 30, 2001, December 31, 2000 and 1999, Coastal Petroleum
shares were owned as follows:
                                           Shares               %
                                           ------            -------
         Coastal Caribbean                    173              59.3
         Lykes                                 78              26.7
         Others                                41              14.0
                                             ----            ------
                                              292             100.0
                                             ====             =====

3.       Marketable Securities
         ---------------------

         At September 30, 2001 and December 31, 2000, there were no marketable
securities with maturity dates of more than three months. At December 31, 1999,
the following marketable securities were available for sale because of the
Company's capital requirements:
Security         Par Value    Maturity Date  Carrying Value       Fair Value
               ---------        ---------    -------------  --------------       ----------
Connecticut   State  Serial  A
Taxable Bond  6.25%              $400,000    July 1, 2003      $390,941           $390,941
                                 ========                      ========           ========
4.       Unproved oil, gas and mineral properties
         ----------------------------------------

         Coastal Petroleum holds three unproved and nonproducing oil, gas and
mineral leases granted by the Trustees of the Internal Improvement Fund of the
State of Florida (the "Trustees"). These leases cover submerged and unsubmerged
lands, principally along the Florida Gulf Coast, and certain inland lakes and
rivers throughout the State.

         The two leases bordering the Gulf Coast have been divided into three
areas, each running the entire length of the coastline from Apalachicola Bay to
the Naples area. Coastal Petroleum has certain royalty interests in the inner
area, no interest in the middle area and has a 100% working interest in the
outside area.

         Coastal Petroleum also has a 100% working interest in Lake Okeechobee,
and a royalty interest in other areas. Coastal Petroleum has agreed not to
conduct exploration, drilling, or mining operations on said lake, except with
prior approval of the Trustees.

4.  Unproved oil, gas and mineral properties (Cont'd)
    -------------------------------------------------

         The three leases have a term of 40 years from January 6, 1976 and
require the payment of annual lease rentals of $59,247; if oil, gas or minerals
are being produced in economically sustainable quantities at January 6, 2016,
these operations will be allowed to continue until they become uneconomic. The
drilling requirements are governed by Chapter 20680, Laws of Florida, Acts of
1941. The Company believes that it is current in fulfilling its drilling
requirements.

         The working interest areas of the three leases are subject to royalties
payable to the Trustees of 12 1/2% on oil and gas, $.50 per long ton of sulfur
and 10% on other minerals. The leases are subject to additional overriding
royalties which aggregate 1/16th as to oil, gas and sulfur and 13/600th as to
other minerals.

         During 2000, the Company capitalized approximately $48,000 ($24,000 in
1999 and $340,000 in 1998) under a program to identify potential drilling
prospects. The amount of 2001 expenditures, if any, will depend on the outcome
of the Florida litigation.

         The following is a summary of the cost of unproved oil, gas and mineral
properties, accounted for under the full cost method, all of which are located
in Florida:
December 31,
                                                                 September 30,            -----------------------------
                                                                      2001                  2000                  1999
                                                                      ----                  ----                  ----
Lease acquisition costs                                            $ 914,619             $ 914,619             $ 914,619
Lease and royalty costs (principally legal fees)                     591,616               591,616               591,616
Lease rentals                                                      2,566,267             2,507,020             2,447,774
Dry hole costs                                                       587,987               587,987               587,987
Other exploratory expenses                                         1,227,120             1,229,316             1,240,372
Salaries                                                             466,983               466,983               466,983
                                                                   ---------             ---------             ---------
                                                                   6,354,592             6,297,541             6,249,351
                                                                   ---------             ---------             ---------
Deduct:
  Reimbursement for lease rentals and other expenses               1,243,086             1,243,086             1,243,086
  Proceeds from relinquishment of surface rights                     246,733               246,733               246,733
                                                                    ---------            ---------             ---------
                                                                   1,489,819             1,489,819             1,489,819
                                                                   ----------           ----------            -----------
Total unproved oil, gas and mineral properties                    $4,864,773            $4,807,722            $4,759,532
                                                                  ==========            ==========            ==========
5.       Litigation
         ----------

Florida Litigation
------------------

         Coastal Petroleum has been involved in various lawsuits for many years.
Coastal Petroleum's current litigation (the "Florida Litigation") now involves
one basic claim: whether the State's offshore drilling policy and its denial of
a permit constitute a taking of its property. In addition, Coastal Caribbean is
a party to another action in which Coastal Caribbean claims that certain of its
royalty interests have been confiscated by the State.

          In 1990, the State of Florida enacted legislation that prohibits
drilling or exploration for oil or gas on Florida's offshore acreage. Although
the law does not apply to areas where Coastal Petroleum is entitled to conduct
exploration, the State of Florida has effectively prevented any exploratory
drilling by denying the Company's application for drilling permits. In addition,
in those areas where Coastal Petroleum has only a royalty interest, the law also
effectively prohibits production of oil and gas, rendering it impossible for
Coastal Petroleum to collect royalties from those areas. During 1998, Coastal
Petroleum exhausted its legal remedies in its efforts to obtain compensation for
the drilling prohibition on its royalty interest acreage.

Lease Taking Case
-----------------

         On June 26, 2000, the First District Court of Appeal affirmed an
earlier ruling that the Florida Department of Environmental Protection (DEP)
could deny Coastal Petroleum a permit to drill an exploratory well about nine
miles south of St. George Island in the Florida Panhandle. While the appeals
court held that the DEP could take such action on the basis of a compelling
public purpose in not allowing offshore oil and gas drilling in Florida, the
court also found that the DEP's action would be unconstitutional "if just
compensation is not paid for what is taken."

         On January 16, 2001, Coastal Petroleum filed a complaint in the Leon
County Circuit Court in Florida against the State of Florida seeking
compensation for the State's taking of its property rights to explore for oil
and gas within its Lease 224-A.

         On February 13, 2001, certain holders of royalties pertaining to Lease
224-A filed a Motion to Intervene as Additional Plaintiffs. On April 24, 2001,
the Leon County Circuit trial judge granted certain royalty holders with
overriding royalties, which aggregate approximately 4% on State Lease 224-A, the
right to intervene on a limited basis in the takings lawsuit. On May 22, 2001,
the royalty holders appealed the Circuit Court's order granting them limited
intervention to the First District Court of Appeal, claiming the order denied
them the right to fully participate in the case until after final judgment and
that the court erroneously found that the royalty holders lack an ownership
interest in Coastal Petroleum's lease. On June 12, 2001, the Court of Appeal
ordered the royalty holders to show cause why the appeal should not be dismissed
for lack of jurisdiction. The royalty holders filed a response to the Court of
Appeal on June 21, 2001, Coastal Petroleum filed its reply on July 2, 2001 and
the State of Florida filed its reply on July 5, 2001. The Court of Appeal is
currently considering the matter.
5.       Litigation (Cont'd)
         -------------------

         On March 5, 2001, the State filed a Motion to Dismiss Coastal
Petroleum's complaint, which was denied by the court on April 26, 2001. After
the Motion was denied, discovery, which had been suspended pending the outcome
of the Motion to Dismiss, resumed. Some depositions have now been taken,
documents have been exchanged and discovery is expected to continue until the
cutoff date of August 25, 2002.

         On November 27, 2001, the Leon County Circuit Court set a trial date
for two weeks beginning September 30, 2002 for Coastal's lawsuit against the
State of Florida.

Royalty Taking Case
-------------------

         The offshore areas covered by Coastal Petroleum's original leases
(prior to the 1976 Settlement Agreement) are subject to certain other royalty
interests held by third parties, including Coastal Caribbean. Several of those
third parties, including Coastal Caribbean, have instituted a separate lawsuit
against the State. That lawsuit claims that the royalty holders' interests have
been confiscated as a result of the State's actions discussed above and that
they are entitled to compensation for that taking. The royalty holders were not
parties to the 1976 Settlement Agreement, and the royalty holders contend that
the terms of the Settlement Agreement do not protect the State from taking
claims by those royalty holders. The case is currently pending before the
Circuit Court in Tallahassee. On December 2, 1999, the Circuit Court denied the
State's motion to dismiss the plaintiffs' claim of inverse condemnation but
dismissed several other claims.

         On May 10, 2000, the State filed a motion for summary judgment but no
hearing date has been set for the motion. Discovery is proceeding.

         Any recovery made in the royalty holders' lawsuit would be shared among
the various plaintiffs in that lawsuit, including Coastal Caribbean, but not
Coastal Petroleum.

Counsel

         The Tampa, Florida law firm of Gaylord Merlin Ludovici Diaz & Bain is
Coastal Petroleum's principal trial counsel in Coastal Petroleum's inverse
condemnation claim against the State of Florida in Florida Circuit Court. Mr.
Cary Gaylord is the lead attorney for Gaylord Merlin. In addition, the law firm
of Angerer & Angerer of Tallahassee, Florida is assisting Gaylord Merlin in the
litigation.

Statutory Attorneys' Fees

         Chapter 73 of Florida law provides in eminent domain proceedings (which
would include Coastal Petroleum's taking claim) that, in addition to the award
made to the property owner, the court shall award attorneys' fees based on the
difference between the final judgment or settlement and the first written offer
made to the property owner by the State in accordance with the following
schedule:
5.       Litigation (Cont'd)
         -------------------

         1.       Thirty-three percent of any difference up to $250,000; plus
         2.       Twenty-five percent of any portion of the difference between
                  $250,000 and $1 million; plus
         3.       Twenty percent of any portion of the difference exceeding
                  $1 million.

Contingency Fees

         Coastal Petroleum has agreed to pay an aggregate of 8.65% in contingent
fees based on any net recovery from execution on or satisfaction of judgment or
from settlement of the Florida litigation to various law firms and current or
former officers of the Company.

         In addition, Coastal Petroleum has agreed to pay Gaylord Merlin a
contingent fee equal to the greater of:

        (a)       approximately 90% of the statutory award of attorneys' fees
                  (discussed above), less the hourly fees paid to Gaylord
                  Merlin, or

         (b)      ten percent of the first $100 million or portion thereof of
                  the compensation received by Coastal Petroleum from the State
                  as compensation for the taking of its property, plus five
                  percent of such compensation in excess of $100 million, less
                  the hourly fees paid to Gaylord Merlin and other costs of the
                  litigation.

Uncertainty

         At September 30, 2001 and December 31, 2000, the amount of unproved
oil, gas and mineral properties totaled $4.9 and $4.8 million respectively,
which costs the Company expects to recover. However, no assurances can be given
that Coastal Petroleum or Coastal Caribbean will prevail on any of the issues
set forth above, that they will recover compensation for any of their claims, or
that a drilling permit will be granted. In addition, even if Coastal Petroleum
were to prevail on any or all of the issues to be decided, no assurance can be
given that Coastal Caribbean or Coastal Petroleum will have sufficient financial
resources to survive until such decisions become final or to drill any wells for
which permits are received. There is also no assurance that any wells drilled
will be successful and lead to production of any oil or gas in commercial
quantities.

6.       Common Stock
         ------------

         The Company's Bye-Law No. 1 provides that any matter to be voted upon
must be approved not only by a majority of the shares voted at such meeting, but
also by a majority in number of the shareholders present in person or by proxy
and entitled to vote thereon.

         The Company has been financing its operations primarily from sales of
its common stock and sales of shares of Coastal Petroleum (See Note 2).
6.       Common Stock (Cont'd)
         ---------------------

         On October 23, 2000, the Company completed the sale of 3,411,971 shares
of its common stock to its shareholders at $1.00 per share. The net proceeds to
the Company were $3,138,765 after deducting the $273,206 cost of the offering.

         The following represents shares issued upon sales of common stock:

                  Number                      Capital     Capital in Excess
 Year            of Shares                      Stock          of Par Value
 ----            ---------                     ------          ------------
 1953              300,000                   $ 30,000           $   654,000
 1954               53,000                      5,300               114,265
 1955               67,000                      6,700               137,937
 1956               77,100                      7,710               139,548
 1957               95,400                      9,540               152,492
 1958              180,884                     18,088               207,135
 1959              123,011                     12,301               160,751
 1960              134,300                     13,430               131,431
 1961              127,500                     12,750                94,077
 1962                9,900                        990                 8,036
 1963              168,200                     23,548                12,041
 1964              331,800                     46,452                45,044
 1965              435,200                     60,928               442,391
 1966              187,000                     26,180               194,187
 1967              193,954                     27,153               249,608
 1968               67,500                      9,450               127,468
 1969                8,200                      1,148                13,532
 1970              274,600                     32,952               117,154
 1971              299,000                     35,880                99,202
 1972              462,600                     55,512               126,185
 1973              619,800                     74,376               251,202
 1974              398,300                     47,796                60,007
 1975                    -                          -              (52,618)
 1976                    -                          -               (8,200)
 1977              850,000                    102,000             1,682,706
 1978               90,797                     10,896               158,343
 1979            1,065,943                    127,914             4,124,063
 1980              179,831                     21,580               826,763
 1981               30,600                      3,672               159,360
 1983            5,318,862                    638,263             1,814,642
 1985                    -                                         (36,220)
                                                    -
 1986            6,228,143                    747,378             2,178,471
 1987            4,152,095                    498,251             2,407,522
 1990            4,298,966                    515,876                26,319
 1996            6,672,726                    800,727             5,555,599
 2000            3,411,971                    409,436             2,729,329
                 ---------                    -------             ---------
                36,914,183                 $4,434,177           $25,103,772
                ----------                 ----------           -----------
6.       Common Stock (Cont'd)
         ---------------------

     The following represents shares issued upon exercise of stock options:

                   Number                       Capital     Capital in Excess
 Year            of  Shares                      Stock          of Par Value
 ----            ----------                     ------          ------------
 1955               73,000                    $ 7,300              $175,200
 1978                7,000                        840                 6,160
 1979              213,570                     25,628               265,619
 1980               76,830                      9,219               125,233
 1981              139,600                     16,752               227,548
 1996               10,000                      1,200                12,300
 1997               10,000                      1,200                10,050
                   -------                      -----                ------
                   530,000                    $62,139              $822,110
                   =======                    =======              ========

        Coastal Caribbean has reserved 7,800,000 shares of its common stock
        which may be issued in exchange for Coastal Petroleum shares, as
        described in Note 2.

7.       Stock Option Plan
         -----------------

         The Company has elected to follow Accounting Principles Board Opinion
No. 25, "Accounting for Stock Issued to Employees" (APB No. 25) and related
Interpretations in accounting for its stock options because the alternative fair
value accounting provided under FASB Statement No. 123, "Accounting for Stock
Based Compensation," requires use of option valuation models that were not
developed for use in valuing stock options. Under APB No. 25, because the
exercise price of the Company's stock options equals the market price of the
underlying stock on the date of grant, no compensation expense is recognized.

         During 1995, the Company adopted a Stock Option Plan covering 1,000,000
shares of the Company's common stock. On March 24, 2000, ten year options to
purchase 700,000 shares of the Company's common stock were granted. A charge to
legal expense in the amount of $75,000 for the issuance of 100,000 options to
legal counsel was recorded. Options are normally immediately vested and
exercisable. The following table summarizes stock option activity:
Options outstanding                                                        Number of Shares         Exercise Price ($)
-------------------                                                        ----------------         ------------------
Outstanding and exercisable at December 31, 1997                                362,000                    1.13
     Granted                                                                    225,000                    2.625
                                                                                -------
Outstanding and exercisable at December 31, 1998                                587,000                 1.13-2.625
     Expired                                                                   (60,000)                    1.13
                                                                               --------
Outstanding and exercisable at December 31, 1999                                527,000                 1.13-2.625
     Expired                                                                   (302,000)                  . 1.13
     Granted                                                                    700,000                     .91
                                                                                -------
Outstanding and exercisable at December 31, 2000 and Sept. 30, 2001             925,000                 .91 -2.625
                                                                                =======
                                                                                                (1.33 weighted average)

Available for grant at December 31, 2000 and September 2001                    55,000
-----------------------------------------------------------                    ======
7.       Stock Option Plan (Cont'd)
         --------------------------

Summary of Options Outstanding at December 31, 2000 and September 30, 2001
--------------------------------------------------------------------------

Year Granted  Number of Shares           Expiration Date      Exercise Prices $
------------  ----------------           ---------------      -----------------
Granted 1998      225,000                  May 19, 2003             2.625
Granted 2000      700,000                 Mar. 22, 2010              .91
                  -------
Total             925,000
                  =======

         Pro forma information regarding net income and earnings per share is
required by FASB Statement No. 123, and has been determined as if the Company
had accounted for its stock options under the fair value method of that
Statement. The fair value for these options was estimated at the date of grant
using a Black-Scholes option-pricing model.

         Option valuation models require the input of highly subjective
assumptions including the expected stock price volatility. The assumptions used
in the valuation model were: 1998 risk free interest rate - 5.45%, expected life
- 5 years, expected volatility - .707 and expected dividend - 0 and in 2000 risk
free interest rate - 6.66%, expected life - 10 years, expected volatility - .741
and expected dividend - 0.

         Because the Company's stock options have characteristics significantly
different from those of traded options, and because changes in the subjective
input assumptions can materially affect the fair value estimate, in management's
opinion, the existing models do not necessarily provide a reliable single
measure of the fair value of its stock options.

         For the purpose of pro forma disclosures, the estimated fair value of
the stock options is expensed in the year of grant since the options are
immediately exercisable. The Company's pro forma information follows:

                                                   Amount         Per Share
                                                   ------         ---------
Net loss as reported - December 31, 1998       $(1,154,681)       $(.03)
Stock option expense                              (369,000)        (.01)
                                               -------------       -----
Pro forma net loss                             $(1,523,681)       $(.04)
                                               ============       ======

Net loss as reported - December 31, 2000       $(1,385,552)       $(.03)
Stock option expense                              (450,000)        (.01)
                                               -------------       -----
Pro forma net loss                             $(1,835,552)       $(.04)
                                               ============       ======

8.       Income taxes
         ------------

         Bermuda currently imposes no taxes on corporate income or capital gains
outside of Bermuda. The Company's subsidiary, Coastal Petroleum, has U.S. net
operating loss carry forwards for federal and state income tax purposes, which
may be used to reduce its taxable income, if any, during future years which
aggregated approximately $12,133,000 at December 31, 2000 ($12,077,000 at
December 31, 1999) and expire in varying amounts from 2001 through 2020. For
financial reporting purposes, a valuation allowance has been recognized to
8.       Income taxes (Cont'd)
         ---------------------

offset the deferred tax assets relating to those carry forwards. Significant
components of the Company's deferred tax assets were as follows:
                                                2000               1999
                                                ----               ----
Net operating losses                         $4,720,000        $4,544,000
Deferred intercompany interest deduction      1,453,000         1,109,000
                                              ---------         ---------
Total deferred tax assets                     6,173,000         5,653,000
Valuation allowance                          (6,173,000)       (5,653,000)
                                             -----------       -----------
Net deferred tax assets                      $        -        $        -
                                             ===========       ===========

9.       Related parties
         ---------------

         G&O'D INC provides accounting and administrative services and office
facilities and support staff to the Company. G&O'D INC is owned by Mr. James R.
Joyce, Treasurer and Assistant Secretary. During 2000, 1999 and 1998, G&O'D
billed fees of $155,440, 144,495, and $160,764, respectively. During the nine
months ended September 30, 2001, G&O'D billed fees in the amount of $102,910.

10.      Going concern
         -------------

         The Company has a limited amount of working capital, has incurred
recurring losses and has an accumulated deficit. Furthermore, as discussed in
Note 5, on January 16, 2001, Coastal Petroleum Company filed a complaint in the
Leon County Circuit Court in Florida against the State of Florida seeking
compensation for the State's taking of its property rights to explore for oil
and gas within its Lease 224-A. On November 27, 2001, the Leon County Circuit
Court set a trial date for two weeks beginning September 30, 2002 for Coastal's
lawsuit against the State of Florida. The cost of that litigation has been
substantial and will require the Company to obtain additional capital. There can
be no assurances that funds on hand or realized or realizable on the sales of
the Company's shares described in Note 6 will be sufficient to allow the Company
to survive until such litigation is concluded. The Company believes the funds on
hand at September 30, 2001 are sufficient to pay the expenses associated with
the proposed rights offering and to fund the Company's operations through the
second quarter of 2002.
Prospective investors may rely only on the information contained in this
prospectus. Coastal Caribbean Oils & Minerals, Ltd., has not authorized anyone
to provide any other information. This prospectus is not an offer to sell to -
nor is it seeking an offer to buy these securities from - any person in any
jurisdiction where the offer and sale is not permitted. The information here is
accurate only as of the date of this prospectus, regardless of the time of the
delivery of this prospectus or any sale of these securities.

No action is being taken in any jurisdiction outside the United States to permit
a pubic offering of the common stock or possession or distribution of this
prospectus in any such jurisdiction. Persons who come into possession of this
prospectus in jurisdictions outside the United States are required to inform
themselves about and to observe the restrictions of that jurisdiction related to
this offering and the distribution of this prospectus.

                     COASTAL CARIBBEAN OILS & MINERALS, LTD.

                               ___________ SHARES

                                  Common Stock

                               ------------------
                                   PROSPECTUS
                               ------------------

                              ___________ __, 2002
PART II.

                     INFORMATION NOT REQUIRED IN PROSPECTUS

Item 13. Other Expenses of Issuance and Distribution.

                  The following is an estimate of our expenses in connection
with the issuance and distribution of the securities being registered, subject
to future contingencies:

    Registration Fees                                     $    1,558
    Stock Exchange Listing Fee                                 5,000
    Printing and Engraving Expenses                           40,000
    Transfer Agent's and Registrar's Fees                     60,000
    Blue Sky Qualification Fees and Expenses                   2,000
    Legal and Accounting Fees and Expenses                   120,000
    Miscellaneous                                             21,442
                                                             -------
    Total                                                   $250,000
                                                            =========

Item 14. Indemnification of Directors and Officers.

                  Paragraph 161 of Coastal Caribbean's Bye-Laws contains the
following provisions respecting indemnification:

                  161. (1) The Directors, Secretary and other officers and each
                  person who is or was or had agreed to become a Director or
                  officer of the Company, and each such person who is or was
                  serving or who had agreed to serve at the request of the Board
                  of Directors or an officer of the Company as an employee or
                  agent of the Company or as a Director, officer, employee or
                  agent of another company, corporation, partnership, joint
                  venture, trust or other enterprise and every Auditor for the
                  time being of the Company and the liquidator or trustees (if
                  any) for the time being acting in relation to any of the
                  affairs of the Company and everyone of them, and every one of
                  their heirs, executors, administrators and estates, shall be
                  indemnified and secured harmless out of the assets and profits
                  of the Company from and against all actions, costs, charges,
                  losses, damages and expenses which they or any of them, their
                  or any of their heirs, executors, administrators or estates,
                  shall or may incur or sustain by or by reason of any act done,
                  concurred in or omitted in or about the execution of their
                  duty, or supposed duty, in their respective offices or trusts;
                  and none of them shall be answerable for the acts, receipts,
                  neglects or defaults of the other or others of them or for
                  joining in any receipts for the sake of conformity, or for any
                  bankers or other persons with whom any moneys or effects
                  belonging to the Company shall or may be lodged or deposited
                  for safe custody, or for insufficiency or deficiency of any
                  security upon which any moneys of or belonging to the Company
                  shall be placed out on or invested, or for any other loss,
                  misfortune or damage which may happen in the execution of
                  their respective offices or trusts, or in relation thereto;
                  PROVIDED THAT this indemnity shall not extend to any matter in
                  respect of any fraud or dishonesty which may attach to any of
                  said persons. Subject to the provisions of the Act and without
                  limiting the generality or the effect of the foregoing, the
                  Company may enter into one or more agreements with any person
                  which provide for indemnification greater or different than
                  that provided in this Bye-Law. Any repeal or modification of
                  this Bye-Law shall not adversely affect any right or
                  protection existing hereunder immediately prior to such repeal
                  or modification.

                           (2) Each Member and the Company agree to waive any
                  claim or right of action he or it might have, whether
                  individually or by or in the right of the Company, against any
                  Director on account of any action taken by such Director, or
                  the failure of such Director to take any action, in the
                  performance of his duties, or supposed duties, with or for the
                  Company; PROVIDED THAT such waiver shall not extend to any
                  matter in respect of any fraud or dishonesty which may attach
                  to such Director. Any repeal or modification of this Bye-Law
                  shall not adversely affect any right or protection of a
                  Director of the Company existing immediately prior to such
                  repeal or modification.

         In 1987, we purchased $100,000 of directors' and officers' liability
insurance coverage from an unaffiliated Bermuda company at a cost of $100,000
plus an annual $7,500 service fee during the period of the policy. During June
1997, the amount of the policy was increased from $100,000 to $200,000. We are
credited with investment income from the policy premium during the term of the
policy and all or a portion of such premium will be refunded at the end of the
policy term to the extent that no claims are made. We had been unable to obtain
any other liability coverage for the Company's directors and officers.

         In recent years, the Company has been able to purchase directors' and
officers' insurance coverage. The current amount of its D&O coverage is $12.2
million (including the above policy) at an annual cost of $216,000.

Item 15. Recent Sales of Unregistered Securities.

         None.

Item 16. Exhibits and Financial Statement Schedules.

(a)      Exhibits

         Item

         1.       Underwriting agreement.

                  Not applicable.

         2.       Plan of acquisition, reorganization, arrangement, liquidation
                  or succession.

                  Not applicable.

         3.       (i)      Articles of Incorporation.

                  Memorandum of Association as amended on June 30, 1982, May 14,
                  1985 and April 7, 1988, filed as Exhibit 3(a) to Report on
                  Form 10-K for the year ended December 31, 1998 are
                  incorporated herein by reference.

                  (ii)     Bye-Laws.

                  Bye-Laws of the Company are incorporated by reference to
                  Exhibit A of the Company's Schedule 14(a) Proxy Statement
                  filed on May 13, 1997.

         4.       Instruments defining the rights of security holders, including
                  indentures.

                  None.

         5.       Opinion re legality.

                  Form of Opinion of Conyers Dill & Pearman filed herein.

         8.       Opinion re tax matters.

                  Not applicable.

         9.       Voting trust agreement

                  Not applicable.

         10.      Material contracts.

                  (a) Drilling Lease No. 224-A, as modified, between the
Trustees of the Internal Improvement Fund of the State of Florida and Coastal
Petroleum Company dated February 27, 1947 filed as Exhibit 10(a) to Report on
Form 10-K for the year ended December 31, 1998 is incorporated herein by
reference.

                  (b) Drilling Lease No. 224-B, as modified, between the
Trustees of the Internal Improvement Fund of the State of Florida and Coastal
Petroleum Company dated February 27, 1947 filed as Exhibit 10(b) to Report on
Form 10-K for the year ended December 31, 1998 is incorporated herein by
reference.

                  (c) Drilling Lease No. 248, as modified, between the Trustees
of the Internal Improvement Fund of the State of Florida and Coastal Petroleum
Company dated February 27, 1947 filed as Exhibit 10(c) to Report on Form 10-K
for the year ended December 31, 1998 is incorporated herein by reference.

                  (d) Memorandum of Settlement dated January 6, 1976 between
Coastal Petroleum Company and the State of Florida filed as Exhibit 10(d) to
Report on Form 10-K for the year ended December 31, 1998 is incorporated herein
by reference.

                  (e) Agreement between the Company and Coastal Petroleum dated
December 3, 1991 filed as Exhibit 10(e) to Report on Form 10-K for the year
ended December 31, 1998 is incorporated herein by reference.

                  (f) Agreement between Lykes  Minerals  Corp.  and Coastal
Caribbean and Coastal  Petroleum dated  October  16, 1992 filed as Exhibit 10(f)
to Report on Form 10-K for the year ended  December  31,  1998 is incorporated
herein by reference.

                  (g) Stock Option Plan adopted March 7, 1995 filed as Exhibit
4A to Form S-8 dated July 28, 1995 is incorporated herein by reference.

         11.      Statement re computation of per share earnings.

                  See Consolidated Financial Statements.

         12.      Statement re computation of ratios.

                  None.

         15.      Letter re unaudited interim financial statements.

                  None.

         16.      Letter re change in certifying accountant.

                  Not applicable.

         21.      Subsidiaries of the registrant.

                  The Company has one subsidiary, Coastal Petroleum Company, a
                  Florida corporation which is 59 1/4 % owned.

         23.      Consent of experts and counsel.

                  Ernst & Young LLP - filed herein.
                  Conyers Dill & Pearman - filed herein.
                  Murtha Cullina LLP- filed herein.
                  Angerer & Angerer - filed herein.
                  Gaylord Merlin Ludovici Diaz & Bain - filed herein

         24.      Power of attorney.

                  Powers of attorney of Graham B. Collis, Nicholas B. Dill,
                  Benjamin W. Heath, John D. Monroe, Timothy L. Largay and
                  Phillip W. Ware filed herein.

         25.      Statement of eligibility of trustee.

                  Not applicable.

         26.      Invitations for competitive bids.

                  Not applicable.

         99.      Additional exhibits

                  Rights Offering Documents
                  -------------------------

                  99.1 Form of subscription card - filed herein 99.2
                  Instructions for Purchasing Stock - filed herein 99.3 Offering
                  cover letter - filed herein 99.4 President's cover letter -
                  filed herein

                  Other Documents
                  ---------------

                  99.5     The decision Coastal Petroleum Company v. Florida
                           Wildlife Federation et. al. of the First District
                           Court of Appeal dated October 6, 1999 (St. George
                           Island permit application case), is incorporated by
                           reference to Exhibit 99(a) to the Company's
                           Current Report on Form 8-K filed on October 7, 1999.
                  99.6     Complaint, filed January 16, 2001 in the Leon County
                           Circuit Court, Coastal Petroleum Company, Plaintiff
                           vs. State of Florida, Department of Environmental
                           Protection, and Board of Trustees of the Internal
                           Improvement Fund, Defendants, is incorporated by
                           reference to Exhibit 99(a) to the Company's Current
                           Report on Form 8-K filed on January 18, 2001.

(b)      Financial Statement Schedules

         Not applicable.

Item 17. Undertakings.

         The undersigned registrants hereby undertake:

         (1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this registration statement:

         (i)  To include any prospectus required by section 10(a)(3) of the
Securities Act of 1933;

         (ii) To reflect in the prospectus any facts or events arising after the
effective date of the registration statement (or the most recent post-effective
amendment thereof) which, individually or in the aggregate, represent a
fundamental change in the information set forth in the registration statement;

         (iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement;

         Provided, however, that paragraphs (1)(i) and (1)(ii) do not apply if
the registration statement is on Form S-3 or Form S-8, and the information
required to be included in a post-effective amendment by those paragraphs is
contained in periodic reports filed by either registrant pursuant to section 13
or section 15(d) of the Securities Exchange Act of 1934 that are incorporated by
reference in the registration statement.

         (2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.

         (3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination of
the offering.

         (4) To file a post-effective amendment to the registration statement to
include any financial statements required by Rule 3-19 of Regulation S-X at the
start of any delayed offering or throughout a continuous offering.

         Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the registrants pursuant to the foregoing provisions, or otherwise, the
registrants have been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrants of expenses
incurred or paid by a director, officer or controlling person of the registrants
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrants will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification is against
public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
SIGNATURES

         Pursuant to the requirements of the Securities Act of 1933, the
registrant has duly caused this registration statement to be signed on its
behalf by the undersigned, thereunto duly authorized in the City of Newport
Beach, in the State of California, on the 10th day of January 2002.

                                         COASTAL CARIBBEAN OILS & MINERALS, LTD.
                                                       (Registrant)

                                         By /s/ Benjamin W. Heath
                                            --------------------------------
                                             Benjamin W. Heath, President

         Pursuant to the requirements of the Securities Act of 1933, this
amendment to this registration statement has been signed below by the following
persons in the capacities and on the dates indicated.
Name                                                    Title                      Date
            ----                                                    -----                      ----

(i) Principal executive officer:

     /s/Benjamin W. Heath                                President and                 January 10, 2002
----------------------------------
        Benjamin W. Heath                                Director

(ii) Principal financial officer:
     and controller or principal
     accounting officer:

     /s/James R. Joyce                                    Treasurer                     January 10, 2002
----------------------------------
        James R. Joyce

(iii) A majority of the Board of
      Directors:

     /s/James R. Joyce                                                                  January 10, 2002
----------------------------------
      James R. Joyce
      Attorney-in-Fact for:

      Graham B. Collis                                    Director
      Nicholas B. Dill                                    Director
      Benjamin W. Heath                                   Director
      John D. Monroe                                      Director
      Timothy L. Largay                                   Director
      Phillip W. Ware                                     Director

        Pursuant to the requirement of the Securities Act of 1933, the
undersigned has signed this registration statement on January 10, 2002.

                              /s/James R. Joyce
                              ------------------------------
                              James R. Joyce
                              Authorized Representative in the
                              United States
INDEX OF EXHIBITS

Item Number                       Description
-----------                       -----------

     5             Form of Opinion of Counsel - Conyers Dill & Pearman

   23.1            Consent of Ernst & Young LLP
   23.2            Consent of Conyers Dill & Pearman
   23.3            Consent of Murtha Cullina LLP
   23.4            Consent of Angerer & Angerer
   23.5            Consent of Gaylord Merlin Ludovici Diaz & Bain

    24            Powers of attorney of Graham B. Collis,  Nicholas B. Dill,
                  Benjamin W. Heath, John D. Monroe, Timothy L. Largay and
                  Phillip W. Ware

                  Additional Exhibits - Rights Offering Documents

   99.1             Form of subscription card
   99.2             Instructions for Purchasing Stock
   99.3             Offering cover letter to Shareholders
   99.4             President's letter to Shareholders - Reason for Offering