THE  WARRANTS REPRESENTED BY THIS CERTIFICATE AND THE  SHARES  OF
COMMON  STOCK  ISSUABLE UPON THE EXERCISE THEREOF HAVE  NOT  BEEN
REGISTERED  UNDER  THE SECURITIES ACT OF 1933,  AS  AMENDED  (THE
"SECURITIES  ACT"), OR ANY OTHER FEDERAL OR STATE  SECURITIES  OR
BLUE SKY LAWS, AND HAVE BEEN ISSUED IN RELIANCE UPON AN EXEMPTION
THEREFROM.  NO OFFER, SALE, TRANSFER, PLEDGE OR OTHER DISPOSITION
(COLLECTIVELY, A "DISPOSAL") OF THE WARRANTS REPRESENTED BY  THIS
CERTIFICATE  OR  THE  SHARES OF COMMON STOCK  ISSUABLE  UPON  THE
EXERCISE  THEREOF  MAY  BE MADE UNLESS (I) REGISTERED  UNDER  THE
SECURITIES  ACT AND ANY APPLICABLE STATE SECURITIES OR  BLUE  SKY
LAWS OR (II) XCL LTD. RECEIVES A WRITTEN OPINION OF UNITED STATES
LEGAL  COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO  IT  TO  THE
EFFECT  THAT  SUCH  DISPOSAL  IS EXEMPT  FROM  SUCH  REGISTRATION
REQUIREMENTS.


     WARRANTS TO PURCHASE
     COMMON STOCK OF XCL LTD.

     Initial Issuance on _______________, ____
      Void  after 5:00 p.m. New York Time, _______________,  ____
[five years after issuance]

                                                       No. LM-__

             THIS    CERTIFIES   THAT,   for   value    received,
_______________(the "Holder") (whose Social  Security  Number  is
______________)  is  the  registered  holder  of  warrants   (the
"Warrants")  to  purchase from XCL LTD., a  Delaware  corporation
(the  "Company"), at any time or from time to time  beginning  on
_______________,  ____, and until 5:00 p.m., New  York  time,  on
_______________,   ____,  [five  years   after   issuance]   (the
"Expiration  Date"), subject to the conditions set forth  herein,
at  the  initial  exercise price of U.S.  $1.50  per  share  (the
"Initial  Exercise Price"), subject to adjustment  as  set  forth
herein  (the  "Exercise Price"), up to an aggregate  of  ________
[21,705  multiplied by number of Units purchased] fully paid  and
non-assessable  shares (the "Shares"), par value $.01  per  share
(the  "Common  Stock"),  of the Company upon  surrender  of  this
certificate (the "Certificate") and payment of the Exercise Price
multiplied  by the number of Shares in respect of which  Warrants
are  then being exercised (the "Purchase Price") at the principal
office  of the Company presently located at 110 Rue Jean Lafitte,
2nd Floor, Lafayette, LA 70508.

          1.     Exercise of Warrants

               (a)      The  exercise of any Warrants represented
by  this Certificate is subject to the conditions set forth below
in Section 4, "Compliance with Securities Laws.

               (b)      Subject  to compliance with  all  of  the
conditions set forth herein, the Holder shall have the  right  to
purchase  from the Company the number of Shares which the  Holder
may  at  the  time be entitled to purchase pursuant hereto,  upon
surrender  of  this Certificate to the Company at  its  principal
office,  together with the form of election to purchase  attached
hereto duly completed and signed, and upon payment to the Company
of  the  Purchase  Price; provided, that  if  the  date  of  such
purchase  is not a day on which banking institutions in New  York
City  are  authorized  or obligated to do business  (a  "Business
Day"),  then such purchase shall take place before 5:00 p.m.  New
York time on the next following Business Day.

               (c)      No  Warrant may be exercised  after  5:00
p.m.,  New York time, on the Expiration Date, at which  time  all
Warrants evidenced hereby, unless exercised prior thereto,  shall
thereafter  be  null and void and all further rights  in  respect
thereof under this Certificate shall thereupon cease.

               (d)      Payment  of the Purchase Price  shall  be
made  in  United States dollars in cash, by wire transfer  or  by
certified  check or banker's draft payable to the  order  of  the
Company, or any combination of the foregoing.

               (e)       The   Warrants   represented   by   this
Certificate are exercisable at the option of the Holder, in whole
or  in part (but not as to fractional Shares).  Upon the exercise
of  less  than all of the Warrants evidenced by this Certificate,
the Company shall forthwith issue to the Holder a new certificate
of like tenor representing the number of unexercised Warrants.

               (f)      Subject  to compliance with  all  of  the
conditions  set forth herein, upon surrender of this  Certificate
to the Company at its principal office, together with the form of
election  to purchase attached hereto duly completed and  signed,
and  upon payment of the Purchase Price, the Company shall  cause
to  be  delivered promptly to or upon the written  order  of  the
Holder  and in such name or names as the Holder may designate,  a
certificate  or  certificates for  the  number  of  whole  Shares
purchased upon the exercise of the Warrants.

          2.       Elimination  of  Fractional  Interests.    The
Company  shall not be required to issue certificates representing
fractions of Shares and shall not be required to issue  scrip  in
lieu  of  fractional interests.  Instead of any  such  fractional
interest  that  would otherwise be issuable to such  Holder,  the
Company shall repurchase such fractional interest in cash  in  an
amount equal to such fractional interest of the closing bid price
for  the Common Stock on The American Stock Exchange, Inc. or any
other  principal stock exchange or in the over-the-counter market
or  other  securities market in which the Common  Stock  is  then
trading  on  the  date of determination (the  "Market  Price  per
Share"); provided, however, the Company shall not be required  to
pay  any Holder any amount in respect of such fractional interest
which is less than $1.00.

          3.      Payment  of Taxes.  The Company  will  pay  all
documentary stamp taxes, if any, attributable to the issuance and
delivery  of  the  Shares  upon the  exercise  of  the  Warrants;
provided, however, that the Company shall not be required to  pay
any  taxes  which  may  be  payable in respect  of  any  transfer
involved in the issuance or delivery of any Warrant or any Shares
in  any name other than that of the Holder, which transfer  taxes
shall  be  paid by the Holder, and until payment of such transfer
taxes,  if  any, the Company shall not be required to issue  such
Shares.

          4.     Compliance with Securities Laws.

               (a)      The  issuance  of the  Warrants  and  the
Shares  issuable pursuant thereto (the Warrants and  such  Shares
being referred to collectively as the "Securities") to the Holder
has not been, and, except as hereinafter set forth in Section  9,
will  not  be, registered under the Securities Act or  any  other
domestic  or foreign securities or blue sky laws (the  Securities
Act and any such other applicable securities or blue sky laws are
hereinafter  collectively referred to herein as  the  "Securities
Laws")   in   reliance  upon  exemptions  from  the  registration
requirements  thereof;  the Holder is  acquiring  the  Securities
solely for its own account for investment and not with a view to,
or for offer or resale in connection with, a distribution thereof
in  violation  of any Securities Laws.  The Securities  shall  be
held  by  the  Holder  unless the sale  or  transfer  thereof  is
subsequently registered under applicable Securities  Laws  or  an
exemption from such registration is available at the time of  the
proposed  sale  or transfer thereof.  Except as  hereinafter  set
forth  in Section 9, the Company shall be under no obligation  to
file  a  registration statement under the Securities Act covering
the  sale  or transfer of the Securities or otherwise to register
the Securities for sale under applicable Securities Laws.

               (b)      Prior  to  any  sale, transfer  or  other
disposition  of any of the Securities (so long as they  have  not
been  registered  under  the Securities Act  as  contemplated  in
Section  9 hereof or are not otherwise freely transferable  under
the  Securities  Laws),  the Holder shall  give  at  least  three
business  days  prior  written  notice  to  the  Company  of  its
intention to effect such sale, transfer or other disposition  and
to  comply  in all other respects with this Section  4(b).   Each
such  notice shall describe the manner and circumstances  of  the
proposed  transfer  in  sufficient detail to  enable  counsel  to
render  the  opinions required herein, and, if requested  by  the
Company, shall be accompanied by an opinion of counsel reasonably
acceptable to the Company (which shall include Holder's  in-house
counsel), addressed to the Company and satisfactory in  form  and
substance  to the Company, stating that, in the opinion  of  such
counsel,  such  transfer  will  be  a  transaction  exempt   from
registration  under  the Securities Laws and that  all  necessary
consents, approvals or authorizations to such transfer have  been
obtained.    Assuming  the  receipt  by  the  Company   of   such
satisfactory opinion, the Holder shall thereupon be  entitled  to
transfer  such  Securities in accordance with the  terms  of  the
notice  delivered by the Holder to the Company. Each  certificate
or  other document issued representing the Securities shall  bear
an  appropriate legend suitably conformed, unless, in the opinion
of  the  respective counsel for the Holder and the Company,  such
legend  is  not  required in order to aid in assuring  compliance
with applicable Securities Laws.

               (c)      The  Holder  shall not  sell  any  Shares
included  in a Registration Statement (as defined in  Section  9)
filed by the Company and declared effective by the Securities and
Exchange  Commission during the period from the date it  receives
notice  of the filing of any such Registration Statement  by  the
Company  through the 90th day after the effective  date  of  such
Registration  Statement, to the public pursuant to Rules  144  or
144A  under  the Securities Act or otherwise, without  the  prior
receipt of the written consent of the Company; provided, however,
that  such  restriction  shall not be applicable  to  the  Holder
unless  the  Registration Statement relates  to  an  underwritten
public  offering of the Company's securities; provided,  further,
the  Holder  shall  be bound by the terms of  this  paragraph  in
connection  with no more than one registration statement  in  any
six month period.

               (d)      In  addition to any specific  restrictive
legends  that  may be required by applicable Securities  Laws  or
agreements  to which the Holder may be a party, the Holder  shall
be  bound  by  a  restrictive legend which may be placed  on  the
certificates representing the Securities. The Company  may  place
and  instruct any transfer agent for the Securities  to  place  a
stop  transfer  notation in the stock records in respect  of  the
certificates  representing  the Securities,  provided  that  such
securities may be transferred upon compliance with the provisions
of this Section 4 and Section 5 below.

          5.     Transfer of Warrants.

               (a)     The Warrants shall be transferable only on
the  books  of the Company maintained at the Company's  principal
office  upon  delivery  of  this Certificate  with  the  form  of
assignment  attached  hereto duly completed  and  signed  by  the
Holder  or by its duly authorized attorney or representative,  or
accompanied  by  proper  evidence of  succession,  assignment  or
authority  to  transfer.   The Company may,  in  its  discretion,
require,  as a condition to any transfer of Warrants, a signature
guarantee  by a commercial bank or trust company, by a broker  or
dealer  which  is  a  member  of  the  National  Association   of
Securities Dealers, Inc.  Upon any registration of transfer,  the
Company  shall deliver a new certificate or certificates of  like
tenor  and evidencing in the aggregate a like number of  Warrants
to  the person entitled thereto in exchange for this Certificate,
subject  to  the limitations provided herein, without any  charge
except  for  any  tax  or other governmental  charge  imposed  in
connection therewith.

               (b)        Notwithstanding   anything   in    this
Certificate to the contrary, neither any of the Warrants nor  any
of the Shares issuable upon exercise of any of the Warrants shall
be  transferable, except upon compliance by the Holder  with  (i)
the  provisions  of  Sections 4 and  5  hereof,  concerning  such
transfer  as if the Holder were the initial Holder, and (ii)  any
applicable  provisions of the Securities Act and  any  applicable
state and foreign securities or blue sky laws.  Any transfer  not
made  in  such  compliance shall be null and void, and  given  no
effect hereunder.

          6.        Exchange   and   Replacement    of    Warrant
Certificates; Loss or Mutilation of Warrant Certificates.

               (a)      This Certificate is exchangeable  without
cost,  upon  the surrender hereof by the Holder at the  principal
office  of  the Company, for new certificates of like  tenor  and
date representing in the aggregate the right to purchase the same
number of Shares in such denominations as shall be designated  by
the Holder at the time of such surrender.

               (b)      Upon  receipt by the Company of  evidence
reasonably satisfactory to it of the loss, theft, destruction  or
mutilation  of this Certificate and, in case of such loss,  theft
or destruction, of indemnity and security reasonably satisfactory
to  it,  and  reimbursement  to the  Company  of  all  reasonable
expenses  incidental thereto, and upon surrender and cancellation
of  this  Certificate, if mutilated, the Company  will  make  and
deliver a new certificate of like tenor, in lieu thereof.

          7.      Initial Exercise Price; Adjustment of Number of
Shares.

               (a)     The Warrants initially are exercisable  at
the  Initial Exercise Price per Share, subject to adjustment from
time to time as provided herein.  No adjustments will be made for
cash  dividends, if any, paid to shareholders of record prior  to
the date on which the Warrants are exercised.

                (b)      In  case the Company shall at  any  time
after the date of this Certificate (i) declare a dividend on  the
shares of Common Stock payable in shares of Common Stock, or (ii)
subdivide or split up the outstanding shares of Common Stock, the
amount  of  Shares to be delivered upon exercise of  any  Warrant
will  be  appropriately  increased so that  the  Holder  will  be
entitled  to receive the amount of Shares that such Holder  would
have  owned  immediately following such actions had such  Warrant
been  exercised immediately prior thereto, and the Exercise Price
in  effect immediately prior to the record date for such dividend
or   the   effective   date  for  such   subdivision   shall   be
proportionately  decreased, all effective immediately  after  the
record  date  for such dividend or the effective  date  for  such
subdivision  or  split  up.   Such  adjustments  shall  be   made
successively whenever any event listed above shall occur.

                (c)      In  case the Company shall at  any  time
after the date of this Certificate combine the outstanding shares
of  Common  Stock into a smaller number of shares the  amount  of
Shares  to  be  delivered upon exercise of any  Warrant  will  be
appropriately  decreased so that the Holder will be  entitled  to
receive  the amount of Shares that such Holder would  have  owned
immediately following such action had such Warrant been exercised
immediately  prior  thereto, and the  Exercise  Price  in  effect
immediately  prior to the record date for such combination  shall
be  proportionately  increased, effective immediately  after  the
record date for such combination.  Such adjustment shall be  made
successively whenever any such combinations shall occur.

               (d)     In the event that the Company shall at any
time  after  the date of this Certificate (i) issue or  sell  any
shares  of  Common  Stock (other than the Shares)  or  securities
convertible or exchangeable into Common Stock to all  holders  of
Common  Stock without consideration or at a price per  share  (or
having  a  conversion price per share, if a security  convertible
into Common Stock) less than the Market Value per share of Common
Stock (as defined in Section 7(f) hereof), or (ii) issue or  sell
options,  rights or warrants to subscribe for or purchase  Common
Stock  to  all holders of Common Stock at a price per share  less
than  the  Market Price per share of Common Stock (as defined  in
Section  7(f)  hereof), the Exercise Price to be in effect  after
the  date of such issuance shall be determined by multiplying the
Exercise  Price  in effect on the day immediately  preceding  the
relevant  issuance or record date, as the case may  be,  used  in
determining such Market Value or Market Price, by a fraction, the
numerator of which shall be the number of shares of Common  Stock
outstanding  on such issuance or record date plus the  number  of
shares of Common Stock which the aggregate offering price of  the
total  number of shares of Common Stock so to be issued or to  be
offered  for  subscription or purchase (or the aggregate  initial
conversion price of the convertible securities so to be  offered)
would purchase at such Market Value or Market Price, as the  case
may  be,  and  the denominator of which shall be  the  number  of
shares  of  Common Stock outstanding on such issuance  or  record
date  plus the number of additional shares of Common Stock to  be
issued  or  to be offered for subscription or purchase  (or  into
which  the  convertible securities so to be offered are initially
convertible); such adjustment shall become effective  immediately
after  the  close  of business on such issuance or  record  date;
provided, however, that no such adjustment shall be made for  the
issuance  of  (s)  options to purchase  shares  of  Common  Stock
granted  pursuant  to the Company's employee stock  option  plans
approved by shareholders of the Company (and the shares of Common
Stock  issuable  upon  exercise of such options)  (provided  that
option exercise prices shall not be less than the Market Value of
the  Common Stock (as defined in Section 7(f) hereof) on the date
of  the  grant  of such options), (t) the Company's  warrants  to
purchase  shares of Common Stock (and the shares of Common  Stock
issuable upon exercise of such warrants), outstanding on the date
hereof,  (u) the Company's shares of Amended Series A, Cumulative
Convertible  Preferred  Stock (and the  shares  of  Common  Stock
issuable upon conversion of such Preferred Stock), outstanding on
the  date  hereof,  or  (v) the Company's  shares  of  Series  B,
Cumulative  Preferred  Stock  (and the  shares  of  Common  Stock
issuable in lieu of dividend and redemption payments thereunder),
outstanding  on the date hereof. In case such subscription  price
may be paid in a consideration, part or all of which shall be  in
a  form other than cash, the value of such consideration shall be
as  determined  reasonably and in good  faith  by  the  Board  of
Directors  of the Company.  Shares of Common Stock  owned  by  or
held   for  the  account  of  the  Company  or  any  wholly-owned
subsidiary shall not be deemed outstanding for the purpose of any
such  computation.   Such adjustment shall be  made  successively
whenever  the  date  of  such issuance is fixed  (which  date  of
issuance  shall be the record date for such issuance if a  record
date  therefor is fixed); and, in the event that such  shares  or
options, rights or warrants are not so issued, the Exercise Price
shall again be adjusted to be the Exercise Price which would then
be in effect if the date of such issuance had not been fixed.

                 (e)      In  case  the  Company  shall  make   a
distribution to all holders of Common Stock (including  any  such
distribution made in connection with a consolidation or merger in
which the Company is the continuing corporation) of evidences  of
its  indebtedness, securities other than Common Stock  or  assets
(other  than cash dividends or cash distributions payable out  of
consolidated earnings or earned surplus or dividends  payable  in
Common Stock), the Exercise Price to be in effect after such date
of  distribution shall be determined by multiplying the  Exercise
Price in effect on the date immediately preceding the record date
for  the  determination of the shareholders entitled  to  receive
such distribution by a fraction, the numerator of which shall  be
the Market Price per share of Common Stock (as defined in Section
7(f)  hereof) on such date, less the then-fair market  value  (as
determined reasonably and in good faith by the Board of Directors
of  the  Company  of  the  portion of the assets,  securities  or
evidences of indebtedness so to be distributed applicable to  one
share of Common Stock and the denominator of which shall be  such
Market  Price  per share of Common Stock, such adjustment  to  be
effective  immediately after the distribution resulting  in  such
adjustment.  Such adjustment shall be made successively  whenever
a date for such distribution is fixed (which date of distribution
shall  be the record date for such distribution if a record  date
therefor is fixed); and, if such distribution is not so made, the
Exercise  Price shall again be adjusted to be the Exercise  Price
which  would  then be in effect if such date of distribution  had
not been fixed.

                (f)     For the purposes of any computation under
this  Section 7, the "Market Price per share" of Common Stock  on
any  date  shall be deemed to be the average of the  closing  bid
price  for  the 20 consecutive trading days ending on the  record
date  for  the  determination  of the  shareholders  entitled  to
receive any rights, dividends or distributions described in  this
Section  7, and the "Market Value per share" of Common  Stock  on
any  date shall be deemed to be the closing bid price on the date
of  the issuance of the securities for which such computation  is
being made, as reported on the principal United States securities
exchange  on  which  the Common Stock is listed  or  admitted  to
trading  or if the Common Stock is not then listed on any  United
States stock exchange, the average of the closing sales price  on
each  such  day  during such 20 day period, in the  case  of  the
Market  Price  computation, or on such date of issuance,  in  the
case  of  the  Market Value computation, in the  over-the-counter
market  as  reported  by the National Association  of  Securities
Dealers'  Automated Quotation System ("NASDAQ"), or,  if  not  so
reported, the average of the closing bid and asked prices on each
such  day  during such 20 day period in the case  of  the  Market
Price  computation, or on such date of issuance, in the  case  of
the  Market  Value computation, as reported in the "pink  sheets"
published by the National Quotation Bureau, Inc. or any successor
thereof,  or, if not so quoted, the average of the middle  market
quotations for such 20 day period in the case of the Market Price
computation,  or  on such date of issuance, in the  case  of  the
Market Value computation, as reported on the daily official  list
of  the  prices  of  stock listed on The  London  Stock  Exchange
Limited  ("The  Stock Exchange Daily Official  List").   "Trading
day"  means  any day on which the Common Stock is  available  for
trading  on  the  applicable  securities  exchange  or   in   the
applicable  securities market.  In the case of  Market  Price  or
Market  Value  computations based on  The  Stock  Exchange  Daily
Official  List,  the  Market  Price  or  Market  Value  shall  be
converted  into  United States dollars at the  then  spot  market
exchange rate of pounds sterling (UK) into United States  dollars
as  quoted by Chemical Bank or any successor bank thereto on  the
date  of determination.  If a quotation of such exchange rate  is
not so available, the exchange rate shall be the exchange rate of
pounds  sterling in United States dollars as quoted in  The  Wall
Street Journal on the date of determination.

                (g)     No adjustment in the Exercise Price shall
be  required unless such adjustment would require an increase  or
decrease  of  at  least  1%  in such  price;  provided  that  any
adjustments which by reason of this Section 7(g) are not required
to be made shall be carried forward and taken into account in any
subsequent  adjustment; provided, further  that  such  adjustment
shall  be  made in all events (regardless of whether or  not  the
amount thereof or the cumulative amount thereof amounts to 1% (or
more)  upon the happening of one or more of the events  specified
in  Sections  7(b),  (c)  or (i).  All  calculations  under  this
Section 7 shall be made to the nearest cent.

                (h)      If  at  any  time, as  a  result  of  an
adjustment  made  pursuant to Section 7(b)  or  (c)  hereof,  the
Holder  of any Warrant thereafter exercised shall become entitled
to  receive any shares of the Company other than shares of Common
Stock,  thereafter the number of such other shares so  receivable
upon  exercise of any Warrant shall be subject to adjustment from
time  to  time  in a manner and on terms as nearly equivalent  as
practicable  to  the  provisions  with  respect  to  the   Shares
contained  in  this  Section  7,  and  the  provisions  of   this
Certificate with respect to the Shares shall apply on like  terms
to such other shares.

                 (i)       In   the  case  of  (l)  any   capital
reorganization of the Company, or of (2) any reclassification  of
the  shares  of  Common  Stock  (other  than  a  subdivision   or
combination of outstanding shares of Common Stock),  or  (3)  any
consolidation or merger of the Company, or (4) the sale, lease or
other transfer of all or substantially all of the properties  and
assets of the Company as, or substantially as, an entirety to any
other  person  or entity, each Warrant shall after  such  capital
reorganization, reclassification of the shares of  Common  Stock,
consolidation,  or  sale  be  exercisable,  upon  the  terms  and
conditions  specified  in this Certificate,  for  the  number  of
shares  of stock or other securities or assets to which a  holder
of  the  number of Shares purchasable (immediately prior  to  the
effectiveness of such capital reorganization, reclassification of
shares of Common Stock, consolidation, or sale) upon exercise  of
a   Warrant   would   have  been  entitled  upon   such   capital
reorganization,  reclassification  of  shares  of  Common  Stock,
consolidation,  merger  or  sale;  and  in  any  such  case,   if
necessary,  the  provisions set forth  in  this  Section  7  with
respect  to  the  rights  thereafter  of  the  Holder  shall   be
appropriately  adjusted  (as determined reasonably  and  in  good
faith  by  the Board of Directors of the Company)  so  as  to  be
applicable,  as  nearly as may reasonably be, to  any  shares  of
stock or other securities or assets thereafter deliverable on the
exercise  of  a Warrant.  The Company shall not effect  any  such
consolidation or sale, unless prior to or simultaneously with the
consummation  thereof, the successor corporation, partnership  or
other  entity  (if  other than the Company) resulting  from  such
consolidation  or the corporation, partnership  or  other  entity
purchasing such assets or the appropriate entity shall assume, by
written  instrument, the obligation to deliver to the  Holder  of
each  Warrant the shares of stock, securities or assets to which,
in  accordance with the foregoing provisions, such Holder may  be
entitled  and  all  other obligations of the Company  under  this
Certificate.  For purposes of this Section 7(i) a merger to which
the  Company is a party but in which the Common Stock outstanding
immediately prior thereto is changed into securities  of  another
corporation  shall  be  deemed a consolidation  with  such  other
corporation being the successor and resulting corporation.

                (j)      Irrespective of any adjustments  in  the
Exercise  Price or the number or kind of shares purchasable  upon
the exercise of the Warrant, Warrant Certificates theretofore  or
thereafter issued may continue to express the same Exercise Price
per  share  and  number and kind of Shares as are stated  on  the
Warrant Certificates initially issuable pursuant to this Warrant.

          8.      Required  Notices to Warrant Holders.   Nothing
contained  in  this Certificate shall be construed as  conferring
upon  the  Holder the right to vote or to consent or  to  receive
notice   as   a  shareholder  in  respect  of  any  meetings   of
shareholders  for the election of directors or any other  matter,
or  as  having  any  rights whatsoever as a  shareholder  of  the
Company.  If, however, at any time prior to the expiration of the
Warrants  or  their exercise, any of the following  events  shall
occur:

               (i)      the  Company shall issue  any  rights  to
          subscribe  for  shares of Common  Stock  or  any  other
          securities of the Company to all of the shareholders of
          the Company; or

               (ii)      a dissolution, liquidation or winding-up
          of  the  Company  (other  than  in  connection  with  a
          consolidation, merger or statutory share exchange) or a
          sale  of  all  or  substantially all of  its  property,
          assets and business as an entirety shall be approved by
          the Company's Board of Directors; or

               (iii)     there shall be any reclassification or a
          change  in the kind of the outstanding shares of Common
          Stock into different securities (other than a change in
          the  number  of outstanding shares or a change  in  par
          value  to  no  par value, or from no par value  to  par
          value)  or  consolidation, merger  or  statutory  share
          exchange of the Company with another entity;

then,  in any one or more of said events, the Company shall  give
written  notice of such event on or before the date  the  Company
gives  notice  to  its shareholders of such event.   Such  notice
shall  specify the applicable record date or the date of  closing
the  transfer books, as the case may be, if any.  Failure to give
such  notice or any defect therein shall not affect the  validity
of any action taken in connection with the event.

          9.     Registration Rights.

               (a)      Piggyback Registration.  If, at any  time
during the five (5) years beginning on the initial issuance  date
of  the  Warrants  represented by this Certificate,  the  Company
proposes to prepare and file any new registration statement under
the  Securities Act covering the public sale of Common  Stock  of
the  Company for cash (in any case, other than in connection with
an  employee  benefit  plan,  a  dividend  reinvestment  plan  or
pursuant to a registration statement on Forms S-4 or S-8  or  any
successor  form)  (collectively, a "Registration Statement"),  it
will  give  written  notice by certified or registered  mail,  at
least  thirty  (30)  days  prior  to  the  filing  of  each  such
Registration Statement, to the Holder of its intention to do  so.
If the Holder notifies the Company within fifteen (15) days after
receipt of any such notice of such Holder's desire to include  in
such  proposed Registration Statement any shares of Common  Stock
(i)  issued  or  issuable  to the Holder  upon  exercise  of  the
Holder's  Warrants, and (ii) that are owned by  the  Holder  (the
"Registrable Shares") (which notice shall specify the  number  of
Registrable Shares owned by the Holder and the number intended to
be  disposed of by the Holder), the Company shall use  reasonable
efforts  to include, to the extent possible, in such Registration
Statement the number of Registrable Shares which the Company  has
been  so  requested to register by the Holder, at  the  Company's
sole  cost  and expense and at no cost or expense to the  Holder,
except  that  the Holder shall pay (i) all underwriters'  broker-
dealers',   placement  agents'  and  similar  selling  discounts,
commissions and fees relating to the Holder's Registrable Shares,
(ii)   all  registration  and  filing  fees  imposed  under   the
Securities  Act, by any stock exchange or under applicable  state
securities  or  blue  sky laws based on the Holder's  Registrable
Shares,  (iii) all transfer, franchise, capital stock  and  other
taxes, if any applicable to the Holder's Registrable Shares,  and
(iv)  the  costs  and expenses of legal counsel,  accountants  or
other  advisors  retained  by the Holder  in  excess  of  $15,000
(collectively, the "Holder's Expenses"), provided that;

               (i)     anything in this Section 9 to the contrary
          notwithstanding,   if  the  Company's   securities   so
          registered  for  sale  are  to  be  distributed  in  an
          underwritten  offering  and  the  managing  underwriter
          shall  advise  the  Company that, in its  opinion,  the
          amount of securities to be offered should be limited in
          order  to  assure a successful offering, the amount  of
          Registrable  Shares to be included in such Registration
          Statement  shall be so limited and shall  be  allocated
          among  the  persons  selling  such  securities  in  the
          following   order  of  priority:   (A)  first   to   be
          registered will be the securities the Company  proposes
          to  sell,  (B)  next  to  be  registered  will  be  the
          securities  subject  to any demand registration  rights
          granted by the Company, (C) next to be registered  will
          be  securities  subject  to any piggyback  registration
          rights  granted  by  the  Company  before  the  initial
          issuance  date  of the Warrants, and  (D)  next  to  be
          registered will be the Registrable Shares and any other
          shares  of  Common  Stock subject to similar  piggyback
          registration   rights  granted  by   the   Company   in
          proportion, as nearly as practicable, to the number  of
          shares of Common Stock desired and eligible to be  sold
          by each holder of such shares of Common Stock; and

               (ii)      anything  in  this  Section  9  to   the
          contrary  notwithstanding, the  Company  shall  not  be
          required  to  include  any of the Holder's  Registrable
          Shares  in  a registration statement if in the  written
          opinion  of  legal  counsel to the Company  upon  which
          Holder  is authorized to rely the securities for  which
          registration is requested may be sold publicly  without
          limitation  or  restriction without registration  under
          the Securities Act; and

               (iii)      if the securities or blue sky  laws  of
          any  jurisdiction in which the securities so registered
          are  proposed to be offered would require the  Holder's
          payment  of  greater registration expenses  than  those
          otherwise required by this Section 9 and if the Company
          shall  determine, in good faith, that the  offering  of
          such  securities in such jurisdiction is necessary  for
          the successful consummation of the registered offering,
          then  the Holder shall either agree to pay the  portion
          of the registration expenses required by the securities
          or blue sky laws of such jurisdiction to be paid by the
          Holder  or  withdraw its request for inclusion  of  its
          Registrable Shares in such registration; and

               (iv)      notwithstanding the provisions  of  this
          Section 9(a), the Company shall have the right  at  any
          time and for any reason or for no reason after it shall
          have  given  written notice pursuant to this  paragraph
          (irrespective   of  whether  a  written   request   for
          inclusion of any such securities shall have been  made)
          to  elect  not  to file any such proposed  Registration
          Statement, or to withdraw the same after the filing but
          prior  to  the  effective date thereof and,  thereupon,
          shall  be relieved from its obligation to proceed  with
          such registration.

               If a Holder's Registrable Shares are included in a
Registration Statement, the Holder shall furnish the  Company  in
writing   with   such  appropriate  documents   and   agreements,
including,  without limitation, indemnification and  contribution
agreements, as well as such appropriate information in connection
with  the  sale  of  such Shares, including, without  limitation,
information  about  the Holder, the Registrable  Shares  and  the
Holder's  plan  of distribution thereof, and other securities  of
the  Company owned by the Holder, as the Company shall reasonably
request or as shall be reasonably required in connection with any
registration,  qualification or compliance referred  to  in  this
Agreement.   In  addition, if the offering is  underwritten,  the
Company shall have the exclusive right to select the underwriter.
The  Holder  shall  execute and deliver all documents  reasonably
requested  by the Company and/or such underwriter and  any  other
documents  customary  in  similar offerings,  including,  without
limitation,  underwriting agreements, custody agreements,  powers
of   attorney,   indemnification   agreements,   and   agreements
restricting other sales of securities.

               The rights and obligations under Sections 9(a) and
(b)  shall  terminate at the earlier of (i) five (5) years  after
the  initial issuance date of the Warrants, or (ii) the date  all
of  the Holder's Registrable Shares have been transferred by  the
Holder,  except  for transfers in accordance  with  Section  5(b)
above.

               (a)      Covenants of the Company with Respect  to
Registration.  The Company covenants and agrees as follows:

               (i)      The Company shall pay all costs, fees and
          expenses in connection with all Registration Statements
          filed  pursuant  to  paragraph  (a)  above,  including,
          without  limitation, the Company's legal and accounting
          fees,   printing  expenses,  filing  fees   and   other
          expenses, except that the Holder shall pay all  of  the
          Holder's Expenses (as defined in paragraph (a)).

               (ii)      The  Company  will  use  its  reasonable
          efforts  to qualify or register the Registrable  Shares
          included  in a Registration Statement for offering  and
          sale  under  the securities or blue sky  laws  of  such
          states   of   the  United  States  as  are   reasonably
          appropriate  to the offering; provided,  however,  that
          the  Company  shall not be required to (A)  qualify  or
          register the Registrable Shares in any jurisdiction  in
          which  the  Company would be required to qualify  as  a
          broker or dealer in securities under the securities  or
          blue  sky  laws  of  such  jurisdictions,  (B)  qualify
          generally  to  do business as a foreign corporation  in
          any   jurisdiction  wherein  it  is  not   already   so
          qualified, (C) subject itself to taxation in  any  such
          jurisdiction,  or  (D) consent to  general  service  of
          process in any such jurisdiction.

          10.     Reservation and Listing of Securities.

                (a)     The Company covenants and agrees that  at
all  times  during  the period the Warrants are exercisable,  the
Company  shall  reserve and keep available, free from  preemptive
rights, out of its authorized and unissued shares of Common Stock
or  out of its authorized and issued shares of Common Stock  held
in its treasury, solely for the purpose of issuance upon exercise
of  the Warrants, such number of Shares as shall be issuable upon
the exercise of the Warrants

               (b)      The  Company covenants and  agrees  that,
upon exercise of the Warrants in accordance with their terms  and
payment  of  the Purchase Price, all Shares issued or  sold  upon
such  exercise shall not be subject to the preemptive  rights  of
any  shareholder and when issued and delivered in accordance with
the terms of the Warrants shall be duly and validly issued, fully
paid  and  non-assessable, and the Holder shall receive good  and
valid record title to such Shares free and clear from any adverse
claim  (as  defined  in the applicable Uniform Commercial  Code),
except such as have been created by the Holder.

          11.        Survival.    All   agreements,    covenants,
representations and warranties herein shall survive the execution
and  delivery  of this Certificate and any investigation  at  any
time  made  by or on behalf of any party hereto and the exercise,
sale  and purchase of the Warrants and the Shares (and any  other
securities or properties) issuable on exercise hereof.

          12.      Registered Holder.  The Company may  deem  and
treat the registered Holder hereof as the absolute owner of  this
Certificate  and the Warrants represented hereby (notwithstanding
any  notation  of  ownership  or other  writing  hereon  made  by
anyone), for the purpose of any exercise of the Warrants, of  any
notice, and of any distribution to the Holder hereof, and for all
other  purposes,  and the Company shall not be  affected  by  any
notice to the contrary.

          13.      Manner  of  Notices.  All  notices  and  other
communications  from the Company to the Holders of  the  Warrants
represented by this Certificate shall be in writing and shall  be
deemed  to have been duly given if and when personally delivered,
two  (2)  business days after being sent by overnight courier  or
ten   (10)   days  after  mailed  by  certified,  registered   or
international  recorded mail, postage prepaid and return  receipt
requested, or when transmitted by telefax, telex or telegraph and
confirmed by sending a similar mailed writing, if to the  Holder,
to  the  last  address of such Holder as it shall appear  on  the
books of the Company maintained at the Company's principal office
or  to such other address as the Holder may have specified to the
Company in writing.

          14.      Headings.  The headings contained  herein  are
for  convenience  of  reference only and are  not  part  of  this
Certificate.

           15.      Governing  Law.   This Certificate  shall  be
deemed  to  be  a contract made under the laws of  the  State  of
Delaware and for all purposes shall be governed by, and construed
in accordance with, the laws of said state, without regard to the
conflict of laws provisions thereof.

           IN  WITNESS  WHEREOF,  the  Company  has  caused  this
Certificate to be duly executed by its duly authorized officers.


Dated: _______________, 1999

                              XCL LTD.



                              By:__________________________________
                              Name:   Marsden W. Miller, Jr.
                              Title:  Chairman   and   Chief
                                      Executive Officer



Attest:


___________________________
Secretary/Assistant Secretary

     XCL LTD.

     FORM OF ELECTION TO PURCHASE

     (To be executed by the registered Holder
     if such Holder desires to exercise Warrants)


                 The   undersigned   registered   Holder   hereby
irrevocably  elects to exercise the right of purchase represented
by  this  Warrant  Certificate for, and to purchase,  ___________
Shares hereunder, and herewith tenders in payment for such Shares
cash,  a  wire  transfer, a certified check or a  banker's  draft
payable   to   the   order  of  XCL  LTD.  in   the   amount   of
_____________________, all in accordance with the  terms  hereof.
The  undersigned requests that a certificate for such  Shares  be
registered in the name of and delivered to:


                             (Please Print Name and Address)



and,  if  said  number  of Shares shall not  be  all  the  Shares
purchasable  hereunder, that a new Warrant  Certificate  for  the
balance   remaining  of  the  Shares  purchasable  hereunder   be
registered in the name of the undersigned Warrant Holder  or  his
Assignee  as below indicated and delivered to the address  stated
below.

DATED:
Name               of               Warrant               Holder:
(Please Print)
Address:

Signature:

Note:            The  above  signature  must  correspond  in  all
respects with the name of the Holder as specified on the face  of
this  Warrant  Certificate, without alteration or enlargement  or
any  change whatsoever, unless the Warrants represented  by  this
Warrant Certificate have been assigned.

     XCL LTD.

     FORM OF ASSIGNMENT

     (To be executed by the registered Holder if such Holder
     desires to transfer the Warrant Certificate)

      FOR  VALUE RECEIVED, the undersigned hereby sells,  assigns
and transfers to:

_________________________________________________________________

     (Please Print Name and Address of Transferee)
_________________________________________________________________

_________________________________________________________________

_________________________________________________________________

Warrants  to purchase up to ________ Shares represented  by  this
Warrant  Certificate, together with all right, title and interest
therein,  and  does  hereby irrevocably  constitute  and  appoint
_____________________, Attorney, to transfer such Warrants on the
books  of  the  Company, with full power of substitution  in  the
premises.  The undersigned requests that if said number of Shares
shall  not  be  all of the Shares purchasable under this  Warrant
Certificate  that  a  new  Warrant Certificate  for  the  balance
remaining   of   the  Shares  purchasable  under   this   Warrant
Certificate be registered in the name of the undersigned  Warrant
Holder  and  delivered to the registered address of said  Warrant
Holder.

DATED:_______________

Signature            of            registered             Holder:
_________________________________________

Note:            The  above  signature  must  correspond  in  all
          respects  with the name of the Holder as  specified  on
          the   face   of   this  Warrant  Certificate,   without
          alteration or enlargement or any change whatsoever. The
          above  signature  of  the  registered  Holder  must  be
          guaranteed by a commercial bank or trust company, by  a
          broker  or  dealer which is a member  of  the  National
          Association of Securities Dealers, Inc. or by a  member
          of  a national securities exchange, The Securities  and
          Futures Authority Limited in the United Kingdom or  The
          London  Stock  Exchange  Limited  in  London,  England.
          Notarized or witnessed signatures are not acceptable as
          guaranteed signatures.

Signature Guaranteed:

_________________________________________
   Authorized Officer

_________________________________________
   Name of Institution