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 April 10, 1997
        Void after 5:00 p.m. New York Time, April 9, 2002

                                               No. _______

             THIS    CERTIFIES   THAT,   for   value    received,
_____________________________,   or   registered   assigns   (the
"Holder")  (whose  Tax  Identification  Number  is  N/A)  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 April 10, 1998 and  until  5:00
p.m.,  New  York time, on April 9, 2002 (the "Expiration  Date"),
subject  to  the  conditions set forth  herein,  at  the  initial
exercise  price  of  U.S. $0.01 per share (the "Initial  Exercise
Price"), subject to adjustment as set forth herein (the "Exercise
Price"),  up  to  an  aggregate  of _____________________________
(_________) 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, Lafayette, LA  70508.
(If,  upon exercise of any of the warrants, the Company satisfies
its obligations hereunder by issuance of preferred stock pursuant
to  Section 10, below, then references to "Shares" shall  include
reference to such Preferred Stock.)

          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)   The number of shares of Common Stock subject hereto and
the  Purchase  Price per share shall be proportionately  adjusted
for  any  increase or decrease in the number of issued shares  of
the  Common Stock resulting from the subdivision or consolidation
of  shares,  or  the payment of a stock dividend after  the  date
hereof,  or  other decrease or increase in the shares  of  Common
Stock  outstanding effected without receipt of  consideration  by
the  Company;  provided, however, that any Warrants  to  purchase
fractional  shares  resulting  from  such  adjustments  shall  be
eliminated upon exercise of the Warrants as provided in Section 2
hereof.

    (c)     If the Company shall at any time merge or consolidate
with  or  into  another corporation, the Holder shall  thereafter
receive, upon the exercise thereof, the securities or property to
which  a  holder  of  the number of shares of Common  Stock  then
deliverable  upon the exercise of such Warrant  would  have  been
entitled  to receive upon such merger or consolidation,  and  the
Company  shall take such steps in connection with such merger  or
consolidation  as may be necessary to assure that the  provisions
of  this certificate shall thereafter be applicable, as nearly as
may  be  reasonable,  in relation to any securities  or  property
thereafter deliverable upon the exercise of such Warrant.  A sale
of  all or substantially all of the assets of the Company  for  a
consideration   (apart  from  the  assumption   of   obligations)
consisting  primarily of securities shall be deemed a  merger  or
consolidation for the foregoing purposes.  In the  event  of  the
proposed  dissolution,  liquidation  or  reorganization  of   the
Company,  other  than  pursuant to a merger or  consolidation  as
referred to above, this Warrant shall terminate as of a  date  to
be fixed by the Board of Directors; provided that no less than 30
days' prior written notice of the date so fixed shall be given to
the  Holder,  and  the Holder shall have the  right,  during  the
period  of  thirty  (30)  days  preceding  such  termination,  to
exercise its Warrants as to all or any part of the shares covered
thereby,  including  shares as to which such  Warrant  would  not
otherwise be exercisable.

       (d)     Irrespective of any adjustments or changes in the
number of shares of Common Stock purchasable upon exercise of the
Warrants,  the  Warrant Certificates theretofore  and  thereafter
issued  shall,  unless the Company shall exercise its  option  to
issue  new Warrant Certificates pursuant to Section 1(e)  hereof,
continue  to express the Purchase Price per share and the  number
of  shares purchasable thereunder as the Purchase Price per share
and the number of shares purchasable thereunder were expressed in
the Warrant Certificates when the same were originally issued.

        (e)   No adjustment of the Purchase Price pursuant to this
Section 7 shall be made if the amount of said adjustment shall be
less  than  $.05;  provided, however,  that  in  such  case,  any
adjustment that would otherwise be required then to be made shall
be  carried forward and shall be made at the time of and together
with  the  next subsequent adjustment that shall amount, together
with any adjustment so carried forward, to at least $.05.

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)     Subject to the following provisos, 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;  provided,  however, that as of the  date  hereof,  the
Company  does  not have a sufficient number of shares  of  Common
Stock   authorized  to  permit  the  exercise  of  the  Warrants;
provided, further, that the Company shall use its best efforts to
cause  the number of its authorized shares of Common Stock to  be
sufficiently  increased  at  the  next  annual  meeting  of   the
Company's stockholders (the "AMS"), to permit the exercise of the
Warrants.  If the increase of the number of authorized shares  of
Common  Stock available for reservation hereunder is not approved
by  the  shareholders  of the Company and the  Company  does  not
otherwise  have  sufficient authorized  but  unissued  shares  of
Common  Stock available to permit exercise of some or all of  the
Warrants  tendered for exercise, then Warrants shall be exercised
for  Common  Stock to the extent that Common Stock  is  available
therefor,  and  the  balance of the tendered  Warrants  shall  be
exercised by the purchase of a new class of Preferred Stock  (the
"New Preferred") of the Company with a liquidation preference  of
$100  per share.  The New Preferred will have the same terms  and
conditions  as  the Company's existing Series E Preferred  Stock,
except that no Common Stock shall be required to be reserved  for
issuance upon conversion of the New Preferred.  The New Preferred
to  be purchased upon the exercise of Warrants shall be based  on
the following formula:
               
                           N = (W x P)  100
                                
       where   "N"   equals  the  number   of   shares   of   New
Preferred  to be issued; "W" equals the number of Warrant  to  be
exercised  by  purchase  of New Preferred;  and  "P"  equals  the
closing  bid  price, on a per share basis, on the American  Stock
Exchange  for the Company's Common Stock on the day  the  Company
received  written  notice of exercise of the Warrants.   Until  a
sufficient number of Shares of Common Stock has been reserved for
exercise  of all of the Warrants, the Company shall keep reserved
a sufficient number of shares of its New Preferred to satisfy its
obligations  under  this Section.  Within 30  days  of  the  date
hereof,  the  Company  shall  file a certificate  of  designation
creating the New Preferred and shall reserve 50,000 shares of its
New Preferred for issuance hereunder.

     (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:  April 10, 1997

                              XCL LTD.




By:__________________________________
Name:________________________________
Title:_______________________________



Attest:


___________________________
Secretary/Assistant Secretary