THE  WARRANTS REPRESENTED BY THIS CERTIFICATE AND THE  SHARES  OF
COMMON  STOCK  ISSUABLE  UPON  EXERCISE  THEREOF  HAVE  NOT  BEEN
REGISTERED  UNDER THE UNITED STATES SECURITIES ACT  OF  1933,  AS
AMENDED (THE "ACT"), OR ANY OTHER FEDERAL OR STATE SECURITIES  OR
BLUE  SKY  LAWS,  AND  HAVE BEEN ISSUED IN A MANNER  INTENDED  TO
COMPLY  WITH THE CONDITIONS CONTAINED IN REGULATION S  UNDER  THE
ACT.   PRIOR  TO  FEBRUARY  18, 1997, NO OFFER,  SALE,  TRANSFER,
PLEDGE  OR OTHER DISPOSITION (COLLECTIVELY, A "DISPOSAL") OF  THE
WARRANTS REPRESENTED BY THIS CERTIFICATE MAY BE MADE (A)  IN  THE
UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, ANY  "U.S.
PERSON" (AS DEFINED IN REGULATION S) UNLESS (i) REGISTERED  UNDER
THE  ACT AND ANY APPLICABLE STATE SECURITIES OR BLUE SKY LAWS  OR
(ii)  XCL  LTD.  (THE  "COMPANY") 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 OR (B) OUTSIDE THE UNITED STATES TO, OR
FOR  THE  ACCOUNT OR BENEFIT OF, ANY PERSON WHO IS  NOT  A  "U.S.
PERSON" UNLESS PRIOR TO SUCH DISPOSAL (i) THE BENEFICIAL OWNER OF
SUCH  SHARES  AND  THE PROPOSED TRANSFEREE SUBMIT  CERTAIN  CERTI
FICATIONS TO THE COMPANY (FORMS OF WHICH ARE AVAILABLE  FROM  THE
COMPANY  AT ITS PRINCIPAL EXECUTIVE OFFICES) AND (ii) THE COMPANY
RECEIVES THE LEGAL OPINION DESCRIBED IN (A)(ii) ABOVE.

                                             No. JFC-15

                      WARRANTS TO PURCHASE
                     COMMON STOCK OF XCL LTD.

              Initial Issuance on January 9, 1997
     Void after 5:00 p.m. New York Time, August 13, 2001

      THIS CERTIFIES THAT, for value received, PROVIDENCE CAPITAL
LTD.  or  registered  assigns (the "Holder")  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 January 9, 1997 and until 5:00 p.m., New  York
time, on August 13, 2001 (the "Expiration Date"), subject to  the
conditions  set  forth herein, at the initial exercise  price  of
$0.125  per  share  (the "Initial Exercise  Price"),  subject  to
adjustment as set forth herein (the "Exercise Price"), up  to  an
aggregate  of FIVE HUNDRED TEN THOUSAND (510,000) (the  "Shares")
fully paid and non-assessable common shares, par value $0.01  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, United States.

             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 U.S. 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  5:00pm 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.  Such certificate or certificates shall
be free of any restrictive legend.  The Company shall ensure that
no  "stop transfer" or similar instruction or order with  respect
to the Shares purchased upon exercise of the Warrants shall be in
effect  at  Chase  Mellon  Shareholder  Services  or  Independent
Registrars  Group Limited, the Company's U.S. and  U.K.  transfer
agents  and  registrars,  respectively,  for  the  Common  Stock,
respectively,  or  any  successor transfer  agents  thereto  (the
"Transfer   Agents");   provided,  however,   that   the   Holder
understands  and agrees that the Company and the Transfer  Agents
will  not register any transfer of the Warrants or the Shares  of
Common  Stock  issuable  upon exercise of  the  Warrants  or  any
interest  therein  which  the  Company  in  good  faith  believes
violates the restrictions set forth in this Certificate.

     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  fractional  Shares  that
would otherwise be issuable to such Holder, the Company shall pay
to  such  Holder a cash adjustment in respect of such  fractional
interest  in an amount equal to such fractional interest  of  the
then-current  Market Price per share (as defined in Section  7(f)
hereof).

      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 taxes, if any, the Company shall not be
required to issue such Shares.

     4.        Compliance with U.S. Securities Laws.  The Warrants and
the  Shares issuable upon the exercise of the Warrants  have  not
been  and  will not be registered under the United  States  Secur
ities Act of 1933, as amended (the "Securities Act") or under any
state  or foreign securities or blue sky laws.  Prior to February
18,  1997,  no offer, sale, transfer, pledge or other disposition
(collectively, a "Disposal") of the Warrants represented by  this
Certificate may be made (a) in the United States or  to,  or  for
the  account  or  benefit of, any "U.S. Person"  (as  defined  in
Regulation  S  under  the Securities Act) unless  (i)  registered
under  the  Act and any applicable State securities or  blue  sky
laws  or  (ii) the Company 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  or (b) outside the United States  to,  or  for  the
account or benefit of, any person who is not a U.S. Person unless
prior  to  such Disposal (i) the beneficial owner of such  Shares
and  the proposed transferee submit certain certifications to the
Company  (forms  of which are available from the Company  at  its
principal  executive offices) and (ii) the Company  receives  the
legal  opinion described in (a)(ii) above.  The Warrants may  not
be exercised within the United States or by, or on behalf of, any
U.S.  Person  unless  the  Warrants  and  the  Shares  have  been
registered under the Securities Act and any applicable state  and
foreign  securities  or  blue sky laws  or  exemptions  from  the
registration  requirements  under  the  Securities  Act  and  any
applicable  state  and foreign securities or blue  sky  laws  are
available.   Accordingly, (i) the Warrants may not  be  exercised
within  the  United  States  and any  Shares  issuable  upon  the
exercise  thereof may not be delivered within the  United  States
except  in  circumstances constituting an "offshore  transaction"
(as  defined  in  Regulation  S)  and  otherwise  complying  with
Regulation  S,  or unless such Shares have been registered  under
the   Securities  Act  and  any  applicable  state  and   foreign
securities  or blue sky laws or exemptions from the  registration
requirements  under the Securities Act and any  applicable  state
and  foreign securities or blue sky laws are available, and  (ii)
it  is a condition to the exercise of the Warrants that the  exer
cising   Holder  must  deliver  to  the  Company  (A)  a  written
certification that such Holder is not a U.S. Person and that  the
Warrants are not being exercised on behalf of, or for the account
or  benefit of, a U.S. Person or (B) a written opinion of  United
States  counsel,  in  form  and  substance  satisfactory  to  the
Company, to the effect that such Holder's Warrants and the Shares
issuable  upon the exercise of such Warrants have been registered
under  the  Securities Act and any applicable state  and  foreign
securities or blue sky laws or the exercise of such Warrants  and
delivery of such Shares are exempt from the registration  require
ments  under  the  Securities Act and any  applicable  state  and
foreign securities or blue sky laws.

             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.,
or  by a member of a national securities exchange, The Securities
and  Futures  Authority  Limited in the United  Kingdom,  or  The
International  Stock  Exchange  in  London,  England.   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
representations, warranties and covenants of the  initial  Holder
of  this Certificate (the "Purchaser") in the Purchase Agreement,
between  the Company and the Purchaser, concerning such  transfer
as  if  the  Holder were the Purchaser, 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 Exercise Price and
                  --------------------------------------------------------
                  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 shares 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 (1) 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 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 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  Series  A,  Cumulative
Convertible  Preferred  Stock (and the  shares  of  Common  Stock
issuable upon conversion of such Preferred Stock), outstanding on
the date hereof, (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, (w) the Company's shares of Series E, Cumulative
Convertible  Preferred Stock (and the shares  of  such  Preferred
Stock  issued in lieu of dividend payments thereunder and  shares
of Common Stock issuable upon conversion of such Preferred Stock)
or  (x)  the  Company's  $15  million  in  principal  of  Secured
Subordinated Debt Notes (and the shares of Common Stock  issuable
in lieu of interest 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  $.02 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  $.02
(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.

           (k)   The Company may, in its sole discretion, at  any
time and from time to time before the Expiration Date, reduce the
Exercise  Price to any lower amount by notice to the Holders,  in
the manner provided in Section 14.

    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 exer
cise, 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 re-classification 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.        Redemption by the Company.  At any time after January
9,  1998,  the  Company  may redeem all, but  not  part,  of  the
Warrants  upon not less than thirty-five (35) days notice  (given
in  the  manner  described in Section 14)  to  the  Holders  (the
"Redemption Notice"), at the redemption price of one cent ($0.01)
per  Warrant,  if the Market Price per share of the Common  Stock
for  the  thirty  consecutive trading days ending  within  thirty
Business  Days  of the date of such Redemption Notice  equals  or
exceeds one dollar and twenty-five cents ($1.25).  The Redemption
Notice  shall specify the date on which the Warrants  are  to  be
redeemed (the "Redemption Date").  If the Warrants are called for
redemption, they may be exercised at any time prior to 5:00  p.m.
New  York time on the business day immediately preceding the date
fixed  for  redemption  in  the  Redemption  Notice.   After  the
Redemption  Date, no Warrant may be exercised and all outstanding
Warrant  Certificates must be surrendered by the Holders  thereof
to  the  Company  and the Holders shall have  no  further  rights
except  to receive, upon surrender of the Certificates evidencing
the redeemed Warrants, the redemption price for such Warrants.

             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.

      (c)       As long as the Warrants shall be outstanding, the
Company  shall  use its reasonable efforts to  cause  all  Shares
issuable  upon the exercise of the Warrants to be  quoted  by  or
listed  on  any national securities exchange or other  securities
listing  service  on  which the shares of  Common  Stock  of  the
Company are then listed.

    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.       Remedies.  The Company agrees that the remedies at law
of  the Holder, in the event of any default or threatened default
by  the  Company in the performance of or compliance with any  of
the  terms  hereof, may not be adequate and such  terms  may,  in
addition  to and not in lieu of any other remedy, be specifically
enforced  by  a  decree of specific performance of any  agreement
contained herein or by an injunction against a violation  of  any
of the terms hereof or otherwise.

     13.       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.

     14.        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 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.

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

       16.       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  under  its
corporate seal.


Dated: January 8, 1997

                                          XCL LTD.

                              By:___________________________________
                              Name: David A. Melman
                              Title: Executive Vice President
                                       and General Counsel


Attest:

_______________________________
   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  Certifi-
cate  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.

IN CONNECTION WITH THIS ELECTION TO PURCHASE, THE WARRANT HOLDER MUST
DELIVER  TO THE COMPANY (i) A WRITTEN CERTIFICATION THAT SUCH  HOLDER
IS  NOT  A "U.S. PERSON" AS DEFINED IN REGULATION S UNDER THE  UNITED
STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND
THAT  THE WARRANTS ARE NOT BEING EXERCISED ON BEHALF OF, OR  FOR  THE
ACCOUNT  OR  BENEFIT OF, A U.S. PERSON, OR (ii) A WRITTEN OPINION  OF
UNITED  STATES  LEGAL COUNSEL, IN FORM AND SUBSTANCE SATISFACTORY  TO
THE COMPANY, TO THE EFFECT THAT THE WARRANTS AND THE SHARES OF COMMON
STOCK  ISSUABLE  UPON EXERCISE OF THE WARRANTS HAVE  BEEN  REGISTERED
UNDER  THE  SECURITIES  ACT  AND  ANY APPLICABLE  STATE  AND  FOREIGN
SECURITIES  LAWS  OR  ARE  EXEMPT FROM THE REGISTRATION  REQUIREMENTS
UNDER  THE  SECURITIES  ACT  AND  ANY APPLICABLE  STATE  AND  FOREIGN
SECURITIES LAWS.

                           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  International  Stock
             Exchange  in  London, England.  Notarized  or  witnessed
             signatures are not acceptable as guaranteed signatures.

Signature Guaranteed:


_______________________________
   Authorized Officer


_______________________________
   Name of Institution