WARRANT AMENDMENT AGREEMENT
                              
                              
      This  Warrant Amendment Agreement dated as of  January
15,  1999  by  and between XCL Ltd., a Delaware  corporation
("XCL"),  and  Estate of J. Edgar Monroe,  J.  Edgar  Monroe
Foundation  (1976) and Construction Specialists, Inc.  d/b/a
Con-Spec,  Inc.  (collectively referred  to  herein  as  the
"Warrantholders").

                    W I T N E S S E T H:
                              
     WHEREAS, each of the Warrantholders holds the number of
warrants  ("Warrants") to purchase shares of  common  stock,
par  value  $0.01 per share, of XCL set forth  opposite  its
name  on  Schedule  I attached hereto, which  Warrants  were
originally  issued  pursuant to  Warrant  Certificates  each
dated  as  of November 6, 1998 (the "Warrant Certificates");
and

      WHEREAS, the Warrantholders acquired their Warrants in
connection  with their purchase of $1,500,000  in  aggregate
principal amount of Units issued by  XCL Land Ltd., a wholly
owned subsidiary of XCL and XCL Ltd., each Unit consisting of
$100,000  in  principal amount of a promissory note  of  XCL
Land (collectively, the "Notes") and 21,705 Warrants; and

     WHEREAS, Warrantholders have this day subscribed for an
additional $500,000 in aggregate principal of Units; and

      WHEREAS,  in  order to induce such  Warrantholders  to
subscribe for the additional Units, XCL agreed to reduce the
exercise price of the Warrants from $3.50 to $2.00 per share
of common stock, subject to adjustment as therein provided.

      NOW,  THEREFORE, in consideration of the premises  and
other  good  and  valuable consideration,  the  receipt  and
sufficiency of which are hereby acknowledged and  confirmed,
the parties hereto hereby agree as follows:

      1.      The definition of "Initial Exercise Price"  in
the  first paragraph of each Warrant Certificates is  hereby
amended to read as follows:

               ". at the initial exercise price of
          U.S.   $2.00  per  share  (the  "Initial
          Exercise Price") ."
          

All  other  terms and provisions of the first  paragraph  of
each Warrant Certificate shall remain unchanged.

      2.      This  Warrant  Amendment Agreement  shall  not
constitute  a waiver or amendment of any other provision  of
the  Warrant Certificates not expressly referred  to  herein
and  except  as expressly amended hereby, the provisions  of
the  Warrant Certificates are and shall remain in full force
and effect.

       3.       Upon  surrender  of  the  original   Warrant
Certificates issued to the Warrantholders, XCL  shall  issue
new  Warrant  Certificates of like tenor and  an  equivalent
number  of  Warrants  to the Warrantholders  reflecting  the
amendment set forth in paragraph 1 above.

      4.     This Warrant Amendment Agreement sets forth the
entire  understanding of the parties hereto with respect  to
the   subject   mater  hereof  and  may   be   executed   in
counterparts, each of which when executed shall be deemed to
be  an  original  but  all  of which  taken  together  shall
constitute one and the same agreement.

      5.      This  Warrant  Amendment  Agreement  shall  be
governed  by  and construed in accordance with the  internal
laws of the State of Delaware without regard to conflicts of
laws.

     IN WITNESS WHEREOF, the parties hereto have caused this
Warrant   Amendment  Agreement  to  be  duly  executed   and
delivered as of the date and year first above written.

                              XCL LTD.


                              By:_________________________
                              Title:_______________________

                              WARRANTHOLDERS:

                              Estate of J. Edgar Monroe

                              By:__________________________
                              Title:_______________________
                              J. Edgar Monroe Foundation
                               (1976)

                              By:___________________________
                              Title:_______________________

                              Construction Specialists, Inc.
                                 d/b/a Con-Spec, Inc.

                              By:___________________________
                              Title:________________________