SUBSCRIPTION AGREEMENT


      SUBSCRIPTION AGREEMENT dated as of January 9, 1997  by  and
among  XCL Ltd., a Delaware corporation (the "Company"), and  the
parties  identified  on the signature page hereof,  such  parties
being collectively referred to herein as the "Subscribers".

      The Company and the Subscribers, each in reliance upon  the
representations,  warranties  and  covenants  contained  in  this
Agreement, agree as follows with respect to the issuance and sale
by  the  Company and the purchase by the Subscribers of up  to  a
maximum  aggregate  amount  of 22,000 shares  ("Shares")  of  the
Company's  unissued  Series F, Cumulative  Convertible  Preferred
Stock,  par  value $1.00 per share, the designations, preferences
and  rights  appertaining to which are set forth in  Exhibit  "A"
annexed  hereto (the "Series F Preferred Stock"), in  the  manner
provided in Section 1 hereof.  Each Subscriber hereby irrevocably
subscribes  for  the number of Shares for the aggregate  purchase
price  determined in accordance with the provisions of Section  1
hereof.  This  Agreement  is  one of several  counterparts  being
executed by Subscribers each identical in all aspects except  for
the identity of the Subscriber and amount of its subscription for
Shares.    The  execution,  delivery  and  performance  of   this
Agreement  by  each Subscriber shall not create any  partnership,
joint  venture,  agency  or other similar relationship  with  the
Company or any other Subscriber purchasing Shares.

      1.     Sale and Purchase of Securities.  This Agreement  is
being   executed   and  delivered  in  several  counterparts   in
connection with the offering by the Company (the "Offering") of a
maximum  aggregate amount of 22,000 shares of Series F  Preferred
Stock  at  one  or  more closings (each a "Closing")  during  the
period  commencing with the date hereof and expiring on  February
28,  1997,  unless sooner terminated by the Company upon  written
notice  to  Subscribers (the "Offering Period"). The Shares,  the
shares of common stock, par value $.01 per share ("Common Stock")
issuable  upon  conversion of the Series  F  Preferred  Stock  in
accordance  with  its terms ("Conversion Stock")  and  additional
shares  of  Series F Preferred Stock issuable at the election  of
the  Company in lieu of cash dividends on the Series F  Preferred
Stock  ("Dividend Stock"), are sometimes hereinafter referred  to
collectively  as  the  "Securities". Subject  to  the  terms  and
conditions  set forth herein, including, without limitation,  the
Company's  unilateral right exercisable in its sole and arbitrary
discretion  to  terminate the Offering at  any  time  during  the
Offering Period, upon countersigning this Agreement, the  Company
agrees  to  sell to the Subscriber executing and delivering  this
Agreement, and the Subscriber hereby irrevocably subscribes  for,
the  number  of  Shares specified on its signature page  attached
hereto in exchange for the following (the "Purchase Price"):

     (a)  Cancellation of a Consulting Agreement between  the
          Company and Mitch Leigh entered into on July 10,  1996,
          and release from obligations thereunder;
     
     (b)  Surrender  by  Mitch Leigh of 1,325,000  shares  of
          unregistered Common Stock and 2,466,875 warrants issued
          in connection with the Consulting Agreement;
     
     (c)  Surrender  by  Mitch  Leigh of  rights  to  acquire
          558,000 Units comprised of 558,000 shares of registered
          Common  Stock  and  558,000  warrants  pursuant  to  an
          agreement dated August 1, 1996;
     
     (d)  Surrender by Abby Leigh of rights to acquire 600,000
          Units  comprised of 600,000 shares of registered Common
          Stock  and  600,000 warrants pursuant to  an  agreement
          dated August 1, 1996;
     
     (e)  Surrender  of registration rights with  respect  to
          3,000,000  shares  of Common Stock  issued  in  a  Unit
          offering dated September 18, 1995;
     
     (f)  Cash  in  the amount of $106,625 tendered by  Mitch
          Leigh; and
     
     (g)  Cash  in  the amount of $112,500 tendered  by  Abby
          Leigh.

      2.      Conditions.    (a) The Subscribers'  obligation  to
purchase   and  pay  for  the  Securities  is  subject   to   the
satisfaction,  on  or before the Closing Date, of  the  following
conditions, except to the extent waived by each Subscriber:

          (i)     Officer's Certificate.  The representations and
     warranties  contained  in Section 3  shall  (except  to  the
     extent of changes caused by transactions contemplated in  or
     expressly permitted by this Agreement) be true on and as  of
     the  Closing  Date  with  the same  effect  as  though  such
     representations and warranties were originally made  on  and
     as  of  such  date;  all agreements to be performed  by  the
     Company  hereunder on or before the Closing Date shall  have
     been duly performed; and the Company shall have delivered to
     the Subscribers a certificate, signed by the President or  a
     Vice  President and the Secretary or an Assistant  Secretary
     of the Company, dated such Closing Date, to such effect.

          (ii)     Proceedings and Documents.   All corporate and
     other  proceedings taken in connection with the transactions
     contemplated  by this Agreement, and all documents  incident
     thereto,  shall  be  reasonably  satisfactory  in  form  and
     substance to the Subscribers and the Subscribers shall  have
     received  copies  of  all documents and  records  which  the
     Subscribers may reasonably request.

      (b)      The Company's obligation to issue and deliver  the
Shares to the Subscribers on each Closing Date is subject to  the
satisfaction,  on or before such Closing Date, of  the  following
conditions, except to the extent waived by the Company:

           (i)      Subscriber's Representations and  Warranties.
     The  representations and warranties contained in  Section  4
     shall   (except   to  the  extent  of  changes   caused   by
     transactions contemplated in or expressly permitted by  this
     Agreement)  be true on and as of the Closing Date  with  the
     same  effect  as though such representations and  warranties
     were  originally  made  on  and as  of  such  date  and  all
     agreements  to be performed by the Subscribers hereunder  on
     or before the Closing Date, shall have been duly performed.

          (ii)     Proceedings and Documents. All legal and other
     proceedings   taken  in  connection  with  the  transactions
     contemplated  by this Agreement, and all documents  incident
     thereto,  including,  without limitation,  the  certificates
     evidencing  the shares of Common Stock, with  duly  executed
     stock  powers attached, comprising payment of a  portion  of
     the Purchase Price, shall be reasonably satisfactory in form
     and  substance  to  the  Company and its  counsel,  and  the
     Company  shall  have received copies of  all  documents  and
     records,  which  the  Company or the Company's  counsel  may
     reasonably request.

      3.      Representations and Warranties by the Company.  The
Company  hereby represents and warrants to the Subscribers  that,
except as disclosed in the SEC Filings (as hereinafter defined):

           (a)      Organization and Good Standing.  The  Company
     and   each  of  its  subsidiaries  is  a  corporation   duly
     organized, validly existing and in good standing  under  the
     laws  of  the  jurisdiction of its  incorporation,  has  the
     requisite  corporate power and authority  to  carry  on  its
     business  as  now  being conducted and is  not  required  to
     qualify to do business as a foreign corporation in any other
     jurisdiction  where the failure so to qualify would  have  a
     material   adverse   effect  on  the   Company's   and   its
     subsidiaries'  business, financial condition or  results  of
     operations, taken as a whole.

           (b)     Certificate of Incorporation and  Bylaws.  The
     Company  has  heretofore  or at  the  Initial  Closing  made
     available  to  the Subscribers upon request a  complete  and
     correct  copy  of the Certificate of Incorporation  and  the
     Amended and Restated Bylaws, each as amended to date, of the
     Company.   Such Certificate of Incorporation and Bylaws,  as
     so amended, are in full force and effect. The Company is not
     in  violation of any of the provisions of its Certificate of
     Incorporation,  as  so  amended,  or  Restated  and  Amended
     Bylaws.

           (c)     Capitalization.  As of December 31, 1996,  the
     Company's  authorized capital stock consists of  500,000,000
     shares  of  Common Stock, of which 276.664,260  shares  were
     validly  issued  and  outstanding and  are  fully  paid  and
     nonassessable, and 2,400,000 shares of preferred stock,  par
     value  $1.00 per share ("Preferred Stock"), to be issued  in
     series  with  such rights and preferences as the  Board  may
     designate  from  time  to  time  of  which  577,803   shares
     designated  the  Series A, Cumulative Convertible  Preferred
     Stock  ("Series A Preferred"), 44,954 shares designated  the
     Series  B, Cumulative Preferred Stock ("Series B Preferred")
     and  46,654  shares  designated  the  Series  E,  Cumulative
     Convertible  Preferred  Stock  ("Series  E  Preferred")  are
     validly  issued  and  outstanding and  are  fully  paid  and
     nonassessable.

           (d)      Corporate  Authority.  The Company  has  full
     corporate  power and authority to enter into this  Agreement
     and to sell the Shares and issue and deliver or cause to  be
     issued and delivered the Shares and to incur and perform the
     obligations   provided  for  herein  or  pursuant   to   the
     provisions  of the Series F Preferred Stock,  all  of  which
     will have been duly authorized by all necessary corporate or
     other  action  of the Company. The execution,  delivery  and
     performance  of this Agreement, and the sale of  the  Shares
     and  the  delivery  by  the Company of  the  Shares  to  the
     Subscribers  in  the manner contemplated by  this  Agreement
     does  not  violate any provision of any law  of  the  United
     States, or the Certificate of Incorporation, as amended,  or
     the  Amended  and  Restated Bylaws of the  Company,  or  any
     agreement or instrument by which the Company, or any of  its
     properties are bound and will not result in the creation  of
     any  encumbrance  or charge upon any asset of  the  Company.
     This  Agreement and the provisions of the Series F Preferred
     Stock  constitute  valid  and  binding  obligations  of  the
     Company  enforceable  in accordance  with  their  respective
     terms,   except  to  the  extent  that  the  indemnification
     provisions hereof may be deemed void as a matter  of  public
     policy  in  any  proceeding commenced by the Commission  (as
     hereinafter defined) or otherwise.

             (e)       Governmental   Consents.   All   consents,
     authorizations  and approvals (if any) of  any  governmental
     agency  or  other regulatory body within the  United  States
     required to be obtained by the Company for the execution and
     delivery of this Agreement and the issuance and sale of  the
     Shares in the manner contemplated by this Agreement, and the
     performance of its obligations assumed under the Shares have
     been obtained and are in full force and effect.

           (f)      Series  F  Preferred Stock. An  aggregate  of
     50,000  shares  of Preferred Stock have been  authorized  as
     "Series  F  Preferred Stock". The Shares, upon  payment  and
     issue  as  provided for in this Agreement and the shares  of
     Dividend  Stock,  upon  issuance as contemplated  under  the
     Series  F Preferred Stock, will be duly authorized,  validly
     issued, fully paid and nonassessable. An aggregate of 18,000
     shares of Dividend Stock have been reserved for issuance  as
     dividends on the Shares.

           (g)      Common  Stock.  The  Conversion  Stock  will,
     following issuance in the manner provided for in the  Series
     F Preferred Stock, be duly authorized, validly issued, fully
     paid  and  nonassessable.  A total of 16,000,000  shares  of
     Common Stock have been reserved for issuance upon conversion
     of the Series F Preferred Stock.

          (h)     Securities and Exchange Commission Filings. The
     Company  has filed all forms, reports and documents required
     to  be  filed  with  the Securities and Exchange  Commission
     ("Commission")  since January 1, 1996 (the  "SEC  Filings").
     The  SEC  Filings (i) were prepared in accordance  with  the
     requirements  of  the  Securities  Act,  or  the  Securities
     Exchange  Act, as the case may be, and (ii) did not  at  the
     time  they  were  filed contain any untrue  statement  of  a
     material  fact or omit to state a material fact required  to
     be  stated  therein  or  necessary  in  order  to  make  the
     statements therein, in the light of the circumstances  under
     which  they were made, not misleading. None of the Company's
     subsidiaries is required to file any forms, reports or other
     documents with the Commission.

           (i)     Financial Statements. The consolidated balance
     sheets  of the Company and its consolidated subsidiaries  as
     at  December 31, 1995 and September 30, 1996 and the related
     consolidated  statements of income and cash  flows  for  the
     fiscal periods ended on such dates, are complete and correct
     in   all  material  respects  and  have  been  prepared   in
     accordance  with  generally accepted  accounting  principles
     consistently   applied   and  each   presents   fairly   the
     consolidated  financial  position of  the  Company  and  its
     consolidated  subsidiaries on the  dates  specified  or  the
     consolidated  results of its and their  operations  for  the
     periods indicated in all material respects.

          (j)     Absence of Certain Material Changes and Events.
     Except  as  disclosed in the SEC Filings and  herein,  since
     September 30, 1996, there has been;

                 (i)      no  material  adverse  change  in   the
          financial  condition, assets, liabilities,  results  of
          operations,  or  business  of  the  Company   and   its
          subsidiaries,  taken  as a whole,  other  than  changes
          disclosed  in the SEC Filings, except that the  Company
          is  currently  suffering a significant working  capital
          shortage  which, if not remedied, may have  a  material
          adverse  effect on the business and financial condition
          of the Company;

                (ii)     no material damage, destruction or  loss
          (whether  or  not coveted by insurance) materially  and
          adversely affecting the properties or business  of  the
          Company and its subsidiaries, taken as a whole; or

               (iii)     no labor trouble, or any other events or
          condition  of  any character, materially and  adversely
          affecting the properties, business or prospects of  the
          Company and its subsidiaries, taken as a whole.

           (k)      Contracts.  The Company is  not  in  material
     violation  of  or  in  material default under  any  material
     contract or commitment to which it is a party or by which it
     is bound.

           (l)      Litigation. There is no material  litigation,
     proceeding  or investigation not fully covered by  insurance
     which  is pending or, to the Company's knowledge, threatened
     against   or  relating  to  the  Company  or  any   of   its
     subsidiaries or its or their properties or business,  which,
     if  adversely decided, would have a material adverse  effect
     on the Company's and its subsidiaries' business or financial
     condition, taken as a whole, or impair the Company's ability
     to  execute, deliver and perform this Agreement. Neither the
     Company  nor  any  of  its subsidiaries  nor  any  of  their
     properties  is subject to any judgment, decree or  order  of
     any  court or any other governmental or administrative  body
     or  agency  which impairs the Company's ability to  execute,
     deliver  and perform this Agreement in accordance  with  its
     terms.

      4.      Representations, Warranties and Agreements  by  the
Subscribers.  Each  Subscriber hereby  severally  represents  and
warrants to and agrees with the Company as follows:

           (a)      Authority, etc.  Each Subscriber  who  is  an
     individual has the legal capacity to enter into and  perform
     this  Agreement  and each Subscriber who is  a  corporation,
     partnership, trust, association or other entity (an  "Entity
     Subscriber") is duly organized, validly existing and in good
     standing  under  the  laws  of  the  jurisdiction   of   its
     incorporation  or organization, in either  case,  with  full
     legal  power  and authority to execute, deliver and  perform
     this Agreement in accordance with its terms.  The execution,
     delivery   and  performance  of  this  Agreement   and   the
     transactions  contemplated hereby by the  Entity  Subscriber
     has been duly authorized by all legal action required to  be
     taken  on  the part of the Entity Subscriber. This Agreement
     constitutes  the  valid  and  binding  obligation  of   each
     Subscriber enforceable in accordance with its terms,  except
     to  the  extent that the indemnification provisions  may  be
     deemed  void as a matter of public policy in any  proceeding
     commenced  by  the Commission or otherwise.  The  execution,
     delivery and performance of this Agreement by the Subscriber
     will  not violate or cause a breach, with or without  notice
     or  the passage of time or both, of each Entity Subscriber's
     Charter  or  other  documents  pursuant  to  which  it   was
     incorporated  or  organized,  any  provision  of  any   law,
     domestic or foreign, to which the Subscriber is subject,  or
     any  agreement or instrument by which the Subscriber, or any
     of  its  properties  are bound, and the  Subscriber  is  not
     currently  insolvent nor will the acquisition of the  Shares
     in  the  manner  contemplated herein render  the  Subscriber
     insolvent.  All consents, authorizations and  approvals  (if
     any)  required  to  be  obtained  in  order  to  enable  the
     Subscriber  to  execute, deliver and perform this  Agreement
     have been duly obtained or shall be obtained on or prior  to
     the  Closing  Date. So long as the Subscriber  continues  to
     hold  the  Shares, it shall, at its own expense, furnish  to
     the Company upon receipt of the written request therefor all
     information  as  may  be  required  to  be  disclosed  under
     applicable  law  regarding its ownership  of  the  Company's
     securities,  including, without limitation, any  information
     that  may  be  required  to  be disclosed  pursuant  to  the
     Internal Revenue Code of 1986, as amended, and the rules and
     regulations  promulgated thereunder. Any  shares  of  Common
     Stock  which  may be transferred to the Company  in  partial
     payment of the Purchase Price shall be transferred free  and
     clear  of  all liens, charges and encumbrances of  any  kind
     whatsoever  ("Adverse Claims") and upon  such  transfer  the
     Company shall be a bona fide purchaser thereof for value and
     the legal and beneficial owner of such shares free and clear
     of all Adverse Claims.

          (b)     Due Diligence Inquiry. The Subscriber, together
     with  its  own advisors, has conducted its own due diligence
     examination  of the Company's and its subsidiaries'  assets,
     business,  financial condition, results of  operations,  and
     prospects.  The  Subscriber is aware of the high  degree  of
     risk  attendant  to an investment in the Shares,  including,
     without  limitation, the Company's current  working  capital
     shortage,  the Company's recent history of limited revenues,
     the  Company's  consideration of the sale  of  its  domestic
     producing and other oil and gas properties, the delays  that
     may   be   encountered  in  realizing  upon  the   Company's
     investment  in the Zhao Dong Block in the Bohai Bay  in  the
     People's Republic of China, and the risks described  in  the
     Company's  Annual Report on Form 10-K for  the  fiscal  year
     ended  December  31,  1995, and in  the  materials  entitled
     "Investment  Considerations"  previously  furnished  to  the
     Subscribers.

           (c)     Independent Investigation. The Subscriber  has
     carefully    reviewed   and   relied   solely    upon    the
     representations  and  warranties of  the  Company  contained
     herein  and upon the independent investigations made  by  it
     and its representatives in making a decision to purchase the
     Securities and has a full understanding and appreciation  of
     the  risks inherent in such a highly speculative investment.
     In  connection  with such investigation, the Subscriber  and
     its  attorneys,  accountants and other  representatives  and
     advisers, if any, (i) have been given an opportunity to ask,
     and  have to the extent the Subscriber considered necessary,
     asked questions of, and have received answers from, officers
     of  the  Company  concerning  the  terms  of  the  Series  F
     Preferred  Stock  and  the affairs of the  Company  and  its
     subsidiaries and (ii) have been given or afforded access  to
     all  documents,  records, books and  additional  information
     which  the Subscriber has requested regarding such  matters.
     In  particular, the Subscriber has been given access to  the
     Certificate  of  Incorporation with all amendments  thereto;
     the Amended and Restated Bylaws of the Company; the material
     contracts   affecting  the  Company  and  its  subsidiaries'
     business;  and  the  files  and records  maintained  by  the
     Company   with   respect  to  its  subsidiaries'   producing
     properties,  undeveloped acreage, and other  assets  of  the
     Company and its subsidiaries.

           (d)     Unregistered Shares. The Subscriber recognizes
     that  the offer and sale by the Company to it of the Shares,
     or the issuance of the Dividend or Conversion Stock have not
     been and, except as hereinafter set forth in Section 5, will
     not  be  registered under the Securities Act and,  with  the
     exception  of  the Conversion Stock, the Exchange  Act,  and
     have  not  been and will not be registered under  any  other
     domestic or foreign securities laws (the Securities Act, the
     Exchange  Act and any such other applicable securities  laws
     are  hereinafter  collectively referred  to  herein  as  the
     "Securities  Laws")  in reliance upon  exemptions  from  the
     registration   requirements  thereof;  the   Subscriber   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 Subscriber understands that the  effect
     of  such  representation and warranty is that the Securities
     must  be  held  indefinitely 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  5,  the
     Company  is  under  no  obligation  either  (i)  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  or
     (ii) to register the Shares or the Dividend Stock under  the
     Exchange Act. The statements contained in this Section 4 are
     true,  correct and complete in all material respects and  do
     not omit any material fact necessary to make such statements
     not misleading.

                (1)     Each of the Subscribers hereby represents
and warrants to the Company that:

                     (i)      it  has  received  a  copy  of  the
               Company's SEC Filings made in fiscal year 1996 and
               to date in 1997;

                    (ii)     it has such knowledge and experience
               in financial and business matters as to be capable
               of   evaluating  the  merits  and  risks   of   an
               investment in the Securities;

                     (iii)  it  is  an "accredited  investor"  as
               defined  in  Rule 501 of Regulation  D  under  the
               Securities Act; and

                     (iv) it understands that the Securities  are
               not being (and, except to the extent set forth  in
               Section  5  hereof, will not be) registered  under
               the Securities Laws; the Securities are being sold
               to it in a transaction that is intended to qualify
               for    an    exemption   from   the   registration
               requirements of the Securities Act, and, except to
               the extent set forth in Section 5 hereof, will not
               be  registered under the Securities Laws  and  may
               not be transferred unless the request for transfer
               is  accompanied  by  a written certification  that
               such  Securities will not be resold in the  United
               States  or to any U.S. person except in accordance
               with  applicable requirements of Rules 144 or 144A
               promulgated  under  the Securities  Act  or  in  a
               transaction  which  in  the  opinion  of  counsel,
               reasonably satisfactory to the Company,  does  not
               require  registration under the  Securities  Laws;
               and  it  also understands that the Securities  may
               not  be transferred unless subsequently registered
               under   the   Securities  Laws,  or  sold   in   a
               transaction  which,  in  the  opinion  of  counsel
               reasonably satisfactory to the Company,  does  not
               require registration under the Securities Laws.

            (e)      Transfer  Conditions.  Prior  to  any  sale,
     transfer  or  other disposition of any of  the  Subscriber's
     Securities  (so long as they have not been registered  under
     the  Securities Act as contemplated in Section 5  hereof  or
     are  otherwise  freely  transferable  under  the  Securities
     Laws), the Subscriber agrees to give at least three business
     days prior written notice to the Company of its intention to
     effect  such  transfer and to comply in all  other  respects
     with this Section 4(e). 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  acceptable  to  the
     Company, 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
     consents, approvals or authorizations to such transfer  have
     been  obtained.  Assuming the receipt by the Company of such
     satisfactory  opinion,  the Subscriber  shall  thereupon  be
     entitled  to  transfer such shares in  accordance  with  the
     terms  of  the  notice delivered by the  Subscriber  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 Subscriber and the Company, such legend  is
     not  required  in  order to aid in assuring compliance  with
     applicable Securities Laws.

           The  Subscriber agrees that it will not sell, transfer
     or  otherwise dispose of any of the Securities  except  upon
     compliance with Sections 4(d), 4(e), 4(f) and 4(g) hereof.

           (f)      Limit  on  Resales During  Registration.  The
     Subscriber  agrees  not  to sell any  Registered  Stock  (as
     defined  in  Section 5) during the period from the  date  it
     receives  notice of the filing of any registration statement
     by  the  Company through the 180th 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 Subscriber unless  the  registration
     statement relates to an underwritten public offering of  the
     Company's securities.

            (g)      Restrictive  Legends  and  Stop  Order.   In
     addition  to  any specific restrictive legends that  may  be
     required  by  applicable Securities Laws  or  agreements  to
     which  the Subscriber may be a party, each Subscriber agrees
     to  be bound by a restrictive legend which may be placed  on
     the certificates representing the Securities. The Subscriber
     understands  and  agrees  that 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. The Subscriber  acknowledges
     and  agrees that the Company is and will be relying upon the
     truth  and  accuracy  of the foregoing  representations  and
     warranties  in offering and selling the Shares  and  issuing
     the  Securities to the Subscriber without first  registering
     them under applicable Securities Laws.

      5.     Registration.  (a)  If at any time after the Closing
the  Company  proposes to register any of its Common Stock  under
the  Securities  Act  for  sale to the public  (such  sale  being
hereinafter  referred  to  as a "Public Offering"),  except  with
respect  to  registration statements on Forms S-4, S-8  or  their
then  equivalents, each such time it will give written notice  to
the  Subscribers  of its intention so to do.   Upon  the  written
request  of a Subscriber, received by the Company within 30  days
after the giving of any such notice by the Company, to include in
such  Public Offering any of its Conversion Stock (which  request
shall  state  the  intended method of disposition  thereof),  the
Company  will use its best efforts to cause the Conversion  Stock
to  be  included  in  the securities to be sold  in  such  Public
Offering, all to the extent requisite to permit the sale or other
disposition  by such Subscriber (in accordance with  its  written
request) of such Conversion Stock. If the Public Offering  is  an
underwritten   public  offering  and  the  managing   underwriter
determines  in good faith and advises in writing that the  number
of  shares  of Common Stock which the Company proposes  to  offer
under  such registration statement, together with the  number  of
shares  of  Conversion  Stock and other shares  of  Common  Stock
requested  to be included in such registration statement  by  the
holders of securities having registration rights similar to those
of  this  Section  5(a), exceeds the number of shares  of  equity
securities  it is advisable to offer and sell at such time,  then
the  number  of shares to be sold by the Company, the Subscribers
and  such  other  shareholders  after  such  reduction  shall  be
allocated  among  the  Company, the Subscribers  and  such  other
shareholders such that the Company shall have the right  to  have
offered  no  less  than  75%  of the original  number  of  shares
proposed   or   requested  by  the  Company  to  be   registered.
Notwithstanding  the  foregoing  provisions,  the   Company   may
withdraw  any registration statement referred to in this  Section
5(a) without thereby incurring any liability to the Subscribers.

      (b)      As  a  condition  to the inclusion  of  shares  of
Registered  Stock in any registration statement, the  Subscribers
will furnish to the Company such information with respect to them
and  their plan of distribution of such shares as is required  to
be  disclosed  in the registration statement (and the  prospectus
and  all  amendments thereto included therein) by the  applicable
rules, regulations and guidelines of the Commission.

      (c)     The Company and the Subscribers agree to enter into
a  written  agreement with the managing underwriter in such  form
and containing such provisions as are customary in the securities
business  for  such an arrangement between such  underwriter  and
companies of the Company's size and investment stature and  their
shareholders.

     (d)     (i) The Company will indemnify and hold harmless the
Subscribers  and  each  other person, if  any  who  controls  the
Subscribers  within  the meaning of the  Securities  Act  or  the
Exchange  Act  from  and  against any  and  all  losses,  claims,
damages, liabilities and legal and other expenses including costs
of investigation caused by any untrue statement or alleged untrue
statement  of  a  material  fact contained  in  any  registration
statement  under which the Registered Stock was registered  under
the  Securities  Act,  any prospectus or  preliminary  prospectus
contained  therein or any amendment, post-effective amendment  or
supplement thereto, or caused by any omission or alleged omission
to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, in light
of  the  circumstances  then existing,  except  insofar  as  such
losses,  claims, damages, liabilities or expenses are  caused  by
any such untrue statement or omission or alleged untrue statement
or  omission  based upon information relating to the  Subscribers
and  furnished  to  the  Company in writing  by  the  Subscribers
expressly for use therein.

      (ii)      It shall be a condition to the obligation of  the
Company  to  effect a registration of the Registered Stock  under
the  Securities Act pursuant hereto, that the Subscribers jointly
and  severally  indemnify and hold harmless the Company  and,  in
connection with an underwritten public offering, each underwriter
and  each  person,  if  any,  who controls  the  Company  or  the
underwriter,  within  the meaning of the Securities  Act  or  the
Exchange  Act,  to  the  same extent as the  indemnity  from  the
Company  in  the foregoing paragraph, but only with reference  to
information relating to the Subscribers furnished to the  Company
or  the  underwriter in writing by the Subscribers expressly  for
use  in the registration statement, any prospectus or preliminary
prospectus  contained  therein or any  amendment,  post-effective
amendment or supplement thereto.

      (iii)   In  case any claim shall be made or any  proceeding
(including  any governmental investigation) shall  be  instituted
involving any indemnified Party in respect of which indemnity may
be  sought pursuant to this Section 5(d), such indemnified  party
shall  promptly notify the indemnifying party in writing  of  the
same;  provided  that  failure to notify the  indemnifying  party
shall  not  relieve  it from any liability  it  may  have  to  an
indemnified  party  otherwise than under this Section  5(d).  The
indemnifying party, upon request of the indemnified party,  shall
retain  counsel reasonably satisfactory to the indemnified  party
to  represent the indemnified party in such proceeding and  shall
pay  the  fees  and disbursements of such counsel.  In  any  such
proceeding, any indemnified party shall have the right to  retain
its  own  counsel, but the fees and disbursements of such counsel
shall be at the expense of such indemnified party unless (i)  the
indemnifying  party shall have failed to retain counsel  for  the
indemnified party as aforesaid, (ii) the indemnifying  party  and
such  indemnified  party  shall  have  mutually  agreed  to   the
retention  of  such  counsel  or  (iii)  representation  of  such
indemnified  party  by the counsel retained by  the  indemnifying
party  would be inappropriate due to differing interests  between
such  indemnified party and any other party represented  by  such
counsel  in such proceeding; provided that the Company shall  not
be  liable  for  the  fees and disbursements  of  more  than  one
additional  counsel for all indemnified parties. The indemnifying
party  shall  not be liable for any settlement of any  proceeding
effected  without  its written consent but if settled  with  such
consent  or  if there be a final judgment for the plaintiff,  the
indemnifying party agrees to indemnify the indemnified party from
and against any loss or liability by reason of such settlement or
judgment.

           (e)      The  registration of the Conversion Stock  as
herein  provided  shall be at the expense of the  Company  except
that   Subscribers  shall  bear  the  cost  of  any  underwriters
discounts, fees and expenses attributable to their shares of such
Stock  and  the  fees  and  expenses of  any  legal  counsel  and
accountants, if any, retained by the Subscribers.

      6.      Survival  of  Representations and  Warranties.  The
representations and warranties of the parties hereto set forth in
this  Agreement  or  in  any certificate  or  other  document  or
instrument  furnished  by or on behalf of  any  party  hereto  in
connection with the transactions contemplated hereby, which shall
be  deemed to be effective as of the date made, shall survive the
execution,  delivery and termination of this  Agreement  and  the
consummation  of the transactions contemplated hereby  and  shall
terminate effective on the first anniversary of the last  Closing
Date to occur hereunder.

      7.     Notices. Any notice, claim, request, demand or other
communication  required  or permitted  to  be  given  under  this
Agreement shall be given in writing and shall be deemed  to  have
been  duly  given  if  delivered or mailed, first  class  postage
prepaid,  or  sent  by  facsimile (with a  copy  mailed  promptly
thereafter  by first class mail, postage prepaid), to  the  party
for whom intended at the following addresses:

If  to  the  Subscribers:      The addresses  set  forth  on  the
                                signature page hereof.

If to the Company:     110 Rue Jean Lafitte
                       Lafayette, Louisiana 70508
                       Attn.: David A. Melman, Esq.
                              Executive Vice President
                       Facsimile Number (318) 237-3316

     With a copy to:

               Peter A. Basilevsky, Esq.
               Satterlee Stephens Burke & Burke LLP
               230 Park Avenue
               New York, New York 10169
               Facsimile Number (212) 818-9606

or  at  such other address, as to any party, as such party  shall
specify by like notice to the other parties.

      8.      Entire Agreement, etc. This Agreement together with
the  Exhibit  hereto  sets  forth the  entire  understanding  and
agreement  between the Company and the Subscribers pertaining  to
the  subject mailer of this Agreement and the Exhibit superseding
any  and  all  prior  agreements, proposals,  understandings  and
arrangements  between the parties hereto, all of which  shall  be
deemed  terminated, cancelled and of no further force and effect.
No  prior  or  contemporaneous understanding or  agreement  shall
alter  or constitute a waiver of any term, condition, obligation,
covenant, representation or warranty contained in this Agreement,
nor  shall  any  assignment, waiver, understanding  or  agreement
purportedly  assigning this Agreement or amending or waiving  any
provision  hereof  be  effective unless and  until  it  shall  be
reduced  to  writing  and  signed by  the  parties  hereto.  This
Agreement  may be executed in counterparts with each  counterpart
being  deemed an original and all such counterparts being  deemed
as  one  single  instrument, The headings in this Agreement  have
been  inserted  for convenience of reference only and  shall  not
affect the interpretation or enforcement of any provision hereof.

      9.     Applicable Law. THIS AGREEMENT SHALL BE GOVERNED  BY
AND  BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
YORK  FOR  ALL  PURPOSES  WITHOUT REGARD  TO  ITS  PRINCIPLES  OF
CONFLICTS OF LAW.

      10.      Submission  to Jurisdiction.      Each  Subscriber
hereby irrevocably and unconditionally:

           (i)      submits  for itself and its property  in  any
     legal  action  or proceeding relating to this  Agreement  to
     which  it is a party, or for recognition and enforcement  of
     any  judgment  in  respect  thereof,  to  the  non-exclusive
     general jurisdiction of the Courts of the State of New York,
     the  courts of the United States of America for the Southern
     District of New York, and appellate courts from any thereof;

           (ii)      consents that any such action or  proceeding
     may  be brought in such courts and waives any objection that
     it may now or hereafter have to the venue of any such action
     or  proceeding  in  any such court or that  such  action  or
     proceeding  was brought in an inconvenient court and  agrees
     not to plead or claim the same;

           (iii)     agrees that service of process in  any  such
     action   or  proceeding  may  be  effected  by  respectively
     delivering or mailing a copy thereof by personal delivery or
     by  registered  or  certified  mail  (or  any  substantially
     similar  form  of mail), postage prepaid, to the  Subscriber
     addressed in the manner set forth in Section 7 hereof or  at
     such  other  address of which the Company  shall  have  been
     notified pursuant thereto; and

           (iv)      agrees that nothing herein shall affect  the
     right  to  effect  service of process in  any  other  manner
     permitted  by  law or shall limit the right to  sue  in  any
     other jurisdiction.

       11.       Termination.  The  Company  may  terminate  this
Agreement  by  notice to the Subscribers at  any  time  prior  to
February 28, 1997. Any termination of this Agreement pursuant  to
this  Section  11 shall be without cost, expense or liability  of
any party.

     12.     Special State Securities Laws Notices.

       Prospective  Purchasers  in  California  must  review  the
following   information   required   by   the   Commissioner   of
Corporations and be aware of its contents:

               "The  sale of the securities  which
               are  the  subject of this agreement
               has  not  been qualified  with  the
               Commissioner of Corporations of the
               State   of   California   and   the
               issuance of such securities or  the
               payment  or receipt of any part  of
               the consideration therefor prior to
               such   qualification  is  unlawful,
               unless  the  sale of the securities
               is exempt from the qualification by
               Section  25100, 25102, or 25105  of
               the  California Corporations  Code.
               The  rights of all parties to  this
               agreement are expressly conditioned
               upon   such   qualification   being
               obtained,  unless the  sale  is  so
               exempt."


      IN  WITNESS WHEREOF, the parties hereto have executed  this
Agreement effective on the 28th day of February, 1997.


                              XCL LTD.



                              By:_______________________________


Title:______________________________

The undersigned hereby subscribes for 18,448 Shares.

                              THE SUBSCRIBER:


                              ______________________________
                              MITCH LEIGH

                              Tax ID No.:______________________

                              Phone No.:_______________________
                              Facsimile No.:_____________________

The undersigned hereby subscribes for 1,731 Shares.

                              THE SUBSCRIBER:


                              ______________________________
                              ABBY LEIGH

                              Tax ID No.:______________________

                              Phone No.:_______________________
                              Facsimile No.:_____________________


             ACKNOWLEDGMENT OF INDIVIDUAL SUBSCRIBER



      On  this  _____ day of ____________, 1997, before  me,  the
undersigned   authority,   duly   commissioned   and   qualified,
personally  came  and  appeared Mitch  Leigh  residing  at  [full
address]   __________________________________________,   to    me
personally  known,  who,  being by me duly  sworn,  declared  and
acknowledged  before  me that he/she knew  the  contents  of  the
foregoing  Agreement and did execute the foregoing  Agreement  in
his/her  capacity  as  a  Subscriber, for  the  purposes  therein
expressed, as his/her free act and deed.


                              ____________________________
                                   Appearer (signature)

_____________________________
Notary Public
Name: [print]__________________________
My commission expires:

             ACKNOWLEDGMENT OF INDIVIDUAL SUBSCRIBER



      On  this  _____ day of ____________, 1997, before  me,  the
undersigned   authority,   duly   commissioned   and   qualified,
personally  came  and  appeared  Abby  Leigh  residing  at  [full
address]   __________________________________________,   to    me
personally  known,  who,  being by me duly  sworn,  declared  and
acknowledged  before  me that he/she knew  the  contents  of  the
foregoing  Agreement and did execute the foregoing  Agreement  in
his/her  capacity  as  a  Subscriber, for  the  purposes  therein
expressed, as his/her free act and deed.


                              ____________________________
                                   Appearer (signature)

_____________________________
Notary Public
Name: [print]__________________________
                     My commission expires: