XCL LTD.

                     WARRANT CERTIFICATE

THE  WARRANTS REPRESENTED BY THIS CERTIFICATE AND THE
SHARES OF COMMON  STOCK  ISSUABLE UPON EXERCISE OF THE
WARRANTS ("SHARES") 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 OF ANY OTHER DOMESTIC  OR  FOREIGN JURISDICTION.
NO  OFFER,  SALE, TRANSFER,  PLEDGE     OR     OTHER
DISPOSITION     (COLLECTIVELY,  A "DISPOSAL")  OF   THE   
WARRANTS REPRESENTED  BY THIS CERTIFICATE, AND UPON EXERCISE, 
THE  SHARES, MAY  BE  MADE 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.
                                        No. NB-1 

                           WARRANTS TO PURCHASE
                         COMMON STOCK OF XCL LTD.

                   Initial Issuance on November 26, 1996
           Void after 5:00 p.m. New York Time, December 31, 1999 

             THIS CERTIFIES THAT, for value received,
Opportunity Associates,  L.P.  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 November 26, 1996 and until  5:00 p.m.,
New  York  time, on December 31,  1999  (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 ONE HUNDRED
THIRTY-THREE THOUSAND THREE   HUNDRED  THIRTY-THREE
(133,333)  fully  paid and   nonassessable common shares, par
value $0.01 per share (the  "Common Stock"), of the Company
(the "Shares"), subject to adjustement as set  forth  herein,
upon surrender of this amended  and  restated warrant
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 of
America.

       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  at any  time  and from time to time after November
26, 1996  to  pur chase 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.
   
               (c)   No Warrant may be exercised after 5:00 p.m.,
New  York  time,  on the Expiration Date, after  which  time all
Warrants evidenced hereby shall be void.
 
               (d)   Payment of the Purchase Price shall be
made in  cash, by wire transfer of immediately available
funds or  by certified check or banker's draft payable to the
order of the Com pany, 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 share  certificate or share 
certificates for the number of whole Shares  purchased upon the 
exercise of the Warrants. Such  share certificate  or share certificates
representing the Shares  shall bear a restrictive legend in
substantially the form of Exhibit  A attahced  hereto and
made a part hereof. The Company  shall  also issue  a  "stop
transfer" or similar instruction or  order  with respect  to
the Shares purchased upon exercise of  the  Warrants that
shall  be in effect at Chase Mellon Shareholders  Services,
Independent  Registrars Group Limited or any  successor
transfer agent for the Common Stock of the Company (the
"Transfer Agent").

     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
the Holder, the Company shall pay to the 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
8(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 transfer 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  have  not  been,  and  will  not be,
registered  under the United States Securities Act  of  1933,
as amended  (the  "Securities Act"), or any other federal  or
state securities  or blue sky laws, except pursuant to the
requirements of  Section 5 hereof. No offer, sale, transfer,
pledge  or  other disposition (collectively, a "Disposal") of the
Warrants represented by this Certificate or the Shares may be made 
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.

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

          (a)   anything  in this Section 5 to the contrary
notwithstanding,  if the Company's securities so registered
for sale  are to be distributed in an underwritten offering
and  the managing  underwriter  shall advise  the Company
that,  in  its opinion, the amount of securities to be
offered should be limited in order to assure a successful offering,  
the amount of Registrable Shares to be included in such Registration
Statement shall  be  so  limited and shall be allocated among
the  persons selling such securities in the following order
of priority:  (A) first  to  be  registered  will be  the  securities  
the Company proposes  to  sell,  (B)  next  to  be  registered
will  be  the securities  subject to any demand registration
rights granted  by the Company, (C) next to be registered
will be securities subject to  any  piggyback  registration
rights granted  by  the  Company before the initial issuance
date of the Warrants, and (D) next to be registered will be
the Registrable Shares and any other shares of  Common Stock
subject to similar piggyback registration rights granted  by
the Company in proportion, as nearly as practicable, to  the
number of shares of Common Stock desired and eligible  to be
sold by each holder of such shares of Common Stock,
provided, however, in no event shall the securities the
Company proposes to sell  constitute less than 75% of the
total amount of securities so to be offered; and

               (b)  anything in this Section 5 to the
contrary notwithstanding, the Company shall not be required
to include any of the Holder's Registrable Shares in a
registration statement if in the written opinion of legal
counsel to the Company the securities for which registration
is requested may be sold publicly without registration under 
the Securities Act; and

          (c)   if  the securities or blue sky laws  of  any
jurisdiction  in which the securities so registered are
proposed to  be  offered  would require the Holder's
payment of  greater registration  expenses  than  those
otherwise required  by  this Section 5 and if the Company
shall determine, in good faith, that the offering of such
securities in such jurisdiction is necessary for  the
successful consummation of the registered offering, then the
Holder shall  either  agree  to  pay  the  portion  of  the
registration expenses required by the securities or blue sky
laws of  such  jurisdiction to be paid by the Holder or
withdraw  its request   for  inclusion  of  its  Registrable
Shares  in   such registration; and

          (d)    notwithstanding  the  provisions  of   this
Section  5, the Company shall have the right at any time and
for any  reason  or  for no reason after it shall have given
written notice  pursuant  to this paragraph (irrespective
of whether  a written  request for inclusion of any such
securities shall  have been  made)  to elect not to file any
such proposed  Registration Statement, or to withdraw the
same after the filing but prior  to the effective date
thereof and, thereupon, shall be relieved from its
obligation to proceed with such registration; and

          (e)   the  Holder, as a condition to the inclusion
of any of his Registrable Shares in any such registered
offering, shall  execute all such customry selling
shareholders agreements as  the  Company may request,
including, without limitation,  any underwriting  agreement
which may  be applicable  to  any  such registered offering.

          6.     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, 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,  which
may be provided 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 United States  national securities exchange, The
Securities  and Futures  Authority Limited in the United
Kingdom, or  The London Stock Exchange Limited in London,
England.  Upon any registration of  transfer, the Company
shall deliver a new warrant certificate or  warrant
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  any applicable  provisions of the Securities
Act and  any applicable state securities or blue sky laws.

     7.     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 warrant 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.  Any transfer  not made in such compliance shall 
be null and void and shall be given no effect hereunder.

     (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 warrant
certificate of like tenor and date, in lieu thereof.

     8.       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 shareholders of record
prior  to  the date on which the Warrants are exercised.

     (b)            In  case the Company shall at any  time
after the date of this Certificate (i) declare a dividend on
all issued  and outstanding 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 8(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 8(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 8(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 or (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), 
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 8(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 8, 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 8, 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 Chase Manhattan Bank, N.A., 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
8(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 8(b), (c) or (i).  All
calculations  under this  Section 8 shall be made to the
nearest cent and the nearest whole share.

     (h)           If  at  any  time, as a  result  of an
adjustment  made  pursuant to Section 8(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  8,  
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  8 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 8(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.

         9.            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 stockholder in respect of any meetings
of stockholders  for the  election of directors or any other
matter, or as having  any rights  whatsoever as a stockholder
of the Company.  If, however, at  any time prior to the
exercise or expiration of the Warrants, any of the following
events shall occur:

                   (a)       the  holders of shares  of  the
    Common Stock shall be entitled to receive a dividend  or
    distribution payable otherwise than in cash, or  a  cash
    dividend or distribution payable otherwise than  out  of
    current  or  retained  earnings,  as  indicated  by  the
    accounting treatment of such dividend or distribution on
    the books of the Company;  or

                   (b)   the Company shall offer to all  the
    holders of  its Common Stock any additional  shares  of
    capital stock of the Company or securities  convertible
    into or exchangeable for shares of capital stock of  the
    Company, or  any option, right or warrant to  subscribe
    therefor; or

                    (c)    a   dissolution,  liquidation
     or winding-up of the Company (other than in connection
     with a  consolidation  or merger) or a sale  of  all  or
     sub stantially  all of its property, assets and
     business  as an  entirety shall be approved by the
     Company's Board of Directors;  or
    
                    (d)    there   shall   be   any
    capital reorganization or reclassification of the
    capital stock of  the  Company (other than a change
    in the number  of outstanding  shares of Common
    Stock or a change  in  the par  value  of  the
    Common Stock), or consolidation  or merger of the
    Company with another entity;
    
then,  in any one or more of said events, the Company shall
give written notice of such event at least fifteen (15) days
prior  to the  date  fixed  as  a record date or the date  of
closing  the transfer books for the determination of the
stockholders entitled to such dividend, distribution,
convertible or exchangeable secur ities or subscription
rights, options or warrants, or entitled to vote  on  such
proposed dissolution, liquidation, winding-up  or sale.  Such
notice shall specify such record date or the date  of closing
the transfer books, as the case may be.  Failure to  give
such notice or any defect therein shall not affect the
validity of any action taken in connection with the
declaration or payment of  any  such  dividend or
distribution, or the issuance  of any convertible  or
exchangeable securities or subscription rights, options  or
warrants, or any proposed dissolution, liquidation, winding-
up or sale.

         10.  Reservation and Listing of Securities.
              -------------------------------------

               (a)  The Company covenants and agrees that at
all times  during  the  period after November 26, 1996,  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  stockholder 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  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.  Notices. All notices and other communications from
the  Company to the Holder 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 Warrant
Certifi cate  to  be duly executed by its duly authorized
officers  under its corporate seal.

Dated: November 26, 1996
                                         XCL LTD.



                             By:_______________________________
                                  David A. Melman
                                  Executive Vice President,
                                   General  Counsel and
                                   Secretary

                                 

Attest:


____________________________
Assistant Secretary

Agreed to and accepted
as of November 26, 1996 by

Opportunity Associates, L.P.


By:___________________________
Name:______________________
Title:_____________________

                          XCL LTD.
                              
                          EXHIBIT A
                              
                     RESTRICTIVE LEGEND
                              
                              
THE  SECURITIES  REPRESENTED BY THIS CERTIFICATE  HAVE  NOT
BEEN REGISTERED  UNDER THE UNITED STATES SECURITIES ACT  OF
1933,  AS AMENDED,  OR  ANY OTHER FEDERAL OR STATE SECURITIES
LAWS  OF  THE UNITED  STATES  OF  AMERICA.  THE SHARES HAVE
BEEN  ACQUIRED  FOR INVESTMENT AND NOT WITH A VIEW TO, OR FOR
SALE IN CONNECTION WITH ANY  DISTRIBUTION THEREOF  WITHIN THE
MEANING OF  THE  SECURITIES ACT OF 1933, AS AMENDED,
APPLICABLE STATE SECURITIES LAWS AND THE RULES  AND
REGULATIONS OF THE SECURITIES AND EXCHANGE COMMISSION, AND
MAY NOT BE SOLD OR TRANSFERRED EXCEPT IN COMPLIANCE WITH SUCH LAWS.


                                   XCL LTD.
                          FORM OF ELECTION TO PURCHASE 
                      (To be executed by the registered Holder
                    if such Holder desires to exercise Warrants)

             The undersigned registered Holder hereby irrevocably elects  
to  exercise  the right of purchase represented  by  this Warrant  
Certificate for, and to purchase, _____________  Shares hereunder, and 
herewith tenders in payment for such Shares cash, a wire transfer, a 
certified check or a banker's draft payable to the  order of XCL Ltd. 
in the amount of ____________________, all  in  accordance  with  the  terms  
hereof.  The undersigned requests  that a share 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
purchas able  hereunder, that a new Warrant Certificate for
the  balance remaining  of  the Shares purchasable hereunder
be registered  in the  name  of  the undersigned Warrant
Holder or his Assignee  as below indicated and delivered to
the address stated below.

DATED:_______________________________________________________

Name of Warrant Holder:____________________________________________________
                                        (Please Print)

Address:___________________________________________________________________
___________________________________________________________________________


Signature:_________________________________________________________________

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

             

             

                          XCL LTD.

                    FORM OF ASSIGNMENT

    (To be executed by the registered Holder if such Holder
         desires to transfer the Warrant Certificate)
         
         
                         FOR  VALUE  RECEIVED, the undersigned hereby 
sells, assigns and transfers to:

________________________________________________________________
        (Please Print Name and Address of Transferee)

_________________________________________________________________
                              
_________________________________________________________________
                              

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

DATED:________________________________________________________________

Signature of registered Holder:__________________________________________

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


Signature Guaranteed:

__________________________________
     Authorized Officer

__________________________________
     Name of Institution