PROMISSORY NOTE


$__________          Date: _______________, ____


I.     PROMISE TO PAY

          For value received, the undersigned promises to pay  to
the            order           of           ____________________,
______________________________,    the    principal    sum     of
____________________  AND NO/100 ($__________)  DOLLARS, together
with  interest on the principal sum at the rate of fifteen  (15%)
percent  per annum commencing on the date that Maker received  an
executed  Subscription  Agreement (as hereinafter  defined)  from
Lender.  Interest shall be calculated on the basis of actual days
elapsed over a 365-day year (366-day year in leap years).

II.     DEFINITIONS

          The  following terms, as used in this Promissory  Note,
shall have the meanings set forth below:

          1.       "Acceleration"  shall  mean  the  exercise  of
Lender's  right  to  accelerate  payment  of  all  principal  and
interest  due on the Note after complying with the provisions  of
Section IV.2.

          2.      "Debt" shall mean (i) indebtedness for borrowed
money, (ii) obligations evidenced by bonds, debentures, notes  or
other  similar instruments, (iii) obligations to pay the deferred
purchase  price  of  property or services,  (iv)  obligations  as
lessee  under  leases  which shall have been  or  should  be,  in
accordance   with   generally  accepted  accounting   principles,
recorded  as capital leases, and (v) obligations under direct  or
indirect guaranties in respect of, and obligations (contingent or
otherwise)  to  purchase or otherwise acquire,  or  otherwise  to
assure  a  creditor against loss in respect of,  indebtedness  or
obligations of the kinds referred to in clauses (i) through  (iv)
above.

          3.      "Default Notice" means a notice sent by  Lender
to  Maker  upon  the occurrence and continuance of  an  Event  of
Default  giving rise to an Acceleration which specifies  (i)  the
nature  of  the  Event  of  Default  that  has  occurred  and  is
continuing  and (ii) that Lender intends to make an  Acceleration
in accordance with the provisions of Section IV.2.

          4.      "Event  of Default" shall have the meaning  set
forth in Section IV.1. hereof.

          5.      "Financing Documents" shall mean this Note  and
the other Notes.

          6.     "Lender" shall mean ____________________.

          7.     "Lien" or "Liens" shall mean any mortgage, lien,
pledge,  charge, security interest or encumbrance  of  any  kind,
including, without limitation, the rights of a vendor, lessor  or
similar party under any conditional sale agreement or other title
retention  agreement  or lease substantially equivalent  thereto,
and  the  rights of the holder of any production payment, advance
payment or similar interest.

          8.      "Lutcher Moore Mitigation Bank Financing" shall
mean  a  financing in the amount of up to $15 million secured  in
full  or  in  part by the Lutcher Moore Tract Wetlands Mitigation
Bank.

          9.      "Lutcher  Moore Tract" shall mean that  certain
tract  of  land located in St. James, Ascension and St. John  the
Baptist  Parishes,  Louisiana,  comprising  approximately  62,000
acres, owned by L.M. Holding Associates, L.P.

          10.      "Maker" shall mean XCL Land, Ltd.,  a  company
organized under the laws of Delaware.

          11.     "Note" shall mean this Promissory Note.

          12.      "Security Documents" shall mean  the  Security
Agreements  each dated as of _______________, ____,  executed  by
Maker  and The Exploration Company of Louisiana, Inc. and Lender,
as amended, and the related Louisiana UCC-1 financing statements,
as amended.

          13.       "Subscription  Agreement"  shall   mean   the
Subscription   Agreement  dated  as  of  _______________,   ____,
executed  by  XCL  Ltd., Maker and Lender  and  relating  to  the
purchase of this Note.

III.     TERMS OF PAYMENT

          1.      Maturity.   All principal and interest  accrued
and  unpaid  under this Note is due and payable in  full  on  the
earlier  of  (a)  the  third business day after  funding  of  the
Lutcher  Moore  Mitigation Bank Financing or (b) _______________,
____   [90  days  after  date  of  note]  unless  extended  until
_______________, ____ [90 additional days after date of note]  by
Maker  at  its  sole  option and without the  need  for  Lender's
consent  by  sending  written  notice  to  Lender  on  or  before
_______________, ____ [two days prior to initial due  date]  that
such  maturity  date has been extended to _______________,  ____.
The  maturity  of  this Note may be extended  for  an  additional
ninety  (90) days or until _______________, ____ with the consent
of  Lender  upon  delivery to Lender by Maker  of  an  additional
promissory note substantially on the terms of this Note,  mutatis
mutandis,  in  the  principal amount equal  to  the  then  unpaid
interest on this Note.

IV.     DEFAULT AND REMEDIES IN EVENT OF DEFAULT

          1.      Events of Default.  The term "Event of Default"
shall mean the occurrence of any one of the following events:

          (a)     The failure of Maker to pay punctually when due
any amount (including, without limitation, principal or interest)
payable with respect to the Note.
          
          (b)      Any  representation or warranty made by  Maker
(or  any  of  its  officers)  under or  in  connection  with  the
Subscription Agreement, or by Maker or the grantor of any lien or
security   interest  pursuant  to  any  agreement   securing   or
purporting  to  secure any of the obligations herein  (including,
without  limitation, any of the Security Documents), shall  prove
to  have been incorrect in any material respect on or as  of  the
date made.

          (c)      The  breach of any term, covenant or agreement
made by Maker hereunder (other than under clause (a), above),  or
under  any other agreement between Maker and Lender, which breach
is  not  cured  within 30 days after receipt by Maker  of  notice
thereof.

          (d)     Maker or any of its subsidiaries shall admit in
writing its inability to pay its debts generally, or shall make a
general  assignment for the benefit of creditors;  or  any  case,
proceeding  or other action under any existing or future  law  of
any  jurisdiction, domestic or foreign, relating  to  bankruptcy,
insolvency  or  relief  of debtors, shall  be  instituted  by  or
against Maker or any of its subsidiaries seeking to adjudicate it
a  bankrupt  or  insolvent, or seeking liquidation,  winding  up,
reorganization, arrangement, adjustment, protection,  relief,  or
composition  of  its debts under any law relating to  bankruptcy,
insolvency or reorganization or relief of debtors, or seeking the
entry  of  an order for relief or the appointment of a  receiver,
trustee,  custodian or other similar official for it or  for  any
substantial  part of its property and, in the case  of  any  such
proceeding instituted against it (but not instituted by it), such
proceeding shall remain undismissed or unstayed for a  period  of
thirty (30) days; or Maker or any of its subsidiaries shall  take
any  corporate action to authorize any of the actions  set  forth
above in this subsection (d) of Section IV.

          (e)      Any judgment or order for the payment of money
in excess of $5,000,000 shall be rendered against Maker or any of
its  subsidiaries  and either (i) enforcement  proceedings  shall
have  been commenced by any creditor upon such judgment or  order
that  have  not been stayed for a period of ten (10)  consecutive
days  and  are  not stayed at the time an action to enforce  this
Note  is commenced, or (ii) there shall be any period of ten (10)
consecutive  days  during which a stay  of  enforcement  of  such
judgment  or  order, by reason of a pending appeal or  otherwise,
shall not be in effect.

          (f)       Any  non-monetary judgment or order shall  be
rendered  against  Maker  or  any of  its  subsidiaries  that  is
reasonably  likely to have a material adverse effect on  (i)  the
business,   condition   (financial  or  otherwise),   operations,
performance,   properties  or  prospects   of   Maker   and   its
subsidiaries, taken as a whole, (ii) the ability of Maker and its
subsidiaries, taken as a whole, to perform its obligations  under
this  Note  or  the  Notes  or under any  agreement  securing  or
purporting to secure the obligations herein to which Maker or any
of  its  subsidiaries is a party or (iii) the rights and remedies
of Lender or its agent under any agreement securing or purporting
to  secure  the obligations herein to which Maker or any  of  its
subsidiaries  is a party, and either (x) enforcement  proceedings
shall  have  been  commenced by any person or  entity  upon  such
judgment or order that have not been stayed for a period  of  ten
(10) consecutive days and are not stayed at the time an action to
enforce this Note is commenced, or (y) there shall be any  period
of  ten  (10) consecutive days during which a stay of enforcement
of  such  judgment  or order, by reason of a  pending  appeal  or
otherwise, shall not be in effect.

          (g)     Maker shall create, insure, assume or suffer to
exist  any  debt  other than (i) debt in respect  of  the  Notes;
(ii)   debt   existing  as  of  the  date  of  the   Notes;   and
(iii)   obligations   to  any  affiliate  of   Maker   that   are
contractually  subordinated to the  indebtedness  represented  by
the Notes.
          2.      Acceleration of Maturity.  Upon the  occurrence
of   any   Event  of  Default  arising  from  any  condition   or
circumstance  other than Maker's failure to pay  punctually  when
due  any amount under the Note, Lender may send a Default  Notice
to  Maker.   Upon  actual receipt of such Default  Notice,  Maker
shall  have five (5) business days to either cure such  Event  of
Default  or pay in full all principal and interest due under  the
Note.   If, after five (5) business days have elapsed from actual
receipt  of  the  Default Notice by Maker, Maker has  not  either
(i)  cured  such  Event  of Default or  (ii)  paid  in  full  all
principal  and  interest due under the Note, then and  only  then
shall  Lender  have  the  right to make  an  Acceleration.   Upon
Acceleration,  the  Note,  all interest  thereon  and  all  other
amounts  payable  thereon shall become and be forthwith  due  and
payable,  without presentment, demand, protest or further  notice
of  any  kind.   The  unpaid balance under the  Note  shall  bear
interest as stated herein until paid in full.

V.     WAIVER OF DEFENSES

          Maker  waives presentment for payment, protest,  notice
of   dishonor,  demand,  and  notice  of  acceleration.   Maker's
liability hereunder shall not be impaired by lack of diligence in
collecting the Note and enforcing any security rights of Lender.

VI.     MAXIMUM INTEREST RATE

          In  no  event  shall  the  rate charged  hereunder  for
interest  exceed  the  maximum  rate  of  interest  permitted  by
applicable law, and if any circumstances, including acceleration,
prepayment, or demand, would cause the rate of interest hereunder
to  exceed  such  maximum rate, the rate  of  interest  hereunder
automatically  shall be reduced to such maximum rate  and  Lender
shall  forgive or refund to Maker any interest above such maximum
rate collected by Lender.

VII.     GOVERNING LAW

          This Note shall be governed by the substantive laws  of
the  State  of  Louisiana,  without any  effect  being  given  to
principles of conflicts of laws.

VIII.     SECURITY

          This  Note  is  secured  by a security  interest  in  a
percentage  of  the general and limited partnership  interest  in
L.M.  Holding  Associates,  L.P.,  a  Louisiana  Partnership   in
Commendam,  granted  by  Maker and  The  Exploration  Company  of
Louisiana,  Inc.  pursuant  to the  Security  Documents.   IT  IS
EXPRESSLY  UNDERSTOOD AND AGREED BY LENDER THAT THE  INDEBTEDNESS
EVIDENCED HEREBY IS INDEBTEDNESS OF MAKER AND NOT INDEBTEDNESS OF
ANY  OF ITS AFFILIATES, INCLUDING BUT NOT LIMITED TO XCL LTD.  OR
XCL-CHINA  LTD.,  AND  LENDER HEREBY EXPRESSLY  ACKNOWLEDGES  AND
AGREES THAT EXCEPT WITH RESPECT TO THE SECURITY INTERESTS GRANTED
TO  IT  PURSUANT  TO THE SECURITY DOCUMENTS,  IT  SHALL  HAVE  NO
RECOURSE  AGAINST  ANY OF MAKER'S AFFILIATES, INCLUDING  BUT  NOT
LIMITED TO XCL LTD. OR XCL-CHINA LTD., OR ANY OF THEIR ASSETS AND
THAT  LENDER  SHALL  LOOK SOLELY TO MAKER,  ITS  ASSETS  AND  THE
COLLATERAL IN WHICH A SECURITY INTEREST HAS BEEN GRANTED  BY  THE
SECURITY  DOCUMENTS  FOR REPAYMENT OF ANY  AND  ALL  AMOUNTS  DUE
HEREUNDER.

IX.     NOTICE

          Whenever  this  Note requires or permits  any  consent,
approval,  notice, request or demand from one party  to  another,
the  consent,  approval, notice, request or  demand  must  be  in
writing  (including  telecopies,  telegraphic,  telex  or   cable
communications)   and   mailed  (prepaid  postage),   telecopied,
telegraphed, telexed, cabled or delivered as follows:

          If to Maker:

              XCL Land, Ltd.
          110 Rue Jean Lafitte
          P. O. Box 53775
          Lafayette, Louisiana 70505
          Attn: Benjamin B. Blanchet
          Telecopier: (318) 237-3316

          If to Lender:

          ____________________
          ____________________
          ____________________

Or, as to any party, at such other address as shall be designated
by  such party in a written notice to the other parties.   Unless
otherwise   specified  herein,  all  such   notices   and   other
communications,  shall,  when  mailed,  telecopied,  telegraphed,
telexed or cabled, be effective and deemed delivered and received
when  deposited  in  the  mails,  telecopied,  delivered  to  the
telegraph company, confirmed by telex answerback or delivered  to
the cable company, respectively.

X.     HEADINGS

                  The   headings  used  in  this  Note  are   for
convenience only and do not constitute a part of the Note.

XI.     RESTRICTIONS ON TRANSFER

          THE  NOTE  REPRESENTED BY THIS INSTRUMENT HAS NOT  BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR UNDER
THE  SECURITIES OR BLUE SKY LAWS OF ANY OTHER DOMESTIC OR FOREIGN
JURISDICTION.   SUCH NOTE MAY NOT BE SOLD, OFFERED  FOR  SALE  OR
OTHERWISE TRANSFERRED EXCEPT IN COMPLIANCE WITH SUCH LAWS AND THE
RULES AND REGULATIONS PROMULGATED THEREUNDER.  SUCH NOTE IS  ALSO
SUBJECT TO CERTAIN RESTRICTIONS ON TRANSFER CONTAINED HEREIN  AND
IN  THE  SUBSCRIPTION  AGREEMENT.  A COPY OF  SUCH  AGREEMENT  IS
AVAILABLE FOR INSPECTION AT THE PRINCIPAL OFFICE OF THE MAKER AND
WILL  BE FURNISHED WITHOUT CHARGE TO ANY HOLDER OF THIS NOTE UPON
WRITTEN REQUEST TO THE SECRETARY OF THE MAKER, AND ALL HOLDERS OF
THE NOTE AGREE TO BE BOUND BY THE PROVISIONS OF SUCH AGREEMENT.

XII.     WAIVERS AND AMENDMENTS

          All  amendments, supplements and modifications to  this
Note  shall  be made only in writing signed by Maker and  Lender,
and then any such amendment, supplement, or modification shall be
effective  only  on the specific instance and  for  the  specific
purpose  for which given.  No consent to any departure  by  Maker
from  the provisions of this Note shall in any event be effective
unless the same shall be in writing and signed by Lender.

                              XCL LAND, LTD.



                              By:________________________________

                              Name:______________________________

                              Title:_____________________________