content: SECURITIES AND EXCHANGE COMMISSION
                         Washington, DC  20549
                        
                        
                        
                                FORM 8-K
                       Current Report Pursuant
                    to Section 13 or 15(d) of the
                    Securities Exchange Act of 1934
                            
                            
  Date  of  report (Date of earliest event reported)  September 24, 1998
                        ___________________
                            
                            
                              XCL LTD.
      (Exact Name of Registrant as Specified in Its Charter)
                            
                            
                            Delaware
            (State or other Jurisdiction of Incorporation)
                            
                            
       1-10669                                   51-0305643
  (Commission File Number)                      (I.R.S. Employer
                                              Identification Number)
  
  
                   110 Rue Jean Lafitte, 2nd Floor
                      Lafayette, Louisiana 70508
                (Address of Principal Executive Offices)
                            
                            
                      318-237-0325
  (Registrant's Telephone Number, Including Area Code)
                            
                            
                            
  Item 5.     Other Events.
  
        On  September 24, 1998, the Company issued a
  press  release announcing  that  the  Production
  Sharing Contract  announced  on August 20, 1998, by
  and between its wholly owned subsidiary, XCLCathay
  Ltd.,  and  China National Oil and  Gas  Exploration
  and Development   Corporation  (CNODC),   for   the
  appraisal   and development of the Zhang Dong Block
  in the shallow-water sea area of the Bohai Bay,
  People's Republic of China, was approved by The
  Ministry  of  Foreign  Trade  and  Economic
  Cooperation  of  the People's  Republic of China, on
  September 15, 1998, and  will  be effective October
  1, 1998.   XCL commenced work on the  block  on
  September 15, 1998, including review and
  reinterpretation of  the extensive available seismic
  data, review and evaluation  of  nine existing  wells
  and  production  and  drilling  facilities,  and
  initial preparation for drilling operations.
  
        The  Zhang Dong Block is a direct northwestern
  and northern extension  of the Zhao Dong Block and
  extends from the  shoreline of  the Dagang Oilfield
  Complex to a water depth of approximately 10  feet.
  Dagang Oilfield (Group) Ltd. (Dagang), XCL's
  operating partner, has conducted approximately 300
  kilometers of 2D and  70 square  kilometers  of  3D 
  seismic on the  block. This  seismic reflects  the 
  existence of a large geological structure extending 
  in depth from the shallowest through the deepest reservoirs 
  found productive on XCL's adjacent Zhao Dong Block.  Dagang
  has drilled nine  exploration  and appraisal wells on
  the  Zhang  Dong  Block designed  to  test  the
  middle zones  found  productive  on  the adjacent
  Zhao   Dong  Block.   Eight  of  these   wells
  found hydrocarbons  in  the middle zones.  Dagang has
  also  constructed two  drilling and production
  facilities on the block  capable  of supporting
  approximately 70 productive wells.  XCL plans to
  drill appraisal  wells to test the middle zones.
  Some of  these  wells will be designed to also test
  the shallower and deeper zones.
  
       Under the terms of the Zhang Dong Production
  Contract, XCL will be the operator and will be
  responsible for the cost of reprocessing and
  reinterpretation of existing 2D and 3D seismic data,
  upgrading of the existing drilling and production
  facilities on the block and initial appraisal
  drilling. Thereafter, development and production
  costs will be shared 49 percent by XCL and 51 percent
  by CNODC.  Oil production will be shared 49 percent
  by XCL and 51 percent by CNODC.
  
  
                       SIGNATURES
                            
  Pursuant  to the requirements of the Securities
  Exchange  Act  of 1934, the registrant has duly
  caused this report to be signed  on its behalf by the
  undersigned hereunto duly authorized.
  
  
                                          XCL LTD.
  
  
    September 28, 1998                 /s/ Lisha C. Falk
  _________________________       By:_______________________________
               Date                       Lisha C. Falk
                                          Corporate Secretary
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metadata_filer: {"company-data": {"conformed-name": "XCL LTD", "cik": "0000720676", "assigned-sic": "1311", "irs-number": "510305643", "state-of-incorporation": "DE", "fiscal-year-end": "1231"}, "filing-values": {"form-type": "8-K", "act": "34", "file-number": "001-10669", "film-number": "98716714"}, "business-address": {"street1": "110 RUE JEAN LAFITTE", "city": "LAFAYETTE", "state": "LA", "zip": "70508", "phone": "3182370325"}, "mail-address": {"street1": "110 RUE JEAN LAFITTE", "street2": "2ND FLOOR", "city": "LAFAYETTE", "state": "LA", "zip": "70508"}, "former-company": [{"former-conformed-name": "EXPLORATION CO OF LOUISIANA INC", "date-changed": "19920703"}, {"former-conformed-name": "EXPLORATION COMPANY OF LOUISIANA INC", "date-changed": "19920128"}]}
text: SECURITIES AND EXCHANGE COMMISSION
                         Washington, DC  20549
                        
                        
                        
                                FORM 8-K
                       Current Report Pursuant
                    to Section 13 or 15(d) of the
                    Securities Exchange Act of 1934
                            
                            
  Date  of  report (Date of earliest event reported)  September 24, 1998
                        ___________________
                            
                            
                              XCL LTD.
      (Exact Name of Registrant as Specified in Its Charter)
                            
                            
                            Delaware
            (State or other Jurisdiction of Incorporation)
                            
                            
       1-10669                                   51-0305643
  (Commission File Number)                      (I.R.S. Employer
                                              Identification Number)
  
                   110 Rue Jean Lafitte, 2nd Floor
                      Lafayette, Louisiana 70508
                (Address of Principal Executive Offices)
                            
                            
                      318-237-0325
  (Registrant's Telephone Number, Including Area Code)
                            
                            
                            
  Item 5.     Other Events.
  
        On  September 24, 1998, the Company issued a
  press  release announcing  that  the  Production
  Sharing Contract  announced  on August 20, 1998, by
  and between its wholly owned subsidiary, XCLCathay
  Ltd.,  and  China National Oil and  Gas  Exploration
  and Development   Corporation  (CNODC),   for   the
  appraisal   and development of the Zhang Dong Block
  in the shallow-water sea area of the Bohai Bay,
  People's Republic of China, was approved by The
  Ministry  of  Foreign  Trade  and  Economic
  Cooperation  of  the People's  Republic of China, on
  September 15, 1998, and  will  be effective October
  1, 1998.   XCL commenced work on the  block  on
  September 15, 1998, including review and
  reinterpretation of  the extensive available seismic
  data, review and evaluation  of  nine existing  wells
  and  production  and  drilling  facilities,  and
  initial preparation for drilling operations.
  
        The  Zhang Dong Block is a direct northwestern
  and northern extension  of the Zhao Dong Block and
  extends from the  shoreline of  the Dagang Oilfield
  Complex to a water depth of approximately 10  feet.
  Dagang Oilfield (Group) Ltd. (Dagang), XCL's
  operating partner, has conducted approximately 300
  kilometers of 2D and  70 square  kilometers  of  3D 
  seismic on the  block. This  seismic reflects  the 
  existence of a large geological structure extending 
  in depth from the shallowest through the deepest reservoirs 
  found productive on XCL's adjacent Zhao Dong Block.  Dagang
  has drilled nine  exploration  and appraisal wells on
  the  Zhang  Dong  Block designed  to  test  the
  middle zones  found  productive  on  the adjacent
  Zhao   Dong  Block.   Eight  of  these   wells
  found hydrocarbons  in  the middle zones.  Dagang has
  also  constructed two  drilling and production
  facilities on the block  capable  of supporting
  approximately 70 productive wells.  XCL plans to
  drill appraisal  wells to test the middle zones.
  Some of  these  wells will be designed to also test
  the shallower and deeper zones.
  
       Under the terms of the Zhang Dong Production
  Contract, XCL will be the operator and will be
  responsible for the cost of reprocessing and
  reinterpretation of existing 2D and 3D seismic data,
  upgrading of the existing drilling and production
  facilities on the block and initial appraisal
  drilling. Thereafter, development and production
  costs will be shared 49 percent by XCL and 51 percent
  by CNODC.  Oil production will be shared 49 percent
  by XCL and 51 percent by CNODC.
  
                       SIGNATURES
                            
  Pursuant  to the requirements of the Securities
  Exchange  Act  of 1934, the registrant has duly
  caused this report to be signed  on its behalf by the
  undersigned hereunto duly authorized.
  
                                          XCL LTD.
  
    September 28, 1998                 /s/ Lisha C. Falk
  _________________________       By:_______________________________
               Date                       Lisha C. Falk
                                          Corporate Secretary