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)     May 20, 1997
  
                 __________________________________________
  
  
                                 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
                       Lafayette, Louisiana 70508
                  (Address of Principal Executive Offices)
  
  
                               318-237-0325
             (Registrant's Telephone Number, Including Area Code)
  
  
  
  Item 5.     Other Events.
  
       On May 20, 1997, the Company sold through Jefferies &
  Company, Inc. ("Jefferies"), in an unregistered offering to
  qualified institutional buyers and accredited institutional
  investors (the "Note Offering") 75,000 Note Units, each
  consisting of $1,000 principal amount of 13.5% Senior Secured
  Notes due May 1, 2004 (collectively, the "Notes") and one Common
  Sock Purchase Warrant (collectively the "Note Warrants") to
  purchase 1,280 shares of the Company's common stock, par value
  $0.01 per share (the "Common Stock").   The Notes and the Note
  Warrants will not be separately transferable until the date which
  is the earlier of (i) August 17, 1997 or (ii) such date as
  Jefferies in its discretion deems appropriate.
  
       Concurrently, the Company also offered through Jefferies, in
  an unregistered offering to qualified institutional buyers and
  accredited institutional investors (the "Concurrent Equity
  Offering") 294,118 Equity Units, each consisting of one share of
  Amended Series A, Cumulative Convertible Preferred Stock, par
  value $1.00 per share ("Amended Series A Preferred Stock"), and
  one Common Stock Purchase Warrant (collectively, the "Equity
  Warrants") to purchase 327 shares of the Company's Common Stock.
  The Amended Series A Preferred Stock and Equity Warrants will not
  be separately transferable until the date which is the earlier of
  (i) October 16, 1997 or (ii) such date as the Company in its
  discretion deems appropriate.
  
       Jefferies was the initial purchaser ("Initial Purchaser") in
  connection with the Note Offering and Concurrent Equity Offering
  (referred to together as the "Offerings")  for which it was paid
  usual and customary compensation as well as reimbursement for its
  out-of-pocket expenses in the Offerings.
  
       Interest on the Notes will be payable semi-annually on May 1
  and November 1, commencing November 1, 1997.  The Notes will
  mature on May 1, 2004. The Notes are not redeemable at the option
  of the Company prior to May 1, 2002, except that the Company may
  redeem, at its option prior to May 1, 2002, up to 35% of the
  original aggregate principal amount of the Notes, at a redemption
  price of 113.5% of the aggregate principal amount of the Notes,
  plus accrued and unpaid interest, if any, to the date of
  redemption, with the net  proceeds of any equity offering
  completed within 90 days prior to such redemption; provided that
  at least $48.75 million in aggregate principal amount of the
  Notes remain outstanding.  On or after May 1, 2002, the Notes are
  redeemable at the option of the Company, in whole or in part, at
  an initial redemption price of 106.75% of the aggregate principal
  amount of the Notes until May 1, 2003, and at par thereafter,
  plus accrued and unpaid interest, if any, to the date of
  redemption.  Upon the occurrence of a change of control, the
  Company will be obligated to make an offer to purchase all
  outstanding Notes at a price equal to 101% of the principal
  amount thereof, plus accrued and unpaid interest, if any, to the
  date of purchase.
  
       Prior to the issuance of the Notes, the Company had
  approximately $32.3 million aggregate principal amount of
  existing full recourse indebtedness (the "Existing Secured
  Debt"), collateralized by substantially all of the outstanding
  capital stock of XCL-China Ltd., the Company's principal
  operating subsidiary ("XCL-China").  Initially, the Notes will be
  secured by all of the gross proceeds of the Offering.  A portion
  of such gross proceeds (approximately $14.6 million) will be
  segregated into a separate account (the "Capitalized Interest
  Account") to pay interest on the Notes through November 1, 1998.
  If certain conditions are met, the collateral for the Notes
  (exclusive of the amount in the Capitalized Interest Account)
  will be released and used to repay the Existing Secured Debt, to
  fund the Company's China operations, and for additional working
  capital for general corporate purposes, the Notes will then be
  secured by a pledge of all of the outstanding capital stock of
  XCL-China, and XCL-China will guarantee the Notes on a senior
  basis.  If such conditions do not occur prior to November 1,
  1997, however, the Notes will be mandatorily redeemed on November
  30, 1997, at a redemption price equal to 100% of the principal
  amount thereof, plus accrued and unpaid interest to the date of
  redemption.  Any remaining unpaid amount in respect of the Notes
  shall become a claim against the Company subordinate in right of
  payment to the Existing Secured Debt.
  
       The Note Warrants will entitle the holders thereof to
  purchase in the aggregate 96,000,000 shares of the Common Stock,
  or approximately 12.5% of the outstanding Common Stock, at the
  closing of this Offerings, on a fully diluted basis, assuming the
  exercise of all the Note Warrants.  The Note Warrants will be
  exercisable at any time after the later of the first anniversary
  of the issue date or such date on which the Company has reserved
  or has available a sufficient number of shares of its Common
  Stock to permit exercise of all the outstanding Note Warrants
  ("Initial Note Warrant Exercise Date") and until 5:00 p.m. New
  York City time on the seventh anniversary of the issue date, at
  an initial exercise price of $0.2063 per share, subject to
  adjustment .  If the Initial Note Warrant Exercise Date does not
  occur by May 20, 1998, then each Note Warrant will automatically
  convert into the right to purchase one share of Amended Series A
  Preferred Stock at an exercise price of $34.00 per share.
  
       Each share of Amended Series A Preferred Stock has a
  liquidation value of $85.00, plus accrued and unpaid dividends.
  Dividends on the Amended Series A Preferred Stock are cumulative
  from May 20, 1997 and are payable semi-annually, commencing
  November 1, 1997, at an annual rate of $8.075 per share.
  Dividends are payable in additional shares of Amended Series A
  Preferred Stock (valued at $85.00 per share) through November 1,
  2000, and thereafter in cash, or at the election of the Company,
  in additional shares of Amended Series A Preferred Stock.  The
  Amended Series A Preferred Stock is convertible into Common
  Stock, at any time after the first anniversary of the issue date,
  at the option of the holders thereof, unless previously redeemed,
  at an initial conversion price of $0.50 per share of Common Stock
  (equivalent to a rate of 170 shares of Common Stock for each
  share of Amended Series A Preferred Stock), subject to adjustment
  under certain conditions.  The Company is entitled to require
  conversion of all the outstanding shares of Amended Series A
  Preferred Stock, at any time after November 20, 1997 if the
  Common Stock shall have traded for 20 trading days during any 30
  consecutive trading day period at a market value equal to or
  greater than 150% of the prevailing conversion rate.
  
       The Amended Series A Preferred Stock is redeemable at any
  time on or after May 1, 2002, in whole or in part, at the option
  of the Company initially at a redemption price of $90.00 per
  share and thereafter at redemption prices which decrease ratably
  annually to $85.00 per share on and after May 1, 2006, plus
  accrued and unpaid dividends to the redemption date.  The Amended
  Series A Preferred Stock is mandatorily redeemable, in whole, on
  May 1, 2007, at a redemption price of $85.00 per share, plus
  accrued and unpaid dividends to the redemption date, payable in
  cash, or at the election of the Company, in Common Stock.
  
       Upon the occurrence of a change in control or certain other
  fundamental changes, the conversion price of the Amended Series A
  Preferred Stock will be reduced, for a limited period, in certain
  circumstances in order to provide holders with loss protection at
  a time when the market value of the Common Stock is less than the
  then prevailing conversion price.
  
       The Amended Series A Preferred Stock will entitle the holder
  thereof to cast the same number of votes as the shares of Common
  Stock then issuable upon conversion thereof on any matter subject
  to the vote of the holders of the Common Stock.  Further, the
  holders of the Amended Series A Preferred Stock will be entitled
  to vote as a separate class (i) to elect two directors if the
  Company is in arrears in payment of three semi-annual dividends,
  and (ii) the approval of two-thirds of the then outstanding
  Amended Series A Preferred Stock will be required for the
  issuance of any class or series of stock ranking prior to the
  Amended Series A Preferred Stock, as to dividends, liquidation
  rights and for certain amendments to the Company's Certificate of
  Incorporation that adversely affect the rights of holders of the
  Amended Series A Preferred Stock.
  
       The Equity Warrants will entitle the holders thereof to
  purchase in the aggregate 96,176,586 shares of the Common Stock,
  or approximately 12.5% of the outstanding Common Stock at the
  closing of the Offerings, on a fully diluted basis, assuming the
  exercise of all the Equity Warrants.  The Equity Warrants are
  exercisable at any time after the later of the first anniversary
  of the issue date or such date on which the Company has reserved
  or has available a sufficient number of shares of its Common
  Stock to permit exercise of all outstanding Equity Warrants
  ("Initial Equity Warrant Exercise Date") and until 5:00 p.m. New
  York City time  on the seventh anniversary of the issue date, at
  an initial exercise price of $0.2063 per share, subject to
  adjustment.  If the Initial Equity Warrant Exercise Date does not
  occur by May 20, 1998, then each Equity Warrant will
  automatically convert into the right to purchase one share of
  Amended Series A Preferred Stock at an exercise price of $34.00
  per share.  In the event the appropriate Chinese governmental
  authorities fail to approve the overall development plan for the
  Zhao Dong Block in the shallow waters of the Bohai Bay in which
  the Company has an interest, on or prior to February 1, 1998,
  then the holders of the Equity Warrants will have the right to
  require the Company to purchase on March 2, 1998, one share of
  Amended Series A Preferred Stock for each Equity Warrant such
  holder owns, at a price of $85.00 per share, plus accrued and
  unpaid dividends to the purchase date.
  
       The securities issued in the Note Offering and in the
  Concurrent Equity Offering are "restricted securities" as defined
  in Rule 144 under the Securities Act of 1933, as amended.  The
  Note Units and Equity Units, and upon separation, the Notes,
  Amended Series A Preferred Stock, Note Warrants and Equity
  Warrants are eligible for trading in the Private Offering,
  Resales and Trading through Automated Linkage Market of the
  National Association of Securities Dealers, Inc.  Holders will
  also be entitled to certain registration rights with respect to
  their securities.  The interest rate on the Notes is subject to
  increase under certain circumstances if the Company is not in
  compliance with its registration obligations to the Note holders.
  
       The Company agreed to issue to Jefferies in connection with
  the Note Offering a total of 15,006 warrants to purchase
  19,207,680 shares of Common Stock at an initial exercise price of
  $0.2063 per share.  Of such warrants, 2,251 will be issued
  directly to a finder, who, will also receive from the Company
  $295,000 in cash, and from the Initial Purchaser, 5,882 of the
  Units being issued in the Concurrent Equity Offering.
  
       Proceeds of the Concurrent Equity Offering, net of
  commissions and expenses, were used to repay certain indebtedness
  and the remainder added to the working capital of the Company.
  
  Item 7.  Financial Statements and Exhibits.
  
          (c)  Exhibits
  
                               INDEX TO EXHIBITS
  
  
  Exhibit No.                     Description
  
  Instruments defining the rights of Security holders:
  
  4.1  Form of Purchase Agreement dated May 13, 1997, between the
       Company and Jefferies & Company, Inc. (the "Initial
       Purchaser") with respect to 75,000 Units each consisting of
       $1,000 principal amount of 13.5% Senior Secured Notes due
       May 1, 2004, Series A and one warrant to purchase 1,280
       shares of the Company's Common Stock with an exercise price
       of $0.2063 per share ("Note Warrants").
  
  4.2  Form of Purchase Agreement dated May 13, 1997, between the
       Company and Jefferies & Company, Inc. (the "Initial
       Purchaser") with respect to 294,118 Units each consisting of
       one share of Amended Series A, Cumulative Convertible
       Preferred Stock ("Amended Series A Preferred Stock") and one
       warrant to purchase 327 shares of the Company's Common Stock
       with an exercise price of $0.2063 per share ("Equity
       Warrants").
  
  4.3  Form of Warrant Agreement and Warrant Certificate dated May
       20, 1997, between the Company and Jefferies & Company, Inc.,
       as the Initial Purchaser, with respect to the Note Warrants.
  
  4.4  Form of Warrant Agreement and Warrant Certificate dated May
       20, 1997, between the Company and Jefferies & Company, Inc.,
       as the Initial Purchaser, with respect to the Equity
       Warrants.
  
  4.5  Form of Designation of Amended Series A Preferred Stock
       dated May 19, 1997.
  
  4.6  Form of Amended Series A Preferred Stock certificate.
  
  4.7  Form of Global Unit Certificate for 75,000 Units consisting
       of 13.5% Senior Secured Notes due May 1, 2004 and Warrants
       to Purchase Shares of Common Stock.
  
  4.8  Form of Global Unit Certificate for 293,765 Units consisting
       of Amended Series A Preferred Stock and Warrants to Purchase
       Shares of Common Stock.
  
  4.9  Form of Warrant Certificate dated May 20, 1997, issued to
       Jefferies & Company, Inc., with respect to 12,755 warrants
       to purchase shares of Common Stock of the Company at an
       exercise price of $0.2063 per share.
  
  
  Material Contracts:
  
  10.1 Form of Indenture dated as of May 20, 1997, between the
       Company, as Issuer and Fleet National Bank, as Trustee
       ("Indenture").
  
  10.2 Form of 13.5% Senior Secured Note due May 1, 2004, Series A
       issued May 20, 1997 to Jefferies & Company, Inc. as the
       Initial Purchaser (Exhibit A to the Indenture).
  
  10.3 Form of Pledge Agreement dated as of May 20, 1997, between
       the Company and Fleet National Bank, as Trustee (Exhibit C
       to the Indenture).
  
  10.4 Form of Cash Collateral and Disbursement Agreement dated as
       of May 20, 1997, between the Company and Fleet National
       Bank, as Trustee and Disbursement Agent, and Herman J.
       Schellstede & Associates, Inc., as Representative (Exhibit F
       to the Indenture).
  
  10.5 Form of Intercreditor Agreement dated as of May 20, 1997,
       between the Company, ING (U.S.) Capital Corporation, the
       holders of the Secured Subordinated Notes due April 5, 2000
       and Fleet National Bank, as trustee for the holders of the
       13.5% Senior Secured Notes due May 1, 2004 (Exhibit G to the
       Indenture).
  
  10.6 Registration Rights Agreement dated as of May 20, 1997, by
       and between the Company and Jefferies & Company, Inc. with
       respect to the 13.5% Senior Secured Notes due May 1, 2004
       and 75,000 Common Stock Purchase Warrants (Exhibit H to the
       Indenture).
  
  10.7 Form of Security Agreement, Pledge and Financing Statement
       and Perfection Certificate dated as of May 20, 1997, by the
       Company in favor of Fleet National Bank, as Trustee (Exhibit
       I to the Indenture).
  
  
  10.8 Registration Rights Agreement dated as of May 20, 1997, by
       and between the Company and Jefferies & Company, Inc. with
       respect to the 9.5% Amended Series A Preferred Stock and
       Common Stock Purchase Warrants.
  
  10.9 Form of Restated Forbearance Agreement dated effective as of
       May 20, 1997, between the Company, XCL-Texas, Inc. and ING
       (U.S.) Capital Corporation.
  
                                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.
  
       June 3, 1997               /s/ David A. Melman
  ________________________      By:_______________________________
               Date                      David A. Melman
                                    Executive Vice President
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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)     May 20, 1997
  
                 __________________________________________
  
                                 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
                       Lafayette, Louisiana 70508
                  (Address of Principal Executive Offices)
  
                               318-237-0325
             (Registrant's Telephone Number, Including Area Code)
  
  Item 5.     Other Events.
  
       On May 20, 1997, the Company sold through Jefferies &
  Company, Inc. ("Jefferies"), in an unregistered offering to
  qualified institutional buyers and accredited institutional
  investors (the "Note Offering") 75,000 Note Units, each
  consisting of $1,000 principal amount of 13.5% Senior Secured
  Notes due May 1, 2004 (collectively, the "Notes") and one Common
  Sock Purchase Warrant (collectively the "Note Warrants") to
  purchase 1,280 shares of the Company's common stock, par value
  $0.01 per share (the "Common Stock").   The Notes and the Note
  Warrants will not be separately transferable until the date which
  is the earlier of (i) August 17, 1997 or (ii) such date as
  Jefferies in its discretion deems appropriate.
  
       Concurrently, the Company also offered through Jefferies, in
  an unregistered offering to qualified institutional buyers and
  accredited institutional investors (the "Concurrent Equity
  Offering") 294,118 Equity Units, each consisting of one share of
  Amended Series A, Cumulative Convertible Preferred Stock, par
  value $1.00 per share ("Amended Series A Preferred Stock"), and
  one Common Stock Purchase Warrant (collectively, the "Equity
  Warrants") to purchase 327 shares of the Company's Common Stock.
  The Amended Series A Preferred Stock and Equity Warrants will not
  be separately transferable until the date which is the earlier of
  (i) October 16, 1997 or (ii) such date as the Company in its
  discretion deems appropriate.
  
       Jefferies was the initial purchaser ("Initial Purchaser") in
  connection with the Note Offering and Concurrent Equity Offering
  (referred to together as the "Offerings")  for which it was paid
  usual and customary compensation as well as reimbursement for its
  out-of-pocket expenses in the Offerings.
  
       Interest on the Notes will be payable semi-annually on May 1
  and November 1, commencing November 1, 1997.  The Notes will
  mature on May 1, 2004. The Notes are not redeemable at the option
  of the Company prior to May 1, 2002, except that the Company may
  redeem, at its option prior to May 1, 2002, up to 35% of the
  original aggregate principal amount of the Notes, at a redemption
  price of 113.5% of the aggregate principal amount of the Notes,
  plus accrued and unpaid interest, if any, to the date of
  redemption, with the net  proceeds of any equity offering
  completed within 90 days prior to such redemption; provided that
  at least $48.75 million in aggregate principal amount of the
  Notes remain outstanding.  On or after May 1, 2002, the Notes are
  redeemable at the option of the Company, in whole or in part, at
  an initial redemption price of 106.75% of the aggregate principal
  amount of the Notes until May 1, 2003, and at par thereafter,
  plus accrued and unpaid interest, if any, to the date of
  redemption.  Upon the occurrence of a change of control, the
  Company will be obligated to make an offer to purchase all
  outstanding Notes at a price equal to 101% of the principal
  amount thereof, plus accrued and unpaid interest, if any, to the
  date of purchase.
  
       Prior to the issuance of the Notes, the Company had
  approximately $32.3 million aggregate principal amount of
  existing full recourse indebtedness (the "Existing Secured
  Debt"), collateralized by substantially all of the outstanding
  capital stock of XCL-China Ltd., the Company's principal
  operating subsidiary ("XCL-China").  Initially, the Notes will be
  secured by all of the gross proceeds of the Offering.  A portion
  of such gross proceeds (approximately $14.6 million) will be
  segregated into a separate account (the "Capitalized Interest
  Account") to pay interest on the Notes through November 1, 1998.
  If certain conditions are met, the collateral for the Notes
  (exclusive of the amount in the Capitalized Interest Account)
  will be released and used to repay the Existing Secured Debt, to
  fund the Company's China operations, and for additional working
  capital for general corporate purposes, the Notes will then be
  secured by a pledge of all of the outstanding capital stock of
  XCL-China, and XCL-China will guarantee the Notes on a senior
  basis.  If such conditions do not occur prior to November 1,
  1997, however, the Notes will be mandatorily redeemed on November
  30, 1997, at a redemption price equal to 100% of the principal
  amount thereof, plus accrued and unpaid interest to the date of
  redemption.  Any remaining unpaid amount in respect of the Notes
  shall become a claim against the Company subordinate in right of
  payment to the Existing Secured Debt.
  
       The Note Warrants will entitle the holders thereof to
  purchase in the aggregate 96,000,000 shares of the Common Stock,
  or approximately 12.5% of the outstanding Common Stock, at the
  closing of this Offerings, on a fully diluted basis, assuming the
  exercise of all the Note Warrants.  The Note Warrants will be
  exercisable at any time after the later of the first anniversary
  of the issue date or such date on which the Company has reserved
  or has available a sufficient number of shares of its Common
  Stock to permit exercise of all the outstanding Note Warrants
  ("Initial Note Warrant Exercise Date") and until 5:00 p.m. New
  York City time on the seventh anniversary of the issue date, at
  an initial exercise price of $0.2063 per share, subject to
  adjustment .  If the Initial Note Warrant Exercise Date does not
  occur by May 20, 1998, then each Note Warrant will automatically
  convert into the right to purchase one share of Amended Series A
  Preferred Stock at an exercise price of $34.00 per share.
  
       Each share of Amended Series A Preferred Stock has a
  liquidation value of $85.00, plus accrued and unpaid dividends.
  Dividends on the Amended Series A Preferred Stock are cumulative
  from May 20, 1997 and are payable semi-annually, commencing
  November 1, 1997, at an annual rate of $8.075 per share.
  Dividends are payable in additional shares of Amended Series A
  Preferred Stock (valued at $85.00 per share) through November 1,
  2000, and thereafter in cash, or at the election of the Company,
  in additional shares of Amended Series A Preferred Stock.  The
  Amended Series A Preferred Stock is convertible into Common
  Stock, at any time after the first anniversary of the issue date,
  at the option of the holders thereof, unless previously redeemed,
  at an initial conversion price of $0.50 per share of Common Stock
  (equivalent to a rate of 170 shares of Common Stock for each
  share of Amended Series A Preferred Stock), subject to adjustment
  under certain conditions.  The Company is entitled to require
  conversion of all the outstanding shares of Amended Series A
  Preferred Stock, at any time after November 20, 1997 if the
  Common Stock shall have traded for 20 trading days during any 30
  consecutive trading day period at a market value equal to or
  greater than 150% of the prevailing conversion rate.
  
       The Amended Series A Preferred Stock is redeemable at any
  time on or after May 1, 2002, in whole or in part, at the option
  of the Company initially at a redemption price of $90.00 per
  share and thereafter at redemption prices which decrease ratably
  annually to $85.00 per share on and after May 1, 2006, plus
  accrued and unpaid dividends to the redemption date.  The Amended
  Series A Preferred Stock is mandatorily redeemable, in whole, on
  May 1, 2007, at a redemption price of $85.00 per share, plus
  accrued and unpaid dividends to the redemption date, payable in
  cash, or at the election of the Company, in Common Stock.
  
       Upon the occurrence of a change in control or certain other
  fundamental changes, the conversion price of the Amended Series A
  Preferred Stock will be reduced, for a limited period, in certain
  circumstances in order to provide holders with loss protection at
  a time when the market value of the Common Stock is less than the
  then prevailing conversion price.
  
       The Amended Series A Preferred Stock will entitle the holder
  thereof to cast the same number of votes as the shares of Common
  Stock then issuable upon conversion thereof on any matter subject
  to the vote of the holders of the Common Stock.  Further, the
  holders of the Amended Series A Preferred Stock will be entitled
  to vote as a separate class (i) to elect two directors if the
  Company is in arrears in payment of three semi-annual dividends,
  and (ii) the approval of two-thirds of the then outstanding
  Amended Series A Preferred Stock will be required for the
  issuance of any class or series of stock ranking prior to the
  Amended Series A Preferred Stock, as to dividends, liquidation
  rights and for certain amendments to the Company's Certificate of
  Incorporation that adversely affect the rights of holders of the
  Amended Series A Preferred Stock.
  
       The Equity Warrants will entitle the holders thereof to
  purchase in the aggregate 96,176,586 shares of the Common Stock,
  or approximately 12.5% of the outstanding Common Stock at the
  closing of the Offerings, on a fully diluted basis, assuming the
  exercise of all the Equity Warrants.  The Equity Warrants are
  exercisable at any time after the later of the first anniversary
  of the issue date or such date on which the Company has reserved
  or has available a sufficient number of shares of its Common
  Stock to permit exercise of all outstanding Equity Warrants
  ("Initial Equity Warrant Exercise Date") and until 5:00 p.m. New
  York City time  on the seventh anniversary of the issue date, at
  an initial exercise price of $0.2063 per share, subject to
  adjustment.  If the Initial Equity Warrant Exercise Date does not
  occur by May 20, 1998, then each Equity Warrant will
  automatically convert into the right to purchase one share of
  Amended Series A Preferred Stock at an exercise price of $34.00
  per share.  In the event the appropriate Chinese governmental
  authorities fail to approve the overall development plan for the
  Zhao Dong Block in the shallow waters of the Bohai Bay in which
  the Company has an interest, on or prior to February 1, 1998,
  then the holders of the Equity Warrants will have the right to
  require the Company to purchase on March 2, 1998, one share of
  Amended Series A Preferred Stock for each Equity Warrant such
  holder owns, at a price of $85.00 per share, plus accrued and
  unpaid dividends to the purchase date.
  
       The securities issued in the Note Offering and in the
  Concurrent Equity Offering are "restricted securities" as defined
  in Rule 144 under the Securities Act of 1933, as amended.  The
  Note Units and Equity Units, and upon separation, the Notes,
  Amended Series A Preferred Stock, Note Warrants and Equity
  Warrants are eligible for trading in the Private Offering,
  Resales and Trading through Automated Linkage Market of the
  National Association of Securities Dealers, Inc.  Holders will
  also be entitled to certain registration rights with respect to
  their securities.  The interest rate on the Notes is subject to
  increase under certain circumstances if the Company is not in
  compliance with its registration obligations to the Note holders.
  
       The Company agreed to issue to Jefferies in connection with
  the Note Offering a total of 15,006 warrants to purchase
  19,207,680 shares of Common Stock at an initial exercise price of
  $0.2063 per share.  Of such warrants, 2,251 will be issued
  directly to a finder, who, will also receive from the Company
  $295,000 in cash, and from the Initial Purchaser, 5,882 of the
  Units being issued in the Concurrent Equity Offering.
  
       Proceeds of the Concurrent Equity Offering, net of
  commissions and expenses, were used to repay certain indebtedness
  and the remainder added to the working capital of the Company.
  
  Item 7.  Financial Statements and Exhibits.
  
          (c)  Exhibits
  
                               INDEX TO EXHIBITS
  
  Exhibit No.                     Description
  
  Instruments defining the rights of Security holders:
  
  4.1  Form of Purchase Agreement dated May 13, 1997, between the
       Company and Jefferies & Company, Inc. (the "Initial
       Purchaser") with respect to 75,000 Units each consisting of
       $1,000 principal amount of 13.5% Senior Secured Notes due
       May 1, 2004, Series A and one warrant to purchase 1,280
       shares of the Company's Common Stock with an exercise price
       of $0.2063 per share ("Note Warrants").
  
  4.2  Form of Purchase Agreement dated May 13, 1997, between the
       Company and Jefferies & Company, Inc. (the "Initial
       Purchaser") with respect to 294,118 Units each consisting of
       one share of Amended Series A, Cumulative Convertible
       Preferred Stock ("Amended Series A Preferred Stock") and one
       warrant to purchase 327 shares of the Company's Common Stock
       with an exercise price of $0.2063 per share ("Equity
       Warrants").
  
  4.3  Form of Warrant Agreement and Warrant Certificate dated May
       20, 1997, between the Company and Jefferies & Company, Inc.,
       as the Initial Purchaser, with respect to the Note Warrants.
  
  4.4  Form of Warrant Agreement and Warrant Certificate dated May
       20, 1997, between the Company and Jefferies & Company, Inc.,
       as the Initial Purchaser, with respect to the Equity
       Warrants.
  
  4.5  Form of Designation of Amended Series A Preferred Stock
       dated May 19, 1997.
  
  4.6  Form of Amended Series A Preferred Stock certificate.
  
  4.7  Form of Global Unit Certificate for 75,000 Units consisting
       of 13.5% Senior Secured Notes due May 1, 2004 and Warrants
       to Purchase Shares of Common Stock.
  
  4.8  Form of Global Unit Certificate for 293,765 Units consisting
       of Amended Series A Preferred Stock and Warrants to Purchase
       Shares of Common Stock.
  
  4.9  Form of Warrant Certificate dated May 20, 1997, issued to
       Jefferies & Company, Inc., with respect to 12,755 warrants
       to purchase shares of Common Stock of the Company at an
       exercise price of $0.2063 per share.
  
  Material Contracts:
  
  10.1 Form of Indenture dated as of May 20, 1997, between the
       Company, as Issuer and Fleet National Bank, as Trustee
       ("Indenture").
  
  10.2 Form of 13.5% Senior Secured Note due May 1, 2004, Series A
       issued May 20, 1997 to Jefferies & Company, Inc. as the
       Initial Purchaser (Exhibit A to the Indenture).
  
  10.3 Form of Pledge Agreement dated as of May 20, 1997, between
       the Company and Fleet National Bank, as Trustee (Exhibit C
       to the Indenture).
  
  10.4 Form of Cash Collateral and Disbursement Agreement dated as
       of May 20, 1997, between the Company and Fleet National
       Bank, as Trustee and Disbursement Agent, and Herman J.
       Schellstede & Associates, Inc., as Representative (Exhibit F
       to the Indenture).
  
  10.5 Form of Intercreditor Agreement dated as of May 20, 1997,
       between the Company, ING (U.S.) Capital Corporation, the
       holders of the Secured Subordinated Notes due April 5, 2000
       and Fleet National Bank, as trustee for the holders of the
       13.5% Senior Secured Notes due May 1, 2004 (Exhibit G to the
       Indenture).
  
  10.6 Registration Rights Agreement dated as of May 20, 1997, by
       and between the Company and Jefferies & Company, Inc. with
       respect to the 13.5% Senior Secured Notes due May 1, 2004
       and 75,000 Common Stock Purchase Warrants (Exhibit H to the
       Indenture).
  
  10.7 Form of Security Agreement, Pledge and Financing Statement
       and Perfection Certificate dated as of May 20, 1997, by the
       Company in favor of Fleet National Bank, as Trustee (Exhibit
       I to the Indenture).
  
  10.8 Registration Rights Agreement dated as of May 20, 1997, by
       and between the Company and Jefferies & Company, Inc. with
       respect to the 9.5% Amended Series A Preferred Stock and
       Common Stock Purchase Warrants.
  
  10.9 Form of Restated Forbearance Agreement dated effective as of
       May 20, 1997, between the Company, XCL-Texas, Inc. and ING
       (U.S.) Capital Corporation.
  
                                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.
  
       June 3, 1997               /s/ David A. Melman
  ________________________      By:_______________________________
               Date                      David A. Melman
                                    Executive Vice President