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)      March  28, 1996
                                                    ____________________


                            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  March 28, 1996, the Company completed the sale  of  its
interest  in  the  Gonzales Gas Unit, a 526-acre producing  lease
located  in  the northwest corner of the Berry R.  Cox  Field  in
South  Texas, to Tesoro E&P Company, L.P., a limited  partnership
owned by Tesoro Petroleum Corporation. The net proceeds of $1.325
million  were applied first against interest on bank debt through
the  date  of  closing ($235,987) and the remainder  ($1,089,444)
against principal of the loan. The sale was effective February 1,
1996.


                           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.

  April 1, 1996                         /s/ David A. Melman  
___________________                 By:_______________________________
       Date                             David A. Melman
                                        Executive Vice President