H.J. GRUY AND ASSOCIATES, INC.
1200 Smith Street, Suite 3040, Houston, Texas  77002 o FAX (713)
739-6112 o (713) 739-1000


                         March 27, 1998
                                
                                
XCL, Ltd.
110 Rue Jean lafitte
Lafayette, Louisiana 70508

RE:     XCL January 1, 1998 Reserve Report

Attn:  Mr. Richard Kennedy

Dear Mr. Kennedy:

H.J.  Gruy and Associates, Inc. will not have a final January  1,
1998  reserve  report  by March 31, 1998.   H.J.  Gruy  engineers
require  additional time to incorporate recent revisions made  to
the  development plan for the Zhao Dong Block.  This  information
will  be provided by XCL on or before April 3, 1998 and a reserve
report will be finalized shortly afterwards.

                                   Sincerely,
                                   H.J. GRUY AND ASSOCIATES, INC.

                                   /s/ James L. Vincelette

                                   Jim Vincelette
                                   Executive Vice President

JV:akr