SECOND WARRANT AMENDMENT AGREEMENT

     This Second Warrant Amendment Agreement dated as of May  21,
1999 by and between XCL Ltd., a Delaware corporation ("XCL"), and
Doug Ashy, Sr. (the "Warrantholder").

                      W I T N E S S E T H:

     WHEREAS, the Warrantholder holds 21,705 warrants to purchase
shares  of common stock, par value $0.01 per share, of XCL having
been  originally issued pursuant to Warrant Certificate No.  LM-6
dated  March 22, 1999 and reflecting an exercise price  of  $1.50
per  share  of  common  stock (subject to adjustment  as  therein
provided) (the "Warrant Certificate"); and

     WHEREAS,  the Warrantholder acquired the Warrant Certificate
in connection with his purchase of one Unit in a private offering
by  XCL Land Ltd., a wholly owned subsidiary of XCL and XCL Ltd.,
to a limited number of qualified investors of up to 62 Units each
Unit  consisting of $100,000 in principal amount of a  promissory
note  of  XCL  Land (collectively the "Notes" and individually  a
"Note") and 21,705 Warrants (the "Warrants"); and

     WHEREAS,  the  exercise  price  contained  in  the   Warrant
Certificate  has  previously been reduced  by  Warrant  Amendment
Agreement  dated as of April 13, 1999 from $1.50  to  $1.325  per
share   of  common  stock  (subject  to  adjustment  as   therein
provided); and

     WHEREAS,  the Subscription Agreement pursuant to  which  the
Warrantholder  subscribed for the Unit referenced above  provides
that until the Warrantholder's Note is paid in full, if the terms
of  the Units (including the Notes and the Warrants) are amended,
no  amendment shall be effective until it is offered to the other
Unit owners and either accepted or rejected by them; and

     WHEREAS, in order to induce a new purchaser to subscribe for
additional Units, XCL agreed to reduce the exercise price of  the
Warrants from $1.3125 to $1.25 per share of common stock (subject
to adjustment as therein provided), which was the price agreed to
on  April 21, 1999, the date on which the new purchaser agreed to
purchase two Units if the exercise price of the Warrants  was  so
reduced and which price is higher than the closing price  of  the
common stock of XCL on that date; and

     WHEREAS,   pursuant  to  his  Subscription  Agreement,   the
Warrantholder was offered the same amendment and accepted it.

     NOW,  THEREFORE, in consideration of the premises and  other
good  and valuable consideration, the receipt and sufficiency  of
which  are hereby acknowledged and confirmed, the parties  hereto
hereby agree as follows:

     1.      The  definition of "Initial Exercise Price"  in  the
first  paragraph of the Warrant Certificate is hereby amended  to
read as follows:

                    "...  at the initial exercise price
          of   U.S.   $1.25  per  share  (the  "Initial
          Exercise Price") ..."

All  other  terms  and provisions of the first paragraph  of  the
Warrant Certificate shall remain unchanged.

     2.      This  Second Warrant Amendment Agreement  shall  not
constitute  a waiver or amendment of any other provision  of  the
Warrant  Certificate not expressly referred to herein and  except
as  expressly  amended  hereby, the  provisions  of  the  Warrant
Certificate are and shall remain in full force and effect.

     3.      Upon  surrender of the original Warrant Certificate,
XCL  shall issue a new Warrant Certificate of like tenor  and  an
equivalent number of Warrants to the Warrantholder reflecting the
amendment set forth in paragraph 1 above.

     4.      This  Second Warrant Amendment Agreement sets  forth
the  entire  understanding of the parties hereto with respect  to
the  subject  mater hereof and may be executed  in  counterparts,
each of which when executed shall be deemed to be an original but
all  of  which taken together shall constitute one and  the  same
agreement.

     5.      This  Second  Warrant Amendment Agreement  shall  be
governed by and construed in accordance with the internal laws of
the State of Delaware without regard to conflicts of laws.

     IN  WITNESS  WHEREOF, the parties hereto  have  caused  this
Second  Warrant  Amendment Agreement  to  be  duly  executed  and
delivered as of the date and year first above written.

                              XCL LTD.


                              By:______________________________
                              Title:_____________________________


                              WARRANTHOLDER:


                              _________________________________
                              Doug Ashy, Sr.