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
