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) December 22, 1999
__________________________________________
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)
Petroleum Tower, Suite 400
3639 Ambassador Caffery Parkway
Lafayette, Louisiana 70503
(Address of Principal Executive Offices)
318-989-0449
(Registrant's Telephone Number, Including Area Code)
Item 5. Other Events.
On December 23, 1999, the Company issued a press release
announcing that on December 22, 1999, it received a notice of
default from three trusts managed by Trust Company of the West
(the "Investment Funds"), which holds approximately 50.67 percent
of the outstanding principal amount of the $75,000,000 Senior
Secured Notes (the "Notes") issued by XCL Ltd. The Investment
Funds issued this notice of default under the Bond Indenture
based on the Company's failure to make interest payments due on
May 3, 1999, and November 1, 1999. As a result of this
declaration of default, the voting or consensual rights and
powers with respect to the stock of XCL-China, Inc., which has
been pledged to secure the Notes, become vested in the Trustee.
XCL-China, Inc. holds the Company's interest in the Zhao Dong
Block, which is located in the shallow water area of Bohai Bay,
People's Republic of China.
Based on the instructions from the Investment Funds, the
Trustee voted to remove the existing Board of Directors of XCL-
China and to elect in their place as the sole director of XCL-
China, Eric Scroggins.
The Company has also been informed that Mr. Scroggins,
acting as the sole director of XCL-China, has adopted resolutions
on behalf of XCL-China, Inc. concerning the petition for
Involuntary Bankruptcy previously filed against XCL-China by
Apache China LDC, a wholly owned subsidiary of Apache
Corporation. Based on the resolutions adopted, XCL-China is (1)
authorized and directed to withdraw its opposition to the
involuntary Chapter 7 bankruptcy proceeding currently pending in
the United States Bankruptcy Court for the Western District of
Louisiana in Opelousas; and (2) authorized and directed to
convert the involuntary Chapter 7 proceeding to a voluntary
Chapter 11 proceeding; and (3) to retain Douglas S. Draper, Jan
M. Hayden and the law firm of Heller, Draper Hayden & Horn of New
Orleans, La., as bankruptcy counsel in its reorganization under
Chapter 11 of the Bankruptcy Code.
Further, the Company understands that the Investment Funds
have entered into a Forbearance and Standstill Agreement with
Apache China LDC and Apache Corporation whereby neither Apache
Corporation nor Apache China shall seek to dismiss or convert the
Chapter 11 Proceeding, or seek the appointment of a trustee, an
examiner with expanded powers or a responsible person to manage
the affairs of XCL-China during the term of this Agreement unless
XCL-China joins in any such application, and that no employee,
agent, contractor, consultant, officer or member of the board of
directors of XCL-China or XCL holding such position or office on
or prior to December 19, 1999, shall be an officer or member of
the Board of Directors of XCL-China during the term of this
Agreement without the written consent of Apache Corporation or
Apache China.
The Company is evaluating its options to respond to the
actions taken by the Investment Funds.
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.
December 28, 1999 /s/ Lisha C. Falk
_________________________ By:_______________________________
Date Name: Lisha C. Falk
Title: Corporate Secretary
