<PAGE>

                 [LETTERHEAD OF MILLING BENSON WOODWARD L.L.P.]





                                 March 29, 2000


Securities and Exchange Commission
450 Fifth Street, N.W.
Judiciary Plaza
Washington, D.C. 20549-1004

Via Edgar Electronic Filing System

         Re:      File Number 0-9219
                  ------------------


Gentlemen:

         Pursuant to  regulations  of the  Securities  and Exchange  Commission,
submitted  herewith for filing on behalf of Avoca,  Incorporated (the "Company")
is the Company's Report on Form 10-KSB for the period ended December 31, 1999.

         This  filing  is  being   effected  by  direct   transmission   to  the
Commission's EDGAR System.

                                                  Sincerely,



                                                  /s/ Guy C. Lyman, Jr.
                                                  Guy C. Lyman, Jr.
                                                  Attorney at Law
                                                  Milling Benson Woodward L.L.P.
                                                  (504) 569-7160
GCL/kj217308

Enclosures

<PAGE>
                               UNITED STATES
                       Securities and Exchange Commission
                             Washington, D.C. 20549
                                   FORM 10-KSB
 X  / Annual report pursuant to Section 13 or 15(d)  of  the Securities Exchange
---   Act of 1934 for the fiscal year ended December 31, 1999

                                       or

   /  Transition  report  pursuant  to  Section  13 or 15(d)  of the  Securities
      Exchange Act of 1934 for the transition period from to

Commission file number 0-9219
                       ------

                               AVOCA, INCORPORATED
--------------------------------------------------------------------------------
                 (Name of small business issuer in its charter)

                    Louisiana                                 72-0590868
--------------------------------------------------     -------------------------
        (State or other jurisdiction of                    (I.R.S. Employer
         incorporation or organization)                  Identification Number)

228 St. Charles Avenue, Suite 838, New Orleans, LA              70130
--------------------------------------------------     -------------------------
   (Address of principal executive offices)                   (Zip Code)

Registrant's telephone number       (504) 552-4720
                              --------------------

Securities registered under Section 12(b) of the Act:

               Title of each class                      Name of each exchange on
                                                            which registered
                     None                                         None
---------------------------------------------------     ------------------------

Securities registered under Section 12(g) of the Exchange Act:

                           Common Stock - No Par Value
                           ---------------------------
                                (Title of Class)

Check  whether the issuer (1) filed all reports  required to be filed by Section
13 or 15(d) of the  Exchange  Act during the past 12 months (or for such shorter
period that  registrant  was  required to file such  reports),  and (2) has been
subject to such filing requirements for the past 90 days. Yes X  No
                                                             ---   ---

Check if there is no disclosure of delinquent  filers in response to Item 405 of
Regulation S-B contained in this form, and no disclosure  will be contained,  to
the  best  of  registrant's   knowledge,  in  definitive  proxy  or  information
statements  incorporated  by  reference  in Part III of this Form  10-KSB or any
amendment to this Form 10-KSB.
                              ---

State issuer's revenues for its most recent fiscal year.  $1,444,810
                                                          ----------

The  aggregate   market  value  of  common  stock  held  on  March  1,  2000  by
non-affiliates of the registrant was $9,903,953. Such value has been computed on
the basis of the  average  bid and asked  prices of the stock and by  excluding,
from the 830,500 shares  outstanding on that date, all stock  beneficially owned
by officers and directors of the  registrant  and by  beneficial  owners of more
than  five  percent  of its  stock,  even  though  all such  persons  may not be
affiliates as defined in SEC Rule 12b-2.

The Company has only one class of common  stock,  of which  830,500  shares were
outstanding on March 1, 2000.

Parts I and II  incorporate by reference  information  from the Annual Report to
Shareholders  for the year ended  December 31, 1999.  Part III  incorporates  by
reference  information  from the Company's  Proxy  Statement  dated February 18,
2000.

Transitional Small Business Disclosure Format (check one):  Yes        No   X
                                                                ---        ---

An exhibit index is located on page 16


<PAGE>



                               AVOCA, INCORPORATED

                          Index to 10-KSB Annual Report

                                                                            PAGE

PART I

Item 1:          Description of Business                                     3-9
Item 2:          Description of Property                                    9-10
Item 3:          Legal Proceedings                                            10
Item 4:          Submission of Matters to a Vote of Security Holders          11


PART II

Item 5:          Market for Common Equity

                 and Related Stockholder Matters                              11
Item 6:          Management's Discussion and Analysis or Plan of
                 Operation                                                    11
Item 7:          Financial Statements                                         11
Item 8:          Changes In and Disagreements With Accountants on
                 Accounting and Financial Disclosure                       11-12


PART III

Item 9:          Directors, Executive Officers, Promoters and
                 Control Persons; Compliance With Section 16(a)
                 of the Exchange Act                                          12
Item 10:         Executive Compensation                                       12
Item 11:         Security Ownership of Certain Beneficial Owners
                 and Management                                            12-13
Item 12:         Certain Relationships and Related Transactions               13
Item 13:         Exhibits and Reports on Form 8-K                          13-14





                                                              Page 2 of 16 Pages


<PAGE>



                                     PART I

Item 1     Description of Business
------     -----------------------

           Avoca, Incorporated ("the Company") is a Louisiana corporation formed
in 1931. It owns and manages approximately 16,000 acres comprising virtually all
of Avoca Island, which is located about 90 miles west of New Orleans in St. Mary
Parish,  Louisiana,  adjacent to and  immediately  southeast of Morgan City. The
island,  approximately  two-thirds of which is under shallow water, is rural and
virtually  undeveloped except for exploration and development of its oil and gas
resources.

           Avoca, Incorporated is a passive royalty company that derives most of
its income from  royalties,  bonuses and delay  rentals under oil and gas leases
covering its Avoca Island acreage.  The following table and  accompanying  lease
map furnish  information  respecting mineral leases in effect for the year ended
December 31, 1999.

                                                              Page 3 of 16 Pages


<PAGE>
<TABLE>
<CAPTION>



MINERAL INCOME

Year Ended December 31, 1999

                                                                                              Initial    Income Recognized in 1999
                                                   Date of                                     Rental      Lease Bonus       Net
Lessee                     Operator                Lease         Acreage     Expiration       Per Acre   or Delay Rental   Royalties
------------------------------------------------------------------------------------------------------------------------------------

<S>                        <C>                     <C>           <C>         <C>                <C>        <C>             <C>
Texaco, Inc.               Texaco, Inc.            5/17/63       41.900      Termination        $  75      $     --        $     72
                                                                             of production

Alliance Operating         Delta Operating         8/14/87      276.733      Termination        $ 200            --         132,877
  Company                    Corporation                                     of production

Burlington Resources       Burlington Resources    8/12/96      420.000      Expired on         $ 110      **21,000              --
Oil & Gas Company          Oil & Gas Company                                 12/12/99

Burlington Resources       Burlington Resources   12/12/97      525.000      Termination        $ 150       105,000              --
Oil & Gas Company          Oil & Gas Company                                 of production
                                                                             or 12/12/00 if
                                                                             nonproducing

The Meridian Resource      The Meridian Resource    5/27/98     406.720      Termination        $ 200        81,345         244,239
& Exploration, Inc.*       & Exploration, Inc.*                              of production
                                                                             or 5/27/01 if
                                                                             nonproducing

CNG Producing Company      CNG Producing Company    8/19/99   1,637.550      Termination        $ 200       327,510               -
                                                                             of production
                                                                             or 8/19/02 if
                                                                             nonproducing

The Meridian Resource      The Meridian Resource   11/18/99     880.000      Termination        $ 200       176,000               -
& Exploration Co.          & Exploration Co.                                 of production
                                                                             or 11/18/02 if
                                                                             nonproducing

The Meridian Resource      The Meridian Resource   11/18/99      80.000      Termination        $ 300        24,000               -
& Exploration Co.          & Exploration Co.                                 of production
                                                                             or 11/18/02 if
                                                                             nonproducing

The Meridian Resource      The Meridian Resource   11/23/99     131.680      Termination        $ 350        46,088               -
& Exploration Co.          & Exploration Co.                                 of production
                                                                             or 11/23/02 if
                                                                             nonproducing
                                                                                                           --------        --------
                                                                                                           $780,943        $377,188
                                                                                                           ========        ========
*---formerly Texas Meridian Resources Exploration, Inc.
**---payment made to extend terms of lease from 8/12/99 - 12/12/99.
</TABLE>

                                                              Page 4 of 16 Pages
<PAGE>



                       [Map of Avoca Island appears here,
                    showing property of Avoca, Incorporated,
                       mineral leases and well locations]







                                                              Page 5 of 16 Pages

<PAGE>

Item 1     Description of Business (continued)
------     -----------------------
           At December 31, 1999,  4,285 acres of the Company's land were covered
by oil and gas leases.  Approximately 624 acres were held by production pursuant
to leases (in favor of Alliance Operating Company,  Burlington Resources Oil and
Gas Company, The Meridian Resource Exploration, Inc. and Texaco, Inc.) providing
for royalties  ranging from 21% to 30%. The remaining 3,661 acres are covered by
leases  in favor of  Burlington  Resources  Oil and Gas  Company,  The  Meridian
Resource & Exploration,  Inc. and CNG Producing  Company.  The Burlington  lease
stipulates  a 22%  royalty.  One  lease,  granted  to The  Meridian  Resource  &
Exploration,  Inc. in 1998,  stipulates a 25% royalty from the surface to 12,500
feet and 23% for all lower  depths.  The remaining  three leases  granted to The
Meridian Resource & Exploration, Inc. in 1999 stipulate a 25% royalty. The lease
granted to CNG Producing Company also stipulates a 25% royalty.

           On average over the last three years, the Delta Operating Corporation
(formerly  Alliance  Operating  Company) Avoca No. 1 well in the Ramos Field has
been the Company's  largest  producing well.  Royalties from the Avoca No. 1, in
which Avoca,  Incorporated has a net revenue interest of approximately 19%, were
responsible for  approximately  35% of the Company's royalty income during 1999,
99% in 1998 and 74% in 1997. Production from the well was 275,816 thousand cubic
feet  (mcf) of gas and 3,950  barrels of  condensate  in 1999 as  compared  with
311,345 mcf of gas and 4,206 barrels of condensate in 1998,  and 245,165 mcf and
3,604 barrels in 1997.

           During 1999, The Meridian Resources & Exploration Co. ("Meridian") C.
M. Thibodaux No. 1 and No. 3 wells, which are located in the Ramos Field, across
Bayou  Chene  just north of the eastern end of Avoca Island, succeeded the Avoca
No. 1  well  as  principal  sources of  the Company's royalty income.  The C. M.
Thibodaux  No. 1  well  was  placed on production June 15, 1999 from the Operc 5
sand, went off production June 25 due to a blowout of the C. M. Thibodaux No. 2
well and

                                                              Page 6 of 16 Pages



<PAGE>



returned to production  August 24 after the plugging of the No. 2 well. TheC. M.
Thibodaux No. 3 well went on production in early November from the Operc B sand.
Royalties  from  these  wells,  in  which  Avoca, Incorporated has a net revenue
interest of 2.87%,  were  responsible  for  approximately  65% of the  Company's
royalty income during 1999. Total 1999 production from the C. M. Thibodaux No. 1
and No. 3 wells was 1,337,524  mcf of gas,  149,060  barrels of  condensate  and
5,117,661 gallons of natural gas liquids (NGL).

           The  Intercoastal  Shipyard  No.  2  well,  operated  by  Black  Gold
Production Company under the Capital  Energy, Inc. lease dated  January 2, 1996,
ceased production on April 8, 1997 and has been plugged and abandoned. The well,
also located in the Ramos Field contributed  $54,327 of royalty  income in 1997.

           The  Company's  share of production from the Bateman lake Field tract
leased to Texaco, Inc. has been negligible in recent years.

           In addition to  information  regarding  prices,  the following  table
shows the Company's share of gas produced (in terms of thousand cubic feet), oil
delivered  (in terms of  barrels)  and natural gas liquids (in terms of gallons)
from the Ramos Field during the last three years.
<TABLE>
<CAPTION>

                                     Volume                                     Average Sales Price
                  ---------------------------------------------       ------------------------------------
         Year         Gas             Oil           NGL               Per mcf       Per bbl        Per gal
         <S>      <C>              <C>              <C>               <C>           <C>            <C>
         1997     56,537 mcf       941 bbls                           $2.83         $20.84
         1998     60,587 mcf       818 bbls                           $2.28         $12.62
         1999     89,891 mcf       7,056 bbls       146,822 gal       $2.41         $18.06         $.35
</TABLE>


                                                              Page 7 of 16 Pages


<PAGE>



           As shown on the table on page 5 of this  report,  the Company granted
four mineral  leases  in 1999 as compared  with two mineral  leases each for the
years 1998 and 1997.  Although  no drilling  operations  were conducted on Avoca
Island  during  the  three  year period ended December 31, 1999, three producing
wells  (the  above-discussed  C. M.  Thibodaux  No. 1  and No. 3  and the Conrad
Industries No. 1) were drilled near the island.

          Further information respecting oil and gas operations on the Company's
property   appears  under  the  captions  "Report  to  the   Shareholders"   and
"Management's  Discussion  and  Analysis of Financial  Condition  and Results of
Operations"  on  pages  3  and  14  of  the  Company's  1999  Annual  Report  to
Shareholders,   attached  as  an  exhibit  hereto  and  incorporated  herein  by
reference.  The  Company's  principal  activities  with  respect  to oil and gas
consist of the granting of leases and the  collection of bonuses,  delay rentals
and  landowner  royalties  thereunder.  Accordingly,  only limited  information,
furnished primarily by the Company's lessees,  has been included with respect to
oil and gas  operations  affecting the  Company's  lands.  Complete  information
respecting these and related matters, such as proved reserves, is unavailable to
the Company and cannot be obtained without unreasonable effort or expense.

           Wild game,  bird hunting and  non-commercial  fishing rights on Avoca
Island are leased to the Avoca Duck Club. A seven-year  cattle lease,  signed in
1998 on 600 acres,  has helped  minimize  expenditures  toward land clearing and
fence maintenance.

           The  Company  has no  employees  but  retains  the  services of three
individuals as independent  contractors.  One acts as consultant to the Board of
Directors and assists with the Company's day to day business affairs.  The other
two  individuals  maintain the  Company's  financial  records and watch over the
Company's lands, respectively.

                                                              Page 8 of 16 Pages
<PAGE>



           Additional  information  regarding the Company's business is included
under Item 2 of this report, incorporated herein by reference.

Item 2     Description of Property
------     -----------------------

           The Company owns approximately  16,000 acres comprising virtually all
of  Avoca  Island.   The  island,   located  in  St.  Mary  Parish,   Louisiana,
approximately 90 miles west of New Orleans, lies southeast of the greater Morgan
City area,  from which it is separated  by Bayou Boeuf.  There are no bridges or
roads leading to the island.  Access is by means of a free ferry which  operates
on a regular schedule across Bayou Boeuf (a distance of approximately  500 feet)
and connects the  northwest  tip of the island with the Morgan City area.  Ferry
service is interrupted by periodic  mechanical  breakdowns and during periods of
high water.

           Avoca Island is within the Morgan City Harbor and Terminal  District.
Bayou  Boeuf  and Bayou  Chene,  which  border  the  island  for a  distance  of
approximately  thirteen  miles  and  form its  northern,  eastern  and  southern
perimeters, are part of the Gulf section of the Intracoastal Waterway.

           Approximately one-third of the island, located along its northern and
eastern  perimeters,  is dry ground.  The remaining  two-thirds is under shallow
water. Avoca Island is rural, and its surface is virtually undeveloped.

           Over the years, preliminary studies and proposals have been made with
regard to a bridge  linking  Avoca Island with the  mainland,  but no definitive
action has resulted from these efforts.  With the Company's  cooperation,  a new
feasibility  study  concerning  industrial   development  of  Avoca  Island  was
completed in 1998 by the St. Mary Parish government and has been reviewed by the
Company and others.

                                                              Page 9 of 16 Pages



<PAGE>
           A study conducted with the assistance of LSU's Cooperative  Extension
Service in 1991 indicates that aquaculture and tree farming are not economically
feasible and that the island's  suitability for farming is limited.  The Company
is  continuing  its  search  for ways to  prudently  develop  Avoca  Island  for
agricultural  and  commercial  use. In addition to ongoing  surface  maintenance
operations  and its long  standing  lease of hunting and  fishing  rights to the
Avoca Duck Club,  the Company  recently  signed a cattle  grazing lease covering
approximately 600 acres on the northern and western parts of the island.

           Information  respecting development of oil and gas resources on Avoca
Island  is  provided  under  Item  1  of  this  report,  incorporated  herein by
reference.

Item 3     Legal Proceedings
------     -----------------

           On December 29, 1999, the Company filed in the 16th Judicial District
Court for the Parish of St. Mary (Docket No. 105195) a lawsuit to evict a former
lessee,  Ernest  Singleton,  from  a  small  parcel of land (less than 10 acres)
located  in  the  northeast part of Avoca Island.  The parcel is included in The
Meridian  Resource  &  Exploration,  Inc.'s  647.504  acre  unit  for  the C. M.
Thibodaux Nos. 1 and 3 wells.
           The defendant,  individually and on behalf of numerous other heirs of
John  Singleton,  has filed a  Reconventional  Demand  and  Petition  in Nullity
asserting  ownership  of the parcel (and other lands not claimed by the Company)
on the ground that a 1970 court judgment which recognized the Company's title to
the disputed area is a nullity.

           The Company has responded with peremptory  exceptions of prescription
and res judicata, which are pending before the court.

                                                             Page 10 of 16 Pages



<PAGE>

Item 4     Submission of Matters to
------     a Vote of Security Holders
           --------------------------

           Not Applicable

                                     PART II

Item 5     Market for Common Equity
------     and Related Stockholder Matters
           -------------------------------

           The  information  called for by this item  appears  under the caption
"Stock Prices and Related  Security  Holder Matters" on page 15 of the Company's
1999  Annual  Report  to  Shareholders,   attached  as  an  exhibit  hereto  and
incorporated herein by reference.

Item 6     Management's Discussion and
------     Analysis or Plan of Operation
           -----------------------------

           The  information  called for  by this item appears under the captions
"Report  to  the  Shareholders"  and  "Management's  Discussion  and Analysis of
Financial Condition and Results of Operations" on pages 3 and 14,  respectively,
of  the  Company's  1999  Annual  Report to Shareholders, attached as an exhibit
hereto and incorporated herein by reference.

Item 7     Financial Statements
------     --------------------

           The information called for by this item appears on pages 4 through 13
of the  Company's  1999 Annual  Report to  Shareholders,  attached as an exhibit
hereto and incorporated herein by reference.

Item 8     Changes In and Disagreements With
------     Accountants on Accounting and Financial Disclosure
           --------------------------------------------------

           With the approval of the  Company's  Board of Directors and effective
upon the filing of the  Company's  Form 10-KSB for the year ended  December  31,
1998, Ernst & Young LLP decided not to stand for  reappointment as the Company's
independent public accountants. There were no

                                                             Page 11 of 16 Pages

<PAGE>
disagreements  with Ernst & Young LLP and its reports have  contained no adverse
opinion, disclaimer of opinion or modification as to uncertainty, audit scope or
accounting principles.

           Effective  March 16,  1999,  Arthur  Andersen LLP has been engaged to
succeed  Ernst & Young LLP  as  the Company's independent public accountants for
2000.

                                    PART III

Item 9     Directors, Executive Officers,
------     Promoters and Control Persons; Compliance
           With Section 16(a) of the Exchange Act
           --------------------------------------

           The Company has three executive officers,  all of whom are directors:
Robert C. Baird, Jr., President,  Richard W. Fox, Vice President, and M. Cleland
Powell, III,  Secretary-Treasurer.  Information  concerning such persons and the
Company's  other  directors  is shown under the caption  "Number and Election of
Directors" on pages 3 and 4 of the Company's  Proxy Statement dated February 18,
2000,  incorporated  herein by reference.  The balance of the information called
for by this item appears under the caption "Section 16(a)  Beneficial  Ownership
Reporting  Compliance" on page 5 of the Company's Proxy Statement dated February
18, 2000, incorporated herein by reference.

Item 10       Executive Compensation
-------       ----------------------

              The information  called for by this item appears under the caption
"Information  Concerning  Management - Executive  Compensation" on page 5 of the
Company's  Proxy  Statement  dated  February  18, 2000,  incorporated  herein by
reference.

Item 11       Security Ownership of Certain
-------       Beneficial Owners and Management
              --------------------------------

              The information  called for by this item appears under the caption
"Voting Securities" on pages 2 and 3, and under the caption "Number and Election
of Directors" on

                                                             Page 12 of 16 Pages
<PAGE>
pages  3  and  4, of  the  Company's  Proxy  Statement  dated February 18, 2000,
incorporated herein by reference.

Item 12       Certain Relationships
-------       and Related Transactions
              ------------------------

              The information  called for by this item appears under the caption
"Information  Concerning  Management - Certain  Relationships"  on page 5 of the
Company's  Proxy  Statement  dated  February  18, 2000,  incorporated  herein by
reference.

                                     PART IV

Item 13       Exhibits and Reports on Form 8-K
-------       --------------------------------

(a)1.         Financial Statements

              The  following  financial   statements  of  Avoca,   Incorporated,
included  in its  1999  Annual  Report  to  Shareholders,  are  incorporated  by
reference in Part II, Item 7:

              Report  of  Ernst & Young LLP, Independent Auditors, dated January
              13, 1999

              Report  of  Arthur  Andersen  LLP, Independent Public Accountants,
              dated January 7, 2000

              Balance sheet - December 31, 1999

              Statements of Income - years ended
              December 31, 1999 and 1998

              Statements of Retained Earnings -
              years ended December 31, 1999 and 1998

              Statements of Cash Flows - years ended
              December 31, 1999 and 1998

              Notes to Financial Statements -
              December 31, 1999

(a)2.         Exhibits required by Item 601 of Regulation S-B:

              3.1       Copy of Composite Charter(1)

              3.2       Copy of Charter, dated October 21, 1931(1)


                                                             Page 13 of 16 Pages
<PAGE>
              3.3       Copy of amendment to Charter, dated
                        September 13, 1972(1)

              3.4       Copy of amendment to Charter, dated
                        May 30, 1975(1)

              3.5       Copy of amendment to Charter, dated
                        September 15, 1981(2)

              3.6       Copy of amendment to Charter, dated
                        March 17, 1987(2)

              3.7       Copy of Composite Charter (as of
                        August 14, 1987)(2)

              4.0       Copy of specimen stock certificate(1)

              13        Annual  Report  to  Shareholders   for  the  year  ended
                        December 31, 1999. Except for the information  expressly
                        specifically  incorporated  by  reference  in this  Form
                        10-KSB,  the annual  report is  provided  solely for the
                        information of the  Securities  and Exchange  Commission
                        and  is not to be  deemed  filed  as  part  of the  Form
                        10-KSB.

              27        Financial Data Schedule

(b)           Reports on Form 8-K

              Forms 8-K,  dealing  with a change in the  Company's  accountants,
were filed on February 4, 1999 and March 23, 1999.

(1)   Incorporated   by  reference  from   registrant's   Form  10  Registration
      Statement,  filed with the Securities and Exchange Commission on April 29,
      1980, Commission file number 0-9219.

(2)   Incorporated by reference from registrant's Form 8 Report dated August 14,
      1987, Commission file number 0-9219.

                                                             Page 14 of 16 Pages
<PAGE>
                                   SIGNATURES
                                   ----------

              Pursuant  to  the requirements of Section 13 of the Securities Act
of 1934, the registrant  has  duly  caused  this  report  to  be  signed  on its
behalf by the  undersigned, thereunto duly authorized.

Avoca, Incorporated




By:  /s/ Robert C. Baird, Jr.
   -------------------------------------
       Robert C. Baird, Jr.
       President and principal executive,
       financial and accounting officer

Date: March 21, 2000

      Pursuant to the requirements of the Securities  Exchange Act of 1934, this
report  has  been  signed  below  by the  following  persons  on  behalf  of the
registrant and in the capacities and on the dates indicated.


/s/ Robert C. Baird, Jr.
------------------------------
Robert C. Baird, Jr., Director
Date: March  21 , 2000
            ----


/s/ Richard W. Fox
------------------------------
Richard W. Fox, Director
Date: March  21 , 2000
            ----



/s/ Guy C. Lyman, Jr.
-------------------------------
Guy C. Lyman, Jr., Director
Date: March  21 , 2000
            ----



/s/ M. Cleland Powell, III
--------------------------------
M. Cleland Powell, III, Director
Date: March  21 , 2000
            ----



J. Scott Tucker
--------------------------------
J. Scott Tucker, Director
Date: March  21 , 2000
            ----

                               Page 15 of 16 Pages
<PAGE>


                                  Exhibit Index

                                                                   Sequentially
                                                                     Numbered
Exhibit No.                      Description                           Page
-----------     -----------------------------------------------    ------------

   3.1          Copy of Composite Charter(1)

   3.2          Copy of Charter, dated October 21, 1931(1)

   3.3          Copy of amendment to Charter, dated September 13,
                1972(1)

   3.4          Copy of amendment to Charter, dated May 30, 1975(1)

   3.5          Copy of amendment to Charter, dated September 15,
                1981(2)

   3.6          Copy of amendment to Charter, dated March 17,
                1987(2)

   3.7          Copy of Composite Charter (as of August 14, 1987)
                (2)

   4.0          Copy of specimen stock certificate(1)

    13          Annual Report to Shareholders  for the year ended
                December 31, 1999.  Except for the information
                expressly  specifically  incorporated by reference
                in this Form 10-KSB,  the  annual  report  is  provided
                solely  for the  information  of the Securities and
                Exchange  Commission and is not to be deemed filed as
                part of the Form 10-KSB.

    27          Financial Data Schedule

--------------------
(1) Incorporated by reference from registrant's Form 10 Registration  Statement,
filed with the Securities and Exchange Commission on April 29, 1980,  Commission
file number 0-9219.

(2) Incorporated by  reference from registrant's  Form 8 Report dated August 14,
1987, Commission file number 0-9219.

                               Page 16 of 16 Pages



<PAGE>
                                                                      EXHIBIT 13



















   AVOCA                                        Annual Report

INCORPORATED                                    --------------------------------
                                                1999


<PAGE>



Description of Business

         Avoca,   Incorporated  owns  and  manages  approximately  16,000  acres
comprising  virtually all of Avoca Island,  which is located about 90 miles west
of New  Orleans in St.  Mary  Parish,  Louisiana,  adjacent  to and  immediately
southeast of Morgan City. The island is rural and virtually  undeveloped  except
for exploration and development of its oil and gas resources.

         Avoca,  Incorporated is largely a passive royalty company which derives
most of its income from  royalties,  bonuses and delay rentals under oil and gas
leases covering its Avoca Island acreage.

Directors and Officers

Robert C. Baird, Jr.,                     M. Cleland Powell, III, Director
Director and President                    and Secretary-Treasurer;
Executive Vice President,                 Senior Vice President,
Whitney National Bank                     Whitney National Bank

Richard W. Fox,                           J. Scott Tucker; Director;
Director and Vice President;              President and Chief Executive Officer,
President, Fox Financial                  Hellenic, Inc.
Consulting, Inc. and Manager,
Longford Farm, L.L.C.

Guy C. Lyman, Jr., Director;
Attorney,
Milling Benson Woodward L.L.P.



2     AVOCA, Incorporated

<PAGE>

Report to the Shareholders

Issued Preliminary to the Sixty-eighth
Annual Meeting of Shareholders on March 21, 2000

Dear Shareholders:

         In 1999 Avoca,  Incorporated  realized the financial benefits of higher
oil and gas prices and the renewed  interest in exploration and development that
resulted.  The Company's net income  increased by 145%, from $328,265 in 1998 to
$803,584 in 1999.  The increase was  attributable  to an 83% increase in revenue
from lease bonuses and delay  rentals,  a 177% increase in royalty income net of
severance  taxes and a new revenue  item,  $113,941  received  from lease option
payments.

         The  availability of compiled 3-D seismic data of Avoca Island resulted
in increased  leasing activity in 1999. Lease bonuses from four new oil, gas and
mineral leases on 2,729.230 acres of Company lands contributed $573,598 to gross
income.

         The  second  largest  contribution  to  1999  income  was  the $241,087
increase in royalty income net of severance taxes.   The  increase resulted from
royalties received on two new wells, The  Meridian Resources & Exploration Co.'s
C. M. Thibodaux No. 1 and No. 3 wells in the Ramos Field.

         The third major  contribution to increased revenue in 1999 was $113,941
received from four new lease options to take down oil, gas and mineral leases on
5,485.75 acres of Company property.

         The Company  continues to explore  opportunities for use of the surface
acreage of Avoca  Island in  addition to the  long-standing  hunting and fishing
lease with the Avoca Duck Club.  The  600-acre  cattle  lease  executed  in 1998
proved  beneficial  to the  Company  this year by  reducing  the cost of surface
maintenance.

         On December 22, 1999,  Burlington  Resources Oil & Gas Company  drilled
the Conrad  Industries  No. 1 well opposite the northern part of Avoca Island to
its total depth of 19,164  feet.  The  operator has advised the Company that the
objective sand was not found, but two other sands were logged at a higher depth.
The unitization hearing on this well, which will determine Avoca  Incorporated's
participation in the unit, has been set for late February, 2000.

         The Company's  operations and financial condition are further discussed
on page 14 of this report and a complete list of mineral  leases is shown inside
the back cover.

                                                      Respectfully submitted,


                                                      /s/ Robert C. Baird, Jr.
                                                      Robert C. Baird, Jr.
                                                      President
February 7, 2000


                                                           AVOCA, Incorporated 3


<PAGE>

Report of Ernst & Young LLP,
Independent Auditors

The Board of Directors
Avoca, Incorporated

         We  have  audited  the  accompanying  statements  of  income,  retained
earnings, and cash flows of Avoca,  Incorporated for the year ended December 31,
1998.  These  financial  statements  are  the  responsibility  of the  Company's
management.  Our  responsibility  is to express  an  opinion on these  financial
statements based on our audit.

         We conducted our audit in accordance with auditing standards  generally
accepted in the United States.  Those standards require that we plan and perform
the audit to obtain reasonable  assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.  An
audit also includes  assessing the accounting  principles  used and  significant
estimates  made by  management,  as well as  evaluating  the  overall  financial
statement  presentation.  We believe that our audit provides a reasonable  basis
for our opinion.

         In our opinion,  the  financial  statements  referred to above  present
fairly,  in  all  material  respects,  the  results  of  Avoca,   Incorporated's
operations  and its  cash  flows  for the  year  ended  December  31,  1998,  in
conformity with accounting principles generally accepted in the United States.

                                       /s/ Ernst & Young LLP

New Orleans, Louisiana
January 13, 1999

4     AVOCA, Incorporated


<PAGE>

Report of Arthur Andersen LLP,
Independent Public Accountants

To the Stockholders of
Avoca, Incorporated

         We have audited the accompanying  balance sheet of Avoca,  Incorporated
(a Louisiana corporation) as of December 31, 1999, and the related statements of
income,  retained  earnings,  and cash  flows  for the year  then  ended.  These
financial  statements are the  responsibility of the Company's  management.  Our
responsibility  is to express an opinion on these financial  statements based on
our audit.

         We conducted our audit in accordance with generally  accepted  auditing
standards.  Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  An audit also includes
assessing the  accounting  principles  used and  significant  estimates  made by
management,  as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.

         In our opinion,  the  financial  statements  referred to above  present
fairly, in all material respects, the financial position of Avoca,  Incorporated
as of December 31, 1999 and the results of its operations and its cash flows for
the year then ended in conformity with generally accepted accounting principles.

                                     /s/ Arthur Andersen LLP

New Orleans, Louisiana
January 7, 2000

                                                           AVOCA, Incorporated 5


<PAGE>

BALANCE SHEET

                                                                     December 31
                                                                            1999
--------------------------------------------------------------------------------

ASSETS

CURRENT ASSETS

      Cash and cash equivalents                                       $  761,573
      Short-term investments                                             922,577
      Accounts receivable                                                 96,000
      Accrued interest receivable                                         33,979
      Recoverable income taxes                                            19,673
      Prepaid expenses                                                     8,502
                                                                     -----------
           TOTAL CURRENT ASSETS                                        1,842,304

PROPERTY AND EQUIPMENT

      Net of accumulated depreciation and depletion of $604,881           73,332

OTHER ASSETS

      Long-term investments                                            1,279,727
      Avoca Drainage Bonds, $415,000, in default -
           at nominal amount                                                   1
                                                                     -----------

                                                                      $3,195,364
                                                                     ===========
6     AVOCA, Incorporated

<PAGE>



                                                                     December 31
                                                                            1999
--------------------------------------------------------------------------------

LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES

      Accounts payable and accrued expenses                           $   16,915
      Dividends payable                                                  705,925
                                                                     -----------
           TOTAL CURRENT LIABILITIES                                     722,840

DEFERRED INCOME TAXES                                                     12,381

SHAREHOLDERS' EQUITY

      Common stock, no par value -- authorized, issued and
           outstanding 830,500 shares                                     94,483
      Retained earnings                                                2,365,660
                                                                     -----------
                            TOTAL SHAREHOLDERS' EQUITY                 2,460,143


                                                                      $3,195,364
                                                                     ===========
See accompanying notes.

                                                           AVOCA, Incorporated 7


<PAGE>

STATEMENTS OF INCOME

                                                          Year ended December 31
                                                  1999                      1998
--------------------------------------------------------------------------------

Revenue:

      Royalties                             $  398,793                 $ 142,733
         Less severance taxes                   21,605                     6,632
                                            ----------                 ---------
                                               377,188                   136,101

      Lease bonuses and delay rentals          780,943                   426,618
      Lease option payments                    113,941                        --
      Pipeline rights-of-way                        --                     4,045
      Interest income                          134,791                   133,748
      Rental income                             30,783                    28,000
      Other                                      7,164                     6,235
                                            ----------                 ---------
                                             1,444,810                   734,747
Expenses:

      Attorney fees and expenses                14,597                    16,361
      Auditing fees                             17,800                    16,000
      Bookkeeping and clerical services          6,000                     6,000
      Management fees                           52,624                    55,442
      Directors' fees                            5,000                     5,000
      Geological and engineering fees and
        expenses                                13,885                    17,491
      Insurance                                 25,335                    22,991
      Office and miscellaneous expenses         31,857                    30,137
      Taxes, other than income taxes            20,564                    22,243
      Repairs and cleanup expenses              17,913                    42,711
                                            ----------                 ---------
                                               205,575                   234,376
                                            ----------                 ---------

              INCOME BEFORE INCOME TAXES     1,239,235                   500,371

Income taxes                                   435,651                   172,106
                                            ----------                 ---------

                              NET INCOME    $  803,584                 $ 328,265
                                            ==========                 =========

Earnings per share (basic and diluted)      $      .97                 $     .40
                                            ==========                 =========

Dividends per share                         $      .85                 $     .32
                                            ==========                 =========


See accompanying notes.

8     AVOCA, Incorporated

<PAGE>

                                                 STATEMENTS OF RETAINED EARNINGS
                                                          Year ended December 31
                                                  1999                      1998
--------------------------------------------------------------------------------

Retained Earnings:

      Balance at beginning of year          $2,268,001                $2,205,496

      Net income for the year                  803,584                   328,265
                                           -----------               -----------
                                             3,071,585                 2,533,761

      Cash dividends:
         1999 - $ .85 per share                705,925                        --
         1998 - $ .32 per share                     --                   265,760
                                           -----------               -----------

                   BALANCE AT END OF YEAR   $2,365,660                $2,268,001
                                           ===========               ===========



See accompanying notes.

                                                           AVOCA, Incorporated 9


<PAGE>
<TABLE>
<CAPTION>

STATEMENTS OF CASH FLOWS
                                                                                         Year ended December 31

                                                                                       1999                   1998
-------------------------------------------------------------------------------------------------------------------

OPERATING ACTIVITIES
<S>                                                                           <C>                    <C>
    Net income                                                                $     803,584          $     328,265
    Adjustments to reconcile net income to net
       cash provided by (used in) operating activities:
        Depreciation expense                                                          3,760                  2,735
        Deferred taxes                                                                 (507)                  (507)
        Change in operating assets and liabilities:
           Accounts receivable                                                      (74,411)                16,074
           Accrued interest receivable                                               (5,426)                 3,077
           Prepaid expenses                                                          (1,934)                (1,627)
           Accounts payable and accrued expenses                                        750                 (1,868)
           Income taxes                                                             (21,041)                 1,574
                                                                              --------------         -------------

                                             NET CASH PROVIDED BY
                                             OPERATING ACTIVITIES                   704,775                347,723

INVESTING ACTIVITIES

    Purchase of short-term investments                                             (148,767)              (909,085)
    Purchase of long-term investments                                            (1,503,873)              (931,936)
    Maturity of investments                                                       1,662,334              1,935,679
    Purchase of equipment                                                            (2,512)                (4,500)
                                                                              --------------         --------------

                                             NET CASH PROVIDED BY
                                             INVESTING ACTIVITIES                     7,182                 90,158

FINANCING ACTIVITIES

    Dividends paid                                                                 (265,760)              (622,875)
                                                                              --------------         --------------

                                             NET CASH USED IN
                                             FINANCING ACTIVITIES                  (265,760)              (622,875)
                                                                              --------------         --------------

                                           INCREASE (DECREASE) IN
                                        CASH AND CASH EQUIVALENTS                   446,197               (184,994)

Cash and cash equivalents at beginning of year                                      315,376                500,370
                                                                              -------------          -------------

                                        CASH AND CASH EQUIVALENTS
                                                   AT END OF YEAR             $     761,573          $     315,376
                                                                              =============          =============


See accompanying notes.
</TABLE>

10     AVOCA, Incorporated


<PAGE>



                                                   NOTES TO FINANCIAL STATEMENTS

December 31, 1999

NOTE A-Significant Accounting Policies

General: Avoca,  Incorporated (the Company) owns and leases land, located in St.
Mary Parish,  Louisiana,  to unaffiliated  parties for oil and gas  exploration.
Income in the accompanying  financial statements is primarily derived from lease
bonuses, delay rentals, seismic permit fees, sale of rights-of-way and royalties
received  from oil and gas  production  related to these  leases.  Estimates  of
proved reserves related to the leases are not available.

Cash Equivalents:  Cash  equivalents  consists of investments with a maturity of
three months or less from date of purchase.

Investments: Short-term investments consist of United States Government Treasury
Notes and United States  Government  agency securities with an original maturity
of greater  than three months but with  maturity  dates within one year from the
balance sheet date.

         Long-term  investments  consist of a United States Government  Treasury
Note and six United States Government agency securities due in 2001.

         Management determines the appropriate classification of debt securities
at the time of purchase  and  reevaluates  such  designation  as of each balance
sheet date. Debt securities are classified as held-to-maturity  when the Company
has the  positive  intent  and  ability  to hold  the  securities  to  maturity.
Held-to-maturity  securities  are stated at  amortized  cost  including  accrued
interest.  At  December  31,  1999  all  short-term  investments  and  long-term
investments  were  classified  as  held-to-maturity.   The  fair  value  of  the
investments approximated the carrying value at December 31, 1999.

Property and  Equipment:  Land is carried at cost less amounts  received for the
sale of rights-of-way and similar servitudes. Land improvements and building are
carried at cost and depreciated  over their  estimated  useful life of 30 years.
Equipment  is carried at cost and  depreciated  over  estimated  useful lives of
three to five years.

Income Taxes: The Company accounts for income taxes in accordance with Statement
of Financial  Accounting Standards (SFAS) No. 109 "Accounting for Income Taxes."
Income  taxes  include   deferred  taxes  resulting   primarily  from  temporary
differences  due to  differences  in bases amounts and  depreciation  periods of
property and equipment for financial reporting purposes and income tax purposes.

Use of Estimates:  The  preparation of financial  statements in conformity  with
generally accepted  accounting  principles requires management to make estimates
and assumptions that affect the amounts reported in the financial statements and
accompanying notes. Actual results could differ from those estimates.

Fair Value of Financial  Instruments:  The fair value of the Company's financial
assets and liabilities approximates book value at December 31, 1999.


                                                          AVOCA, Incorporated 11
<PAGE>
NOTES TO FINANCIAL
STATEMENTS (Continued)

NOTE B-Income Taxes
<TABLE>
<CAPTION>

The  components  of income tax expense  for the years  ended  December 31 are as
follows:

                                                                  1999                   1998
---------------------------------------------------------------------------------------------

Current:
<S>                                                             <C>                 <C>
         Federal                                                $ 382,803           $ 157,314
         State                                                     53,355              15,299
                                                                ---------           ---------
                                        TOTAL CURRENT             436,158             172,613
                                                                ---------           ---------

Deferred:
         Federal                                                     (445)               (462)
         State                                                        (62)                (45)
                                                                ---------           ----------
                                       TOTAL DEFERRED                (507                (507)
                                                                ---------           ----------

                                                                $ 435,651           $ 172,106
                                                                =========           =========

</TABLE>


The deferred income tax liability of $12,381 relates to a difference between the
accounting and income tax basis of property and equipment.

The  Company  paid  income  taxes of  $455,000  and  $171,000  in 1999 and 1998,
respectively.

NOTE B-Income Taxes (continued)

The  reconciliations  between  the  federal  statutory  income  tax rate and the
Company's  effective  income tax rate,  for the years  ended  December 31 are as
follows:
<TABLE>
<CAPTION>

                                                                       1999                      1998
                                                               Amount        Rate        Amount        Rate
-----------------------------------------------------------------------------------------------------------
<S>                                                          <C>            <C>        <C>            <C>
Tax expense based on federal statutory rate                  $ 421,340      34.0%      $ 170,126      34.0%
Statutory percentage depletion                                 (20,339)     (1.6)         (7,279)     (1.5)
State income taxes (net of federal income tax deduction)        53,311       4.3          15,265       3.1
Other                                                          (18,661)     (1.5)         (6,006)     (1.2)
                                                             ---------    ------       ---------     -----
                          INCOME TAXES                       $ 435,651      35.2%      $ 172,106      34.4%
                                                             =========    ======       =========     =====
</TABLE>




12     AVOCA, Incorporated


<PAGE>
                                                              NOTES TO FINANCIAL
                                                          STATEMENTS (Continued)

NOTE C-Major Customers

The net  royalties  received  from  two  independent  oil  and  gas  exploration
companies  accounted for  virtually all of total net royalties  recorded for the
year ended December 31, 1999 compared to one independent oil and gas exploration
company  accounting  for virtually  all of total net royalties  recorded for the
year ended  December 31, 1998.  Lease bonus and delay rental revenue in 1999 and
1998 was the result of leases with three and two companies,  respectively. Lease
option  payments  consisted of payments  from two  companies  for the year ended
December 31, 1999.  Pipeline  rights-of- way revenue recognized in 1998 resulted
from a rights-of-way agreement with one company.

NOTE D-Oil and Gas Quantities Produced

The  following  table  reflects the  Company's  share of the oil and gas volumes
produced from leases held under production during each of the last two years:

                                                     Production
                                      ------------------------------------------
                                       Oil               Gas               NGL
                                      (BBLs)            (MCFs)            (GALs)
                                      ------------------------------------------
1999                                  7,056             89,891           146,822
1998                                    818             60,587               --


NOTE F-Commitment

The  Company  has a lease  with the Avoca  Duck Club (the  Club),  an  unrelated
entity,  to allow  the  members  of the Club use of the  Company's  land for the
purpose of hunting wild game and birds, and for noncommercial  fishing. The term
of the lease  commenced  June 1,  1994 for a period  of ten years  with the Club
having two ten-year  options to extend the lease.  Under the terms of the lease,
the Club  constructed  a new  building  including a separate  apartment  for the
exclusive use of the Company's  caretaker.  This building  replaced the building
destroyed by fire in December 1992.  During 1994,  under the terms of the lease,
the Company  contributed  $50,000,  which  represents  the  approximate  cost to
construct the apartment.

If the Company elects to exercise its unrestricted, unconditional and absolutely
discretionary  right to  terminate  the lease  before  the end of its term,  the
Company  must  reimburse  the Club for its  undepreciated  cost of the  building
(excluding the Company's cash contribution), based on straight-line depreciation
over 30 years.  Under the lease, the Club's  undepreciated  cost of the building
will be  reduced  over time to an  ultimate  reimbursable  amount  not less than
$80,000.

                                                          AVOCA, Incorporated 13

<PAGE>
Management's Discussion and
Analysis of Financial Condition and
Results of Operations

Liquidity and Capital Resources

The Company's continued liquidity is evidenced by the fact that more than 93% of
its  assets,  as measured by book  value,  are cash and cash  equivalents,  U.S.
Government and U.S.  Government agency securities.  Current  liabilities at year
end were $722,840,  including a $705,925  dividend declared in December 1999 but
not paid until  January  2000.  The  Company's  business is largely  passive and
consequently  all  capital   requirements   for  exploration,   development  and
production of the Company's mineral resources are funded by its lessees. Current
financial  resources and  anticipated  net income are expected to be adequate to
meet cash requirements in the year ahead.

1999 As Compared to 1998

The Company  enjoyed an  improved  earnings  year in 1999.  Revenue for the year
increased  by $710,063  or  approximately  97%.  The  majority of the  increase,
reflected in the income statement as lease bonuses and delay rentals, comes from
the  granting of four new oil,  gas and mineral  leases which netted the Company
$573,598 in bonuses during the year. Three of the new leases, totaling 1,091.680
acres, were granted to The Meridian Resource & Exploration Co. The fourth lease,
for 1,637.550 acres, was granted to CNG Producing Company.

         Also  contributing  to increased revenue in 1999 was a $241,087 or 177%
increase in royalty income net of severance taxes.  The increase is attributable
to production from The Meridian Resources & Exploration Co. C.M. Thibodaux No. 1
and  No. 3  wells  in  the Ramos Field.  The No. 1 well was placed on production
June 15, 1999  from  the  Operc  5  Sand, went off production June 25 due to the
blowout  of  the C.M. Thibodaux No. 2 well and  returned to production August 24
after the successful plugging of the No. 2 well.  The C.M. Thibodaux No. 3  well
(a replacement  for  the No. 2 well) went on production from the Operc B sand in
early November.  The Company's net revenue interest in the No. 1 and No. 3 wells
is approximately 2.87%. The wells were responsible for 65% of the Company's 1999
royalty income.   Total  1999 production from the C.M. Thibodaux No. 1 & 3 wells
was 1,337,524 Mcf of gas, 149,060 barrels of condensate and 5,117,661 gallons of
natural gas liquids (NGL), as reported on check vouchers.

         In 1999 the Delta Operating  Corporation  (formerly  Alliance Operating
Company)  Avoca  No.  1 well  also  in  the  Ramos  Field  was  responsible  for
approximately  35% of the  Company's  royalty  income.  In  1998  the  well  was
responsible  for virtually all of the royalty  income.  Total gas and condensate
recoveries  from the Avoca No. 1 well (in which the  Company  has a net  revenue
interest  of  approximately  19%)  decreased  from  311,345 Mcf of gas and 4,206
barrels  of  condensate  in 1998 to  275,816  Mcf of gas and  3,950  barrels  of
condensate  in 1999.  The well was shut in for  several  days in August to treat
scale in the producing formation.  According to the well's operator, performance
is  improving  and an  additional  treatment  is  scheduled  to further  improve
performance.  The  average  1999  sales  prices  from the  Avoca No. 1 well were
approximately  $2.42  per Mcf of gas and  $15.70  per  barrel of  condensate  as
compared to $2.28 per Mcf of gas and $12.62 per barrel of condensate in 1998.

         On December 22, 1999,  Burlington  Resources Oil & Gas Company  drilled
the Conrad  Industries  No. 1 well opposite the northern part of Avoca Island to
its total depth of 19,164  feet.  The Company has been  advised by the  operator
that they did not find their objective MA3 Sand but did log two other sands at a
higher depth.  The  unitization  hearing on this well, that will determine Avoca
Incorporated's participation in the unit, has been set for late February, 2000.

         Four new  lease  options  to take  down  oil,  gas and  mineral  leases
contributed an additional  $113,941 to revenues in 1999 (reflected in the income
statements as lease option payments). Three options totaling 2,592.75 acres were
granted to McRae  Exploration  &  Production,  Inc. One option on 1,459.3  acres
lapsed December 20, 1999 without being exercised. The other McRae options expire
on June 26, 2000 and July 3, 2000. The fourth option (on 2,893 acres), which was
granted  to Kevin  Caliva &  Associates,  Inc.  and  assigned  to CNG  Producing
Company, resulted in a 1,637.55 acre oil, gas and mineral lease dated August 19,
1999. No lease options were granted in 1998.

         Interest  income  on  U.S.   Government  and  U.S.   Government  agency
securities  increased  slightly  to the  availability  of  increased  funds  for
investment.

         Overall expenses were $28,801 or  approximately  12% lower in 1999 than
in 1998.  The  $1,764  decrease  in  attorney  fees and the $3,606  decrease  in
geological and engineering fees and expenses resulted primarily from the lack of
need for these services in 1999. The $2,818 decrease in management fees resulted
primarily from the smaller bonus paid to the Company's  general  manager,  which
partially  offset  fees  paid to the  Company's  new land  manager.  The  $1,720
increase in office and miscellaneous  expenses resulted primarily from increased
annual meeting expenses.  The $2,344 increase in insurance expense is attributed
to the cost of  automobile  insurance for the  second-hand  Jeep for our surface
manager.

         The $1,679  decrease in taxes,  other than income taxes and the $24,798
reduction in repairs and cleanup expenses are a result of the 600 acre

                                                          Continued on next page
14     AVOCA, Incorporated


<PAGE>
Management's Discussion and
Analysis of Financial Condition and
Results of Operations (Continued)

cattle lease on the northern part of the island  signed in 1998.  Because of the
cattle lease,  cleanup expenses have been greatly reduced and the land qualified
for an agricultural assessment, which reduced the property taxes.

         In comparison  with 1998,  income tax expense  increased  $263,545 as a
result of an increase in taxable income.

         Net income was $.97 per share in 1999 as  compared  to $.40  per  share
in  1998.  In line  with  the Company's increased  income,  dividends  increased
from $.32 per share in 1998 to $.85 per share in 1999.  Future dividends will be
largely  dependent on the amount of oil and gas related income received.

         The Company has not suffered any  disruptions  in its operations due to
the  year  2000  issue.  Furthermore,   the  Company  has  not  experienced  any
disruptions  in its  operations  due to year 2000  problems  experienced  by the
organizations with which the Company does business. The Company has not incurred
and does not expect to incur any significant costs related to year 2000 issues.

         Further  information  regarding the Company's  financial  condition and
results of operations is contained in the President's message on page 4.

STOCK PRICES AND RELATED
SECURITY HOLDER MATTERS

As of January 7, 2000,  there were  approximately  728  holders of record of the
Company's stock, which is traded in the over-the-counter market.

         The following  table shows the range of high and low bid quotations for
the Company's  stock for each  quarterly  period  during the last two years,  as
quoted by the National Quotation Bureau,  Incorporated.  Such quotations reflect
inter-dealer  prices,  without retail mark-up,  mark-down or commissions and may
not necessarily reflect actual transactions. The table also shows the amount and
frequency of cash dividends declared by the Company during the same period.

Period               High       Low     Declared  Record Date  Date Paid  Amount

1999

  First Quarter     $14.00    $12.00
  Second Quarter     22.00     15.00
  Third Quarter      23.00     19.00
  Fourth Quarter     21.00     19.00    12-17-99    1-6-00       1-21-00    $.85

1998

  First Quarter     $19.75    $18.34
  Second Quarter     20.00     18.50
  Third Quarter      18.63     14.00
  Fourth Quarter     15.00     12.50    12-15-98    1-6-99       1-22-99    $.32



AVOCA
INCORPORATED

The Company will furnish without charge a copy of its 1999 Annual Report on Form
10-KSB to be filed with the  Securities and Exchange  Commission,  including the
financial statements and financial statement schedules thereto, to any record or
beneficial  owner of its Common  Stock as of February 7, 2000.  Requests for the
report must be in writing  addressed  to Avoca,  Incorporated,  228 St.  Charles
Avenue, Suite 838, New Orleans,  Louisiana 70130,  Attention: M. Cleland Powell,
III.  If made by a person who was not a  shareholder  of record on  February  7,
2000, the request must include a good faith  representation that such person was
a beneficial  owner of Common Stock on that date.  Copies of any exhibits to the
Form  10-KSB will be  furnished  upon  payment of $.20 per page plus  postage to
cover the cost of furnishing such copies.

                                                          AVOCA, Incorporated 15


<PAGE>



                       [Map of Avoca Island appears here,
                    showing property of Avoca, Incorporated,
                       mineral leases and well locations]


<PAGE>
<TABLE>
<CAPTION>
MINERAL INCOME

Year Ended December 31, 1999

                                                                                              Initial    Income Recognized in 1999
                                                   Date of                                     Rental      Lease Bonus       Net
Lessee                     Operator                Lease         Acreage     Expiration       Per Acre   or Delay Rental   Royalties
------------------------------------------------------------------------------------------------------------------------------------

<S>                        <C>                     <C>           <C>         <C>                <C>        <C>             <C>
Texaco, Inc.               Texaco, Inc.            5/17/63       41.900      Termination        $  75      $     --        $     72
                                                                             of production

Alliance Operating         Delta Operating         8/14/87      276.733      Termination        $ 200            --         132,877
  Company                    Corporation                                     of production

Burlington Resources       Burlington Resources    8/12/96      420.000      Expired on         $ 110      **21,000              --
Oil & Gas Company          Oil & Gas Company                                 12/12/99

Burlington Resources       Burlington Resources   12/12/97      525.000      Termination        $ 150       105,000              --
Oil & Gas Company          Oil & Gas Company                                 of production
                                                                             or 12/12/00 if
                                                                             nonproducing

The Meridian Resource      The Meridian Resource    5/27/98     406.720      Termination        $ 200        81,345         244,239
& Exploration, Inc.*       & Exploration, Inc.*                              of production
                                                                             or 5/27/01 if
                                                                             nonproducing

CNG Producing Company      CNG Producing Company    8/19/99   1,637.550      Termination        $ 200       327,510               -
                                                                             of production
                                                                             or 8/19/02 if
                                                                             nonproducing

The Meridian Resource      The Meridian Resource   11/18/99     880.000      Termination        $ 200       176,000               -
& Exploration Co.          & Exploration Co.                                 of production
                                                                             or 11/18/02 if
                                                                             nonproducing

The Meridian Resource      The Meridian Resource   11/18/99      80.000      Termination        $ 300        24,000               -
& Exploration Co.          & Exploration Co.                                 of production
                                                                             or 11/18/02 if
                                                                             nonproducing

The Meridian Resource      The Meridian Resource   11/23/99     131.680      Termination        $ 350        46,088               -
& Exploration Co.          & Exploration Co.                                 of production
                                                                             or 11/23/02 if
                                                                             nonproducing
                                                                                                           --------        --------
                                                                                                           $780,943        $377,188
                                                                                                           ========        ========
*---formerly Texas Meridian Resources Exploration, Inc.
**---payment made to extend terms of lease from 8/12/99 - 12/12/99.
</TABLE>