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


                                                                March 25  , 2003
                                                                     -----



Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549

Via Edgar Electronic Filing System

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 10KSB for the year ended December 31, 2002.

        The financial  statements in the report do not reflect a change from the
preceding year in any accounting principles or  practices  or  in the methods of
application of those principles or practices.

        This filing is being effected by direct transmission to the commission's
EDGAR system.

                                        Sincerely,


                                        /s/ Guy C. Lyman, Jr.
                                        Guy C. Lyman, Jr.

GCL, JR./kj

<PAGE>

                       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, 2002

  /   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 Identification Number)
 incorporation or organization)

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.  X
                              -----

State issuer's revenues for its most recent fiscal year.  $2,710,961
                                                          ----------

The  aggregate   market  value  of  common  stock  held  on  March  5,  2003  by
non-affiliates of the registrant was $8,703,349. 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 5, 2003.

Parts I and II  incorporate by reference  information  from the Annual Report to
Shareholders  for the year ended  December 31, 2002.  Part III  incorporates  by
reference  information  from the Company's  Proxy  Statement  dated February 18,
2003.

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

An exhibit index is located on page 16-18


<PAGE>

                               AVOCA, INCORPORATED

                          Index to 10-KSB Annual Report

                                                                            PAGE

PART I

Item 1:          Description of Business                                    3-10
Item 2:          Description of Property                                   10-11
Item 3:          Legal Proceedings                                         11-14
Item 4:          Submission of Matters to a Vote of Security Holders          14


PART II

Item 5:          Market for Common Equity
                 and Related Stockholder Matters                              14
Item 6:          Management's Discussion and Analysis or Plan of
                 Operation                                                    14
Item 7:          Financial Statements                                         15
Item 8:          Changes in and Disagreements with Accountants
                 on Accounting and Financial Disclosures                      15


PART III

Item 9:          Directors, Executive Officers, Promoters and
                 Control Persons; Compliance With Section 16(a)
                 of the Exchange Act                                          15
Item 10:         Executive Compensation                                       16
Item 11:         Security Ownership of Certain Beneficial Owners
                 and Management                                               16
Item 12:         Certain Relationships and Related Transactions               16
Item 13:         Exhibits and Reports on Form 8-K                          16-18
Item 14:         Controls and Procedures                                      18




                                                              Page 2 of 20 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, 2002.

                                                              Page 3 of 20 Pages
<PAGE>
<TABLE>
<CAPTION>
MINERAL INCOME

Year Ended December 31, 2002

                                                                                    Initial            Income Recognized in 2002
                                                Date of                             Payment              Lease Bonus       Net
Lessee/Operator                                  Lease     Acreage    Expiration    Per Acre           or Delay Rental  Royalties
------------------------------------------------------------------------------------------------------------------------------------
<S>                                             <C>        <C>                        <C>               <C>            <C>
Texaco, Inc. (Enervest Operating L.L.C.)        5/17/63    41.9000   Termination      $ 75              $     --       $       205
                                                                     of production

Alliance Operating Company
(Delta Operating Corporation)                   8/14/87   276.7330   Termination      $200                    --            45,465*
                                                                     of production

The Meridian Resource & Exploration Company     5/27/98   212.3750   Termination      $200                    --         1,965,592*
(The Meridian Resource & Exploration LLC)                            of production

CNG Producing Company                           8/19/99 1,637.5500   Termination      $200               450,326                 -
(now known as Dominion Exploration                                   of production
  & Production, Inc.)                                                or 8/19/04 if
                                                                     nonproducing

The Meridian Resource & Exploration Company    11/18/99    15.5633   Termination      $300                    --                 B*
(The Meridian Resource & Exploration LLC)                            of production

The Meridian Resource & Exploration LLC         5/24/02   256.3200   Termination      $350                89,712                 -
                                                                     of production
                                                                     or 5/24/05 if
                                                                     nonproducing
                                                                                     -----              --------


*All  royalties  received  from the  Meridian  Resource &  Exploration,  LLC
 are included under the May 27, 1998 lease as separate remittances are not
 received for the individual leases.                                                                    $540,038        $2,011,262
                                                                                                        ========        ==========
</TABLE>

                                                              Page 4 of 20 Pages
<PAGE>



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

                                                              Page 5 of 20 Pages
<PAGE>



Item 1     Description of Business (continued)
------     -----------------------

           At December 31, 2002,  approximately 15% of the Company's land (2,440
acres) was covered by oil and gas leases.  Approximately  547 acres were held by
production  and the remaining  1,893 acres were covered by leases which,  if non
producing,  require the  payment of annual  delay  rentals to  maintain  them in
effect and expire at the end of their primary  terms (three to five years).  The
leases (six in all) stipulate royalties ranging from 23% to 30%.

           The Meridian  Resources & Exploration LLC ("Meridian") Avoca No. 47-1
well has been the Company's largest royalty producer since it went on production
December  2000.  Royalties  from the Avoca No.  47-1 well were  responsible  for
approximately  67% and 36% of the Company's  net royalty  income during 2001 and
2002  respectively.  Total  2001  production  from the Avoca  No.  47-1 well was
4,597,565  Mcf of gas,  64,518  barrels of  condensate  and  809,733  gallons of
natural  gas  liquids as compared to  1,973,503  Mcf of gas,  21,534  barrels of
condensate and 32,769 gallons of natural gas liquids for 2002 as reported on the
check  vouchers.  Production  from the well began to decline in January 2002 and
continued  until  the  well  went off  production  in June.  A brief  return  to
production  in  August  resulted  in a minimal  amount of gas and a  substantial
amount  of  water.  In  September,  workover  operations  began and the well was
recompleted  in the higher Operc C sand. The unit for the  recompleted  well has
the same  configuration as the preexisting unit, and the Company will retain its
existing  12.41% net  revenue  interest.  The well  returned  to  production  in
December  and  average  daily  production  for  January  and  February  2003 was
approximately 8,900 Mcf of gas.

           The Meridian C. M. Thibodaux No. 1 and No. 3 wells were the Company's
largest  royalty  producers from 1999 to 2001  (until surpassed by the Avoca No.
47-1 well when it went on  production)  and  remained as important  contributors
to the  Company's  royalty income in 2002.

                                                              Page 6 of 20 Pages
<PAGE>

Royalties  from these  wells,  in which  Avoca,  Incorporated  has a net revenue
interest of 2.71%,  were responsible for  approximately  80%, 30% and 37% of the
Company's net royalty  income during 2000,  2001 and 2002,  respectively.  Total
production  from the C. M.  Thibodaux No. 1 and No. 3 wells was 7,898,975 Mcf of
gas, 342,248 barrels of condensate and 10,547,944 gallons of natural gas liquids
in 2000 as compared with 7,677,632 Mcf of gas, 276,392 barrels of condensate and
2,357,432  gallons of natural  gas  liquids  in 2001 and  6,788,419  Mcf of gas,
224,017  barrels of  condensate  and 422,453  gallons of natural gas liquids for
2002 as  reported on the check  vouchers.  The well's  operator  has advised the
Company that, in an attempt to increase  production,  the C. M.  Thibodaux No. 1
well was shut-in mid December  2002 and treated for scale buildup in the tubing.
The operator has also advised that it plans to recomplete the well in the higher
Operc 3 sand and return it to production.

           A new well,  the  Meridian  State Lease No.  16049 well, in which the
Company has a net revenue interest of approximately 2.71%, went on production in
February 2002 and was  responsible  for  approximately  25% of the Company's net
royalty income for the year.  Total 2002  production from the well was 2,552,893
Mcf of gas and 341,300  barrels of condensate as reported on the check vouchers.
Like the Meridian C. M.  Thibodaux No. 1 and No. 3 wells and the Meridian  Avoca
No.  47-1 well,  the new well is located in the Ramos Field  across  Bayou Chene
just north of the eastern end of Avoca Island.

           The Delta Operating Corporation (formerly Alliance Operating Company)
Avoca No. 1 well,  also located in the Ramos Field,  was responsible for 11%, 3%
and 2% of the Company's net royalty income in 2000, 2001 and 2002, respectively.
Total  production from the well (in which the Company has a net revenue interest
of approximately  19%) was 216,264 Mcf of gas and 3,463 barrels of condensate in
2000 as reported on check vouchers as compared with 139,334 Mcf of gas


                                                              Page 7 of 20 Pages
<PAGE>

and 1,677  barrels of condensate in 2001 and 66,024 Mcf of gas and 1,344 barrels
of condensate in 2002.

           Burlington  Resources Oil & Gas  Company's  Conrad  Industries  No. 1
well, located in the Wyandotte Field opposite the northern part of Avoca Island,
was placed on production  April 29, 2000 and  generated  $158,479 in net royalty
income for the Company  before it "watered  out" on August 20, 2000.  Burlington
abandoned  its  sidetracking  operations  in  April  2001  and the well has been
plugged and abandoned.

           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 and Wyandotte Field during the last three years.

                 Volume                            Average Sales Price
-----------------------------------------     ----------------------------
Year    Gas (mcf)  Oil (bbls)   NGL (gal)     Per Mcf    Per bbl  Per gal
2000     284,030     9,934       199,688      $ 4.28     $ 27.80   $ .42
2001     806,177    15,837       164,496      $ 4.94     $ 31.53   $ .41
2002     511,363    18,279        15,534      $ 3.18     $ 24.91   $ .24

In 2002, the Company  granted one new mineral lease on 256 acres and extended an
existing lease on 1,638 acres,  as compared with granting of two leases covering
1,900 acres in 2001 and three leases covering 260 acres in 2000.

           During the last three years, the Company's  mineral lessees commenced
the  drilling  of six wells  (including  four  non-producers)  on or near  Avoca
Island.  Drilling commenced on three of the

                                                              Page 8 of 20 Pages
<PAGE>
wells,  including the  above-mentioned  Avoca No. 47-1 well,  in 2000.  Drilling
commenced on the other three wells, including the above-mentioned Meridian State
Lease No. 16049 well and Burlington/Petro Hunt's Avoca No. 45 well, during 2001.
No new wells were spudded during 2002,  but drilling  continued on the Avoca No.
45 well,  which was located on  Burlington/Petro  Hunt's 1,873 acre lease in the
middle of Avoca Island. The well was drilled to a permitted depth of 16,200 feet
to test several sands  including  the lower  Miocene Cam 1 and Cam 5 sands.  The
sands were found to be non-productive  and the well was plugged and abandoned in
April 2002.  Burlington  elected not to pay the delay rental due in November and
the lease has terminated.

           Further information regarding 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  14-15  of the  Company's  2002  Annual  Report  to
Shareholders,   attached  as  an  exhibit  hereto  and  incorporated  herein  by
reference.  The Company's  activities with respect to oil and gas are limited to
the granting of leases, options,  seismic permits 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  regarding 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. Cattle grazing leases, described under
Item 2 of this report, have helped to minimize expenditures associated with 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-

                                                              Page 9 of 20 Pages


<PAGE>

day business affairs. The other two individuals maintain the Company's financial
records and watch over the Company's lands, respectively.

           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  Bouef  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


                                                             Page 10 of 20 Pages

<PAGE>

Avoca  Island was  completed in 1998 by the St. Mary Parish  government  and has
been reviewed by the Company and others.

           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 in 2002 renewed a cattle  grazing  lease  covering
lands located on the north and western parts of the island. The new lease covers
758 acres and expires in 2007.

           Information  regarding  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
------     -----------------

           1.     Avoca,  Incorporated  on  December  29, 1999 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 and  represents  no more than 13% of the
Company's acreage in the unit.

           Having answered the Company's petition, the defendant and other heirs
of John  Singleton  filed a Notice of Lis  Pendens,  Reconventional  Demand  and
Petition  in  Nullity  claiming  ownership  of the parcel  (and other  lands not
claimed  by  the  Company)  and  asserting  that  a 1970  court  judgment  which
recognized  the Company's  title to the disputed  area is a nullity.  Responsive
Peremptory Exceptions of Prescription and Res Judicata were filed by the Company
on March 3, 2000. On

                                                             Page 11 of 20 Pages
<PAGE>
June 7,  2000,  the  court  rendered  judgment  in favor of the  Company  in the
eviction  proceedings  and  ordered  Ernest  Singleton  to vacate the  premises.
Although Mr. Singleton has left Avoca Island,  an appeal was filed. The judgment
of eviction was affirmed by the appellate court and has become final.

           In December, 2000, thirty-four named individuals, alleging themselves
to be  descendants  of the  original  owners of the  property  described  in the
petition  and  reconventional  demand,  were  allowed  to  intervene  and assert
ownership  claims in the  proceedings.  In  response,  a Dilatory  Exception  of
Vagueness  was filed.  The  exception  was  maintained  on February 9, 2001.  On
January 29, 2003, the court, on the Company's motion, dismissed the intervention
because the  intervenors  had failed to amend the  intervention  within the time
specified by the court on February 9, 2001.

           On March 26, 2001,  the court  rendered  judgment  upholding  Avoca's
exception of Res Judicata and dismissing the Singletons'  Reconventional  Demand
and Petition in Nullity.  The Singletons appealed to the Louisiana First Circuit
Court of Appeals,  which on October 2, 2002 reversed the trial court's Judgment.
The  Company's  application  for a rehearing was denied and the  litigation  was
remanded to the trial court for further proceedings,  including consideration of
the  Exception  of  Prescription  filed by the  Company  on March 3,  2000,  the
Exception of No Cause of Action which it filed on December 27, 2003 with respect
to the nullity  claim and the Motion to Set Hearing for Class  Action  which the
Singletons  filed on January 6, 2003. On January 24, 2003,  the court upheld the
Company's  Exception of No Cause of Action and ruled that the Singletons had not
stated a cause of action to annul the 1970  judgment  (effectively  mooting  the
Company's  Exception of Prescription).  Having been given 30 days to amend their
petition to properly  assert a nullity  action,  the Singletons on February 2003
filed an Amending  Reconvention  and Petition  asserting

                                                             Page 12 of 20 Pages
<PAGE>
fraud as the basis for their  above-mentioned  nullity  claim;  expanding  their
original  ownership  claim to cover 162 acres,  including  all of the  Company's
acreage in the unit for the C. M.  Thibodaux Nos. 1 and 3 wells and the Meridian
State  Lease No.  16049  well and a small  portion of the unit for the Avoca No.
47-1 well;  naming The  Meridian  Resources  &  Exploration  LLC as third  party
defendant  to  defend  its  royalty  distributions;  and  seeking  to  have  the
litigation certified as a class action.  Responsive pleadings have not yet  been
filed by the Company.

           On September 13, 2001 (prior to the appellate court's October 2, 2002
ruling),  the Company filed a Motion for Preliminary  Injunction to prohibit the
Singletons,  their invitees,  et al. from trespassing on or interfering with the
Company's possession and enjoyment of certain described portions of Avoca Island
in disregard of the court's prior judgments. The motion was heard on October 31,
2001. On November 26, 2001, pursuant to a joint stipulation of the parties,  the
court addressed  certain of the conduct  complained of in the motion and granted
injunctive relief with respect thereto.

           The  Company   believes  it  has  meritorious   defenses   (including
prescription)  to all of the claims  asserted by the  Singletons  and intends to
continue to vigorously defend against them.

           2.     On    June    28, 1999,  Ernest   and      Evelyn   Singleton,
William  Singleton,  Jr., Perry Smith,  Brenda  Henderson,  Individually  and on
Behalf of Her Minor Children,  Mikila and Keith Henderson,  Mandalay Properties,
LLC,  Anthony J.  Guarisco,  Jr.,  Marilyn G. Vinson,  Terry D.  Guarisco,  Sr.,
Individually and as Representatives of All Those Similarly Situated filed in the
16th Judicial  District  Court for the Parish of St. Mary (Docket No.  104204) a
lawsuit against Northfield  Insurance  Company,  The Lumbermen's Mutual Casualty
Company,  Texas  Meridian  Production  Corporation,   The  Meridian  Resource  &
Exploration  Company,  George  Smith,  George  Craig,  Kurt D.  Byth,  Patterson
Services,  Inc., Reliance Insurance Company,  Commercial  Underwriters Insurance


                                                             Page 13 of 20 Pages
<PAGE>
Company and Petroleum Professionals International, Inc. seeking damages for loss
of production,  reservoir damage,  property damage and personal injury resulting
from the blowout of the C. M.  Thibodaux No. 2 well  (precursor of the Thibodaux
No. 3 well) in June of 1999.

           On May 15, 2002, the Louisiana First Circuit Court of Appeal affirmed
the trial court's  certification of the lawsuit as a class action.  The Company,
which has an  interest  in the unit for the well,  falls  within  the "below the
ground"  subclass of persons owning mineral  interests  impacted by the blowout.
The  Company  has not  been  notified  by the  trial  court of the date by which
members of the class must elect to remain in or opt out of the class action.


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
2002  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  14-15,
respectively,  of the Company's 2002 Annual Report to Shareholders,  attached as
an exhibit hereto and incorporated herein by reference.

                                                             Page 14 of 20 Pages
<PAGE>
Item 7     Financial Statements
------     --------------------

           The information  called for by this item comprises pages 4 through 13
of the  Company's  2002 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 Disclosures
           --------------------------------------------------------

           The  information  called for by this item  appears  under the caption
"Independent  Auditors"  on page  15 of the  Company's  2002  Annual  Report  to
Shareholders,   attached  as  an  exhibit  hereto  and  incorporated  herein  by
reference.

                                    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, J. Scott Tucker, Vice President, and M. Cleland
Powell, III,  Secretary-Treasurer.  Information  concerning such persons and the
Company's other directors,  Bernard E. Boudreaux,  Jr. and Guy C. Lyman, Jr., is
shown under the caption  "Number and Election of  Directors" on pages 3 and 4 of
the Company's Proxy Statement  dated February 18, 2003,  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, 2003, incorporated herein by
reference.

                                                             Page 15 of 20 Pages

<PAGE>
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, 2003,  incorporated  herein by
reference.


Item 11    Security Ownership of Certain
-------    Beneficial Owners and Management
           and Related Stockholder Matters
           -------------------------------

           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 pages 3 and 4, of the Company's  Proxy Statement dated February
18, 2003, incorporated herein by reference.

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

           Not applicable.

Item 13    Exhibits and Reports on Form 8-K
-------
(a)1.      Financial Statements

           The following financial statements of Avoca,  Incorporated,  included
in its 2002 Annual Report to Shareholders, are incorporated by reference in Part
II, Item 7:

           Report  of  LeGlue & Company, Independent Auditors, dated January 14,
           2003

           Report of Arthur Andersen LLP, Independent Public Accountants,  dated
           January 11, 2002

           Balance sheet - December 31, 2002

           Statements of Income - years ended
           December 31, 2002 and 2001

           Statements of Retained Earnings -
           years ended December 31, 2002 and 2001
           Statements of Cash Flows - years ended
           December 31, 2002 and 2001


                                                             Page 16 of 20 Pages

<PAGE>

           Notes to Financial Statements -
           December 31, 2002

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

           3.1       Copy of Composite Charter1

           3.2       Copy of Charter, dated October 21, 19311

           3.3       Copy of amendment to Charter, dated
                     September 13, 19721

           3.4       Copy of amendment to Charter, dated
                     May 30, 19751

           3.5       Copy of amendment to Charter, dated
                     September 15, 19812

           3.6       Copy of amendment to Charter, dated
                     March 17, 19872

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

           4.0       Copy of specimen stock certificate1

           13        Annual Report to Shareholders for
                     the year ended December 31, 2002.  Except for
                     those portions specifically designated as being
                     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.



                                                             Page 17 of 20 Pages
<PAGE>
(b)        Reports on Form 8-K

           The following  reports on Form 8-K were filed during the last quarter
of the period covered by this report:

           Date of Report          Items Reported
           --------------          --------------

           November 4, 2002        Certification required by  Section 906 of the
                                   Sarbanes-Oxley Act of 2002

           December 11, 2002       Declaration of annual dividend
           and signed on December 17, 2002


----------------------------
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.


Item 14       Controls and Procedures
-------       -----------------------

         Robert C. Baird, Jr., the Company's  principal  executive and financial
officer,  has evaluated the effectiveness of the Company's  disclosure  controls
and procedures (as defined in Rule 13a-14(c)  under the Securities  Exchange Act
of 1934) as of a date within 90 days of the filing of this report. Based on that
evaluation,  he  has  concluded  that  the  Company's  disclosure  controls  and
procedures are adequate and effective. There have been no significant changes in
the Company's  internal  controls or in other  factors that could  significantly
affect  internal  controls  subsequent  to the  date  Mr.  Baird  completed  his
evaluation.

                                                             Page 18 of 20 Pages
<PAGE>
                                   SIGNATURES
                                   ----------

              Pursuant to the  requirements  of Section 13 of the Securities Act
of 1934,  the  registrant  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    25  , 2003
            -------

      In accordance  with the  requirements of the Exchange Act, 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  25 , 2003
            ----


/s/ Bernard E. Boudreaux, Jr.
Bernard E. Boudreaux, Jr., Director
Date: March  25 , 2003
            ----


/s/ Guy C. Lyman, Jr.
Guy C. Lyman, Jr., Director
Date: March  25 , 2003
            ----


/s/ M. Cleland Powell, III
M. Cleland Powell, III, Director
Date: March  25 , 2003
            ----


/s/ J. Scott Tucker
J. Scott Tucker, Director
Date: March  25 , 2003
            ----

                                                             Page 19 of 20 Pages
<PAGE>
                                 CERTIFICATIONS

    I, Robert C. Baird, Jr. Principal Executive  Officer and Principal Financial
Officer, certify that:

    1. I have reviewed this annual report on Form 10-KSB of Avoca, Incorporated;

    2. Based  on  my  knowledge,  this annual report does not contain any untrue
statement of a material fact or omit to state a material fact  necessary to make
the statements made, in light of the  circumstances  under which such statements
were made,  not  misleading  with  respect to the period  covered by this annual
report;

    3. Based  on  my knowledge,  the financial  statements,  and other financial
information  included  in this annual  report,  fairly  present in all  material
respects the financial  condition,  results of operations  and cash flows of the
registrant as of, and for, the periods presented in this annual report;

    4. The  registrant's  other  certifying  officers and I are responsible  for
establishing and maintaining  disclosure  controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:

    a)  designed  such  disclosure  controls  and  procedures  to   ensure  that
material  information  relating to the  registrant,  including its  consolidated
subsidiaries, is made known to us by others within those entities,  particularly
during the period in which this annual report is being prepared;

    b) evaluated  the  effectiveness of the registrant's disclosure controls and
procedures  as of a date  within 90 days prior to the filing date of this annual
report (the "Evaluation Date"); and

    c) presented in this annual report our conclusions about  the  effectiveness
of  the  disclosure  controls  and  procedures based on our evaluation as of the
Evaluation Date,

    5. The  registrant's  other certifying officers and I have disclosed,  based
on our most  recent  evaluation,  to the  registrant's  auditors  and the  audit
committee  of  registrant's  board  of  directors  (or  persons  performing  the
equivalent functions):

    a)  All  significant  deficiencies  in the design or  operation of  internal
controls  which  could  adversely  affect  the  registrant's  ability to record,
process,  summarize  and  report  financial  data  and have  identified  for the
registrant's auditors any material weaknesses in internal controls; and

    b)  Any fraud, whether or not material,  that involves  management  or other
employees who have a significant role in the registrant's internal controls; and

    6. The  registrant's  other certifying officers and I have indicated in this
annual report whether there were significant  changes in internal controls or in
other factors that could  significantly  affect internal controls  subsequent to
the date of our most recent  evaluation,  including any corrective  actions with
regard to significant deficiencies and material weaknesses.


Date   March 25, 2003
       --------------
                                               /s/ Robert C. Baird, Jr.
                                               ---------------------------------
                                               Robert C. Baird, Jr.
                                               Principal  Executive Officer  and
                                               Principal Financial Officer


                                                             Page 20 of 20 Pages


<PAGE>
                                                                      EXHIBIT 13


                    AVOCA                      Annual Report
                INCORPORATED                   2002


<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

Bernard E. Boudreaux, Jr.,                     J. Scott Tucker; Director;
Director;                                      and Vice President;
Executive Counsel to the                       President and Chief Executive
Governor of Louisiana                          Officer, Hellenic, Inc. (real
                                               estate, oil and gas, investments,
Guy C. Lyman, Jr., Director;                   construction)
Attorney,
Milling Benson Woodward L.L.P.




2 AVOCA, Incorporated


<PAGE>
Report to the Shareholders

Issued Preliminary to the Seventy First
Annual Meeting of Shareholders on March 18, 2003

Dear Shareholders:
         Lower  natural gas prices,  reduced  production  from three of the four
wells that are responsible  for most of the Company's  royalty income and a drop
in lease bonus and delay rental income resulted in the first decrease in revenue
since 1998.
         Average  natural  gas  prices  were  approximately  38% lower  in  2002
than in 2001.  Aggregate  production  from the C. M.  Thibodaux  No. 1 and No. 3
wells declined 12% and  production  from the Avoca No. 47-1 well declined 56% as
compared with the prior year. The three wells accounted for approximately 73% of
the Company's royalty income in 2002.
         The  disappointing  performance  of the Avoca No. 47-1 well during 2002
has been ameliorated by recompletion of the well in a new sand and its return to
production  in  December.  Also,  the  Company  has  benefited  from a new well,
designated  as  Meridian  State Lease No.  16049,  which went on  production  in
February  2002 and was  responsible  for  approximately  25% of Avoca's  royalty
income for the year.
         During 2002 the Company granted one new lease and extended another. CNG
Producing  Company (now  Dominion  Exploration  Production,  Inc.)  extended the
primary term of its 1,637.55-acre  lease dated August 19, 1999 for an additional
two years at a higher royalty and rental.  An option granted in 2001 resulted in
a new 256.32-acre lease to The Meridian Resource & Exploration LLC.
         Drilling activity during 2002 was limited to the Burlington/Petro  Hunt
Avoca No. 45-1 well,  which was  permitted to 16,200 feet to test several  sands
including  the lower  Miocene Cam 1 and Cam 5 sands.  The sands were found to be
non-productive,  the well was  plugged  and  abandoned  in April  and the  lease
dropped.
         The Company's  operations and financial condition are further discussed
on pages 14 and 15 of this report and a complete list of mineral leases is shown
inside the back cover.

                                    Sincerely,

                                    /s/ Robert C. Baird, Jr.
                                    Robert C. Baird, Jr.
                                    President

                                                           AVOCA, Incorporated 3
<PAGE>
Report of
Independent Auditor's

To the Board of Directors and
Stockholders of Avoca, Incorporated

         We have audited the balance sheet of Avoca,  Incorporated  (a Louisiana
corporation)  as of December 31,  2002,  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.  The financial  statements of Avoca,  Incorporated as of December 31,
2001, were audited by other auditors who have ceased operations and whose report
dated January 11, 2002, expressed an unqualified opinion on those statements.
         We conducted our audit in accordance with auditing standards  generally
accepted in the United States of America.  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 2002 financial statements referred to above present
fairly, in all material respects, the financial position of Avoca,  Incorporated
as of December 31, 2002,  and the results of its  operations  and its cash flows
for the year then  ended in  conformity  with  accounting  principles  generally
accepted in the United States of America.

                                                    Respectfully submitted,


                                                    /s/ LeGlue & Company
                                                    (A Professional Corporation)
New Orleans, Louisiana
January 14, 2003



4 AVOCA, Incorporated

<PAGE>
Report of
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, 2001 and the related statements of
income,  retained earnings, and cash flows for the years ended Dec. 31, 2001 and
2000.  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 audits.
         We conducted our audits 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 audits provide 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, 2001 and the results of its operations and its cash flows for
the  years  ended  December  31,  2001 and 2000 in  conformity  with  accounting
principles generally accepted in the United States.

                                               /s/ Arthur Andersen LLP

New Orleans, Louisiana
January 11, 2002



                                                           AVOCA, Incorporated 5
<PAGE>



BALANCE SHEET

                                                               December 31
                                                                      2002
----------------------------------------------------------------------------

ASSETS

CURRENT ASSETS
      Cash and cash equivalents                                $ 1,182,312
      Short-term investments                                     1,722,005
      Accounts receivable                                          133,963
      Accrued interest receivable                                   32,201
      Recoverable income taxes                                       2,253
      Prepaid expenses                                              12,593
                                                               -----------
           TOTAL CURRENT ASSETS                                  3,085,327

PROPERTY AND EQUIPMENT
      Less accumulated depreciation and depletion                   85,719

OTHER ASSETS
      Long-term investments                                      1,320,000
      Avoca Drainage Bonds, $415,000, in default -
           at nominal amount                                             1
                                                               -----------

                                                                $4,491,047
                                                               ===========

6 AVOCA, Incorporated
<PAGE>



                                                               December 31
                                                                      2002
----------------------------------------------------------------------------

LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES
      Accounts payable and accrued expenses                     $   19,996
      Dividends payable                                          1,453,375
                                                               -----------
           TOTAL CURRENT LIABILITIES                             1,473,371

DEFERRED INCOME TAXES                                               16,672

SHAREHOLDERS' EQUITY

      Common stock, no par value -- authorized,
           issued and outstanding 830,500 shares                   94,483
      Retained earnings                                         2,906,521
                                                              -----------
                     TOTAL SHAREHOLDERS' EQUITY                 3,001,004
                                                              -----------


                                                               $4,491,047
                                                              ===========
See accompanying notes.

                                                           AVOCA, Incorporated 7
<PAGE>

STATEMENTS OF INCOME

                                                      Year ended December 31
                                                      2002              2001
                                                   ----------------------------
Revenue:
      Royalties                                   $2,085,522         $4,436,654
         Less severance taxes                        (74,260)          (164,538)
                                                 -----------        -----------
                                                   2,011,262          4,272,116

      Lease bonuses and delay rentals                540,038            937,683
      Lease option payments                                -            105,500
      Interest income                                 98,711            181,007
      Rental income                                   46,725             33,295
      Other                                           14,225              4,434
                                                 -----------          ---------
                                                   2,710,961          5,534,035
Expenses:
      Attorney fees and expenses                      60,336             39,695
      Auditing fees                                   18,230             20,000
      Bookkeeping and clerical services                9,750              8,700
      Management fees                                 71,350             65,487
      Directors' fees                                 15,000             10,000
      Geological and engineering fees and expenses    20,349             26,160
      Insurance                                       41,850             27,350
      Office and miscellaneous expenses               45,789             58,215
      Taxes, other than income taxes                  22,748             23,488
                                                 -----------          ---------
                                                     305,402            279,751

                      INCOME BEFORE INCOME TAXES   2,405,559          5,254,284

Income taxes                                         775,104          1,696,246
                                                 -----------          ---------

                                      NET INCOME  $1,630,455         $3,558,038

Earnings per share (basic and diluted)           $      1.96         $     4.28
                                                 ===========         ===========

Dividends declared per share                     $      1.75         $     4.00
                                                 ===========         ===========




See accompanying notes.

8 AVOCA, Incorporated
<PAGE>



                                                 STATEMENTS OF RETAINED EARNINGS

                                                      Year ended December 31
                                                      2002              2001
                                                 -------------------------------

Retained Earnings:

      Balance at beginning of year                $2,729,441         $2,493,403

      Net income for the year                      1,630,455          3,558,038
                                                 -----------        -----------
                                                   4,359,896          6,051,441

      Cash dividends:
         2002 - $1.75 per share                    1,453,375                  -
         2001 - $4.00 per share                            -          3,322,000
                                                 -----------        -----------

                BALANCE AT END OF YEAR            $2,906,521         $2,729,441
                                                 ===========         ==========

See accompanying notes.

                                                           AVOCA, Incorporated 9
<PAGE>

STATEMENTS OF CASH FLOWS

                                                      Year ended December 31
                                                      2002              2001
                                                  ------------------------------

OPERATING ACTIVITIES
    Net income                                    $1,630,455         $3,558,038
    Adjustments to reconcile net income
       to net cash provided by (used in)
       operating activities:
        Depreciation expense                          5,734               4,389
        Deferred taxes                                5,305                (507)
        Change in operating assets and
          liabilities:
           Accounts receivable                      117,212             (91,280)
           Accrued interest receivable               15,223              16,884
           Prepaid expenses                          (2,812)               (611)
           Accounts payable and accrued expenses      7,996             (10,581)
           Income taxes                              (7,923)              19,062
                                                 -----------        ------------

                          NET CASH PROVIDED BY
                          OPERATING ACTIVITIES    1,771,190           3,495,394

INVESTING ACTIVITIES
    Purchase of investments                      (5,046,680)         (5,344,045)
    Maturity of investments                       5,708,325           4,707,712
    Purchase of equipment                           (26,899)                  -
                                                 -----------        ------------

                         NET CASH PROVIDED BY
                         (USED IN)
                         INVESTING ACTIVITIES       634,746            (636,333)

FINANCING ACTIVITIES
    Dividends paid                               (2,325,400)         (2,283,875)
                                                ------------        ------------

                          NET CASH (USED IN)
                        FINANCING ACTIVITIES     (2,325,400)         (2,283,875)
                                                ------------        ------------

                           INCREASE IN CASH
                       AND CASH EQUIVALENTS          80,536             575,186

Cash and cash equivalents at
  beginning of year                               1,101,776             526,590
                                                ------------        ------------

                 CASH AND CASH EQUIVALENTS
                            AT END OF YEAR      $ 1,182,312         $ 1,101,776
                                                ============        ============



See accompanying notes.

10 AVOCA, Incorporated
<PAGE>
                                                   NOTES TO FINANCIAL STATEMENTS

December 31, 2002

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.  In
addition to interest  income and the  leasing of hunting  rights,  income in the
accompanying financial statements is primarily derived from lease bonuses, delay
rentals,  lease  option  payments  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 consist of investments  with  a  maturity of
three months or less from date of purchase.

Investments:  Short-term  investments consist of 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 five United States Government agency
securities: one due in 2004 and four due in 2005.
         Management  determines  the  appropriate  classification  of       debt
securities at the time of purchase.  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, 2002 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, 2002.

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, 2002.

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

NOTE B Income Taxes

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

                                                                  2002                   2001
---------------------------------------------------------------------------------------------
Current:
<S>                                                           <C>                  <C>
         Federal                                              $   676,130          $1,486,170
         State                                                     93,669             210,583
                                                              -----------          ----------
                                        TOTAL CURRENT             769,799           1,696,753
                                                              -----------          ----------

Deferred:
         Federal                                                    4,642                (444)
         State                                                        663                 (63)
                                                              -----------          -----------
                                       TOTAL DEFERRED               5,305                (507)
                                                              -----------          -----------

                                                              $   775,104          $1,696,246
                                                              ===========          ===========
</TABLE>



The deferred income tax liability of $16,672 relates to a difference between the
accounting  and  income  tax basis and  depreciation  periods  of  property  and
equipment.

The Company  paid  income  taxes of $771,000  and  $1,685,000  in 2002 and 2001,
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>
                                                                       2002                     2001
                                                                 Amount     Rate        Amount       Rate
-------------------------------------------------------------------------------------------------------------
<S>                                                             <C>         <C>      <C>              <C>
Tax expense based on federal statutory rate                     817,890     34.0%    $ 1,786,457      34.0%
Statutory percentage depletion                                 (106,362)    (4.4)       (226,269)     (4.3)
State income taxes (net of federal income tax deduction)         96,051      4.0         217,426       4.1
Other                                                           (32,475)    (1.6)        (81,368)     (1.5)
                                                           -------------    -----      ----------     ------

                                            INCOME TAXES       $775,104     32.0%    $ 1,696,246      32.3%
                                                           =============    =====    ============     ======
</TABLE>
12 AVOCA, Incorporated


<PAGE>

                                                              NOTES TO FINANCIAL
                                                          STATEMENTS (Continued)

NOTE C Major Customers

The net  royalties  received  from  one  independent  oil  and  gas  exploration
companies accounted for 98% and 97% of total net royalties recorded for 2002 and
2001,  respectively.  Lease bonus and delay rental  revenue in 2002 and 2001 was
the result of leases with two and five  companies,  respectively.  Lease  option
payments  consisted of payments from two  companies for the year ended  December
31, 2001.

NOTE D Oil and Gas Quantities Produced (unaudited)

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)
                                -------------------------------------------

2002                            18,279            511,363           15,534
2001                            15,837            806,177          164,496



NOTE E 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 94% of its
assets,  as  measured  by book  value,  are cash and cash  equivalents  and U.S.
Government agency securities.  Current  liabilities at year end were $1,473,371,
including a  $1,453,375  dividend  declared in December  2002 but not paid until
January 2003. 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.

2002 As Compared to 2001
Avoca,  Incorporated  is largely a passive  company that owns lands in Louisiana
under  which  hydrocarbons  are  located.  The  hydrocarbons  are  developed  in
accordance  with  the  custom  of the  trade  in the  oil and  gas  industry  in
Louisiana,  which development is conducted with risks and uncertainties  usually
associated with the production and marketing of hydrocarbons.
         Total revenue for 2002  decreased by $2,823,074 or  approximately  51%,
primarily  because of a $2,260,854  decrease in royalty  income net of severance
taxes.  Also  contributing  to  decreased  revenue in 2002 was a $397,645 or 42%
decrease in lease  bonuses and delay  rentals,  the absence of income from lease
option payments as compared with $105,500  received from this source in 2001 and
an $82,296 or 45% decrease in interest income.
         Royalty income,  net of severance taxes,  decreased  approximately  53%
from $4,272,116 in 2001 to $2,011,262 in 2002 due to a decrease of approximately
38% in the  average  sales price of natural gas and  declining  production  from
three of the four principal wells in which the Company has a royalty interest.
         The Meridian Resource & Exploration LLC's Avoca No. 47-1 well (in which
the Company has a net revenue interest of approximately  12.41%) was responsible
for $720,137 in royalty income in 2002, a 75% decrease from  $2,844,577 in 2001.
Although  average gas prices were lower in 2002,  the  principal  reason for the
decrease in royalty  income from this well was its declining  production,  which
began in January 2002 and continued  until the well went off production in June.
A brief return to production in August resulted in a minimal amount of gas and a
substantial  amount of water. In September  Meridian applied to the Commissioner
of  Conservation  for  creation of a new unit for the Avoca No. 47-1 well in the
Operc C sand,  which is closer to the  surface  than the 0-3 sand from which the
well had been  producing.  The unit,  which  was  approved  by the  Commissioner
effective  November 2002, has the same configuration as the preexisting unit and
the Company will retain its existing 12.41% net revenue  interest.  The well was
recompleted in the Operc C sand, and returned to production in December. Average
daily production for the month of January 2003 was 9,500 Mcf of gas.
         Net royalties  received from  Meridian's C. M.  Thibodaux No. 1 & No. 3
wells in 2002 declined to $738,008 from  $1,279,512 in 2001 as a result of a 12%
decline in  production  combined  with the decline in the average sales price of
gas. The Company's net revenue  interest in both wells is  approximately  2.71%.
Total 2002 production from the C. M. Thibodaux No. 1 & No. 3 wells was 6,788,419
Mcf of gas,  $224,017  barrels of condensate and 422,453  gallons of natural gas
liquids as compared to 7,677,632 Mcf of gas,  276,392  barrels of condensate and
2,357,432  gallons of natural  gas  liquids  for 2001 as  reported  on the check
vouchers.  The well's  operator has advised the  Company,  that in an attempt to
increase  production,  the C. M.  Thibodaux  No. 1 well was shut-in mid December
2002 and treated for scale buildup in the tubing.  The operator has also advised
that it plans to recomplete the well in the higher Operc 3 said and return it to
production.
         The importance of the Delta Operating  Corporation  (formerly  Alliance
Operating Company) Avoca No. 1 well, has diminished in recent years. In 2002 the
Avoca No. 1 well was  responsible  for only $45,465 or  approximately  2% of the
Company's  net  royalty  income,  down from 3% in 2001 and 11% in 2000.  Despite
treatments for scale buildup, total gas and condensate production from the Avoca
No. 1 well (in which the  Company has a net  revenue  interest of  approximately
19%)  decreased  from 139,334 Mcf of gas and 1,677 barrels of condensate in 2001
to 66,024 Mcf of gas and 1,344  barrels of condensate in 2002 as reported on the
check vouchers.
         The decline in royalty  income would have been greater but for $507,447
in royalties  received from a new well which went on production in February 2002
and was  responsible for  approximately  25% of the Company's net royalty income
for the year. The well was drilled by Burlington  Resources Oil & Gas Company as
the Avoca No. 36-1 well and completed at a measured depth of 19,209-19,245 feet.
The  Commissioner  of  Conservation  has determined  that the well,  renamed the
Meridian  State Lease No. 16049,  is producing from an existing sand seen in the
Meridian C. M.  Thibodaux  No. 1 well and is already  unitized as the Operc 5 RA
SUA  Unit.  Meridian  has taken  over the  operation  of the well,  in which the
Company has a net revenue interest of approximately 2.71%. Total 2002 production
from the well was  2,552,893  Mcf of gas and 341,300  barrels of  condensate  as
reported on the check vouchers.  Like the Meridian C. M. Thibodaux No. 1 and No.
3 wells and the  Meridian  Avoca No.  47-1 well,  the new well is located in the
Ramos Field across Bayou Chene just north of the eastern end of Avoca Island.
         Production from the four Meridian wells (the Avoca No. 47-1 well, C. M.
Thibodaux  No. 1 and No. 3 wells and the new State  Lease  No.  16049  well) was
responsible for 98% of the Company's royalty income for 2002.
         In December  2001,  Burlington  and  Petro-Hunt,  L.L.C.  (partner  and
operator)  spudded  the Avoca No.  45-1  Rocky  Raccoon  prospect  well on their
1,873.0147-acre  oil, gas and mineral lease in the middle of Avoca  Island.  The
well was  drilled to a  permitted  depth of 16,200  feet to test  several  sands
including  the lower  Miocene Cam 1 and Cam 5 sands.  The sands were found to be
non-productive and the well was plugged and abandoned in April 2002.  Burlington
elected  not to pay  the  delay  rental  due  in  November  and  the  lease  has
terminated.
         Income from lease bonuses and delay rentals  decreased from $937,683 in
2001 to $540,038 in 2002 or  approximately  42%.  Six  leases,  which  generated
$609,173 in lease bonuses and delay rental  income in 2001,  terminated in 2002.
Four leases,  including the  Burlington  lease  discussed  above,  lapsed due to
non-payment  of delay rentals and two leases expired at the end of their primary
terms.  During 2002, the Company granted one new lease and extended one existing
lease,  which generated a total of $212,528 in additional  lease bonus and delay
rental income. CNG Producing Company (now Dominion Exploration Production, Inc.(
extended the primary term of its  1,637.55-acre  lease dated August 19, 1999 for
an additional  two years at a higher  royalty and rental.  An option  granted in
2001 resulted in a new 256.32-acre  lease to Meridian.  During 2001, the Company
granted two leases which covered  1,900.0147 acres and yielded $508,100 in lease
bonuses.
         Interest income on U.S. Government and
                                                          Continued on next page

14 AVOCA, Incorporated

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

U.S.  Government  agency  securities  declined  approximately  45% due  to lower
interest rates and a decrease in funds available for investment.
         Overall  expenses for 2002 were $25,651 or  approximately  9% higher in
2002 than in 2001.  The  $20,641  increase  in attorney  fees and  expenses  was
primarily attributable to new disclosure and certification  requirements imposed
on public  companies by Congress  and the  Securities  and Exchange  Commission.
Insurance  expense  increased  $14,500 or 53% due to  changes  in the  Company's
insurance  coverage  and an  increase in premium  costs.  These  increases  were
partially  offset by a  reduction  in the need for  geological  and  engineering
services and decreases in office and miscellaneous expenses.
         In comparison  with 2001,  income tax expense  decreased  $921,142 as a
result of a decrease in taxable  income.
         Net income was $1.96 per share in 2002 as  compared  to $4.28 per share
in 2001. In line with the Company's  decreased income,  dividends decreased from
$4.00 per share in 2001 to $1.75 per  share in 2002.  Future  dividends  will be
largely dependent on the amount of oil and gas related income received.
         Further  information  regarding the Company's  financial  condition and
results of operations is contained in the President's message on page 3.

Stock Prices And Related
Security Holder Matters

As of January 7, 2003,  there were  approximately  661  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 OTC Bulletin Board. Such quotations reflect  inter-dealer  prices,
without  retail  mark-up,  mark-down or  commissions  and may not 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
2002
  First Quarter      $24.50   $22.20
  Second Quarter      25.10    19.25
  Third Quarter       20.95    17.00
  Fourth Quarter      19.00    16.01   12-11-02    1-7-03      1-22-03     $1.75

2001
  First Quarter      $21.00    20.06
  Second Quarter      22.00    21.00     6-7-01   6-25-01      6-29-01     $1.20
  Third Quarter       25.00    19.90
  Fourth Quarter      25.00    23.50   12-11-01    1-7-02      1-22-02     $2.80

Independent Auditors

The  Board  of  Directors   dismissed  Arthur  Andersen  LLP  as  the  Company's
independent  accountants,  effective July 19, 2002. The dismissal was occasioned
by the  Enron-related  criminal  conviction  of  Arthur  Andersen  LLP  and  the
consequences thereof, which in the opinion of the Board comprised the ability of
the  firm  to  act as the  Company's  independent  accountants.  There  were  no
disagreements with Arthur Andersen LLP and its reports have contained no adverse
opinion, disclaimer of opinion or modification as to uncertainty, audit scope or
accounting principles.
         It is anticipated  that LeGlue & Company CPAs,  which succeeded  Arthur
Andersen LLP as the Company's independent  accountants on July 22, 2002, will be
asked to serve again in this capacity for 2003.

AVOCA
INCORPORATED

The Company will furnish without charge a copy of its 2002 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, 2003.  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,
2003, the request must include a good faith  representation that such person was
a beneficial owner of Common Stock on that date.

                                                          AVOCA, Incorporated 15
<PAGE>



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



16 AVOCA, Incorporated
<PAGE>
<TABLE>
<CAPTION>
MINERAL INCOME

Year Ended December 31, 2002

                                                                                    Initial            Income Recognized in 2002
                                                Date of                             Payment              Lease Bonus       Net
Lessee/Operator                                  Lease     Acreage    Expiration    Per Acre           or Delay Rental  Royalties
------------------------------------------------------------------------------------------------------------------------------------
<S>                                             <C>        <C>                        <C>               <C>            <C>
Texaco, Inc. (Enervest Operating L.L.C.)        5/17/63    41.9000   Termination      $ 75              $     --       $       205
                                                                     of production

Alliance Operating Company
(Delta Operating Corporation)                   8/14/87   276.7330   Termination      $200                    --            45,465*
                                                                     of production

The Meridian Resource & Exploration Company     5/27/98   212.3750   Termination      $200                    --         1,965,592*
(The Meridian Resource & Exploration LLC)                            of production

CNG Producing Company                           8/19/99 1,637.5500   Termination      $200               450,326                 -
(now known as Dominion Exploration                                   of production
  & Production, Inc.)                                                or 8/19/04 if
                                                                     nonproducing

The Meridian Resource & Exploration Company    11/18/99    15.5633   Termination      $300                    --                 -*
(The Meridian Resource & Exploration LLC)                            of production

The Meridian Resource & Exploration LLC         5/24/02   256.3200   Termination      $350                89,712                  -
                                                                     of production
                                                                     or 5/24/05 if
                                                                     nonproducing
                                                                                     -----              --------


*All  royalties  received  from the  Meridian  Resource &  Exploration,  LLC
 are included under the May 27, 1998 lease as separate remittances are not
 received for the individual leases.                                                                    $540,038        $2,011,262
                                                                                                        ========        ==========
</TABLE>
                                                          AVOCA, Incorporated 17