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, 2001

  /   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.  $5,534,035
                                                          ----------

The  aggregate   market  value  of  common  stock  held  on  March  8,  2002  by
non-affiliates  of the registrant was $11,227,640.  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 8, 2002.

Parts I and II  incorporate by reference  information  from the Annual Report to
Shareholders  for the year ended  December 31, 2001.  Part III  incorporates  by
reference  information  from the Company's  Proxy  Statement  dated February 19,
2002.

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

An exhibit index is located on page 18


<PAGE>



                               AVOCA, INCORPORATED

                          Index to 10-KSB Annual Report

                                                                            PAGE

PART I

Item 1:          Description of Business                                     3-9
Item 2:          Description of Property                                   10-11
Item 3:          Legal Proceedings                                         11-12
Item 4:          Submission of Matters to a Vote of Security Holders          12


PART II

Item 5:          Market for Common Equity
                 and Related Stockholder Matters                              12
Item 6:          Management's Discussion and Analysis or Plan of
                 Operation                                                    13
Item 7:          Financial Statements                                         13
Item 8:          Changes in and Disagreements with Accountants
                 on Accounting and Financial Disclosures                      13


PART III

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




                                                              Page 2 of 18 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, 2001.

                                                              Page 3 of 18 Pages
<PAGE>
<TABLE>
<CAPTION>
MINERAL INCOME

Year Ended December 31, 2001

Initial                    Income Recognized in 2001

                                                                                     Initial        Income Recognized in 2001
                                                Date of                              Payment          Lease Bonus       Net
Lessee/Operator                                 Lease       Acreage    Expiration    Per Acre       or Delay Rental  Royalties
----------------------------------------------------------------------------------------------------------------------------------
<S>                                             <C>         <C>        <C>              <C>             <C>          <C>
Texaco, Inc. (Enervest Operating L.L.C.)        5/17/63     41.9000    Termination      $ 75            $   --       $   226
                                                                       of production

Alliance Operating Company
(Delta Operating Corporation)                   8/14/87    276.7330    Termination      $200                --       145,329*
                                                                       of production

Burlington Resources Oil & Gas Company          8/12/96      7.9140    Termination      $110
                                                                       of production
                                                                                                             B         2,472
Burlington Resources Oil & Gas Company         12/12/97    127.4760    Termination      $150
                                                                       of production

The Meridian Resource & Exploration Co.         5/27/98    212.3750    Termination      $200             1,000     4,124,089*
                                                                       of production
                                                                       or 5/27/01 if
                                                                       nonproducing

CNG Producing Company                           8/19/99  1,637.5500    Termination      $200           327,510             B
                                                                       of production
                                                                       or 8/19/02 if
                                                                       nonproducing

The Meridian Resource & Exploration Co.        11/18/99     80.0000    Termination      $300            19,331             B*
                                                                       of production
                                                                       or 11/18/02 if
                                                                       nonproducing

The Meridian Resource & Exploration Co.        11/23/99    131.6800    Termination      $350            46,088             B
                                                                       of production
                                                                       or 11/23/02 if
                                                                       nonproducing

Burlington Resources Oil & Gas Company         11/15/00     51.4100    Termination
                                                                       of production
                                                                       or 11/15/03 if
                                                                       nonproducing     $350            17,993             B

 The Meridian Resource & Exploration Co.        12/06/00     50.4600    Termination
                                                                       of production
                                                                       or 12/06/03 if
                                                                       nonproducing     $350            17,661             B

LLOG Exploration & Production Company           6/01/01     27.0000    Termination
                                                                       of production
                                                                       or 6/1/04 if
                                                                       nonproducing     $300             8,100             B

Burlington Resources Oil & Gas Company L.P.     11/1/01  1,873.0147    Termination
& Petro-Hunt L.L.C. (Petro-Hunt L.L.C.)                                of production
                                                                       on 11/1/04 if
                                                                       nonproducing     $267           500,000             B
                                                                                                      --------    ----------
                                                                                                      $937,683    $4,272,116
                                                                                                      ========    ==========

*All royalties received from the Meridian Resource & Exploration, Inc. are included under the May 27, 1998
lease as separate remittances are not received for the individual leases.
</TABLE>
                                                              Page 4 of 18 Pages
<PAGE>

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

                                                              Page 5 of 18 Pages
<PAGE>
Item 1     Description of Business (continued)
------     -----------------------
           At December 31, 2001,  approximately 28% of the Company's land (4,518
acres) was covered by oil and gas leases.  Approximately  547 acres were held by
production.  The  remaining  3,971  acres  were  covered  by  leases  which,  if
nonproducing,  will expire at the end of their  three-year  primary terms unless
the lessees pay delay rentals to maintain them in effect. The leases (12 in all)
stipulate royalties ranging from 21% to 30%.
           The Delta Operating Corporation (formerly Alliance Operating Company)
Avoca No. 1 well,  located in the Ramos Field, was responsible for approximately
35%,  11% and 3% of the  Company's  net royalty  income in 1999,  2000 and 2001,
respectively.  Total gas and condensate recoveries from the Avoca No. 1 well (in
which the Company has a net revenue interest of  approximately  19%) amounted to
275,816 Mcf of gas and 3,590  barrels of condensate in 1999 as reported on check
vouchers.  Production  decreased  to  216,264  Mcf of gas and 3,463  barrels  of
condensate  in 2000 and to 139,334 Mcf of gas and 1,677 barrels of condensate in
2001 as reported on check vouchers.
           From  1999  until  2001,  The  Meridian  Resources  & Exploration Co.
("Meridian")  C. M.  Thibodaux No. 1 and No. 3 wells were the Company's  largest
royalty producers.  Royalties from these wells, in which Avoca, Incorporated has
a net revenue interest of 2.71%, were responsible for approximately 65%, 80% and
30%  of  the  Company's  net  royalty   income  during  1999,   2000  and  2001,
respectively. Total 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 in 1999 (four  months of  production),  as  compared  with
7,898,975 Mcf of gas,  342,428  barrels of condensate and 10,547,944  gallons of
natural  gas  liquids  in 2000 and  7,677,632  Mcf of gas,  276,392  barrels  of
condensate and 2,357,432  gallons of natural gas liquids in 2001, as reported on
check vouchers.

                                                              Page 6 of 18 Pages
<PAGE>

           A new well,  the  Avoca 47-1,  in which the Company has a net revenue
interest of approximately  12.41%,  replaced the C.M.  Thibodaux No. 1 and No. 3
wells as the  Company's  largest  royalty  producer in 2001.  The Avoca No. 47-1
well, which went on production in December 2000, bottom holed in Section 47 west
of the C.M.  Thibodaux  No. 1 & No. 3 wells and produces  from the Operc 3 sand.
This Ramos Field well was responsible for approximately 67% of the Company's net
royalty income in 2001.  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 reported on check vouchers.
           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.

<TABLE>
<CAPTION>
                            Volume                                            Average Sales Price
     ---------------------------------------------------------         ---------------------------------
     Year           Gas               Oil            NGL               Per Mcf       Per bbl     Per gal
     <S>        <C>                <C>             <C>                 <C>          <C>          <C>
     1999         89,891 mcf       7,056 bbls      146,822 gal         $ 2.41       $ 18.06      $ .35
     2000        284,030 mcf       9,934 bbls      199,688 gal         $ 4.28       $ 27.80      $ .42
     2001        806,177          15,837           164,496             $ 4.94       $ 31.53      $ .41

</TABLE>



                                                              Page 7 of 18 Pages
<PAGE>
           In 2001, the Company granted two mineral leases  covering  1,900.0147
acres,  as compared with three leases covering 260 acres in 2000 and four leases
covering 2,729 acres in 1999.
           Drilling  activity  increased  significantly  in 2001. On December 9,
2000, Meridian spudded the Avoca 47-2 well, which was permitted to a total depth
of 20,000 feet to test the Operc 5 sand and to  bottomhole  approximately  1,700
feet south of the Avoca 47-1 well.  In early May 2001,  drilling  was  abandoned
because the Operc 5 sand was faulted out.  Meridian  used that surface  location
and surface  casing to drill the C.M.  Thibodaux  No. 25-2 well to bottomhole in
Bayou  Chene  opposite  the eastern of Avoca  Island.  The well was drilled to a
vertical depth of 18,720 feet,  targeting the Operc A, B, C and 3 sands. On July
30, 2001, a Meridian representative advised the Company that the well had logged
as a non-producer and was temporarily abandoned awaiting further evaluation.
           On  March  29,  2001,   Burlington   Resources   Oil  &  Gas  Company
("Burlington") spudded the Avoca No. 1 well to bottomhole in Section 36 near the
eastern end of the island. The No. 1 well was a 20,500-foot test of the Cris A-1
sand,  which is below  the  Operc  sands  producing  from  the  Meridian  wells.
Burlington  advised  the Company  that,  after  drilling to a vertical  depth of
20,323 feet, the Cris A-2 sands were found to be unproductive.  They pulled back
up the hole to between 19,204-19,245  measured depth to a new sand they call the
Cris-A and renamed the well State Lease 16049.  A test in October 2001 indicated
a good commercial well and Burlington applied for a hearing to form a geological
production  unit.  Meridian  has  taken  the  position  that the  sand  found at
19,204-19,245  measured depth is an existing sand seen in the C.M. Thibodaux No.
1 well and is an Operc 5 sand completion  already unitized as the Operc 5 RA SUA
Unit.  The issue was  reviewed at a recent  Office of  Conservation  hearing the
results of which,  to date,  have not been  announced.  Meridian  has taken over
operation of the well.


                                                              Page 8 of 18 Pages
<PAGE>
           On December 26, 2001,  Burlington and Petro-Hunt L.L.C.  (partner and
operator) spudded the Avoca No. 45-1 Rocky Raccoon Prospect in Section 45, T16S,
R13E in the middle of the island on their  1,873.0147-acre  lease.  Drilling  is
underway to test the lower Miocene Cam 1 and Cam 5 sands at a permitted depth of
16,200 feet.
           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 4 and  14-15  of the  Company's  2001  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 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.
           Additional  information  regarding the Company's business is included
under Item 2 of this report, incorporated herein by reference.

                                                              Page 9 of 18 Pages
<PAGE>
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  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

                                                             Page 10 of 18 Pages
<PAGE>
maintenance operations and its long standing lease of hunting and fishing rights
to the Avoca  Duck  Club,  the  Company in 1998  signed a cattle  grazing  lease
covering 600 acres on the north and western  parts of the island.  In 2000,  the
lease was replaced by a new lease, which 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
------     -----------------

           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.
           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 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

                                                             Page 11 of 18 Pages
<PAGE>

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 March 13,  2001,  the court  issued  Reasons for  Judgment,  which
includes seven pages of scholarly  reasons,  upholding  Avoca's exception of res
judicata and dismissing the  Singletons'  Reconventional  Demand and Petition in
Nullity at the reconvenors' cost.  Notwithstanding  the intervenors' claim, as a
practical  matter,  the judgment  rendered in accordance with the March 13, 2001
Reasons  For  Judgment  should  put  an end to the  claims  asserted  by  Ernest
Singleton, et al. Nevertheless, a notice of appeal has been filed.
           On September  13, 2001,  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  counsel,  the court  addressed  certain  of the  conduct
complained of in the motion and granted injunctive relief with respect thereto.

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
2001  Annual  Report  to  Shareholders,   attached  as  an  exhibit  hereto  and
incorporated herein by reference.

                                                             Page 12 of 18 Pages
<PAGE>

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  4  and  14-15,
respectively,  of the Company's 2001 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 5 through 13
of the  Company's  2001 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
           ---------------------------------------

           Not applicable.

                                    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 19, 2002,  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 19, 2002, incorporated herein by
reference.

                                                             Page 13 of 18 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  19, 2002,  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
19, 2002, incorporated herein by reference.

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

           Not  applicable.  Although not called for by this item,  reference is
made to the information that appears under the caption  "Information  Concerning
Management - Certain  Relationships"  on page 5 of the Company's Proxy Statement
dated February 19, 2002, 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 2001 Annual Report to Shareholders, are incorporated by reference in Part
II, Item 7:

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

           Balance sheet - December 31, 2001

           Statements of Income - years ended
           December 31, 2001 and 2000

           Statements of Retained Earnings -
           years ended December 31, 2001 and 2000

                                                             Page 14 of 18 Pages
<PAGE>
           Statements of Cash Flows - years ended
           December 31, 2001 and 2000

           Notes to Financial Statements -
           December 31, 2001

(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, 2001.  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.



                                                             Page 15 of 18 Pages
<PAGE>
(b)        Reports on Form 8-K

           One Form 8-K,  dealing with  declaration of a special  dividend,  was
filed on June 11, 2001.  Another Form 8-K, dealing with declaration of an annual
dividend, was filed on December 19, 2001.

--------------------------------
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 18 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 19, 2002


      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 19, 2002

/s/Bernard E. Bouderaux, Jr.
Bernard E. Boudreaux, Jr., Director
Date: March 19, 2002


/s/Guy C. Lyman, Jr.
Guy C. Lyman, Jr., Director
Date: March 19, 2002



/s/M. Cleland Powell, III
M. Cleland Powell, III, Director
Date: March 19, 2002


/s/J. Scott Tucker
J. Scott Tucker, Director
Date: March 19, 2002


                                                             Page 17 of 18 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, 2001.
                       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.



--------------------
(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 18 of 18 Pages
<PAGE>
                                                                      EXHIBIT 13







AVOCA                                   Annual Report
                                        -----------------------------
INCORPORATED                            2001


<PAGE>


                       THIS PAGE LEFT INTENTIONALLY BLANK




2  AVOCA, Incorporated

<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.






                                                           AVOCA, Incorporated 3

<PAGE>
Report to the Shareholders

Issued Preliminary to the Seventieth
Annual Meeting of Shareholders on March 19, 2002

Dear Shareholders:
         Aided by higher  oil and gas  prices and new  production,  the  Company
continued to benefit from ongoing  interest in  exploration  and  development of
Avoca  Island's  mineral  resources  and  reported a third  consecutive  year of
increased  profitability.  The  Company's  net income  increased  by 151%,  from
$1,415,018  in  2000  to   $3,558,038  in  2001.   The  increase  was  primarily
attributable  to a 163% increase in revenue from royalty income net of severance
taxes,  a 72%  increase  in lease  bonuses and delay  rentals,  and receipt of a
$105,500 lease option payment.
         The major contributor  to royalty  income was a full year of production
from The Meridian  Resource & Exploration,  Inc. Avoca No. 47-1 well. This well,
together with the C.M. Thibodaux No. 1 and No. 3 wells,  produced  $4,124,089 or
97% of the Company's  2001 net royalty  income.  Additional  royalty  income was
produced by Delta  Operating  Corporation's  Avoca No. 1 well, also in the Ramos
Field.
         Two new leases were signed in 2001 covering  1,900 acres and generating
$508,100 in lease bonus income.
         On  December  9,  2000,  Meridian  spudded  the Avoca No.  47-2 well to
bottomhole  approximately  1,700 feet south of the Avoca No.  47-1 well.  In May
2001, a Meridian  press release  announced  that the well was drilled to a total
depth of 20,675 feet and logged but the objective  Operc 5 sand was faulted out.
Meridian  immediately  commenced drilling the C.M. Thibodaux No. 25-2 well using
the surface location and surface casing of the Avoca No. 47-2 well to bottomhole
in Bayou Chene opposite the eastern end of Avoca Island. The well was drilled to
a vertical depth of 17,820 feet targeting the Operc A, B, C and 3 sands. On July
20, 2001, a Meridian representative advised the Company that the well was logged
as  a  non-producer  and  was  being  temporarily   abandoned  awaiting  further
evaluation.
         On March 29, 2001, Burlington spudded the Avoca No. 1 well, which was a
20,500-foot  test of the Chris A-1 sand below the Operc sands producing from the
Meridian wells.  This proved  unproductive  and the well has been completed in a
higher Cris-A sand and renamed State Lease 16049.  Once the unit is established,
the well will be placed on production.
         The most recent drilling  activity on the island is the spudding of the
Burlington/Petro-Hunt  Avoca No. 45-1 well on  December  26,  2001.  The well is
being drilled to a permitted 16,200 feet.
         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.

                                   Sincerely,

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

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
                                                                        2001

ASSETS

CURRENT ASSETS
      Cash and cash equivalents                                      $ 1,101,776
      Short-term investments                                           2,313,650
      Accounts receivable                                                251,175
      Accrued interest receivable                                         47,424
      Prepaid expenses                                                     9,781
                                                                     -----------
           TOTAL CURRENT ASSETS                                        3,723,806

PROPERTY AND EQUIPMENT

      Less accumulated depreciation and depletion                         64,554


OTHER ASSETS
      Long-term investments                                            1,390,000
      Avoca Drainage Bonds, $415,000, in default -
           at nominal amount                                                   1
                                                                     -----------

                                                                      $5,178,361
                                                                      ==========

6  AVOCA, Incorporated

<PAGE>
                                                                     December 31
                                                                            2001
--------------------------------------------------------------------------------
LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES

      Accounts payable and accrued expenses                          $    12,000
      Income taxes payable                                                 5,670
      Dividends payable                                                2,325,400
                                                                     -----------
           TOTAL CURRENT LIABILITIES                                   2,343,070

DEFERRED INCOME TAXES                                                     11,367

SHAREHOLDERS' EQUITY

      Common stock, no par value -- authorized, issued and
           outstanding 830,500 shares                                     94,483
      Retained earnings                                                2,729,441
                                                                     -----------
                            TOTAL SHAREHOLDERS' EQUITY                 2,823,924
                                                                     -----------


                                                                      $5,178,361
                                                                      ==========

See accompanying notes.

                                                           AVOCA, Incorporated 7

<PAGE>
STATEMENTS OF INCOME

                                                          Year ended December 31
                                                    2001                    2000
--------------------------------------------------------------------------------

Revenue:

      Royalties                              $4,436,654              $1,680,232
         Less severance taxes                  (164,538)                (55,497)
                                            -----------              -----------
                                              4,272,116               1,624,735

      Lease bonuses and delay rentals           937,683                 546,197
      Lease option payments                     105,500                      --
      Interest income                           181,007                 171,231
      Rental income                              33,295                  33,708
      Other                                       4,434                   8,289
                                            -----------                ---------
                                              5,534,035               2,384,160
Expenses:

      Attorney fees and expenses                 39,695                  53,124
      Auditing fees                              20,000                  21,275
      Bookkeeping and clerical services           8,700                   7,350
      Management fees                            65,487                  59,425
      Directors' fees                            10,000                   6,250
      Geological and engineering fees and
        expenses                                 26,160                  26,550
      Insurance                                  27,350                  25,905
      Office and miscellaneous expenses          58,215                  43,211
      Taxes, other than income taxes             23,488                  22,153
      Repairs and cleanup expenses                  656                  16,518
                                            -----------                ---------
                                                279,751                 281,761
                                            -----------                ---------
          INCOME BEFORE INCOME TAXES          5,254,284               2,102,399

Income taxes                                  1,696,246                 687,381
                                            -----------                ---------

                          NET INCOME         $3,558,038              $1,415,018
                                            ===========              ===========

Earnings per share (basic and diluted)       $     4.28              $     1.70
                                            ===========              ===========

Dividends declared per share                 $     4.00              $     1.55
                                            ===========              ===========




See accompanying notes.

8 AVOCA, Incorporated
<PAGE>



                                                 STATEMENTS OF RETAINED EARNINGS

                                                          Year ended December 31


                                                  2001                      2000
--------------------------------------------------------------------------------

Retained Earnings:

      Balance at beginning of year          $2,493,403                $2,365,660

      Net income for the year                3,558,038                 1,415,018
                                           -----------               -----------
                                             6,051,441                 3,780,678

      Cash dividends:
         2001 - $4.00 per share              3,322,000                         -
         2000 - $1.55 per share                      -                 1,287,275
                                           -----------               -----------

                   BALANCE AT END OF YEAR   $2,729,441                $2,493,403
                                           ===========                ==========




See accompanying notes.

                                                          AVOCA, Incorporated  9

<PAGE>
STATEMENTS OF CASH FLOWS

                                                          Year ended December 31
                                                       2001                 2000
--------------------------------------------------------------------------------

OPERATING ACTIVITIES
    Net income                                        $3,558,038     $1,415,018
    Adjustments to reconcile net income to net
       cash provided by operating activities:
        Depreciation expense                               4,389          4,389
        Deferred taxes                                      (507)          (507)
        Change in operating assets and liabilities:
           Accounts receivable                           (91,280)       (63,895)
           Accrued interest receivable                    16,884        (30,329)
           Prepaid expenses                                 (611)          (668)
           Accounts payable and accrued expenses         (10,581)         5,666
           Income taxes                                   19,062          6,281
                                                      -----------     ----------

                            NET CASH PROVIDED BY
                            OPERATING ACTIVITIES       3,495,394      1,335,955

INVESTING ACTIVITIES
    Purchase of investments                           (5,344,045)    (1,787,591)
    Maturity of investments                            4,707,712        922,578
                                                      -----------     ----------

                                NET CASH USED IN
                            INVESTING ACTIVITIES        (636,333)      (865,013)

FINANCING ACTIVITIES

    Dividends paid                                    (2,283,875)      (705,925)
                                                      -----------     ----------

                                NET CASH USED IN
                            FINANCING ACTIVITIES      (2,283,875)      (705,925)
                                                      -----------     ----------

                          INCREASE (DECREASE) IN
                       CASH AND CASH EQUIVALENTS         575,186       (234,983)

Cash and cash equivalents at beginning of year           526,590        761,573
                                                      ----------       ---------

                       CASH AND CASH EQUIVALENTS
                                  AT END OF YEAR      $1,101,776       $526,590
                                                      ==========       =========


See accompanying notes.

10  AVOCA, Incorporated
<PAGE>
                                                   NOTES TO FINANCIAL STATEMENTS

December 31, 2001

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 eight United States Government agency
securities: four each due in 2003 and 2004.
         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, 2001 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, 2001.

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, 2001.

                                                         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>
                                                                  2001                   2000
---------------------------------------------------------------------------------------------
Current:
<S>                                                            <C>                   <C>
         Federal                                               $1,486,170            $599,414
         State                                                    210,583              88,474
                                                              ------------           ---------
                                        TOTAL CURRENT           1,696,753             687,888
                                                              ------------           ---------
Deferred:
         Federal                                                     (444)               (442)
         State                                                        (63)                (65)
                                                                ----------           ---------
                                       TOTAL DEFERRED                (507)               (507)
                                                                ----------           ---------

                                                                $1,696,246          $ 687,381
                                                                ==========          ==========

</TABLE>

The deferred income tax liability of $11,367 relates to a difference between the
accounting and income tax basis of property and equipment.

The  Company  paid income  taxes of  $1,685,000  and  $684,000 in 2001 and 2000,
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>

                                                                      2001                      2000
                                                               Amount       Rate        Amount        Rate
-------------------------------------------------------------------------------------------------------------
<S>                                                           <C>           <C>        <C>            <C>
Tax expense based on federal statutory rate                   1,786,457     34.0%      $714,816       34.0%
Statutory percentage depletion                                 (226,269)    (4.3)       (85,606)      (4.1)
State income taxes (net of federal income tax deduction)        217,426      4.1         87,179        4.1
Other                                                           (81,368)    (1.5)       (29,008)      (1.4)
                                                             -----------    ------     ---------     ------

                                              INCOME TAXES   $1,696,246       32.3%    $687,381       32.6%
                                                             ===========    =======    =========     ======
</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,  2001  compared  to  three  independent  oil  and gas
exploration  companies  accounting  for  virtually  all of total  net  royalties
recorded  for the year ended  December  31,  2000.  Lease bonus and delay rental
revenue in 2001 and 2000 was the result of leases with five and four  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)
                                     -------------------------------------------
2001                                 15,837            806,177           164,496
2000                                 11,204            301,232           302,613


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 93% 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 $2,343,070,
including a  $2,325,400  dividend  declared in December  2001 but not paid until
January 2002.
         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.

2001 As Compared to 2000
         The Company's profitability continued to increase in 2001 for the third
consecutive  year.  Revenue for the year increased  $3,149,875 or  approximately
132%  primarily  because  of a  $2,647,381  increase  in  royalty  income net of
severance taxes.  Also  contributing to increased revenue in 2001 was a $391,486
or 72%  increase in lease  bonuses and delay  rentals and receipt of $105,500 in
lease option payments whereas no funds were received from this source in 2000.
         Royalty  income,  net  of  severance  taxes,  rose from  $1,624,735  to
$4,272,116 or  approximately  163%, due to royalties  received from The Meridian
Resources & Exploration Company on a new well, the Avoca No. 47-1, which went on
production December 4, 2000. The Avoca No. 47-1 well (in which the Company has a
net revenue interest of approximately  12.41%) bottomholed in Section 47 west of
the C.M.  Thibodaux No. 1 & No. 3 wells and produces from the Operc 3 sand. This
Ramos Field well was  responsible  for  $2,844,577 or  approximately  67% of the
Company's net royalty income in 2001.  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 (NGL) as reported on the check vouchers.
         Net  royalties  received  from  the C.M. Thibodaux No. 1 & No. 3 wells,
also in the Ramos Field,  remained  virtually  unchanged from the prior year and
were  responsible  for  $1,279,512  or  approximately  30% of the  Company's net
royalty  income in 2001.  The  Company's  net revenue  interest in both wells is
approximately 2.71%. Total 2001 production from the C.M. Thibodaux No. 1 & No. 3
wells was 7,677,632  Mcf of gas,  276,392  barrels of  condensate  and 2,357,432
gallons of natural  gas  liquids  (NGL) as  compared  to  7,898,975  Mcf of gas,
342,428  barrels of  condensate  and  10,547,944  gallons of natural gas liquids
(NGL) for 2000 as reported on the check vouchers.
         In 2001, the Delta Operating  Corporation  (formerly Alliance Operating
Company) Avoca No. 1 well, also in the Ramos Field, was responsible for $145,329
or approximately 3% of the Company's net royalty income,  down from 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  221,795  Mcf of gas and 3,463  barrels  of
condensate  in 2000 to 139,334  Mcf of gas and 1,677  barrels of  condensate  in
2001. The average 2001 sales prices from the Avoca No. 1 well were approximately
$4.93 per Mcf of gas and $26.90 per barrel of  condensate  as  compared to $4.18
per Mcf of gas and $26.83 per barrel of condensate in 2000.
         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.
         On December 9, 2000,  Meridian  spudded the Avoca No. 47-2 well,  which
was  permitted  to a total  depth of 20,000 feet to test the Operc 5 sand and to
bottomhole  approximately  1,700 feet south of the Avoca 47-1 well. In early May
2001,  drilling was abandoned because the Operc 5 sand was faulted out. Meridian
used that surface  location and surface  casing to drill the C. M. Thibodaux No.
25-2 well to  bottomhole  in Bayou  Chene  opposite  the  eastern  part of Avoca
Island.  The well was drilled to a vertical  depth of 18,720 feet  targeting the
Operc A, B, C and 3 sands. On July 30, 2001, a Meridian  representative  advised
the  Company  that the well had  logged as a  non-producer  and was  temporarily
abandoned awaiting further evaluation.
         On  March  29,  2001,  Burlington  spudded  the  Avoca  No.  1 well  to
bottomhole in Section 36 near the eastern end of the island.  The No. 1 well was
a  20,500-foot  test of the  Cris A-1  sand,  which is  below  the  Operc  sands
producing from the Meridian wells.  Burlington  advised the Company that,  after
drilling to a vertical depth of 20,323 feet, the Cris A-2 sands were found to be
unproductive.  They  pulled back up the hole to between  19,204-19,245  measured
depth (MD) to a new sand they call the Cris-A and  renamed  the well State Lease
16049.  A test in October 2001 indicated a good  commercial  well and Burlington
applied for a hearing to form a geological  production unit.  Meridian has taken
the position that the sand found at 19,204-19,245 MD is an existing sand seen in
the C.M. Thibodaux No. 1 well and is an Operc 5 sand completion already unitized
as the  Operc 5 RA SUA  Unit.  The  issue  was  reviewed  at a recent  Office of
Conservation  hearing the results of which,  to date,  have not been  announced.
Meridian has taken over operation of the well.
         On December 26, 2001,  Burlington  and Petro-Hunt  L.L.C.  (partner and
operator) spudded the Avoca No. 45-1 Rocky Raccoon Prospect in Section 45, T16S,
R13E in the middle of the island on their  1,873.0147-acre  oil, gas and mineral
lease. Drilling is underway to test the lower Miocene Cam 1 and Cam 5 sands at a
permitted depth of 16,200 feet.
         As compared with three new oil, gas and mineral leases  covering 259.87
acres,  which were  responsible  for $67,254 in lease bonuses  during 2000,  the
Company  during 2001  granted two new leases,  which cover  1900.0147  acres and
yielded $508,100 in lease bonuses. An option granted earlier in 2001 resulted in
the  1,873.0147-acre  lease to  Burlington  Resources Oil & Gas Company L.P. and
Petro-Hunt L.L.C. The other lease covering 27-acres was granted to

                                                          Continued on next page
14  AVOCA, Incorporated
<PAGE>
Management's Discussion and
Analysis of Financial Condition and
Results of Operations (Continued)

LLOG Exploration & Production Company.
         Interest  income  on  U.S.   Government  and  U.S.   Government  agency
securities  increased  slightly due to the  availability  of increased funds for
investment.
         Overall expenses for 2001 were approximately the same as those incurred
in 2000.  The  $13,429  decrease  in  attorney  fees & expenses  and the $15,862
decrease in repairs and cleanup  expenses  were  attributable  to a reduction in
costs  associated with a lawsuit to evict a former lessee from a small parcel of
land and clean up this area on the northeast part of the island. These decreases
offset moderate increases in bookkeeping and clerical services, management fees,
directors'  fees,   insurance,   office  and  taxes  other  than  income  taxes.
Miscellaneous  expense  increased  primarily  because of higher  transfer  agent
expenses and financial support of local community economic development efforts.
          In comparison with 2000, income tax expense increased  $1,008,865 as a
result of an  increase  in  taxable  income.
          Net income was  $4.28 per share in 2001 as compared to $1.70 per share
in 2000. In line with the Company's increased income,  dividends  increased from
$1.55 per share in 2000 to $4.00 per share in 2001.  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 4.

STOCK PRICES AND RELATED
SECURITY HOLDER MATTERS

As of January 9, 2002,  there were  approximately  670  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 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
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     12-12-01     1-7-02     1-22-02   $2.80

2000
  First Quarter    $21.00     $18.75
  Second Quarter    21.00      18.00
  Third Quarter     25.00      18.50
  Fourth Quarter    25.00      18.00     12-14-00     1-8-01     1-22-01   $1.55


AVOCA
INCORPORATED
The Company will furnish without charge a copy of its 2001 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, 2002.  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,
2002, 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]


<PAGE>
<TABLE>
<CAPTION>
MINERAL INCOME

Year Ended December 31, 2001

Initial                    Income Recognized in 2001

                                                                                     Initial        Income Recognized in 2001
                                                Date of                              Payment          Lease Bonus       Net
Lessee/Operator                                 Lease       Acreage    Expiration    Per Acre       or Delay Rental  Royalties
----------------------------------------------------------------------------------------------------------------------------------
<S>                                             <C>         <C>        <C>              <C>             <C>          <C>
Texaco, Inc. (Enervest Operating L.L.C.)        5/17/63     41.9000    Termination      $ 75            $   --       $   226
                                                                       of production

Alliance Operating Company
(Delta Operating Corporation)                   8/14/87    276.7330    Termination      $200                --       145,329*
                                                                       of production

Burlington Resources Oil & Gas Company          8/12/96      7.9140    Termination      $110
                                                                       of production
                                                                                                             B         2,472
Burlington Resources Oil & Gas Company         12/12/97    127.4760    Termination      $150
                                                                       of production

The Meridian Resource & Exploration Co.         5/27/98    212.3750    Termination      $200             1,000     4,124,089*
                                                                       of production
                                                                       or 5/27/01 if
                                                                       nonproducing

CNG Producing Company                           8/19/99  1,637.5500    Termination      $200           327,510             B
                                                                       of production
                                                                       or 8/19/02 if
                                                                       nonproducing

The Meridian Resource & Exploration Co.        11/18/99     80.0000    Termination      $300            19,331             B*
                                                                       of production
                                                                       or 11/18/02 if
                                                                       nonproducing

The Meridian Resource & Exploration Co.        11/23/99    131.6800    Termination      $350            46,088             B
                                                                       of production
                                                                       or 11/23/02 if
                                                                       nonproducing

Burlington Resources Oil & Gas Company         11/15/00     51.4100    Termination
                                                                       of production
                                                                       or 11/15/03 if
                                                                       nonproducing     $350            17,993             B

The Meridian Resource & Exploration Co.        12/06/00     50.4600    Termination
                                                                       of production
                                                                       or 12/06/03 if
                                                                       nonproducing     $350            17,661             B

LLOG Exploration & Production Company           6/01/01     27.0000    Termination
                                                                       of production
                                                                       or 6/1/04 if
                                                                       nonproducing     $300             8,100             B

Burlington Resources Oil & Gas Company L.P.     11/1/01  1,873.0147    Termination
& Petro-Hunt L.L.C. (Petro-Hunt L.L.C.)                                of production
                                                                       on 11/1/04 if
                                                                       nonproducing     $267           500,000             B
                                                                                                      --------    ----------
                                                                                                      $937,683    $4,272,116
                                                                                                      ========    ==========

*All royalties received from the Meridian Resource & Exploration, Inc. are included under the May 27, 1998
lease as separate remittances are not received for the individual leases.
</TABLE>