SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-K/A
                                (AMENDMENT NO. 1)
(MARK ONE)
            ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE  SECURITIES  EXCHANGE
/X/         ACT OF 1934 [FEE REQUIRED]

For the fiscal year ended SEPTEMBER 30, 1998
                          ------------------------------------------------------

            TRANSITION  REPORT  UNDER  SECTION  13 OR  15(d)  OF THE  SECURITIES
/ /         EXCHANGE ACT OF 1934 [NO FEE REQUIRED]

For the transition period from                     to
                               --------------------  ---------------------------

                        Commission file number 000-21956
                                               ---------

                               EVANS SYSTEMS, INC.
--------------------------------------------------------------------------------
             (Exact name of registrant as specified in its charter)

            Texas                                        74-1613155
--------------------------------------------------------------------------------
(State or other jurisdiction of             (I.R.S. employer identification no.)
incorporation or organization)

720 Avenue F North, Bay City, Texas                          77404-2480
--------------------------------------------------------------------------------
(Address of principal executive offices)                      (Zip code)

Issuer's telephone number, including area code: (409) 245-2424
                                                --------------------------------

Securities registered under Section 12(b) of the Exchange Act: None.

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

================================================================================
   TITLE OF EACH CLASS             NAME OF EACH EXCHANGE ON WHICH REGISTERED
================================================================================
Common Stock, $.01 par value         Nasdaq NMS
================================================================================


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

            Indicate by check mark if disclosure of delinquent  filers  pursuant
to  Item  405 of  Regulation  S-K is  not  contained  herein,  and  will  not 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-K
or any amendment to this Form 10-K. [X]
                                     -

            The aggregate market value of the Registrant's  Common Stock held by
non-affiliates at January 12, 1999 was approximately  $26,800,000.  For purposes
of computing such market value,  the  Registrant  has deemed as affiliates  only
executive officers, directors and their affiliates.
<PAGE>
            The  total  number  of  shares  of  the  Registrant's  Common  Stock
outstanding at January 12, 1999 was 3,545,709,  exclusive of treasury  shares or
shares held by subsidiaries of the registrant.

            Documents incorporated by reference: None.

                                      -2-
<PAGE>
                                EXPLANATORY NOTE

            This  Amendment  No. 1 on Form 10-K/A  (this  "Amendment")  is being
filed in order to amend the  Registrant's  Annual Report on Form 10-K filed with
the  Securities  and  Exchange  Commission  on January  13,  1999 to include the
information required to be disclosed in Part III thereof.

            Part III of this Annual Report is hereby  amended in its entirety to
add the following information:

                                    PART III

ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

            The following table sets forth certain  information  with respect to
the current directors and executive officers of the Company.


     NAME                 POSITION                                        AGE
--------------------------------------------------------------------------------

Jerriel L. Evans, Sr.     Chairman of the Board, President and Chief       59
                          Executive Officer

Peter J. Losavio, Jr.     Vice Chairman of the Board                       57

Maybell H. Evans          Director and Secretary                           59

Darlene E. Jones          Director, Treasurer and Administrative Manager   40

Charles N. Way            Director, Vice President and Controller          56

Richard A. Goeggel        Director , Vice President and Chief Financial
                          Officer                                          47

Julie H. Edwards          Director                                         40

Carl W. Schafer           Director                                         62

Richard B. Dix            Executive Vice President                         30

Jerry L. Evans, Jr.       Vice President of Corporate Relations 
                          and Human Resources                              33

            The principal  occupation of each director and executive officer for
at least the last five years is set forth below:

                                      -3-
<PAGE>

            JERRIEL L. EVANS,  SR. has been a member of the  Company's  Board of
Directors  since  August  1968.  Mr.  Evans  founded the Company in 1968 and has
served as its Chairman of the Board, President and Chief Executive Officer since
that time. Mr. Evans was born in Flint, Texas, in 1939 and subsequently moved to
Woodsboro,  Texas,  where he graduated  from  Woodsboro High School in 1957. Mr.
Evans  attended  San  Antonio  Community  College  where he majored in  Business
Administration.  From 1954 to 1960,  Mr.  Evans  owned and  operated  a gasoline
service station.  From 1960 to 1968, Mr. Evans was employed by Amoco Oil Company
where he held various sales and  managerial  positions.  In 1985, he was awarded
top salesman for the Kansas City Region.  Because the region  comprised  several
states, the honor bestowed upon Mr. Evans was very prestigious. Additionally, in
1992, Mr. Evans was selected as a Regional  Finalist for the Entrepreneur of the
year Award granted annually by Ernst & Young and Merrill Lynch.

            PETER J. LOSAVIO,  JR. has been a member of the  Company's  Board of
Directors since May 1993. Mr. Losavio was born in Baton Rouge, Louisiana in 1949
and graduated  from Baton Rouge High School in 1967. He received his Bachelor of
Science  degree in chemistry  from Tulane  University  in 1970,  and his Masters
degree in chemistry from Tulane  University in 1973. He graduated from Louisiana
State  University  Law School in Baton  Rouge,  Louisiana in 1975 and received a
masters of law in taxation from the  University of Florida in 1976.  Mr. Losavio
is a Board Certified Tax Attorney. He became a licensed and certified accountant
in Louisiana in 1979.  He completed  the certified  financial  planning  program
offered by the College for Financial Planning in Denver, Colorado in 1987. Since
1967, Mr. Lasavio has had a private law practice in Baton Rouge, Louisiana.  Mr.
Losavio has been a co-author  and  lecturer  for  various  continuing  education
programs sponsored by the Society of Louisiana  Certified Public Accountants and
National Business Institute. He was a speaker at the 1990 Louisiana Advanced Tax
Workshop.  From 1990 to  present,  he has been a member  of the Ad Hoc  Advisory
Committee to the  Commissioner  of Securities  for the State of Louisiana.  From
1980 to present, he has been as assistant bar examiner. In 1980, he was Chairman
of the Tax Committee for the Society of Louisiana Certified Public Accountants.

            MAYBELL  H.  EVANS  has  been a  member  of the  Company's  Board of
Directors  since  August  1968.  Ms.  Evans  has also  served  as the  Company's
Secretary since its inception. Ms. Evans was born in Holliday, Texas in 1939 and
graduated  from Sweeny  High  School,  Sweeny,  Texas,  in 1957.  She joined the
Company  full  time in 1968,  managing  accounts  receivable,  collections,  and
corporate affairs.

            DARLENE  E.  JONES  has  been a  member  of the  Company's  Board of
Directors  since  December  1992.  Ms. Jones is also Treasurer and serves as the
Administrative Manager for the Company. She has held these positions since 1993.
Ms. Jones was born in San Antonio,  Texas,  in 1958, and graduated from Bay City
High School in 1976.  She then attended and graduated in 1980 from  Southwestern
University where she received a Bachelor of Science degree in Biology/Chemistry.
Subsequently,  Ms.  Jones  completed  course  work  involving  computer  systems
technology. She joined the Company in 1980.

            CHARLES WAY has been a member of the  Company's  Board of  Directors
since March 1982.  Mr. Way also serves as the Vice  President and  Controller of
the  Company.  He has held  these  positions  since  June  1980  and June  1998,
respectively. Mr. Way previously served as the Company's Chief Financial Officer
from June 1980 until June 1998.  Mr. Way joined the Company in June of 1979.  He
was born in  Houston,  Texas,  in 1942 and  graduated  from Jessie H. Jones High
School in 1961.  He  received  a B.B.A.  


                                      -4-
<PAGE>

degree in  Accounting  from Texas A&M  University  in 1966. He was employed with
Texaco,  Inc. From 1966 to 1968 where he served as an  accountant.  From 1968 to
1973, Mr. Way served as an Accounting Division Manager with Tenneco Oil Company.
From  1973 to  1976,  he was  employed  as a  Controller  with  News,  Inc.  And
Subsidiaries.  From 1976 to 1979, Mr. Way owned and operated All-Ways Automotive
Tire Service in Houston, Texas.

            RICHARD  A.  GOEGGEL  has been a member  of the  Company's  Board of
Directors  since December  1998. Mr. Goeggel was born in St. Louis,  Missouri in
1951,  and  earned  his A. B.  degree  in  Economics  and  M.B.A.  in  Finance &
Accounting from Cornell  University in 1974 and 1976  respectively.  Until 1997,
Mr. Goeggel was employed as Vice President and CFO of Truck  Accessories  Group,
Inc. From 1995 to 1996 he served as financial  advisor to the Board of Directors
of Stanley  Stores,  Inc.;  and from 1989 to 1995 he was employed with AppleTree
Markets, Inc. as Vice President,  treasurer and director. Mr. Goeggel joined the
Company in January 1998 as financial advisor and was hired as Vice President and
Chief Financial Officer in June 1998.

            JULIE  H.  EDWARDS  has  been a  member  of the  Company's  Board of
Directors since December 1997. Ms. Edwards was born in Charleston, West Virginia
in 1959 and earned her Bachelor of Science degree in geology and geophysics from
Yale  University  in 1980.  Ms.  Edwards  earned her Masters  degree in Business
Administration/Finance  from Wharton  Graduate  School in 1985.  Ms. Edwards was
employed with Smith  Barney,  Harris Upham & Co. from 1984 to 1991 and served as
Vice President of Corporate Finance with Smith Barney,  Harris Upham & Co., from
1988 to 1991.  Since 1991,  Mrs.  Edwards has been  employed  with  Frontier Oil
Corporation as Senior Vice President of Finance and Chief Financial Officer.

            CARL  W.  SCHAFER  has  been a  member  of the  Company's  Board  of
Directors since December 1992. Mr. Schafer was born in Chicago, Illinois in 1936
and obtained his primary and  secondary  education in Illinois.  He received his
Bachelor of Arts with  distinction  from the University of Rochester in 1958. He
served with the U. S. Bureau of the Budget as a budget examiner  (1961-1964),  a
legislative   analyst   (1964-1966),   deputy  director  of  budget  preparation
(1966-1968),  director of budget preparation (1968-1969), and as staff assistant
to the U. S. House of Representative  Appropriations Committee (1969). He served
with  Princeton  University  as  director of the budget  (1969-1972),  treasurer
(1972-1976),  financial vice president,  treasurer and chief  financial  officer
(1976-1987).  He served as a principal of Rockefeller  and Company,  Inc.,  from
1987 to 1990. He is currently president of the Atlantic  Foundation,  Princeton,
New Jersey.  He served as co-chairman of the New Jersey Governor's Task Force on
improving New Jersey's Economic and Regulatory Climate from 1982 to 1983, and is
currently  a  trustee  or  director  of  Roadway  Express,  Inc.,  Frontier  Oil
Corporation,  Nutraceutix,  Inc.,  Electronic  Clearing  House,  Inc.,  Base Ten
Systems,  Inc.,  the Paine Webber and Guardian  Groups of Mutual  Funds,  Harbor
Branch Institution,  Inc., and the Johnson Atelier School of Sculpture.  He is a
member of the International Advisory Council of William Sword and Company, Inc.

            RICHARD B. DIX joined the Company as  Executive  Vice  President  in
April 1998. Mr. Dix was born in Corpus Christi, Texas in 1968. He graduated from
Baylor  University  with a B.B.A. in 1990 with a focus on  Entrepreneurship  and
International Business.  Prior to joining the Company, Mr. Dix served four years

                                      -5-
<PAGE>

as owner and Chief Executive Officer of Do-Rags,  Inc., a recreational head-wear
manufacturer,  which was sold in 1995. Since 1995, he has been actively involved
as a private consultant to several companies.

            JERRY L.  EVANS,  JR.  has been with the  Company  for over  fifteen
years,  having started with the Company as a Store  Associate in 1983. Mr. Evans
graduated  from Bay City High School in 1983 and attended  both  Wharton  Junior
college  and  Southwest  Texas  State,  where he focused on  Communications  and
Political Science. Mr. Evans served as Vice President of Investor Relations from
1993 to 1998 when he was  appointed  Vice  President of  Corporate  and Investor
Relations  and Human  Resources  in April 1998.  Mr.  Evans is active on several
organization and community committees having served as Chairman of the Matagorda
County Republican Party, City Councilman for Bay City, Chairman of the Home Rule
Charter  Commission and the Board of Directors of the Texas Petroleum  Marketers
and Convenience Store Association.

            There  are  no  family  relationships   between  any  directors  and
executive  officers of the Company except that Jerriel L. Evans, Sr. and Maybell
H. Evans are husband  and wife and Jerry L. Evans,  Jr. and Darlene E. Jones are
their son and daughter, respectively.

MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS

            During the fiscal year ended September 30, 1998 ("Fiscal 1998"), the
Company's  Board  of  Directors  formally  met on  nine  occasions.  Each of the
directors attended (or participated by telephone) more than 75% of such meetings
of the Board of Directors and  committees on which he served during Fiscal 1998.
The Board of Directors has no committees other than the  Compensation  Committee
and the Audit Committee.

            The Company's Compensation Committee, which is comprised of Peter J.
Losavio (Chairman),  Carl W. Schafer and Julie H. Edwards,  reviews and approves
the  compensation  of the  Company's  executive  officers  and  administers  and
interprets the Company's stock option plans. The  Compensation  Committee met or
took action on two occasions during Fiscal 1998.

            The Company's Audit Committee, which is comprised of Carl W. Schafer
(Chairman),  Peter J.  Losavio and Julie H.  Edwards  recommends  the  Company's
independent auditors,  reviews the scope of their engagement,  consults with the
auditors, reviews the results of their examination,  acts as liaison between the
Board of  Directors  and the  auditors  and reviews  various  Company  policies,
including  those  relating  to  accounting  and  internal  controls.  The  Audit
Committee met or took action on three occasions during Fiscal 1998.

COMPENSATION OF DIRECTORS

            During  Fiscal 1998,  each  director,  who is not an employee of the
Company,  received $1,500 for each Board of Directors' meeting attended, or $500
for each committee meeting attended,  which was held on a day other than a Board
of Director's  meeting day. The Company also pays its  non-employee  directors a
monthly  retainer fee of $500.  Employees of the Company  receive no  additional
compensation  for service as a director.  All directors are reimbursed for their
reasonable  out-of-pocket  expenses  incurred in connection with their duties to
the Company.


                                      -6-
<PAGE>
            On December 19, 1997, directors Edwards,  Schafer and Losavio,  were
each  granted  options to purchase  7,500  shares of Common Stock at an exercise
price of $1.625 per share under the ESI Stock Benefit Plan of 1995.

ITEM 11.  EXECUTIVE COMPENSATION

            The following table sets forth, for the fiscal years ended September
30, 1998,  1997, and 1996,  certain summary  information  concerning  annual and
long-term compensation paid by the Company for services in all capacities to the
Company of the Chief Executive  Officer,  and the other most highly  compensated
executive   officers  of  the  Company  at  September   30,  1998  who  received
compensation  of at least  $100,000  during the Fiscal 1998  (collectively,  the
"Named Officers").

                           SUMMARY COMPENSATION TABLE


<TABLE>
<CAPTION>
                                                       Annual Compensation                        Long-Term Compensation Awards
                                      --------------------------------------------------    ----------------------------------------
                                                                          Other Annual      Restricted
              Name and                                                    Compensation        Stock                       All Other
         Principal Position             Year      Salary($)    Bonus($)      ($)(1)          Awards($)    Options(#)    Compensation
         ------------------             ----      ---------    --------   ------------      ----------    ----------    ------------

<S>                                     <C>        <C>             <C>       <C>              <C>          <C>             <C>
Jerriel L. Evans, Sr.
          Chairman of the Board,        1998       125,093        -0-         ---              ---         91,500          (2)(3)
          President and                 1997       125,093        -0-         ---             1,210          ---           (2)(3)
          Chief Executive Officer       1996       122,252      37,934        240              292           ---           (2)(3)

Richard A. Goeggel (4)
           Vice-President and           1998       85,000         -0-         ---              ---         50,000          ---
           Chief Financial Officer      1997         -0-          -0-         ---              ---           ---           ---
                                        1996         -0-          -0-         ---              ---           ---           ---

Richard B. Dix (5)
         Executive Vice-President       1998       75,789         -0-         ---              ---         35,000          ---
                                        1997         -0-          -0-         ---              ---           ---           ---
                                        1996         -0-          -0-         ---              ---           ---           ---

</TABLE>

(1)   Although  the  officers  receive  certain  perquisites,  the value of such
      perquisites did not exceed for any officer the lesser of $50,000 or 10% of
      the officer's salary and bonus.

(2)   In addition to the  compensation  for Mr. Evans set forth  above,  he also
      receives  lease  income for the rental of various  properties  used by the
      Company.

(3)   The Company owns two split dollar life insurance  policies whereby it pays
      the premiums and Mr. Evans' estate will receive the death benefit less the
      accumulated cash value, which would return to the Company. Yearly premiums
      for Mr.  Evans' life  insurance  policy  were $2,580 for 1998,  $2,580 for
      1997, and $2,580 for 1996.

(4)   Mr.  Goeggel's  employment  with the  Company  (including  time spent as a
      consultant) began in January 1998.

(5)   Mr. Dix's employment with the Company began in April 1998.


                                      -7-
<PAGE>
OPTION/SAR GRANTS IN LAST FISCAL YEAR

            The  following  table  sets  forth  certain  information  concerning
Options/SARs granted during Fiscal 1998 to the Named Officers:

<TABLE>
<CAPTION>
                                                                          Potential Realizable Value of Assumed
                                                                               Annual Rates of Stock Price
                                                                            Appreciation for Option Term(2)

                           Shares       % of Total
                         Underlying     Granted to
                        Options/SARs    Employees     Exercise or Base  Expiration
          Name           Granted(#)   In Fiscal 1998    ($/Share)(1)       Date          5%($)        10%($)
          ----           ----------   --------------    ------------       ----          -----        ------

<S>                       <C>             <C>             <C>           <C>            <C>           <C>    
Jerriel L. Evans, Sr.     91,500          22.6%           1.4425        12/19/07       214,996       342,244
Richard B. Dix            35,000           8.6%            1.250        04/16/03        55,839        70,459
Richard A. Goeggel        50,000          12.3%            3.500        04/16/03       223,349       281,839

</TABLE>

(1)         The  exercise  price of the  options  granted is equal to the market
            value of the Company's Common Stock on the date of grant.

(2)         Potential  realizable  value of each grant  assumes  that the market
            prices of the underlying security appreciates at annualized rates of
            5% and 10% over the term of the  award.  Actual  gains,  if any,  on
            stock option  exercises are dependent on the future  performance  of
            common stock.  There can be no assurance that the amounts  reflected
            on this table will be achieved.

OPTION EXERCISES AND FISCAL YEAR-END OPTION VALUES

            The following  table sets forth all stock  options  exercised by the
Named  Officers  during  Fiscal  1998 and the  number  and value of  unexercised
options held by such executive officers at Fiscal Year-End.


<TABLE>
<CAPTION>
                                                                        Number of Securities                    Value of Unexercised
                                                                       Underlying Unexercised                       In-the-money
                                                                             Options at                              Options at
                                                                          Fiscal Year-End                      Fiscal Year-End($)(2)
                                                              --------------------------------------    ----------------------------

            NAME                   Shares         Value          EXERCISABLE        UNEXERCISABLE       EXERCISABLE    UNEXERCISABLE
                                 Acquired on    Realized
                                 EXERCISE(#)     ($)(1)

<S>                                   <C>           <C>               <C>               <C>                   <C>         <C>
Jerriel L. Evans, Sr.                -0-           -0-               -0-                91,500               -0-          $394,136
Richard B. Dix                       -0-           -0-               -0-                35,000               -0-          $157,500
Richard  A. Goeggel                  -0-           -0-               -0-                50,000               -0-          $112,500

</TABLE>


(1)         Value  realized is calculated  based on the  difference  between the
            option  exercise price and the closing market price of the Company's
            Common  Stock on the date of  exercise  multiplied  by the number of
            shares to which the exercise relates.

(2)         Value of unexercised in-the-money options is calculated based on the
            difference  between the option  exercise price and the closing price
            of the Company's Common Stock at fiscal year-end,  multiplied by the
            number of shares  underlying  the options.  The closing price of the
            Company's  Common  Stock as reported on the NASDAQ  Stock  Market on
            September 30, 1998 was $5.75.

EMPLOYMENT AGREEMENTS

            Jerriel L. Evans,  Sr. and the Company  entered  into an  employment
agreement,  dated April 6, 1998,  for Mr. Evans to serve as President  and Chief
Executive  Officer of the Company  through  September  30, 2001.  The  agreement
provides  for an annual  base  salary of  $120,000  during the first year of its
term,  $140,000  during the second year of its term,  $150,000  during the third
year of its term and for annual  increases in each of the remaining  years to be
determined by the Board of Directors. The agreement also


                                      -8-

<PAGE>

provides  for  an  annual  bonus  in an  amount  equal  to 7  1/2%  of  the  net
consolidated  after-tax  profits of the Company.  The  agreement  provides  that
certain  options  granted to Mr. Evans will vest upon a change of control of the
Company.  During the term of his employment with the Company,  Mr. Evans is also
entitled to (i) participation in all other benefit plans provided by the Company
to its  executives,  (ii) four weeks  paid  vacation  per year,  (iii) term life
insurance  policies in the aggregate face amount of $2,000,000,  and (iv) a $500
per month non-accountable car allowance.  The agreement also restricts Mr. Evans
from  competing  with the Company or soliciting  customers or other business for
any entity  other than the  Company  during the term of the  agreement  and from
disclosing certain confidential information with respect to the Company.

            Richard B. Dix and the Company entered into an employment agreement,
dated June 22,  1998,  for Mr. Dix to serve as Executive  Vice-President  of the
Company through April 15, 2000. The agreement provides for an annual base salary
of $108,000  during the first year of its term and for annual  increases in each
of the remaining years to be determined by the Board of Directors. The agreement
provides  that  certain  options  granted  to Mr. Dix will vest upon a change of
control of the Company.  During the term of his employment with the Company, Mr.
Dix is also entitled to (i) participation in all other benefit plans provided by
the Company to its executives, and (ii) two weeks paid vacation per year. Upon a
change of control of the Company that results in Mr. Dix's  removal as Executive
Vice-President a significant change in the conditions of his employment or other
breach of the  agreement,  Mr. Dix has the right to elect to deem his employment
to have been  terminated  by the Company and receive a lump sum payment equal to
the remaining term of the agreement (which amount shall be reduced such that all
payments  will be  deductible  to the  Company and not subject to the excise tax
imposed by the United States Internal Revenue Code of 1986, as amended).  Except
as  expressly  permitted  in the  agreement,  Mr.  Dix is also  restricted  from
competing  with the Company or  soliciting  customers or other  business for any
entity  other  than  the  Company  during  the  term of the  agreement  and from
disclosing certain confidential information with respect to the Company.

            Richard  A.  Goeggel  and the  Company  entered  into an  employment
agreement,  dated June 22, 1998,  for Mr. Goeggel to serve as Vice President and
Chief  Financial  Officer of the Company  through June 15, 2000.  The  agreement
provides for an annual base salary of $120,000 during the first year of its term
and for annual  increases in each of the remaining years to be determined by the
Board of Directors.  The agreement  provides that certain options granted to Mr.
Goeggel  will vest upon a change of control of the  Company.  During the term of
his  employment  with  the  Company,   Mr.  Goeggel  is  also  entitled  to  (i)
participation  in  all  other  benefit  plans  provided  by the  Company  to its
executives,  and (ii) two weeks paid vacation per year. Upon a change of control
of the Company that results in Mr. Goeggel's  removal as Vice-President or Chief
Financial  Officer,  a significant change in the conditions of his employment or
other breach of the  agreement,  Mr.  Goeggel has the right to elect to deem his
employment to have been terminated by the Company and receive a lump sum payment
equal to the remaining term of the agreement (which amount shall be reduced such
that all  payments  will be  deductible  to the  Company  and not subject to the
excise tax  imposed by the  United  States  Internal  Revenue  Code of 1986,  as
amended).  Except as expressly  permitted in the agreement,  Mr. Goeggel is also
restricted  from  competing  with the Company or  soliciting  customers or other
business for any entity other than the Company  during the term of the agreement
and  from  disclosing  certain  confidential  information  with  respect  to the
Company.

                                      -9-

<PAGE>

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

            The following table sets forth information  concerning  ownership of
the Company's  Common Stock,  as of December 31, 1998, by (i) each person who is
known by the Company to be the beneficial owner of more than five percent of the
Common  Stock,  (ii)  each of the  Company's  directors,  (iii)  each  executive
officer, and (iv) all current directors and executive officers of the Company as
a group.

<TABLE>
<CAPTION>

                                                                        Amount and
                                                                         Nature of
                                                                         Beneficial           Percent of
          Name and Address(1)                                           Ownership(2)           Class(3)
          -------------------                                           ------------           --------

<S>                                                                     <C>                      <C>  
J. L. Evans Systems, Ltd., a Texas Limited Partnership                  1,351,200(4)             33.6%
J. L. Evans, Sr.                                                        1,500,162(5)             37.3%
Maybell H. Evans                                                        1,429,715(6)             35.6%
Charles N. Way                                                             39,650(7)               *
Richard B. Dix                                                              1,000                  *
Richard A. Goeggel                                                              0                  0
Darlene E. Jones                                                           65,750(8)              1.6%
J. L. Evans, Jr.                                                           45,869(9)              1.1%
Carl W. Schafer                                                            27,875(10)              *
          c/o The Atlantic Foundation
          66 Witherspoon Road
          Princeton, NJ 08542
Peter J. Losavio, Jr.                                                      20,000(10)              *
          8414 Bluebonnet Blvd., Suite 110
          Baton Rouge, LA 70810
Julie H. Edwards                                                            7,500(11)
           c/o Frontier Oil Corporation
           10000 Memorial Drive, Suite 600
           Houston, TX 77024
All executive officers and directors as a group (10 persons)            1,786,321                44.4%
</TABLE>

*        less than 1%

(1)      Unless otherwise indicated, the address of each beneficial owner is c/o
         the Company, Post Office Box 2480, Bay City, Texas 77404-2480.
(2)      Beneficial  ownership has been determined in accordance with Rule 13d-3
         under the Exchange Act ("Rule 13d-3") and unless  otherwise  indicated,
         represents  shares of which the  beneficial  owner has sole  voting and
         investment power.

                                      -10-
<PAGE>
(3)      The percentage of class is calculated in accordance with Rule 13d-3 and
         assumes that the  beneficial  owner has  exercised any options or other
         rights to subscribe which are execrable within sixty (60) days and that
         no other options or rights to subscribe  have been  exercised by anyone
         else.
(4)      The general partner is J. L. Evans Management,  Inc.  (controlled by J.
         L.  Evans,  Sr. and  Maybell H.  Evans) and the  limited  partners  are
         Jerriel . Evans, Sr., Maybell H. Evans, and their children,  Darlene E.
         Jones, Jerriel L. Evans, Jr., and Terry W. Evans.
(5)      Includes  1,351,200 shares held by J. L. Evans Systems,  Ltd., of which
         Mr. Evans claims beneficial ownership.  Includes 64,500 shares issuable
         upon the exercise of options.
(6)      Includes  1,351,200 shares held by J. L. Evans Systems,  Ltd., of which
         Ms. Evans claims beneficial ownership.  Includes 12,500 shares issuable
         upon the exercise of options.
(7)      Includes  24,750  shares  issuable  to Mr.  Way  upon the  exercise  of
         warrants and 12,500 upon the exercise of options.
(8)      Includes  20,000  shares  issuable  to Ms.  Jones upon the  exercise of
         warrants and 45,000 upon the exercise of options.
(9)      Includes 45,000 shares issuable to Mr. Evans,  Jr. upon the exercise of
         options.
(10)     Includes 20,000 shares issuable to Messrs. Schafer and Losavio upon the
         exercise of  options.
(11)     Includes  7,500  shares  issuable to Ms.  Edwards  upon the exercise of
         options.

SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

         Section  16(a) of the  Securities  Exchange  Act of 1934,  as  amended,
requires the Company's officers and directors, and persons who own more than ten
percent  of a  registered  class of the  Company's  equity  securities,  to file
reports of ownership and changes in ownership  with the  Securities and Exchange
Commission (the "Commission").  Officers, directors and greater than ten percent
shareholders are required by the Commission's regulations to furnish the Company
with copies of all Section 16(a) forms they file.

         The Company  believes,  based  solely on review of copies of such forms
furnished  to the  Company,  or  written  representations  that no Form 5's were
required, that all Section 16(a) filing requirements applicable to its officers,
directors  and greater than ten percent  beneficial  owners were  complied  with
during Fiscal 1998,  except that each of Messrs.  Dix and Goeggel  inadvertently
filed a Form 3 late.

ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

            During  Fiscal  1998,  the Company  leased three  convenience  store
locations  from the  majority  shareholder  of the Company.  One ten-year  lease
commenced in June 1987, with monthly lease payments of $2,500 and allows for one
five-year  automatic  renewal  at  the  Company's  option.  One  ten-year  lease
commenced in December 1995, with monthly lease payments of $1,800 and allows for
two five-year automatic renewals at the Company's option. The other location was
sold by the majority  shareholder in December 1998. The amounts paid under these
leases were $76,800 for the years ended  September  30, 1998 and $73,000 for the
years ended September 30, 1997 and 1996.  Future minimum lease commitments as of
September 30, 1998 were $51,200.

            During Fiscal 1998, the Company rented,  on a month-to-month  basis,
five convenience store locations from the majority shareholder.  Previously, the
Company  rented  additional  locations  which  were sold by the

                                      -11-

<PAGE>

shareholder to unrelated  parties.  The total  month-to-month  rent paid for the
year ended  September  30, 1998 were  $34,800 and  $104,000  for the years ended
September 30, 1998 and $73,000 for the years ended  September 30, 1997 and 1996.
All five  locations  were sold by the  shareholder  to unrelated  third  parties
subsequent to September 30, 1998.

            See  Note  8  ("Related  Party   Transactions")   of  the  Notes  to
Consolidated  Financial  Statements for disclosure  regarding a note  receivable
from a former  director.  The balance of the note  receivable was  approximately
$111,000 at September 30, 1998. The note was repaid in December 1998.

            From time to time the Company makes advances to individuals  who are
shareholders,  directors,  officers and/or employees.  Such advances are usually
unsecured  and accrue  interest  at 9%.  There were no advances  outstanding  at
September 30, 1998.

                                      -12-
<PAGE>
                                   SIGNATURES

            Pursuant  to  the  requirements  of  Section  13  or  15(d)  of  the
Securities  Exchange Act of 1934,  the Registrant has duly caused this report to
be signed on its behalf by the undersigned, thereunto duly authorized.

Dated: January 28, 1999


                                      EVANS SYSTEMS, INC.

                                      By: /S/ JERRIEL L. EVANS, SR.
                                          --------------------------------------
                                          Name:  Jerriel L. Evans, Sr.
                                          Title: President and Chief
                                                 Executive Officer


            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/ JERRIEL L. EVANS, SR.     (Director and Principal           January 28, 1999
------------------------      Executive Officer)
Jerriel L. Evans, Sr.

/S/ RICHARD A. GOEGGEL        (Principal Financial Officer      January 28, 1999
------------------------      and Principal Accounting
Richard A. Goeggel            Officer)

/S/ MAYBELL H. EVANS          Director                          January 28, 1999
------------------------
Maybell H. Evans

/S/ CHARLES N. WAY            Director                          January 28, 1999
------------------------
Charles N. Way

/S/ DARLENE E. JONES          Director                          January 28, 1999
------------------------
Darlene E. Jones

/S/ CARL W. SCHAFER           Director                          January 28, 1999
------------------------
Carl W. Schafer

/S/ PETER J. LOSAVIO          Director                          January 28, 1999
------------------------
Peter J. Losavio

/S/ JULIE H. EDWARDS          Director                          January 28, 1999
------------------------
Julie H. Edwards