<PAGE>


                                November 12, 1998







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

Via Edgar Electronic Filing System

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

Gentlemen:

                Pursuant  to   regulations   of  the   Securities  and  Exchange
Commission,   submitted  herewith for  filing on behalf  of  Avoca, Incorporated
(the "Company")  is the Company's  Report  on  Form  10-QSB for the period ended
September 30, 1998.

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

                                               Sincerely,


                                               /s/ Edward B. Grimball
                                               ---------------------------------
                                               Edward B. Grimball
                                               Executive Vice President &
                                               Chief Financial Officer
                                               (504) 586-7570

EBG/drm
<PAGE>
                     U.S. Securities and Exchange Commission

                             Washington, D.C. 20549

                                   FORM 10-QSB

[X]  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended  September 30, 1998
                                                                          
[ ]  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
--------------------------------------------------------------------------------
(Exact name of small business issuer as specified in its charter)

               Louisiana                               72-0590868              
     -------------------------------               -------------------
     (State or other jurisdiction of                (I.R.S. Employer
     incorporation or organization)                Identification No.)


                  P.O. Box 61260, New Orleans, Louisiana 70161
                 ----------------------------------------------
                    (Address of principal executive offices)

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


                  ---------------------------------------------
                     (Former name, former address and former
                    fiscal year, if changed since last report

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 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       
   -----    -----

State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date: 830,500 shares on October 31, 1998
                                          --------------------------------------

Transitional Small Business Disclosure Format (check one);  Yes      No  X  
                                                               -----   -----
An exhibit index is located on page  10  of this report.
                                   ------


<PAGE>



                               AVOCA, INCORPORATED
                               -------------------

                                    I N D E X
                                    ---------



                                                                        Page No.
                                                                        --------

Part I.           Financial Information (Unaudited)
                  ---------------------

                  Condensed Balance Sheet - September 30, 1998                 4

                  Condensed Statements of Income
                           Three Months Ended September 30, 1998
                           and 1997 and Nine Months Ended
                           September 30, 1998 and 1997                         5

                  Condensed Statements of Cash Flows
                           Nine Months Ended September 30, 1998
                           and 1997                                            6

                  Notes to Condensed Financial Statements                      7

                  Management's Discussion and Analysis or
                  Plan of Operation                                         8-10

Part II.          Other Information
                  -----------------

                  Exhibits and Reports on Form 8-K                         10-11

                  Signature                                                   11




<PAGE>



                               AVOCA, INCORPORATED

                         PART I - FINANCIAL INFORMATION

                           Item 1 Financial Statements


<PAGE>

<TABLE>
<CAPTION>
                               Avoca, Incorporated

                       Condensed Balance Sheet (Unaudited)

                               September 30, 1998



Assets
Current assets:
<S>                                                                                                             <C>        
      Cash                                                                                                      $     6,151
      Short-term investments                                                                                      1,600,742
      Accounts receivable                                                                                            28,543
      Accrued interest receivable                                                                                    37,393
      Prepaid expenses                                                                                               10,061
                                                                                                                -----------
Total current assets                                                                                              1,682,890

Property and equipment, less accumulated depreciation and depletion                                                  70,763

Other assets:
      Long-term investments                                                                                         830,311
      Avoca Drainage Bonds, $415,000, in default -- at nominal amount                                                     1
                                                                                                                -----------
                                                                                                                $ 2,583,965
                                                                                                                ===========


Liabilities and shareholders' equity
Current liabilities:
      Accounts payable and accrued expenses                                                                           4,596
      Income taxes payable                                                                                           37,035
                                                                                                                -----------
Total current liabilities                                                                                            41,631

Deferred income taxes                                                                                                13,015

Shareholders' equity:
      Common stock, no par value -- authorized, issued and outstanding
           830,500 shares                                                                                            94,483
      Retained earnings                                                                                           2,434,836
                                                                                                                -----------
Total shareholders' equity                                                                                        2,529,319
                                                                                                                -----------
                                                                                                                $ 2,583,965
                                                                                                                ===========


See accompanying notes
</TABLE>


<PAGE>
<TABLE>
<CAPTION>



                               Avoca, Incorporated

                   Condensed Statements of Income (Unaudited)



                                                                  Three months ended                        Nine months ended
                                                                     September 30                              September 30
                                                               1998                 1997                 1998                 1997
                                                           --------             --------            ---------            ---------
Revenue:
<S>                                                        <C>                  <C>                 <C>                  <C>      
    Royalties                                              $ 40,164             $ 38,400            $ 112,247            $ 169,053
    Less severance taxes                                      1,949                1,953                5,218                4,320
                                                           --------             --------            ---------            ---------
                                                             38,215               36,447              107,029              164,733

    Lease bonuses and delay rentals                          46,200               46,200              269,118               46,200
    Seismic permits                                              -                    -                    -               211,241
    Interest income                                          34,567               33,529               99,070               91,540
    Rental and other income                                   6,916                3,484               27,916               24,484
                                                           --------             --------            ---------            ---------
                                                            125,898              119,660              503,133              538,198


Expenses:
    Legal and accounting services                             4,006                3,779               19,430               15,803
    Consultant fees                                          11,929                9,000               43,676               37,000
    Geological and engineering fees                           3,630                  641               12,291                4,516
    Insurance                                                 5,852                5,511               17,088               17,003
    Miscellaneous expenses                                    5,815                5,258               65,408               35,831
                                                           --------             --------            ---------            ---------
                                                             31,232               24,189              157,893              110,153
                                                           --------             --------            ---------            ---------

Income before income taxes                                   94,666               95,471              345,240              428,045

Income taxes                                                 35,724               66,811              115,900              140,699
                                                           --------             --------            ---------            ---------
Net income                                                 $ 58,942             $ 28,660            $ 229,340            $ 287,346
                                                           ========             ========            =========            =========




Net income per share                                       $    .07             $    .04            $     .28            $     .35
                                                           ========             ========            =========            =========





See accompanying notes.
</TABLE>



<PAGE>
<TABLE>
<CAPTION>



                               Avoca, Incorporated

                 Condensed Statements of Cash Flows (Unaudited)




                                                                                                 Nine months ended
                                                                                                    September 30
                                                                                               1998                  1997
                                                                                        ----------------------------------

Operating activities
<S>                                                                                     <C>                   <C>        
Net income                                                                              $   229,340           $   287,346
Adjustments to reconcile net income to net cash
  provided by (used in) operating activities:
      Depreciation expense                                                                    2,052                 2,051
      Deferred taxes                                                                     (      380)           (      380)
      Changes in operating assets and liabilities:
        Operating assets                                                                 (    1,557)           (   11,396)
        Operating liabilities                                                                23,598            (    3,576)
                                                                                        ------------           -----------
Net cash provided by operating activities                                                   253,053               274,045

Investing activities
Maturity of investments                                                                   1,616,624             1,493,776
Purchase of investments                                                                  (1,741,021)           (1,417,019)
                                                                                       -------------           -----------
Net cash provided by (used in) investing activities                                      (  124,397)               76,757

Financing activities
Dividends paid                                                                           (  622,875)           (  373,725)
                                                                                       -------------           -----------
Net cash used in financing activities                                                    (  622,875)           (  373,725)
                                                                                       -------------           -----------

Decrease in cash and cash equivalents                                                    (  494,219)           (   22,923)
Cash and cash equivalents at beginning of period                                            500,370                65,127
                                                                                       -------------           -----------
Cash and cash equivalents at end of period                                              $     6,151           $    42,204
                                                                                       =============          ============








See accompanying notes.
</TABLE>



<PAGE>


                               Avoca, Incorporated

               Notes to Condensed Financial Statements (Unaudited)

                      Nine months ended September 30, 1998





1. Basis of Accounting

The accompanying  unaudited condensed financial statements have been prepared in
accordance with generally accepted  accounting  principles for interim financial
information  and  with the  instructions  of Form  10-QSB  and  Item  310(b)  of
Regulation  S-B.  Accordingly,  they do not include all of the  information  and
footnotes  required by generally  accepted  accounting  principles  for complete
financial statements. In the opinion of management,  all adjustments (consisting
of normal recurring accruals)  considered necessary for a fair presentation have
been included.  Operating  results for the nine-month period ended September 30,
1998 are not necessarily  indicative of the results that may be expected for the
year ended  December 31, 1998. For further  information,  refer to the financial
statements and footnotes thereto included in the Company's annual  shareholders'
report incorporated by reference in the Form 10- KSB for the year ended December
31, 1997.

The  Company  considers  its United  States  Government  securities  held with a
maturity of three months or less when purchased to be cash equivalents.

2. Earnings Per Share

The Company  adopted  FAS No.  128,  Earnings  Per Share,  in the quarter  ended
December 31, 1997. The adoption has no impact on previously  reported  quarterly
earnings per share amounts. Due to the Company's simple capital structure, basic
and diluted earnings per share are the same.









<PAGE>
Item 2 -          Management's Discussion and
                  Analysis or Plan of Operation

         The  unaudited  statements of income show that net income for the third
quarter of 1998,  as compared  with the third  quarter of 1997,  increased  from
$28,660 to $58,942.
         As  compared  with the third  quarter  of 1997,  royalty  income net of
severance taxes for the third quarter of 1998 increased  $1,768 or approximately
5%  because  of  higher  gas  production  from the  Avoca  No. 1 well,  which is
responsible for most of the Company's royalty income. Although the average sales
price of gas decreased  from $2.37 per Mcf for the three months ended  September
30, 1997 to $2.25 per Mcf for the three months  ended  September  30, 1998,  gas
production  from  the  Avoca  No.  1 well  for the  third  quarter  of 1998  was
approximately 17% higher than the comparable period of 1997.
         Lease  bonuses and delay  rentals for the third  quarter of 1998 remain
unchanged from the comparable period of 1997.
         Interest  income  on  U.S.   Government  and  U.S.   Government  agency
securities  increased  slightly because of higher interest rates and an increase
in funds available for investment.
         Rental and other income doubled  because a long standing annual surface
lease was renewed early.
         As compared with the third quarter of 1997,  expenses  increased $7,043
or approximately  29%. The $2,929 increase in consultant fees is attributable to
the hiring of a new part-time  land manager.  Geological  and  engineering  fees
increased $2,989 because of increased  mineral activity during the third quarter
of 1998.
         The change in income tax expense for the three months  ended  September
30, 1998 resulted from a slight decrease in taxable income for the third quarter
of 1998 compared to the same period


<PAGE>



of 1997.  In  addition,  the  income  tax  expense  for the three  months  ended
September 30, 1997 reflected a revision in the Company's estimated effective tax
rate for the year ended September 30, 1997.
         Total  revenue  for the nine month  period  ended  September  30,  1998
declined $35,065 or  approximately  7%. Revenues from royalties net of severance
taxes during the first nine months of 1998  decreased  $57,704 or  approximately
35%,  primarily  because of the absence of royalty income from the  Intercoastal
Shipyard  No.  2  well.  The  well,  which  ceased  production  in  April  1997,
contributed $54,327 of royalty income during the first nine months of 1997.
         The above mentioned decrease in net income would have been greater were
it not for the improved  performance of the Delta Operating  Company Avoca No. 1
well.  Although the average sales price of gas decreased  from $2.79 per Mcf for
the nine months  ended  September  30, 1997 to $2.37 per Mcf for the nine months
ended  September  30,  1998,  gas  production  from  the  Avoca  No.  1 well was
approximately 30% higher than the comparable period of 1997.
         Revenue from lease  bonuses and delay rentals for the first nine months
of 1998 increased  $222,918 or approximately  483% as compared to the first nine
months of 1997.  The increase  results from two new oil and gas leases  totaling
1,114.59  acres  executed  in the second  quarter  of 1998 with  Texas  Meridian
Resources Exploration,  Inc. No drilling operations were conducted on the island
during the first nine months of 1998.
         Interest  income  on  U.S.   Government  and  U.S.   Government  Agency
securities for the nine month period ended  September 30, 1998 increased  $7,530
or  approximately  8% due to  higher  interest  rates and an  increase  in funds
available for investment.
         Rental and other  income for the first  nine  months of 1998  increased
$3,432 or approximately  14% over the comparable period of 1997 due to the early
renewal of a surface lease.


<PAGE>



         Expenses for the nine month period ended  September 30, 1998  increased
$47,740 or 43% as compared to the first nine months of 1997. The majority of the
$29,577 increase in miscellaneous expense is attributable to the cost of special
remedial surface  maintenance on the northern part of Avoca island. The increase
in legal and accounting services,  principally legal, and the $7,775 increase in
geological and  engineering  fees results  primarily from the increased need for
these  services  due to  increased  mineral  activity.  The $6,676  increase  in
consultant  fees results from the hiring of a new part-time land manager and, to
a lesser extent,  from the larger bonus paid to the Company's general manager in
recognition of commendable results achieved in 1997.
         The  change in income  tax  expense  for the nine  month  period  ended
September  30,  1998  resulted  from a decrease  in taxable  income for the nine
months ended September 30, 1998 as compared to the same period of 1997.
         The  Company's  continued  liquidity  is  evidenced  by the  fact  that
approximately  94% of its assets,  as measured by book value,  are cash and U.S.
Government and U.S. Government agency securities.
         In  addition  to  interest  income,  the  Company  customarily  derives
essentially  all of its other  income from the  granting of oil, gas and mineral
leases, the collection of bonuses,  delay rentals and royalties thereunder,  and
the leasing of hunting rights. The Company's business is passive and all capital
requirements  for  exploration,  development  and  production  of the  Company's
mineral resources are funded by its lessees.

                           Part II - OTHER INFORMATION

Item 6 - Exhibits and Reports on Form 8-K
         (a)      Exhibits required by Item 601 of Regulation S-B:
         Exhibit 27 - Financial Data Schedule.


<PAGE>


         (b)      Reports on Form 8-K
         Reports on Form 8-K: No reports  have been filed during the quarter for
which this report is filed.

                                   SIGNATURES
                                   ----------

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


                                       AVOCA, INCORPORATED
                                            Registrant


November 3, 1998                       /s/ Edward B. Grimball
------------------------------        -----------------------------------------
                                       Edward B. Grimball
                                       President and Principal Financial Officer