<PAGE>


                                 August 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
June 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     June 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 July 31, 1998
                                          --------------------------------------

Transitional Small Business Disclosure Former (check one);  Yes        No  X
                                                               -----     -----

An exhibit index is located at page  12  of this report.
                                   ------


<PAGE>



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

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



                                                                        Page No.
                                                                        --------

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

                  Condensed Balance Sheet - June 30, 1998                      4

                  Condensed Statements of Income
                           Three Months Ended June 30, 1998 and
                           1997 and Six Months Ended June 30, 1998
                           and 1997                                            5

                  Condensed Statements of Cash Flows
                           Six Months Ended June 30, 1998
                           and 1997                                            6

                  Notes to Condensed Financial Statements                      7

                  Management's Discussion and Analysis or
                  Plan of Operation                                         8-11

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

                  Exhibits and Reports on Form 8-K                            11

                  Signature                                                   11



<PAGE>



                               AVOCA, INCORPORATED

                         PART I - FINANCIAL INFORMATION

                           Item 1 Financial Statements

<PAGE>
<TABLE>
<CAPTION>
                               Avoca, Incorporated

                       Condensed Balance Sheet (Unaudited)

                                  June 30, 1998


Assets
Current assets:
<S>                                                                                                             <C>        
      Cash and cash equivalents                                                                                 $   225,003
      Short-term investments                                                                                      1,388,424
      Accounts receivable                                                                                            30,301
      Accrued interest receivable                                                                                    28,283
      Prepaid expenses                                                                                               15,173
                                                                                                                -----------
Total current assets                                                                                              1,687,184

Property and equipment, less accumulated depreciation and depletion                                                  71,447

Other assets:
      Long-term investments                                                                                         802,313
      Avoca Drainage Bonds, $415,000, in default -- at nominal amount                                                     1
                                                                                                                -----------
                                                                                                                $ 2,560,945
                                                                                                                ===========


Liabilities and shareholders' equity Current liabilities:
      Accounts payable and accrued expenses                                                                     $     3,242
      Income taxes payable                                                                                           74,184
                                                                                                                -----------
Total current liabilities                                                                                            77,426

Deferred income taxes                                                                                                13,142

Shareholders' equity:
      Common stock, no par value -- authorized, issued and outstanding
           830,500 shares                                                                                            94,483
      Retained earnings                                                                                           2,375,894
                                                                                                                -----------
Total shareholders' equity                                                                                        2,470,377
                                                                                                                -----------
                                                                                                                $ 2,560,945
                                                                                                                ===========



See accompanying notes
</TABLE>


<PAGE>
<TABLE>
<CAPTION>



                               Avoca, Incorporated

                   Condensed Statements of Income (Unaudited)




                                                                Three months ended                           Six months ended
                                                                     June 30                                      June 30
                                                               1998                 1997                 1998                1997
                                                            -------              -------              -------             -------
Revenue:
<S>                                                        <C>                  <C>                  <C>                 <C>      
    Royalties                                              $ 39,495             $ 18,935             $ 72,083            $ 130,653
    Less severance taxes                                      1,967                  416                3,269                2,367
                                                            -------              -------              -------             --------
                                                             37,528               18,519               68,814              128,286
    Lease bonuses and delay rentals                         222,918                   -               222,918                   -
    Seismic permits                                              -               211,241                   -               211,241
    Interest income                                          31,845               29,287               64,503               58,011
    Rental and other income                                  21,000               21,000               21,000               21,000
                                                            -------              -------             --------              -------
                                                            313,291              280,047              377,235              418,538


Expenses:
    Legal and accounting services                             4,583                8,613               15,424               12,024
    Consultant fees                                          10,747                9,000               31,747               28,000
    Geological and engineering fees                           4,241                1,289                8,661                3,875
    Insurance                                                 5,600                5,720               11,236               11,492
    Miscellaneous expenses                                   11,103                7,790               59,593               30,573
                                                            -------               ------             --------              -------
                                                             36,274               32,412              126,661               85,964
                                                            -------              -------             --------              -------

Income before income taxes                                  277,017              247,635              250,574              332,574

Income taxes                                                 80,176               51,061               80,176               73,888
                                                            -------              -------              -------              -------
Net income                                                $ 196,841            $ 196,574            $ 170,398            $ 258,686
                                                            =======              =======              =======              =======



Net income per share                                       $    .24             $    .24             $    .21             $    .31
                                                             ======               ======               ======               ======


See accompanying notes.
</TABLE>


<PAGE>
<TABLE>
<CAPTION>



                               Avoca, Incorporated

                 Condensed Statements of Cash Flows (Unaudited)




                                                                                                 Six months ended
                                                                                                     June 30
                                                                                                1998                  1997
                                                                                         ----------------------------------
Operating activities
<S>                                                                                      <C>                   <C>        
Net income                                                                               $   170,398           $   258,686
Adjustments to reconcile net income to net cash
  provided by operating activities:
      Depreciation expense                                                                     1,368                 1,368
      Deferred taxes                                                                      (      253)           (      253)
      Changes in operating assets and liabilities:
        Operating assets                                                                         683                 4,004
        Operating liabilities                                                                 59,393            (    3,918)
                                                                                         -----------           -----------
Net cash provided by operating activities                                                    231,589               259,887

Investing activities
Maturities of investments                                                                  1,276,682             1,236,947
Purchases of investments                                                                  (1,160,763)           (1,151,772)
                                                                                         -----------           -----------
Net cash provided by investing activities                                                    115,919                85,175

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

Decrease in cash and cash equivalents                                                     (  275,367)           (   28,663)
Cash and cash equivalents at beginning of period                                             500,370                65,127
                                                                                         -----------           -----------
Cash and cash equivalents at end of period                                               $   225,003           $    36,464
                                                                                         ===========           ===========


See accompanying notes.
</TABLE>


<PAGE>


                               Avoca, Incorporated

               Notes to Condensed Financial Statements (Unaudited)

                         Six months ended June 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 six-month  period ended June 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 second  quarter of 1998 was  $196,841,  virtually the same as net income for
the comparable period of 1997.
                  As compared with the second  quarter of 1997,  royalty  income
net of  severance  taxes for the  second  quarter of 1998  increased  $19,009 or
approximately 103% primarily because the Avoca No. 1 well, which was responsible
for most of the  company's  royalty  income,  was shut in from March 11, 1997 to
April 29, 1997 for repairs to the purchaser's  gas pipeline.  The increase would
have been greater than 103% but for income received during the second quarter of
1997 from the now defunct Intercoastal  Shipyard No. 2 well. Production from the
Avoca No. 1 well,  which increased 172% in comparison with the second quarter of
1997,  has been  improved by a perforation  acid wash  treatment in early April,
1998.  Second  quarter  results were also improved by a rise in the price of gas
from $2.13 per Mcf for the three months ended June 30, 1997 to $2.44 per Mcf for
the three months ended June 30, 1998.
                  No income was received from 3-D seismic  permits in the second
quarter of 1998 as compared with  $211,241  received from this source during the
comparable  period of 1997. In the second quarter of 1997, the Company  extended
the term of a 3-D seismic  permit  granted in 1996 to Texas  Meridian  Resources
Exploration,  Inc. covering 7,535 acres on the southern part of the island.  The
permit  included  an option to lease all or part of the  permitted  acreage  for
mineral  development.  Texas  Meridian  exercised  the option  during the second
quarter of 1998 and the Company  received  $222,918 in lease  bonuses on two new
oil, gas & mineral leases totaling  1,114.59 acres. No income from lease bonuses
was received in the second quarter of 1997.


<PAGE>



                  Interest income on U.S.  Government and U.S. Government agency
securities  increased  $2,558  or 9%  because  of higher  interest  rates and an
increase in funds available for investment.
                  As  compared  with  the  second  quarter  of  1997,   expenses
increased  $3,862 or  approximately  12%.  Increases in  miscellaneous  expenses
(including  $5,609 for special remedial surface  maintenance),  consultant fees,
and  geological  &  engineering  fees  were  partially  offset by  decreases  in
insurance and in legal and  accounting  services  which  reflects a reduction in
attorney's fees.
                  The change in income tax  expense for the three  months  ended
June 30, 1998 resulted from an increase in taxable income for the second quarter
of 1998 as compared to the second quarter of 1997.
                  Total  revenues  for the six month  period ended June 30, 1998
decreased $41,303 or approximately 10%. Revenues from royalties net of severance
taxes  during the first six months of 1998  decreased  $59,472 or  approximately
46%,  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 six 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 $3.00
per Mcf for the six  months  ended  June 30,  1997 to $2.43  per Mcf for the six
months  ended  June 30,  1998,  gas  production  from the  Avoca  No. 1 well was
approximately  39% higher for the first six months of 1998 as compared  with the
comparable period of 1997.


<PAGE>



                  No  income  was  received  from the  granting  of 3-D  seismic
permits for the first six months of 1998 as compared with $211,241  received for
the first six months of 1997.
                  Revenue from lease bonuses and delay rentals for the first six
months of 1998 was  $222,918.  No income was  received  from this source for the
comparable period of 1997. As explained above, the Company entered into two oil,
gas & mineral leases with Texas Meridian Resources  Exploration,  Inc. in May of
1998.
                  Interest income on U.S.  Government and U.S. Government Agency
securities for the six month period ended June 30, 1998 increased  $6,492 or 11%
because  of  higher  interest  rates  and an  increase  in funds  available  for
investment.
                  Expenses  for  the  six  month  period  ended  June  30,  1998
increased  $40,697 or 47% as compared  to the first six months of 1997.  Most of
the $29,020  increase in  miscellaneous  expense is  attributable to the cost of
special  remedial  surface  maintenance on the northern part of the island.  The
$3,400  increase in legal and  accounting  services  and the $4,786  increase in
geological  and  engineering  fees  results  primarily  from  increased  mineral
activity.  The $3,747  increase in  consulting  fees results from a larger bonus
paid to the company's  general  manager in recognition  of  commendable  results
achieved in 1997, as well as the hiring of a new part-time land manager.
                  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


<PAGE>



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.

                  (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


August 6, 1998                         /s/ Edward B. Grimall
----------------------------------     -----------------------------------------
                                       Edward B. Grimball
                                       President and Principal Financial Officer




<PAGE>


                                  EXHIBIT INDEX


                                                           Sequentially
 Exhibit                                                     Numbered
 Number           Description                                  Page

   27             Financial Data Schedule