Preheat oven to 350 degrees. Sift flour, sugar, cocoa and baking soda until an ungreased 8x8 inch pan. Make 3 holes in mixture. Pour oil into first hole and vanilla into the third hole.

Beat egg with water in a small bowl; pour over dry ingredients; add nuts. Stir with a fork until evenly blended.

Bake in a 350 degree oven for 35 minutes or until center springs back when lightly touched with fingertip. Cool in pan on wire rack.