U.S. SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-QSB

                Quarterly Report under Section 12(b) or 12(g) of
                           The Securities Act of 1934

                     For the Period ended September 30, 2007

                        Commission File Number 333-144493


                            STERLING EXPLORATION INC.
                 (Name of small business issuer in its charter)

        Nevada                                                      N/A
(State of incorporation)                                    (Employer ID Number)

                          388 Drake Street, Suite 2703
                          Vancouver, BC, Canada V6B 6A8
                                 (604)-899-1495
          (Address and telephone number of principal executive offices)

Check whether the registrant (1) has filed all reports required to be filed by
Section 13 or 15 (d) of the Securities Exchange Act of 1934 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 [ ] No [X]

Check whether the registrant is a shell company (as defined in Rule 12b-2 of the
Exchange Act). Yes [X] No [ ]

There were 8,055,000 shares of Common Stock outstanding as of September 30,
2007.
<PAGE>
STERLING EXPLORATION INC.
Balance Sheets
(An Exploration Stage Company)
(Expressed in US Dollars)
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>

                                                                       September 30,        June 30,
                                                                           2007               2007
                                                                         --------           --------
                                                                        (Unaudited)         (Audited)
<S>                                                                      <C>                <C>
                                     ASSETS
CURRENT ASSETS
  Cash                                                                   $ 12,025           $  8,391
                                                                         --------           --------

TOTAL ASSTS                                                              $ 12,025           $  8,391
                                                                         ========           ========

                           LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES
  Accounts payable and accrued liabilities                               $     --           $     --
  Loans from related party                                                 15,000              5,000
                                                                         --------           --------

TOTAL CURRENT LIABILITIES                                                  15,000              5,000
                                                                         --------           --------
STOCKHOLDERS' EQUITY
  Capital stock
    Authorized 75,000,000 ordinary voting shares at $0.001 per share
    Issued and outstanding:
    8,055,000 common shares at par  value                                   8,055              8,055
  Additional paid in capital                                               18,945             18,945
                                                                         --------           --------
                                                                           27,000             27,000
  Deficit accumulated during the exploration stage                        (29,975)           (23,609)
                                                                         --------           --------

TOTAL STOCKHOLDERS' EQUITY                                                 (2,975)             3,391
                                                                         --------           --------

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                               $ 12,025           $  8,391
                                                                         ========           ========
</TABLE>


                                       2
<PAGE>
STERLING EXPLORATION INC.
Statements of Income
(An Exploration Stage Company)
(Expressed in US Dollars)
(Unaudited)
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                                                          Accumulated From
                                                  Three Months         Three Months       Inception Date of
                                                     Ended                Ended          August 18, 2003 to
                                                  September 30,        September 30,         September 30,
                                                      2007                 2006                 2007
                                                   ----------           ----------           ----------
<S>                                                <C>                  <C>                  <C>
GENERAL AND ADMINISTRATIVE EXPENSES
  Bank charges and interest                        $       59           $       19           $      450
  Filing and transfer agent fees                        2,253                   --                2,253
  Professional fees                                     4,000                  795               12,176
  Mineral properties                                       --                   --               14,500
  Office expenses                                          54                   --                  596
                                                   ----------           ----------           ----------

Total general and administrative expenses               6,366                  814               29,975
                                                   ----------           ----------           ----------

Net loss                                           $   (6,366)          $     (814)          $  (29,975)
                                                   ==========           ==========           ==========

EARNINGS PER SHARE - BASIC AND DILUTED             $    (0.00)          $    (0.00)
                                                   ==========           ==========

WEIGHTED AVERAGE OUTSTANDING SHARES                 8,055,000            8,055,000
                                                   ==========           ==========
</TABLE>


                                       3
<PAGE>
STERLING EXPLORATION INC.
Statement of Stockholders' Equity
(An Exploration Stage Company)
(Expressed in US Dollars)
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                                                                 Deficit
                                                                                               Accumulated      Total
                               Price      Number of                  Additional      Total     During the       Stock-
                                Per        Common            Par      Paid-in       Capital    Exploration      holders'
                               Share       Shares           Value     Capital        Stock        Stage         Equity
                               -----       ------           -----     -------        -----        -----         ------
<S>                            <C>        <C>           <C>          <C>          <C>          <C>            <C>
Balance, August 18, 2003                         --     $     --     $     --      $     --     $      --      $     --
September 5, 2003
  Subscribed for cash          $0.001     2,000,000        2,000           --         2,000            --         2,000
October 30, 2003
  Subscribed for cash          $0.001     1,500,000        1,500           --         1,500                       1,500
Comprehensive loss for the
 period ended June 30, 2004                                                                           (80)          (80)
                                        -----------     --------     --------      --------     ---------      --------
Balance, June 30, 2004 (audited)          3,500,000        3,500           --         3,500           (80)        3,420

October 4, 2004
  Subscribed for cash          $0.001     3,000,000        3,000           --         3,000                       3,000
October 27, 2004
  Subscribed for cash          $0.01      1,050,000        1,050        9,450        10,500                      10,500
December 7, 2004
  Subscribed for cash          $0.01        450,000          450        4,050         4,500                       4,500
January 10, 2005
  Subscribed for cash          $0.1          15,000           15        1,485         1,500                       1,500
January 27, 2005
  Subscribed for cash          $0.1          40,000           40        3,960         4,000                       4,000
Net loss                                                                                           (7,547)       (7,547)
                                        -----------     --------     --------      --------     ---------      --------
Balance, June 30, 2005 (audited)          8,055,000        8,055       18,945        27,000        (7,627)       19,373
Net loss                                                                                           (7,573)       (7,573)
                                        -----------     --------     --------      --------     ---------      --------
Balance, June 30, 2006 (audited)          8,055,000     $  8,055     $ 18,945      $ 27,000     $ (15,200)     $ 11,800
                                        -----------     --------     --------      --------     ---------      --------
Net loss                                                                                           (8,409)       (8,409)
                                        -----------     --------     --------      --------     ---------      --------
Balance, June 30, 2007 (audited)          8,055,000     $  8,055     $ 18,945      $ 27,000     $ (23,609)     $  3,391
Net loss                                                                                           (6,366)       (6,366)
                                        -----------     --------     --------      --------     ---------      --------

Balance, September 30, 2007 (unaudited)   8,055,000     $  8,055     $ 18,945      $ 27,000     $ (29,975)     $ (2,975)
                                        ===========     ========     ========      ========     =========      ========
</TABLE>

                                       4
<PAGE>
STERLING EXPLORATION INC.
Statements of Cash Flows
(An Exploration Stage Company)
(Expressed in US Dollars)
(Unaudited)
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                                                               Accumulated From
                                                           Three Months       Three Months     Inception Date of
                                                              Ended              Ended        August 18, 2003 to
                                                           September 30,      September 30,       September 30,
                                                               2007               2006               2007
                                                             --------           --------           --------
<S>                                                        <C>                  <C>                  <C>
CASH DERIVED FROM (USED FOR) OPERATING ACTIVITIES
  Net loss for the period                                    $ (6,366)          $   (814)          $(29,975)
  Adjustments to reconcile net loss to net cash
   Provided by (used in) operating activities
  Changes in operating assets and liabilities
     Accounts payable                                              --                 --                 --
                                                             --------           --------           --------

          Net cash (used in) operating activities              (6,366)              (814)           (29,975)
                                                             --------           --------           --------
FINANCING ACTIVITIES
  Loans from related party                                     10,000             15,000
  Shares subscribed for cash                                       --                 --             27,000
                                                             --------           --------           --------

          Net cash provided by financing activities            10,000                 --             42,000
                                                             --------           --------           --------
INVESTING ACTIVITIES

          Net cash used for investing activities                   --                 --                 --
                                                             --------           --------           --------

Cash increase during the period                                 3,634               (814)            12,025
Cash beginning of the period                                    8,391             11,800                 --
                                                             --------           --------           --------

Cash end of the period                                       $ 12,025           $ 10,986           $ 12,025
                                                             ========           ========           ========
</TABLE>


                                       5
<PAGE>
STERLING EXPLORATION INC.
Notes to Financial Statements
September 30, 2007
(An Exploration Stage Company)
(Expressed in US Dollars)
(Unaudited)
--------------------------------------------------------------------------------

1. NATURE AND CONTINUANCE OF OPERATIONS

   Sterling  Exploration Inc. ("the Company") was incorporated under the laws of
   State of Nevada,  U.S.  on August 18,  2003,  with an  authorized  capital of
   75,000,000  common shares with a par value of $0.001.  The Company's year end
   is the end of June. The Company is in the  exploration  stage of its resource
   business.  During  the  period  ended  June 30,  2004 the  Company  commenced
   operations by issuing shares and acquiring a mineral  property located in the
   Province of Ontario,  Canada. The Company has not yet determined whether this
   property   contains   reserves  that  are   economically   recoverable.   The
   recoverability  of costs  incurred for  acquisition  and  exploration  of the
   property  will be dependent  upon the discovery of  economically  recoverable
   reserves,  confirmation of the Company's interest in the underlying property,
   the  ability of the  Company to obtain  necessary  financing  to satisfy  the
   expenditure  requirements  under the property  agreement  and to complete the
   development of the property and upon future profitable production or proceeds
   for the sale thereof.

   These financial  statements have been prepared on a going concern basis which
   assumes the  Company  will be able to realize  its assets and  discharge  its
   liabilities in the normal course of business for the foreseeable  future. The
   Company has incurred  losses  since  inception  resulting  in an  accumulated
   deficit  of  $29,975  as  at  September  30,  2007  and  further  losses  are
   anticipated in the  development  of its business  raising  substantial  doubt
   about the Company's  ability to continue as a going  concern.  The ability to
   continue  as a  going  concern  is  dependent  upon  the  Company  generating
   profitable  operations in the future and/or to obtain the necessary financing
   to meet its  obligations  and  repay  its  liabilities  arising  from  normal
   business  operations  when they  come  due.  Management  intends  to  finance
   operating  costs over the next twelve  months with  existing cash on hand and
   loans from directors and or private placement of common stock.

2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

   BASIS OF PRESENTATION

   The financial statements of the Company have been prepared in accordance with
   generally accepted accounting  principles in the United States of America and
   are presented in US dollars.

   EXPLORATION STAGE COMPANY

   The Company complies with the Financial  Accounting Standards Board Statement
   No.  7,  its   characterization  of  the  Company  as  an  exploration  stage
   enterprise.

   MINERAL INTERESTS

   Mineral property acquisition,  exploration and development costs are expensed
   as incurred until such time as economic reserves are quantified.  To date the
   Company has not  established  any proven or probable  reserves on its mineral
   properties.   The  Company  has  adopted  the  provisions  of  SFAS  No.  143
   "Accounting for Asset Retirement Obligations" which establishes standards for
   the initial measurement and subsequent accounting for obligations  associated
   with the sale,  abandonment,  or other disposal of long-lived tangible assets
   arising from the  acquisition,  construction  or  development  and for normal
   operations  of such assets.  As at September 30, 2007,  any  potential  costs
   relating to the retirement of the Company's mineral property interest has not
   yet been determined.

                                       6
<PAGE>
STERLING EXPLORATION INC.
Notes to Financial Statements
September 30, 2007
(An Exploration Stage Company)
(Expressed in US Dollars)
(Unaudited)
--------------------------------------------------------------------------------

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

   USE OF ESTIMATES AND ASSUMPTIONS

   The preparation of financial statements in conformity with generally accepted
   accounting  principles  requires management to make estimates and assumptions
   that affect the reported  amounts of assets and liabilities and disclosure of
   contingent assets and liabilities at the date of the financial statements and
   the  reported  amounts of revenues  and  expenses  during the period.  Actual
   results could differ from those estimates.

   The  carrying  value of cash and  accounts  payable and  accrued  liabilities
   approximates  their  fair  value  because  of the  short  maturity  of  these
   instruments.  Unless otherwise noted, it is management's  opinion the Company
   is not exposed to significant interest, currency or credit risks arising from
   these financial instruments.

   ENVIRONMENTAL COSTS

   Environmental  expenditures that relate to current operations are expensed or
   capitalized as appropriate. Expenditures that relate to an existing condition
   caused by past  operations,  and which do not contribute to current or future
   revenue generation, are expensed. Liabilities are recorded when environmental
   assessments  and/or  remedial  efforts  are  probable,  and the  cost  can be
   reasonably estimated.  Generally, the timing of these accruals coincides with
   the earlier of completion of a feasibility study or the Company's commitments
   to plan of action based on the then known facts.

   INCOME TAXES

   The Company  follows the  liability  method of  accounting  for income taxes.
   Under this method,  deferred income tax assets and liabilities are recognized
   for the estimated tax  consequences  attributable to differences  between the
   financial  statement  carrying values and their  respective  income tax basis
   (temporary  differences).  The  effect on  deferred  income  tax  assets  and
   liabilities  of a change in tax rates is  recognized  in income in the period
   that includes the enactment date.

   At September 30, 2007 a full deferred tax asset valuation  allowance has been
   provided and no deferred tax asset has been recorded.

   BASIC AND DILUTED LOSS PER SHARE

   The  Company  computes  loss  per  share in  accordance  with  SFAS No.  128,
   "Earnings per Share" which  requires  presentation  of both basic and diluted
   earnings per share on the face of the statement of operations. Basic loss per
   share is computed by dividing net loss  available to common  shareholders  by
   the weighted  average number of outstanding  common shares during the period.
   Diluted loss per share gives effect to all dilutive  potential  common shares
   outstanding during the period. Dilutive loss per share excludes all potential
   common shares if their effect is anti-dilutive.

   The Company has no potential dilutive  instruments and accordingly basic loss
   and diluted loss per share are equal.

                                       7
<PAGE>
STERLING EXPLORATION INC.
Notes to Financial Statements
September 30, 2007
(An Exploration Stage Company)
(Expressed in US Dollars)
(Unaudited)
--------------------------------------------------------------------------------

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

   STOCK-BASED COMPENSATION

   In December 2004, the FASB issued SFAS No. 123R, "Share-Based Payment", which
   replaced  SFAS  No.  123,  "Accounting  for  Stock-Based   Compensation"  and
   superseded APB Opinion No. 25, "Accounting for Stock Issued to Employees". In
   January 2005,  the Securities  and Exchange  Commission  ("SEC") issued Staff
   Accounting Bulletin ("SAB") No. 107,  "Share-Based  Payment",  which provides
   supplemental  implementation  guidance  for SFAS  No.  123R.  SFAS  No.  123R
   requires all share-based payments to employees,  including grants of employee
   stock  options,  to be recognized in the  financial  statements  based on the
   grant date fair value of the award.  SFAS No.  123R was to be  effective  for
   interim or annual reporting  periods beginning on or after June 15, 2005, but
   in April  2005 the SEC issued a rule that will  permit  most  registrants  to
   implement  SFAS No. 123R at the beginning of their next fiscal year,  instead
   of the next  reporting  period as required by SFAS No.  123R.  The  pro-forma
   disclosures  previously  permitted  under SFAS No.  123 no longer  will be an
   alternative  to financial  statement  recognition.  Under SFAS No. 123R,  the
   Company  must  determine  the  appropriate  fair  value  model to be used for
   valuing share-based  payments,  the amortization method for compensation cost
   and the transition method to be used at date of adoption.

   The transition methods include prospective and retroactive  adoption options.
   Under the retroactive options, prior periods may be restated either as of the
   beginning  of  the  year  of  adoption  or for  all  periods  presented.  The
   prospective  method  requires that  compensation  expense be recorded for all
   unvested  stock  options and  restricted  stock at the beginning of the first
   quarter of adoption of SFAS No. 123R,  while the  retroactive  methods  would
   record  compensation  expense for all unvested  stock options and  restricted
   stock  beginning  with the first  period  restated.  The Company  adopted the
   modified  prospective  approach of SFAS No.  123R for the  quarter  beginning
   December 1, 2005. The Company did not record any compensation  expense in the
   third quarter of 2007 because there were no stock options  outstanding  prior
   to the adoption or at September 30, 2007.

   RECENT ACCOUNTING PRONOUNCEMENTS

   In February  2006,  the FASB issued  SFAS No.  155,  "Accounting  for Certain
   Hybrid  Financial  Instruments-an  amendment of FASB  Statements  No. 133 and
   140",  to  simplify  and make more  consistent  the  accounting  for  certain
   financial  instruments.  SFAS No. 155 amends  SFAS No. 133,  "Accounting  for
   Derivative  Instruments  and  Hedging  Activities",   to  permit  fair  value
   re-measurement   for  any  hybrid  financial   instrument  with  an  embedded
   derivative that otherwise would require bifurcation,  provided that the whole
   instrument is accounted  for on a fair value basis.  SFAS No. 155 amends SFAS
   No. 140, "Accounting for the Impairment or Disposal of Long-Lived Assets", to
   allow a  qualifying  special-purpose  entity to hold a  derivative  financial
   instrument  that  pertains  to  a  beneficial  interest  other  than  another
   derivative  financial  instrument.  SFAS No.  155  applies  to all  financial
   instruments  acquired or issued  after the  beginning  of an  entity's  first
   fiscal year that begins after  September 15, 2006,  with earlier  application
   allowed.  This standard is not expected to have a  significant  effect on the
   Company's future reported financial position or results of operations.

   In March 2006,  the FASB issued SFAS No. 156,  "Accounting  for  Servicing of
   Financial  Assets,  an amendment of FASB  Statement No. 140,  Accounting  for
   Transfers  and  Servicing  of  Financial   Assets  and   Extinguishments   of
   Liabilities".  This statement  requires all separately  recognized  servicing
   assets and  servicing  liabilities  be initially  measured at fair value,  if
   practicable,  and permits for subsequent  measurement using either fair value
   measurement  with  changes  in  fair  value  reflected  in  earnings  or  the
   amortization and impairment requirements of Statement No. 140. The subsequent
   measurement  of  separately   recognized   servicing   assets  and  servicing
   liabilities  at fair value  eliminates the necessity for entities that manage
   the risks  inherent  in  servicing  assets  and  servicing  liabilities  with
   derivatives  to qualify for hedge  accounting  treatment and  eliminates  the
   characterization   of  declines  in  fair  value  as  impairments  or  direct
   write-downs.  SFAS No. 156 is  effective  for an entity's  first  fiscal year
   beginning  after  September 15, 2006.  This adoption of this statement is not
   expected  to have a  significant  effect  on the  Company's  future  reported
   financial position or results of operations.

                                       8
<PAGE>
STERLING EXPLORATION INC.
Notes to Financial Statements
September 30, 2007
(An Exploration Stage Company)
(Expressed in US Dollars)
(Unaudited)
--------------------------------------------------------------------------------

3. MINERAL INTERESTS

   On January 20, 2005,  the Company  entered into a mineral  property  purchase
   agreement  to acquire a 100%  interest  in one mineral  claim  located in one
   mineral  claim located in the Scadding  Township,  Sudbury  Mining  Division,
   Ontario for total consideration of $7,000.

   The  mineral  interest  is held in trust for the Company by the vendor of the
   property.  Upon  request  from the  Company the title will be recorded in the
   name of the Company with the appropriate mining recorder.

   During the year ended June 30, 2006,  exploration cost of $7,500 was incurred
   for the mineral property.

4. COMMON STOCK

   The  total  number  of  common  shares  authorized  that may be issued by the
   Company  is  75,000,000  shares  with a par  value  of one  tenth of one cent
   ($0.001) per share and no other class of shares is authorized.

   During the period ended June 30, 2005, the Company issued 8,055,000 shares of
   common stock for total cash  proceeds of $27,000.  At September  30, 2007 and
   2006 there were no outstanding stock options or warrants.

5. INCOME TAXES

   As of September 30, 2007,  the Company had net operating  loss carry forwards
   of  approximately  $29,975  that may be  available  to reduce  future  years'
   taxable income through 2027.  Future tax benefits which may arise as a result
   of these losses have not been  recognized in these financial  statements,  as
   their  realization  is determined  not likely to occur and  accordingly,  the
   Company  has  recorded  a  valuation  allowance  for the  deferred  tax asset
   relating to these tax loss carry-forwards.

                                       9
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

RESULTS OF OPERATIONS

We did not earn any revenues during the three-month period ended September 30,
2007.

We incurred operating expenses in the amount of $6,366 and $814 for the
three-month periods ended September 30, 2007 and 2006. The operating expenses
were comprised primarily of general and administrative expenses.

Our net loss for the three-month period ended September 30, 2007 increased
$5,552 from the comparative period in fiscal 2006 (2006: $814).

At September 30, 2007, we had total assets of $12,025 consisting entirely of
cash. At the same date, our liabilities consisted of a loan payable of $15,000.
The loan is due to our director which is interest-free, with no specific terms
of repayment.

We have not attained profitable operations and are dependent upon obtaining
financing to pursue exploration activities. For these reasons our auditors
believe that there is substantial doubt that we will be able to continue as a
going concern.

PLAN OF OPERATION

Our plan of operation for the twelve months is to complete the first phase of
the exploration program on our claim consisting of geological mapping and
sampling and geophysical survey. In addition to the $6,000 we anticipate
spending for the first phase of the exploration program as outlined below, we
anticipate spending an additional $5,000 on professional fees and general
administrative costs. Total expenditures over the next 12 months are therefore
expected to be approximately $11,000. If we experience a shortage of funds prior
to funding we may utilize funds from our director, however she has no formal
commitment, arrangement or legal obligation to advance or loan funds to the
company.

The following two phase exploration proposal and cost estimate is offered with
the understanding that the second phase is contingent upon positive
(encouraging) results being obtained from the first phase and are being able to
raise the funds to pay for the second phase:

                                       10
<PAGE>
                               EXPLORATION PROGRAM
     PHASE 1                                                     $        US $
                                                               -----      ----
     Geological Review                                           500
     Geological Mapping and Sampling (GPS)                     3,500
     Report Writing/Consulting                                 1,500
     Operating Supplies                                          500
                                                    TOTAL      6,000      6,000
     PHASE 2
     Geophysical Survey (targets for drilling)                 7,000
     Follow up Mapping and Sampling                            1,000
     Report Writing/Consulting                                 1,500
     Operating Supplies                                          500
                                                    TOTAL     10,000     10,000

                                                    TOTAL                16,000

We plan to commence Phase 1 of the exploration program on the claim in the
Spring of 2008. We expect this phase to take 7 days to complete and an
additional one to two months for the geologist to receive the results from the
assay lab and prepare his report.

The above program costs are management's estimates based upon the
recommendations of the professional geologist's report and the actual project
costs may exceed our estimates. To date, we have not commenced exploration.

Following phase one of the exploration program, if it proves successful in
identifying mineral deposits, we intend to proceed with phase two of our
exploration program. The estimated this program will take approximately 14 days
to complete and an additional one to two months for the geologist to receive the
results from the assay lab and prepare his report. Subject to the results of
phase 1 and the receipt of additional funds, of which there is no guarantee, we
anticipate commencing the second phase of our exploration program in Summer of
2008.

We have a verbal agreement with Scott Jobin-Bevans, the professional geologist
who prepared the geology report on the Railway Prospect property, to retain his
services for our planned exploration program. We will require additional funding
to proceed with any subsequent work on the claim; we have no current plans on
how to raise the additional funding. We cannot provide any assurance that we
will be able to raise sufficient funds to proceed with any work after the first
phase of the exploration program.

                                       11
<PAGE>
OFF-BALANCE SHEET ARRANGEMENTS

We have no off-balance sheet arrangements.

SIGNIFICANT ACCOUNTING POLICIES

It is suggested that these financial statements be read in conjunction with our
June 30, 2007 audited financial statements and notes thereto, which can be found
in our Form 10K-SB annual filing, and amendments thereto, on the SEC website at
www.sec.gov under our SEC File Number 333-144493.

BASIS OF PRESENTATION

The financial statements of the Company have been prepared in accordance with
generally accepted accounting principles in the United States of America and are
presented in US dollars.

EXPLORATION STAGE COMPANY

The Company complies with the Financial Accounting Standards Board Statement No.
7, its characterization of the Company as an exploration stage enterprise.

MINERAL INTERESTS

Mineral property acquisition, exploration and development costs are expensed as
incurred until such time as economic reserves are quantified. To date the
Company has not established any proven or probable reserves on its mineral
properties. The Company has adopted the provisions of SFAS No. 143 "Accounting
for Asset Retirement Obligations" which establishes standards for the initial
measurement and subsequent accounting for obligations associated with the sale,
abandonment, or other disposal of long-lived tangible assets arising from the
acquisition, construction or development and for normal operations of such
assets. As at September 30, 2007, any potential costs relating to the retirement
of the Company's mineral property interest has not yet been determined.

USE OF ESTIMATES AND ASSUMPTIONS

The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the period. Actual results
could differ from those estimates.

The carrying value of cash and accounts payable and accrued liabilities
approximates their fair value because of the short maturity of these
instruments. Unless otherwise noted, it is management's opinion the Company is

                                       12
<PAGE>
not exposed to significant interest, currency or credit risks arising from these
financial instruments.

ENVIRONMENTAL COSTS

Environmental expenditures that relate to current operations are expensed or
capitalized as appropriate. Expenditures that relate to an existing condition
caused by past operations, and which do not contribute to current or future
revenue generation, are expensed. Liabilities are recorded when environmental
assessments and/or remedial efforts are probable, and the cost can be reasonably
estimated. Generally, the timing of these accruals coincides with the earlier of
completion of a feasibility study or the Company's commitments to plan of action
based on the then known facts.

INCOME TAXES

The Company follows the liability method of accounting for income taxes. Under
this method, deferred income tax assets and liabilities are recognized for the
estimated tax consequences attributable to differences between the financial
statement carrying values and their respective income tax basis (temporary
differences). The effect on deferred income tax assets and liabilities of a
change in tax rates is recognized in income in the period that includes the
enactment date.

At September 30, 2007 a full deferred tax asset valuation allowance has been
provided and no deferred tax asset has been recorded.

BASIC AND DILUTED LOSS PER SHARE

The Company computes loss per share in accordance with SFAS No. 128, "Earnings
per Share" which requires presentation of both basic and diluted earnings per
share on the face of the statement of operations. Basic loss per share is
computed by dividing net loss available to common shareholders by the weighted
average number of outstanding common shares during the period. Diluted loss per
share gives effect to all dilutive potential common shares outstanding during
the period. Dilutive loss per share excludes all potential common shares if
their effect is anti-dilutive.

The Company has no potential dilutive instruments and accordingly basic loss and
diluted loss per share are equal.

STOCK-BASED COMPENSATION

In December 2004, the FASB issued SFAS No. 123R, "Share-Based Payment", which
replaced SFAS No. 123, "Accounting for Stock-Based Compensation" and superseded
APB Opinion No. 25, "Accounting for Stock Issued to Employees". In January 2005,
the Securities and Exchange Commission ("SEC") issued Staff Accounting Bulletin
("SAB") No. 107, "Share-Based Payment", which provides supplemental

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implementation guidance for SFAS No. 123R. SFAS No. 123R requires all
share-based payments to employees, including grants of employee stock options,
to be recognized in the financial statements based on the grant date fair value
of the award. SFAS No. 123R was to be effective for interim or annual reporting
periods beginning on or after June 15, 2005, but in April 2005 the SEC issued a
rule that will permit most registrants to implement SFAS No. 123R at the
beginning of their next fiscal year, instead of the next reporting period as
required by SFAS No. 123R. The pro-forma disclosures previously permitted under
SFAS No. 123 no longer will be an alternative to financial statement
recognition. Under SFAS No. 123R, the Company must determine the appropriate
fair value model to be used for valuing share-based payments, the amortization
method for compensation cost and the transition method to be used at date of
adoption.

The transition methods include prospective and retroactive adoption options.
Under the retroactive options, prior periods may be restated either as of the
beginning of the year of adoption or for all periods presented. The prospective
method requires that compensation expense be recorded for all unvested stock
options and restricted stock at the beginning of the first quarter of adoption
of SFAS No. 123R, while the retroactive methods would record compensation
expense for all unvested stock options and restricted stock beginning with the
first period restated. The Company adopted the modified prospective approach of
SFAS No. 123R for the quarter beginning December 1, 2005. The Company did not
record any compensation expense in the third quarter of 2007 because there were
no stock options outstanding prior to the adoption or at September 30, 2007.

RECENT ACCOUNTING PRONOUNCEMENTS

In February 2006, the FASB issued SFAS No. 155, "Accounting for Certain Hybrid
Financial Instruments-an amendment of FASB Statements No. 133 and 140", to
simplify and make more consistent the accounting for certain financial
instruments. SFAS No. 155 amends SFAS No. 133, "Accounting for Derivative
Instruments and Hedging Activities", to permit fair value re-measurement for any
hybrid financial instrument with an embedded derivative that otherwise would
require bifurcation, provided that the whole instrument is accounted for on a
fair value basis. SFAS No. 155 amends SFAS No. 140, "Accounting for the
Impairment or Disposal of Long-Lived Assets", to allow a qualifying
special-purpose entity to hold a derivative financial instrument that pertains
to a beneficial interest other than another derivative financial instrument.
SFAS No. 155 applies to all financial instruments acquired or issued after the
beginning of an entity's first fiscal year that begins after September 15, 2006,
with earlier application allowed. This standard is not expected to have a

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significant effect on the Company's future reported financial position or
results of operations.

In March 2006, the FASB issued SFAS No. 156, "Accounting for Servicing of
Financial Assets, an amendment of FASB Statement No. 140, Accounting for
Transfers and Servicing of Financial Assets and Extinguishments of Liabilities".
This statement requires all separately recognized servicing assets and servicing
liabilities be initially measured at fair value, if practicable, and permits for
subsequent measurement using either fair value measurement with changes in fair
value reflected in earnings or the amortization and impairment requirements of
Statement No. 140. The subsequent measurement of separately recognized servicing
assets and servicing liabilities at fair value eliminates the necessity for
entities that manage the risks inherent in servicing assets and servicing
liabilities with derivatives to qualify for hedge accounting treatment and
eliminates the characterization of declines in fair value as impairments or
direct write-downs. SFAS No. 156 is effective for an entity's first fiscal year
beginning after September 15, 2006. This adoption of this statement is not
expected to have a significant effect on the Company's future reported financial
position or results of operations.

ITEM 3. CONTROLS AND PROCEDURES

EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES

Under the supervision and with the participation of our management, including
our principal executive officer and principal financial officer, we have
conducted an evaluation of the effectiveness of the design and operation of our
disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e)
under the Securities and Exchange Act of 1934, as of the end of the period
covered by this report. Based on this evaluation, our principal executive
officer and principal financial officer concluded as of the evaluation date that
our disclosure controls and procedures were effective such that the material
information required to be included in our Securities and Exchange Commission
reports is recorded, processed, summarized and reported within the time periods
specified in SEC rules and forms relating to our company, particularly during
the period when this report was being prepared.

Additionally, there were no significant changes in our internal controls or in
other factors that could significantly affect these controls subsequent to the
evaluation date. We have not identified any significant deficiencies or material
weaknesses in our internal controls, and therefore there were no corrective
actions taken.

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                           PART II - OTHER INFORMATION

ITEM 6. EXHIBITS

The following exhibits are included with this quarterly filing. Those marked
with an asterisk and required to be filed hereunder, are incorporated by
reference and can be found in their entirety in our Form SB-2 Registration
Statement, filed under SEC File Number 333-144493, at the SEC website at
www.sec.gov:

     Exhibit
     Number                        Description
     ------                        -----------

       3.1        Articles of Incorporation*
       3.2        Bylaws*
      31.1        Sec. 302 Certification of Principal Executive Officer
      31.2        Sec. 302 Certification of Principal Financial Officer
      32.1        Sec. 906 Certification of Principal Executive Officer
      32.2        Sec. 906 Certification of Principal Financial Officer

                                   SIGNATURES

In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.

December 21, 2007                 Sterling Exploration Inc., Registrant


                                  By: /s/ Lynn Wigen
                                      ------------------------------------------
                                      Lynn Wigen, President, Chief Executive
                                      Officer, Principal Accounting Officer, and
                                      Chief Financial Officer

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