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

                                   Form 10-QSB

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

    For the period ended December 31, 2007

[] 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: 333-144493


                           Sterling Exploration, Inc.
                 (Name of small business issuer in its charter)

             Nevada                                          N/A
  (State or other jurisdiction              (I.R.S. Employer Identification No.)
of incorporation or organization)


   388 Drake Street, Suite 2703, Vancouver, British Columbia, Canada, V6B 6A8
                    (Address of principal executive offices)

                                 (604) 899-1495
                          (Issuer's telephone number)

Indicate by check mark whether the issuer: (1) has 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[ ]

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

Indicate the number of shares  outstanding  of each of the  issuer's  classes of
common stock, as of the most practicable date:

          Class                              Outstanding as of February 12, 2008
          -----                              -----------------------------------
Common Stock, $0.001 par value                          8,055,000
<PAGE>
                           STERLING EXPLORATION, INC.

                                   FORM 10-QSB

Part 1 FINANCIAL INFORMATION

Item 1. Financial Statements                                                  4
          Balance Sheets
          Statements of Operations
          Statements of Cash Flows
          Notes to Financial Statements

Item 2. Management's Discussion and Analysis of Financial Condition
        or Plan of Operation                                                 12

Item 3. Controls and Procedures                                              15

Part II. OTHER INFORMATION

Item 1. Legal Proceedings                                                    15

Item 2. Unregistered Sales of Securities and Use of Proceeds                 15

Item 3. Defaults Upon Senior Securities                                      15

Item 4. Submission of Matters to a Vote of Security Holders                  15

Item 5. Other Information                                                    16

Item 6. Exhibits                                                             16

                                       2
<PAGE>
NOTE REGARDING FORWARD LOOKING STATEMENTS

This Quarterly  Report includes or is based upon estimates  projections or other
"forward  looking  statements".  Such  forward-looking  statements  include  any
projections or estimates  made by us and our  management in connection  with our
business operations. Such forward-looking statements are based on the beliefs of
Sterling  Exploration,  Inc.  When  used in this  Quarterly  Report,  the  words
"anticipate,"   "believe,"   "estimate,"   "expect,"   "intends"   and   similar
expressions,  as they relate to us, are  intended  to  identify  forward-looking
statements,  which  include  statements  relating  to, among other  things,  our
ability to continue to  successfully  compete in the apparel and fiber  markets.
While these forward looking statements,  and any assumptions upon which they are
based,  are made in good faith and reflect our current  information and judgment
regarding the direction of our business, actual results will almost always vary,
sometimes materially, from any estimates, predictions,  projections, assumptions
or other future performance suggested herein.

Such estimate, projections or other "forward looking statements" involve various
risks and  uncertainties.  We caution the reader that important  factors in some
cases have affected and, in the future,  could materially  affect actual results
and cause actual results to differ  materially from the results expressed in any
such estimates, projections or other "forward-looking statements".

                                       3
<PAGE>
                                     PART I

ITEM 1. FINANCIAL STATEMENTS

STERLING EXPLORATION INC.
Balance Sheets
(An Exploration Stage Company)
(Expressed in US Dollars)
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                                      December 31,        June 30,
                                                                         2007               2007
                                                                       --------           --------
                                                                     (Unaudited)          (Audited)
<S>                                                                    <C>                <C>
                                     ASSETS

CURRENT ASSETS
  Cash                                                                 $    809           $  8,391
                                                                       --------           --------

TOTAL ASSTS                                                            $    809           $  8,391
                                                                       ========           ========

                      LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES
  Accounts payable and accrued liabilities                             $     --           $     --
  Loans from related party                                               20,000              5,000
                                                                       --------           --------

      TOTAL CURRENT LIABILITIES                                          20,000              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                      (46,191)           (23,609)
                                                                       --------           --------

TOTAL STOCKHOLDERS' EQUITY                                              (19,191)             3,391
                                                                       --------           --------

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                             $    809           $  8,391
                                                                       ========           ========
</TABLE>


Approved on behalf of the board

_______________________________, Director

_______________________________, Director

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

<TABLE>
<CAPTION>
                                                                                                                 Accumulated
                                                                                                                    From
                                                                                                                  Inception
                                                                                                                   Date of
                                             Six Months       Six Months      Three Months     Three Months    August 18, 2003
                                               Ended            Ended            Ended            Ended               to
                                             December 31,     December 31,     December 31,     December 31,      December 31,
                                                2007             2006             2007             2006              2007
                                             ----------       ----------       ----------       ----------        ----------
<S>                                          <C>              <C>              <C>              <C>               <C>
GENERAL AND ADMINISTRATIVE EXPENSES
  Bank charges and interest                  $       85       $       38       $       26       $       19        $      476
  Filing and transfer agent fees                 14,898               --           12,645               --            14,898
  Professional fees                               7,295            3,295            3,295            2,500            15,471
  Mineral properties                                 --               --               --               --            14,500
  Office expenses                                   304               --              250               --               846
                                             ----------       ----------       ----------       ----------        ----------
Total general and administrative expenses        22,582            3,333           16,216            2,519            46,191
                                             ----------       ----------       ----------       ----------        ----------

Net loss                                     $  (22,582)      $   (3,333)      $  (16,216)      $   (2,519)       $  (46,191)
                                             ==========       ==========       ==========       ==========        ==========

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

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

                                       5
<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                                                                                           (22,582)       (22,582)
                                            ----------     -------     -------       --------     --------       --------

Balance, December 31, 2007 (unaudited)       8,055,000     $ 8,055     $18,945       $ 27,000     $(46,191)      $(19,191)
                                            ==========     =======     =======       ========     ========       ========
</TABLE>

                                       6
<PAGE>
STERLING EXPLORATION INC.
Statements of Cash Flows
(An Exploration Stage Company)
(Expressed in US Dollars)
(Unaudited)
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                                                                                      Accumulated
                                                                                                                         From
                                                                                                                       Inception
                                                                                                                        Date of
                                                      Six Months      Six Months     Three Months    Three Months   August 18, 2003
                                                        Ended           Ended           Ended           Ended              to
                                                      December 31,    December 31,    December 31,    December 31,     December 31,
                                                         2007            2006            2007            2006             2007
                                                       --------        --------        --------        --------         --------
<S>                                                    <C>             <C>             <C>             <C>              <C>
CASH DERIVED FROM (USED FOR)
OPERATING ACTIVITIES
  Net loss for the period                              $(22,582)       $ (3,333)       $(16,216)       $ (2,519)        $(46,191)
  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       (22,582)         (3,333)        (16,216)         (2,519)         (46,191)
                                                       --------        --------        --------        --------         --------
FINANCING ACTIVITIES
  Loans from related party                               15,000              --           5,000              --           20,000
  Shares subscribed for cash                                 --              --              --              --           27,000
                                                       --------        --------        --------        --------         --------

          Net cash provided by financing activities      15,000              --           5,000              --           47,000
                                                       --------        --------        --------        --------         --------

INVESTING ACTIVITIES                                         --              --              --              --               --
                                                       --------        --------        --------        --------         --------

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

Cash increase during the period                          (7,582)         (3,333)        (11,216)         (2,519)             809
Cash beginning of the period                              8,391          11,800          12,025          10,986               --
                                                       --------        --------        --------        --------         --------

Cash end of the period                                 $    809        $  8,467        $    809        $  8,467         $    809
                                                       ========        ========        ========        ========         ========
</TABLE>

                                       7
<PAGE>
STERLING EXPLORATION INC.
Notes to Financial Statements
December 31, 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 $46,191 as at December 31, 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 December 31, 2007,  any  potential  costs
   relating to the retirement of the Company's mineral property interest has not
   yet been determined.

                                       8
<PAGE>
STERLING EXPLORATION INC.
Notes to Financial Statements
December 31, 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 December 31, 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  implementation  guidance  for SFAS  No.  123R.  SFAS  No.  123R

                                       9
<PAGE>
STERLING EXPLORATION INC.
Notes to Financial Statements
December 31, 2007
(An Exploration Stage Company)
(Expressed in US Dollars)
(Unaudited)
--------------------------------------------------------------------------------

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

   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 December 31, 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.

                                       10
<PAGE>
STERLING EXPLORATION INC.
Notes to Financial Statements
December 31, 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 December  31, 2007 and
   2006 there were no outstanding stock options or warrants.

5. INCOME TAXES

   As of December 31, 2007, the Company had net operating loss carry forwards of
   approximately  $46,191 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.

                                       11
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

The following discussion and analysis of our results of operations and financial
position should be read in conjunction with our audited financial statements and
the notes thereto  included  elsewhere in this Quarterly  Report.  Our financial
statements  are prepared in accordance  with U.S. GAAP. All references to dollar
amounts in this section are in U.S. dollars unless expressly stated otherwise.

The  following  discussion  is intended to provide an analysis of our  financial
condition  and  should  be  read  in  conjunction  with  our  audited  financial
statements and the notes thereto. The matters discussed in this section that are
not historical or current facts deal with  potential  future  circumstances  and
developments.  Such forward-looking  statements include, but are not limited to,
the development plans for our growth,  trends in the results of our development,
anticipated  development plans,  operating expenses and our anticipated  capital
requirements and capital  resources.  Our actual results could differ materially
from the results discussed in the forward-looking statements.

OVERVIEW

Sterling  Exploration  Inc.  was  incorporated  in Nevada on August 18,  2003 to
engage in the business of  acquisition,  exploration  and development of natural
resource properties.  At that time, we began to seek capital and the development
and  implementation of our business plan.  Subsequently,  we identified  certain
potential mineral  properties for acquisition.  As of the date of this Quarterly
Report,  we hold  title to one  mineral  claim,  known as the  Railway  Prospect
Property,  which may contain little or no economic  mineralization.  The Railway
Prospect Property is comprised of sixteen unpatented mining claim units covering
approximately 633 acres. The claim was originally  recorded on January 27, 2004.
On January 20, 2005,  we purchased  the claim from Pilgrim Creek Mining Ltd. for
$7,000.00.

As of the date of this Quarterly Report,  we have re-staked the claim,  which is
now in  good  standing  until  February  2010.  We  have  not  carried  out  any
exploration  work on the claim nor have we incurred any exploration  costs.  Our
geologist  has  concluded  that the Railway  Prospect  Property  claim is a good
prospect for the discovery of gold mineralization. He has recommended a two-hase
surface  exploration  program  to  further  examine  the  property.   Management
anticipates that the cost of the proposed  program is  approximately  $6,000 for
the initial phase of exploration and approximately $10,000 for the second phase.
We believe that the initial  exploration  phase will be supported by generators.
Water  required  for  exploration  and  development  is  available  in the area.
Management  anticipates that commencement of phase I of the exploration  program
is in the spring/summer of 2008.

In the event our claim does not  contain  any  reserves,  all funds that we have
spent on exploration  will be lost. Even if we complete our current  exploration
program and are successful in identifying a mineral deposit, we will be required
to expend  substantial funds on further drilling and engineering  studies before
we will know if we have a commercially viable mineral deposit or reserve.

RESULTS OF OPERATION

SIX-MONTH  PERIOD  ENDED  DECEMBER 31, 2007  COMPARED TO SIX-MONTH  PERIOD ENDED
DECEMBER 31, 2006.

Our  net  loss  during  the  six-month   period  ended  December  31,  2007  was
approximately  ($22,582)  compared to a net loss of ($3,333)  for the  six-month
period ended December 31, 2006 (an increase of $19,249).

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<PAGE>
During the six-month periods ended December 31, 2007 and 2006, respectively,  we
did not generate any revenue.  During the  six-month  period ended  December 31,
2007, we incurred general and administrative expenses in the aggregate amount of
$22,582  compared to $3,333 incurred during the six-month  period ended December
31, 2006. The general and administrative  expenses incurred during the six-month
period ended  December 31, 2007 consisted of: (i) filing and transfer agent fees
of $14,898 (2006: $-0-); (ii) professional fees of $7,295 (2006: $3,295);  (iii)
office expenses of $304 (2006:  $-0-); and (iv) bank charges and interest of $85
(2006: $38).

The increase in net loss during the  six-month  period  ended  December 31, 2007
compared  to the  six-month  period  ended  December  31,  2006 is  attributable
primarily to the  increase in  professional  fees and filing and transfer  agent
fees. General and administrative  expenses generally include corporate overhead,
financial and  administrative  contracted  services,  marketing  and  consulting
costs.

Our net loss during the six-month  period ended  December 31, 2007 was ($22,582)
or ($0.00) per share compared to a net loss of ($3,333) or ($0.00) per share for
the six-month  period ended  December 31, 2006.  The weighted  average number of
shares outstanding was 8,055,000 at December 31, 2007 and 2006, respectively.

THREE-MONTH  PERIOD ENDED DECEMBER 31, 2007 COMPARED TO THREE-MONTH PERIOD ENDED
DECEMBER 31, 2006.

Our net  loss  during  the  three-month  period  ended  December  31,  2007  was
approximately  ($16,216)  compared to a net loss of ($2,519) for the three-month
period ended December 31, 2006 (an increase of $13,697).

During the three-month  periods ended December 31, 2007 and 2006,  respectively,
we did not generate any revenue.  During the  three-month  period ended December
31,  2007,  we incurred  general and  administrative  expenses in the  aggregate
amount of $16,216  compared to $2,519  incurred  during the  three-month  period
ended December 31, 2006. The general and administrative expenses incurred during
the  three-month  period ended  December 31, 2007  consisted  of: (i) filing and
transfer agent fees of $12,645 (2006:  $-0-);  (ii)  professional fees of $3,295
(2006:  $2,500);  (iii)  office  expenses  of $-0- (2006:  $846);  and (iv) bank
charges and interest of $19 (2006: $476).

The increase in net loss during the  three-month  period ended December 31, 2007
compared to the  three-month  period  ended  December  31, 2006 is  attributable
primarily to the  increase in  professional  fees and filing and transfer  agent
fees.

Our net loss during the three-month period ended December 31, 2007 was ($16,216)
or ($0.00) per share compared to a net loss of ($2,519) or ($0.00) per share for
the three-month  period ended December 31, 2006. The weighted  average number of
shares outstanding was 8,055,000 at December 31, 2007 and 2006, respectively.

LIQUIDITY AND CAPITAL RESOURCES

SIX-MONTH PERIOD ENDED DECEMBER 31, 2007

Our financial  statements have been prepared assuming that we will continue as a
going  concern  and,  accordingly,  do not include  adjustments  relating to the

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<PAGE>
recoverability  and realization of assets and classification of liabilities that
might be necessary should we be unable to continue in operation.

As at the six-month period ended December 31, 2007, our current assets were $809
and our current liabilities were $20,000, resulting in a working capital deficit
of  $19,991.10.  As at the six-month  period ended  December 31, 2007, our total
assets were $809 consisting of cash compared to total assets of $8,391 at fiscal
year ended June 30, 2007.  As at the six-month  period ended  December 31, 2007,
our total  liabilities  were $20,000  consisting  of a loan from a related party
compared to current  liabilities  of $5,000 at fiscal year ended June 30,  2007.
The increase in current  liabilities  was  primarily  due to the increase in the
loan from the related party.

Stockholders'  equity/deficit  decreased  from  $3,391  as at June  30,  2007 to
($19,191) as at December 31, 2007.

We have not generated  positive cash flows from  operating  activities.  For the
six-month  period  ended  December  31,  2007,  net cash flow used in  operating
activities was ($22,582) compared to net cash flow used in operating  activities
of ($3,333) for the six-month period ended December 31, 2006. Net cash flow used
in operating  activities  during the  six-month  period ended  December 31, 2007
consisted primarily of a net loss of ($22,582).

During the six-month  period ended  December 31, 2007, net cash flow provided by
financing  activities  was  $15,000  compared  to net cash flow  from  financing
activities of $-0- for the six-month  period ended  December 31, 2006.  Net cash
flow  provided  from  financing  activities  during the  six-month  period ended
December 31, 2007  pertained to the $15,000  received as proceeds  from the loan
from related party.

PLAN OF OPERATION

Advances and further private  placements are expected to be adequate to fund our
operations  over the next six  months.  We have no lines of credit or other bank
financing  arrangements.  Generally, we have financed operations to date through
the  proceeds  of the  private  placement  of  equity  and debt  securities.  In
connection with our business plan,  management  anticipates that  administrative
expenses  will  increase  over the next  twelve  months.  We may also  encounter
business  endeavors that require  significant  cash commitments or unanticipated
problems or expenses that could result in a requirement for additional cash.

Additional  issuances of equity or convertible  debt  securities  will result in
dilution  to our  current  shareholders.  Further,  such  securities  might have
rights,  preferences  or  privileges  senior  to our  common  stock.  Additional
financing may not be available  upon  acceptable  terms,  or at all. If adequate
funds are not available or are not available on acceptable  terms, we may not be
able to take advantage of prospective new business  endeavors or  opportunities,
which could  significantly and materially restrict our business  operations.  We
are continuing to pursue external financing  alternatives to improve our working
capital position and to grow the business to the greatest possible extent.

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<PAGE>
The report of the independent registered public accounting firm that accompanies
our fiscal year end June 30, 2007 and June 30, 2006 audited financial statements
contains an explanatory paragraph expressing substantial doubt about our ability
to continue as a going  concern.  The  financial  statements  have been prepared
"assuming that we will continue as a going concern," which  contemplates that we
will  realize our assets and  satisfy our  liabilities  and  commitments  in the
ordinary course of business.

MATERIAL COMMITMENTS

As of the date of this Quarterly Report, we do not have any material commitments
to which we are a party.

ITEM 3. INTERNATL CONTROLS AND PROCEDURES

An evaluation was conducted under the supervision and with the  participation of
our  management,  including Lynn Wigen,  our Chief  Executive  Officer and Chief
Financial  Officer,  of the  effectiveness  of the design and  operation  of our
disclosure  controls  and  procedures  as of December  31,  2007.  Based on that
evaluation, Ms. Wigen concluded that our disclosure controls and procedures were
effective as of such date to ensure that information required to be disclosed in
the reports that we file or submit  under the Exchange Act of 1934,  as amended,
is  recorded,  processed,  summarized  and  reported  within  the  time  periods
specified in the rules and forms.  Such officer also  confirms that there was no
change in our internal  control over  financial  reporting  during the six-month
period ended December 31, 2007, that has materially  affected,  or is reasonably
likely to materially affect, our internal control over financial reporting.

                                     PART II

ITEM 1. LEGAL PROCEEDINGS

As of the date of this  Quarterly  Report,  we are not aware of any  pending  or
existing legal proceedings  involving our company or its officers and directors.
We are  not  aware  of any  proceedings  being  contemplated  by any  person  or
governmental authority against us, our properties or our officers and directors.

ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS

Not applicable.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES.

Not applicable.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

Not applicable.

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ITEM 5. OTHER INFORMATION.

Not applicable.

ITEM 6. EXHIBITS

(a) Exhibits

31.1 Certification of Chief Executive  Officer  pursuant to Securities  Exchange
     Act of 1934 Rule 13a-14(a) or 15d-14(a).

31.2 Certification of Chief Financial  Officer  pursuant to Securities  Exchange
     Act of 1934 Rule 13a-14(a) or 15d-14(a).

32.1 Certification of Chief Executive  Officer  pursuant to Securities  Exchange
     Act of 1934 Rule  13a-14(b) or 15d-14(b)  and 18 U.S.C.  Section  1350,  as
     adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2 Certification of Chief Financial  Officer  pursuant to Securities  Exchange
     Act of 1934 Rule  13a-14(b) or 15d-14(b)  and 18 U.S.C.  Section  1350,  as
     adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

                                   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.

                                      Sterling Exploration, Inc.


Date: February 12, 2008               By: /s/ Lynn Wigen
                                         ---------------------------------------
                                         Lynn Wigen, President and Chief
                                         Executive Officer


Date: February 12, 2008               By: /s/ Lynn Wigen
                                         ---------------------------------------
                                         Lynn Wigen, Chief Financial Officer

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