SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549


                                   FORM 10-KSB

     |X| ANNUAL REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
                                   ACT OF 1934

                   For the fiscal year ended December 31, 2006
                          COMMISSION FILE NO. 333-85460
                                       or
   |_| TRANSITION REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
                                   ACT OF 1934

                  For the transition period from ______to______

                             Standard Drilling, Inc.
                 (Name of small business issuer on its charter)

    Nevada                          1381                        84-1598154
    ------                          ----                        ----------
(State or Other         (Primary Standard Industrial         (I.R.S. Employer
Jurisdiction of         Classification Code Number)       Identification Number)
Incorporation
or Organization)

                          1667 K Street, NW, Suite 1230
                             Washington, D.C. 20006
                                 (202) 223-4401
                          (Address and telephone number
         of principal executive offices and principal place of business)

Check whether the issuer (1) filed all reports required to be filed by sections
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 |_|

Check if disclosure of delinquent filers pursuant to Item 405, of Regulation S-B
is not contained in this form , and no disclosure will be contained, to the best
of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-KSB or any amendment to
this Form 10-KSB. |_|

Registrant's revenue for its most recent fiscal year: $473,163

On May 10, 2007 the aggregate market value of the voting stock of Standard
Drilling, Inc. held by non-affiliates of the registrant was $8,875,710. There is
currently a limited public market for the registrant's common stock.

As of May 10, 2007 there were 45,998,000, outstanding shares of common stock,
par value $0.001.

Transitional Small Business Format: Yes |_| No |X|

Documents incorporated by reference: None.


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<PAGE>

Cautionary Notice Regarding Forward Looking Statements

         "Standard Drilling," the "company," "we," "us" or "our" refer to
Standard Drilling, Inc., a Nevada corporation, and its subsidiaries, except
where otherwise indicated or required by context. This report contains a number
of forward-looking statements that reflect management's current views and
expectations with respect to our business, strategies, future results and events
and financial performance. All statements made in this Annual Report other than
statements of historical fact, including statements that address operating
performance, events or developments that management expects or anticipates will
or may occur in the future, including statements related to revenues, cash flow,
profitability, adequacy of funds from operations, statements expressing general
optimism about future operating results and non-historical information, are
forward looking statements. In particular, the words "believe," "expect,"
"intend," " anticipate," "estimate," "may," variations of such words, and
similar expressions identify forward-looking statements, but are not the
exclusive means of identifying such statements and their absence does not mean
that the statement is not forward-looking. These forward-looking statements are
subject to certain risks and uncertainties, including those discussed below. Our
actual results, performance or achievements could differ materially from
historical results as well as those expressed in, anticipated or implied by
these forward-looking statements. We do not undertake any obligation to revise
these forward-looking statements to reflect any future events or circumstances.


         Readers should not place undue reliance on these forward-looking
statements, which are based on management's current expectations and projections
about future events, are not guarantees of future performance, are subject to
risks, uncertainties and assumptions (including those described below) and apply
only as of the date of this report. Our actual results, performance or
achievements could differ materially from the results expressed in, or implied
by, these forward-looking statements. Factors that could cause or contribute to
such differences include, but are not limited to, those discussed below in "Risk
Factors" as well as those discussed elsewhere in this report, and the risks
discussed in our press releases and other communications to shareholders issued
by us from time to time which attempt to advise interested parties of the risks
and factors that may affect our business. We undertake no obligation to publicly
update or revise


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<PAGE>

ITEM 1.  DESCRIPTION OF BUSINESS.

General

         We currently have one 1500 horsepower land drilling rig and certain key
components and partial inventory for two 1500 horsepower rigs which are under
construction. We have a contract to with Romfor West Africa, Ltd. ("Romfor") to
construct 2 additional 1500 horsepower land drilling rigs using currently owned
key components together with newly purchased additional components. Our second
and third rigs may be completed and made operational if and when purchase orders
are received for them. Our drilling and rig construction operations are
currently idle as we evaluate our strategic options and financing alternatives.

         The Company is unable to forecast a time frame for completion of the
two additional rigs because of a lack of financing.

         Our operational headquarters are in the Houston, Texas area just south
of the United States' currently most active natural gas regions.

Our Executive Offices

         Our principal executive and administrative office facility is located
at 1667 K Street, N.W., Suite 1230, Washington, D.C. 20006 and our telephone
number is (202) 955-9490 and we have an operations office at Ashford VI, 1155
Dairy Ashford South, Fourth Floor, Houston, TX 77079.

Business Strategy

         Management and our Board of Directors are currently evaluating our
strategic options in light of changing market conditions and our inability to
secure additional financing.

Our Projects


Burnett Oil Company Project

         On November 1, 2006, we entered into an Agreement with Burnett Oil
Company ("Burnett"), pursuant to which the Company can earn an undivided 60%
working interest in certain Burnett oil and gas leases in exchange for a cash
payment of $250,000 by the Company to Burnett and the Company drilling and
completing a well, using one of its rigs, on the subject leases into the Barnett
Shale formation in the Fort Worth Basin in Johnson County, Texas. The first well
drilled under this Agreement was the DeCleva 1 well.

         The Agreement also gives the Company the right to submit proposals for
all future drilling operations with respect to the subject leases. Burnett has
agreed that it will retain the Company to conduct such drilling operations
provided that the Company's proposal includes financial terms no less favorable
than those offered by reputable third parties using comparable equipment and
crews, and that Burnett is satisfied with the quality and efficiency of the
Company's equipment and crews, subject to its sole discretion.

         On April 16, 2007, we signed a Termination Agreement with Burnett,
under which we terminated our participation in the DeCleva Project. Under the
terms of the Termination Agreement, Burnett placed $1.2 million into escrow.
These funds will be used to pay off existing liabilities incurred by Standard
during the drilling of the DeCleva 1 well. Within sixty days from the closing ,
if no other notices of claims, outstanding invoices not previously disclosed or
notices of liens have been received by either Burnett or Standard or filed
against the Well or Leases, then and only then will Burnett release the balance
of the account, if any, to Standard


                                       3
<PAGE>

The Land Drilling Industry

         Rig usage has steadily increased since 1999. From the average rig count
in 1999 to June 2006 the industry has experienced a growth rate in excess of
300%. Land drilling companies are putting new and refurbished land drilling rigs
into active drilling service to meet the demands of natural gas exploration and
production companies, who need of contract drilling services to exploit higher
natural gas prices. Over the past 2 years, average natural gas prices have been
rising due to (i) high production decline rates of current natural gas fields
and (ii) increasing demand to generate electricity in the United States from
consumers and power plants. A steady increase in natural gas prices in turn
increases the amount of drilling activity conducted by natural gas exploration
and production companies. This demand is met onshore by land drilling rig
companies who provide the equipment and crews to drill the wells for the
exploration and production industry.


Drilling Equipment

         A drilling rig consists of engines, a hoisting system, a rotating
system, pumps and related equipment to circulate drilling fluid, blowout
preventers and related equipment.

         Diesel or gas engines are typically the main power sources for a
drilling rig. Power requirements for drilling jobs may vary considerably, but
most drilling rigs employ two or more engines to generate between 500 and 2,000
horsepower, depending on well depth and rig design. Most drilling rigs capable
of drilling in deep formations, involving depths greater than 15,000 feet, use
diesel-electric power units to generate and deliver electric current through
cables to electrical switch gears, then to direct-current electric motors
attached to the equipment in the hoisting, rotating and circulating systems.

         Drilling rigs use long strings of drill pipe and drill collars to drill
wells. Drilling rigs are also used to set heavy strings of large-diameter pipe,
or casing, inside the borehole. Because the total weight of the drill string and
the casing can exceed 500,000 pounds, drilling rigs require significant hoisting
and braking capacities. Generally, a drilling rig's hoisting system is made up
of a mast, or derrick, a drilling line, a traveling block and hook assembly and
ancillary equipment that attaches to the rotating system, a mechanism known as
the drawworks. The drawworks mechanism consists of a revolving drum, around
which the drilling line is wound, and a series of shafts, clutches and chain and
gear drives for generating speed changes and reverse motion. The drawworks also
houses the main brake, which has the capacity to stop and sustain the weights
used in the drilling process. When heavy loads are being lowered, a hydraulic or
electric auxiliary brake assists the main brake to absorb the great amount of
energy developed by the mass of the traveling block, hook assembly, drill pipe,
drill collars and drill bit or casing being lowered into the well.

         The rotating equipment from top to bottom consists of a swivel, the
kelly bushing, the kelly, the rotary table, drill pipe, drill collars and the
drill bit. We refer to the equipment between the swivel and the drill bit as the
drill stem. The swivel assembly sustains the weight of the drill stem, permits
its rotation and affords a rotating pressure seal and passageway for circulating
drilling fluid into the top of the drill string. The swivel also has a large
handle that fits inside the hook assembly at the bottom of the traveling block.
Drilling fluid enters the drill stem through a hose, called the rotary hose,
attached to the side of the swivel. The kelly is a triangular, square or
hexagonal piece of pipe, usually 40 feet long, that transmits torque from the
rotary table to the drill stem and permits its vertical movement as it is
lowered into the hole. The bottom end of the kelly fits inside a corresponding
triangular, square or hexagonal opening in a device called the kelly bushing.
The kelly bushing, in turn, fits into a part of the rotary table called the
master bushing. As the master bushing rotates, the kelly bushing also rotates,
turning the kelly, which rotates the drill pipe and thus the drill bit. Drilling
fluid is pumped through the kelly on its way to the bottom. The rotary table,
equipped with its master bushing and kelly bushing, supplies the necessary
torque to turn the drill stem. The drill pipe and drill collars are both steel
tubes through which drilling fluid can be pumped. Drill pipe, sometimes called
drill string, comes in 30-foot sections, or joints, with threaded sections on
each end. Drill collars are heavier than drill pipe and are also threaded on the
ends. Collars are used on the bottom of the drill stem to apply weight to the
drilling bit. At the end of the drill stem is the bit, which chews up the
formation rock and dislodges it so that drilling fluid can circulate the
fragmented material back up to the surface where the circulating system filters
it out of the fluid.


                                       4
<PAGE>

         Drilling fluid, often called mud, is a mixture of clays, chemicals and
water or oil, which is carefully formulated for the particular well being
drilled. Bulk storage of drilling fluid materials, the pumps and the mud-mixing
equipment are placed at the start of the circulating system. Working mud pits
and reserve storage are at the other end of the system. Between these two points
the circulating system includes auxiliary equipment for drilling fluid
maintenance and equipment for well pressure control. Within the system, the
drilling mud is typically routed from the mud pits to the mud pump and from the
mud pump through a standpipe and the rotary hose to the drill stem. The drilling
mud travels down the drill stem to the bit, up the annular space between the
drill stem and the borehole and through the blowout preventer stack to the
return flow line. It then travels to a shale shaker for removal of rock
cuttings, and then back to the mud pits, which are usually steel tanks. The
reserve pits, usually one or two fairly shallow excavations, are used for waste
material and excess water around the location.

         There are numerous factors that differentiate drilling rigs, including
their power generation systems and their drilling depth capabilities. The actual
drilling depth capability of a rig may be less than or more than its rated depth
capability due to numerous factors, including the size, weight and amount of the
drill pipe on the rig.

                                  RISK FACTORS

         The following factors affect our business and the industry in which it
operates. The risks and uncertainties described below are not the only ones we
face. Additional risks and uncertainties not presently known or that we
currently consider immaterial may also have an adverse effect on our business.
If any of the matters discussed in the following risk factors were to occur, our
business, financial condition, results of operations, cash flows, or prospects
could be materially adversely affected.

Risks Relating to our Business

We will need to raise additional funds immediately in order to continue
operations. If we do not raise funds immediately we will be forced to cease our
operations, and our ability to obtain the necessary funding is uncertain.

         We will need to raise additional funds immediately in order to continue
our operations. If we do not raise funds immediately we will be forced to cease
our operations and we will be unable to continue as a going concern. We have no
immediate internal sources of funds from our existing credit line, and we do not
have any committed sources of capital. Additional financing through partnering,
public or private equity financings, lease transactions or other financing
sources may not be available on acceptable terms, or at all. Additional equity
financings could result in significant dilution to our stockholders



We currently have no revenue producing operations nor do we anticipate
generating any cash from operations in 2007.


                                       5
<PAGE>

         Our drilling and rig construction operations are currently idle as we
evaluate our strategic options and financing alternatives. We do not have any
rigs currently contracted or operating and our rigs are not currently, nor are
expected to produce any revenue from contract drilling unless additional
financing is attained.

         We currently have one 1500 horsepower land drilling rig and certain key
components and inventory for two 1500 horsepower rigs which are under
construction. We have a contract to purchase three 1500 horsepower rigs from
Romfor West Africa, Ltd. ("Romfor") Our second and third rigs may be completed
and made operational if and when purchase orders are received for them.



We are currently overdue on our Interim Credit Agreement, and have no ability to
immediately generate cash aside from a sale of assets.

         On November 27, 2006, Standard Drilling, Inc. (the "Company"), as
borrower, entered into an Interim Credit Agreement, effective as of November 20,
2006, with Prentis B. Tomlinson, Jr., the Chairman and Chief Executive Officer
of the Company, as lender, in an initial aggregate principal amount of $1
million (the "Loan"), which may be increased at Mr. Tomlinson's sole discretion
to a maximum aggregate principal amount of $5 million. The initial aggregate
principal amount of the Loan is evidenced by a Promissory Note, effective as of
November 20, 2006, made by the Company in favor of Mr. Tomlinson. Interest will
accrue on the outstanding principal amount of the Loan at the rate of 10% per
annum, compounded monthly. The outstanding principal amount of the Loan,
together with all unpaid accrued interest thereon, is payable upon demand by Mr.
Tomlinson no earlier than 90 days from November 20, 2006. The Company intends to
use the proceeds of the Loan for general corporate and working capital purposes.

         To secure the payment and performance of its obligations under the
Interim Credit Agreement and the Promissory Note, the Company entered into a
Security Agreement, effective as of November 20, 2006, in favor of Mr.
Tomlinson, pursuant to which the Company granted to Mr. Tomlinson a lien and
security interest in and to the Company's land drilling Rig #1.

         As of the date of this filing, the Loan is currently overdue. The
Company currently has no access to additional capital and does not have the
ability to repay the Loan unless we sell assets for cash. We may be forced to
sell all, or substantially all of our assets to pay our creditors and avoid a
potential involuntary bankruptcy petition. As of December 31, 2006, we had
outstanding payables of $4,128,557, a Loan payable, under our Interim Credit
Agreement of $1,657,578, and $52,313 in cash.


We have a limited operating history and limited revenues.

         Our business commenced in February 2006 and, accordingly, is subject to
substantial risks inherent in the commencement of a new business enterprise.
Consequently we have limited assets and operations. To date, we have generated
limited revenue from our operations, no business history and may not be able to
successfully identify, develop and operate oil and gas leases, generate
revenues, or operate profitably that investors can analyze to aid them in making
an informed judgment as to the merits of an investment in us. Any investment in
us should be considered a high risk investment because the investor will be
placing funds at risk in a company with unforeseen costs, expenses, competition,
and other problems to which new ventures are often subject.

         Investors should not purchase our stock unless they can afford to lose
their entire investment.


                                       6
<PAGE>


We operate in the oil and natural gas  exploration  and production  industry,  a
historically  cyclical  industry with levels of activity that are  significantly
affected by the levels and volatility of oil and natural gas prices.

         As a provider of contract land drilling services, our business depends
on the level of drilling activity by oil and natural gas exploration and
production companies operating in the geographic markets where we operate. The
oil and natural gas exploration and production industry is a historically
cyclical industry characterized by significant changes in the levels of
exploration and development activities. Oil and natural gas prices, and market
expectations of potential changes in those prices, significantly affect the
levels of those activities. Worldwide political, economic and military events
have contributed to oil and natural gas price volatility and are likely to
continue to do so in the future. Any prolonged reduction in the overall level of
exploration and development activities, whether resulting from changes in oil
and natural gas prices or otherwise, can materially and adversely affect us in
many ways by negatively impacting:

         o    our revenues, cash flows and profitability;

         o    our ability to maintain or increase our borrowing capacity;

         o    our ability to obtain additional capital to finance our business
              and make acquisitions, and the cost of that capital;

         o    our ability to retain skilled rig personnel whom we would need in
              the event of an upturn in the demand for our services; and

         o    the fair market value of our rig fleet.

         Depending on the market prices of oil and natural gas, oil and natural
gas exploration and production companies may cancel or curtail their drilling
programs, thereby reducing demand for our services. Oil and natural gas prices
have been volatile historically and, we believe, will continue to be so in the
future. Many factors beyond our control affect oil and natural gas prices,
including:

         o    the cost of exploring for, producing and delivering oil and
              natural gas;

         o    the discovery rate of new oil and natural gas reserves;

         o    the rate of decline of existing and new oil and natural gas
              reserves;

         o    significant increases in US imports of liquid natural gas (LNG)
              or in imports from Canada;

         o    available pipeline and other oil and natural gas transportation
              capacity;

         o    the ability of oil and natural gas companies to raise capital;

         o    actions by OPEC, the Organization of Petroleum Exporting
              Countries;

         o    political instability in the Middle East and other major oil and
              natural gas producing regions;

         o    economic conditions in the United States and elsewhere;

         o    governmental regulations, both domestic and foreign;

         o    domestic and foreign tax policy;


                                       7
<PAGE>

         o    weather conditions in the United States and elsewhere;

         o    the pace adopted by foreign governments for the exploration,
              development and production of their national reserves;

         o    the price of foreign imports of oil and natural gas; and

         o    the overall supply and demand for oil and natural gas.

We have limited sources of liquidity and will need to raise additional capital
in order to execute our business plan.

         We will require additional capital to execute our business plan, and
our ability to obtain the necessary funding is uncertain. The timing and degree
of any future capital requirements will depend on many factors, including:

         o    the accuracy of the assumptions underlying our estimates for our
              capital needs in 2007 and beyond;

         o    the number of prospects we identify;

         o    the terms on which we can obtain rights to those prospects;

         o    the cost of developing the prospects; and

         o    our success rate in developing economically successful prospects.

         We have no immediate internal sources of funds, and we do not have any
committed sources of capital. Additional financing through partnering, public or
private equity financings, lease transactions or other financing sources may not
be available on acceptable terms, or at all. Additional equity financings could
result in significant dilution to our stockholders. If sufficient capital is not
available, we may be required to delay or reduce the scope of our rig
acquisition or operation activities which could have a material adverse effect
on our business and financial results.

         As of December 31, 2006, our monthly operating overhead is
approximately $250,000 and such amount will increase as we expand our
operations.

Several of our officers are also employed as officers and directors for another
company which may lead to conflicts of interest for these officers.

Several of our officers, including our CEO, President and former CFO, are also
employed as officers and/or directors of Calibre Energy, Inc., a company engaged
in the business of exploration and production of oil and natural gas. There
exists a substantial possibility of a conflict of interest for those officers
employed by Calibre Energy, arising from their employment by both us and Calibre
Energy. As officers, these individuals will have a duty of loyalty to both
companies, and a conflict will arise if we enter into any arrangements with
Calibre Energy or if we and Calibre Energy engage, or attempt to engage, in the
same businesses. In such cases, the officers may not be able to make decisions
or take action that satisfies their obligations to both companies.

Employment of some of our officers by another company may limit the time they
have available to devote to managing our business.


                                       8
<PAGE>

         As noted above, several of our officers, including our President and
Vice Chairman, are also employed as officers and/or directors of Standard
Drilling. Calibre Energy pays the officers salaries comparable to, and in some
cases greater than, the salaries we pay them. Our employment agreements with
these officers require them to devote such time to managing our business as is
reasonably necessary to perform their duties under the employment agreement but
do not specify a specific number of hours or percentage of time. Further, the
officers have significant discretion on a day to day basis as to whether to
devote time to the management of our business or management of Calibre Energy's
business. As a result of the salaries paid to them by, their fiduciary duties
to, and their ownership of a substantial interest in, Calibre Energy, or for any
other reason, the officers may determine to devote most or all of their time to
Calibre Energy for an extended period of time. Because of the time required of
these officers to manage Calibre Energy's business, they may not devote
sufficient time to managing our business, and as a result our business and
financial results could be adversely affected. The supervision of the officers'
performance by directors without any conflict of interest regarding Calibre
Energy is limited to the oversight provided by Mr. Anderson, unless one or more
additional unconflicted directors are added to our Board in the future.

Our conflicts committee consists of a single director and, in the event of a
transaction or other circumstance involving Calibre Energy, Inc., the committee
will not be able to rely on the unconflicted advice of much of our senior
management, and if our single director resigns or is otherwise unable to perform
his obligations as a director, we will not be able to take action on a matter
involving conflicts for our remaining directors until either one or more new
unconflicted directors are appointed or the Board takes action in the absence of
unconflicted directors.

         Mr. Anderson is our only director who is not a director or officer of
Calibre Energy, and he does not constitute a majority of the Board of Directors.
Mr. Anderson is the sole member of our conflicts committee, which is charged
with determining all actions that are required to be taken or may be taken by us
with respect to any opportunity or transaction that involves a conflict of
interest for any officer or director. While the conflicts committee will have
complete access to our management and is entitled to engage such outside
engineering, financial, legal and other assistance as it deems appropriate, in
the event of a transaction or other circumstance involving Calibre Energy the
committee will not be able to rely on the unconflicted advice of much of our
senior management. Further, if Mr. Anderson resigns or is otherwise unable to
perform his obligations as a director, we will not be able to take action on any
matters that are delegated to the conflicts committee until one or more new
unconflicted directors are appointed and made members of the conflicts
committee, or unless and until the Board determines to take action in the
absence of any unconflicted directors, relying on its determination as to the
fundamental fairness of the proposed transaction to our shareholders.

Increases in the supply of rigs or a decrease in demand for rigs could decrease
dayrates and utilization rates.

         Any increase in the supply of land rigs, whether through new
construction or refurbishment, or a reduction in demand for rigs could decrease
dayrates and utilization rates, which would adversely affect our revenues and
profitability. In addition, such an adverse effect on our revenue and
profitability could be further aggravated by any downturn in oil and natural gas
prices which may lead to a decrease in the demand for rigs.

A material reduction in the levels of exploration and development activities in
the Ft. Worth and Arkoma Basins or an increase in the number of rigs mobilized
to the Ft. Worth and Arkoma Basins could materially and adversely affect our
operations.

         We intend to conduct all of our initial operations in the Ft. Worth and
Arkoma Basins. A material reduction in the levels of exploration and development
activities in Ft. Worth and Arkoma Basins due to a variety of oil and natural
gas industry risks described above or an increase in the number of rigs
mobilized to the Ft. Worth and Arkoma Basins could result in increased
competition, reduced rates and materially and adversely affect our operations.

If we are unable to successfully complete the refurbishment of our rigs on
schedule and use those rigs, at profitable levels, our financial condition and
results of operations will be adversely affected.


                                       9
<PAGE>

         Our three initial rigs that we have contracted to buy are in the
process of refurbishment. Our refurbishment projects are subject to the risks of
delay and potential cost overruns inherent in any large construction project,
including shortages of equipment, unforeseen engineering problems, work
stoppages, weather interference, unanticipated cost increases, inability to
obtain necessary certifications and approvals and shortages of materials or
skilled labor. Significant delays could have a material adverse effect on
anticipated contract commitments with respect to the rigs being refurbished,
while significant cost overruns or delays in general could adversely affect our
financial condition and results of operations.

The drilling industry has a history of cyclicality and may experience losses in
the future.

         Although the industry has been largely profitable in the last two
years, it has a history of losses. Our profitability in the future will depend
on many factors, but largely on utilization rates and dayrates for our drilling
rigs. Current utilization rates and dayrates may decline due to reductions in
demand for rigs or an oversupply of rigs, and we may experience losses in the
future.

We need to purchase additional rigs at reasonable cost in order to expand our
fleet; however, we may not be able to acquire any additional rigs which will
have an adverse effect on our operations and financial results.

         As a key component of our business strategy, we intend to acquire up to
three rigs in the next 5 months. We may be unable to continue to identify
additional suitable rigs, negotiate acceptable terms or successfully acquire any
rigs. In addition, we will have to ultimately refurbish our rigs. Our failure to
incorporate any acquired assets into our operations successfully or to minimize
any unforeseen operational difficulties could have a material adverse effect on
our financial condition and results of operations.

We operate in a highly competitive, fragmented industry in which price
competition is intense.

         We will encounter substantial competition from other drilling
contractors. Our primary market areas are highly fragmented and competitive. The
fact that drilling rigs are mobile and can be moved from one market to another
in response to market conditions heightens the competition in the industry.

         The drilling contracts we compete for are usually awarded on the basis
of competitive bids or direct negotiations with customers. We believe pricing
and rig availability are the primary factors our potential customers consider in
determining which drilling contractor to select. In addition, we believe the
following factors are also important:

         o    the type and condition of each of the competing drilling rigs;

         o    the ability to provide drilling equipment adaptable to, and
              personnel familiar with, new technologies and drilling
              techniques.

         o    the mobility and efficiency of the rigs;

         o    the quality of service and experience of the rig crews; and

         o    the offering of ancillary services.

         While we must be competitive in our pricing, our competitive strategy
is to emphasize the quality of our equipment and experience of our drilling
management to differentiate us from our competitors. This strategy is less
effective when lower demand for drilling services or an oversupply of rigs
usually results in increased price competition making it more difficult for us
to compete on the basis of factors other than price. In all of the markets in
which we compete, an oversupply of rigs can cause greater price competition.


                                       10
<PAGE>

         Contract drilling companies compete primarily on a regional basis, and
the intensity of competition may vary significantly from region to region at any
particular time. If demand for drilling services improves in a region where we
operate, our competitors might respond by moving in suitable rigs from other
regions. An influx of rigs from other regions could rapidly intensify
competition and reduce profitability.

We face competition from many competitors with greater resources which may make
it more difficult for us to compete.

         Many of our competitors have greater financial, technical and other
resources than we do. Their greater capabilities in these areas may enable them
to:

         o    better withstand industry downturns;

         o    compete more effectively on the basis of price and technology;

         o    retain skilled rig personnel; and

         o    build new rigs or acquire and refurbish existing rigs so as to be
              able to place rigs into service more quickly than us in periods
              of high drilling demand.

Unexpected cost overruns on footage contracts or turnkey contracts could
adversely affect our financial position and our results of operations.

         Although we intend to focus on daywork contracts, we could choose to
enter into footage contracts. Under a footage contract we are responsible for
"in-hole" equipment, damage to the hole and controlling any event that could
arise from fire or uncontrollable flows of oil or natural gas above or below the
surface of the ground. We do not purchase insurance for these exposures and we
might have to bear the full cost of such risks, which could have an adverse
effect on our financial condition and results of operation. Similar to our
footage contracts, under turnkey contracts drilling companies assume most of the
risks associated with drilling operations that the operator generally assumes
under a daywork contract. Although we do not expect to regularly enter into
turnkey contracts, if we were to enter into a turnkey contract or acquire such a
contract in connection with future acquisitions, the occurrence of uninsured or
under-insured losses or operating cost overruns on such a job could have a
material adverse effect on our financial position and results of operations.

Our operations involve operating hazards, which if not insured or indemnified
against, could adversely affect our results of operations and financial
condition.

         Our operations are subject to the many hazards inherent in the contract
land drilling business, including the risks of:

         o    blowouts;

         o    fires and explosions;

         o    loss of well control;

         o    collapse of the borehole;

         o    lost or stuck drill strings; and

         o    damage or loss from natural disasters.


                                       11
<PAGE>

         Any of these hazards can result in substantial liabilities or losses to
us from, among other things:

         o    damage or loss from natural disasters;

         o    damage to, or destruction of, our property and equipment and that
              of others;

         o    personal injury and loss of life;

         o    damage to producing or potentially productive oil and natural gas
              formations through which we drill; and

         o    environmental damage.

         We will seek to protect ourselves from some but not all operating
hazards through insurance coverage. However, some risks are either not insurable
or insurance is available only at rates that we consider uneconomical. Those
risks include pollution liability in excess of relatively low limits. Depending
on competitive conditions and other factors, we attempt to obtain contractual
protection against uninsured operating risks from our customers. However,
customers who provide contractual indemnification protection may not in all
cases maintain adequate insurance or assets to support their indemnification
obligations. Our insurance or indemnification arrangements may not adequately
protect us against liability or loss from all the hazards of our operations. The
occurrence of a significant event that we have not fully insured or indemnified
against or the failure of a customer to meet its indemnification obligations to
us could materially and adversely affect our results of operations and financial
condition. Furthermore, we may be unable to maintain adequate insurance in the
future at rates we consider reasonable.

We face increased exposure to operating difficulties because we primarily focus
on drilling for natural gas which increases the risk we may experience operating
difficulties which increase our costs or create significant liabilities.

         A majority of our drilling contracts are expected to be with
exploration and production companies in search of natural gas. Drilling on land
for natural gas generally occurs at deeper drilling depths than drilling for
oil. Although deep-depth drilling exposes us to risks similar to risks
encountered in shallow-depth drilling, the magnitude of the risk for deep-depth
drilling is greater because of the higher costs and greater complexities
involved in drilling deep wells. We expect to generally enter into International
Association of Drilling Contractors contracts that contain "day work"
indemnification language that transfers responsibility for down hole exposures
such as blowout and fire to the operator, leaving us responsible only for damage
to our rig and our personnel. If we do not adequately insure the risk from
blowouts or if our contractual indemnification rights are insufficient or
unfulfilled, our profitability and other results of operation and our financial
condition could be adversely affected in the event we encounter blowouts or
other significant operating difficulties while drilling at deeper depths.

Our operations are subject to various laws and governmental regulations that
could restrict our future operations, increase our operating costs and adversely
affect out business and financial conditions.

         Many aspects of our operations are subject to various federal, state
and local laws and governmental regulations, including laws and regulations
governing:

         o    environmental quality;

         o    pollution control;

         o    remediation of contamination;


                                       12
<PAGE>

         o    preservation of natural resources; and

         o    worker safety.

         Our operations are subject to stringent federal, state and local laws
and regulations governing the protection of the environment and human health and
safety. Several such laws and regulations relate to the disposal and discharge
of hazardous oilfield waste and other waste material into the environment.
Several such laws also require removal and remedial action and other cleanup
under certain circumstances, commonly regardless of fault. These laws and
regulations may require the acquisition of permits before drilling commences and
may restrict the types, quantities, concentrations and control of substances
that can be released into the environment. Planning, implementation and
maintenance of protective measures are required to prevent accidental
discharges.

         Spills of oil, natural gas liquids, drilling fluids and other
substances may subject us to penalties and cleanup requirements. Handling,
storage and disposal of both hazardous and non-hazardous wastes are also subject
to these regulatory requirements. In addition, our operations are often
conducted in or near ecologically sensitive areas, which are subject to special
protective measures and which may expose us to additional operating costs and
liabilities for accidental discharges of oil, natural gas, drilling fluids,
contaminated water or other substances or for noncompliance with other aspects
of applicable laws and regulations.

         The federal Clean Water Act, as amended by the Oil Pollution Act, the
federal Clean Air Act, the federal Resource Conservation and Recovery Act, the
federal Comprehensive Environmental Response, Compensation, and Liability Act,
or CERCLA, the Safe Drinking Water Act, the Occupational Safety and Health Act,
or OSHA, and their state counterparts and similar statutes are the primary
vehicles for imposition of such requirements and for civil, criminal and
administrative penalties and other sanctions for violation of their
requirements. The OSHA hazard communication standard, the Environmental
Protection Agency "community right-to-know" regulations under Title III of the
federal Superfund Amendment and Reauthorization Act and comparable state
statutes require us to organize and report information about the hazardous
materials we use in our operations to employees, state and local government
authorities and local citizens. In addition, CERCLA, also known as the
"Superfund" law, and similar state statutes impose strict liability, without
regard to fault or the legality of the original conduct, on certain classes of
persons who are considered responsible for the release or threatened release of
hazardous substances into the environment. These persons include the current
owner or operator of a facility where a release has occurred, the owner or
operator of a facility at the time a release occurred, and companies that
disposed of or arranged for the disposal of hazardous substances found at a
particular site. This liability may be joint and several. Such liability, which
may be imposed for the conduct of others and for conditions others have caused,
includes the cost of removal and remedial action as well as damages to natural
resources. Few defenses exist to the liability imposed by environmental laws and
regulations. It is also not uncommon for third parties to file claims for
personal injury and property damage caused by substances released into the
environment.

         Environmental laws and regulations are complex and subject to frequent
changes. Failure to comply with governmental requirements or inadequate
cooperation with governmental authorities could subject a responsible party to
administrative, civil or criminal action. We may also be exposed to
environmental or other liabilities originating from businesses and assets that
we acquired from others. Compliance with applicable environmental laws and
regulations has not, to date, materially affected our capital expenditures,
earnings or competitive position, although compliance measures have added to our
costs of our drilling equipment. We do not expect to incur material capital
expenditures in our next fiscal year in order to comply with current or
reasonably anticipated environment control requirements. However, our compliance
with amended, new or more stringent requirements, stricter interpretations of
existing requirements or the future discovery of regulatory noncompliance or
contamination may require us to make material expenditures or subject us to
liabilities that we currently do not anticipate.


                                       13
<PAGE>

         In addition, our business depends on the demand for land drilling
services from the oil and natural gas industry and, therefore, is affected by
tax, environmental and other laws relating to the oil and natural gas industry
generally, by changes in those laws and by changes in related administrative
regulations. It is possible that these laws and regulations may in the future
add significantly to our operating costs or those of our customers or otherwise
directly or indirectly affect our operations.

We rely on a few key employees whose absence or loss could adversely affect our
business.

         Many key responsibilities within our business have been assigned to a
small number of employees. The loss of their services could adversely affect our
business. In particular, the loss of the services of our Chairman and Chief
Executive Officer Prentis B. Tomlinson, Jr., President and Chief Operating
Officer Edward L. Moses, Jr. or our Vice President of Operations, Michael J.
Walker, could disrupt our operations. We have entered into employment contracts
with our executives. As a practical matter, any employment agreement we may
enter into will not assure the retention of our employees. In addition, we do
not maintain "key person" life insurance policies on any of our employees. As a
result, we are not insured against any losses resulting from the death of any
key employee.

We may be unable to attract and retain qualified, skilled employees necessary to
operate our business.

         Our success depends in large part on our ability to attract and retain
skilled and qualified personnel. Our inability to hire, train and retain a
sufficient number of qualified employees could impair our ability to manage and
maintain our business. We require skilled employees who can perform physically
demanding work. Shortages of qualified personnel are occurring in our industry.
As a result of the volatility of the oil and natural gas industry and the
demanding nature of the work, potential employees may choose to pursue
employment in fields that offer a more desirable work environment at wage rates
that are competitive with ours. If we should suffer any material loss of
personnel to competitors or be unable to employ additional or replacement
personnel with the requisite level of training and experience to adequately
operate our equipment, our operations could be materially and adversely
affected. With a reduced pool of workers, it is possible that we will have to
raise wage rates to attract workers from other fields and to retain our current
employees. If we are not able to increase our service rates to our customers to
compensate for wage-rate increases, our financial condition and results of
operations may be adversely affected. In addition, demand for workers with the
necessary skills is increasing and making it more difficult to locate and hire
such employees.

We could be adversely affected by shortages of equipment supplies.

         The materials and supplies we will use in our drilling operations
include fuels to operate our drilling equipment, drilling mud, drill pipe, drill
collars, drill bits and cement. We do not rely on a single source of supply for
any of these items. From time to time there have been shortages of drilling
equipment and supplies during periods of high demand which we believe could
reoccur. Shortages could result in increased prices for drilling equipment or
supplies that we may be unable to pass on to customers. In addition, during
periods of shortages, the delivery times for equipment and supplies can be
substantially longer. Any significant delays in our obtaining drilling equipment
or supplies could limit drilling operations and jeopardize our relations with
customers. In addition, shortages of drilling equipment or supplies could delay
and adversely affect our ability to obtain new contracts for our rigs, which
could have a material adverse effect on our financial condition and results of
operations.

Drilling wells is speculative, unpredictable, and may be unprofitable.

         We will be required to pay our pro rata share of drilling expenses on a
prospect where we take a working interest. Drilling involves high risk, and the
probability is high that no oil and gas will be discovered in commercial
quantities. In most instances, a dry hole will result in a total loss of any
amounts invested in obtaining and the drilling of the prospect.


                                       14
<PAGE>

Risks Related to Our Common Stock

There is currently no market for our securities, and there are substantial
restrictions on the transferability of our securities.

         There is currently a limited market for our common stock. Accordingly,
purchasers of the shares offered hereby will be required to bear the economic
consequences of holding such securities for an indefinite period of time. An
active trading market for our common stock may not ever develop. Any trading
market that does develop may be volatile, and significant competition to sell
our common stock in any such trading market may exist, which could negatively
affect the price of our common stock. As a result, the value of our common stock
may decrease. Additionally, if a trading market does develop, such market may be
highly illiquid, and our common stock may trade at a price that does not
accurately reflect the underlying value of our net assets or business prospects.
Investors are cautioned not to rely on the possibility that an active trading
market may develop or on the prices at which our stock may trade in any market
that does develop in making an investment decision.

We presently do not intend to pay cash dividends on our stock.

         We currently anticipate that no cash dividends will be paid on any of
our stock in the foreseeable future. While our dividend policy will be based on
the operating results and capital needs of the business, it is anticipated that
all earnings, if any, will be retained to finance future expansion of our
business.

         Our officers and directors control 28.5% of our stock and thus may
elect the majority of our directors.

         Our officers and directors own or control a substantial portion of our
issued and outstanding shares of the Company. Officers and directors own
approximately 28.5% of the issued and outstanding shares of common stock.
Therefore, officers and directors will have the voting power to elect members of
our board of directors and to control substantially all corporate actions and
decisions for an indefinite period of time. The business is managed and
controlled primarily by the officers and directors.

ITEM 2.  DESCRIPTION OF PROPERTY.

         Office Lease. Standard Drilling , Inc. also leases 2,360 square feet of
office space in Washington, D.C. that serves as its corporate office. The lease
is at market rates and expires in October 2008. Additionally, Stanrard has an
operations office of 4,000 square feet in Houston, Texas. The lease is at market
rates and expires in August 30, 2011.

ITEM 3.  LEGAL PROCEEDINGS.

         We are not currently a party to any legal proceedings.


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

         No meetings were held in 2006.


                                       15
<PAGE>

                                     PART II


ITEM 5.  MARKET FOR COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND SMALL
BUSINESS ISSUER PURCHASES OF EQUITY SECURITIES

PRICE RANGE OF OUR COMMON STOCK AND DIVIDEND POLICY

         As of March 15, 2007 after consummation of the merger, there were
45,998,000 shares of our common stock outstanding, held by approximately 241
holders, including shares held in street name. Our common stock is quoted on the
OTC Bulletin Board under the symbol "STDR.OB." The following table sets forth,
for the periods indicated, the high and low bids for our common stock; the bids
reflect inter-dealer prices, without retail mark-up, mark-down or commission and
may not represent actual transactions. The last reported bid for our common
stock on the OTC Bulletin Board on May 14, 2007 was $0.27 per share.

                                                           High           Low
   Fiscal Year Ended December 31, 2004
     First Quarter.....................................     $0             $0
     Second Quarter....................................      0              0
     Third Quarter.....................................      0              0
     Fourth Quarter....................................      0              0

   Fiscal Year Ended December 31, 2005
     First Quarter.....................................      0              0
     Second Quarter....................................      0              0
     Third Quarter.....................................      0              0
     Fourth Quarter....................................      0              0

   Fiscal Year Ended December 31, 2006
     First Quarter.....................................      0              0
     Second Quarter....................................      0              0
     Third Quarter.....................................      0              0
     Fourth Quarter ...................................     1.13           1.13

   Fiscal Year Ended December 31, 2007
     First Quarter (Through March 31, 2007)............     1.05           0.58




         The stock market has from time to time experienced significant price
and volume fluctuations that are unrelated to the operating performance of
particular companies. Like the stock prices of other small exploration and
production companies, the market price of our common stock may in the future be,
subject to significant volatility. Factors such as reports on the results of
leasing or drilling operations, changes in the price of oil and gas or drilling
costs, changes in estimates of our performance by securities analysts, and
failure to meet securities analysts' expectations may have a significant effect
on the market price of our common stock. In addition, the price of our stock
could be affected by stock price volatility in the exploration and production
industry or the capital markets in general without regard to our operating
performance.

ITEM 6.  MANAGEMENT'S DISCUSSION AND ANALYSIS AND PLAN OF OPERATIONS


                                       16
<PAGE>

Results of Operations from February 14, 2006 (Inception) to December 31, 2006

         We commenced our operations and entered into a contract for the
construction of three rigs in February 2006. Prior to that time, we did not have
any significant activities or assets. Consequently, we are not able to compare
results of operations for the period from February 14, 2006 (inception) to
December 31, 2006 to any earlier period.



         Burnett Oil Company Project

         On November 1, 2006, we entered into an Agreement with Burnett Oil
Company ("Burnett"), pursuant to which the Company can earn an undivided 60%
working interest in certain Burnett oil and gas leases in exchange for a cash
payment of $250,000 by the Company to Burnett and the Company drilling and
completing a well, using one of its rigs, on the subject leases into the Barnett
Shale formation in the Fort Worth Basin in Johnson County, Texas. The first well
drilled under this Agreement was the DeCleva 1 well.

         The Agreement also gives the Company the right to submit proposals for
all future drilling operations with respect to the subject leases. Burnett has
agreed that it will retain the Company to conduct such drilling operations
provided that the Company's proposal includes financial terms no less favorable
than those offered by reputable third parties using comparable equipment and
crews, and that Burnett is satisfied with the quality and efficiency of the
Company's equipment and crews, subject to its sole discretion.


         On April 16, 2007, we signed a Termination Agreement with Burnett,
under which we terminated our participation in the DeCleva Project. Under the
terms of the Termination Agreement, Burnett placed $1.2 million into escrow.
These funds will be used to pay off existing liabilities incurred by Standard
during the drilling of the DeCleva 1 well. Within sixty days from the closing ,
if no other notices of claims, outstanding invoices not previously disclosed or
notices of liens have been received by either Burnett or Standard or filed
against the Well or Leases, then and only then will Burnett release the balance
of the account, if any, to Standard


         Net Sales.

         For the period from February 14, 2006 (inception) to December 31, 2006,
we had revenues of $473,163.

         General and Administrative Expenses.

         For the period from February 14, 2006 (inception) to December 31, 2006,
general and administrative expenses were $4,226,194. A total of $1,410,932 was
for costs associated with our continuing general and administrative expenses,
$353,674 was for professional fees principally associated with capital raising
activities, and $2,041,118 was for compensation expense.

         Net Loss.

         For the period from February 14, 2006 (inception) to December 31, 2006,
we had a net loss of $3,624,041. The net loss is primarily attributable to
minimal operating revenues to support general and administrative costs until
such time as we achieve operating results from our drilling program.


                                       17
<PAGE>

         Liquidity and Capital Resources

         As of December 31, 2006, we had cash of $52,313 and a working capital
deficit of $7,452,821. We expect to have monthly overhead costs of approximately
$250,000 per month for the next twelve months. Since our inception, our primary
sources of liquidity have been generated by the sale of equity securities
(including the issuance of securities in exchange for goods and services to
third parties and to pay costs of employees), draw downs on our Interim Credit
Agreement, and cash generated from the sale of assets. To date, the net proceeds
from the sales of securities have been used to fund the construction of our
drilling rigs and our general and administrative costs including substantial
costs for the registration of our securities.

         We will need to raise additional funds immediately in order to continue
our operations. If we do not raise funds immediately we will be forced to cease
our operations and we will be unable to continue as a going concern. We have no
immediate internal sources of funds, and we do not have any committed sources of
capital. Additional financing through partnering, public or private equity
financings, lease transactions or other financing sources may not be available
on acceptable terms, or at all. Additional equity financings could result in
significant dilution to our stockholders.

         On November 27, 2006, Standard Drilling, Inc. (the "Company"), as
borrower, entered into an Interim Credit Agreement, effective as of November 20,
2006, with Prentis B. Tomlinson, Jr., the Chairman and Chief Executive Officer
of the Company, as lender, in an initial aggregate principal amount of $1
million (the "Loan"), which may be increased at Mr. Tomlinson's sole discretion
to a maximum aggregate principal amount of $5 million. The initial aggregate
principal amount of the Loan is evidenced by a Promissory Note, effective as of
November 20, 2006, made by the Company in favor of Mr. Tomlinson. Interest will
accrue on the outstanding principal amount of the Loan at the rate of 10% per
annum, compounded monthly. The outstanding principal amount of the Loan,
together with all unpaid accrued interest thereon, is payable upon demand by Mr.
Tomlinson no earlier than 90 days from November 20, 2006. The Company intends to
use the proceeds of the Loan for general corporate and working capital purposes.

         To secure the payment and performance of its obligations under the
Interim Credit Agreement and the Promissory Note, the Company entered into a
Security Agreement, effective as of November 20, 2006, in favor of Mr.
Tomlinson, pursuant to which the Company granted to Mr. Tomlinson a lien and
security interest in and to the Company's land drilling Rig #1.

         As of the date of this filing, the Loan is currently overdue. The
Company currently has no access to additional capital and does not have the
ability to repay the Loan unless we sell assets for cash.


         On June 9, 2006, we raised an aggregate of $18,223,000 ($16,488,290 net
of offering costs) through the sale of 9,111,500 units of Standard Drilling.
Each unit consists of two shares of common stock of Standard Drilling and one
warrant to purchase a share of common stock of Standard Drilling at an exercise
price of $1.75 and a term of 2 years.

         CASH FLOW FROM OPERATING ACTIVITIES

         For the period from February 14, 2006 (inception) to December 31, 2006,
net cash provided by operating activities was $459,397, primarily attributed to
a net loss of $3,624,041 in the period offset by an increase in accounts payable
of $4,128,557.

         CASH FLOW FROM INVESTING ACTIVITIES

         For the period from February 14, 2006 (inception) to December 31, 2006,
net cash used in investing activities was $20,821,364, driven primarily by our
investment in the construction of our drilling rigs.


                                       18
<PAGE>

         CASH FLOW FROM FINANCING ACTIVITIES

         For the period from February 14, 2006 (inception) to December 31, 2006,
net cash provided by financing activities was $18,775,453, which was attributed
to our sale of common stock and purchase warrants. At December 31, 2006, the
Company had received net proceeds from notes payable of $1,657,578.

Future capital expenditures and commitments

         As of December 31, 2006, our remaining cash balance and revenues from
existing projects will be insufficient to cover our current liabilities,
obligations and contractual commitments for the remainder of 2007. We will need
to raise additional capital through the sale of equity and/or debt securities to
fully meet our 2007 capital budget. Failure to raise necessary capital or
generate sufficient cash flow from operations in 2007 will cause us to curtail
or eliminate certain development and drilling of existing and planned projects
as well as to curtail the acquisition of mineral properties.

         As a result, the actual amount and timing of our capital expenditures
may differ materially from our estimates. Some of the other factors which may
prevent us from meeting our 2007 capital budget are, among other things, actual
drilling results, cost overruns, the availability of drilling rigs and other
services and equipment, regulatory, technological and competitive developments,
and all such other assumptions referenced in this report.

         Off-Balance Sheet Arrangements

         As of December 31, 2006, we had no off-balance sheet arrangements.

         Related Party Transactions

         For more information on these transactions, please read "Certain
Relationships and Related Party Transactions" in this prospectus.

         Critical Accounting Policies

         Our discussion and analysis of our financial condition and results of
operations is based on our financial statements, which have been prepared in
accordance with generally accepted accounting principles in the United States of
America. The preparation of these financial statements requires us to make
estimates and judgments that affect the reported amounts of assets, liabilities
and expenses. We base our estimates on historical experience and on various
other assumptions that we believe to be reasonable under the circumstances, the
results of which form the basis for making judgments about the carrying values
of assets and liabilities that are not readily apparent from other sources.
Actual results may differ from these estimates under different assumptions or
conditions. We believe the following critical accounting policies affect our
most significant judgments and estimates used in preparation of our consolidated
financial statements.

         Use of Estimates.

         The preparation of financial statements in conformity with generally
accepted accounting principles in the United States of America 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 reporting period. Actual results could differ from those
estimates.


                                       19
<PAGE>

         Significant estimates also will include proved oil and gas reserve
quantities which are the basis for the calculation of depreciation, depletion
and impairment of oil and gas properties, and timing and costs associated with
its retirement obligations. Currently, we have no proved oil and gas reserves.

         Cash and Cash Equivalents.

         Cash and cash equivalents include cash in banks and certificates of
deposit which mature within three months of the date of purchase.

         Concentration of Credit Risk..

         Financial instruments that potentially subject us to concentration of
credit risk consist of cash. At December 31, 2006, we had no cash accounts in
excess of federally insured limits. We maintain cash accounts only at large high
quality financial institutions and we believe the credit risk associated with
cash is remote.

         Oil and Gas Properties.

         We follow the full cost method of accounting for oil and gas
properties. Accordingly, all costs associated with acquisition, exploration, and
development of oil and gas reserves, including directly related overhead costs
and related asset retirement costs, are capitalized.

         All capitalized costs of oil and gas properties, including the
estimated future costs to develop proved reserves, are amortized on the
unit-of-production method using estimates of proved reserves. Investments in
unproved properties and major development projects in progress are not amortized
until proved reserves associated with the projects can be determined and are
periodically assessed for impairment. If the results of an assessment indicate
that the properties are impaired, such impairment is added to the costs being
amortized and is subject to the ceiling test.

         Capitalized costs are subject to a "ceiling test," which limits such
costs to the aggregate of the "estimated present value," discounted at a
10-percent interest rate of future net revenues from proved reserves, based on
current economic and operating conditions, plus the cost of properties not being
amortized, plus the lower of cost or fair market value of unproved properties
included in costs being amortized, less the income tax effects related to book
and tax basis differences of the properties.

         Sales of proved and unproved properties are accounted for as
adjustments of capitalized costs with no gain or loss recognized, unless such
adjustments would significantly alter the relationship between capitalized costs
and proved reserves of oil and gas, in which case the gain or loss is recognized
in income. Abandonments of properties are accounted for as adjustments of
capitalized costs with no loss recognized.

         Oil and Gas Properties Not Subject to Amortization.

         We are currently participating, on a non-operated basis, in oil and gas
exploration and development activities. At December 31, 2006, all oil reserves
have been classified as unproved reserves. Consequently, all the property,
development and exploratory costs have been excluded in computing amortization.
We will begin to amortize these costs when these projects are evaluated, which
is currently estimated to be 2007.

         Drilling Rigs and Equipment

         Drilling rigs and equipment, including renewals and betterments, are
capitalized and stated at cost, while maintenance and repairs are expensed
currently. Assets are depreciated on a straight-line basis. The depreciable
lives of land drilling equipment approximate 15 years. The depreciable life for
certain other equipment including drill pipe and camp quarters ranges from three
to seven years. Depreciation is not commenced until acquired rigs and equipment
are placed in service. Once placed in service, depreciation continues when rigs
are being repaired, refurbished or between periods of deployment. As of December
31, 2006, we had not recognized any depreciation expense associated with
drilling rigs, as no rigs had been placed in service. We periodically evaluate
long-lived assets to determine that their net carrying value is not in excess of
their net realizable value. We consider a number of factors, such as estimated
future cash flows and current market value analysis in determining the net
realizable value. Assets are written down to fair value if the fair value is
below the net carrying value.


                                       20
<PAGE>

         Revenue Recognition.

         We expect to derive substantially all of our revenues from the oil and
natural gas land drilling services. Drilling revenues and expenses for daywork
and term contracts are recorded as the drilling progresses. For footage
contracts, we recognize the revenues and expenses upon completion of the well.
We generally receive payment from one to three months after the service has been
rendered. Oil and gas revenues are recorded in the month the product is
delivered to the purchaser and title transfers. We generally receive payment
from one to three months after the sale has occurred. Each month we estimate the
volumes sold and the price at which they were sold to record revenue. Variances
between estimated revenue and actual amounts are recorded in the month payment
is received.

         Furniture and Office Equipment.

         Furniture and office equipment is stated at cost. Depreciation is
computed on a straight-line basis over the estimated useful lives of 5 years.
During the period from inception to December 31, 2006, depreciation expense was
$30,307.

         Employee Stock Plan.

         At December 31, 2006, we have a stock-based compensation plan, which is
described more fully in Note 8 to our financial statements included elsewhere in
this prospectus. As required under generally accepted accounting principles, we
account for the plan under the recognition and measurement principles of FASB
Statement No. 123R, Accounting for Stock-Based Compensation.


                                       21
<PAGE>

ITEM 7.  FINANCIAL STATEMENTS

             REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors
Standard Drilling, Inc.
Washington, DC 20006

We have audited the accompanying balance sheet of Standard Drilling, Inc. as of
December 31, 2006, and the related statements of operations, shareholders'
equity and comprehensive income, and cash flows for the period from February 14,
2006 (inception) through December 31, 2006. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audit.

We conducted our audit in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement.. An audit also includes examining,
on a test basis, evidence supporting the amounts and disclosures in the
financial statements, assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Standard Drilling, Inc. as of
December 31, 2006, and the results of its operations and its cash flows for the
period from February 14, 2006 (inception) through December 31, 2006, in
conformity with accounting principles generally accepted in the United States of
America.

The accompanying financial statements have been prepared assuming that Standard
Drilling, Inc. will continue as a going concern. As discussed in Note 3 to the
financial statements, Standard Drilling, Inc. was formed on February 14, 2006
and has commitments for the purchase of equipment that exceed available funds;
has no revenues; and has generated operating losses since inception, which
raises substantial doubt about its ability to continue as a going concern.
Management's plans in regard to these matters are described in Note 3. The
financial statements do not include any adjustments that might result from the
outcome of this uncertainty.



/s/ Moore & Associates, Chartered


Moore & Associates, Chartered
Las Vegas, Nevada
May 14, 2007


                                       22
<PAGE>

                             STANDARD DRILLING, INC.
                                  Balance Sheet



                                     ASSETS
                                     ------

                                                                   December 31,
                                                                       2006
                                                                   ------------
CURRENT ASSETS

        Cash and cash equivalents                                  $     52,313
        Accounts receivable                                             486,610
        Prepaid expenses                                                503,776
        Short-term note receivable                                        5,000
                                                                   ------------

                 Total Current Assets                                 1,047,699
                                                                   ------------

PROPERTY & EQUIPMENT

        Oil and gas properties                                        2,989,933
        Drilling rigs and machinery                                   7,516,024
        Office furniture and equipment                                1,281,572
        Accumulated depreciation                                        (30,307)
                                                                   ------------

                 Total Property & Equipment, Net                     11,757,222
                                                                   ------------

OTHER ASSETS

        Deposits on rigs                                              8,974,689
        Notes receivable                                                 13,750
        Equity investment                                                59,146
                                                                   ------------

                 Total Other Assets                                   9,047,585
                                                                   ------------

                 TOTAL ASSETS                                      $ 21,852,506
                                                                   ============


                                       23

   The accompanying notes are an integral part of these financial statements.


<PAGE>

                             STANDARD DRILLING, INC.
                                  Balance Sheet




                 LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
                 ----------------------------------------------

CURRENT LIABILITIES

        Accounts payable                                           $  4,128,557
        Accrued expenses                                              2,711,385
        Note payable - related party                                  1,657,578
                                                                   ------------

                 Total Current Liabilities                            8,497,520
                                                                   ------------

                 TOTAL LIABILITIES                                    8,497,520

STOCKHOLDERS' EQUITY (DEFICIT)

        Common stock; 100,000,000 shares authorized,
          at $0.001 par value, 45,073,000 shares
         issued and outstanding, respectively                            45,073
        Additional paid-in capital                                   18,026,709
        Stock subscriptions receivable                                 (370,000)
        Prepaid stock awards                                           (722,755)
        Accumulated deficit                                          (3,624,041)
                                                                   ------------

                 Total Stockholders' Equity (Deficit)                13,354,986
                                                                   ------------

                 TOTAL LIABILITIES AND STOCKHOLDERS'
                   EQUITY (DEFICIT)                                $ 21,852,506
                                                                   ============




   The accompanying notes are an integral part of these financial statements.


                                       24
<PAGE>

                             STANDARD DRILLING, INC.
                            Statements of Operations

                                                               From Inception
                                                            of the Development
                                                                  Stage on
                                                             February 14, 2006
                                                                  Through
                                                                December 31,
                                                                    2006
                                                             ------------------


REVENUES - Drilling                                          $          473,163

COST OF SALES                                                           360,396
                                                             ------------------

         GROSS PROFIT                                                   112,767
                                                             ------------------

OPERATING EXPENSES

      Salaries and wages                                              2,041,118
      Depreciation, amortization, and depletion                          30,307
      Legal and professional                                            353,674
      General and administrative                                      1,408,720
                                                             ------------------

         Total Operating Expenses                                     3,833,819
                                                             ------------------

         OPERATING LOSS                                              (3,721,052)
                                                             ------------------

OTHER INCOME (EXPENSE)

      Interest income                                                   136,689
      Interest expense                                                  (11,324)
      Loss on investment                                                (28,354)
                                                             ------------------

         Total Other Income (Expense)                                    97,011
                                                             ------------------

         NET LOSS                                            $       (3,624,041)
                                                             ==================

         BASIC AND DILUTED
           LOSS PER SHARE                                    $            (0.09)
                                                             ==================

         WEIGHTED AVERAGE
           NUMBER OF SHARES
           OUTSTANDING                                               41,965,500
                                                             ==================




   The accompanying notes are an integral part of these financial statements.


                                       25
<PAGE>

                             STANDARD DRILLING, INC.
                  Statements of Stockholders' Equity (Deficit)

<TABLE>
<CAPTION>

                                             Common Stock            Additional        Stock            Prepaid         Retained
                                    -----------------------------     Paid-In       Subscriptions        Stock          Earnings
                                       Shares          Amount          Capital       Receivable          Awards         (Deficit)
                                    -------------   -------------   -------------   -------------    -------------    -------------

<S>                                 <C>             <C>             <C>             <C>              <C>              <C>
Balance at inception on
  February 14, 2006                            --   $          --   $          --   $          --    $          --    $          --

Initial capital from founding
  shreholders for services
  rendered                             23,000,000          23,000              --              --               --               --

Issuance of common stock
  for cash, prepaid services,
  and subscriptions receivable         22,073,000          22,073      18,026,709        (370,000)        (722,755)              --

Net loss for the period from
  inception on  February 14, 2006
  through December 31, 2006                    --              --              --              --               --       (3,624,041)
                                    -------------   -------------   -------------   -------------    -------------    -------------

Balance, December 31, 2006             45,073,000   $      45,073   $  18,026,709   $    (370,000)   $    (722,755)   $  (3,624,041)
                                    =============   =============   =============   =============    =============    =============

</TABLE>


   The accompanying notes are an integral part of these financial statements.


                                       26
<PAGE>

                             STANDARD DRILLING, INC.
                             Statement of Cash Flows

<TABLE>
<CAPTION>

                                                                     From Inception
                                                                   of the Development
                                                                        Stage on
                                                                   February 14, 2006
                                                                         Through
                                                                       December 31,
                                                                          2006
                                                                   ------------------

CASH FLOWS FROM OPERATING ACTIVITIES
<S>                                                                <C>
       Net loss                                                    $       (3,624,041)
       Adjustments to reconcile net loss to net cash
         used by operating activities:
                Depreciation, depletion and amortization                       30,307
                Common stock issued for services                               23,000
                Loss on equity investment                                      28,354
       Changes in operating assets and liabilities
                Increase in accounts receivable                              (486,610)
                Increase in prepaid expenses                                 (503,776)
                Increase in accounts payable                                4,128,557
                Increase in accrued expenses                                2,711,385
                                                                   ------------------

                       Net Cash Used by Operating Activities                2,307,176
                                                                   ------------------

CASH FLOWS FROM INVESTING ACTIVITIES

                Purchase of oil and gas properties                         (2,989,933)
                Purchase of fixed assets                                   (8,797,596)
                Cash paid as deposits on fixed assets                      (8,974,689)
                Cash paid on notes receivable                                 (18,750)
                Cash paid on equity investment                                (87,500)
                                                                   ------------------

                       Net Cash Used by Investing Activities              (20,868,468)
                                                                   ------------------

CASH FLOWS FROM FINANCING ACTIVITIES

                Cash received on note payable                               1,657,578
                Sale of common stock for cash                              16,956,027
                                                                   ------------------

                       Net Cash Provided by Financing Activities           18,613,605
                                                                   ------------------

                NET DECREASE IN CASH                                           52,313

                CASH AT BEGINNING OF PERIOD                                        --
                                                                   ------------------

                CASH AT END OF PERIOD                              $           52,313
                                                                   ==================

SUPPLIMENTAL DISCLOSURES OF
       CASH FLOW INFORMATION

       CASH PAID FOR:

                Interest                                           $           11,324
                Income Taxes                                       $               --

</TABLE>

         The accompanying condensed notes are an integral part of these
                          interim financial statements.


                                       27
<PAGE>

                             STANDARD DRILLING, INC.

                          Notes to Financial Statements

Note 1.  Organization and Business Operations

         We currently have one 1500 horsepower land drilling rig and certain key
         components and partial inventory for two 1500 horsepower rigs which are
         under construction. We have a contract to with Romfor West Africa, Ltd.
         ("Romfor") to construct 2 additional 1500 horsepower land drilling rigs
         using currently owned key components together with newly purchased
         additional components. Our second and third rigs may be completed and
         made operational if and when purchase orders are received for them. Our
         drilling and rig construction operations are currently idle as we
         evaluate our strategic options and financing alternatives.

         The Company is unable to forecast a time frame for completion of the
         two additional rigs because of a lack of financing.

         Management and our Board of Directors are currently evaluating our
         strategic options in light of changing market conditions and our
         inability to secure additional financing.

Note 2.  Summary of Significant Accounting Policies

         Use of Estimates

         The preparation of financial statements in conformity with accounting
         principles generally accepted in the United States of America 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 reporting period.
         Actual results could differ from those estimates.

         Significant estimates also will include proved oil and gas reserve
         quantities which are the basis for the calculation of depreciation,
         depletion and impairment of oil and gas properties, and timing and
         costs associated with its retirement obligations. Currently, the
         Company has no proved oil and gas reserves.

         Cash and Cash Equivalents

         Cash and cash equivalents include cash in banks and certificates of
         deposit which mature within three months of the date of purchase.

         Concentration of Credit Risk

         Financial instruments that potentially subject the Company to
         concentration of credit risk consist of cash. At December 31, 2006, the
         Company had no cash in excess of federally insured limits. The Company
         maintains cash accounts only at large high quality financial
         institution and the Company believes the credit risk associated with
         cash is remote.

         Oil and Gas Properties

         The Company follows the full cost method of accounting for oil and gas
         properties. Accordingly, all costs associated with acquisition,
         exploration, and development of oil and gas reserves, including
         directly related overhead costs and related asset retirement costs, are
         capitalized.


                                       28
<PAGE>

         All capitalized costs of oil and gas properties, including the
         estimated future costs to develop proved reserves, are amortized on the
         unit-of-production method using estimates of proved reserves.
         Investments in unproved properties and major development projects in
         progress are not amortized until proved reserves associated with the
         projects can be determined and are periodically assessed for
         impairment. If the results of an assessment indicate that the
         properties are impaired, such impairment is added to the costs being
         amortized and is subject to the ceiling test.

          Capitalized costs are subject to a "ceiling test," which limits such
          costs to the aggregate of the "estimated present value," discounted at
          a 10-percent interest rate of future net revenues from proved
          reserves, based on current economic and operating conditions, plus the
          cost of properties not being amortized, plus the lower of cost or fair
          market value of unproved properties included in costs being amortized,
          less the income tax effects related to book and tax basis differences
          of the properties.

          Sales of proved and unproved properties are accounted for as
          adjustments of capitalized costs with no gain or loss recognized,
          unless such adjustments would significantly alter the relationship
          between capitalized costs and proved reserves of oil and gas, in which
          case the gain or loss is recognized in income. Abandonments of
          properties are accounted for as adjustments of capitalized costs with
          no loss recognized.

         Oil and Gas Properties Not Subject to Amortization

         The Company is currently participating, on a non-operated basis, in oil
         and gas exploration and development activities. At December 31, 2006,
         all oil reserves have been classified as unproved reserves.
         Consequently, all the property, development and exploratory costs have
         been excluded in computing amortization. Standard will begin to
         amortize these costs when these projects are evaluated, which is
         currently estimated to be 2007.

         Drilling Rigs and Equipment

         Drilling rigs and equipment, including renewals and betterments, are
         capitalized and stated at cost, while maintenance and repairs are
         expensed currently. Assets are depreciated on a straight-line basis.
         The depreciable lives of land drilling equipment approximate 15 years.
         The depreciable life for certain other equipment including drill pipe
         and camp quarters ranges from three to seven years. Depreciation is not
         commenced until acquired rigs and equipment are placed in service. Once
         placed in service, depreciation continues when rigs are being repaired,
         refurbished or between periods of deployment. As of November 1, 2006,
         the Company began recognizing depreciation expense associated with
         drilling rigs. The Company periodically evaluates long-lived assets to
         determine that their net carrying value is not in excess of their net
         realizable value. The Company considers a number of factors, such as
         estimated future cash flows and current market value analysis in
         determining the net realizable value. Assets are written down to fair
         value if the fair value is below the net carrying value.

         Revenue Recognition

         The Company derives substantially all of our revenues from the oil and
         natural gas land drilling services. Drilling revenues and expenses for
         daywork and term contracts are recorded as the drilling progresses. For
         footage contracts, the Company recognizes the revenues and expenses
         upon completion of the well. The Company generally receives payment
         from one to three months after the service has been rendered. Oil and
         gas revenues are recorded in the month the product is delivered to the
         purchaser and title transfers. The Company generally receives payment
         from one to three months after the sale has occurred. Each month the
         Company estimates the volumes sold and the price at which they were
         sold to record revenue. Variances between estimated revenue and actual
         amounts are recorded in the month payment is received.


                                       29
<PAGE>

         Furniture and Office Equipment

         Furniture and office equipment is stated at cost. Depreciation is
         computed on a straight-line basis over the estimated useful lives of 5
         years. During the period ended December 31, 2006 there was depreciation
         expense was $9,634.

         Employee Stock Plan

         At December 31, 2006, Standard Drilling has a stock-based compensation
         plan, which is described more fully in Note 8. As required under
         generally accepted accounting principles, Standard Drilling accounts
         for the plan under the recognition and measurement principles of FASB
         Statement No. 123R, Accounting for Stock-Based Compensation.

         Income Taxes

         Provisions for income taxes are based on taxes payable or refundable
         for the current year and deferred taxes on temporary differences
         between the amount of taxable income and pretax financial income and
         between the tax bases of assets and liabilities and their reported
         amounts in the financial statements. Deferred tax assets and
         liabilities are included in the financial statements at currently
         enacted income tax rates applicable to the period in which the deferred
         tax assets and liabilities are expected to be realized or settled as
         prescribed in FASB Statement No. 109, Accounting for Income Taxes. As
         changes in tax laws or rate are enacted, deferred tax assets and
         liabilities are adjusted through the provision for income taxes. A
         valuation allowance is established when necessary to reduce the
         deferred tax asset to the amount expected to be realized.

Note 3.  Going Concern

         As shown in the accompanying financial statements, Standard has
         incurred operating losses since inception and expects to continue to
         incur losses through 2007. As of December 31, 2006, Standard has
         commitments for the purchase of equipment that exceed available funds;
         has no revenues; and has generated operating losses since inception.
         These factors raise substantial doubt about our ability to continue as
         a going concern. Standard's ability to achieve and maintain
         profitability and positive cash flow is dependent upon Standard's
         ability to complete the refurbishment and modifications to drilling
         rigs economically; utilize the drilling equipment at profitable levels,
         and convert unproved oil and gas properties to producing properties at
         economic levels. Management plans to fund its future operations by
         obtaining additional financing and commencing commercial drilling
         activities for third parties. However, there is no assurance that
         Standard will be able to utilize the drilling equipment at economic
         levels, convert our unproved properties to producing properties; or
         obtain additional financing from investors or private lenders and, if
         available, such financing may not be on commercial terms acceptable to
         Standard or its shareholders.

Note 4.  Income Tax Matters

         Net deferred tax assets consist of the following components as of
         December 31, 2006:

              Net operating loss carryovers             $1,413,376

              Less valuation allowance                  (1,413,376)
                                                     -------------

              Net deferred tax asset                 $           0
                                                     =============


                                       30
<PAGE>

         Standard has net operating loss carry forwards of approximately
         $3,624,041, which will begin to expire in 2026. The deferred tax assets
         are net of a full valuation allowance of $1,413,376 based on the amount
         that management believes will ultimately be realized. Realization of
         deferred tax assets is dependent upon sufficient future taxable during
         the period that deductible temporary differences and carry-forwards are
         expected to be available to reduce taxable income. The components
         giving rise to the net deferred tax assets described above have been
         included in the accompanying balance sheet as noncurrent assets.

          The income tax provision differs from the amount of income determined
          by applying the U.S. Federal income tax rate to pretax income
          primarily due to the valuation allowance.

Note 5.  Oil and Gas Properties Not Subject to Amortization

          Standard is currently participating in oil and gas exploration and
          development activities on onshore properties in the Fort Worth Basin
          and Arkoma Basin. At December 31, 2006, all oil and gas properties are
          classified as unproved. Accordingly, the capital costs have been
          excluded from the computation of amortization of the full cost pool.
          The Company will begin to amortize these costs as the properties are
          developed and reserve estimates are available. We estimate that the
          properties we will be developed, evaluated and subject to amortization
          by the 2007 year end.

         Costs excluded from amortization consist of the following at December
         31, 2006:

<TABLE>
<CAPTION>

         ---------------------------------------------------------------------------------------------------------------------------
                                 Acquisition            Exploration            Development            Capitalized
         Year Incurred              Costs                  Costs                  Costs                 Interest              Total
         ---------------------------------------------------------------------------------------------------------------------------
         <S>                     <C>                    <C>                    <C>                    <C>                   <C>
              2006                 $606,128                                                                                 $606,128
         ---------------------------------------------------------------------------------------------------------------------------

</TABLE>

Note 6.  Shareholders' Equity

         Preferred Stock

         Standard Drilling is authorized to issue up to 10,000,000 of $.001 par
         value preferred stock, the rights and preferences of which are to be
         determined by the Board of Directors at or prior to the time of
         issuance. As of December 31, 2006 none of the preferred stock is
         outstanding.

         Common Stock

         Standard Drilling is authorized to issue 100,000,000 shares of common
         stock, par value of $.001 per share. The founding shareholders were
         issued 23,000,000 shares of common stock for services rendered. On June
         9, 2006, Standard Drilling completed a private offering of 9,111,500
         units at a price of $2.00 per unit realizing net proceeds after
         offering costs of $15,868,290. Each unit consisted of two shares of
         common stock and a warrant to purchase one share of common stock at an
         exercise price of $1.75 per share for every two shares of common stock
         the investor purchases in the offering. There were 9,111,500 warrants
         granted in the offering and the warrants expire two years from
         purchase. These warrants are valued at $546,690. Standard Drilling
         recognized fees and expenses related to the offering of $1,734,710.
         Standard Drilling also granted 1,688,800 warrants at an exercise price
         of $1.00 per share with the same terms and conditions as those issued
         in the private offering to the placement agent. These warrants were
         valued at $101,328.

         Reverse Merger


                                       31
<PAGE>

         In the Merger, Online Holdings exchanged 41,223,000 shares of its
         common stock for 41,223,000 shares of common stock of Standard Drilling
         Delaware and reserved for issuance (1) 10,800,300 shares of common
         stock pursuant to outstanding warrants to purchase common stock of
         Standard Drilling Delaware that were assumed by Online Holdings, and
         (2) 8,520,000 shares of common stock pursuant to outstanding options to
         purchase common stock of Standard Drilling Delaware pursuant to the
         Standard Drilling, Inc. 2006 Stock Incentive Plan that were assumed by
         Online Holdings. Standard Drilling Delaware paid Online Holdings
         $60,000 as a deposit pursuant to the Merger Agreement. A condition to
         the Merger was an agreement by the then principal stockholder of Online
         Holdings to cancel, immediately prior to the Merger, 20,000,000
         outstanding shares of common stock of Online Holdings that had been
         issued to the principal shareholder. In consideration of such
         cancellation, Online Holdings paid the principal shareholder $60,000,
         and Standard recognized recapitalization expense of $60,000. The then
         principal shareholder of Online Holdings also assumed the net
         liabilities of Online Holdings. As a result of the Merger, Standard had
         45,073,000 shares of common stock issued and outstanding and an
         additional 19,320,300 shares of common stock reserved for issuance as
         described above.

         In connection with the Merger, Online Holdings changed its name to
         Standard Drilling, Inc.

Note 7.  Note Receivable for Common Stock Issued

         On May 30, 2006, and in connection with the private offering completed
         on June 9, 2006, Standard received a promissory note from an unrelated
         individual in the amount of $800,000 for the purchase of 400,000 units
         of Standard. The note bears interest at 4% per annum. The note and all
         accrued interest were due and payable on October 1, 2006. The Company
         holds a security interest and a lien on these units as collateral. As
         of December 31, 2006, $370,000 in principal amount remained on the
         note.

Note 8.  Stock Option Plan

         The Company adopted the 2006 Stock Incentive Plan (the "Plan") in
         February 2006. Under the Plan options may be granted to key employees
         and other persons who contribute to the success of the Company. The
         Company has reserved 9,000,000 shares of common stock for the plan. On
         July 27, 2006, Standard Drilling issued 6,250,000 options to purchase
         shares of its common stock at a price of $0.07 per share with a fair
         value of $467,500 or $0.07 per share. The options expire on January 25,
         2008, are exercisable from the date of issuance and may be exercised on
         a net cashless basis. Any common stock so issued must be forfeited back
         to the Company if the closing price of its common stock on any exchange
         on which the common stock of the Company is traded or quoted fails to
         equal or exceed $2.50 for 10 trading days prior to January 25, 2008. In
         addition on the same date, the Company issued 2,195,000 options to
         purchase shares of its common stock at a price of $0.07 per share with
         a fair value of $162,316 or $0.07 per share. The options expire on
         January 25, 2008, may be exercised on a net cashless basis and are
         exercisable after the later of the date the closing price of its common
         stock on any exchange on which the common stock of the Company is
         traded or quoted equals or exceeds $2.50 for 10 trading days or January
         1, 2007. Due to the complexity of valuing the vesting and forfeiture
         terms of these options, the Company valued the above stock options
         using a lattice valuation model, with the assistance of a valuation
         consultant. The lattice model is constructed from valuation inputs to
         represent a wide range of possible future paths for the stock price
         throughout the life of the option. The option payoff is calculated over
         a large number of price paths (randomly selected using the Monte Carlo
         method) along the lattice. The average of the present value of the
         option payoff along these paths is the estimated value of the option.
         The assumptions used in the lattice model were: a risk-free interest
         rate of 5.00%; the current stock price at date of issuance of $0.965
         per share; the exercise price of the options of $0.07 per share; the
         term of 18 months; volatility of 39.22%; and dividend yield of 0.0%.


                                       32
<PAGE>

         On July 27, 2006, the Company issued 100,000 incentive stock options to
         an employee with an exercise price of $0.965. These options expire on
         July 27, 2016, vest equally over 4 years and with a fair value of
         $57,340. The Company valued these options using the Black-Scholes
         valuation model. The model uses market sourced inputs such as interest
         rates, stock prices, and option volatilities, the selection of which
         requires management's judgment, and which may impact the value of the
         options. The assumptions used in the Black-Scholes valuation model
         were: a risk-free interest rate of 5.00%; the current stock price at
         date of issuance of $0.965 per share; the exercise price of the options
         of $0.965; the term of 18 months; volatility of 39.22%; and dividend
         yield of 0.0%.

         The value of the stock options granted were recognized as compensation
         expense beginning in the third quarter of 2006 and will continue to be
         recognized over the vesting term of the options.

Note 9.  Related Party Transactions

         On November 27, 2006, Standard Drilling, Inc. (the "Company"), as
         borrower, entered into an Interim Credit Agreement, effective as of
         November 20, 2006, with Prentis B. Tomlinson, Jr., the Chairman and
         Chief Executive Officer of the Company, as lender, in an initial
         aggregate principal amount of $1 million (the "Loan"), which may be
         increased at Mr. Tomlinson's sole discretion to a maximum aggregate
         principal amount of $5 million. The initial aggregate principal amount
         of the Loan is evidenced by a Promissory Note, effective as of November
         20, 2006, made by the Company in favor of Mr. Tomlinson. Interest will
         accrue on the outstanding principal amount of the Loan at the rate of
         10% per annum, compounded monthly. The outstanding principal amount of
         the Loan, together with all unpaid accrued interest thereon, is payable
         upon demand by Mr. Tomlinson no earlier than 90 days from November 20,
         2006. The Company intends to use the proceeds of the Loan for general
         corporate and working capital purposes.

         To secure the payment and performance of its obligations under the
         Interim Credit Agreement and the Promissory Note, the Company entered
         into a Security Agreement, effective as of November 20, 2006, in favor
         of Mr. Tomlinson, pursuant to which the Company granted to Mr.
         Tomlinson a lien and security interest in and to the Company's land
         drilling Rig #1.

         As of the date of this filing, the Loan is currently overdue. The
         Company currently has no access to additional capital and does not have
         the ability to repay the Loan unless we sell assets for cash.

         As of the date of this filing, the Company's Chairman and CEO, Mr.
         Prentis B. Tomlinson, Jr., owns approximately 75% of Calibre Energy,
         Inc., a publicly held oil and gas exploration company which trades on
         the Over-The-Counter-Bulletin-Board under the symbol CBRE, and serves
         as its Chairman and CEO.

         On March 24, 2006, the Company borrowed $350,000 from Calibre Energy,
         Inc. pursuant to a loan bearing interest at 4% per annum. On April 7,
         2006 Standard paid $350,545 to Calibre Energy, Inc., the full amount of
         the loan with all interest due.

         Several of the Company's officers and directors, including its CEO,
         President and CFO, are also employed as officers and/or directors of
         Calibre Energy, Inc., a company engaged in the business of oil and gas
         exploration and production.

Note 10. Commitments and Contingencies

         The Company has entered into a five year lease agreement for office
         space in Houston, TX. The lease commenced on July 1, 2006 and will
         expire on June 30, 2011.


                                       33
<PAGE>

         At December 31, 2006, future minimum lease payments under the operating
         lease are as follows:

<TABLE>
<CAPTION>

                                                                 Payments Due By Period

                                       Total      Less Than 1    1-3 Years     3-5 Years
                                                     Year
                                    -----------   -----------   -----------   -----------

<S>                                 <C>           <C>           <C>           <C>
Rent Obligations                    $   285,700   $    54,100   $   112,800   $   118,800
Drilling Rig Purchase Commitments    14,651,634    14,651,634
                                    -----------   -----------   -----------   -----------

         Total                      $14,937,334   $14,705,734   $   112,800   $   118,800

         The Company had rent expense of $37,448 for the period ended December
         31, 2006.

</TABLE>

Note 11.  Subsequent Events


                                       34
<PAGE>

ITEM 8.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.


Change of Accountants

         Effective October 12, 2006, the Board of Directors of Standard
Drilling, Inc (the "Company"), a Nevada corporation, determined to change the
Company's independent accountants and dismissed Ehrhardt Keefe Steiner &
Hottman, PC as the Company's independent registered public accounting firm. The
Board of Directors of the Company approved the decision to change independent
auditors.

         During the Company's two most recent fiscal years, ending December 31,
2004 and 2005 and during the period from January 1, 2006 through October 12,
2006, (i) there were no disagreements between the Company and Ehrhardt Keefe
Steiner & Hottman, PC on any matter of accounting principles or practices,
financial statement disclosure or auditing scope or procedure which, if not
resolved to the satisfaction of Ehrhardt Keefe Steiner & Hottman, PC would have
caused Ehrhardt Keefe Steiner & Hottman, PC to make reference to the matter in
its reports on the Company's financial statements, and (ii) neither of Ehrhardt
Keefe Steiner & Hottman's reports on the Company's financial statements for such
fiscal years contained any adverse opinion or disclaimer of opinion, or was
qualified or modified as to uncertainty, audit scope, or accounting principles
with the exception of the following "going concern" qualifications:

         The report for the fiscal year ended December 31, 2004 included the
following:

         "The accompanying consolidated financial statements have been prepared
assuming that the Company will continue as a going concern. As shown in the
consolidated financial statements, the Company is in the development stage and
has a stockholder deficit of $11,325. The planned principal operations had
commenced, but there has been no significant revenue therefrom. This condition
raises substantial doubt about the Company's ability as a going concern.

         The report for the fiscal year ending December 31, 2005 included the
following:

         "The accompanying financial statements have been prepared assuming that
the Company will continue as a going concern. The Company ceased business
operations in December 2003. The Company has also incurred accumulated losses
through December 31, 2005 of $114,055 and current liabilities exceed current
assets by $12,831. These conditions raise substantial doubt about the Company's
ability as a going concern."

         During the two most recent fiscal years ending December 31, 2004 and
2005 there have been no reportable events as set forth in Item 304(a)(1)(v) of
Regulation S-K.

New independent registered public accounting firm

         The Board of Directors of Standard Drilling appointed Malone & Bailey
as the Company's Independent Registered Public Accountant effective October 12,
2006. Prior to such date, the Company did not consult with Malone & Bailey, P.C.
regarding (i) the application of accounting principles to a specified
transaction, the type of audit opinion that might be rendered on the Company's
financial statements or any other matter that was the subject of a disagreement
between the Company and its former auditor as described in Item 304(a)(1)(iv) of
Regulation S-K set forth above under "Item 2.01 Completion of Acquisition or
Disposition of Assets" is incorporated herein by reference.

         The Board of Directors of Standard Drilling appointed Moore &
Associates, Chartered as the Company's Independent Registered Public Accountant
effective April 30, 2007. Prior to such date, the Company did not consult with
Malone & Bailey, P.C. regarding (i) the application of accounting principles to
a specified transaction, the type of audit opinion that might be rendered on the
Company's financial statements or any other matter that was the subject of a
disagreement between the Company and its former auditor as described in Item
304(a)(1)(iv) of Regulation S-K set forth above under "Item 2.01 Completion of
Acquisition or Disposition of Assets" is incorporated herein by reference.


                                       35
<PAGE>

ITEM 8A. CONTROLS AND PROCEDURES.

         Our management, with the participation of our chief executive officer
and chief financial officer, has evaluated the effectiveness of our disclosure
controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the
Securities Exchange Act of 1934 (the "Exchange Act")) as of December 31, 2006.
Based on this evaluation, our chief executive officer and chief financial
officer have concluded that, as of December 31, 2006, our disclosure controls
and procedures were not effective. Our conclusion was based on (1) our lack of
systematic accounting and disclosure procedures, (2) the initial stages of the
development of our IT systems, (3) the hiring and development of new personnel
and (4) the number of adjustments identified by our independent auditors during
the course of their review. Changes in our internal controls over financial
reporting occurred in the fourth quarter 2006 that materially affected our
internal control over financial reporting. We attribute all of the identified
weaknesses to the formative stage of our organizational development. We
currently lack the personnel resources to ensure that our disclosure controls
and procedures are adequate. We are addressing the procedural and control issues
by adding more formalized accounting procedures and IT systems to maintain and
monitor our Oil and Gas Properties and Reserves.

         The Company has substantially increased its business activities since
the merger on September 1, 2006. Accordingly, the Company has been required to
improve its system of internal control over financial reporting during the
fiscal quarter covered by this report by (1) initiating a plan to formalize
accounting and disclosure procedures for Oil and Gas Properties and Reserve
Calculations; (2) further development of our internal IT systems; (3) performing
additional reviews of our internal Oil and Gas Properties and Reserve
Calculations prior to review by our independent auditors to ensure that no items
that would have a material affect or are reasonably likely to have a material
affect on internal control over financial reporting will be identified prior to
issuance of our reports.


                                       36
<PAGE>

                                    PART III

ITEM 9.  DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT.


MANAGEMENT

         The following table sets forth certain information with respect to our
current directors and executive officers.

         The following table sets forth certain information regarding our
directors and executive officer as of December 31, 2006. Between January 1, 2007
and the date of this filing, Mr. Pennington, Mr. Moffett, Mr. Walker, and Mr.
Steelhammer have all resigned from their respective positions and are no longer
employed by or affiliated with the Company.

         Our executive officers are elected by the board of directors and serve
at the discretion of the board. All of the current directors serve until the
next annual stockholders' meeting or until their successors have been duly
elected and qualified.

<TABLE>
<CAPTION>

Name                                 Age       Position
----                                 ---       --------

<S>                                   <C>      <C>
Prentis B. Tomlinson, Jr.             64       Chairman of the Board and CEO
Edward L. Moses, Jr.                  68       President, COO, and Director
Robert T. Moffett                     55       Sr. Vice President and General Counsel*
O. Oliver Pennington, III             35       Vice President and Chief Financial Officer*
Michael J. Walker                     60       Vice President of Operations*
W. Richard Anderson                   50       Director
Robert H. Steelhammer                 55       Director*

</TABLE>

         The following biographies describe the business experience of our
executive officers and directors. Each of our officers and directors were
appointed to their positions on September 1, 2006 in connection with the merger
of Standard Drilling, Inc. and Standard Drilling Acquisition Co. Each officer
devotes such of his business time, attention and energies to the business of the
Company as are reasonably necessary to perform his respective duties under his
Employment Agreement.

         Prentis B. Tomlinson, Jr., Chairman and CEO. Mr. Tomlinson has over 30
years of experience in the energy industry, and is a second-generation oil and
gas man who traces his roots back to Tomlinson Geophysical Service, founded in
1937 by P. B. Tomlinson, Sr. Mr. Tomlinson has founded a number of companies in
the energy sector, including exploration and production companies, a crude
trading company and another oilfield service company, TGS Geophysical, Inc.,
which merged with Nopec in 1997 to form TGS Nopec (www.TGS-Nopec.com) (OSE:
TGS). Since 2001, Mr. Tomlinson has been a private investor. In 2003, Mr.
Tomlinson helped to found, and remains a significant shareholder, a drilling
technology company based in Houston, Texas, Particle Drilling Technologies, Inc.
(www.particledrilling.com) (Nasdaq: PDRT). In 2005, Mr. Tomlinson founded
Calibre Energy, Inc. (www.calibreenergy.com) (OTC: CBRE.OB) and currently serves
as Chairman, President, and CEO. Mr. Tomlinson expects to continue in his
position at Calibre Energy while also serving as our Chairman and CEO.


                                       37
<PAGE>

         Edward L. Moses, Jr., President, COO and Director. Mr. Moses has over
40 years experience in the oil and gas industry beginning as a roustabout and
roughneck for drilling contractors while studying for his B.S. in Petroleum
Engineering at Texas A&M University. He is currently a Director of Horizon
Offshore (Nasdaq: HOFF). In 2005, Mr. Moses helped to found Calibre Energy, Inc.
(www.calibreenergy.com) (OTC: CBRE.OB) and currently serves as Vice Chairman and
as a Director of Calibre Energy. After receiving his engineering degree in 1958,
Mr. Moses joined The Superior Oil Company where he was Manager of Domestic and
International Drilling Operations. He left Superior Oil in 1976 to work as an
independent consultant where he and his partners provided consulting and turnkey
drilling services throughout the Gulf Coast, South Texas, and North Sea areas as
well as India and Central America. Mr. Moses joined Deep Tech companies in 1989
as Vice President, Engineering. Before leaving Deep Tech in 1998, he served as
Senior Vice President of North Atlantic Pipeline Partners, L.P.; Senior Vice
President of Tatham Offshore Canada, Limited; Managing Director of Deepwater
Production Systems, Inc.; and Executive Vice President of RIGCO North American,
L.L.C. From 1998 until 2000, Mr. Moses was the Chairman and Chief Executive
Officer of Prime Natural Resources, Inc., a Houston based exploration and
production company. Since 2000 Mr. Moses has been a private investor. He is a
Professional Engineer in Texas and Louisiana, member of Society of Petroleum
Engineers, Texas Society of Professional Engineers, and a Director of
Spindletop. Mr. Moses expects to continue his position at Calibre Energy while
also serving as our President and COO.

         Robert T. Moffett, Senior Vice President and General Counsel. Mr.
Moffett has over 30 years of experience in the oil & gas industry. After
graduating from Southern Methodist University Law School in 1976, Mr. Moffett
served as a Law Clerk for a United States District Court Judge for the Southern
District of Texas. In 1978, he formed the law firm of Moffett & Davis,
specializing in oil & gas matters, later merging with the largest oil & gas law
firm in the State of Texas. Mr. Moffett then went on to form Moffett & Brewster
in 1987. Moffett & Brewster, specialized in the purchase and management of oil &
gas minerals for various investors. In 1992, Mr. Moffett joined Howell
Corporation as General Counsel and later became Corporate Secretary. In 2002,
Howell Corporation was sold to Anadarko Petroleum Corporation. The sale was
handled by senior management, without the participation of investment bankers,.
Since 2003, Mr. Moffett has been in private law practice. Further, Mr. Moffett
has served as a Director and Chairman of the Audit Committee of Genesis Energy,
L.P. * Resigned May 3, 2007.

         O. Oliver Pennington, III, Vice President and Chief Financial Officer.
Mr. Pennington has over 11 years of experience in the financial industry and can
trace his roots in the oil and gas business through his grandfather, Arthur
Buzzini, back to the mid-1930s. From July 2005 until December of 2005 Mr.
Pennington was a private investor. From January 2003 until June 2005, Mr.
Pennington was employed as a partner and senior member of the investment team of
Sthenos Capital Limited, a hedge fund based in London, and from August 1996
until September of 2002 as the Head of International Trading, analyst and member
of the international investment team at Kingdon Capital Management Corp., a
hedge fund based in New York. He was a private investor from September 2002
until January of 2003. Mr. Pennington started his career as a trader for AIM
Management, an asset management company based in Houston. In December 2005, Mr.
Pennington joined Calibre Energy, Inc. (www.calibreenergy.com) (OTC: CBRE.OB)
and currently serves as its CFO. * Resigned April 3, 2007.

         Michael J. Walker, Vice President of Operations. With over 38 years of
worldwide drilling, engineering, operations and management experience, Mr.
Walker has demonstrated expertise in innovative drilling practices and
completion for domestic and international projects. He is also skilled in
developing mature assets, and the planning and execution of remote exploration
wells. Mr. Walker worked as the Worldwide Drilling Manager and Chief Drilling
Engineer for Occidental Petroleum Corporation's Headquarters office and 15
subsidiaries (Common: OXY) www.oxy.com where he handled their domestic and
International assets (2001-2006). During 2000-2001, Mr. Walker worked at
Anadarko Petroleum Corporation (Common: APC) www.anadarko.com as Manager of
Drilling in the International and Offshore Division. Mr. Walker served as the
Manager of Drilling, Worldwide for Union Pacific Resources Company (NYSE: UPR)
www.up.com (1987-2000). As Manager of Drilling and Production for the
International Division of Diamond Shamrock, Mr. Walker conducted the drilling
and evaluation of wells and managed subsidiary offices in six different
countries (1983-1987). * Resigned April 30, 2007.


                                       38
<PAGE>

         W. Richard Anderson, Director. Mr. Anderson worked with Hein &
Associates LLP, a Houston based certified public accounting firm, from 1984 to
1998, where he served as a partner from 1989 to January 1995 and as a managing
partner of the firm from January 1995 to October 1998. In 1999, Mr. Anderson
left Hein & Associates to work at Prime Natural Resources, Inc. as its Chief
Financial Officer. Since 2000 he has served as President and Chief Executive
Officer of Prime Natural Resources. Prime Natural Resources is a closely held
exploration and production company. Additionally, Mr. Anderson became a Director
in 1999 of Boots & Coots International Well Control and chairs the audit
committee to the board as well as serves as a member of the Compensation
Committee. In 2005, Mr. Anderson became a Director of Calibre Energy, Inc.
(www.calibreenergy.com) (OTC: CBRE.OB) and currently chairs the audit committee.

         Robert H. Steelhammer, Director. Mr. Steelhammer has been a practicing
attorney in Houston, Texas since 1972. Prior to entering the practice of law,
Mr. Steelhammer was a practicing registered professional engineer with Fluor
Corporation. From 1987 until present, Mr. Steelhammer has been the named partner
at Steelhammer & Miller, P.C, corporate, oil and gas, business, international
and real estate law. Prior to that, Mr. Steelhammer practiced oil and gas,
business, corporate and general litigation law for Weitinger, Steelhammer &
Tucker, P.C. He received a Bachelor of Science degree from the University of
Texas and a Juris Doctor degree from South Texas College of Law. He is a member
of the State Bar of Texas, a registered professional engineer for the State of
Texas and a member of the American Institute of Chemical Engineers. He began his
career as a process engineer for Tenneco. He has also worked for US Industrial
Chemicals and the Fluor Corporation in the same capacity. Since 1983, he has
served as a member of the Board of Directors of Prosperity Bancshares, Inc., a
member of its audit committee and chairman of its corporate governance
committee. * Resigned March 26, 2007.

         Effective September 1, 2006, Mr. Shaun Carter, prior to that date our
sole director and officer, resigned as an officer and a director.

Committees of the Board of Directors

         We currently have an audit committee, a compensation committee, a
nominating and corporate governance committee and a conflicts committee.

         Audit Committee. The audit committee selects, on behalf of our board of
directors, an independent public accounting firm to be engaged to audit our
financial statements, discuss with the independent auditors their independence,
review and discuss the audited financial statements with the independent
auditors and management and recommend to our board of directors whether the
audited financials should be included in our Annual Reports to be filed with the
Securities and Exchange Commission. The audit committee operates pursuant to a
written charter. Mr. Anderson is the sole member of the audit committee.

         All of the current members of the audit committee are non-employee
directors who: (1) meet the criteria for independence set forth in Rule
10A-3(b)(1) under the Securities Exchange Act of 1934, as amended (the "Exchange
Act"); (2) have not participated in the preparation of our financial statements
or the financial statements of Online Holdings, Inc.; and (3) are able to read
and understand fundamental financial statements, including a balance sheet,
income statement and cash flow statement. The board has determined that Mr.
Anderson qualifies as an "Audit Committee Financial Expert" as defined by item
401(e) of Regulation S-B of the Exchange Act.

         Compensation Committee. The compensation committee reviews and either
approves, on behalf of our board of directors, or recommends to the board of
directors for approval (1) the annual salaries and other compensation of our
executive officers and (2) individual stock and stock option grants. The
compensation committee also provides assistance and recommendations with respect
to our compensation policies and practices and assists with the administration
of our compensation plans. The members of our compensation committee have been
found by the Board of Directors to be "independent directors" using the criteria
for independence set forth in Rule 10A-3(b)(1) under the Exchange Act, and are
neither an officer nor employee of us or our subsidiary. The compensation
committee operates pursuant to a written charter. Mr. Anderson is the sole
member compensation committee.


                                       39
<PAGE>

         Nominating and Corporate Governance Committee. The nominating and
corporate governance committee assists our board of directors in fulfilling its
responsibilities by: identifying and approving individuals qualified to serve as
members of our board of directors, selecting director nominees for our annual
meetings of shareholders, evaluating the performance of our board of directors,
and developing and recommending to our board of directors corporate governance
guidelines and oversight with respect to corporate governance and ethical
conduct. Mr. Anderson, as Chairman, and Mr. Steelhammer are the current members
of the nominating and corporate governance committee; they have been found by
the Board of Directors to be "independent directors" using the criteria for
independence set forth in Rule 10A-3(b)(1) under the Exchange Act. This
committee operates pursuant to a written charter adopted on April 4, 2006.

         Conflicts Committee. The conflicts committee determines all actions
that are required to be taken or may be taken, by us with respect to any
opportunity or transaction that involves a conflict of interest for any officer
or director. The members of the conflicts committee are also charged with
overseeing the amount of time devoted to the management of our business by
officers and directors who are also employed by Standard Drilling, Inc. Our
Board of Directors has granted the conflicts committee full and final authority
to make decisions for the Board with respect to these matters and the Board of
Directors may not adopt any position or take any action that is contrary to a
determination of the conflicts committee. The authority granted to the conflicts
committee includes the power to terminate, with or without cause, those officers
who are also officers or directors of Standard Drilling, Inc.

         Each officer or director, who is notified of, offered or made aware of
an opportunity or transaction that involves a conflict of interest for any of
our officers or directors is required to report it to the Board and to the
conflicts committee. In order to be able to make the evaluations necessary for
its decisions, the conflicts committee has the right to require reports from any
of our officers and employees and to engage its own geologists, geophysicists,
attorneys, accountants and other experts and advisors as it deems necessary to
assist it in making its determinations. The conflicts committee will hold
meetings as determined by either its Chairman or a majority of its members; the
conflicts committee may also act by unanimous written consent of its members.
The vote of a majority of its members will constitute the decision of the
committee. The conflicts committee is comprised of Mr. Anderson. This committee
operates pursuant to a written charter adopted on January 9, 2007.


Section 16(a) Beneficial Ownership Reporting Compliance

         Section 16(a) of the Securities Exchange Act of 1934 requires our
directors, executive officers and beneficial owners of more than 10% of our
Common Stock to file with the SEC reports of their holdings of, and transactions
in, our Common Stock. Based solely upon our review of copies of such reports and
written representations from reporting persons that were provided to us, we
believe that our officers, directors and 10% stockholders complied with these
reporting requirements with respect to 2006.

Code of Ethics

         We have adopted a written code of ethics that applies to our principal
executive officer, principal financial officer, principal accounting officer and
any persons performing similar functions. The Company will provide a copy of its
code of ethics to any person without charge upon written request addressed to
Standard Drilling, Inc., 1667 K Street, NW, Suite 1230, Washington, D.C. 20006.


                                       40
<PAGE>

ITEM 10. EXECUTIVE COMPENSATION



         The following tables set forth certain information regarding our CEO
and each of our most highly-compensated officers whose total annual salary and
bonus for the period ending December 31, 2006 exceeded $100,000.

                           Summary Compensation Table

<TABLE>
<CAPTION>

                                                   Annual Compensation                        Long Term Compensation Awards
                                                   -------------------                        -----------------------------
                                                                                       Securities Underlying             All Other
                Name and                                 Salary         Bonus                 Options                   Compensation
         Principal Position (2)              Year          ($)           ($)                    (#)                          ($)
         ----------------------              ----          ---           ---                    ---                         ----
<S>                                          <C>        <C>              <C>                 <C>                             <C>
Prentis B. Tomlinson(1)                      2006       $174,998          -                  4,000,000                        -
Chief Executive Officer                      2005           -             -                                                   -
                                             2004           -             -                                                   -

O. Oliver Pennington, III (1)                2006       $174,998          -                   650,000                         -
Chief Financial Officer                      2005           -             -                                                   -
                                             2004           -             -                                                   -

Edward L. Moses (1)                          2006       $174,998                             1,250,000                        -
President and COO                            2005           -             -                                                   -
                                             2004           -             -                      -                            -

Robert T. Moffett (1)                        2006       $156,250                              400,000                         -
Senior Vice President                        2005           -             -                                                   -
and General Counsel
                                             2004           -             -                      -                            -

Michael J. Walker (1)                        2006       $133,333          -                   300,000                         -
Vice President Operations                    2005           -             -                      -                            -
                                             2004           -             -                      -                            -

</TABLE>

----------
(1) Each executive served for less than a full year in 2006.

(2) Shaun Carter was the sole officer for Online Holdings, Inc. during 2003,
2004, and 2005, and received no compensation during those years. Mr. Carter
resigned as an officer and director on September 1, 2006.


                                       41
<PAGE>


Options Exercises and First Quarter 2007 Quarter End Values

<TABLE>
<CAPTION>

                                              Number of Shares                               Value of Unexercised
                                           Underlying Unexercised                            In-the-Money Options
                                          Options at March 31 2007                             at March 31 2007
                                          ------------------------                             ----------------
        Name                        Exercisable              Unexercisable           Exercisable              Unexercisable
        ----                        -----------              -------------           -----------              -------------

<S>                                 <C>                      <C>                     <C>                      <C>
Prentis B. Tomlinson (1)                 -                       4,000,000
Edward L. Moses (1)                      -                       1,250,000                -                         $0
O. Oliver Pennington, III (2)            -                        650,000                 -                     $1,255,000
W. Richard Anderson (1)                  -                        600,000                 -                         $0
Robert T. Moffett (2)                    -                        400,000                 -                      $251,000
Michael J. Walker                        -                        300,000                 -                          -

    ----------

</TABLE>

         No options were exercised during the fiscal year ended December 31,
2006. No stock appreciation rights were outstanding at the end of the 2006
fiscal year.

         Employment Agreements

         During the fiscal years ended December 31, 2003, 2004 and 2005, neither
Shaun Carter, our sole director and officer prior to our acquisition of Standard
Drilling in August 2006, nor the officers and directors of Standard Drilling who
became our officers and directors upon completion of our acquisition of Standard
Drilling, received any compensation from us. Set forth below is a summary of the
material terms of the compensation and employment agreements made between
Standard Drilling and its executive officers which we assumed in connection with
our acquisition of Standard Drilling.

         Prentis B. Tomlinson, Jr. Mr. Tomlinson entered into an employment
agreement effective February 14, 2006. The agreement has a three year term and
provides that Mr. Tomlinson will serve as CEO. Mr. Tomlinson receives an annual
base salary of $200,000, which may be increased at our discretion and may elect
to receive an amount of restricted stock or options determined by the
compensation committee in lieu of salary and benefits. Mr. Tomlinson's base
salary shall be increased to $400,000 upon the second anniversary date from the
effective date of this agreement. Mr. Tomlinson has also received the following
stock options pursuant to the agreement: non-statutory options to purchase
4,000,000 shares of our common stock at a price of $.07 per share. The options
expire on January 25, 2008, may be exercised on a net cashless basis, and are
exercisable from the date of issuance. Any common stock so issued must be
forfeited back to the Company if the closing price of our common stock on any
exchange on which the common stock of the Company is traded or quoted fails to
equal or exceed $2.50 for 10 trading days prior to January 25, 2008.

         Edward L. Moses, Jr. Mr. Moses entered into an employment agreement
effective February 14, 2006. The agreement has a three year term and provides
that Mr. Moses will serve as President and COO. Mr. Moses receives an annual
base salary of $200,000, which may be increased at our discretion. Mr. Moses may
elect to receive an amount of restricted stock or options determined by the
compensation committee in lieu of salary and benefits. Mr. Moses' base salary
shall be increased to $380,000 upon the second anniversary date from the
effective date of this agreement. Mr. Moses has also received the following
stock options pursuant to the agreement: non-statutory options to purchase
1,250,000 shares of our common stock at a price of $.07 per share. The options
expire on January 25, 2008, may be exercised on a net cashless basis, and are
exercisable from the date of issuance. Any common stock so issued must be
forfeited back to the Company if the closing price of our common stock on any
exchange on which the common stock of the Company is traded or quoted fails to
equal or exceed $2.50 for 10 trading days prior to January 25, 2008. As our
business will be conducted from various venues and in lieu of the provision of
Company owned equipment, the Company will reimburse Mr. Moses as an expense a
monthly sum of $1,000.


                                       42
<PAGE>

         Robert T. Moffett. Mr. Moffett entered into an employment agreement
effective May 15, 2006. The agreement has a three year term and provides that
Mr. Moffett will serve as Senior Vice President and General Counsel. Mr. Moffett
receives an annual base salary of $250,000, which may be increased at our
discretion. Mr. Moffett's base salary shall be increased to $380,000 upon the
second anniversary date from the effective date of this agreement. Mr. Moffett
has also received the following stock options pursuant to the agreement:
non-statutory options to purchase 400,000 shares of our common stock at a price
of $.07 per share. The options expire on January 25, 2008, may be exercised on a
net cashless basis, and are exercisable after the later of the date the closing
price of our common stock on any exchange on which the common stock of Standard
Drilling, Inc. is traded or quoted equals or exceeds $2.50 for 10 trading days
or January 1, 2007. As our business will be conducted from various venues and in
lieu of the provision of Company owned equipment, the Company will reimburse Mr.
Moffett as an expense a monthly sum of $1,000.

         O. Oliver Pennington, III. Mr. Pennington entered into an employment
agreement effective February 14, 2006. The agreement has a three year term and
provides that Mr. Pennington will serve as Vice President and CFO. Mr.
Pennington receives an annual base salary of $200,000, which may be increased at
our discretion. Mr. Pennington's base salary shall be increased to $360,000 upon
the second anniversary date from the effective date of this agreement. Mr.
Pennington has also received the following stock options pursuant to the
agreement: non-statutory options to purchase 650,000 shares of our common stock
at a price of $.07 per share. The options expire on January 25, 2008, may be
exercised on a net cashless basis, and are exercisable after the later of the
date the closing price of our common stock on any exchange on which the common
stock of Standard Drilling, Inc. is traded or quoted equals or exceeds $2.50 for
10 trading days or January 1, 2007.

         Michael J. Walker. Mr. Walker entered into an employment agreement
effective May 1, 2006. The agreement has a three-year term and provides that Mr.
Walker will serve as Vice President of Operations. Mr. Walker receives an annual
base salary of $200,000, which may be increased at our discretion. Mr. Walker's
base salary shall be increased to $360,000 upon the second anniversary date from
the effective date of this agreement. Mr. Walker has also received the following
stock options pursuant to the agreement: non-statutory options to purchase
300,000 shares of our common stock at a price of $.07 per share. The options
expire on January 25, 2008, may be exercised on a net cashless basis, and are
exercisable after the later of the date the closing price of our common stock on
any exchange on which the common stock of Standard Drilling, Inc. is traded or
quoted equals or exceeds $2.50 for 10 trading days or January 1, 2007. As our
business will be conducted from various venues and in lieu of the provision of
Company owned equipment, the Company will reimburse Mr. Walker as an expense a
monthly sum of $1,000.

         Other Employment Agreement Terms. Each of the foregoing employment
agreements also include the following terms:

         Each employee is entitled to participate in any employee benefit plans
that are made available to our employees and shall be eligible, in the sole
discretion of the Board, to be considered for a bonus following each fiscal year
ending during the Term based upon the Executive's performance and the operating
results of the Company and their affiliates during such year in relation to
performance targets established by the Board. Determination of the bonus amount
shall take into account such unusual or nonrecurring items as the Chief
Executive Officer of Standard and/or the Board deem appropriate.


                                       43
<PAGE>

         During the term of the agreement, we may terminate the employee's
employment at any time by giving three months written notice. Additionally, we
may terminate the employee's employment for cause upon written notice. The
employee may terminate his employment for "Good Reason" when there is a decrease
in the Executive's base salary, or a materially adverse diminution of the
overall level of responsibilities of the Executive, or a material breach by the
Company of any term or provision of the employment agreement or after a change
of control, or any personal reason that the Board or Compensation Committee of
the Board in its discretion determines shall constitute "Good Reason."

         In the event of a "Change of Control" (as defined below), if the
employee is terminated without cause or he terminates his employment for good
reason at any time during the three year period following the Change of Control,
the employee will be entitled to the following: all outstanding stock options
granted on or prior to the Change of Control shall become immediately
exercisable and shall remain exercisable for a period of three years, a lump-sum
payment equal to three times the employee's then current Base Salary, a lump-sum
payment equal to three times the highest annual bonus allowed under the
Executive Bonus Plan during the three year period preceding the date of the
Change of Control, and continued medical and dental coverage for three years
from the termination date at no cost to the employee.

         For purposes of the agreement, a "Change of Control" means: a tender
offer for more than 25% of the outstanding voting securities of the company; the
company is merged or consolidated with another corporation, and as a result of
the transaction, less than 75% of the outstanding voting securities of the
resulting corporations are beneficially owned by stockholders of the company
immediately prior to the transaction; the company sells all or substantially all
of its assets to another entity that is not a wholly-owned subsidiary; during
any 15-month period, individuals who at the beginning of such period constituted
the board of directors of the company (including any new member whose election
was approved by at least 2/3 of the members of the Board then still in office
who were members at the beginning of such period) cease for any reason to
constitute at least a majority of the Board; the Compensation Committee of the
Board determines, in its sole discretion, that a change of control has occurred;
or 80% or more of the outstanding voting securities of the company are acquired
by any person or entity other than the company, its subsidiaries or its
affiliates.

         The employment agreement with the employee also contains customary
nondisclosure, non-compete and proprietary rights provisions. In addition, until
two years after termination of the agreement, the employee is subject to a
non-solicitation agreement with respect to, among others, customers, suppliers
and employees of the company.

         As disclosed herein, Mr. Tomlinson, our Chairman and CEO, Mr. Moses,
our President and COO, and Mr. Pennington, our former Vice President and CFO are
concurrently serving as officers, directors or employees of Calibre Energy, Inc.
Such service has been approved by the Company's Board of Directors.

2006 Stock Incentive Plan

         In connection with our acquisition of Standard Drilling, we assumed the
2006 Stock Incentive Plan that had previously been adopted by the Board of
Directors and shareholders of Standard Drilling, Inc. The plan permits grants of
options or restricted stock to employees, board members, officers or
consultants. The plan is administered by our Board of Directors. The Board has
the authority to determine the persons to whom awards are to be granted, the
time at which awards will be granted, the number of shares to be represented by
each award, and the consideration to be received, if any. The committee
administering the plan also has the power to interpret the plan and to create or
amend its rules.


                                       44
<PAGE>

         Reservation of Shares. Grants of stock options and restricted stock may
be made pursuant to the plan. The number of shares of common stock issued under
the plan may not exceed 9,000,000 shares. Shares shall be deemed to have been
issued under the plan only to the extent actually issued and delivered pursuant
to an award. To the extent that an award lapses or the rights of its holder
terminate, any shares of common stock subject to the award will again be
available for the grant of an award under the plan. The maximum number of shares
that may be issued under the plan, as well as the number and price of shares of
common stock or other consideration subject to an award under the plan, will be
appropriately adjusted by the committee in the event of changes in the
outstanding common stock by reason of recapitalizations, reorganizations,
mergers, consolidations, combinations, split-ups, split-offs, spin-offs,
exchanges or other relevant changes in capitalization or distributions to the
holders of common stock occurring after an award is granted.

         Stock Options. The plan provides for granting (1) "incentive" stock
options as defined in Section 422 of the Internal Revenue Code of 1986, as
amended (the "Code"), and (2) stock options that do not constitute incentive
stock options ("non-statutory" stock options). The exercise price for an option
granted under the plan is determined by the committee but will be no less than
the fair market value of the option, which will be based on the fair market
value our common stock on the date the option is granted. The option price upon
exercise shall be paid in the manner prescribed by the committee. Additionally,
stock appreciation rights may be granted in conjunction with incentive stock
options or non-statutory stock options. Stock appreciation rights give the
holder, among other things, the right to a payment in cash, common stock, or a
combination thereof, in an amount equal to the difference between the fair
market value of our common stock at the date of exercise and the option exercise
price. Non-statutory options will have an exercise price determined by the
committee and such exercise price may be less than the fair market value of the
common stock on the date of grant. The options granted under the plan are
assignable and transferable pursuant to compensation committee approval. In the
event that incentive stock option grants are made under the plan, such options
will be subject to more stringent restrictions on transfer.

         Restricted Stock. The plan permits the committee to grant restricted
stock awards. Shares of common stock will be issued or delivered to the
employee, consultant or director at the time the award is made without any
payment to us (other than for any payment amount determined by the committee in
its discretion), but such shares will be subject to certain restrictions on the
disposition thereof and certain obligations to forfeit and surrender such shares
to us as may be determined in the discretion of the committee. The committee may
provide that the restrictions on disposition and the obligations to forfeit the
shares will lapse based on (1) the attainment of one or more performance
measures established by the committee, (2) the holder's continued employment or
continued service as a consultant or director for a specified period, (3) the
occurrence of any event or the satisfaction of any other condition specified by
the committee in its sole discretion or (4) a combination of any of these
factors. Upon the issuance of shares of common stock pursuant to a restricted
stock award, except for the foregoing restrictions and unless otherwise
provided, the recipient of the award will have all the rights of our
stockholders with respect to such shares, including the right to vote such
shares and to receive all dividends and other distributions paid with respect to
such shares. The committee may, in its discretion, fully vest any outstanding
restricted stock award as of a date determined by the committee.

         Change of Control. The plan provides that, upon a Corporate Change (as
hereinafter defined), the committee may accelerate the vesting of options,
cancel options and make payments in respect thereof in cash, or adjust the
outstanding options as appropriate to reflect such Corporate Change (including,
without limitation, adjusting an option to provide that the number and class of
shares of common stock covered by such option will be adjusted so that the
option will thereafter cover securities of the surviving or acquiring
corporation or other property (including cash) as determined by the committee).
The plan provides that a Corporate Change occurs if (1) we are not be the
surviving entity in any merger or consolidation (or we survive only as a
subsidiary of an entity), (2) we sell, lease or exchange or agree to sell, lease
or exchange all or substantially all of our assets to any other person or
entity, (3) we are to be dissolved and liquidated, (4) any person or entity,
including a "group" as contemplated by Section 13(d)(3) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), acquires or gains
ownership or control (including, without limitation, power to vote) of more than
50% of the outstanding shares of our voting stock (based upon voting power), or
(5) as a result of or in connection with a contested election of directors, the
persons who were our directors before such election shall cease to constitute a
majority of our Board of Directors. No changes were made to outstanding awards
under the plan in connection with our reverse merger with Online Holdings Inc.
other than all options to purchase common stock became options to purchase an
equivalent number of shares of our common stock at the same exercise price.


                                       45
<PAGE>

         Term and Amendment. Our Board of Directors may terminate the plan at
any time with respect to any shares of common stock for which awards have not
been granted. Our Board of Directors has the right to alter or amend the plan at
any time, provided that no change in the plan may be made that would impair the
rights of a participant in the plan with respect to an award previously granted
without the consent of the participant. In addition, our Board of Directors may
not, without the consent of our stockholders, amend the plan to (1) increase the
maximum aggregate number of shares that may be issued under the plan or (2)
change the class of individuals eligible to receive awards under the plan.

         Outstanding Awards. As of December 31, 2006, the outstanding options to
purchase common stock under the plan consisted of 8,445,000 options to purchase
shares of common stock in the aggregate at $0.07 per share and 100,000 options
to purchase shares of common stock in the aggregate at $0.965 per share.
6,250,000 of the outstanding options expire on January 25, 2008 and may be
exercised on a net cashless basis. Such options are exercisable from the date of
issuance. Any common stock so issued must be forfeited back to the company if
the closing price of our common stock on any exchange on which the common stock
of Standard Drilling, Inc. is traded or quoted fails to equal or exceed $2.50
for 10 trading days prior to January 25, 2008. 2,195,000 of the outstanding
options are exercisable after the later of the date the closing price of our
common stock on any exchange on which the common stock of Standard Drilling,
Inc. is traded or quoted equals or exceeds $2.50 for 10 trading days or January
1, 2007. The options expire on January 25, 2008 and may be exercised on a net
cashless basis. 100,000 of the outstanding of stock options have an exercise
price of $0.965, vest equally over 4 years and expire on July 27, 2016. We have
issued no restricted stock or stock appreciation rights under the plan.

Certain Relationships and Related Transactions.

         On November 27, 2006, Standard Drilling, Inc. (the "Company"), as
borrower, entered into an Interim Credit Agreement, effective as of November 20,
2006, with Prentis B. Tomlinson, Jr., the Chairman and Chief Executive Officer
of the Company, as lender, in an initial aggregate principal amount of $1
million (the "Loan"), which may be increased at Mr. Tomlinson's sole discretion
to a maximum aggregate principal amount of $5 million. The initial aggregate
principal amount of the Loan is evidenced by a Promissory Note, effective as of
November 20, 2006, made by the Company in favor of Mr. Tomlinson. Interest will
accrue on the outstanding principal amount of the Loan at the rate of 10% per
annum, compounded monthly. The outstanding principal amount of the Loan,
together with all unpaid accrued interest thereon, is payable upon demand by Mr.
Tomlinson no earlier than 90 days from November 20, 2006. The Company intends to
use the proceeds of the Loan for general corporate and working capital purposes.

         To secure the payment and performance of its obligations under the
Interim Credit Agreement and the Promissory Note, the Company entered into a
Security Agreement, effective as of November 20, 2006, in favor of Mr.
Tomlinson, pursuant to which the Company granted to Mr. Tomlinson a lien and
security interest in and to the Company's land drilling Rig #1.

         As of the date of this filing, the Loan is currently overdue. The
Company currently has no access to additional capital and does not have the
ability to repay the Loan unless we sell assets for cash.


         Our Chairman and CEO, Mr. Prentis B. Tomlinson, Jr., owns approximately
75.0% of Calibre Energy, Inc., a publicly held oil and gas exploration company
which trades on the Over-The-Counter-Bulletin-Board under the symbol CBRE, and
serves as its President, CEO and Chairman of the Board for Calibre Energy.
Further, Mr. Moses serves as an officer of Calibre Energy.


                                       46
<PAGE>

         On March 24, 2006, we borrowed $350,000 from Calibre Energy, Inc.
pursuant to a loan bearing interest at 4% per annum. On April 7, 2006 we paid
$350,544.54 to Calibre Energy, Inc., the full amount of the loan with all
interest due.

         We believe all of the transactions with related parties have been on
terms no less favorable to us than those terms which may have been obtained from
unrelated third parties.

         Several of our officers, including our CEO and President, are also
employed as officers and/or directors of Calibre Energy, Inc., a company engaged
in the business of exploration and production of oil and natural gas. Serving as
an officer and/or director for both companies limits the amount of time
available to be devoted by them to managing our business. On average such
officers devote approximately 35 to 40 hours per week to each company; however
the actual amount devoted to managing either company fluctuates from week to
week depending upon the needs and activities of each company. We do not believe
that the dual employment of our officers, and the resulting potential
limitations on available time, has negatively affected our business. As our
business develops, we anticipate engaging additional management.

         The dual obligations also create a risk of a conflict of interest for
those officers. We have a majority of independent directors. To the extent
conflicts of interest do arise, we intend to have future conflicts of interest
reviewed and resolved by our independent directors.

         We anticipate entering into drilling contracts with Calibre Energy to
provide them with drilling services. The terms of any such engagement will be
reviewed and approved or rejected by the independent directors. We expect the
terms of any such agreement to be no less favorable to us than those terms which
may have been obtained from unrelated third parties. When appropriate, we will
obtain competing bids for our drilling services, and may enter into contracts
with other companies to provide drilling services.

         We share facilities and some overhead costs with Calibre Energy in
Washington D.C. and are party to a shared services agreement pursuant to which
we will pay Calibre for office space and supplies, secretarial services and any
other services they provide to us in sharing the Washington D.C. office space.
The average monthly payment by us to Calibre Energy under the services agreement
is expected to be approximately $20,000. The services agreement may be
terminated by either party on 30 days notice.

         In addition, Mr. O. Oliver Pennington, III, our former Vice President
and Chief Financial Officer, who resigned on April 3, 2007, is our CEO's
son-in-law.

                          DESCRIPTION OF CAPITAL STOCK

Preferred Stock

         We are authorized to issue up to 10,000,000 shares of preferred stock,
par value $0.001. As of the date hereof none of the preferred stock is
outstanding. The Board of Directors may by resolution create, and authorize the
issuance of, additional classes of preferred stock with such rights and
preferences as the Board of Directors may determine.

Common Stock

         We are authorized to issue 100,000,000 shares of common stock, par
value $.001 per share. As of the date hereof, the Company had 45,998,000 shares
of common stock issued and outstanding. Each share of common stock is entitled
to one vote per share for the election of directors and on all other matters
submitted to a vote of stockholders. There are no cumulative voting rights.
Common stockholders do not have preemptive rights or other rights to subscribe
for additional shares, and the Company's common stock is not subject to
conversion or redemption. All the outstanding common stock is duly and validly
issued and fully paid and non-assessable. In the event of liquidation, the
holders of common stock will share equally in any balance of corporate assets
available for distribution to them after payment of any preferred stock
liquidation preference. Subject to the rights of holders of any other securities
subsequently issued, holders of the common stock are entitled to receive
dividends when and as declared by the Company's Board of Directors out of funds
legally available. The Company has not paid any dividends since its inception
and has no intention to pay any dividends in the foreseeable future. Any future
dividends would be subject to the discretion of the Company's Board of Directors
and would depend on, among other things, future earnings, and the operating and
financial condition of the Company, its capital requirements, and general
business conditions.


                                       47
<PAGE>

Warrants and Options

         We have adopted the 2006 Standard Drilling Stock Incentive Plan (the
"Plan"), pursuant to which Standard Drilling may issue to our officers,
directors, employees and consultants incentive stock options, non-qualified
stock options and shares of restricted stock. The Plan provides for us to issue
up to 9,000,000 shares of our common stock pursuant to awards under the Plan. As
of December 31, 2006, we have outstanding options to purchase 8,545,000 shares
of common stock issued under the Plan. We have designed the plan to qualify
under the Internal Revenue Service ("IRS") code as an incentive stock option
plan.

         We have issued 9,111,500 warrants to purchase one share of our common
sock. The warrants have an exercise price of $1.75 per share and expire on June
9, 2008. If at any time the closing price for our common stock equals or exceeds
$3.00 per share for 20 consecutive trading days, we have the right to cause the
warrants to expire 30 days after delivering notice to the warrant holders.
During such 30 day period, the warrant holders will have the right to exercise
their warrants.

         As part of our private offering in June 2006, we issued warrants to
purchase 1,688,800 shares of our common stock at a price of $1.00 per share.
These warrants are exercisable immediately and will expire June 9, 2008. If at
any time the closing price for our common stock equals or exceeds $3.00 per
share for 20 consecutive trading days, we have the right to cause the warrants
to expire 30 days after delivering notice to the warrant holders. During such 30
day period, the warrant holders will have the right to exercise their warrants.

Registration Rights

         Pursuant to a Registration Rights Agreement entered into with some of
our stockholders, we are obligated to use commercially reasonable efforts to
file a Registration Statement as soon as possible, to register the re-sale of
the shares of our common stock, including the shares issuable upon exercise of
the warrants.

         We are also obligated to become a reporting issuer in Canada as
promptly as practical.

         Additionally, if we do not have in place an effective Registration
Statement on Form S-1 or Form SB-2 for the shares noted above, and we intend to
file a registration statement to register shares of our common stock (other than
a registration on Form S-8 relating solely to employee, director or consulting
stock option of purchase plans or other equity compensation plans or a
registration on Form S-4 relating solely to a transaction under Rule 145
promulgated under the U.S. Securities Act), we are required to offer to include
in such registration statement 45,998,000 shares of common stock. Provided, the
number of such shares that are included in an underwritten offering by us may be
subject to limitation by the underwriters in such offering if marketing factors
require such limitations.

         Any sales to be made by a holder of common stock pursuant to an
effective registration statement are subject to certain blackout rights that may
be exercised by us pursuant to which we may prevent any holder from selling
under the registration statement for up to 90 days in any six-month period.


                                       48
<PAGE>

         We have agreed to pay all costs and expenses associated with the
registration of the shares of common stock disclosed above other than legal fees
for more than one legal counsel for the selling holders and any underwriters'
fees, discounts or commissions relating to the registered re-sale of the shares.
The Registration Rights Agreement also contains customary indemnification
provisions between us and the holders of the registered securities.

Anti-Takeover Provisions

         Certain provisions in our certificate of incorporation may encourage
persons considering unsolicited tender offers or other unilateral takeover
proposals to negotiate with our board of directors rather than pursue
non-negotiated takeover attempts.

         Blank Check Preferred Stock. Our certificate of incorporation
authorizes blank check preferred stock. Our board of directors can set the
voting, redemption, conversion and other rights relating to such preferred stock
and can issue such stock in either a private or public transaction. The issuance
of preferred stock, while providing desired flexibility in connection with
possible acquisitions and other corporate purposes, could adversely affect the
voting power of holders of common stock and the likelihood that holders will
receive dividend payments and payments upon liquidation and could have the
effect of delaying, deferring or preventing a change in control of our company.

Dividend Policy

         We currently intend to retain future earnings to fund the development
and growth of our business and, therefore, do not anticipate paying cash
dividends within the foreseeable future. Any future payment of dividends will be
determined by our Board of Directors and will depend on our consolidated
financial condition and results of operations and other factors deemed relevant
by our Board of Directors.

Legal Proceedings

         We are not currently a party to any pending legal proceedings.

Recent Sales of Unregistered Securities

         On June 9, 2006, the Company completed a private offering of 9,111,500
units at a price of $2.00 per unit. Each unit consisted of two shares of common
stock and a warrant to purchase one share of common stock at an exercise price
of $1.75 per share for every two shares of common stock the investor purchases
in the offering. There were 9,111,500 warrants granted in the offering and the
warrants expire two years from purchase. These warrants are valued at $546,690.
The Company paid fees and expenses related to the offering of $1,733,828. The
Company also granted 1,688,800 warrants at an exercise price of $1.00 per share
with the same terms and conditions as those issued in the private offering to
the placement agent. These warrants were valued at $101,328.

         In connection with the closing of our acquisition of Standard Drilling,
Inc., a Delaware corporation ("Standard Drilling Delaware"), on September 1,
2006, we issued 41,223,000 shares of our voting common stock, par value $0.001
per share ("Common Stock"), to the former holders of common stock of Standard
Drilling, Inc., a Delaware corporation and assumed warrants and options to
acquire 19,320,300 shares of our common stock. We have reserved for issuance:
(1) 10,800,300 shares of Common Stock pursuant to outstanding warrants to
purchase common stock of Standard Drilling that were assumed by us, and (2)
8,520,000 shares of Common Stock pursuant to outstanding options to purchase
common stock of Standard Drilling to Standard Drilling Delaware's 2006 Stock
Incentive Plan that were assumed by the Company. No underwriters were involved
in the acquisition described herein. The securities were issued to Standard
Drilling's stockholders in the United States in reliance upon the exemption from
the registration requirements of the Securities Act, as set forth in Section
4(2) under the Securities Act and Rule 506 of Regulation D promulgated
thereunder relating to sales by an issuer not involving any public offering, to
the extent an exemption from such registration was required. The U.S. purchasers
of shares of our stock described above represented to us in connection with
their purchase that they were accredited investors and were acquiring the shares
for investment and not distribution, that they could bear the risks of the
investment and could hold the securities for an indefinite period of time. The
securities were issued to Canadian holders of Standard Drilling, Inc. securities
pursuant to Regulations and an exemption in subsection 2.11(a) of National
Instrument 45-106.


                                       49
<PAGE>

         All the purchasers received written disclosures that the securities had
not been registered under the Securities Act and that any resale must be made
pursuant to a registration or an available exemption from such registration. The
sales of these securities were made without general solicitation or advertising.

Indemnification of Directors and Officers

         Chapter 78 of the Nevada General Corporation Law ("NGCL") provides that
a corporation may indemnify any person who was or is a party or is threatened to
be made a party to any threatened, pending or completed action, suit or
proceeding whether civil, criminal, administrative or investigative (other than
an action by or in the right of the corporation) by reason of the fact that he
is or was a director, officer, employee or agent of the corporation, or is or
was serving at the request of the corporation as a director, officer, employee
or agent of another corporation, partnership, joint venture, trust or other
enterprise, against expenses (including attorneys' fees), judgments, fines and
amounts paid in settlement actually and reasonably incurred by him in connection
with such action, suit or proceeding if he is not liable pursuant to NGCL
Section 78.138 or acted in good faith and in a manner he reasonably believed to
be in or not opposed to the best interests of the corporation, and, with respect
to any criminal action or proceeding, had no reasonable cause to believe his
conduct was unlawful. NGCL Chapter 78 further provides that a corporation
similarly may indemnify any such person serving in any such capacity who was or
is a party or is threatened to be made a party to any threatened, pending or
completed action or suit by or in the right of the corporation to procure a
judgment in its favor by reason of the fact that he is or was a director,
officer, employee or agent of the corporation or is or was serving at the
request of the corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise, against
expenses (including attorneys' fees) actually and reasonably incurred in
connection with the defense or settlement of such action or suit if he is not
liable pursuant to NGCL Section 78.138 or acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
corporation and except that no indemnification shall be made in respect of any
claim, issue or matter as to which such person shall have been adjudged to be
liable to the corporation unless and only to the extent that the court or other
court of competent jurisdiction in which such action or suit was brought shall
determine upon application that, despite the adjudication of liability but in
view of all of the circumstances of the case, such person is fairly and
reasonably entitled to indemnity for such expenses which the court or other
court of competent jurisdiction shall deem proper.

         Our Articles of Incorporation and By-laws provide that we may indemnify
its officers, directors, agents and any other persons to the fullest extent
permitted by the NGCL.

         Additionally, under their employment agreements with Standard Drilling
(which agreements were assumed by us in connection with the acquisition of
Standard Drilling), Messrs. Tomlinson, Moses, Moffett, Pennington, and Walker,
are entitled to indemnification in their capacity as officers of the company to
the fullest extent permitted by the NGCL.

ITEM 11  Financial Statements and Exhibits.

  (a) The following exhibits of Standard are incorporated herein


                                       50
<PAGE>

  (c)     Exhibits

Exhibit No.                 Description
-----------                 -----------

2.1      Amended and Restated Agreement and Plan of Reorganization dated August
         __, 2006 by and among Online Holdings, Inc., a Nevada corporation,
         Standard Drilling Acquisition Corp., a Delaware corporation, and
         Standard Drilling, Inc., a Delaware corporation, (incorporated by
         reference from Exhibit 2.1 to the Current Report on Form 8-K filed by
         the Company on June 23, 2006)

3.1      Amended and Restated Articles of Incorporation of Online Holdings, Inc.

3.3      Bylaws of Online Holdings, Inc.

10.1     Registration Rights Agreement dated June 9, 2006 by and among Standard
         Drilling, Inc. and the stockholders named therein.

10.2     Contract with Romfor West Africa Ltd., effective May 15, 2006

10.3     Standard Drilling, Inc. 2006 Stock Incentive Plan

10.4     Form of Incentive Stock Option Agreement

10.5     Form of Non-Statutory Stock Option Agreement A

10.6     Form of Non-Statutory Stock Option Agreement B

10.7     Employment Agreement dated July 27, 2006 between Standard Drilling,
         Inc. and Prentis B. Tomlinson, Jr.

10.8     Employment Agreement dated July 27, 2006 between Standard Drilling,
         Inc. and Edward L. Moses, Jr.

10.9     Employment Agreement dated July 27, 2006 between Standard Drilling,
         Inc. and Robert T. Moffett

10.10    Employment Agreement dated July 27, 2006 between Standard Drilling,
         Inc. and Michael J. Walker

10.11    Employment Agreement dated July 27, 2006 between Standard Drilling,
         Inc. and O. Oliver Pennington, III


                                       51
<PAGE>

                               INDEX TO EXHIBITS
                                       OF
                             STANDARD DRILLING, INC.



Exhibit 31.1 *       Chief Executive Officer Certification Pursuant to Section
                     13a-14 of the Securities Exchange Act

Exhibit 32.1 *       Certification Pursuant to 18 U.S.C. Section 1350, as
                     Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act
                     of 2002

*Filed herewith

                                   SIGNATURES

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

                                         STANDARD DRILLING, INC.



Date:   May 18, 2007                By:  /s/ Prentis B. Tomlinson, Jr.
     ------------------------          -----------------------------------------
                                         Name: Prentis B. Tomlinson, Jr.,
                                               Chairman, Chief Executive Officer
                                               & Interim Chief Financial Officer


                                       52