UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION


WASHINGTON,
D.C. 20549





FORM
10-KSB





(Mark
One)





[X]
            ANNUAL
      REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934





For the
fiscal year ended December 31, 2007





[  ]
            TRANSITION
      REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934





For the
transition period from __________ to ___________





Commission
file
number                                           000-51569





STANDARD DRILLING,
INC.


(Exact
name of small business issuer as specified in its charter)





Nevada
              (State
      or Other Jurisdiction of Incorporation or Organization)
            6770
              (Primary
      Standard Industrial
              Classification
      Code Number)
            84-1598154
              (I.R.S.
      Employer
              Identification
      Number)





1640 Terrace Way, Walnut
Creek, California 94597


(Address
of principal executive offices)





(925)
938-0406


(Registrant's
telephone number)





Securities
registered under Section 12(b) of the Exchange Act:





NONE





Securities
registered under Section 12(g) of the Exchange Act:





COMMON
STOCK, $.001 PAR VALUE PER SHARE





Check
whether the registrant (1) has filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes [X] No
[  ]





Check if
there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B not contained in this form, and no disclosure will be contained,
to the best of the 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. [X]





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








The
issuer's revenues for the most recent fiscal year ended December 31, 2007 were
$0.





The
aggregate market value of the issuer's voting and non-voting common equity held
by non-affiliates computed by reference to the average bid and ask price of such
common equity as of April 11, 2008, was approximately $4,442,898.





As of
April 9, 2008, the issuer had 34,208,880 shares of common stock, $0.001 par
value per share outstanding ("Common Stock"),





Documents
Incorporated by Reference:





NONE





Transitional
Small Business Disclosure Format:





Yes
[   ] No [X]











STANDARD
DRILLING, INC.


FORM
10-KSB


YEAR
ENDED DECEMBER 31, 2007


INDEX





PART
    I4Item
      1.
            Description
      of Business8Item
      2.
            Description
      of Property8Item
      3.
            Legal
      ProceedingsItem
      4.
            Submission
      of Matters to a Vote of Security Holders
            9PART
      II10Item
      5.
            Market
      for Common Equity and Related Stockholder MattersItem
      6.
            Management's
      Discussion and Analysis or Plan of Operation
            11Item
      7.
            Financial
      Statements
            F-1Item
      8.
            Changes
      in and Disagreements with Accountants on Accounting and Financial
      Disclosure
            22Item
      8A.
            Controls
      and Procedures
            22Item
      8B.
            Other
      Information
            23PART
      IIIItem
      9.
            Directors,
      Executive Officers, Promoters and Control Persons; Compliance with Section
      16(a) of the Exchange Act
            24Item
      10.
            Executive
      Compensation
            26Item
      11.
            Security
      Ownership of Certain Beneficial Owners and Management and Related
      Stockholder Matters
            28Item
      12.
            Certain
      Relationships and Related Transactions
            29Item
      13.
            Exhibits
      and Reports on Form 8-K
            31Item
      14.
            Principal
      Accountant Fees and Services
            32













PART
I





ITEM 1. DESCRIPTION OF
BUSINESS





SPECIAL
NOTE REGARDING FORWARD-LOOKING STATEMENTS





CERTAIN
STATEMENTS IN THIS ANNUAL REPORT ON FORM 10-KSB (THIS "FORM 10-KSB"), INCLUDING
STATEMENTS UNDER "ITEM 1. DESCRIPTION OF BUSINESS," AND "ITEM 6. MANAGEMENT'S
DISCUSSION AND ANALYSIS", CONSTITUTE "FORWARD LOOKING STATEMENTS" WITHIN THE
MEANING OF SECTION 27A OF THE SECURITIES ACT OF 1934, AS AMENDED, AND THE
PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 (COLLECTIVELY, THE "REFORM
ACT"). CERTAIN, BUT NOT NECESSARILY ALL, OF SUCH FORWARD-LOOKING STATEMENTS CAN
BE IDENTIFIED BY THE USE OF FORWARD-LOOKING TERMINOLOGY SUCH AS "BELIEVES",
"EXPECTS", "MAY", "SHOULD", OR "ANTICIPATES", OR THE NEGATIVE THEREOF OR OTHER
VARIATIONS THEREON OR COMPARABLE TERMINOLOGY, OR BY DISCUSSIONS OF STRATEGY THAT
INVOLVE RISKS AND UNCERTAINTIES. SUCH FORWARD-LOOKING STATEMENTS INVOLVE KNOWN
AND UNKNOWN RISKS, UNCERTAINTIES AND OTHER FACTORS WHICH MAY CAUSE THE ACTUAL
RESULTS, PERFORMANCE OR ACHIEVEMENTS OF STANDARD DRILLING, INC. ("STANDARD
DRILLING," "STANDARD,"  THE "COMPANY," "WE," "US" OR "OUR") TO BE
MATERIALLY DIFFERENT FROM ANY FUTURE RESULTS, PERFORMANCE OR ACHIEVEMENTS
EXPRESSED OR IMPLIED BY SUCH FORWARD-LOOKING STATEMENTS. REFERENCES IN THIS FORM
10-KSB, UNLESS ANOTHER DATE IS STATED, ARE TO DECEMBER 31, 2007.





HISTORY





The
Company was originally formed as a Nevada corporation on July 27, 2001, under
the name Online Holdings, Inc.  Subsequently on September 1, 2006,
pursuant to an Agreement and Plan of Merger (the “Merger Agreement”) dated July
24, 2006 by and among the Company, Standard Drilling Acquisition Co., a Delaware
corporation (“Merger Sub”), and Standard Drilling, Inc., a Delaware corporation
(“Standard Drilling Delaware”), Merger Sub was merged with and into Standard
Drilling Delaware, and Standard Drilling Delaware became a wholly-owned
subsidiary of the Company (the “Merger”). As a result of the Merger, the
Company, which previously had no material operations, acquired the business of
Standard Drilling Delaware.  Also pursuant to the Merger, the Company
changed its name to Standard Drilling, Inc.





Subsequent
to the Merger, the Company was organized to provide contract land drilling
services to independent and major oil and gas exploration and production
companies.  The Company constructed, owned and operated land drilling
rigs.





On June
5, 2007, we entered into a purchase and sale agreement to sell our sole
completed 1500 horsepower land-drilling rig ("Rig 1") for a gross purchase price
of $7,800,000. Rig 1 was sold to Romfor West Africa, a subsidiary of Romfor
Supply Company, Inc. ("Romfor"). At the time of the signing of the


purchase
and sale agreement, Romfor was our largest individual creditor. The purchase and
sale agreement for Rig 1 closed on September 24, 2007.  Rig 1
represented substantially all of our assets.





On
September 24, 2007, the Company entered into an Asset Purchase Agreement with
PBT Capital Partners, LLC (“PBT”).  PBT is a private company whose
sole shareholder is Prentis B. Tomlinson, Jr., who was our Chairman and Chief
Executive Officer at the time we entered into the agreement.  Under
the terms of the Asset Purchase Agreement, PBT assumed substantially all of our
assets and associated and contingent liabilities in return for leaving not less
than $839,068 in cash in the Company and providing us a note payable in the
amount of $600,000. The $600,000 note payable by PBT was due on or before
December 31, 2007 and guaranteed by Mr. Tomlinson, which amount has not been
paid to date. In connection with the Asset Purchase Agreement, $833,389 of the
amount owed by the Company under the Interim Credit Agreement was
forgiven.  Additionally, in connection with the Asset Purchase
Agreement, PBT assumed our obligations under our office space lease, our
employment agreements with our various officers and Directors and certain
severance agreements we entered into with our former officers and
Directors.  We retained all of the liabilities relating to the
Advisory Consulting Agreement between us and International Capital Advisory,
Inc., the Support Services Agreement between us and Petroleum Financial Inc.,
and the obligation to provide healthcare benefits to David Wilson, our former
Manager of Operations under the terms of his severance agreement until February
2009.





-4-


In
connection with the Asset Purchase Agreement in September and October 2007, we
entered into Mutual Releases (the “Releases”) with various of our former
officers, Directors and parties who we had previously entered into agreements
with, including Romfor West Africa, Ltd., Prentis B. Tomlinson, Jr., our former
Chairman and Chief Executive Officer, O. Oliver Pennington, III, our former Vice
President and Chief Financial Officer, E.L. Moses, Jr., our former President,
Chief Operating Officer and Director, W. Richard Andersen, our former Director,
Peter F. Frey, Treasurer, and Daniel A. Drum, our former Vice President of
Finance, pursuant to which such individuals and entities agreed to release us
from any and all known and unknown claims, we agreed to release such parties
from any and all know or known claims, and such individuals and entities agreed
to cancel the shares of common stock and options to acquire shares of common
stock which they held in the Company.









The Asset
Purchase Agreement is part of a plan of restructuring which the Company
anticipates will allow it to raise additional capital and pursue new business
opportunities. Standard's Board of Directors will continue to evaluate the
Company's strategic options.





In
connection with the Company’s entry into the Asset Purchase Agreement with PBT
Capital Partners, LLC, Mr. Tomlinson resigned as Chairman and Chief Executive
Officer of the Company, and the Board appointed Edward L. Moses as Interim
Chairman.  Subsequently on November 28, 2007, the Board appointed
David S. Rector as Chairman and principal executive officer of the
Company.  Also on or around November 28, 2007, W. Richard Anderson and
Edward L. Moses resigned as Directors, leaving Mr. Rector as the sole Director
of the Company.





The
Company's drilling and rig construction operations are currently idle as
Management and the Board of Directors are currently evaluating strategic options
in light of changing market conditions and the Company's inability to secure
additional financing. The Company is also actively seeking a merger with or an
acquisition of an existing operating company as it evaluates financing
alternatives and strategic options.





On or
around December 17, 2007, the NASDAQ Stock Market informed the Company that all
quotations for the Company's securities will be deleted from the
Over-The-Counter Bulletin Board (“OTCBB”) effective with the open of business on
December 18, 2007 due to its failure to satisfy NASD Rule
6530.  NASDAQ had determined that the Company was late in filing
required annual and quarterly financial information three times in two years,
and thus was subject to automatic delisting for a period of one year pursuant to
Rule 6530.  In the event the Company timely files its periodic reports
for a period of one year, and otherwise meets NASDAQ’s listing requirements, the
Company may be allowed to quote its securities on the OTCBB once
again.  The Company's common shares are currently quoted on the Pink
Sheets under the symbol “STDR”.





The
Company cancelled an aggregate of 11,000,000 shares of the Company’s common
stock and 5,650,000 options held by former employees and consultants of the
Company, in connection with the execution of the Releases in October
2007.    To date 10,250,000 shares have been cancelled; the
remaining 750,000 common shares will be cancelled in due course.





CURRENT
STATUS AS A BLANK CHECK SHELL COMPANY





Since
approximately September 2007, after we affected the sale and purchase agreement
with Romfor and the Asset Purchase Agreement with PBT Capital Partners, LLC, we
have been classified as a "shell company". Rule 12b-2 of the Securities and
Exchange Act of 1934, as amended (the "Securities Act") defines "shell company,"
as a company (other than an asset-backed issuer), which has "no operations; and
either no or nominal assets; assets consisting of solely cash and cash
equivalents; or assets consisting of any amount of cash and cash equivalents and
nominal other assets." Additionally, since approximately September 2007, our
operations have been classified as a "blank check" company, which is defined as
"any development stage company that is issuing a penny stock, within the meaning
of Section 3 (a)(51) of the Exchange Act and that has no specific business plan
or purpose, or has indicated that its business plan is to merge with an
unidentified company or companies." Many states have enacted statutes, rules and
regulations limiting the sale of securities of "blank check" companies in their
respective jurisdictions. Management does not intend to undertake any efforts to
cause a market to develop in our securities until we have successfully concluded
a business combination. The Company intends to comply with the periodic
reporting requirements of the Exchange Act of 1934, as amended (the “Exchange
Act”) for so long as we are subject to those requirements.





-5-


We
currently plan to investigate and, if such investigation warrants, acquire a
target company or business seeking the perceived advantages of being a publicly
held corporation and, to a lesser extent that desires to employ our funds in its
business. Our principal business objective for the next twelve (12) months and
beyond will be to achieve long-term growth potential through a combination with
a business rather than immediate, short-term earnings. We will not restrict our
potential candidate target companies to any specific business, industry or
geographical location and, thus, may acquire any type of business.





The
analysis of new business opportunities has and will be undertaken by or under
the supervision of David S. Rector, our sole officer and Director. As of the
date of this filing, we have not had any conversations with potential merger or
acquisition targets nor have we entered into any definitive agreement with any
party. In our efforts to analyze potential acquisition targets, we may consider
the following kinds of factors:





(a)
            Potential
      for growth, indicated by new technology, anticipated market expansion or
      new products;(b)
            Competitive
      position as compared to other firms of similar size and experience within
      the industry segment as well as within the industry as a
      whole;(c)
            Strength
      and diversity of management, either in place or scheduled for
      recruitment;(d)
            Capital
      requirements and anticipated availability of required funds, to be
      provided by the Registrant or from operations, through the sale of
      additional securities, through joint ventures or similar arrangements or
      from other sources;(e)
            The
      cost of participation by us as compared to the perceived tangible and
      intangible values and potentials;(f)
            The
      extent to which the business opportunity can be
  advanced;(g)
            The
      accessibility of required management expertise, personnel, raw materials,
      services, professional assistance and other required items;
      and(h)
            Other
      relevant factors.




In
applying the foregoing criteria, no one of which will be controlling, our
management will attempt to analyze all factors and circumstances and make a
determination based upon reasonable investigative measures and available data.
Potentially available business opportunities may occur in many different
industries, and at various stages of development, all of which will make the
task of comparative investigation and analysis of such business opportunities
extremely difficult and complex. Due to the limited capital we have available
for investigation, we may not discover or adequately evaluate adverse facts
about the opportunity to be acquired.





-6-


FORM
OF ACQUISITION





The
manner in which we participate in an opportunity will depend upon the nature of
the opportunity, our respective needs and desires as well as those of the
promoters of the opportunity, and the relative negotiating strength of us and
such promoters.





It is
likely that we will acquire our participation in a business opportunity through
the issuance of common stock or other securities. Although the terms of any such
transaction cannot be predicted, it should be noted that in certain
circumstances the criteria for determining whether or not an acquisition is a
so-called "tax free" reorganization under Section 368(a)(1) of the Internal
Revenue Code of 1986, as amended (the "Code"), depends upon the issuance to the
stockholders of the acquired company of at least 80 percent of the common stock
of the combined entities immediately following the reorganization. If a
transaction were structured to take advantage of these provisions rather than
other "tax free" provisions provided under the Code, all prior stockholders
would in such circumstances retain 20% or less of the total issued and
outstanding shares. Under other circumstances, depending upon the relative
negotiating strength of the parties, prior stockholders may retain substantially
less than 20% of the total issued and outstanding shares. This could result in
substantial additional dilution to the equity of those who were our stockholders
prior to such reorganization.




Our
present stockholders will likely not have control of a majority of our voting
shares following a reorganization transaction. As part of such a transaction,
our current director may resign and new directors may be appointed without any
vote by stockholders.





In the
case of an acquisition, the transaction may be accomplished upon the sole
determination of our management without any vote or approval by stockholders. In
the case of a statutory merger or consolidation directly involving the Company,
it will likely be necessary to call a stockholders' meeting and obtain the
approval of the holders of a majority of the outstanding shares. The necessity
to obtain such stockholder approval may result in delay and additional expense
in the consummation of any proposed transaction and will also give rise to
certain appraisal rights to dissenting stockholders. Most likely, management
will seek to structure any such transaction so as not to require stockholder
approval.





It is
anticipated that the investigation of specific business opportunities and the
negotiation, drafting and execution of relevant agreements, disclosure documents
and other instruments will require substantial management time and attention and
substantial cost for accountants, attorneys and others. If a decision is made
not to participate in a specific business opportunity, the costs theretofore
incurred in the related investigation would not be recoverable. Furthermore,
even if an agreement is reached for the participation in a specific business
opportunity, the failure to consummate that transaction may result in our loss
of the related costs incurred.





We
presently have no employees apart from our sole officer and Director, David S.
Rector. Mr. Rector is engaged in outside business activities and as a result, he
is unsure of the amount of time he will be able to devote to our business until
the acquisition of a successful business opportunity has been
consummated.





EMPLOYEES





As of
December 31, 2007, our only employee is David Rector who services as the
Company’s sole Director, President and Chief Executive Officer.  Mr.
Rector currently works for the Company on a part time basis.  We may
hire additional employees and/or consultants in the future; however we expect no
significant changes in the number of our employees other than such changes, if
any, incident to a business combination.





COMPETITION





If we
should resume operations in contract land drilling services, of which we
currently have no plans, we face competition from numerous other companies
involved in land drilling services.  Many of these land drilling
service companies have greater resources than we do and may be better able to
offer their products and services at prices lower than we can.





Currently,
we face competition from other public companies that have positioned themselves
as an acquisition target.  Further, many of the public companies we
compete against for acquisition may be more attractive to acquisition
candidates.





-7-


PATENTS,
TRADEMARKS AND LICENSES





We do not
currently hold any rights to patents, trademarks or licenses.





GOVERNMENT
REGULATION





Various
federal, state and local laws regulating the discharge of materials into the
environment, or otherwise relating to the protection of the environment,
directly impacted our former oil and gas operations, and consequently may impact
our operations and costs. These regulations include, among others, (i)
regulations by the Environmental Protection Agency and various state agencies
regarding approved methods of disposal for certain hazardous and non-hazardous
wastes; (ii) the Comprehensive Environmental Response, Compensation, and
Liability Act, Federal Resource Conservation and Recovery Act and analogous
state laws which regulate the removal or remediation of previously disposed
wastes (including wastes disposed of or released by prior owners or operators),
property contamination (including groundwater contamination), and remedial
plugging operations to prevent future contamination; (iii) the Clean Air Act and
comparable state and local requirements which may result in the gradual
imposition of certain pollution control requirements with respect to air
emissions from our operations; (iv) the Oil Pollution Act of 1990 which contains
numerous requirements relating to the prevention of and response to oil spills
into waters of the United States; (v) the Resource Conservation and Recovery Act
which is the principal federal statute governing the treatment, storage and
disposal of hazardous wastes; and (vi) state regulations and statutes governing
the handling, treatment, storage and disposal of naturally occurring radioactive
material.  Management believes that we are in substantial compliance with
applicable environmental laws and regulations. To date, we have not expended any
material amounts to comply with such regulations, and management does not
currently anticipate that future compliance will have a materially adverse
effect on our consolidated financial position as we no longer conduct any oil
and gas operations. However, if we are deemed not to be in compliance with
applicable environmental laws, we could be forced to expend substantial amounts
to be in compliance, which would have a materially adverse effect on our
available cash and liquidity.





ITEM 2. DESCRIPTION OF
PROPERTY





OFFICE
SPACE





Our
primary office space currently occupies approximately 240 square feet of office
space, at 1640 Terrace Way, Walnut Creek, California 94597, which we are
provided at the home of David Rector, our sole officer and Director, free of
charge. Mr. Rector does not have any current plans to cease providing such
office space free of charge, nor do we have any current plans to seek an
alternative office space arrangement.   Our prior office space
was leased under a Lease Agreement, which was assigned to a third party in
September 2007 in connection with the Asset Purchase Agreement.





LAND
DRILLING RIGS





As of
December 31, 2007, the Company no longer owns any completed land drilling rigs
or any other property or equipment, as all such rigs, property and equipment
were assigned to Romfor Supply Company, Inc. in connection with the purchase
agreement and PBT in connection with the Asset Purchase Agreement, described
above.







ITEM 3. LEGAL
PROCEEDINGS





From time
to time, we may become party to litigation or other legal proceedings that we
consider to be a part of the ordinary course of our business. We are not
currently involved in legal proceedings that could reasonably be expected to
have a material adverse effect on our business, prospects, financial condition
or results of operations. We may become involved in material legal proceedings
in the future.





-8-


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





None.






































-9-





PART
II





ITEM 5. MARKET FOR COMMON
EQUITY AND RELATED STOCKHOLDER MATTERS





The table
below sets forth the high and low trading prices for the Company's common stock
for the periods indicated as reported by the NASDAQ OTC-Bulletin Board and the
Pinksheets trading market. The quotations reflect inter-dealer prices, without
retail mark-up, mark-down or commission and may not represent actual
transactions. On or around December 17, 2007, the NASDAQ Stock Market informed
the Company that all quotations for the Company's securities will be deleted
from the OTCBB effective with the open of business on Tuesday, December 18, 2007
due to its failure to satisfy NASD Rule 6530.   The Company's
common shares are quoted on the Pinksheets under the symbol “STDR”.





TRADING
      PRICESQUARTER
      ENDED
            
            HIGH
            
            
            LOWDecember
      31, 2007
            
            $
            0.20
            
            
            $
            0.06September
      30, 2007
            
            $
            0.30
            
            
            $
            0.20June
      30, 2007
            
            $
            0.55
            
            
            $
            0.27March
      31, 2007
            
            $
            1.20
            
            
            $
            0.58December
      31, 2006
            
            $
            1.20
            
            
            $
            1.00September
      30, 2006
            
            $
            0
            
            
            $
            0June
      30, 2006
            
            $
            0
            
            
            $
            0March
      31, 2006
            
            $
            0
            
            
            $
            0




We have a
total of 110,000,000 shares of stock authorized, of which 100,000,000 are shares
of common stock, $0.001 par value and 10,000,000 are shares of preferred stock,
$0.001 par value. As of April 9, 2008, the Company had approximately 34,208,880
shares of common stock outstanding held by approximately two hundred nineteen
(219) shareholders of record.  To date, the Company has not paid
dividends on its common stock.  We have no shares of common stock
subject to outstanding options or warrants to purchase, or securities
convertible into, our common stock. We have no outstanding shares of Preferred
Stock.





The
Company's common stock is considered a "penny stock" as defined in the
Commission's rules promulgated under the Exchange Act. The Commission's rules
regarding penny stocks impose additional sales practice requirements on
broker-dealers who sell such securities to persons other than established
customers and accredited investors (generally persons with net worth in excess
of $1,000,000 or an annual income exceeding $200,000 or $300,000 jointly with
their spouse). For transactions covered by the rules, the broker-dealer must
make a special suitability determination for the purchaser and receive the
purchaser's written agreement to the transaction prior to the sale. Thus the
Rules affect the ability of broker-dealers to sell the Company's shares should
they wish to do so because of the adverse effect that the Rules have upon
liquidity of penny stocks. Unless the transaction is exempt under the Rules,
under the Securities Enforcement Remedies and Penny Stock Reform Act of 1990,
broker-dealers effecting customer transactions in penny stocks are required to
provide their customers with (i) a risk disclosure document; (ii) disclosure of
current bid and ask quotations if any; (iii) disclosure of the compensation of
the broker-dealer and its sales personnel in the transaction; and (iv) monthly
account statements showing the market value of each penny stock held in the
customer's account. As a result of the penny stock rules, the market liquidity
for the Company's securities may be severely adversely affected by limiting the
ability of broker-dealers to sell the Company's securities and the ability of
purchasers of the securities to resell them.





RECENT
SALES OF UNREGISTERED SECURITIES




In September 2007, former
related parties of the Company cancelled 925,000 shares of common stock in
connection with the Asset Purchase Agreement.


The
Company cancelled an aggregate of  11,000,000 shares of the Company’s
common stock and 5,650,000 options held by former employees and consultants of
the Company, in connection with the execution of mutual releases by each of
these individuals in October through December 2007.  To date 10,250,000
shares have been cancelled; the remaining 750,000 common shares will be
cancelled in due course which shares have been included in the number of issued
and outstanding shares disclosed throughout this Report.





-10-








ITEM 6. MANAGEMENT'S
DISCUSSION AND ANALYSIS OR PLAN OF OPERATION





This
report contains forward looking statements within the meaning of Section 27a of
the Securities Act of 1933 and Section 21e of the Securities Exchange Act of
1934. These forward looking statements are subject to certain risks and
uncertainties that could cause actual results to differ materially from
historical results or anticipated results, including those set forth under "Risk
Factors" in this Management's Discussion and Analysis of Financial Condition and
Results of Operations" and elsewhere in this report. The following discussion
and analysis should be read in conjunction with "Selected Financial Data" and
the Company's financial statements and notes thereto included elsewhere in this
report.





PLAN
OF OPERATIONS OVERVIEW





Our current business objective for the next twelve (12)
months is to investigate and, if such investigation warrants, acquire a target
company or business seeking the perceived advantages of being a publicly held
corporation. Our principal business objective for the next twelve (12) months
and beyond will be to achieve long-term growth potential through a combination
with a business rather than immediate, short-term earnings. We will not restrict
our potential candidate target companies to any specific business, industry or
geographical location and, thus, may acquire any type of
business.





We do not
currently engage in any business activities that provide us with positive cash
flows. As such, the costs of investigating and analyzing business combinations
for the next approximately twelve (12) months and beyond will be paid with our
current cash and other current assets on hand and through funds raised through
other sources, which may not be available on favorable terms, if at
all.





During
the next twelve (12) months we anticipate incurring costs related
to:





(i)
            filing
      of Exchange Act reports, and(ii)
            costs
      relating to consummating an
acquisition.





We
believe we will be able to meet these costs with our current cash on hand and
funds we may borrow, and additional amounts, as necessary, to be loaned to or
invested in us by our stockholders or other investors.





We may
consider a business which has recently commenced operations, is a developing
company in need of additional funds for expansion into new products or markets,
is seeking to develop a new product or service, or is an established business
which may be experiencing financial or operating difficulties and is in need of
additional capital. In the alternative, a business combination may involve the
acquisition of, or merger with, a company which does not need substantial
additional capital, but which desires to establish a public trading market for
its shares, while avoiding, among other things, the time delays, significant
expense, and loss of voting control which may occur in a public
offering.





Any
target business that is selected may be a financially unstable company or an
entity in its early stages of development or growth, including entities without
established records of sales or earnings. In that event, we will be subject to
numerous risks inherent in the business and operations of financially unstable
and early stage or potential emerging growth companies. In addition, we may
effect a business combination with an entity in an industry characterized by a
high level of risk, and, although our management will endeavor to evaluate the
risks inherent in a particular target business, there can be no assurance that
we will properly ascertain or assess all significant risks.




Our
management anticipates that it will likely be able to effect only one business
combination, due primarily to our limited financing, and the dilution of
interest for present and prospective stockholders, which is likely to occur as a
result of our management's plan to offer a controlling interest to a target
business in order to achieve a tax free reorganization. This lack of
diversification should be considered a substantial risk in investing in us,
because it will not permit us to offset potential losses from one venture
against gains from another.





-11-


We
anticipate that the selection of a business combination will be complex and
extremely risky. Because of general economic conditions, rapid technological
advances being made in some industries and shortages of available capital, our
management believes that there are numerous firms seeking even the limited
additional capital which we will have and/or the perceived benefits of becoming
a publicly traded corporation. Such perceived benefits of becoming a publicly
traded corporation include, among other things, facilitating or improving the
terms on which additional equity financing may be obtained, providing liquidity
for the principals of and investors in a business, creating a means for
providing incentive stock options or similar benefits to key employees, and
offering greater flexibility in structuring acquisitions, joint ventures and the
like through the issuance of stock. Potentially available business combinations
may occur in many different industries and at various stages of development, all
of which will make the task of comparative investigation and analysis of such
business opportunities extremely difficult and complex.





YEAR
ENDED DECEMBER 31, 2007, COMPARED TO THE YEAR ENDED DECEMBER 31,
2006





We
commenced our operations and entered into a contract for the construction of
three oil drilling 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. In September 2007, we determined to
seek another line of business and liquidated all of the assets related to the
oil drilling rigs. Accordingly, all of the activities related to the drilling
rigs have been reclassified as discontinued operations.





Net
Sales.





For the
period from February 14, 2006 (inception) to December 31, 2006 and for the year
ended December 31, 2007 we had no revenues from continuing
operations.





General
and Administrative Expenses.





For the
period from February 14, 2006 (inception) to December 31, 2006, general and
administrative expenses from continuing operations were $-0-. During the year
ended December 31, 2007 we had $74,854 in general and administrative expenses.
The general and administrative expenses were primarily professional fees
principally associated with maintaining the Company as a public
entity.





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 the
discontinued operations from our drilling program. During the year ended
December 31, 2007, we had a total net loss of $12,243,213, which included
$12,168,359 of net loss from our discontinued operations and $74,854 from our
continuing operations.





As of
December 31, 2007, we have had only minimal operations, which mainly consisted
of searching out potential merger or acquisition targets.





LIQUIDITY
AND CAPITAL RESOURCES





As of
December 31, 2007, we had cash and cash equivalents of $795,436.  We
expect to have monthly overhead costs of approximately $25,000 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).  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.  Our future liquidity and our
liquidity in the next twelve months depends on our continued ability to obtain
sources of capital to fund our continuing operations and to seek out potential
merger and acquisition partners.





-12-


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 in the Company.  Each unit
consists of two shares of common stock 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.





On
November 27, 2006, we entered into an Interim Credit Agreement, effective as of
November 20, 2006, with Prentis B. Tomlinson, Jr., the then Chairman and Chief
Executive Officer of the Company, as lender, in an initial aggregate principal
amount of $1 million (the “Loan”). The initial aggregate principal amount of the
Loan was evidenced by a Promissory Note, effective as of November 20, 2006, made
by the Company in favor of Mr. Tomlinson. Interest accrued 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, was payable upon demand by Mr. Tomlinson.





On
September 24, 2007, the Company entered into an Asset Purchase Agreement with
PBT Capital Partners, LLC.  PBT Capital Partners, LLC is a private
company whose sole shareholder is Prentis B. Tomlinson, Jr., who was our
Chairman and Chief Executive Officer at the time we entered into the
agreement.  Under the terms of the Asset Purchase Agreement, PBT
Capital Partners, LLC assumed substantially all of our assets and associated and
contingent liabilities in order to improve our financial position. The Asset
Purchase Agreement created a $600,000 note payable by PBT Capital Partners LLC
to us on or before December 31, 2007, which note is described in greater detail
above, and remains outstanding as of the filing of this report. In connection
with the Asset Purchase Agreement, $833,389 of the amount owed by the Company
under the Interim Credit Agreement was forgiven.





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 Mr. Tomlinson a lien and security interest
in and to the Company’s land drilling Rig#1.





CASH FLOW
FROM OPERATING ACTIVITIES





For the
year ended December 31, 2007, net cash used by operating activities was
$18,103,427, primarily attributed to a net loss of $12,243,213 , a decrease in
accounts payable of $4,128,557, and accrued expenses of $2,711,385.





CASH FLOW
FROM INVESTING ACTIVITIES





For the
year December 31, 2007, net cash provided by investing activities was
$20,180,968, driven primarily by the liquidation of our investment in fixed
assets in connection with the Asset Purchase Agreement described
above.





CASH FLOW
FROM FINANCING ACTIVITIES





For the
year ended December 31, 2007, net cash used by financing activities was
$1,334,418, which was attributed to the repayment of notes payable of
$1,652,018. During the year ended December 31, 2007, we received net proceeds
from stock subscriptions receivable of $317,600.





Future
capital expenditures and commitments





As of
December 31, 2007, our remaining cash balance will be sufficient to cover our
current liabilities, obligations and contractual commitments for the remainder
of 2008.  We may need to raise additional capital through the sale of
equity and/or debt securities to complete the acquisition of an operating
company.





The
actual amount and timing of our capital expenditures may differ materially from
our estimates.





-13-


OFF-BALANCE
SHEET ARRANGEMENTS





As of
December 31, 2007, we had no off-balance sheet arrangements.





We
currently plan to investigate and, if such investigation warrants, acquire a
target company or business seeking the perceived advantages of being a publicly
held corporation and, to a lesser extent, that desires to employ our funds in
its business. Our principal business objective for the next twelve (12) months
and beyond, will be to achieve long-term growth potential through a combination
with a business rather than immediate, short-term earnings. We will not restrict
our potential candidate target companies to any specific business, industry or
geographical location and, thus, may acquire any type of business.




We do not
currently have any commitments from our officer and Director, David Rector and
plan to use our current cash on hand to continue our operations until such time
as we find a potential merger or acquisition target, of which there can be no
assurance.





Critical
Accounting Policies





Our
discussion and analysis of our financial condition and results of operations is
based upon our audited financial statements, which have been prepared in
accordance with accounting principals generally accepted in the United States.
The preparation of these financial statements requires us to make estimates and
judgments that affect the reported amounts of assets, liabilities, revenues and
expenses, and related disclosure of any contingent assets and liabilities. On an
on-going basis, we evaluate our estimates, including those related to
uncollectible receivable, investment values, income taxes, the recapitalization
and contingencies. We base our estimates on various assumptions that we believe
to be reasonable under the circumstances, the results of which form the basis
for making judgments about 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.




Recently issued accounting
pronouncements. The Company does not expect the adoption of any recently
issued accounting pronouncements to have a significant impact on the Company’s
results of operations, financial position or cash flows.





RISK
FACTORS





Our
business is subject to numerous risk factors, including the
following:





WE
MAY NOT BE ABLE TO CONTINUE OUR BUSINESS PLAN AND BUSINESS ACTIVITIES WITHOUT
ADDITIONAL FINANCING.





We depend
to a great degree on the ability to attract external financing in order to
conduct future exploratory activities. We believe we can continue our business
operations for approximately the next two (2) years with our current cash on
hand.  We do not anticipate the need for any additional funding to
continue our operations for the next twelve (12) months.  We have
generated nominal revenues to date, and can make no assurances that the Company
will have revenues in the future or be able to raise additional financing. If we
are unable to raise the additional funds required for our business activities in
the future, we may be forced to abandon our current business plan.  If
you invest in us and we are unable to raise the required funds, your investment
could become worthless.





WE
HAVE A LIMITED OPERATING HISTORY AND MINIMAL ASSETS AND HAVE HAD NO OPERATIONS
AND GENERATED NO REVENUES SINCE OCTOBER 2003.





We have a
limited operating history, and have had no operations since September 2007 and
no revenues or earnings from operations since approximately September 2007. We
have no significant assets or financial resources. We will, in all likelihood,
sustain operating expenses without corresponding revenues, at least until the
consummation of a business combination. This may result in us incurring a net
operating loss which will increase continuously until we can consummate a
business combination with a target company. There is no assurance that we can
identify such a target company and consummate such a business
combination.





-14-


SHAREHOLDERS
WHO HOLD UNREGISTERED SHARES OF OUR COMMON STOCK ARE NOT ELIGIBLE TO SELL OUR
SECURITIES PURSUANT TO RULE 144, DUE TO OUR STATUS AS A “BLANK CHECK” COMPANY
AND A “SHELL COMPANY”





We are
characterized as both a “blank check” company and a “shell company.” The term
"blank check company" is defined as a company that is a development stage
company that has no specific business plan or purpose or has indicated that its
business plan is to engage in a merger or acquisition with an unidentified
company or companies, or other entity or person; and is issuing "penny stock,"
as defined in Rule 3a51-1 under the Securities Exchange Act of
1934.  Because we are a “blank check” company, Rule 144 of the
Securities Act of 1933, as amended (“Rule 144”) is not available to our
shareholders and we are required to comply with additional SEC rules regarding
any offerings we may undertake.





Additionally,
pursuant to Rule 144 of the Securities Act of 1933, as amended (“Rule 144”), a
“shell company” is defined as a company that has no or nominal operations; and,
either no or nominal assets; assets consisting solely of cash and cash
equivalents; or assets consisting of any amount of cash and cash equivalents and
nominal other assets.  As such, we are a “shell company” pursuant to
Rule 144, and as such, sales of our securities pursuant to Rule 144 are not able
to be made until 1) we have ceased to be a “shell company; 2) we are subject to
Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, and have
filed all of our required periodic reports for a period of one year; and a
period of at least twelve months has elapsed from the date “Form 10 information”
has been filed with the Commission reflecting the Company’s status as a
non-“shell company.”  Because none of our securities can be sold
pursuant to Rule 144, until at least a year after we cease to be a “shell
company” (as described in greater detail above), any securities we issue to
consultants, employees, in consideration for services rendered or for any other
purpose will have no liquidity until and unless such securities are registered
with the Commission and/or until a year after we cease to be a “shell company”
and have complied with the other requirements of Rule 144, as described
above.





As a
result of us being a “blank check” company and a “shell company” it will be
harder for us to fund our operations and pay our consultants with our securities
instead of cash.  Additionally, as we may not ever cease to be a
“blank check company” or a “shell company,” investors who hold our securities
may be forced to hold such securities indefinitely.





THERE
MAY BE CONFLICTS OF INTEREST BETWEEN OUR MANAGEMENT AND OUR NON-MANAGEMENT
STOCKHOLDERS.





Conflicts
of interest create the risk that management may have an incentive to act
adversely to the interests of other investors. A conflict of interest may arise
between our management's personal pecuniary interest and its fiduciary duty to
our stockholders. Further, our management's own pecuniary interest may at some
point compromise its fiduciary duty to our stockholders.





THE
NATURE OF OUR PROPOSED OPERATIONS IS HIGHLY SPECULATIVE.





The
success of our proposed plan of operation will depend to a great extent on the
operations, financial condition and management of the identified target company.
While management will prefer business combinations with entities having
established operating histories, there can be no assurance that we will be
successful in locating candidates meeting such criteria. In the event we
complete a business combination, of which there can be no assurance, the success
of our operations will be dependent upon management of the target company and
numerous other factors beyond our control.





-15-


THE
COMPETITION FOR BUSINESS OPPORTUNITIES AND COMBINATIONS IS GREAT.





We are
and will continue to be an insignificant participant in the business of seeking
mergers with and acquisitions of business entities. A large number of
established and well-financed entities, including venture capital firms, are
active in mergers and acquisitions of companies which may be merger or
acquisition target candidates for us. Nearly all such entities have
significantly greater financial resources, technical expertise and managerial
capabilities than us and, consequently, we will be at a competitive disadvantage
in identifying possible business opportunities and successfully completing a
business combination. Moreover, we will also compete with numerous other small
public companies in seeking merger or acquisition candidates.





IT
WILL BE IMPRACTICABLE FOR US TO CONDUCT AN EXHAUSTIVE INVESTIGATION PRIOR TO ANY
BUSINESS COMBINATION, WHICH MAY LEAD TO A FAILURE TO MEET OUR FIDUCIARY
OBLIGATIONS TO OUR SHAREHOLDERS.





Our
limited funds and the fact that we currently only have one officer and Director
will likely make it impracticable to conduct a complete and exhaustive
investigation and analysis of a target company. The decision to enter into a
business combination, therefore, will likely be made without detailed
feasibility studies, independent analysis, market surveys or similar information
which, if we had more funds available to it, would be desirable. We will be
particularly dependent in making decisions upon information provided by the
principals and advisors associated with the business entity seeking our
participation. Management may not be able to meet its fiduciary obligation to us
and our stockholders due to the impracticability of completing thorough due
diligence of a target company. By our failure to complete a thorough due
diligence and exhaustive investigation of a target company, we are more
susceptible to derivative litigation or other stockholder suits. In addition,
this failure to meet our fiduciary obligations increases the likelihood of
plaintiff success in such litigation.





WE
HAVE NO CURRENT AGREEMENTS IN PLACE FOR A BUSINESS COMBINATION OR OTHER
TRANSACTION, AND WE CURRENTLY HAVE NO STANDARDS FOR POTENTIAL BUSINESS
COMBINATIONS, AND AS A RESULT, OUR MANAGEMENT HAS SOLE DISCRETION REGARDING ANY
POTENTIAL BUSINESS COMBINATION.





We have
no current arrangement, agreement or understanding with respect to engaging in a
business combination with a specific entity. There can be no assurance that we
will be successful in identifying and evaluating suitable business opportunities
or in concluding a business combination. Management has not identified any
particular industry or specific business within an industry for evaluation by
us. There is no assurance that we will be able to negotiate a business
combination on terms favorable to us. We have not established a specific length
of operating history or a specified level of earnings, assets, net worth or
other criteria which we will require a target company to have achieved, or
without which we would not consider a business combination with such business
entity. Accordingly, we may enter into a business combination with a business
entity having no significant operating history, losses, limited or no potential
for immediate earnings, limited assets, negative net worth or other negative
characteristics.




-16-


ANY
FUTURE BUSINESS COMBINATION IS HIGHLY DEPENDENT ON THE ACTIONS OF OUR SOLE
OFFICER AND DIRECTOR.





While
seeking a business combination, management anticipates devoting only a limited
amount of time per month to our business. Our sole officer has not entered into
a written employment agreement with us and he is not expected to do so in the
foreseeable future. We have not obtained key man life insurance on our
officer/director.   Mr. Rector, as our current sole officer and
Director, currently has significant control over whether we enter into a merger
or acquisition in the future.  As a result, shareholders should keep
in mind that they may have little control over what merger or acquisition, if
any, we may enter into in the future.





OUR
AUDITOR HAS RAISED DOUBT AS TO WHETHER WE CAN CONTINUE AS A GOING
CONCERN.





We have
generated nominal revenues since inception; and have not generated any revenues
since September 2007, nor have we had any operations since September 2007. We
had an accumulated deficit of $15,867,254 as of December 31, 2007 and working
capital of $795,436 as of December 31, 2007. These factors among others indicate
that we may be unable to continue as a going concern, particularly in the event
that we cannot obtain additional financing and/or attain profitable operations.
The accompanying financial statements do not include any adjustments that might
result from the outcome of this uncertainty and if we cannot continue as a going
concern, your investment in us could become devalued or even
worthless.





REPORTING
REQUIREMENTS MAY DELAY OR PRECLUDE AN ACQUISITION.





Section
13 of the Securities Exchange Act of 1934 (the "Exchange Act") requires
companies subject thereto to provide certain information about significant
acquisitions including audited financial statements for the company acquired and
a detailed description of the business operations and risks associated with such
company's operations. The time and additional costs that may be incurred by some
target companies to prepare such financial statements and descriptive
information may significantly delay or essentially preclude consummation of an
otherwise desirable acquisition by us. Additionally, acquisition prospects that
do not have or are unable to obtain the required audited statements may not be
appropriate for acquisition so long as the reporting requirements of the
Exchange Act are applicable.





WE
HAVE NOT CONDUCTED ANY MARKET RESEARCH REGARDING ANY POTENTIAL BUSINESS
COMBINATIONS.





We have
neither conducted, nor have others made available to it, market research
indicating that demand exists for the transactions contemplated by us. Even in
the event demand exists for a transaction of the type contemplated by us, there
is no assurance we will be successful in completing any such business
combination.





WE
DO NOT PLAN TO DIVERSIFY OUR OPERATIONS IN THE EVENT OF A BUSINESS
COMBINATION.





Our
proposed operations, even if successful, will in all likelihood result in our
engaging in a business combination with only one target company. Consequently,
our activities will be limited to those engaged in by the business entity which
we will merge with or acquire. Our inability to diversify its activities into a
number of areas may subject us to economic fluctuations within a particular
business or industry and therefore increase the risks associated with our
operations.





ANY
BUSINESS COMBINATION WILL LIKELY RESULT IN A CHANGE IN CONTROL AND IN OUR
MANAGEMENT.





A
business combination involving the issuance of our common stock will, in all
likelihood, result in shareholders of a target company obtaining a controlling
interest in the Company. Any such business combination may require our
shareholder to sell or transfer all or a portion of their common stock. The
resulting change in control of the Company will likely result in removal of the
present officer and director of the Company and a corresponding reduction in or
elimination of his participation in the future affairs of the
Company.





-17-


REDUCTION
OF PERCENTAGE SHARE OWNERSHIP FOLLOWING BUSINESS COMBINATION.





Our
primary plan of operation is based upon a business combination with a business
entity which, in all likelihood, will result in our issuing securities to
shareholders of such business entity. The issuance of previously authorized and
unissued common stock would result in a reduction in percentage of shares owned
by our present shareholders and could therefore result in a change in control of
our management.





FEDERAL
AND STATE TAXATION RULES COULD ADVERSELY EFFECT ANY BUSINESS COMBINATION WE MAY
UNDERTAKE.





Federal
and state tax consequences will, in all likelihood, be major considerations in
any business combination we may undertake. Currently, such transactions may be
structured so as to result in tax-free treatment to both companies, pursuant to
various federal and state tax provisions. We intend to structure any business
combination so as to minimize the federal and state tax consequences to both us
and the target company; however, there can be no assurance that such business
combination will meet the statutory requirements of a tax-free reorganization or
that the parties will obtain the intended tax-free treatment upon a transfer of
stock or assets. A non-qualifying reorganization could result in the imposition
of both federal and state taxes which may have an adverse effect on both parties
to the transaction.





WE
MAY BE FORCED TO RELY ON UNAUDITED FINANCIAL STATEMENTS IN CONNECTION WITH ANY
BUSINESS COMBINATION.





We will
require audited financial statements from any business entity we propose to
acquire. No assurance can be given; however, that audited financials will be
available to us prior to a business combination. In cases where audited
financials are unavailable, we will have to rely upon unaudited information that
has not been verified by outside auditors in making our decision to engage in a
transaction with the business entity. The lack of the type of independent
verification which audited financial statements would provide increases the risk
that we, in evaluating a transaction with such a target company, will not have
the benefit of full and accurate information about the financial condition and
operating history of the target company. This risk increases the prospect that a
business combination with such a business entity might prove to be an
unfavorable one for us.





WE
MAY BE SUBJECT TO FURTHER GOVERNMENT REGULATION WHICH WOULD ADVERSELY AFFECT OUR
OPERATIONS.





Although
we will be subject to the reporting requirements under the Exchange Act,
management believes we will not be subject to regulation under the Investment
Company Act of 1940, as amended (the "Investment Company Act"), since we will
not be engaged in the business of investing or trading in securities. If we
engage in business combinations which result in our holding passive investment
interests in a number of entities, we could be subject to regulation under the
Investment Company Act. If so, we would be required to register as an investment
company and could be expected to incur significant registration and compliance
costs. We have obtained no formal determination from the Securities and Exchange
Commission as to our status under the Investment Company Act and, consequently,
violation of the Act could subject us to material adverse
consequences.





OUR
BUSINESS WILL HAVE NO REVENUES UNLESS AND UNTIL WE MERGE WITH OR ACQUIRE AN
OPERATING BUSINESS.





We have
had no revenues from operations for approximately the past five (5) months. We
have had no operations for approximately the past (5) five months. We may not
realize any revenues unless and until we successfully merge with or acquire an
operating business.





-18-


THE
COMPANY MAY ISSUE MORE SHARES IN CONNECTION WITH A MERGER OR ACQUISITION, WHICH
WOULD RESULT IN SUBSTANTIAL DILUTION.





Our
Certificate of Incorporation, as amended, authorizes the issuance of a maximum
of 100,000,000 shares of common stock and a maximum of 10,000,000 shares of
preferred stock. Any merger or acquisition effected by us may result in the
issuance of additional securities without stockholder approval and may result in
substantial dilution in the percentage of our common stock held by our then
existing stockholders. Moreover, the common stock issued in any such merger or
acquisition transaction may be valued on an arbitrary or non-arm's-length basis
by our management, resulting in an additional reduction in the percentage of
common stock held by our then existing stockholders. Our Board of Directors has
the power to issue any or all of such authorized but unissued shares without
stockholder approval. To the extent that additional shares of common stock or
preferred stock are issued in connection with a business combination or
otherwise, dilution to the interests of our stockholders will occur and the
rights of the holders of common stock might be materially adversely
affected





WE
CANNOT ASSURE YOU THAT FOLLOWING A BUSINESS COMBINATION WITH AN OPERATING
BUSINESS, OUR COMMON STOCK WILL BE LISTED ON NASDAQ OR ANY OTHER SECURITIES
EXCHANGE.





Following
a business combination, we may seek the listing of our common stock on NASDAQ or
the American Stock Exchange. However, we cannot assure you that following such a
transaction, we will be able to meet the initial listing standards of either of
those or any other stock exchange, or that we will be able to maintain a listing
of our common stock on either of those or any other stock exchange. After
completing a business combination, until our common stock is listed on the
NASDAQ or another stock exchange.  However, investors should keep in
mind that we are currently prohibited from quoting our common stock on the
Over-The-Counter Bulletin Board until we are able to successfully timely file
four consecutive periodic reports.  As such, we provide no assurances
that our  common stock would be eligible to trade on the OTC Bulletin
Board, another over-the-counter quotation system, or on the "pinksheets,"
following any acquisition or merger, and our stockholders may find it more
difficult to dispose of shares or obtain accurate quotations as to the market
value of our common stock if we are unable to quote our securities and no market
for our securities exists. In addition, we would be subject to an SEC rule that,
even if we are able to list our securities on one of the markets described
above, that if it failed to meet the criteria set forth in such rule, imposes
various practice requirements on broker-dealers who sell securities governed by
the rule to persons other than established customers and accredited investors.
Consequently, such rule may deter broker-dealers from recommending or selling
our common stock, which may further affect its liquidity. This would also make
it more difficult for us to raise additional capital following a business
combination. Additionally, there can be no assurances that we will be able to
obtain listing on any exchange, the OTC Bulletin Board or maintain our listing
on the "pinksheets," which failure could cause our common stock to become
worthless.





PRINCIPAL
STOCKHOLDERS MAY ENGAGE IN A TRANSACTION TO CAUSE THE COMPANY TO REPURCHASE
THEIR SHARES OF COMMON STOCK.





In order
to provide control of the Company to a third party, our principal stockholders
may choose to cause the Company to sell Company securities to third parties,
with the proceeds of such sale being utilized for the Company to repurchase
shares of common stock held by such principal stockholders. As a result of such
transaction, our management, principal stockholders and Board of Directors may
change.





-19-


WE
HAVE PREFERRED STOCK AUTHORIZED, WHICH PREFERRED STOCK MAY BE ISSUED BY OUR
BOARD OF DIRECTORS WITHOUT FURTHER SHAREHOLDER APPROVAL AND WHICH MAY HAVE
RIGHTS AND PREFERENCES GREATER THAN OUR COMMON STOCK.





Our
Certificate of Incorporation, as amended, authorizes the issuance of up to
10,000,000 shares of preferred stock with designations, rights and preferences
determined from time to time by its Board of Directors. Accordingly, our Board
of Directors is empowered, without stockholder approval, to issue preferred
stock with dividend, liquidation, conversion, voting, or other rights which
could adversely affect the voting power or other rights of the holders of the
common stock. In the event of issuance, the preferred stock could be utilized,
under certain circumstances, as a method of discouraging, delaying or preventing
a change in control of the Company. Although we have no present intention to
issue any shares of its authorized preferred stock, there can be no assurance
that the Company will not do so in the future.




COMPLIANCE
WITH SECTION 404 OF THE SARBANES-OXLEY ACT WILL STRAIN OUR LIMITED FINANCIAL AND
MANAGEMENT RESOURCES.





Moving
forward, we anticipate incurring significant legal, accounting and other
expenses in connection with our status as a fully reporting public company. The
Sarbanes-Oxley Act of 2002 (the "Sarbanes-Oxley Act") and new rules subsequently
implemented by the SEC have imposed various new requirements on public
companies, including requiring changes in corporate governance practices. As
such, our management and other personnel will need to devote a substantial
amount of time to these new compliance initiatives. Moreover, these rules and
regulations will increase our legal and financial compliance costs and will make
some activities more time-consuming and costly. In addition, the Sarbanes-Oxley
Act requires, among other things, that we maintain effective internal controls
for financial reporting and disclosure of controls and procedures. In
particular, for this Annual Report on Form 10-KSB, we were required to perform
system and process evaluation and testing of our internal controls over
financial reporting to allow management to report on the effectiveness of our
internal controls over financial reporting, as required by Section 404 of the
Sarbanes-Oxley Act.  For fiscal year 2009, Section 404 will require us
to obtain a report from our independent registered public accounting firm
attesting to the assessment made by management.  Our testing, or the
subsequent testing by our independent registered public accounting firm, may
reveal deficiencies in our internal controls over financial reporting that are
deemed to be material weaknesses. Our compliance with Section 404 will require
that we incur substantial accounting expense and expend significant management
efforts. We currently do not have an internal audit group, and we may need to
hire additional accounting and financial staff with appropriate public company
experience and technical accounting knowledge.  Moreover, if we are
not able to comply with the requirements of Section 404 in a timely manner, or
if we or our independent registered public accounting firm identifies
deficiencies in our internal controls over financial reporting that are deemed
to be material weaknesses, the market price of our stock could decline, and we
could be subject to sanctions or investigations by the SEC or other regulatory
authorities, which would require additional financial and management
resources.





WE
ARE CURRENTLY BANNED FROM APPLYING FOR QUOTATION ON THE OVER-THE-COUNTER
BULLETIN BOARD FOR AT LEAST ONE YEAR.




On or
about December 17, 2007, our common stock was removed from quotation on the
Over-The-Counter Bulletin Board pursuant to our failure to comply with NASD Rule
6530.  Pursuant to that rule any OTCBB issuer which fails to file a
periodic report (Form 10-QSB's or 10-KSB's) by the due date of such report
(notwithstanding any extension granted to the issuer by the filing of a Form
12b-25), three (3) times during any twenty-four (24) month period is
automatically de-listed from the OTCBB. As NASDAQ found that we failed to timely
file three periodic reports in a twenty-four (24) month period, we were
automatically removed from the OTCBB.  Pursuant to the rule, we are
not eligible to be listed on the OTCBB for a period of one-year following our
removal, during which time any subsequent late filing would reset the one-year
period of de-listing. If we are late in our periodic filings, our one year ban
from the OTCBB will be extended, and we may never be able to quote our
securities on the OTCBB.  As a result, our securities may become
worthless and we may be forced to curtail or abandon our business
plan.





-20-


INVESTORS
MAY FACE SIGNIFICANT RESTRICTIONS ON THE RESALE OF OUR COMMON STOCK DUE TO
FEDERAL REGULATIONS OF PENNY STOCKS.





Our
common stock will be subject to the requirements of Rule 15(g)9, promulgated
under the Securities Exchange Act as long as the price of our common stock is
below $5.00 per share. Under such rule, broker-dealers who recommend low-priced
securities to persons other than established customers and accredited investors
must satisfy special sales practice requirements, including a requirement that
they make an individualized written suitability determination for the purchaser
and receive the purchaser's consent prior to the transaction. The Securities
Enforcement Remedies and Penny Stock Reform Act of 1990, also requires
additional disclosure in connection with any trades involving a stock defined as
a penny stock. Generally, the Commission defines a penny stock as any equity
security not traded on an exchange or quoted on NASDAQ that has a market price
of less than $5.00 per share. The required penny stock disclosures include the
delivery, prior to any transaction, of a disclosure schedule explaining the
penny stock market and the risks associated with it. Such requirements could
severely limit the market liquidity of the securities and the ability of
purchasers to sell their securities in the secondary market.





In
addition, various state securities laws impose restrictions on transferring
"penny stocks" and as a result, investors in the Company’s common stock may have
their ability to sell their shares of the common stock impaired.





-21-


ITEM 7. FINANCIAL
STATEMENTS




MOORE
& ASSOCIATES, CHARTERED


ACCOUNTANTS AND
ADVISORS


PCAOB REGISTERED








REPORT OF INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM








To
the Board of Directors


Standard
Drilling, Inc.


(A
Development Stage Company)





We have
audited the accompanying balance sheets of Standard Drilling, Inc. (A
Development Stage Company) as of December 31, 2007 and December 31, 2006, and
the related statements of operations, stockholders’ equity and cash flows for
the years ended December 31, 2007 and from inception on February 14, 2006
through December 31, 2006 and December 31, 2007. 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
audits.





We
conducted our audits in accordance with standards of the Public Company
Accounting Oversight Board (United States).  Those standards require
that we plan and perform the audits to obtain reasonable assurance about whether
the financial statements are free of material misstatement.  An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements.  An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement
presentation.  We believe that our audits provide 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. (A
Development Stage Company) as of December 31, 2007 and December 31, 2006, and
the related statements of operations, stockholders’ equity and cash flows for
the years ended December 31, 2007 and from inception on February 14, 2006
through December 31, 2006 and December 31, 2007, in conformity with accounting
principles generally accepted in the United States of America.





The
accompanying financial statements have been prepared assuming that the Company
will continue as a going concern.  As discussed in Note 2 to the
financial statements, the Company has not established an ongoing source of
revenues and has generated operating losses since inception and expects to
continue to incur losses, which raises substantial doubt about its ability to
continue as a going concern.  Management’s plans concerning these
matters are also described in Note 2.  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


April 11,
2008





2675 S. Jones Blvd. Suite
109, Las Vegas, NV 89146 (702) 253-7499 Fax (702) 253-7501




F-1





STANDARD
      DRILLING, INC.(A
      Development Stage Company)Balance
      SheetsASSETSDecember
      31,
            
            December
      31,2007
            
            2006CURRENT
      ASSETSCash
      and cash equivalents
            
            $
            795,436
            
            
            $
            52,313Total
      Current Assets
            
            
            795,436
            
            
            
            52,313OTHER
      ASSETSNotes
      receivable
            
            
            600,000
            
            
            
            -Net
      assets of discontinued operations
            
            
            -
            
            
            
            21,800,193Total
      Other Assets
            
            
            600,000
            
            
            
            21,800,193TOTAL
      ASSETS
            
            $
            1,395,436
            
            
            $
            21,852,506LIABILITIES AND STOCKHOLDERS'
      EQUITYCURRENT
      LIABILITIESAccounts
      payable
            
            $
            -
            
            
            $
            -Net
      liabilities of discontinued operations
            
            
            -
            
            
            
            8,497,520Total
      Current Liabilities
            
            
            -
            
            
            
            8,497,520TOTAL
      LIABILITIES
            
            
            -
            
            
            
            8,497,520STOCKHOLDERS'
      EQUITYPreferred
      stock: 10,000,000 shares authorized,at
      $0.001 par value; no shares issued
            
            
            -
            
            
            
            -Common
      stock; 100,000,000 shares authorized,at
      $0.001 par value, 45,007,000 and 45,073,000shares
      issued and outstanding, respectively
            
            
            34,207
            
            
            
            45,073Additional
      paid-in capital
            
            
            17,228,483
            
            
            
            18,026,709Stock
      subscriptions receivable
            
            
            -
            
            
            
            (370,000
            )Prepaid
      stock awards
            
            
            -
            
            
            
            (722,755
            )Accumulated
      deficit
            
            
            (15,867,254
            )
            
            
            (3,624,041
            )Total
      Stockholders' Equity
            
            
            1,395,436
            
            
            
            13,354,986TOTAL
      LIABILITIES ANDSTOCKHOLDERS'
      EQUITY
            
            $
            1,395,436
            
            
            $
            21,852,506The
      accompanying notes are an integral part of these financial
      statements.






F-2


STANDARD
      DRILLING, INC.(A
      Development Stage Company)Statements
      of OperationsFrom
      Inception
            
            
            From
      Inceptionof
      the
            
            
            of
      theDevelopment
            
            
            DevelopmentStage
      on
            
            
            Stage
      onFor
      the
            
            
            February
      14,
            
            
            February
      14,Year
      Ended
            
            
            2006
      Through
            
            
            2006
      ThroughDecember
      31,
            
            
            December
      31,
            
            
            December
      31,2007
            
            
            2006
            
            
            2007REVENUES
            
            $
            -
            
            
            $
            -
            
            
            $
            -COST
      OF SALES
            
            
            -
            
            
            
            -
            
            
            
            -GROSS
      PROFIT
            
            
            -
            
            
            
            -
            
            
            
            -OPERATING
      EXPENSESGeneral
      and administrative
            
            
            74,854
            
            
            
            -
            
            
            
            74,854Total
      Operating Expenses
            
            
            74,854
            
            
            
            -
            
            
            
            74,854OPERATING
      LOSS
            
            
            (74,854
            )
            
            
            -
            
            
            
            (74,854
            )DISCONTINUED
      OPERATIONS
            
            
            (12,168,359
            )
            
            
            (3,624,041
            )
            
            
            (15,792,400
            )LOSS
      BEFORE INCOME TAXES
            
            
            (12,243,213
            )
            
            
            (3,624,041
            )
            
            
            (15,867,254
            )PROVISION
      FOR INCOME TAXES
            
            
            -
            
            
            
            -
            
            
            
            -NET
      LOSS
            
            $
            (12,243,213
            )
            
            $
            (3,624,041
            )
            
            $
            (15,867,254
            )BASIC
      AND DILUTEDLOSS
      PER SHARE
            
            $
            (0.31
            )
            
            $
            (0.11
            )WEIGHTED
      AVERAGENUMBER
      OF SHARESOUTSTANDING
            
            
            39,640,000
            
            
            
            32,521,268The
      accompanying notes are an integral part of these financial
      statements.






F-3


STANDARD
      DRILLING, INC.(A
      Development Stage Company)Statements
      of Stockholders' Equity
  Additional
              
              Stock
              
              PrepaidPreferred
      Stock
              
              Common
      Stock
              
              Paid-In
              
              Subscriptions
              Stock
              
              AccumulatedShares
              
              Amount
              
              Shares
              
              Amount
              
              Capital
              
              Receivable
              
              Awards
              
              Deficit
              
              TotalBalance
      at inception onFebruary
      14, 2006
              
              -
              
              $
              -
              
              -
              
              $
              -
              
              $
              -
              
              $
              -
              
              $
              -
              
              $
              -
              
              $
              -Initial
      capital from foundingshareholders
      for services rendered
              -
              
              
              -
              
              23,000,000
              
              
              23,000
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              23,000Issuance
      of common stock for cash,prepaid
      services, and subscriptionsreceivable
              
              -
              
              
              -
              
              22,073,000
              
              
              22,073
              
              
              18,026,709
              
              
              (370,000
              )
              
              (722,755
              )
              
              -
              
              
              16,956,027Net
      loss for the period from inceptionon  February
      14, 2006 throughDecember
      31, 2006
              
              -
              
              
              -
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              (3,624,041
              )
              
              (3,624,041
              )Balance,
      December 31, 2006
              -
              
              
              -
              
              45,073,000
              
              
              45,073
              
              
              18,026,709
              
              
              (370,000
              )
              
              (722,755
              )
              
              (3,624,041
              )
              
              13,354,986Cash
      received on subscriptionsreceivable
              
              -
              
              
              -
              
              -
              
              
              -
              
              
              -
              
              
              317,600
              
              
              -
              
              
              -
              
              
              317,600Amortization
      of prepaid services topaid-in
      capital
              
              -
              
              
              -
              
              -
              
              
              -
              
              
              (742,472
              )
              
              -
              
              
              722,755
              
              
              -
              
              
              (19,717
              )Write-off
      of stock subscriptionsreceivable
              
              -
              
              
              -
              
              -
              
              
              -
              
              
              -
              
              
              52,400
              
              
              -
              
              
              -
              
              
              52,400Common
      shares cancelled
              
              -
              
              
              -
              
              (10,866,000
              )
              
              (10,866
              )
              
              (55,754
              )
              
              -
              
              
              -
              
              
              -
              
              
              (66,620
              )Net
      loss for the year endedDecember
      31, 2007
              
              -
              
              
              -
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              (12,243,213
              )
              
              (12,243,213
              )Balance,
      December 31, 2007
              -
              
              $
              -
              
              34,207,000
              
              $
              34,207
              
              $
              17,228,483
              
              $
              -
              
              $
              -
              
              $
              (15,867,254
              )
              $
              1,395,436
  The
accompanying notes are an integral part of these financial
statements.


F-4




STANDARD
      DRILLING, INC.(A
      Development Stage Company)Statements
      of Cash FlowsFrom
      Inception
              
              
              From
      Inceptionof
      the Development
              
              
              of
      the DevelopmentStage
      on
              
              
              Stage
      onFor
      the
              
              
              February
      14, 2006
              
              
              February
      14, 2006Year
      Ended
              
              
              Through
              
              
              ThroughDecember
      31,
              
              
              December
      31,
              
              
              December
      31,2007
              
              
              2006
              
              
              2007OPERATING
      ACTIVITIESNet
      loss
              
              $
              (12,243,213
              )
              
              $
              (2,089,115
              )
              
              $
              (15,867,254
              )Adjustments
      to reconcile net loss to net cashused
      by operating activities:Depreciation,
      depletion and amortization
              
              
              446,402
              
              
              
              17,939
              
              
              
              476,710Common
      stock issued for services
              
              
              -
              
              
              
              575,242
              
              
              
              575,242Loss
      on equity investment
              
              
              59,146
              
              
              
              -
              
              
              
              59,146Gain
      on disposal of equity instruments
              
              
              (39,497
              )
              
              
              -
              
              
              
              (39,497
              )Loss
      on disposal of assets
              
              
              (476,709
              )
              
              
              -
              
              
              
              (476,709
              )Changes
      in operating assets and liabilities(Increase)
      decrease in accounts receivable
              
              
              486,610
              
              
              
              -
              
              
              
              (197,463
              )(Increase)
      decrease in prepaid expenses
              
              
              503,776
              
              
              
              (29,691
              )
              
              
              (219,165
              )Decrease
      in deposits
              
              
              -
              
              
              
              -
              
              
              
              5,285Increase
      (decrease) in accounts payable
              
              
              (4,128,557
              )
              
              
              987,144
              
              
              
              1,303,028Increase
      in accrued expenses
              
              
              (2,711,385
              )
              
              
              -
              
              
              
              (728,051
              )Net
      Cash Used by Operating Activities
              
              
              (18,103,427
              )
              
              
              (538,481
              )
              
              
              (15,108,728
              )INVESTING
      ACTIVITIESPurchase
      of oil and gas properties
              
              
              2,989,933
              
              
              
              (1,102,362
              )
              
              
              (2,427,507
              )Change
      in fixed assets
              
              
              8,797,596
              
              
              
              (343,946
              )
              
              
              1,074,406Change
      in deposits on fixed assets
              
              
              8,974,689
              
              
              
              (9,158,022
              )
              
              
              671,138Change
      in notes receivable
              
              
              (581,250
              )
              
              
              -
              
              
              
              (600,000
              )Cash
      paid on equity investment
              
              
              -
              
              
              
              (87,500
              )
              
              
              (87,500
              )Net
      Cash Provided (Used) byInvesting
      Activities
              
              
              20,180,968
              
              
              
              (10,691,830
              )
              
              
              (1,369,463
              )FINANCING
      ACTIVITIESChange
      in notes payable, net
              
              
              (1,652,018
              )
              
              
              -
              
              
              
              -Cash
      received on subscriptions receivable
              
              
              317,600
              
              
              
              -
              
              
              
              317,600Sale
      of common stock for cash
              
              
              -
              
              
              
              15,868,290
              
              
              
              16,956,027Net
      Cash Provided (Used) byFinancing
      Activities
              
              
              (1,334,418
              )
              
              
              15,868,290
              
              
              
              17,273,627NET
      DECREASE IN CASH
              
              
              743,123
              
              
              
              4,637,979
              
              
              
              795,436CASH
      AT BEGINNING OF PERIOD
              
              
              52,313
              
              
              
              -
              
              
              
              -CASH
      AT END OF PERIOD
              
              $
              795,436
              
              
              $
              4,637,979
              
              
              $
              795,436SUPPLIMENTAL
      DISCLOSURES OFCASH
      FLOW INFORMATIONCASH
      PAID FOR:Interest
              
              $
              -
              
              
              $
              544
              
              
              $
              11,324Income
      Taxes
              
              $
              -
              
              
              $
              -
              
              
              $
              -The
      accompanying notes are an integral part of these financial
      statements.






F-5


STANDARD
DRILLING, INC.
 Notes to
Consolidated Financial Statements
 December
31, 2007 and 2006


NOTE
1 – ORGANIZATION AND BUSINESS OPERATIONS
 
 Standard
Drilling, a Nevada Corporation, was organized to provide contract land drilling
services to independent and major oil and gas exploration and production
companies. As of September 30, 2007, the Company ceased all ongoing operations
and is evaluating financing alternatives and strategic options.
 
 On
September 24, 2007 Standard Drilling, Inc. ( "the Company") entered into an
Asset Purchase Agreement with PBT Capital Partners, LLC. Under the terms of the
Asset Purchase Agreement, PBT Capital Partners, LLC assumed substantially all of
the Company's assets and associated and contingent liabilities in order to
improve the financial position of the Company. As of the effective date of the
Asset Purchase Agreement, the Company's existing and contingent liabilities
exceeded the value of its assets.
 
 The Asset
Purchase Agreement was part of a plan of restructuring which the Company
anticipates will allow it raise additional capital and pursue new business
opportunities. The Company's Board of Directors will continue to evaluate the
Company's strategic options.
 
 PBT
Capital Partners, LLC is a private company whose sole shareholder is Prentis B.
Tomlinson, Jr., the Company's Chairman and Chief Executive Officer, and is a
related party as of the effective date of the transaction. The Asset Purchase
Agreement created a $600,000 note receivable from PBT Capital Partners LLC to
Standard Drilling, Inc. on or before December 31, 2007. The transaction was
approved by the Company's independent directors.
 
 In
conjunction with the Asset Purchase Agreement with PBT Capital Partners, LLC,
sums owed by the Company under the Interim Credit Agreement, which totaled
$833,389 as of September 24, 2007, were forgiven.
 
 NOTE
2 – GOING CONCERN
 
 The
Company has incurred operating losses since inception and expects to continue to
incur losses through 2008. As of December 31, 2007, the Company has not
established an ongoing source of revenues and has generated operating losses
since inception and expects to continue to incur losses. This factor raises
substantial doubt about the Company's ability to continue as a going concern.
The Company's ability to achieve and maintain profitability and positive cash
flow is dependent upon its ability to attain additional financing and/or merge
with an existing operating company. There is no assurance that the Company will
be able to implement its business plan or obtain adequate financing to fund
future operations.
 
 NOTE
3 –  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 
 Share-Based
Payments-The Company has adopted the fair value based method of
accounting for stock-based employee compensation in accordance with Statement of
Financial Accounting Standards Number 123 (REVISED 2004), "Share-Based
Payment"  (SFAS 123[R]).  In accordance with SFAS 123[R],
option expense of $-0- and $-0- was recognized for the years ended December 31,
2007 and 2006, respectively.  The expense was calculated using the
Black-Scholes valuation model.
 
 Fair Value of Financial
Instruments – The carrying value of cash and cash equivalents, accounts
receivable and accounts payable approximates fair value due to the short-term
maturity of these instruments.  The carrying value of notes payable
approximates fair value because negotiated terms and conditions are consistent
with current market rates as of December 31, 2007 and 2006.
 
 F-6
 STANDARD
DRILLING, INC.
 Notes to
Consolidated Financial Statements
 December
31, 2007 and 2006
  NOTE
3 –  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(Continued)
 
 Cash and Cash
Equivalents-For purposes of financial statement presentation, the Company
considers all highly liquid investments with a maturity of three months or less,
from the date of purchase, to be cash equivalents.
 
 Concentration of Credit
Risk – Financial instruments, which potentially subject us to
concentrations of credit risk, consist principally of cash and trade
receivables.  Concentrations of credit risk with respect to trade
receivables are limited due to the clients that comprise our customer base and
their dispersion across different business and geographic areas.  We
estimate and maintain an allowance for potentially uncollectible accounts and
such estimates have historically been within management's
expectations.  Our cash balances are maintained in accounts held by
major banks and financial institutions located in the United
States.  The Company occasionally maintains amounts on deposit with a
financial institution that are in excess of the federally insured limit of
$100,000.  Statement of Financial Accounting Standards No. 105
identifies this as a concentration of credit risk requiring disclosure,
regardless of the degree of risk. The risk is managed by maintaining all
deposits in high quality financial institutions. The Company had amounts in
excess of federally insured limits at December 31, 2007.
 
  Basic Loss Per Share
- The computation of basic and diluted loss per common share is based on the
weighted average number of shares outstanding during each period.
  December
      31,2007
              
              
              2006NET
      LOSS
              
              $
              (12,243,213
              )
              
              $
              (3,624,041
              )BASIC
      LOSS PER COMMON SHARE
              
              $
              (0.31
              )
              
              $
              (0.11
              )BASIC
      WEIGHTED  AVERAGENUMBER
      OF SHARES OUTSTANDING
              
              
              39,640,000
              
              
              
              32,521,268
   The
computation of basic loss per common share is based on the weighted average
number of shares outstanding during the year.  Common stock
equivalents are excluded from the computation of fully diluted loss per share
because they would have been anti-dilutive. The Company has no common stock
equivalents outstanding as of December 31, 2007 and 2006.
  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.
  Revenue Recognition-
The Company applies the provisions of SEC Staff Accounting Bulletin No. 104,
"Revenue Recognition in Financial Statements" ("SAB 104"), which provides
guidance on the recognition, presentation and disclosure of revenue in financial
statements filed with the SEC. SAB 104 outlines the basic criteria that must be
met to recognize revenue and provides guidance for disclosure
 
 F-7
 STANDARD
DRILLING, INC.
 Notes to
Consolidated Financial Statements
 December
31, 2007 and 2006
 NOTE
3 –  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(Continued)
 
 related
to revenue recognition policies. In general, the Company recognizes revenue
related to goods and services provided when (i) persuasive evidence of an
arrangement exists, (ii) delivery has occurred or services have been rendered,
(iii) the fee is fixed or determinable, and (iv) collectability is reasonably
assured.
 
 Income Taxes- The
Company has adopted FASB 109 to account for income taxes. The Company currently
has no issues which create timing differences that would mandate deferred tax
expense. Net operating losses would create possible tax assets in future years,
but due to the uncertainty as to the utilization of net operating loss carry
forwards, a valuation allowance has been made to the extent of any tax benefit
that net operating losses may generate.
 Net
deferred tax assets consist of the following components as of December 31, 2007
and 2006:
  2007
              
              
              2006Deferred
      tax assets:NOL
      Carryover
              
              $
              5,365,264
              
              
              $
              590,411Deferred
      tax liabilities:
              
              
              -
              
              
              
              -Valuation
      allowance
              
              
              (5,365,264
              )
              
              
              (590,411
              )Net
      deferred tax asset
              
              $
              -
              
              
              $
              -
  The
income tax provision differs from the amount of income tax determined by
applying the U.S. federal and state income tax rates of 39% to pretax income
from continuing operations for the years ended December 31, 2007 and 2006 due to
the following:
  2007
              
              
              2006Book
      Loss from Operations
              
              $
              (4,774,853
              )
              
              $
              (814,755
              )Common
      stock issued for services
              
              
              -
              
              
              
              224,344Valuation
      allowance
              
              
              4,774,853
              
              
              
              590,411$
              -
              
              
              $
              -
 
  At
December 31, 2007, the Company had net operating loss carry forwards of
approximately $15,292,012 that may be offset against future taxable income from
the year 2024 through 2027.  No tax benefit has been reported in the
December 31, 2007financial statements since the potential tax benefit is offset
by a valuation allowance of the same amount.
  Due to
the change in ownership provisions of the Tax Reform Act of 1986, net operating
loss carry forwards for Federal income tax reporting purposes are subject to
annual limitations.  Should a change in ownership occur, net operating
loss carryforwards may be limited as to use in future years.
  
 F-8
 STANDARD
DRILLING, INC.
 Notes to
Consolidated Financial Statements
 December
31, 2007 and 2006
 
 NOTE
3 –  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(Continued)
 
  Recent Accounting
Pronouncements- In December 2007, the FASB issued SFAS 160,
“Noncontrolling interests in Consolidated Financial Statements – an amendment of
ARB No. 51”. This Statement amends ARB 51 to establish accounting and reporting
standards for the noncontrolling interest in a subsidiary and for the
deconsolidation of a subsidiary. It clarifies that a noncontrolling interest in
a subsidiary is an ownership interest in the consolidated entity that should be
reported as equity in the consolidated financial statements. This Statement is
effective for fiscal years beginning on or after December 15, 2008. Early
adoption is not permitted. Management is currently evaluating the effects of
this statement, but it is not expected to have any impact on the Company’s
financial statements.
  In June
2007, the Financial Accounting Standards Board issued FAS No. 141R, Business Combinations - This
Statement implements certain revisions to SFAS 141, including changes to the
measurement of purchase consideration, measurement of goodwill, capitalization
of in-process research and development, and definition of the acquisition date.
This statement is effective for fiscal years, and interim periods within those
fiscal years, beginning on or after December 15, 2008. The implementation of
this pronouncement had no effect on the Company’s consolidated financial
statements.
  In
February 2007 , the FASB issued SFAS 159, “The Fair Value Option for Financial
Assets and Financial Liabilities. SFAS 159 creates a fair value option allowing
an entity to irrevocably elect fair value as the initial and subsequent
measurement attribute for certain financial assets and financial liabilities,
with changes in fair value recognized in earnings as they occur. SFAS 159 also
requires an entity to report those financial assets and financial liabilities
measured at fair value in a manner that separates those reported fair values
from the carrying amounts of assets and liabilities measured using another
measurement attribute on the face of the statement of financial position.
Lastly, SFAS 159 requires an entity to provide information that would allow
users to understand the effect on earnings of changes in the fair value on those
instruments selected for the fair value election. SFAS 159 is effective for
fiscal years beginning after November 15, 2007 with early adoption permitted.
The Company is continuing to evaluate SFAS 159 and to assess the impact on its
results of operations and financial condition if an election is made to adopt
the standard.
  In
September 2006, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 157, “Fair Value Measurements” which defines
fair value, establishes a framework for measuring fair value in generally
accepted accounting principles (GAAP), and expands disclosures about fair value
measurements. Where applicable, SFAS No. 157 simplifies and codifies
related guidance within GAAP and does not require any new fair value
measurements. SFAS No. 157 is effective for financial statements issued for
fiscal years beginning after November 15, 2007, and interim periods within
those fiscal years. Earlier adoption is encouraged. The Company does
not expect the adoption of SFAS No. 157 to have a significant effect on its
financial position or results of operation.
  F-9
 STANDARD
DRILLING, INC.
 Notes to
Consolidated Financial Statements
 December
31, 2007 and 2006
 
 NOTE
4 –  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, 2007, 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.  During the year ended December 31, 2007 the
Company cancelled 10,866,000 shares in order to help facilitate corporate
restructuring.
 
 Reverse
Merger
 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) 8,545,000 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 Drilling 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, Online Holdings
changed its name to Standard Drilling, Inc. As of September 30, 2007, Standard
Drilling had 45,006,380 shares of common stock issued and outstanding and an
additional 19,345,300 shares of common stock reserved for issuance.
 
 
 NOTE
5 – RELATED PARTY TRANSACTIONS
 
 On
September 24, 2007 Standard Drilling, Inc. ("Standard", or "the Company")
entered into an Asset Purchase Agreement with PBT Capital Partners, LLC. Under
the terms of the Asset Purchase Agreement, PBT Capital Partners, LLC assumed
substantially all of the Company's assets and associated and contingent
liabilities in order to improve the financial position of the Company. As of the
effective date of the Asset Purchase Agreement, the Company's existing and
contingent liabilities exceeded the value of its assets.
 
 F-10
 STANDARD
DRILLING, INC.
 Notes to
Consolidated Financial Statements
 December
31, 2007 and 2006
 
 
 NOTE
5 – RELATED PARTY TRANSACTIONS (Continued)
 
 The Asset
Purchase Agreement is part of a plan of restructuring which the Company
anticipates will allow it raise additional capital and pursue new business
opportunities. Standard's Board of Directors will continue to evaluate the
Company's strategic options.
 
 PBT
Capital Partners, LLC is a private company whose sole shareholder is Prentis B.
Tomlinson, Jr., Standard's Chairman and Chief Executive Officer, and is a
related party as of the effective date of the transaction. The Asset Purchase
Agreement creates a $600,000 note payable by PBT Capital Partners
 LLC to
Standard Drilling, Inc. on or before December 31, 2007. The transaction was
approved by the Company's independent directors.
 
 In
conjunction with the Asset Purchase Agreement with PBT Capital Partners, sums
owed by Standard under the Interim Credit Agreement, which totaled $833,389 as
of September 24, 2007 were forgiven.
 
 F-11
 ITEM 8. CHANGES IN AND
DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE





(a) On
April 30, 2007, Malone & Bailey, PC was dismissed as the certifying
accountant for the Company.





Malone
& Bailey, PC had served from the inception of the Company as the certifying
accountant for the Company's financial statements. From the date on which Malone
& Bailey PC was engaged until the date Malone & Bailey, PC was
dismissed, there were no disagreements with Malone & Bailey, PC on any
matter of accounting principles or practices, financial statement disclosure, or
auditing scope or procedure, which disagreements, if not resolved to the
satisfaction of Malone & Bailey, PC would have caused Malone & Bailey,
PC to make reference to the subject matter of the disagreements in connection
with any reports it would have issued, and there were no "reportable events" as
that term is defined in Item 304(a)(1)(iv) of Regulation S-B.





The
Company provided Malone & Bailey PC with a copy of the foregoing disclosure,
and has requested that Malone & Bailey PC furnish it with a letter addressed
to the Securities and Exchange Commission stating whether or not it agrees with
such disclosure. The Company has incorporated by reference a copy of the letter
from Malone & Bailey PC as an exhibit to this report.





(b)
On April 30, 2007, the Company entered into an engagement letter with Moore
& Associates, Chartered to assume the role of its new certifying accountant.
Moore & Associates, Chartered has been asked to audit the year ended
December 31, 2006. During the period from inception and the subsequent interim
periods prior to the engagement of Moore & Associates, Chartered, the
Company did not consult with Moore & Associates, Chartered with regard
to:





(i)
the application of accounting principles to a specified transaction, either
completed or proposed; or the type of audit opinion that might be rendered on
the Company's financial statements; or





(ii)
any matter that was either the subject of a disagreement or a reportable event
(as described in Item 304(a)(1)(iv) of Regulation S-B).





The
engagement of the new principal auditor was recommended and approved by the
Company's Board of Directors.








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, 2007, 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.





-22-


Changes
in Internal Control Over Financial Reporting





There
were no changes in our internal control over financial reporting during our most
recent fiscal quarter that have materially affected, or are reasonably likely to
materially affect, our internal control over financial reporting.







Item 8A(T).  Controls and
Procedures





Management’s
Annual Report on Internal Control over Financial Reporting


Moving
forward, we anticipate incurring significant legal, accounting and other
expenses in connection with our status as a fully reporting public company. The
Sarbanes-Oxley Act of 2002 (the "Sarbanes-Oxley Act") and new rules subsequently
implemented by the SEC have imposed various new requirements on public
companies, including requiring changes in corporate governance practices. As
such, our management and other personnel will need to devote a substantial
amount of time to these new compliance initiatives. Moreover, these rules and
regulations will increase our legal and financial compliance costs and will make
some activities more time-consuming and costly. In addition, the Sarbanes-Oxley
Act requires, among other things, that we maintain effective internal controls
for financial reporting and disclosure of controls and procedures. In
particular, for this Annual Report on Form 10-KSB, we were required to perform
system and process evaluation and testing of our internal controls over
financial reporting to allow management to report on the effectiveness of our
internal controls over financial reporting, as required by Section 404 of the
Sarbanes-Oxley Act. For fiscal year 2008, Section 404 will require us to obtain
a report from our independent registered public accounting firm attesting to the
assessment made by management. Our testing, or the subsequent testing by our
independent registered public accounting firm, may reveal deficiencies in our
internal controls over financial reporting that are deemed to be material
weaknesses. Our compliance with Section 404 will require that we incur
substantial accounting expense and expend significant management efforts. We
currently do not have an internal audit group, and we will need to hire
additional accounting and financial staff with appropriate public company
experience and technical accounting knowledge. Moreover, if we are not able to
comply with the requirements of Section 404 in a timely manner, or if we or our
independent registered public accounting firm identifies deficiencies in our
internal controls over financial reporting that are deemed to be material
weaknesses, the market price of our stock could decline, and we could be subject
to sanctions or investigations by the SEC or other regulatory authorities, which
would require additional financial and management resources.





ITEM 8B. OTHER
INFORMATION.





None.




-23-








PART
III





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





The
following table sets forth the name, age and position of our director and
executive officer. There are no other persons who can be classified as a
promoter or controlling person of us. Our officers and director are as
follows:







Name
            Age
            PositionDavid
      S. Rector
            61
            Chief
      Executive Officer,Chief
      Financial Officer, President, Secretary, Treasurer and
      Director







DAVID
S. RECTOR


Chief
Executive Officer, Chief Financial Officer, President, Secretary, Treasurer and
Director





Mr.
Rector has served as our Chief Executive Officer, Chief Financial Officer,
President, Secretary, Treasurer and Director since November 2007.  Mr.
Rector has also served as the Chief Executive Officer, President, Principal
Accounting Officer, Secretary, and Treasurer of Nano Holdings International,
Inc. since April 2004.  Mr. Rector previously served as President,
Chief Executive Officer and Chief Operating Officer of Nanoscience from June
2004 to December 2006, when he resigned as an officer and Director of
Nanoscience.  Since June 1985, Mr. Rector has been the principal of
the David Stephen Group, which provides enterprise consulting services to
emerging and developing companies in a variety of industries. From January 1995
until June 1995, Mr. Rector served as the General Manger of the Consumer
Products Division of Bemis-Jason Corporation. Mr. Rector was employed by Sunset
Designs Inc., a manufacturer and marketer of consumer product craft kits from
June 1980 until June 1985. From June 1983 until June 1985, Mr. Rector served as
President and General Manager of Sunset, from August 1981 until May 1985, Mr.
Rector served as an Administrative and International Director of Sunset, and
from June 1980 until August 1981, Mr. Rector served as Group Product Manager for
Sunset.





Additionally,
Mr. Rector currently served on the Board of Directors of the following companies
as of December 31, 2007:





Name
            Director SinceSenesco
      Technologies, Inc.
              (AMEX:SNT)
            February
      2002Dallas
      Gold & Silver Exchange
              (AMEX:DSG)
            May
      2003Nano
      Holdings International, Inc.
              (OTCBB:NNOH)
            April
      2004RXelite,
      Inc.
              (OTCBB:RXEI)
            October
      2007







As a
result, the amount of time that Mr. Rector has to devote to our activities may
be limited.





Mr.
Rector obtained his Bachelors Degree in Business Administration from Murray
State University in 1969.





-24-


Employment
and Consulting Agreements





There are
currently no employment or consulting agreements between us and Mr.
Rector.





In
connection with the October 2007 resignation of Prentis B. Tomlinson, Jr. as the
Company’s Chairman and Chief Executive Officer, and the November 2007
resignations of W. Richard Anderson and Edward L. Moses as Directors, the
Company terminated the employment agreements of Mr. Tomlinson, Mr. Anderson and
Mr. Moses.  Upon termination of these employment agreements, the
Company owed no back pay, severance pay, or other compensation to any of these
individuals.





Audit
Committee





As of the
date of this filing, we have no Audit Committee in place nor any immediate plans
to form one. However, if or when we are required to maintain an Audit Committee
pursuant to the Sarbanes-Oxley Act of 2002, we plan to take steps to comply with
such requirement.





-25-


SECTION
16 (A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE





Section
16(a) of the securities Exchange Act of 1934, as amended, requires our
directors, executive officers and persons who own more than 10% of a class of
our equity securities which are registered under the Exchange Act to file with
the Securities and Exchange Commission initial reports of ownership and reports
of changes of ownership of such registered securities. Such executive officers,
directors and greater than 10% beneficial owners are required by Commission
regulation to furnish us with copies of all Section 16(a) forms filed by such
reporting persons.





To our
knowledge, based solely on a review of the copies of such reports furnished to
us and on representations that no other reports were required, we are of the
opinion that David S. Rector is currently subject to Section 16(a) filing
requirements.





ITEM 10. EXECUTIVE
COMPENSATION


The
following tables set forth certain information regarding our officers and
Directors (and former officers and Directors) for the last three fiscal
years:
 
 SUMMARY
      COMPENSATION TABLEName
      and principal position
                (a)
              Year
                (b)
              Salary
      ($)
                (c)
              Bonus
      ($)
                (d)
              Stock
      Awards ($)
                (e)
              Option
      Awards ($)
                (f)
              Non-Equity
      Incentive Plan Compensation ($)
                (g)
              Nonqualified
      Deferred Compensation Earnings ($)
                (h)
              All
      Other Compensation ($)
                (i)
              Total
      ($)
                (j)David
      S. Rector (A)
              2007
              $1,500
              -
              -
              -
              -
              -
              -
              $1,500CEO,
      CFO, President, Secretary, Treasurer
                and
      DirectorPrentis
      B. Tomlinson(1)(B)
              2007
              -
              -
              -
              -
              -
              -
              -
              -Former
      CEO and Chairman
              2006
              $174,998
              -
              -
              (3)
              -
              -
              -
              $174,9982005
              -
              
              
              
              
              
              
              -O.
      Oliver Pennington, III (1)(C)
              2007
              -
              -
              -
              -
              -
              -
              -
              -Former
      CFO
              2006
              $174,998
              -
              -
              (4)
              -
              -
              -
              $174,9982005
              -
              -
              -
              -
              -
              -
              -
              -
   -26-
  Edward
      L. Moses (1)(D)
              2007
              $9,000
              -
              -
              -
              -
              -
              -
              $9,000Former
      President, COO and Director
              2006
              $174,998
              -
              -
              (5)
              -
              -
              -
              $174,9882005
              -
              -
              -
              -
              -
              -
              -
              -Robert
      T. Moffett (1)(E)
              2007
              $114,.223
              -
              -
              -
              -
              -
              -
              $114,233Former
      Senior Vice President and General Counsel
              2006
              $156,250
              -
              -
              (6)
              -
              -
              -
              $156,2502005
              -Michael
      J. Walker (F)
              2007
              -
              -
              -
              -
              -
              -
              -
              -Former
      Vice President of Engineering
              2006
              $133,333
              -
              -
              (7)
              -
              
              -
              $133,3332005
              -Robert
      H. Steelhammer(G)
              2007
              -
              -
              -
              -
              -
              -
              -
              -Former
      DirectorW.
      Richard Andersen(H)
              2007
              -
              -
              -
              -
              -
              -
              -
              -Shaun
      Carter
              2006
              -
              -
              -
              -
              -
              -
              -
              -Former
      Chief Executive Officer and Director (2)
  * Does
not include perquisites and other personal benefits in amounts less than 10% of
the total annual salary and other compensation. Other than the individuals
listed above, we have no other executive employees who have received more than
$100,000 in compensation, including bonuses and options, during each of the last
three (3) fiscal years.
 
 (1)
              Each
      executive served for less than a full year in 2006.(2)
              Shaun
      Carter was the sole officer for Online Holdings, Inc. during 2004, and
      2005, and received no compensation during those years.  Mr.
      Carter resigned as an officer and director on September 1,
      2006.(3)
              While
      4,000,000 options to purchase shares of the Company’s common stock were
      granted to Mr. Tomlinson in fiscal 2006, such options were cancelled in
      2007 in connection with the Company’s entry into the Asset Purchase
      Agreement (described above) and such option therefore have no value in the
      table above.(4)
              While
      650,000 options to purchase shares of the Company’s common stock were
      granted to Mr. Pennington in fiscal 2006, such options were cancelled in
      2007 in connection with the Company’s entry into the Asset Purchase
      Agreement (described above) and such option therefore have no value in the
      table above.(5)
              While
      1,250,000 options to purchase shares of the Company’s common stock were
      granted to Mr. Moses in fiscal 2006, such options were cancelled in 2007
      in connection with the Company’s entry into the Asset Purchase Agreement
      (described above) and such option therefore have no value in the table
      above.(6)
              While
      400,000 options to purchase shares of the Company’s common stock were
      granted to Mr. Moffett in fiscal 2006, such options were cancelled in 2007
      in connection with the Company’s entry into the Asset Purchase Agreement
      (described above) and such option therefore have no value in the table
      above.(7)
              While
      300,000 options to purchase shares of the Company’s common stock were
      granted to Mr. Walker in fiscal 2006, such options were cancelled in 2007
      in connection with the Company’s entry into the Asset Purchase Agreement
      (described above) and such option therefore have no value in the table
      above.
 
 (A)
Appointed November 28, 2007.
 (B)
Resigned on October 9, 2007.
 (C)
Resigned on April 3, 2007.
 (D)
Resigned on November 30, 2007.
 (E)
Resigned on May 3, 2007.
 (F)
Resigned on April 30, 2007.
 (G)
Resigned as a Director on March 26, 2007.
 (H)
Resigned as a Director on November 28, 2007.


-27-




COMPENSATION
DISCUSSION AND ANALYSIS





Director
Compensation





No
non-executive members of our Board of Directors currently receive any
compensation for any services performed in their capacity as a Director of the
Company, however, the Board of Directors reserves the right in the future to
award the members of the Board of Directors cash or stock based consideration
for their services to the Company, which awards, if granted shall be in the sole
determination of the Board of Directors.





Executive
Compensation Philosophy





Our Board
of Directors, consisting solely of David S. Rector (our sole executive officer
for the year ended December 31, 2007), determines the compensation given to our
executive officers in their sole determination. Our executive compensation
program is designed to attract and retain talented executives to meet our
short-term and long-term business objectives. In doing so, we attempt to align
our executives’ interests with the interests of our shareholders by providing an
adequate compensation package to such executives. This compensation package
currently consists solely of warrants to purchase shares of our common stock and
restricted stock awards.





Compensation
Philosophy




The
Company’s compensation philosophy is as follows:




•
            
            The
      Company believes that compensation is an integral component of its overall
      business and human resource strategies. As such, the Company’s
      compensation plans moving forward will strive to promote the hiring and
      retention of personnel necessary to execute the Company’s business
      strategies and achieve its business
objectives.




•
            
            The
      Company’s compensation plans moving forward will be strategy-focused,
      competitive, and recognize and reward individual and group contributions
      and results. The Company’s compensation plans will strive to promote an
      alignment of the interests of employees with the interests of the
      shareholders by having a portion of compensation based on financial
      results and actions that will generate future shareholder
      value.




•
            
            In
      order to reward financial performance over time, the Company’s
      compensation programs generally may consist of: base compensation, and may
      also consist of short-term variable incentives and long-term variable
      incentives, including the granting of warrants and/or restricted stock
      awards as appropriate.




•
            
            The
      Company’s compensation plans will be administered consistently and fairly
      to promote equal opportunities for the Company’s officers and employees
      (if any).








ITEM 11. SECURITY OWNERSHIP
OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER
MATTERS





The
following table provides the names and addresses of each person known to own
directly or beneficially more than 5% of our outstanding common stock (as
determined in accordance with Rule 13d-3 under the Exchange Act) as of March 31,
2008, and by the officers and directors, individually and as a group. Except as
otherwise indicated, all shares are owned directly.





-28-


Name
      and Address ofBeneficial
      Owner
            
            Shares
            
            Percent(1)David
      S. Rector
            
            
            0
            
            
            0%Chief
      Executive Officer, Chief Financial Officer, President, Secretary,
      Treasurer and Director1640
      Terrace WayWalnut
      Creek, California 94597International
      Capital Advisory Inc.
            
            
            2,000,000
            
            
            5.85%40
      Bassano Road
              Toronto,
      Ontario, Canada M2N2K1Kystie
      Finance Ltd
            
            
            2,000,000
            
            
            5.85%P.O.
      Box 958Pasea
      Estate Road BVITown
      TortolaWolverine
      International Holdings Ltd
            
            
            2,000,000
            
            
            5.85%Rue
      Barthelemy Menn 81205
      Geneva, SwitzerlandAll
      of the officers and
            
            
            0
            
            
            0%directors
      as a group (1 person)






(1) Using
34,208,880 shares of common stock issued and outstanding as of April 9,
2008.








Changes
In Control





The
Company does not currently anticipate any changes in control of the
Company.








ITEM 12. CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS





On March
26, 2007, Mr. Robert H. Steelhammer resigned as a director of the Company. Mr.
Steelhammer served on the Audit Committee, the Compensation Committee, Conflicts
Committee, as Chairman, and the Nominating and Governance Committee of the
Board of Directors. Mr. Steelhammer informed the Company that he was not
resigning due to any disagreement with the Company.





On April
3, 2007, our Chief Financial Officer, O. Oliver Pennington, III resigned from
the Company to pursue other business opportunities. Mr. Pennington informed the
Company that he was not resigning due to any disagreement with the
Company.





On April
30, 2007, our Vice President of Drilling Operations, Michael J. Walker resigned
from the Company to pursue other business opportunities. Mr. Walker informed the
Company that he was not resigning due to any disagreement with the
Company.





On May 3,
2007, our Senior Vice President and General Counsel, Robert T. Moffett resigned
from the Company to pursue other business opportunities. Mr. Moffett informed
the Company that he was not resigning due to any disagreement with the
Company.





On
September 24, 2007, the Company entered into an Asset Purchase Agreement with
PBT Capital Partners, LLC (“PBT”).  PBT is a private company whose
sole shareholder is Prentis B. Tomlinson, Jr., who was our Chairman and Chief
Executive Officer at the time we entered into the agreement.  Under
the terms of the Asset Purchase Agreement, PBT assumed substantially all of our
assets and associated and contingent liabilities in return for leaving not less
than $839,068 in cash in the Company and providing us a note payable in the
amount of $600,000. The $600,000 note payable by PBT to was due on or before
December 31, 2007 and guaranteed by Mr. Tomlinson, which note remains
outstanding as of the date of this report. In connection with the Asset Purchase
Agreement, $833,389 of the amount owed by the Company under the Interim Credit
Agreement was forgiven.  Additionally, in connection with the Asset
Purchase Agreement, PBT assumed our obligations under our office space lease,
our employment agreements with our various officers and Directors and certain
severance agreements we entered into with our former officers and
Directors.  We retained all of the liabilities relating to the
Advisory Consulting Agreement between us and International Capital Advisory,
Inc., the Support Services Agreement between us and Petroleum Financial Inc.,
and the obligation to provide healthcare benefits to David Wilson, our former
Manager of Operations under the terms of his severance agreement until February
2009.





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In
connection with the Asset Purchase Agreement in September and October 2007, we
entered into Mutual Releases (the “Releases”) with various of our former
officers, Directors and parties who we had previously entered into agreements
with, including Romfor West Africa, Ltd., Prentis B. Tomlinson, Jr., our former
Chairman and Chief Executive Officer, O. Oliver Pennington, III, our former Vice
President and Chief Financial Officer, E.L. Moses, Jr., our former President,
Chief Operating Officer and Director, W. Richard Andersen, our former Director,
Peter F. Frey, Treasurer, and Daniel A. Drum, our former Vice President of
Finance pursuant to which such individuals and entities agreed to release us
from any and all known and unknown claims, we agreed to release such parties
from any and all known or unknown claims, and such individuals and entities
agreed to cancel the shares of common stock and options to acquire shares of
common stock which they held in the Company.





In
connection with the Company’s entry into the Asset Purchase Agreement with PBT
Capital Partners, LLC, Mr. Tomlinson resigned as Chairman and Chief Executive
Officer of the Company on October 9, 2007, and the Board appointed Edward L.
Moses as Interim Chairman.  Subsequently on November 28, 2007, the
Board appointed David S. Rector as Chairman and principal executive officer of
the Company.  Also on or around November 28, 2007, W. Richard Anderson
and Edward L. Moses resigned as Directors, leaving Mr. Rector as the sole
Director of the Company. Upon termination of these employment agreements, the
Company owed no back pay, severance pay, or other compensation to any of these
individuals, as such severance payments were assigned to PBT in connection with
the Asset Purchase.




In September 2007, certain
of our former affiliates cancelled an aggregate of 925,000 shares of our common
stock.




The
Company received for cancellation and return to the treasury, an aggregate
11,000,000 shares of the Company’s common stock and 5,650,000 options held by
former employees and consultants of the Company, in connection with the
execution of the Releases.  This includes the cancellation of
9,250,000 shares and 4,000,000 options held by Prentis B. Tomlinson, Jr., a
former Director and Chief Executive Officer of the Company; 1,000,000 shares and
1,250,000 options held by Edward L. Moses, a former Director of the Company;
200,000 shares and 250,000 options held by Daniel A. Drum, a former employee of
the Company; 150,000 share and 150,000 options held by Peter F. Frey, a former
employee of the Company; and 400,000 shares held by O. Oliver Pennington, a
former Chief Financial Officer of the Company.  Cancellation of
10,250,000 common shares has been effected through December 10,
2007.  To date 10,250,000 share have been cancelled; the remaining
750,000 common shares will be cancelled in due course.    As of
April 9, 2008, the Company has 34,208,880 shares of common stock issued and
outstanding, which amount includes the 750,000 shares which have not been
cancelled to date.





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ITEM 13. EXHIBITS AND
REPORTS ON FORM 8-K





(a)
EXHIBITS




2.1
            Agreement
      and Plan of Merger dated July 27, 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 with the SEC on July 27, 2006).3.1
            Amended
      and Restated Articles of Incorporation of the Company (incorporated by
      reference from Exhibit 3.1 to the Current Report on Form 8-K filed with
      the SEC on September 6, 2006).3.2
            Bylaws
      of the Company (incorporated by reference from Exhibit 3.2 to Form SB-2
      filed by the Company on December 19, 2001).10.1
            Registration
      Rights Agreement dated June 9, 2006 by and among Standard Drilling, Inc.
      and the stockholders named therein (incorporated by reference from Exhibit
      3.1 to the Current Report on Form 8-K filed with the SEC on September 6,
      2006).10.2
            Contract
      with Romfor West Africa Ltd., effective May 15, 2006 (incorporated by
      reference from Exhibit 3.1 to the Current Report on Form 8-K filed with
      the SEC on September 6, 2006).10.3
            Standard
      Drilling, Inc. 2006 Stock Incentive Plan (incorporated by reference from
      Exhibit 3.1 to the Current Report on Form 8-K filed with the SEC on
      September 6, 2006).10.4
            Form
      of Incentive Stock Option Agreement (incorporated by reference from
      Exhibit 3.1 to the Current Report on Form 8-K filed with the SEC on
      September 6, 2006).10.5
            Form
      of Non-Statutory Stock Option Agreement A (incorporated by reference from
      Exhibit 3.1 to the Current Report on Form 8-K filed with the SEC on
      September 6, 2006).10.6
            Form
      of Non-Statutory Stock Option Agreement B (incorporated by reference from
      Exhibit 3.1 to the Current Report on Form 8-K filed with the SEC on
      September 6, 2006).10.7
            Employment
      Agreement dated July 27, 2006 between Standard Drilling, Inc. and Prentis
      B. Tomlinson, Jr. (incorporated by reference from Exhibit 3.1 to the
      Current Report on Form 8-K filed with the SEC on September 6,
      2006).10.8
            Employment
      Agreement dated July 27, 2006 between Standard Drilling, Inc. and Edward
      L. Moses, Jr. (incorporated by reference from Exhibit 3.1 to the Current
      Report on Form 8-K filed with the SEC on September 6,
    2006).10.9
            Employment
      Agreement dated July 27, 2006 between Standard Drilling, Inc. and Robert
      T. Moffett (incorporated by reference from Exhibit 3.1 to the Current
      Report on Form 8-K filed with the SEC on September 6,
    2006).10.10
            Employment
      Agreement dated July 27, 2006 between Standard Drilling, Inc. and Michael
      J. Walker (incorporated by reference from Exhibit 3.1 to the Current
      Report on Form 8-K filed with the SEC on September 6,
    2006).10.11
            Employment
      Agreement dated July 27, 2006 between Standard Drilling, Inc. and O.
      Oliver Pennington, III (incorporated by reference from Exhibit 3.1 to the
      Current Report on Form 8-K filed with the SEC on September 6,
      2006).10.12
            Purchase
      and Sale Agreement dated June 5, 2007 between Standard Drilling, Inc. and
      Romfor West Africa.






-31-






10.13
            Asset
      Purchase Agreement dated September 24, 2007 between Standard Drilling,
      Inc. and PBT Capital Partners, LLC (incorporated by reference from Exhibit
      10.1 to the Current Report on Form 8-K filed with the SEC on October 11,
      2007).10.14
            Resignation
      letter of Prentis B. Tomlinson Jr. dated October 9, 2007 (incorporated by
      reference from Exhibit 3.1 to the Current Report on Form 10-QSB filed with
      the SEC on November 21, 2007).16.1
            Letter
      from Malone & Bailey, PC (incorporated by reference as exhibit 16.1 to
      the Company’s report on Form 8-K, filed with the Commission on November
      29, 2007).31*
            Certificate
      of the Chief Executive Officer and Chief Financial Officer pursuant to
      Section 302 of the Sarbanes-Oxley Act of 200232*
            Certificate
      of the Chief Executive Officer and Chief Financial Officer pursuant to
      Section 906 of the Sarbanes-Oxley Act of
2002





*Filed
herewith





(b)
REPORTS ON FORM 8-K





We filed
the following reports on Form 8-K during the fourth quarter of
2007:





o
            The
      Company filed a report on Form 8-K on November 30, 2007 to report the
      appointment of David S. Rector as Director and principal executive
      officer, and the resignation of W. Richard Anderson and Edward L. Moses as
      Directors.





o
            The
      Company filed a report on Form 8-K on December 14, 2007 to report the
      NASDAQ Stock Market providing notice that a Panel authorized by the FINRA
      Board of Governors will determine whether the Company's securities are
      eligible for continued quotation on the OTCBB under NASD Rules 6530 and
      6540, and to report the cancellation of 11,000,000 shares of the Company’s
      common stock.





o
            The
      Company filed a report on Form 8-K on December 17, 2007 to report the
      NASDAQ Stock Market providing notice that the company was delisted from
      the OTCBB.








ITEM 14. PRINCIPAL
ACCOUNTANT FEES AND SERVICES





AUDIT
FEES





The
aggregate fees billed for each of the fiscal years ended December 31, 2007 and
2006 for professional services rendered by the principal accountant for the
audit of the Company's annual financial statements and the review of the
financial statements included in the registrant's Form 10-QSB or for services
that are normally provided by the accountant in connection with statutory and
regulatory filings or engagements for those fiscal years was approximately
$14,000 and $12,000, respectively.





AUDIT
RELATED FEES





None.





TAX
FEES





None.





ALL OTHER
FEES





None.





-32-





SIGNATURES





In
accordance with Section 13 or 15(d) of the Securities Exchange Act of 1934, the
Registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.





STANDARD
DRILLING, INC.





By: /s/ David
Rector


David
Rector,


Chief
Executive Officer (Principal Executive Officer)


Chief
Financial Officer (Principal Financial Officer)


April 15,
2008











In
accordance with the Exchange Act, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.







Name
            Title
            Date/s/ David
      Rector
              David
      Rector
            Chief
      Executive Officer (Principal Executive Officer),
            April
      15, 2008President,
      Chief Financial Officer(Principal
      Accounting Officer),Treasurer,
      Secretary and Director





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