UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION


Washington,
D.C.  20549





FORM
10-K





(Mark
One)


[√]
              ANNUAL
      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934





For
      the fiscal year ended December 31,
2008





or





[  
      ]
              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 registrant as
      specified in its charter)





Nevada
              84-1598154(State
      or other jurisdiction of incorporation or organization)
              (I.R.S.
      Employer Identification No.)





1640
      Terrace Way, Walnut Creek, CA
              94597(Address
      of principal executive offices)
              (Zip
      Code)





Registrant's
      telephone number, including area code:
              (925)
      938-0406





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





Title
      of each class
              Name
      of each exchange on which registeredNone
              Not
      applicable





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





Common
      Stock, par value $0.001 per share(Title
      of class)





Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined in
Rule 405 of the Securities Act.   [  ] Yes [√]
No





Indicate
by check mark if the registrant is not required to file reports pursuant to
Section 13 or Section 15(d) of the Act.


[  ]
Yes [√] No





Indicate
by check mark whether the registrant (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required
to file such reports), and (2) has been subject to such filing requirements for
the past 90 days. Yes [√] No [  ]








Indicate
by check mark if disclosure of delinquent filers pursuant to Item 405 of
Regulation S-K is not contained herein, and will not 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-K or any amendment to this
Form 10-K.


[√]





Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting
company:





Large
      accelerated filer
                [
       ]
                Accelerated
      filer
                [  ]Non-accelerated
      filer
                  (Do
      not check if smaller reporting company)
                [ 
      ]
                Smaller
      reporting company
                [√]





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





State the
aggregate market value of the voting and non-voting common equity held by
non-affiliates computed by reference to the price at which the common equity was
sold, or the average bid and asked prices of such common equity, as of the last
business day of the registrant's most recently completed second fiscal
quarter.
$3,052,254 on June 30, 2008.





Indicate
the number of shares outstanding of each of the registrant's classes of common
stock, as of the latest practicable date.   33,458,880 shares of
common stock are issued and outstanding as of March 2, 2009.





DOCUMENTS
INCORPORATED BY REFERENCE





List
hereunder the following documents if incorporated by reference and the Part of
the Form 10-K (e.g., Part I, Part II, etc.) into which the document is
incorporated: (1) Any annual report to security holders; (2) Any proxy or
information statement; and (3) Any prospectus filed pursuant to Rule 424(b) or
(c) under the Securities Act of 1933.  The listed documents should be
clearly described for identification purposes (e.g., annual report to security
holders for fiscal year ended December 24, 1980).  None.






















STANDARD
DRILLING, INC.


FORM
10-K


TABLE
OF CONTENTS





Page
      No.Part
      IItem
      1.
                Business.
                4Item
      1A.
                Risk
      Factors.
                7Item
      1B.
                Unresolved
      Staff Comments.
                9Item
      2.
                Properties.
                9Item
      3.
                Legal
      Proceedings.
                9Item
      4.
                Submission
      of Matters to a Vote of Security Holders.
                9Part
      IIItem
      5.
                Market
      for Registrant's Common Equity, Related Stockholder Matters and Issuer
      Purchases of Equity Securities.
                9Item
      6.
                Selected
      Financial Data.
                11Item
      7.
                Management's
      Discussion and Analysis of Financial Condition and Results of
      Operations.
                11Item
      7A.
                Quantitative
      and Qualitative Disclosures About Market Risk.
                13Item
      8.
                Financial
      Statements and Supplementary Data.
                F-1
      -- F-14Item
      9.
                Changes
      In and Disagreements With Accountants on Accounting and Financial
      Disclosure.
                14Item
      9A.(T)
                Controls
      and Procedures.
                14Item
      9B.
                Other
      Information.
                15Part
      IIIItem
      10.
                Directors,
      Executive Officers and Corporate Governance.
                15Item
      11.
                Executive
      Compensation.
                17Item
      12.
                Security
      Ownership of Certain Beneficial Owners and Management and Related
      Stockholder Matters.
                18Item
      13.
                Certain
      Relationships and Related Transactions, and Director
      Independence.
                19Item
      14.
                Principal
      Accounting Fees and Services.
                19Part
      IVItem
      15.
                Exhibits,
      Financial Statement Schedules.
                20





CAUTIONARY
STATEMENT REGARDING FORWARD-LOOKING INFORMATION





This report contains forward-looking
statements. These forward-looking statements are subject to known and unknown
risks, uncertainties and other factors which may cause actual results,
performance or achievements to be materially different from any future results,
performance or achievements expressed or implied by such forward-looking
statements.  These forward-looking statements were based on various
factors and were derived utilizing numerous assumptions and other factors that
could cause our actual results to differ materially from those in the
forward-looking statements.  These factors include, but are not
limited to, our ability to consummate the acquisition of an operating entity
and/or assets, our ability to generate revenues and pay our operating expenses,
our ability to raise capital as necessary, economic, political and market
conditions and fluctuations, government and industry regulation, interest rate
risk, U.S. and global competition, and other factors.  Most of these
factors are difficult to predict accurately and are generally beyond our
control.  You should consider the areas of risk described in
connection with any forward-looking statements that may be made
herein.  Readers are cautioned not to place undue reliance on these
forward-looking statements and readers should carefully review this report in
its entirety, including the risks described in "Item 1A. - Risk
Factors".  Except for our ongoing obligations to disclose material
information under the Federal securities laws, we undertake no obligation to
release publicly any revisions to any forward-looking statements, to report
events or to report the occurrence of unanticipated events.  These
forward-looking statements speak only as of the date of this report, and you
should not rely on these statements without also considering the risks and
uncertainties associated with these statements and our business.





OTHER
PERTINENT INFORMATION





Unless
specifically set forth to the contrary, when used in this prospectus the terms
“Standard Drilling", "we"", "our", the "Company" and similar terms refer to
Standard Drilling, Inc., a Nevada corporation.  In addition, when used
herein and unless specifically set forth to the contrary, “2008” refers to the
year ended December 31, 2008 and “2007” refers to the year ended December 31,
2007.













PART I





ITEM
1.                                DESCRIPTION
OF BUSINESS.





Following the September 2007
transactions with Romfor West Africa and PBT Capital Partners, LLC, both of
which are described later in this section under “Our History,” we do not have
any business or operations and are considered a "shell" company under Federal
securities laws.  We are actively seeking to acquire assets or shares
of an entity actively engaged in business which generates revenues, in exchange
for our securities.  Our purpose is to seek, investigate and, if such
investigation warrants, acquire an interest in business opportunities presented
to us by persons or firms who or which desire to seek the perceived advantages
our company may offer.  We will not restrict our search to any
specific business, industry, or geographical location and we may participate in
a business venture of virtually any kind or nature.  This discussion
of the proposed business is purposefully general and is not meant to be
restrictive of our virtually unlimited discretion to search for and enter into
potential business opportunities. Management anticipates that it may be able to
participate in only one potential business venture because we have nominal
assets and limited financial resources. This lack of diversification should be
considered a substantial risk to our stockholders because it will not permit us
to offset potential losses from one venture against gains from
another.





We may seek a business opportunity with
entities which have recently commenced operations, or which wish to utilize the
public marketplace in order to raise additional capital in order to expand into
new products or markets, to develop a new product or service, or for other
corporate purposes.  We may acquire assets and establish wholly-owned
subsidiaries in various businesses or acquire existing businesses as
subsidiaries.  We anticipate that the selection of a business
opportunity in which to participate will be complex and extremely
risky.  Due to general economic conditions, rapid technological
advances being made in some industries and shortages of available capital,
management believes that there are numerous firms seeking the perceived benefits
of a publicly registered corporation.  These perceived benefits may
include facilitating or improving the terms on which additional equity financing
may be sought, providing liquidity for incentive stock options or similar
benefits to key employees, providing liquidity (subject to restrictions of
applicable statutes), for all stockholders and other
factors.  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.





The analysis of new business
opportunities will be undertaken by, or under the supervision of, Mr. David S.
Rector, our Chief Executive Officer, who may not be considered a professional
business analyst.  Mr. Rector will be the key person in the search,
review and negotiation with potential acquisition or merger
candidates.  We intend to concentrate on identifying preliminary
prospective business opportunities which may be brought to our attention through
present associations of Mr. Rector and legal counsel or by our
stockholders.  In analyzing prospective business opportunities, we
will consider such matters as:





•
            the
      available technical, financial and managerial
resources;•
            working
      capital and other financial requirements;•
            history
      of operations, if any;•
            prospects
      for the future;•
            nature
      of present and expected competition;•
            the
      quality and experience of management services which may be available and
      the depth of that management;•
            the
      potential for further research, development, or
    exploration;•
            specific
      risk factors not now foreseeable but which then may be anticipated to
      impact our proposed activities;•
            the
      potential for growth or expansion;•
            the
      potential for profit;•
            the
      perceived public recognition of acceptance of products, services, or
      trades; name identification; and•
            other
      relevant factors.





We will
not acquire or merge with any company for which audited financial statements
cannot be obtained within the time period prescribed by applicable rules of the
United States Securities and Exchange Commission which is presently four
business days from the closing date of the transaction.  This
requirement for readily available audited financial statement may require us to
preclude a transaction with a potential candidate which might otherwise be
beneficial to our stockholders.





-4-


We will not restrict our search for any
specific kind of company, but may acquire a venture which is in its preliminary
or development stage, which is already in operation, or in essentially any stage
of its corporate life. It is impossible to predict at this time the status of
any business in which we may become engaged, in that such business may need to
seek additional capital, may desire to have its shares publicly traded, or may
seek other perceived advantages which we may offer.  However, we do
not intend to obtain funds in one or more private placements to finance the
operation of any acquired business opportunity until such time as we have
successfully consummated such a merger or acquisition.  We anticipate
that we will incur nominal expenses in the implementation of our business plan
which will be funded from our current working capital.





In implementing a structure for a
particular business acquisition, we may become a party to a merger,
consolidation, reorganization, joint venture, or licensing agreement with
another corporation or entity.  We may also acquire stock or assets of
an existing business.  On the consummation of a transaction, it is
probable that our present management and stockholders will no longer be in
control of our company.  In addition, our sole director may, as part
of the terms of the acquisition transaction, resign and be replaced by new
directors without a vote of our stockholders.





We anticipate that any securities
issued in any such reorganization would be issued in reliance upon exemption
from registration under applicable federal and state securities laws. In some
circumstances, however, as a negotiated element of a transaction, we may agree
to register all or a part of such securities immediately after the transaction
is consummated or at specified times thereafter.  If such registration
occurs, of which there can be no assurance, it will be undertaken by the
surviving entity after we have successfully consummated a merger or acquisition
and we are no longer considered a "shell" company.  Until such time as
this occurs, we will not attempt to register any additional
securities.  The issuance of substantial additional securities and
their potential sale into any trading market which may develop in our securities
may have a depressive effect on the value of our securities in the future, if
such a market develops, of which there is no assurance.





Employees





As of March 2, 2009, we had one
employee, Mr. Rector, our Chief Executive Officer.  Mr. Rector is
involved in other business activities and devotes his time and attention to our
business on a part-time basis as needed.





Our
History





We were 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 dated July 24, 2006 by and among our company, Standard Drilling
Acquisition Co., a Delaware corporation (“Standard Drilling Acquisition”), and
Standard Drilling, Inc., a Delaware corporation (“Standard Drilling Delaware”),
Standard Drilling Acquisition was merged with and into Standard Drilling
Delaware, and Standard Drilling Delaware became our wholly-owned subsidiary. As
a result of the merger, our company, which previously had no material
operations, acquired the business of Standard Drilling Delaware.  In
conjunction with the merger, we changed our name to Standard Drilling,
Inc.





Upon the
consummation of the merger each outstanding share of common stock of Standard
Drilling Delaware was converted into one share of our common
stock.  All outstanding options and warrants to purchase common stock
of Standard Drilling Delaware were assumed by us and converted into options and
warrants to purchase an equal number of shares of our common stock on the same
terms and conditions.  The merger resulted in a change of control of
our company, with the former security holders of Standard Drilling Delaware
owning approximately 91.4% of the our outstanding common stock, or approximately
94% assuming the exercise of all outstanding options and warrants, following the
closing of the merger.




-5-


In the
merger, we exchanged 41,223,000 shares of our common stock for 41,223,000 shares
of common stock of Standard Drilling Delaware and reserved for
issuance:





•
            10,800,300
      shares of common stock pursuant to outstanding warrants to purchase common
      stock of Standard Drilling Delaware that were assumed by us,
      and•
            8,520,000
      shares of common stock pursuant to outstanding options to purchase common
      stock of Standard Drilling Delaware pursuant to the Standard Drilling,
      Inc. 2006 Stock Incentive Plan that were assumed by
  us.





In connection with the merger, Standard
Drilling Delaware paid us $60,000 as a deposit pursuant to the Merger Agreement.
A condition to the merger was an agreement by our then principal stockholder to
cancel, immediately prior to the merger, 20,000,000 outstanding shares of our
common stock that had been issued to the principal stockholder.  In
consideration of such cancellation, we paid the principal stockholder $60,000,
and Standard Drilling Delaware recognized recapitalization expense of $60,000.
Our then principal stockholder also assumed our net liabilities.





Following this transaction, we were
organized to provide contract land drilling services to independent and major
oil and gas exploration and production companies.  We constructed,
owned and operated land drilling rigs.





On June 5, 2007, we entered into a
purchase and sale agreement with Romfor West Africa, a subsidiary of Romfor
Supply Company, Inc. ("Romfor") to sell our sole, completed 1,500 horsepower
land-drilling rig ("Rig 1") for a gross purchase price of
$7,800,000.  At the time of the signing of the purchase and sale
agreement, Romfor was our largest individual creditor and Rig 1 represented
substantially all of our assets. The purchase and sale agreement for Rig 1
closed on September 24, 2007.





On September 24, 2007, we also entered
into an Asset Purchase Agreement with PBT Capital Partners, LLC (“PBT”), 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 our company
and providing us a note payable in the amount of $600,000 which was due on or
before December 31, 2007 and guaranteed by Mr. Tomlinson.  In
connection with the Asset Purchase Agreement, $833,389 of the amount owed by us
under an interim credit agreement was forgiven and we transferred all of the
shares of our former wholly-owned subsidiary, Standard E& P, Inc., to
PBT.  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.





In connection with the Asset Purchase
Agreement with PBT, in September 2007 and October 2007, we entered into mutual
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 these mutual releases these
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 known
claims, and such individuals and entities agreed to cancel an aggregate of
11,000,000 shares of our common stock and options to purchase 5,650,000 shares
of our common stock.





-6-


In connection with the Asset Purchase
Agreement with PBT, Mr. Tomlinson resigned as our Chairman and Chief Executive
Officer, and the Board appointed Mr. Edward L. Moses as Interim
Chairman.  Subsequently on November 28, 2007, the Board appointed Mr.
David S. Rector as our Chairman and principal executive officer.  Also
on or around November 28, 2007, Messrs. W. Richard Anderson and Edward L. Moses
resigned as directors, leaving Mr. Rector as our sole director.





In October 2008 we entered into a
letter agreement with PBT and Mr. Tomlinson pursuant to which PBT was to place
$233,425 in escrow on or before December 31, 2008.  These funds were
to be applied to the payment of any failure to drill penalties which were
accrued by us as of the date of the Asset Purchase Agreement in September 2007
under leases which were included in the assets acquired by PBT if and to the
extent any claim was made against us within 18 months from the date of the
letter agreement.  In the event a valid claim was made against us, Mr.
Tomlinson agreed to also immediately pay approximately $223,000 on our
behalf.  The October 2008 letter agreement also contained
representations and warranties from PBT that all failure to drill penalties
resulting from other lease which was part of the assets acquired by PBT has been
extinguished or released and that all liabilities under various employment
agreements have also been extinguished or released together with an affirmative
undertaking by PBT to provide us with written evidence of these
releases.  Finally, the letter agreement contained an obligation of
PBT to pay various property taxes totaling approximately $186,000 on our behalf
related to assets acquired by it, as well as paying approximately $4,300 to a
third party for other services rendered prior to the closing of the Asset
Purchase Agreement and an affirmative undertaking by PBT to provide us with
written evidence of these payments.  In consideration of these actions
we agreed to cancel the $600,000 promissory note due us by PBT which was then in
default.  PBT has not deposited the funds in escrow as required nor
have they provided us with any of the releases or evidences of payment as
required by the October 2008 letter agreement.  Accordingly, PBT is
currently in default under the terms of this letter agreement.  During
2008, we wrote-off the $600,000 note payable to us by PBT as the collection of
the amount was deemed unlikely.  The accounting treatment for the debt
does not impact any legal rights we have against PBT and Mr.
Tomlinson.  We are evaluating remedies we have against PBT and Mr.
Tomlinson in the event there is not a satisfactory resolution to these
matters.





ITEM
1.A                      RISK
FACTORS.





Before
you invest in our securities, you should be aware that there are various risks.
You should consider carefully these risk factors, together with all of the other
information included in this annual report before you decide to purchase our
securities. If any of the following risks and uncertainties develop into actual
events, our business, financial condition or results of operations could be
materially adversely affected.





Our auditors have raised substantial
doubts as to our ability to continue as a going concern.





Our
consolidated financial statements have been prepared assuming we will continue
as a going concern. Since inception we have experienced recurring losses from
operations, which losses have caused an accumulated deficit of approximately
$17.4 million as of December 31, 2008. These factors, among others, raise
substantial doubt about our ability to continue as a going concern. Our
financial statements do not include any adjustments that might result from the
outcome of this uncertainty.  Following the transactions with Romfor
West Africa and PBT which are described earlier in this section, our operating
expenses are minimal and will be funded from our existing working
capital.  However, we anticipate that we will continue to incur losses
in future periods until we are successful in completing a business combination
with an operating entity.  If for some reason we are not able to
consummate a business combination within a reasonable period of time, we may not
have sufficient resources to continue meeting our reporting obligations with the
Securities and Exchange Commission or other obligations which arise from our
minimal operations.  If we were to fail to continue to meet our SEC
reporting obligations the attractiveness of our vehicle to an operating company
would be severely diminished and our ability to consummate a business
combination would be in jeopardy.





We
currently do not have an operating business, but also do not intend to pursue a
course of complete liquidation and dissolution, and accordingly, the value of
your shares may decrease.





We
currently do not have any operating business.  We continue to incur
operating expenses while we consider alternative operating plans. These plans
may include business combinations with or investments in other operating
companies, or entering into a completely new line of business. We have not yet
identified any such opportunities, and thus, you will not be able to evaluate
the impact of such a business strategy on the value of your stock. In addition,
we cannot assure you that we will be able to identify any appropriate business
opportunities. Even if we are able to identify business opportunities that our
Board deems appropriate, we cannot assure you that such a strategy will provide
you with a positive return on your investment, and it may in fact result in a
substantial decrease in the value of your stock. These factors will
substantially increase the uncertainty, and thus the risk, of investing in our
shares.





-7-


Our
sole officer and director does not devote all of his time and attention to our
business.





Mr. Rector, who serves as our sole
officer and director, devotes only approximately 20% of his time to the business
and affairs of our company.  Because Mr. Rector is primarily
responsible for the identification and consummation of an acquisition of an
operating company for us, we are materially dependent upon his efforts on our
part.  It is possible that because he does not spend his full time and
efforts on our behalf that it may take longer to identify and close an
acquisition of an operating company than if he was employed by us on a full-time
basis.





We
may not be able to identify or fully capitalize on any appropriate business
opportunities.





We have
not yet identified any appropriate business opportunities, and, due to a variety
of factors outside of our control, we may not be able to identify or fully
capitalize on any such opportunities. These factors include:





•
            competition
      from other potential acquirors and partners of and investors in potential
      acquisitions, many of whom may have greater financial resources than we
      do;•
            in
      specific cases, failure to agree on the terms of a potential acquisition,
      such as the amount or price of our acquired interest, or incompatibility
      between us and management of the company we wish to acquire;
      and•
            the
      possibility that we may lack sufficient capital and/or expertise to
      develop promising opportunities.





Even if
we are able to identify business opportunities that our Board deems appropriate,
we cannot assure you that such a strategy will provide you with a positive
return on your investment, and may in fact result in a substantial decrease in
the value of your stock. In addition, if we enter into a combination with a
business that has operating income, we cannot assure you that we will be able to
utilize all or even a portion of our existing net operating loss carryover for
federal or state tax purposes following such a business combination. If we are
unable to make use of our existing net operating loss carryover, the tax
advantages of such a combination may be limited, which could negatively impact
the price of our stock and the value of your investment. These factors will
substantially increase the uncertainty, and thus the risk, of investing in our
shares.





Our
common stock was removed from quotation on the OTC Bulletin Board because of our
failure to timely file various reports with the Securities and Exchange
Commission.





In December 2007 our common stock was
determined to no longer be eligible for quotation on the OTC Bulletin Board as a
result of our failure to comply with Financial Industry Regulatory Association
(FINRA) Rule 6530.  Under FINRA Rule 6530, which is informally known
as the "Three Strikes Rule", a FINRA member is prohibited from quoting
securities of an OTC Bulletin Board issuer such as our company if the issuer
either fails to timely file these reports or is otherwise delinquent in the
filing requirements three times in the prior two year period or if the issuer's
common stock has been removed from quotation on the OTC Bulletin Board twice in
that two year period.  As a result, our common stock is now quoted on
the Pink Sheets.  Pink Sheets offers a quotation service to companies
that are unable to list their securities on an exchange or for companies, such
as ours, whose securities are not eligible for quotation on the OTC Bulletin
Board.  The requirements for quotation on the Pink Sheets are
considerably lower and less regulated than those of the OTC Bulletin Board or an
exchange.  Because our common stock is quoted on the Pink Sheets, it
is possible that even fewer brokers or dealers would be interested in making a
market in our common stock which further adversely impacts its
liquidity.





You
may find it extremely difficult or impossible to resell our shares. Even if an
active public market is established, we cannot guarantee you that there will
ever be any liquidity in our common stock.





While our common stock is quoted on the
Pink Sheets, there is not an active market for our common stock and there can be
no assurance that an active public market for our common stock will ever be
established.  Purchasers of our shares of common stock will face
significant obstacles if they wish to resell the shares. Absent an active public
market for our common stock, an investment in our shares should be considered
illiquid.  Even if an active public market is established, it is
unlikely a liquid market will develop. Because of our relatively small size and
limited revenues, the investment community may show little or no interest in our
securities and investors may not be readily able to liquidate their investment,
if at all. Investors seeking liquidity in a security should not purchase our
shares of common stock.





-8-


The
tradability of our common stock is limited under the penny stock regulations
which may cause the holders of our common stock difficulty should they wish to
sell the shares.





Because the quoted price of our common
stock is less than $5.00 per share, our common stock is considered a "penny
stock," and trading in our common stock is subject to the requirements of Rule
15g-9 under the Securities Exchange Act of 1934 ("Exchange
Act").  Under this rule, broker/dealers who recommend low-priced
securities to persons other than established customers and accredited investors
must satisfy special sales practice requirements. The broker/dealer must make an
individualized written suitability determination for the purchaser and receive
the purchaser's written consent prior to the transaction.





SEC regulations also require additional
disclosure in connection with any trades involving a "penny stock," including
the delivery, prior to any penny stock transaction, of a disclosure schedule
explaining the penny stock market and its associated risks. These requirements
severely limit the liquidity of securities in the secondary market because few
broker or dealers are likely to undertake these compliance activities and this
limited liquidity will make it more difficult for an investor to sell his shares
of our common stock in the secondary market should the investor wish to
liquidate the investment.  In addition to the applicability of the
penny stock rules, other risks associated with trading in penny stocks could
also be price fluctuations and the lack of a liquid market.





ITEM
1B.                      UNRESOLVED
STAFF COMMENTS.





Not applicable to a smaller reporting
company.





ITEM
2.                         DESCRIPTION
OF PROPERTY.





Our principal executive office
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 Mr. David S. Rector, our sole officer and director, free of charge as well as
all related office equipment and communication lines.  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.





ITEM
3.                         LEGAL
PROCEEDINGS.





We are
not a party to any pending or threatened litigation.





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





None.





PART
II





ITEM
5.                         MARKET
FOR COMMON STOCK AND RELATED STOCKHOLDER MATTERS.





Market
Price of and Dividends on Common Equity and Related Stockholder
Matters





Since December 2007 our common stock
has been quoted in the over-the-counter market on the Pink Sheets under the
symbol STDR and trading in our common stock is extremely
limited.  Previously, our common stock had been quoted in the
over-the-counter market on the OTC Bulletin Board; however, as described
elsewhere herein, in December 2007 our common stock was determined to no longer
be eligible for quotation on the OTC Bulletin Board as a result of our failure
to comply with FINRA Rule 6530.  The reported high and low bid prices
for the common stock as reported on the OTC Bulletin Board and subsequently on
the Pink Sheets are shown below for the periods indicated. The quotations
reflect inter-dealer prices, without retail mark-up, markdown or commission, and
may not represent actual transactions.






-9-





High
                                              Low2007First
      quarter ended March 31, 2007
                                              $1.20
                                              $0.58Second
      quarter ended June 30, 2007
                                              $0.55
                                              $0.27Third
      quarter ended September 30, 2007
                                              $0.30
                                              $0.20Fourth
      quarter ended December 31, 2007
                                              $0.20
                                              $0.062008First
      quarter ended March 31, 2008
                                              $0.18
                                              $0.125Second
      quarter ended June 30, 2008
                                              $0.13
                                              $0.125Third
      quarter ended September 30, 2008
                                              $0.19
                                              $0.13Fourth
      quarter ended December 31, 2008
                                              $0.13
                                              $0.0008





The
closing price of our common stock as reported on the Pink Sheets was $0.008 per
share on December 31, 2008.  No shares of our common stock have traded
since that date.  As of March 2, 2009, there were approximately 208
record owners of our common stock.





Dividend
Policy





Under Nevada law, a company is
prohibited from paying dividends if the company, as a result of paying such
dividends, would not be able to pay its debts as they become due, or if the
company’s total liabilities and preferences to preferred stockholders exceed
total assets.  We have never paid cash dividends on our common stock
and we do not anticipate that any cash dividends will be paid in the foreseeable
future.  Any payment of cash dividends on our common stock in the
future will be dependent on the our financial condition, results of operations,
current and anticipated cash requirements, plans for expansion, as well as other
factors the Board of Directors deems relevant.





Recent
Sales of Unregistered Securities





None.





Registration
Rights





In June 2006 Standard Drilling Delaware
closed a private offering of securities in which it sold 9,111,500 units of
securities, with each unit consisting of two shares of common stock and one two
year common stock purchase warrant with an exercise price of $1.75 per
share.  In June 2008 the exercise price of the warrants was reduced to
$0.125 per share and the exercise period was extended until June 9,
2010.  In connection with this offering, Standard Drilling Delaware
granted the purchasers registration rights covering the shares of common stock
underlying the units.  Standard Drilling Delaware agreed to file a
registration statement with the Securities and Exchange Commission within 180
days from the closing of a merger with a public company.   As
described elsewhere herein, the securities issued by Standard Drilling Delaware
in this offering were exchanged for like securities in our company under the
terms of the Merger Agreement which closed in September 2006 and under the terms
of the Merger Agreement we agreed to be bound by the registration
rights.  Accordingly, we were obligated to file the registration
statement covering the resale of the shares underlying the units by February
2007, which such registration statement has not been filed.  Under the
terms of the private offering, the purchasers are entitled to receive 0.10 of an
additional unit for each unit purchased in the offering because the registration
statement was not filed on a timely basis, resulting in the issuance of an
additional 182,300 shares of our common stock and warrants to purchase an
additional 91,150 shares.  We have not issued these additional
securities as of the date of this report.





-10-


ITEM
6.                  SELECTED
FINANCIAL DATA.





Not applicable to a smaller reporting
company.





ITEM
      7.
            MANAGEMENT'S
      DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
      OPERATIONS.





The following discussion of our
financial condition and results of operationfor 2008 and 2007
should be read in conjunction with the financial statements and the notes to
those statements that are included elsewhere in this report. Our discussion
includes forward-looking statements based upon current expectations that involve
risks and uncertainties, such as our plans, objectives, expectations and
intentions. Actual results and the timing of events could differ materially from
those anticipated in these forward-looking statements as a result of a number of
factors, including those set forth under the Item 1A. Risk Factors, Cautionary
Notice Regarding Forward-Looking Statements and Business sections in this Form
10-K.  We use words such as “anticipate,” “estimate,” “plan,”
“project,” “continuing,” “ongoing,” “expect,” “believe,” “intend,” “may,”
“will,” “should,” “could,” and similar expressions to identify forward-looking
statements.





Plan
of Operations





Our
current business objective for the next 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 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
12 months and beyond will be paid with our current cash on hand and through
funds raised through other sources, which may not be available on favorable
terms, if at all.  During the next 12 months we anticipate incurring
costs related to the filing of quarterly, annual and other reports with the
Securities and Exchange Commission and  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.





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 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.





-11-


Results
of Operations





2008
compared to 2007





Net
sales





For 2008 and 2007 we had no revenues
from continuing operations. As of December 31, 2008, we have had only minimal
operations, which mainly consisted of searching out potential merger or
acquisition targets.





General
and Administrative Expenses





For 2008, general and administrative
expenses from continuing operations were $1,554,838. During 2007 we had $74,854
in general and administrative expenses. The general and administrative expenses
for 2007 were primarily professional fees principally associated with
maintaining our company as a public entity. During 2008, we recorded a bad debt
of $600,000 as a result of the write-off of the note payable issued to us by PBT
in 2007 and $643,720 of non-cash expense for the value of options granted and
revalued. We recorded a non-cash expense of $40,263 related to options granted
to Mr. David Rector, our sole officer and director, during 2008 and a non-cash
expense of $603,457 related to the reduction in the exercise price on 10,800,300
of previously granted warrants.  In 2008 we made an allowance for bad
debts for the note receivable as the collection thereof was deemed unlikely,
however we continue to actively pursue collection of the note. The balance of
our general and administrative expenses for 2008 were legal, accounting and
consulting fees incurred to keep our filing status current and to search for new
business opportunities. In 2007 all of our general and administrative expenses
were legal, accounting and professional fees incurred to keep our filing status
current and to search for new business opportunities.





Net Loss





For 2008, we had a net loss of
$1,553,956.  The net loss is primarily attributable to the bad debt of
$600,000 and the expense recorded for options granted and revalued of $643,720.
During 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.





Liquidity
and Capital Resources





As of December 31, 2008, we had cash
and cash equivalents of $485,200.  We expect to have monthly overhead
costs of approximately $25,000 per month for the next 12 months, which includes
costs associated with our compliance with Federal securities laws and our
efforts to find a new business to acquire or merge with.   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 costs for the registration of our securities in 2002.  Our
future liquidity and our liquidity in the next 12 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. As of December 31,
2008, our remaining cash balance will be sufficient to cover our current
liabilities, obligations and contractual commitments for the remainder of
2009.  The actual amount and timing of our capital expenditures may
differ materially from our estimates.   In addition, we may need
to raise additional capital through the sale of equity and/or debt securities to
complete the acquisition of an operating company; however,  it is
unlikely that we will be able raise additional capital until we identify and
possibly close such an acquisition for our company .  Even then, given
the relative present illiquidity of the capital markets there are no assurances
we will be able to raise any necessary capital.  If we are not able to
raise capital as necessary, it is possible we will be unable to close an
acquisition which will provide operating revenues to our company.  In
that event, the likelihood that we can continue as a going concern is doubtful
and investors could lose their entire investment in our company.











-12-


Cash
Flow from Operating Activities





For 2008, net cash used by operating
activities was $310,236, primarily attributed to a net loss of $1,553,956 offset
by the allowance for bad debts of $600,000 and the value of the options granted
and revalued of $643,720.





Cash
Flow from Investing Activities





For 2008, net cash provided by
investing activities was $-0-.





Cash
Flow from Financing Activities





For 2008, net cash provided by
financing activities was $-0-.





ITEM
7A.              QUANTITATIVE
AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.





Not applicable for a smaller reporting
company.






-13-





ITEM
8.                  FINANCIAL
STATEMENTS AND SUPPLEMENTARY DATA.





Please see our Financial Statements
beginning on page F-1 of this annual report.






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, 2008 and 2007, and the related
statements of operations, stockholders’ equity and cash flows for the years
ended December 31, 2008 and 2007, and from inception on February 14, 2006
through December 31, 2008. 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 audit 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, 2008 and 2007, and the related
statements of operations, stockholders’ equity and cash flows for the years
ended December 31, 2008 and 2007, and from inception on February 14, 2006
through December 31, 2008, 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 yet established an ongoing source of
revenues and has generated operating losses since inception, 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
 March 24,
2009
 
 6490 West Desert Inn Rd, Las
Vegas, NV 89146 (702) 253-7499 Fax (702)
253-7501








F-1




STANDARD
      DRILLING, INC.(A
      Development Stage Company)Balance
      SheetsASSETSDecember
      31,
                                                                                                                                
                                                                                                                                December
      31,2008
                                                                                                                                
                                                                                                                                
                                                                                                                                2007CURRENT
      ASSETSCash
                                                                                                                                
                                                                                                                                $
                                                                                                                                485,200
                                                                                                                                
                                                                                                                                
                                                                                                                                $
                                                                                                                                795,436Total
      Current Assets
                                                                                                                                
                                                                                                                                
                                                                                                                                485,200
                                                                                                                                
                                                                                                                                
                                                                                                                                
                                                                                                                                795,436OTHER
      ASSETSNotes
      receivable
                                                                                                                                
                                                                                                                                
                                                                                                                                
                                                                                                                                
                                                                                                                                
                                                                                                                                
                                                                                                                                600,000TOTAL
      ASSETS
                                                                                                                                
                                                                                                                                $
                                                                                                                                485,200
                                                                                                                                
                                                                                                                                
                                                                                                                                $
                                                                                                                                1,395,436LIABILITIES AND STOCKHOLDERS'
      EQUITYCURRENT
      LIABILITIESAccounts
      payable
                                                                                                                                
                                                                                                                                $
                                                                                                                                -
                                                                                                                                
                                                                                                                                
                                                                                                                                $
                                                                                                                                -Total
      Current Liabilities
                                                                                                                                
                                                                                                                                
                                                                                                                                -
                                                                                                                                
                                                                                                                                
                                                                                                                                
                                                                                                                                -STOCKHOLDERS'
      EQUITYPreferred
      stock, 10,000,000 shares authorizedat
      par value of $0.001, noneshares
      issued and outstanding
                                                                                                                                
                                                                                                                                
                                                                                                                                -
                                                                                                                                
                                                                                                                                
                                                                                                                                
                                                                                                                                -Common
      stock, 100,000,000 shares authorizedat
      par value of $0.001, 33,458,880 and 34,207,000shares
      issued and outstanding, respectively
                                                                                                                                
                                                                                                                                
                                                                                                                                33,459
                                                                                                                                
                                                                                                                                
                                                                                                                                
                                                                                                                                34,207Additional
      paid-in capital
                                                                                                                                
                                                                                                                                
                                                                                                                                17,872,951
                                                                                                                                
                                                                                                                                
                                                                                                                                
                                                                                                                                17,228,483Deficit
      accumulated during the development stage
                                                                                                                                
                                                                                                                                
                                                                                                                                (17,421,210
                                                                                                                                )
                                                                                                                                
                                                                                                                                
                                                                                                                                (15,867,254
                                                                                                                                )Total
      Stockholders' Equity
                                                                                                                                
                                                                                                                                
                                                                                                                                485,200
                                                                                                                                
                                                                                                                                
                                                                                                                                
                                                                                                                                1,395,436TOTAL
      LIABILITIES AND STOCKHOLDERS' EQUITY
                                                                                                                                
                                                                                                                                $
                                                                                                                                485,200
                                                                                                                                
                                                                                                                                
                                                                                                                                $
                                                                                                                                1,395,436




The
accompanying notes are an integral part of these financial
statements.
  F-2


STANDARD
      DRILLING(A
      Development Stage Company)Statements
      of OperationsFrom
      InceptionFor
      the Year
                                                                          
                                                                          For
      the Year
                                                                          
                                                                          on
      February 14,Ended
                                                                          
                                                                          Ended
                                                                          
                                                                          2006
      ThroughDecember
      31, 2008
                                                                          
                                                                          December
      31, 2007
                                                                          
                                                                          December
      31, 2008REVENUES
                                                                          $
                                                                          -
                                                                          
                                                                          $
                                                                          -
                                                                          
                                                                          $
                                                                          -COST
      OF SALES
                                                                          
                                                                          -
                                                                          
                                                                          
                                                                          -
                                                                          
                                                                          
                                                                          -GROSS
      MARGIN
                                                                          
                                                                          -
                                                                          
                                                                          
                                                                          -
                                                                          
                                                                          
                                                                          -OPERATING
      EXPENSESGeneral
      and administrative
                                                                          
                                                                          1,554,838
                                                                          
                                                                          
                                                                          74,854
                                                                          
                                                                          
                                                                          1,629,692Total
      Operating Expenses
                                                                          
                                                                          1,554,838
                                                                          
                                                                          
                                                                          74,854
                                                                          
                                                                          
                                                                          1,629,692INCOME
      (LOSS) FROM OPERATIONS
                                                                          
                                                                          (1,554,838
                                                                          )
                                                                          
                                                                          (74,854
                                                                          )
                                                                          
                                                                          (1,629,692
                                                                          )OTHER
      INCOME (EXPENSES)Interest
      income
                                                                          
                                                                          882
                                                                          
                                                                          
                                                                          -
                                                                          
                                                                          
                                                                          882Total
      Other Income (Expenses)
                                                                          
                                                                          882
                                                                          
                                                                          
                                                                          -
                                                                          
                                                                          
                                                                          882LOSS
      BEFORE DISCONTINUED OPERATIONS
                                                                          
                                                                          (1,553,956
                                                                          )
                                                                          
                                                                          (74,854
                                                                          )
                                                                          
                                                                          (1,628,810
                                                                          )DISCONTINUED
      OPERATIONS
                                                                          
                                                                          -
                                                                          
                                                                          
                                                                          (12,168,359
                                                                          )
                                                                          
                                                                          (15,792,400
                                                                          )LOSS
      BEFORE INCOME TAXES
                                                                          
                                                                          -
                                                                          
                                                                          
                                                                          (12,168,359
                                                                          )
                                                                          
                                                                          (15,792,400
                                                                          )PROVISION
      FOR INCOME TAXES
                                                                          
                                                                          -
                                                                          
                                                                          
                                                                          -
                                                                          
                                                                          
                                                                          -NET
      LOSS
                                                                          $
                                                                          (1,553,956
                                                                          )
                                                                          $
                                                                          (12,243,213
                                                                          )
                                                                          $
                                                                          (17,421,210
                                                                          )BASIC
      LOSS PER SHARE
                                                                          $
                                                                          (0.05
                                                                          )
                                                                          $
                                                                          (0.31
                                                                          )WEIGHTED
      AVERAGE NUMBEROF
      SHARES OUTSTANDING
                                                                          
                                                                          33,832,940
                                                                          
                                                                          
                                                                          39,640,000







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




F-3




STANDARD
      DRILLING, INC.(A
      Development Stage Company)Statements
      of Stockholders' Equity




DeficitAccumulatedAdditional
                          
                          
                          Stock
                          
                          
                          Prepaid
                          
                          
                          During
      theCommon
      Stock
                          
                          
                          Paid-in
                          
                          
                          Subscriptions
                          
                          
                          Stock
                          
                          
                          DevelopmentShares
                          
                          
                          Amount
                          
                          
                          Capital
                          
                          
                          Receivable
                          
                          
                          Awards
                          
                          
                          Stage
                          
                          
                          TotalBalance
      at inception onFebruary
      14, 2006
                          
                          
                          -
                          
                          
                          $
                          -
                          
                          
                          $
                          -
                          
                          
                          $
                          -
                          
                          
                          $
                          -
                          
                          
                          $
                          -
                          
                          
                          $
                          -Contributed
      capital for services
                          
                          
                          23,000,000
                          
                          
                          
                          23,000
                          
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          23,000Common
      stock issued forcash,
      prepaid services andsubscriptions
      receivable
                          
                          
                          22,073,000
                          
                          
                          
                          22,073
                          
                          
                          
                          18,026,709
                          
                          
                          
                          (370,000
                          )
                          
                          
                          (722,755
                          )
                          
                          
                          -
                          
                          
                          
                          16,956,027Net
      loss for the period endedDecember
      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 servicesto
      paid-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
                          )
                          
                          
                          1,395,436Fair
      value of options grantedand
      revalued
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          643,720
                          
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          643,720Common
      shares cancelled
                          
                          
                          (748,120
                          )
                          
                          
                          (748
                          )
                          
                          
                          748
                          
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          -Net
      loss for the year endedDecember
      31, 2008
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          (1,553,956
                          )
                          
                          
                          (1,553,956
                          )Balance,
      December 31, 2008
                          
                          
                          33,458,880
                          
                          
                          $
                          33,459
                          
                          
                          $
                          17,872,951
                          
                          
                          $
                          -
                          
                          
                          $
                          -
                          
                          
                          $
                          (17,421,210
                          )
                          
                          $
                          485,200




The
accompanying notes are an integral part of these financial
statements.
   F-4






STANDARD
      DRILLING(A
      Development Stage Company)Statements
      of Cash Flows




For
      the Year
                            
                            
                            For
      the Year
                            
                            
                            on
      February 14,Ended
                            
                            
                            Ended
                            
                            
                            2006
      ThroughDecember
      31,
                            
                            
                            December
      31,
                            
                            
                            December
      31,2008
                            
                            
                            2007
                            
                            
                            2008OPERATING
      ACTIVITIESNet
      loss
                            
                            $
                            (1,553,956
                            )
                            
                            $
                            (12,243,213
                            )
                            
                            $
                            (17,421,210
                            )Adjustments
      to reconcile net loss tonet
      cash used by operating activities:Depreciation,
      depletion and amortization
                            
                            
                            -
                            
                            
                            
                            446,402
                            
                            
                            
                            476,710Common
      stock issued for services
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            575,242Loss
      on equity investment
                            
                            
                            -
                            
                            
                            
                            59,146
                            
                            
                            
                            59,146Gain
      on disposal of equity instruments
                            
                            
                            -
                            
                            
                            
                            (39,497
                            )
                            
                            
                            (39,497
                            )Fair
      value of options granted
                            
                            
                            643,720
                            
                            
                            
                            -
                            
                            
                            
                            643,720Write
      off of notes receivable
                            
                            
                            600,000
                            
                            
                            
                            -
                            
                            
                            
                            600,000Loss
      on disposal of assets
                            
                            
                            -
                            
                            
                            
                            (476,709
                            )
                            
                            
                            (476,709
                            )Changes
      to operating assets and liabilities:(Increase)
      decrease in accounts receivable
                            
                            
                            -
                            
                            
                            
                            486,610
                            
                            
                            
                            (197,463
                            )(increase)
      decrease in prepaid expenses
                            
                            
                            -
                            
                            
                            
                            503,776
                            
                            
                            
                            (219,165
                            )Decrease
      in deposits
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            5,285Increase
      (decrease) in accounts payable
                            
                            
                            -
                            
                            
                            
                            (4,128,557
                            )
                            
                            
                            1,303,028(Decrease)
      in accrued expenses
                            
                            
                            -
                            
                            
                            
                            (2,711,385
                            )
                            
                            
                            (728,051
                            )Net
      Cash Used in Operating Activities
                            
                            
                            (310,236
                            )
                            
                            
                            (18,103,427
                            )
                            
                            
                            (15,418,964
                            )INVESTING
      ACTIVITIESPurchase
      of oil and gas properties
                            
                            
                            -
                            
                            
                            
                            2,989,933
                            
                            
                            
                            (2,427,507
                            )Purchase
      of fixed assets
                            
                            
                            -
                            
                            
                            
                            8,797,596
                            
                            
                            
                            1,074,406Payment
      of deposits on fixed assets
                            
                            
                            -
                            
                            
                            
                            8,974,689
                            
                            
                            
                            671,138Change
      in notes receivable
                            
                            
                            -
                            
                            
                            
                            (581,250
                            )
                            
                            
                            (600,000
                            )Cash
      paid on equity investment
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            (87,500
                            )Net
      Cash Provided by(Used
      in) Investing Activities
                            
                            
                            -
                            
                            
                            
                            20,180,968
                            
                            
                            
                            (1,369,463
                            )FINANCING
      ACTIVITIESBorrowings
      of notes payable
                            
                            
                            -
                            
                            
                            
                            (1,652,018
                            )
                            
                            
                            -Cash
      received on subscriptions receivable
                            
                            
                            -
                            
                            
                            
                            317,600
                            
                            
                            
                            317,600Sale
      of common stock for cash
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            16,956,027Net
      Cash Used by Financing Activities
                            
                            
                            -
                            
                            
                            
                            (1,334,418
                            )
                            
                            
                            17,273,627NET
      DECREASE IN CASH
                            
                            
                            (310,236
                            )
                            
                            
                            743,123
                            
                            
                            
                            485,200CASH
      AT BEGINNING OF PERIOD
                            
                            
                            795,436
                            
                            
                            
                            52,313
                            
                            
                            
                            -CASH
      AT END OF PERIOD
                            
                            $
                            485,200
                            
                            
                            $
                            795,436
                            
                            
                            $
                            485,200SUPPLEMENTAL
      DISCLOSURES OFCASH
      FLOW INFORMATIONCASH
      PAID FOR:Interest
                            
                            $
                            -
                            
                            
                            $
                            -
                            
                            
                            $
                            -Income
      Taxes
                            
                            $
                            -
                            
                            
                            $
                            -
                            
                            
                            $
                            -






The
accompanying notes are an integral part of these financial
statements.
   F-5


STANDARD
DRILLING, INC.


Notes to Financial
Statements


December 31, 2008 and
2007




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 2009. As of December 31, 2008, 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. The Company’s plan is complete a merger or
acquisition of 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 $643,720 and $-0- was recognized for the years ended December
31, 2008 and 2007, 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, 2008 and
2007.
 F-6
 STANDARD
DRILLING, INC.
 Notes
to
Financial
Statements
 December
31,
2008
and
2007
  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
$250,000.  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 no deposits in
excess of federally insured limits at December 31, 2008.
 
  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
      31,2008
                        
                        
                        2007NET
      LOSS
                        
                        $
                        (1,553,956
                        )
                        
                        $
                        (12,243,213
                        )BASIC
      LOSS PER COMMON SHARE
                        
                        $
                        (0.05
                        )
                        
                        $
                        (0.27
                        )BASIC
      WEIGHTED AVERAGENUMBER
      OF SHARES OUTSTANDING
                        
                        
                        34,207,000
                        
                        
                        
                        39,640,000
 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 11,800,300 common
stock equivalents outstanding as of December 31, 2008.
  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 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.
 
 F-7
 STANDARD
DRILLING, INC.
 Notes
to
Financial Statements
 December
31,
2008
and
2007
   NOTE
3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
 
 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, 2008
and 2007:
 2008
                  
                  
                  2007Deferred
      tax assets:NOL
      Carryover
                  
                  $
                  5,720,256
                  
                  
                  $
                  5,365,264Deferred
      tax liabilities:
                  
                  
                  -
                  
                  
                  
                  -Valuation
      allowance
                  
                  
                  (5,720,256
                  )
                  
                  
                  (5,365,264
                  )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, 2008 and 2007 due to
the following:
  2008
                  
                  
                  2007Book
      Loss from Operations
                  
                  $
                  (606,043
                  )
                  
                  $
                  (4,774,853
                  )Fair
      value of options granted
                  
                  
                  251,051
                  
                  
                  
                  -Valuation
      allowance
                  
                  
                  354,992
                  
                  
                  
                  4,774,853$
                  -
                  
                  
                  $
                  -
 At
December 31, 2008, the Company had net operating loss carry forwards of
approximately $16,202,248 that may be offset against future taxable income from
the year 2024 through 2028.  No tax benefit has been reported in the
December 31, 2008 financial 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 carry forwards may be limited as to use in future years.
 
 F-8
 STANDARD
DRILLING, INC.
 Notes to Financial
Statements
 December 31, 2008 and
2007
 
 NOTE
3 –  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(Continued)
 
  Recent Accounting
Pronouncements- In June 2008, the FASB issued
FASB Staff Position EITF 03-6-1, Determining Whether Instruments
Granted in Share-Based Payment Transactions Are Participating Securities,
(“FSP EITF 03-6-1”). FSP EITF 03-6-1 addresses whether instruments granted in
share-based payment transactions are participating securities prior to vesting,
and therefore need to be included in the computation of earnings per share under
the two-class method as described in FASB Statement of Financial Accounting
Standards No. 128, “Earnings per Share.” FSP EITF 03-6-1 is effective for
financial statements issued for fiscal years beginning on or after
December 15, 2008 and earlier adoption is prohibited. We are not required
to adopt FSP EITF 03-6-1; neither do we believe that FSP EITF 03-6-1 would have
material effect on our consolidated financial positionand results of
operations if adopted.
  In May
2008, the Financial Accounting Standards Board (“FASB”) issued SFAS No. 163,
“Accounting for Financial
Guarantee Insurance Contracts-and interpretation of FASB Statement No.
60”.SFAS
No. 163 clarifies how Statement 60 applies to financial guarantee insurance
contracts, including the recognition and measurement of  premium
revenue and claims liabilities. This statement also requires expanded
disclosures about financial guarantee insurance contracts. SFAS No. 163 is
effective for fiscal years beginning on or after December 15, 2008, and interim
periods within those years. SFAS No. 163 has no effect on the Company’s
financial position, statements of operations, or cash flows at this
time.
  In May
2008, the Financial Accounting Standards Board (“FASB”) issued SFAS No. 162,
“The Hierarchy of Generally
Accepted Accounting Principles”.SFAS No. 162 sets forth
the level of authority to a given accounting pronouncement or document by
category. Where there might be conflicting guidance between two categories, the
more authoritative category will prevail. SFAS No. 162 will become effective 60
days after the SEC approves the PCAOB’s amendments to AU Section 411 of the
AICPA Professional Standards. SFAS No. 162 has no effect on the Company’s
financial position, statements of operations, or cash flows at this
time.
  In March
2008, the Financial Accounting Standards Board, or FASB, issued SFAS No. 161,
Disclosures about Derivative
Instruments and Hedging Activities—an amendment of FASB Statement No.
133.This standard requires companies to provide enhanced
disclosures about (a) how and why an entity uses derivative instruments, (b) how
derivative instruments and related hedged items are accounted for under
Statement 133 and its related interpretations, and (c) how derivative
instruments and related hedged items affect an entity’s financial position,
financial performance, and cash flows. This Statement is effective for financial
statements issued for fiscal years and interim periods beginning after November
15, 2008, with early application encouraged. The Company has not yet adopted the
provisions of SFAS No. 161, but does not expect it to have a material impact on
its financial position, results of operations or cash flows.
 
 In
December 2007, the SEC issued Staff Accounting Bulletin (SAB) No. 110 regarding
the use of a "simplified" method, as discussed in SAB No. 107 (SAB 107), in
developing an estimate of expected term of "plain vanilla" share options in
accordance with SFAS No. 123 (R), Share-Based
Payment.  In particular, the staff indicated in SAB 107 that it
will accept a company's election to use the simplified method, regardless of
whether the company has sufficient information to make more refined estimates of
expected term. At the time SAB 107 was issued, the staff believed that more
detailed external information about employee exercise behavior (e.g., employee
exercise patterns by industry and/or other categories of companies) would, over
time, become readily available to companies. Therefore, the staff stated in SAB
107 that it would not expect a company to use the simplified method for share
option grants after December
31, 2007. The staff understands that such detailed information about employee
exercise behavior may not be widely available by December 31, 2007. Accordingly,
the staff will continue to accept, under certain circumstances, the use of the
simplified method beyond December 31, 2007. The Company currently uses the
simplified method for “plain vanilla” share options and warrants, and will
assess the impact of SAB 110 for fiscal year 2009. It is not believed that this
will have an impact on the Company’s financial position, results of operations
or cash flows.
 
 F-9
 STANDARD
DRILLING, INC.
 Notes
to Financial Statements
 December
31, 2008 and
2007
    NOTE
3 –  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(Continued)
 
 In
December 2007, the FASB issued SFAS No. 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. Before this
statement was issued, limited guidance existed for reporting noncontrolling
interests. As a result, considerable diversity in practice existed. So-called
minority interests were reported in the consolidated statement of financial
position as liabilities or in the mezzanine section between liabilities and
equity. This statement improves comparability by eliminating that diversity.
This statement is effective for fiscal years, and interim periods within those
fiscal years, beginning on or after December 15, 2008 (that is, January 1, 2009,
for entities with calendar year-ends). Earlier adoption is prohibited. The
effective date of this statement is the same as that of the related Statement
141 (revised 2007). The Company will adopt this Statement beginning March 1,
2009. It is not believed that this will have an impact on the Company’s
financial position, results of operations or cash flows.
 
 In
December 2007, the FASB, issued FAS No. 141 (revised 2007), Business Combinations.’This
Statement replaces FASB Statement No. 141, Business Combinations, but
retains the fundamental requirements in Statement 141.  This
Statement establishes principles and requirements for how the acquirer: (a)
recognizes and measures in its financial statements the identifiable assets
acquired, the liabilities assumed, and any noncontrolling interest in the
acquiree; (b) recognizes and measures the goodwill acquired in the business
combination or a gain from a bargain purchase; and (c) determines what
information to disclose to enable users of the financial statements to evaluate
the nature and financial effects of the business combination. This statement
applies prospectively to business combinations for which the acquisition date is
on or after the beginning of the first annual reporting period beginning on or
after December 15, 2008. An entity may not apply it before that date. The
effective date of this statement is the same as that of the related FASB
Statement No. 160, Noncontrolling Interests in
Consolidated Financial Statements.  The Company will adopt this
statement beginning March 1, 2009. It is not believed that this will have an
impact on the Company’s financial position, results of operations or cash
flows.
 
 In
February 2007, the FASB, issued SFAS No. 159,The Fair Value Option for Financial
Assets and Liabilities—Including an Amendment of FASB Statement No.
115.  This standard permits an entity to choose to measure many
financial instruments and certain other items at fair value. This option is
available to all entities. Most of the provisions in FAS 159 are elective;
however, an amendment to FAS 115 Accounting for Certain Investments
in Debt and Equity Securities applies to all entities with available for
sale or trading securities. Some requirements apply differently to entities that
do not report net income. SFAS No. 159 is effective as of the beginning of an
entities first fiscal year that begins after November 15, 2007. Early adoption
is permitted as of the beginning of the previous fiscal year provided that the
entity makes that choice in the first 120 days of that fiscal year and also
elects to apply the provisions of SFAS No. 157 Fair Value
Measurements.  The Company adopted SFAS No. 159 beginning March 1,
2008. The adoption of this pronouncement did not have an impact on the Company’s
financial position, results of operations or cash
flows.
 F-10
 STANDARD
DRILLING, INC. Notes
to Financial Statements
 December
31, 2008 and
2007
 NOTE
3 –  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(Continued)
 
 
 In
September 2006, the FASB issued SFAS No. 157, Fair Value
Measurements  This statement defines fair value, establishes a
framework for measuring fair value in generally accepted accounting principles
(GAAP), and expands disclosures about fair value measurements. This statement
applies under other accounting pronouncements that require or permit fair value
measurements, the Board having previously concluded in those accounting
pronouncements that fair value is the relevant measurement attribute.
Accordingly, this statement does not require any new fair value measurements.
However, for some entities, the application of this statement will change
current practice. This statement is effective for financial statements issued
for fiscal years beginning after November 15, 2007, and interim periods within
those fiscal years. Earlier application is encouraged, provided that the
reporting entity has not yet issued financial statements for that fiscal year,
including financial statements for an interim period within that fiscal year.
The Company adopted this statement March 1, 2008. The adoption of this
pronouncement did not have an impact on the Company’s financial position,
results of operations or cash flows.
 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, 2008, none of
the preferred stock is outstanding.
 
 Common
Stock
 Standard
Drilling is authorized to issue 100,000,000 shares of common stock, par value of
$.001 per share. The founding shareholders were issued 23,000,000 shares of
common stock for services rendered. On June 9, 2006, Standard Drilling completed
a private offering of 9,111,500 units at a price of $2.00 per unit realizing net
proceeds after offering costs of $15,868,290. Each unit consisted of two shares
of common stock and a warrant to purchase one share of common stock at an
exercise price of $1.75 per share for every two shares of common stock the
investor purchases in the offering. There were 9,111,500 warrants granted in the
offering and the warrants expire two years from purchase. These warrants are
valued at $546,690. Standard Drilling recognized fees and expenses related to
the offering of $1,734,710. Standard Drilling also granted 1,688,800 warrants at
an exercise price of $1.00 per share with the same terms and conditions as those
issued in the private offering to the placement agent. These warrants were
valued at $101,328.
 
 Reverse
Merger
 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. During the years ended December 31, 2008 and 2007, 748,
120 and 10,866,000 shares were returned to the Company and
cancelled.  As of December 31, 2008, Standard Drilling had 33,458,880
shares of common stock issued and outstanding and an additional 19,345,300
shares of common stock reserved for issuance.
 
 F-11
 STANDARD DRILLING, INC. Notes to
Financial Statements
 December 31,
2008 and 2007
     NOTE
5 –  OPTIONS AND WARRANTS
  On June
6, 2008, the Company’s Board of Directors approved the reduction of the purchase
price of all warrants issued by the Company to date, totaling warrants to
purchase an aggregate of 10,800,300 common shares of the Company from $1.75 per
share in connection with 9,111,500 warrants and from $1.00 per share in
connection with 1,688,800 warrants to $0.125 per share, while extending the
exercise period from June 9, 2008 until June 9, 2010.  The Company
also revised the acceleration term for the acceleration of the termination of
the term of the warrants which will lapse in the event the common stock of the
Company trades at $0.25 per share for a trading period of 20 days following
notice to the warrant holders. Also on or about June 19, 2008, the Board of
Directors of the Company approved the issuance of options to purchase 1,000,000
shares of the Company’s common stock at an exercise price of $0.125 per share
for (5) five years to the Company’s President and Chief Executive Officer, David
S. Rector.  The Company issued the options as consideration for
services rendered to the Company by Mr. Rector.
  During
2008 and 2007, the Company recorded as expense $643,720 and $-0-, respectively,
in compensation expense related to share-based payment awards as a result of
adopting SFAS 123R. The Company recognizes compensation expense for share-based
payment awards on the straight-line basis over the requisite service period of
the entire award, unless the awards are subject to market conditions, in which
case the Company recognizes compensation expense over the requisite service
period of each separate vesting installment. Compensation expense related to
share-based payment awards is recorded in general and administrative expense.
The fair value of each option or warrant award is estimated on the date of the
grant using the Black-Scholes -pricing model that uses the assumptions noted in
the following table. The expected term of the options or warrants granted
represents the period of time that options or warrants granted are expected to
be outstanding. Expected volatilities are based on historical volatility of the
stock of similar companies and other factors. The risk-free interest rate for
the period matching the expected term of the option or warrant is based on the
U.S. Treasury yield curve in effect at the time of the grant. The following
table sets forth information about the weighted-average fair value of options
granted during the years ended December 31, 2008 and 2007 and the
weighted-average assumptions used for such grants:
 2008
                          
                          
                          2007Dividend
      yields
                          
                          
                          0.0
                          %
                          
                          
                          -Expected
      volatility
                          
                          
                          80.0
                          %
                          
                          
                          -Risk-free
      interest rate
                          
                          
                          3.25
                          %
                          
                          
                          -Option
      terms
                          
                          1–
      2 years
                          
                          
                          -
    F-12
 STANDARD
DRILLING, INC.
 Notes
to Financial Statements
 December
31, 2008 and
2007
   NOTE
5 –  OPTIONS AND WARRANTS (Continued)
  Common Stock
Options
  Changes
in stock options and warrants issued for the years ended December 31, 2008 and
2007 are as follows:
  WeightedNumber
                
                
                AverageOf
                
                
                ExerciseOptions
                
                
                PriceOutstanding,
      December 31, 2006
                
                
                16,450,300
                
                
                $
                1.37Granted
                
                
                -
                
                
                
                -Exercised
                
                
                -
                
                
                
                -Cancelled
                
                
                (5,650,000
                )
                
                
                1.37Outstanding,
      December 31, 2007
                
                
                10,800,300
                
                
                $
                1.37Exercisable,
      December 31, 2007
                
                
                10,800,300
                
                
                $
                1.37Outstanding,
      December 31, 2007
                
                
                10,800,300
                
                
                $
                1.37Granted
                
                
                1,000,000
                
                
                
                0.13Exercised
                
                
                -
                
                
                
                -Cancelled
                
                
                -
                
                
                
                -Outstanding,
      December 31, 2008
                
                
                11,800,300
                
                
                $
                0.13Exercisable,
      December 31, 2008
                
                
                11,800,300
                
                
                $
                0.13
 
  
  The
following table summarizes information about stock options and warrants
outstanding at December 31, 2008:
  Options/Warrants
Outstanding
                                                            
                                                            
                                                            Options/Warrants
  ExercisableWeighted
                                                            
                                                            
                                                            Weighted
      Average
                                                            
                                                            
                                                            
                                                            
                                                            
                                                            WeightedRange
      of
                                                            
                                                            
                                                            Number
                                                            
                                                            
                                                            Average
                                                            
                                                            
                                                            Remaining
      Life
                                                            
                                                            
                                                            
                                                            
                                                            
                                                            AveragePrices
                                                            
                                                            
                                                            Outstanding
                                                            
                                                            
                                                            Exercise Price
                                                            
                                                            
                                                            (in years)
                                                            
                                                            
                                                            Options
                                                            
                                                            
                                                            Exercise Price$
                                                            0.013
                                                            
                                                            
                                                            
                                                            10,800,300
                                                            
                                                            
                                                            $
                                                            0.13
                                                            
                                                            
                                                            
                                                            1.50
                                                            
                                                            
                                                            
                                                            10,800,300
                                                            
                                                            
                                                            $
                                                            0.130.013
                                                            
                                                            
                                                            
                                                            1,000,000
                                                            
                                                            
                                                            
                                                            0.13
                                                            
                                                            
                                                            
                                                            2.50
                                                            
                                                            
                                                            
                                                            1,000,000
                                                            
                                                            
                                                            
                                                            0.1311,800,300
                                                            
                                                            
                                                            $
                                                            0.13
                                                            
                                                            
                                                            
                                                            
                                                            
                                                            
                                                            
                                                            11,800,300
                                                            
                                                            
                                                            $
                                                            0.13
 
 
 
 F-13
 STANDARD
DRILLING, INC.
 Notes
to Financial Statements
 December
31, 2008 and
2007
   NOTE
6 – RELATED PARTY TRANSACTIONS
 
 On
September 24, 2007 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 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., 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
the Company which was to have been paid on or before December 31, 2007. The
transaction was approved by the Company's independent directors. During 2008,
the Company wrote off the note receivable as uncollectible.
 
 In
conjunction with the Asset Purchase Agreement with PBT Capital Partners, sums
owed by the Company under the Interim Credit Agreement, which totaled $833,389
as of September 24, 2007 were forgiven.
 
 NOTE
7 – CONTINGENCIES
 
 In
conjunction with the Asset Purchase Agreement with PBT Capital Partners certain
liabilities and obligations of the Company were assumed by the PBT Capital
Partners. The Company has not received releases from the liabilities assumed by
PBT Capital Partners however no claims have been made against the Company for
the liabilities and obligations. The Company would make a corresponding claim
against PBT Capital Partners if any claims were made against the
Company.
 
  F-14






ITEM
      9.
            CHANGES
      IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
      DISCLOSURE.





None.





ITEM
9A(T).         CONTROLS AND
PROCEDURES.





Evaluation of Disclosure Controls
and Procedures.  We maintain "disclosure controls and
procedures" as such term is defined in Rule 13a-15(e) under the Exchange
Act.  In designing and evaluating our disclosure controls and
procedures, our management recognized that disclosure controls and procedures,
no matter how well conceived and operated, can provide only reasonable, not
absolute, assurance that the objectives of disclosure controls and procedures
are met.  Additionally, in designing disclosure controls and
procedures, our management necessarily was required to apply its judgment in
evaluating the cost-benefit relationship of possible disclosure controls and
procedures.  The design of any disclosure controls and procedures also
is based in part upon certain assumptions about the likelihood of future events,
and there can be no assurance that any design will succeed in achieving its
stated goals under all potential future conditions.  Based on his
evaluation as of the end of the period covered by this Annual Report on Form
10-K, our Chief Executive Officer who also serves as our Chief Financial Officer
has concluded that our disclosure controls and procedures were not effective
such that the information relating to our company, required to be disclosed in
our Securities and Exchange Commission reports (i) is recorded, processed,
summarized and reported within the time periods specified in SEC rules and forms
and (ii) is accumulated and communicated to our management, including our Chief
Executive Officer, to allow timely decisions regarding required disclosure. Our
management concluded that our disclosure controls and procedures were not
effective as a result of material weaknesses in our internal control over
financial reporting. We are a small organization with only one employee. Under
these circumstances it is impossible to segregate duties. We do not expect our
internal controls to be effective until such time as we complete an acquisition
of an operating company and even then there are no assurances that our
disclosure controls will be adequate in future periods.









-14-


Management's Report on Internal
Control Over Financial Reporting.  Our management is
responsible for establishing and maintaining adequate internal control over
financial reporting as defined in Rule 13a-15(f) of the Exchange
Act.  Because of its inherent limitations, internal control over
financial reporting may not prevent or detect misstatements.  Also,
projections of any evaluation of effectiveness to future periods are subject to
the risk that controls may become inadequate because of changes in conditions,
or the degree of compliance with the policies or procedures may
deteriorate.





Our
management assessed the effectiveness of our internal control over financial
reporting as of December 31, 2008.  In making this assessment,
management used the criteria set forth by the Committee of Sponsoring
Organizations of the Treadway Commission ("COSO") in Internal Control-Integrated
Framework.  Based on the assessment using those criteria, our
management concluded that the internal control over financial reporting was
effective at December 31, 2008.  This annual report does not include
an attestation report of our registered public accounting firm regarding
internal control over financial reporting.  Our management's report
was not subject to attestation by our registered public accounting firm pursuant
to temporary rules of the SEC that permit us to provide only management's report
in this annual report.





Changes in Internal Control over
Financial Reporting.There have been no changes in our
internal control over financial reporting during our fourth fiscal quarter that
has materially affected, or is reasonably likely to materially affect, our
internal control over financial reporting.





ITEM
9B.                      Other
Information.





None.





PART
III





ITEM
10.                       DIRECTORS,
EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.





Executive
officers and directors





Name
              Age
              PositionsDavid
      S. Rector
              62
              Chief
      Executive Officer, President, Chief Financial Officer, 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 previously
served as a member of the Board of Directors, the Chief Executive Officer,
President, principal accounting officer, Secretary, and Treasurer of Nevada Gold
Holdings, Inc. (OTCBB: NGHI) from April 2004 until December 2008.  Mr.
Rector previously served as President, Chief Executive Officer and Chief
Operating Officer of Nanoscience Technologies, Inc. from June 2004 to December
2006.  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.  Mr. Rector received a Bachelor’s degree in
Business Administration from Murray State University in 1969.  Mr.
Rector also serves as a member of the Board of Directors of the following
companies:





Name
                Director
      SinceSenseco
      Technologies (AMEX: SNT)
                April
      2004Dallas
      Gold & Silver Exchange (AMEX: DSG)
                May
      2003US
      Uranium Inc. (OTCBB: USUI)
                June
      2007Federal
      Sports and Entertainment, Inc. (OTCBB: FEDS)
                September
      2008Nanodynamics
      Holdings Inc. (OTCBB: NNDY)
                June
      2008Cardone
      Plus, Inc.
                May
      2007





Mr.
Rector devotes approximately 20% of his time and attention to our
company.





Each
director is elected at our annual meeting of stockholders and holds office until
the next annual meeting of stockholders, or until his successor is elected and
qualified.





-15-


Compliance
with Section 16(a) of the Exchange Act





Section 16(a) of theSecurities Exchange Act
of 1934, as amended, requires our executive officers and directors, and persons
who beneficially own more than 10% of a registered class of our equity
securities to file with the Securities and Exchange Commission initial
statements of beneficial ownership, reports of changes in ownership and annual
reports concerning their ownership of our common shares and other equity
securities, on Forms 3, 4 and 5 respectively.  Executive officers,
directors and greater than 10% stockholders are required by the Securities and
Exchange Commission regulations to furnish us with copies of all Section 16(a)
reports they file.  Based on our review of the copies of such forms
received by us, and to the best of our knowledge, all executive officers,
directors and persons holding greater than 10% of our issued and outstanding
stock have filed the required reports in a timely manner during
2008:





Code
of Ethics and Business Conduct





In 2002 we adopted a Code of Ethics and
Business Conduct which applies to our officers, directors and
employees.  The Code of Ethics and Business Conduct are written
standards that are reasonably designed to deter wrongdoing and to promotehonest and ethical conduct, including the ethical handling of actual
or apparent conflicts of interest between personal and professional
relationships,full, fair, accurate, timely, and understandable
disclosure in reports and documents that we file with, or submit to, the
Securities and Exchange Commission and in other public communications made by
us, compliance with applicable governmental laws, rules and
regulations, the prompt internal reporting of violations of the
code to an appropriate person or persons identified in the code, andaccountability for adherence to the code.  We will provide a
copy, without charge, to any person desiring a copy of the Code of Ethics and
Business Conduct, by written request to, 1640 Terrace Way, Walnut Creek,
California  94597, Attention: Corporate Secretary.





Committees
of our Board of Directors





Our Board of Directors has not
established any committees, including an Audit Committee, a Compensation
Committee or a Nominating Committee, any committee performing a similar
function. The functions of those committees are being undertaken by our sole
director.





We do not have a policy regarding the
consideration of any director candidates which may be recommended by our
stockholders, including the minimum qualifications for director candidates, nor
has our Board of Directors established a process for identifying and evaluating
director nominees. We have not adopted a policy regarding the handling of any
potential recommendation of director candidates by our stockholders, including
the procedures to be followed.  Our Board has not considered or
adopted any of these policies as we have never received a recommendation from
any stockholder for any candidate to serve on our Board of
Directors.  Given our relative size and lack of directors and officers
insurance coverage, we do not anticipate that any of our stockholders will make
such a recommendation in the near future. While there have been no nominations
of additional directors proposed, in the event such a proposal is made, all
members of our Board will participate in the consideration of director
nominees.





Our sole
director is not an "audit committee financial expert" within the meaning of Item
401(e) of Regulation S-K. In general, an "audit committee financial expert" is
an individual member of the audit committee or Board of Directors
who:





•
            understands
      generally accepted accounting principles and financial
      statements,•
            is
      able to assess the general application of such principles in connection
      with accounting for estimates, accruals and reserves,•
            has
      experience preparing, auditing, analyzing or evaluating financial
      statements comparable to the breadth and complexity to our financial
      statements,•
            understands
      internal controls over financial reporting, and•
            understands
      audit committee functions.





Our securities are not quoted on an
exchange, however, that has requirements that a majority of our Board members be
independent and we are not currently otherwise subject to any law, rule or
regulation requiring that all or any portion of our Board of Directors include
"independent" directors, nor are we required to establish or maintain an Audit
Committee or other committee of our Board of Directors.





-16-


ITEM
11.                        EXECUTIVE
COMPENSATION.





The
following table summarizes all compensation recorded by us in the last completed
fiscal year for our principal executive officer, each other executive officer
serving as such whose annual compensation exceeded $100,000, and up to two
additional individuals for whom disclosure would have been made in this table
but for the fact that the individual was not serving as an executive officer of
our company at December 31, 2008. The value attributable to any option awards is
computed in accordance with FAS123R.





SUMMARY COMPENSATION
  TABLEName
      and principal position
                                  (a)
                                Year
                                  (b)
                                Salary
                                  ($)
                                  (c)
                                Bonus
                                  ($)
                                  (d)
                                Stock
                                  Awards
                                  ($)
                                  (e)
                                Option
                                  Awards
                                  ($)
                                  (f)
                                Non-Equity
      Incentive Plan Compen-sation ($)
                                  (g)
                                Non-qualified
      Deferred Compen-sation Earnings ($)
                                  (h)
                                All
                                  Other
      Compen-sation
                                  ($)
                                  (i)
                                Total
                                  ($)
                                  (j)David
      S. Rector 1
                                2008
                                0
                                0
                                0
                                40,263
                                0
                                0
                                43,000
                                83,2632007
                                1,500
                                0
                                0
                                0
                                0
                                0
                                0
                                1,500





1           Mr.
Rector’s 2008 compensation includes $43,000 of consulting fees to a entity owned
by Mr. Rector as compensation for his services to us and $40,263 representing
the value of five-year options to purchase 1,000,000 shares of our common stock
with an exercise price of $0.0125 per share granted him in June 2008 as partial
compensation for services to us.





How
Mr. Rector’s Compensation is Determined





Mr.
Rector is not a party to an employment agreement with our
company.  His compensation is determined from time to time by our
Board of Directors, of which he is the sole member.  The amount of
compensation paid is arbitrary and such compensation is not tied to any
performance goals or other traditional measurements.  The amount of
compensation to be paid to Mr. Rector may be increased from time to time at the
sole discretion of our Board.





Outstanding
Equity Awards at Fiscal Year-End


The
following table provides information concerning unexercised options, stock that
has not vested and equity incentive plan awards for each named executive officer
outstanding as of December 31, 2008:





OPTION
      AWARDS
                                STOCK
      AWARDSName
                                  (a)
                                Number
      of Securities Underlying Unexercised Options
                                  (#)
      Exercisable
                                  (b)
                                Number
      of Securities Underlying Unexercised Options
                                  (#)
      Unexercisable (c)
                                Equity
      Incentive Plan Awards: Number of Securities Underlying Unexercised
      Unearned Options
                                  (#)
                                  (d)
                                Option
      Exercise Price
                                  ($)
                                  (e)
                                Option
      Expiration Date
                                  (f)
                                Number
      of Shares or Units of Stock That Have Not Vested (#)
                                  (g)
                                Market
      Value of Shares or Units of Stock That Have Not Vested ($)
                                  (h)
                                Equity
      Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights
      that Have Not Vested (#)
                                  (i)
                                Equity
      Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or
      Other Rights That Have Not Vested (#)
                                  (j)David
      S. Rector
                                1,000,000
                                -
                                -
                                $0.0125
                                June
      2013
                                -
                                -
                                -
                                -





2006
Stock Incentive Plan





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





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




-17-


Stock Options. The plan
provides for granting (1) "incentive" stock options as defined in Section 422 of
the Internal Revenue Code of 1986, as amended (the "Code"), and (2) stock
options that do not constitute incentive stock options ("non-statutory" stock
options). The exercise price for an option granted under the plan is determined
by the committee but will be no less than the fair market value of the option,
which will be based on the fair market value our common stock on the date the
option is granted. The option price upon exercise shall be paid in the manner
prescribed by the committee. Additionally, stock appreciation rights may be
granted in conjunction with incentive stock options or non-statutory stock
options. Stock appreciation rights give the holder, among other things, the
right to a payment in cash, common stock, or a combination thereof, in an amount
equal to the difference between the fair market value of our common stock at the
date of exercise and the option exercise price. Non-statutory options will have
an exercise price determined by the committee and such exercise price may be
less than the fair market value of the common stock on the date of
grant. The options granted under the plan are assignable and transferable
pursuant to compensation committee approval. In the event that incentive stock
option grants are made under the plan, such options will be subject to more
stringent restrictions on transfer.
 
 Restricted Stock. The plan
permits the committee to grant restricted stock awards. Shares of common stock
will be issued or delivered to the employee, consultant or director at the time
the award is made without any payment to us (other than for any payment amount
determined by the committee in its discretion), but such shares will be subject
to certain restrictions on the disposition thereof and certain obligations to
forfeit and surrender such shares to us as may be determined in the discretion
of the committee. The committee may provide that the restrictions on disposition
and the obligations to forfeit the shares will lapse based on (1) the attainment
of one or more performance measures established by the committee, (2) the
holder's continued employment or continued service as a consultant or director
for a specified period, (3) the occurrence of any event or the satisfaction of
any other condition specified by the committee in its sole discretion or (4) a
combination of any of these factors. Upon the issuance of shares of common stock
pursuant to a restricted stock award, except for the foregoing restrictions and
unless otherwise provided, the recipient of the award will have all the rights
of our stockholders with respect to such shares, including the right to vote
such shares and to receive all dividends and other distributions paid with
respect to such shares. The committee may, in its discretion, fully vest any
outstanding restricted stock award as of a date determined by the
committee.




Change of Control. The plan
provides that, upon a Corporate Change (as hereinafter defined), the committee
may accelerate the vesting of options, cancel options and make payments in
respect thereof in cash, or adjust the outstanding options as appropriate to
reflect such Corporate Change (including, without limitation, adjusting an
option to provide that the number and class of shares of common stock covered by
such option will be adjusted so that the option will thereafter cover securities
of the surviving or acquiring corporation or other property (including cash) as
determined by the committee). The plan provides that a Corporate Change occurs
if (1) we are not be the surviving entity in any merger or consolidation (or we
survive only as a subsidiary of an entity), (2) we sell, lease or exchange or
agree to sell, lease or exchange all or substantially all of our assets to any
other person or entity, (3) we are to be dissolved and liquidated, (4) any
person or entity, including a "group" as contemplated by Section 13(d)(3) of the
Exchange Act, acquires or gains ownership or control (including, without
limitation, power to vote) of more than 50% of the outstanding shares of our
voting stock (based upon voting power), or (5) as a result of or in connection
with a contested election of directors, the persons who were our directors
before such election shall cease to constitute a majority of our Board of
Directors.





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





Outstanding Awards. As of
December 31, 2008, the outstanding options to purchase common stock under the
plan consisted of 1,000,000 options to purchase shares of common stock in the
aggregate at an exercise price of $0.125 per share.





Compensation
of Directors





We have
not established standard compensation arrangements for our directors and the
compensation, if any, payable to each individual for their service on our Board
will be determined from time to time by our Board of Directors based upon the
amount of time expended by each of the directors on our behalf.  The
sole member of our Board of Directors did not receive compensation for his
services for the year ended December 31, 2008.





ITEM
      12.
            SECURITY
      OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED
      STOCKHOLDER MATTERS





At March
2, 2009, we had 33,458,880 shares of our common stock issued and outstanding.
The following table sets forth information regarding the beneficial ownership of
our common stock as of March 2, 2009 by:





•
            each
      person known by us to be the beneficial owner of more than 5% of our
      common stock;•
            each
      of our directors;•
            each
      of our named executive officers; and•
            our
      named executive officers, directors and director nominees as a
      group.





Unless otherwise indicated, the
business address of each person listed is in care of 1640 Terrace Way, Walnut
Creek, California  94597. The percentages in the table have been
calculated on the basis of treating as outstanding for a particular person, all
shares of our common stock outstanding on that date and all shares of our common
stock issuable to that holder in the event of exercise of outstanding options,
warrants, rights or conversion privileges owned by that person at that date
which are exercisable within 60 days of that date. Except as otherwise
indicated, the persons listed below have sole voting and investment power with
respect to all shares of our common stock owned by them, except to the extent
that power may be shared with a spouse.


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Name
      of Beneficial Owner
              Amount
      and Nature of
                Beneficial
      Ownership
              %
      of ClassDavid
      S. Rector 1
              1,000,000
              2.9%All
      officers and directors as a group (one person)1
              1,000,000
              2.9%International
      Capital Advisory, Inc. 2
              2,000,000
              6.0%Kystie
      Finance Ltd. 3
              2,000,000
              6.0%Morrie
      Tobin 4
              3,980,000
              11.9%Wolverine
      International Holdings Ltd. 5
              2,000,000
              6.0%





1           The
number of shares beneficially owned by Mr. Rector includes options to purchase
1,000,000 shares of our common stock with an exercise price of $0.0125 per
share.





2           International
Capital Advisory, Inc.’s address is 40 Bassano Road, Toronto, Ontario
Canada  M2N2K1.





3           Kystie
Finance Ltd.’s address is Post Office Box 958, Pasea Estate Road, Tortola
BVI.





4           The
amount beneficially owned by Mr. Tobin includes 240,000 shares of our common
stock held by the Tobin Family Trust over which Mr. Tobin has voting and
dispositive control.  Mr. Tobin’s address is 40 Bassano Road, Toronto,
Ontario Canada  M2N2K1.





5           Wolverine
International Holdings, Ltd.’s address is Rue Barthelemy Menn 8 1205 Geneva,
Switzerland.





ITEM 13.
            CERTAIN
      RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
      INDEPENDENCE.





None.





Director
Independence





Our sole director is not “independent”
within the meaning of FINRA Marketplace Rule 4200.








ITEM
14.                        PRINCIPAL
ACCOUNTING FEES AND SERVICES.





Moore & Associates Chartered served
as our independent registered public accounting firm for 2008 and
2007.  The following table shows the fees that were billed for the
audit and other services provided by such firm for 2008 and 2007.


2008
                                                                          
                                                                          
                                                                          2007Audit
      Fees
                                                                          
                                                                          $
                                                                          16,875
                                                                          
                                                                          
                                                                          $
                                                                          14,000Audit-Related
      Fees
                                                                          
                                                                          
                                                                          0
                                                                          
                                                                          
                                                                          
                                                                          0Tax
      Fees
                                                                          
                                                                          
                                                                          0
                                                                          
                                                                          
                                                                          
                                                                          0All
      Other Fees
                                                                          
                                                                          
                                                                          0
                                                                          
                                                                          
                                                                          
                                                                          0Total
                                                                          
                                                                          $
                                                                          16,875
                                                                          
                                                                          
                                                                          $
                                                                          14,000


Audit Fees — This category
includes the audit of our annual financial statements, review of financial
statements included in our Quarterly Reports on Form 10-Q and services that are
normally provided by the independent registered public accounting firm in
connection with engagements for those fiscal years. This category also includes
advice on audit and accounting matters that arose during, or as a result of, the
audit or the review of interim financial statements.
 
 -19-
 Audit-Related Fees — This
category consists of assurance and related services by the independent
registered public accounting firm that are reasonably related to the performance
of the audit or review of our financial statements and are not reported above
under “Audit Fees.” The services for the fees disclosed under this category
include consultation regarding our correspondence with the Securities and
Exchange Commission and other accounting consulting.
 
 Tax Fees — This category
consists of professional services rendered by our independent registered public
accounting firm for tax compliance and tax advice. The services for the fees
disclosed under this category include tax return preparation and technical tax
advice.
 
 All Other Fees — This
category consists of fees for other miscellaneous items.


Our Board of Directors has adopted a
procedure for pre-approval of all fees charged by the our independent registered
public accounting firm.  Under the procedure, the Board approves the
engagement letter with respect to audit, tax and review
services.  Other fees are subject to pre-approval by the Board, or, in
the period between meetings, by a designated member of Board.  Any
such approval by the designated member is disclosed to the entire Board at the
next meeting.  The audit and tax fees paid to the auditors with
respect to 2007 were pre-approved by the entire Board of Directors.





ITEM
15.                      EXHIBITS,
FINANCIAL STATEMENT SCHEDULES.





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
      (1)3.1
            Amended
      and Restated Articles of Incorporation (2)3.2
            Bylaws
      (3)10.1
            Contract
      with Romfor West Africa Ltd., effective May 15, 2006
(4)10.2
            Standard
      Drilling, Inc. 2006 Stock Incentive Plan (4)10.3
            Asset
      Purchase Agreement dated September 24, 2007 between Standard Drilling,
      Inc. and PBT Capital Partners, LLC10.4
            Letter
      Agreement dated October 9, 2008 by and between Standard Drilling, Inc.,
      PBT Capital Partners, LLC and Prentis B. Tomlinson, Jr.
  *31.1
            Certification
      of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley
      Act of 2002 *31.2
            Certification
      of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley
      Act of 2002 *32.1
            Certification
      of Chief Executive Officer and Chief Financial Officer pursuant to Section
      906 of the Sarbanes-Oxley Act of 2002
*





*           filed
herewith.





(1)
            Incorporated
      by reference to the Current Report on Form 8-K as filed with the
      Securities and Exchange Commission on July 27, 2006.(2)
            Incorporated
      by reference to the Current Report on Form 8-K as filed with the
      Securities and Exchange Commission on September 6,
2006.(3)
            Incorporated
      by reference to the Registration Statement on Form SB-2, SEC File No.
      333-75434, as declared effective by the Securities and Exchange Commission
      on May 14, 2002.(4)
            Incorporated
      by reference to the Current Report on Form 8-K filed with the Securities
      and Exchange Commission on September 6, 2006.(5)
            Incorporated
      by reference the Current Report on Form 8-K filed with the Securities and
      Exchange Commission on October 11,
2007.








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SIGNATURES





Pursuant
to the requirements of Section 13 or 15(d) of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.





Standard
      Drilling, Inc.March
      25, 2009
              By: /s/ David S. RectorDavid
      S. Rector, Chief Executive
Officer





Pursuant to the requirements of the
Securities Exchange Act of 1934, this report has been signed below by the
following persons on behalf of the registrant in the capacities and on the dates
indicated.








Name
              Positions
              Date/s/ David S. Rector
                David
      S. Rector
              Chief
      Executive Officer, Chief Financial Officer, President, Secretary,
      Treasurer, sole director, principal executive officer and principal
      financial and accounting officer
              March
      25, 2009























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