**SECURITIES
      AND EXCHANGE COMMISSION**


Washington,
      D.C. 20549





**FORM
      10-QSB**





Quarterly
      Report Under Section 13 or 15(d) of the


Securities
      Exchange Act of 1934





For
      the
      Three Months Ended March 31, 2007





Commission
      File No. 000-51229








**STRATUM
      HOLDINGS, INC.**


(Exact
      Name of Small Business Issuer as specified in its charter)





**Nevada**
            
            **51-0482104**(State
                or other jurisdiction
              of
                incorporation)
            
            (IRS
                Employer Identification Number)





**Three
                Riverway, Suite 1500**
              **Houston,
                Texas**
            
            **77056**(Address
                of principal
              executive
                offices)
            
            (zip
                code)





**(713)
      479-7000**


(Issuer's
      telephone number, including area code)








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





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





The
      number of shares outstanding of Common Stock, par value $.001 per share, as
      of
      May 14, 2007 was 25,393,572 shares and the aggregate market value of such shares
      held by non-affiliates of the registrant (based upon the closing bid price
      of
      such shares as listed on the NASD Bulletin Board on May 14, 2007) was
      approximately $8,552,000.





Transitional
      Small Business Disclosure Format (check one): Yes [ ] No [X]








**** **STRATUM
      HOLDINGS, INC.**


**(formerly,
      Tradestar Services, Inc.)**


**FORM
      10-QSB**





**INDEX**





PART
                I. FINANCIAL INFORMATION
            **Page**Item
                1. Financial StatementsCondensed
                Consolidated Balance Sheets as of March 31, 2007 (Unaudited) andDecember
                31, 2006
            3Condensed
                Consolidated Statements of Operations for the three months endedMarch
                31, 2007 and 2006 (Unaudited)
            4Condensed
                Consolidated Statements of Cash Flows for the three months endedMarch
                31, 2007 and 2006 (Unaudited)
            5Notes
                to Condensed Consolidated Financial Statements
            6Item
                2. Management's Discussion and Analysis or Plan of
                Operation
            11Item
                3. Controls and Procedures
            17PART
                II.OTHER INFORMATIONItem
                1. Legal Proceedings
            18Item
                2. Unregistered Sales of Equity Securities and Use of Proceeds
            18Item
                3. Defaults Upon Senior Securities
            18Item
                4. Submission of Matters to a Vote of Security Holders
            18Item
                5. Other Information
            18Item
                6. Exhibits
            18Signatures
            19







*-
          2
          -*






**STRATUM
        HOLDINGS, INC.**
 **(formerly,
        Tradestar Services, Inc.)**
 **Condensed
        Consolidated Balance Sheets**


**March
                31, 2007 (Unaudited)**
            
            **December
                31, 2006****Assets**Current
                assets:Cash
                and cash equivalents
            
            $
            351,439
            
            $
            261,010Accounts
                receivable, less allowances of $381,054and
                $352,263, respectively
            
            
            10,766,002
            
            
            8,277,568Prepaid
                expenses and other
            
            
            803,825
            
            
            880,230Total
                current assets
            
            
            11,921,266
            
            
            9,418,808Property
                and equipment:Oil
                and gas properties (full cost method)
            
            
            13,480,798
            
            
            13,433,333Other
                property and equipment
            
            
            1,057,987
            
            
            893,51214,538,785
            
            
            14,326,845Less:
                Accumulated depreciation, depletion & amortization
            
            
            (964,738
            )
            
            (816,871
            )Net
                property and equipment
            
            
            13,574,047
            
            
            13,509,974Other
                assets:Goodwill
            
            
            13,646,335
            
            
            9,089,162Deferred
                income taxes
            
            
            489,100
            
            
            489,100Other
            
            
            369,973
            
            
            636,821Total
                other assets
            
            
            14,505,408
            
            
            10,215,083Total
                assets
            
            $
            40,000,721
            
            $
            33,143,865**Liabilities
                and Stockholders’ Equity**Current
                liabilities:Current
                portion of long-term debt
            
            $
            9,375,920
            
            $
            7,661,885Accounts
                payable
            
            
            4,431,341
            
            
            2,129,381Accrued
                liabilities
            
            
            1,645,780
            
            
            1,514,856Total
                current liabilities
            
            
            15,453,041
            
            
            11,306,122Long-term
                debt, net of current portion
            
            
            11,151,163
            
            
            10,577,969Deferred
                income taxes
            
            
            3,306,425
            
            
            3,378,400Total
                liabilities
            
            
            29,910,629
            
            
            25,262,491Stockholders’
                equity:Preferred
                stock, $.01 par value per share, 1,000,000 sharesauthorized,
                None issued
            
            
            -
            
            
            -Common
                stock, $.001 par value per share, 50,000,000 sharesauthorized,
                25,393,572 and 23,804,286 shares issued and outstanding,
                respectively
            
            
            25,394
            
            
            23,804Additional
                paid in capital
            
            
            11,778,315
            
            
            9,441,664Accumulated
                deficit
            
            
            (1,723,809
            )
            
            (1,584,094
            )Foreign
                currency translation
            
            
            10,192
            
            
            -Total
                stockholders’ equity
            
            
            10,090,092
            
            
            7,881,374Total
                liabilities and stockholders’ equity
            
            $
            40,000,721
            
            $
            33,143,865





See
      accompanying notes to condensed consolidated financial
      statements.


*-
          3
          -*


**STRATUM
        HOLDINGS, INC.**
 **(formerly,
        Tradestar Services, Inc.)**
 **Condensed
        Consolidated Statements of Operations**
 **(Unaudited)**





**Three
                Months Ended March 31,****2007**
            
            **2006**Revenues:Staffing
              servicesConstruction
            
            $
            3,766,629
            
            $
            3,344,309Petroleum
                engineering
            
            
            9,166,453
            
            
            -Oil
                and gas sales
            
            
            684,705
            
            
            -Other
            
            
            68,972
            
            
            -13,686,759
            
            
            3,344,309Expenses:Cost
                of staffing servicesConstruction
            
            
            2,926,762
            
            
            2,669,804Petroleum
                engineering
            
            
            7,207,320
            
            
            -Lease
                operating expense
            
            
            372,765
            
            
            -Depreciation,
                depletion & amortization
            
            
            244,140
            
            
            4,009Workover
                expense
            
            
            191,276
            
            
            -Selling,
                general and administrative
            
            
            2,540,209
            
            
            534,415Interest
                expense
            
            
            415,977
            
            
            34,78313,898,449
            
            
            3,243,011Income
                (loss) before income taxes
            
            
            (211,690
            )
            
            101,298Benefit
                from income taxes
            
            
            71,975
            
            
            -Net
                income (loss)
            
            $
            (139,715
            )
            $
            101,298Net
                income (loss) per share, basic and diluted
            
            $
            (0.01
            )
            $
            0.01Weighted
                average shares outstanding, basic
            
            
            24,541,350
            
            
            10,950,000Weighted
                average shares outstanding, diluted
            
            
            24,541,350
            
            
            11,306,947








See
      accompanying notes to condensed consolidated financial
      statements.


*-
          4
          -*


**STRATUM
      HOLDINGS, INC.**


(formerly,
      Tradestar Services, Inc.)


**Condensed
        Consolidated Statements of Cash Flows**


**(Unaudited)**


**Three
                Months Ended March 31,****2007**
            
            **2006****Cash
                flows provided (used) in operating activities:**Net
                income (loss)
            
            $
            (139,715
            )
            $
            101,298Adjustments
                to reconcile net income(loss)
                to cash (used in) operations:Depreciation,
                depletion & amortization
            
            
            244,140
            
            
            4,009Deferred
                income taxes
            
            
            (71,975
            )
            
            -Stock
                based compensation
            
            
            115,740
            
            
            -Services
                contributed by officers
            
            
            -
            
            
            12,500Other
                changes, net
            
            
            167,373
            
            
            15,440Changes
                in current assets and liabilities:Accounts
                receivable
            
            
            685,423
            
            
            12,511Other
                current assets
            
            
            122,216
            
            
            (20,000
            )Accounts
                payable and accrued liabilities
            
            
            (267,725
            )
            
            (888,701
            )Net
                cash provided (used) in operating activities
            
            
            855,477
            
            
            (762,943
            )**Cash
                flows (used) in investing activities:**Net
                cash used in acquisition of subsidiary
            
            
            (151,841
            )
            
            -Purchase
                of property and equipment
            
            
            (199,066
            )
            
            (15,809
            )Proceeds
                from sale of property and equipment
            
            
            -
            
            
            -Net
                cash (used) in investing activities
            
            
            (350,907
            )
            
            (15,809
            )**Cash
                flows provided (used) in financing activities:**Net
                proceeds of stockholder advances
            
            
            182,063
            
            
            300,000Proceeds
                from long term debt
            
            
            98,647
            
            
            1,250Payment
                of long term debt
            
            
            (1,467,351
            )
            
            -Proceeds
                from issuance of common stock
            
            
            675,000
            
            
            -Proceeds
                from exercise of warrants
            
            
            75,000
            
            
            -Proceeds
                from exercise of options
            
            
            22,500
            
            
            -Net
                cash provided (used) in financing activities
            
            
            (414,141
            )
            
            301,250Net
                increase in cash and cash equivalents
            
            
            90,429
            
            
            (477,502
            )Cash
                and equivalents at beginning of period
            
            
            261,010
            
            
            759,750Cash
                and equivalents at end of period
            
            $
            351,439
            
            $
            282,248





See
      accompanying notes to condensed consolidated financial
      statements.


*-
          5
          -*


**STRATUM
      HOLDINGS, INC.**


**(formerly,
      Tradestar Services, Inc.)**


**Notes
      to Condensed Consolidated Financial Statements**


**(Unaudited)**








**(1)**  **Basis
      of Presentation**





The
      accompanying condensed consolidated financial statements have been prepared
      by
      the Company without audit, pursuant to the rules and regulations of the
      Securities and Exchange Commission and in accordance with accounting principles
      for interim financial information. In the opinion of management, these condensed
      consolidated financial statements contain all adjustments (consisting only
      of
      normal recurring adjustments) necessary to fairly state the financial position
      of the Company as of March 31, 2007 and the results of its operations and cash
      flows for the three month period ended March 31, 2007 and 2006. Certain
      information and footnote disclosures normally included in financial statements
      prepared in accordance with generally accepted accounting principles have been
      condensed or omitted. Interim results of operations are not necessarily
      indicative of results for subsequent interim periods or the remainder of the
      full year. These financial statements should be read in conjunction with our
      Annual Report on Form 10-KSB for the year ended December 31, 2006.








**(2)**  **Corporate
      Acquisitions**





On
      May
      23, 2006, the Company acquired the outstanding common stock of The CYMRI
      Corporation (“CYMRI”) for total consideration of $12.6 million paid in a
      combination of cash, notes payable and 12,540,000 shares of Common Stock, along
      with Warrants to purchase 1,136,043 shares of Common Stock at $1.87 per share.
      CYMRI and its subsidiaries perform petroleum engineering services largely for
      customers in the United States and are engaged in the exploration and production
      of oil and natural gas from properties located in Texas and Louisiana. The
      Company has accounted for the acquisition of CYMRI as a purchase with Stratum
      treated as the acquirer. The following is a condensed balance sheet showing
      the
      fair values of the assets acquired and liabilities assumed from CYMRI as of
      the
      date of the acquisition (including transaction costs of
      $250,000):


Current
                  assets
              
              $
              4,850,647Property
                  and equipment
              
              
              13,774,229Goodwill
                  arising in the acquisition
              
              
              9,089,162Other
                  assets
              
              
              77,453Current
                  liabilities
              
              
              (3,208,571
              )Long-term
                  debt(see
                  Note 3)
              
              
              (8,666,639
              )Deferred
                  income taxes
              
              
              (3,318,081
              )$
              12,598,200


The
      deemed effective date of the CYMRI acquisition for accounting purposes was
      June
      1, 2006 and, should circumstances warrant, the Company will make subsequent
      purchase accounting adjustments up to May 31, 2007. The effect of including
      CYMRI’s results of operations in the Company’s consolidated financial statements
      was to increase revenues for the three months ended March 31, 2007 by $7,942,000
      and to decrease net loss, after giving effect to the purchase accounting
      adjustments, by $219,000 ($0.01 per share).


*-
          6
          -*


On
      March
      2, 2007, the Company acquired the outstanding capital stock of Decca Consulting,
      Ltd. (“Decca”) for total consideration of $5.1 million (plus working capital)
      paid in a combination of cash, notes payable and 828,572 shares of Common Stock,
      along with Warrants to purchase 200,000 shares of Common Stock at $2.10 per
      share. Decca provides consulting services for the Canadian energy industry.
      The
      Company has accounted for the acquisition of Decca as a purchase with Stratum
      treated as the acquirer. The following is a condensed balance sheet showing
      the
      fair values of the assets acquired and liabilities assumed from Decca as of
      the
      date of the acquisition (including transaction costs of $243,000):





Current
                assets
            
            $
            3,280,427Property
                and equipment
            
            
            9,672Goodwill
                arising in the acquisition
            
            
            4,557,173Current
                liabilities
            
            
            (2,409,398
            )$
            5,437,874





The
      deemed effective date of the Decca acquisition for accounting purposes was
      March
      1, 2007 and, should circumstances warrant, the Company will make subsequent
      purchase accounting adjustments up to February 28, 2008. The effect of including
      Decca’s results of operations in the Company’s consolidated financial statements
      since March 1, 2007 was to increase revenues for the three months ended March
      31, 2007 by $1,956,000 and to decrease net loss, after giving effect to the
      purchase accounting adjustments, by $56,000 ($0.00 per share).





**(3)**  **Long
      Term Debt**





As
      of
      March 31, 2007 and December 31, 2006, the Company had the following long-term
      debt obligations, including amounts assumed or incurred in the CYMRI and Decca
      acquisitions (see Note 2):





Balance
                atMarch
                31, 2007
            
            December
                31, 2006$20,000,000
                line of credit with a bank, principal payable $95,000 per month beginning
                in October 2006 through maturity in November 2007, interest at 1.0%
                above
                prime payable monthly, secured by the first lien on CYMRI’s oil and gas
                properties and deposits held by stockholders
            
            $
            5,750,000
            
            $
            6,035,000$7,000,000
                line of credit with a bank, interest at 1.0% above prime payable
                monthly
                through maturity in May 2010, secured by accounts receivable of petroleum
                and construction staffing services businesses
            
            
            3,904,508
            
            
            3,805,861Notes
                payable to former CYMRI shareholders, bearing interest at 10%, payable
                in
                total monthly installments of $65,335 beginning in June 2006 through
                maturity at May 2008, and secured by substantially all assets, subject
                to
                liens on oil and gas properties
            
            
            2,662,676
            
            
            2,789,986Notes
                payable to 8 individuals, incurred in acquisition of CYMRI, bearing
                interest at 10%, interest only payable monthly beginning in July
                2006
                through maturity at May 2008, unsecured
            
            
            2,250,000
            
            
            2,250,000$1,500,000
                term loan from a bank, interest at 4.0% above prime payable monthly
                through maturity in March 2009, secured by accounts receivable of
                petroleum and construction staffing services businesses
            
            
            1,500,000
            
            
            -Notes
                payable to 3 individuals, incurred by CYMRI in acquisition of a
                subsidiary, bearing interest at 8%, payable in total monthly installments
                of $54,219 beginning in March 2005 through maturity at February 2010,
                secured by subsidiary's oil and gas properties
            
            
            1,644,618
            
            
            1,772,676Notes
                payable to 2 individuals, incurred in acquisition of Decca, bearing
                interest at 9%, payable in monthly installments of $30,099 (Cdn)
                from
                April 1, 2007 through March 31, 2012, unsecured
            
            
            1,233,950
            
            
            -Advances
                from stockholders, bearing interest at 10%, interest only payable
                monthly
                through maturity at May 2009, unsecured
            
            
            833,549
            
            
            973,294Other
                short term notes for liability insurance and accrued payables
            
            
            747,782
            
            
            613,03720,527,083
            
            
            18,239,854Current
                portion of long term debt
            
            
            (9,375,920
            )
            
            (7,661,885
            )$
            11,151,163
            
            $
            10,577,969


Borrowings
      under the bank credit agreement secured by CYMRI’s oil and gas properties are
      subject to a borrowing base, which is periodically redetermined, and amounted
      to
      $6,035,000 as of December 31, 2006, the latest redetermination date. The terms
      of the bank credit agreement, as amended, require CYMRI to maintain certain
      financial covenants regarding working capital ratio, interest coverage level,
      the ratio of loan balance to loan balance plus stockholders’ equity, and the
      non-payment of dividends. Except for the violation of an interest coverage
      covenant, which the bank has agreed to forbear, the Company was in compliance
      with such financial covenants as of March 31, 2007. The Company’s periodic
      payment obligations under the bank credit facility are dependent upon a
      semi-annual evaluation of CYMRI’s producing oil and gas properties and its
      continued compliance with these financial covenants. As presently structured,
      borrowings outstanding under the bank credit facility are due in November 2007.
      The Company is considering various alternatives for the refinancing of this
      debt, including a possible disposition of the oil and gas properties securing
      such debt.


*-
          7
          -*


The
      terms
      of the bank credit agreement secured by accounts receivable of the petroleum
      and
      construction staffing services businesses provide for a borrowing base of 85%
      of
      qualifying accounts receivable up to $7,000,000 and require the Company’s
      petroleum and construction staffing subsidiaries to maintain certain financial
      covenants with regard to minimum net worth and other equity amounts. The Company
      was not in compliance with the minimum net worth covenant of its construction
      staffing subsidiary and certain other equity related convenants as of March
      31,
      2007, however, the Company has obtained a waiver from the bank with respect
      to
      such covenants.  As a condition of the waiver, the bank is requiring an
      accelerated $500,000 principal payment by June 30, 2007, which the Company
      expects to make. In conjunction with the acquisition of Decca (see Note 2),
      the bank agreed to amend the credit facility to increase the maximum borrowings
      from $5,000,000 to $7,000,000 and to provide for new borrowings secured by
      Decca’s accounts receivable in an amount not to exceed $4,000,000 (Cdn); the
      Company had made no borrowings under the Decca credit facility as of March
      31,
      2007. The maturity of the amended credit facility was also extended by one
      year
      to May 2010. Additionally, the bank provided a two year amortizing term loan
      in
      the amount of $1,500,000 in conjunction with the Decca acquisition.





**(4)**  **Net
      Income (Loss) Per Share**





Basic
      income (loss) per common share is computed by dividing the net income or loss
      by
      the weighted average number of shares of common stock outstanding during the
      period, including the issuance of 385,714 shares in a private placement at
      $1.75
      per share for gross proceeds of $675,000 in the three months ended March 31,
      2007. Diluted income (loss) per common share is computed by dividing net income
      or loss by the weighted average number of shares of common stock outstanding
      during the period and potentially dilutive common share equivalents, consisting
      of stock options and warrants, under the Treasury Stock Method. The effects
      of
      potential common stock equivalents are not included in computations when their
      effect is anti-dilutive. Because of the net loss for the three months ended
      March 31, 2007, the basic and diluted average outstanding shares are considered
      the same, since including the shares would have an antidilutive effect on the
      net loss per share calculation.





**(5)**  **Stock-Based
      Compensation**





The
      Company has a stock-based compensation plan which was approved by the
      stockholders in October 2005 and amended in October 2006. Under the plan, as
      amended, a maximum of 2,400,000 shares may be awarded to directors and employees
      in the form of stock options, restricted stock or stock appreciation rights
      (to
      date, only stock options have been issued under the plan). The exercise price,
      terms and other conditions applicable to each stock option grant are generally
      determined by the Board of Directors. The exercise price of stock options is
      set
      on the grant date and may not be less than the fair market value of the
      Company’s Common Stock on that date. The stock options generally become
      exercisable over a three year period and expire after five years.





Effective
      January 1, 2006, the Company adopted SFAS No. 123 (revised 2004),
“ *Share-Based
      Paymen* t”
("SFAS
      123R") requiring that compensation expense related to share-based payment
      transactions with employees be recognized in the financial statements. The
      cost
      is measured at the grant date, based on the calculated fair value of the award,
      and is recognized as an expense over the employee’s requisite service period
      (generally, the vesting period of the award). Prior to January 1, 2006, the
      Company accounted for share-based compensation to employees in accordance with
      APB Opinion No. 25, “ *Accounting
      for Stock Issued to Employees”* (“APB
      25”) and related interpretations. The Company adopted SFAS 123R using the
      modified prospective method, accordingly, financial statements for prior periods
      were not restated.





*-
          8
          -*


There
      were no employee options granted under the plan until the fourth quarter of
      2005. Option activity with directors and employees since January 1, 2006 were
      as
      follows (including options granted to directors outside of the
      plan):





**Number**
            
            **Wtd.****Avg.**
            
            **Wtd.****Avg.**
            
            **Aggregate****of**
            
            **Exercise**
            
            **Remaining**
            
            **Intrinsic****Shares**
            
            **Price**
            
            **Term
                (Yrs.)**
            
            **Value**Outstanding
                at January 1, 2006
            
            
            550,000
            
            $
            0.25Options
                granted
            
            
            1,144,100
            
            
            1.87Outstanding
                at December 31, 2006
            
            
            1,694,100
            
            
            1.34Options
                granted
            
            
            400,000
            
            
            2.10Options
                exercised
            
            
            (125,000
            )
            
            (0.18
            )Options
                forfeited
            
            
            (47,000
            )
            
            (2.10
            )Outstanding
                at March 31, 2007
            
            
            1,922,100
            
            $
            1.56
            
            
            4.5
            
            $
            800,850Exercisable
                at March 31, 2007
            
            
            425,000
            
            $
            0.69
            
            
            4.2
            
            $
            451,250





Stock-based
      compensation expense for the three months ended March 31, 2007 in the amount
      of
      $115,740 has been recognized as a current period expense in the accompanying
      Consolidated Financial Statements. As
      of
      March 31, 2007, total unrecognized compensation cost of $1,472,900 related
      to
      stock options is expected to be recognized over a weighted average period of
      approximately 4.9 years. The
      estimated fair value of the options granted to employees under the plan was
      calculated using a Black Scholes option pricing model. The
      following schedule reflects the assumptions included in this model as it relates
      to the valuation of such options: (a) Expected volatility - 95%; (b) Expected
      risk free interest rate - 6%; (c) Expected dividend yield - zero; and (d)
      Expected option term - 3 years.





The
      aggregate intrinsic value in the table above represents the total pre-tax
      intrinsic value (the difference between the Company’s closing stock price on the
      last trading day of the first quarter of 2007 and the exercise price, multiplied
      by the number of in-the-money options) that would have been received by the
      option holders had all option holders exercised their options on March 31,
      2007.
      The amount of aggregate intrinsic value will change based on the fair market
      value of the Company’s stock.








**(6)**  **Stockholder
      Advances and Related Matters**





The
      Company received net stockholder advances in the amounts of $182,000 and
      $300,000 in the three months ended March 31, 2007 and 2006, respectively.
      Stockholder advances, excluding amounts advanced to finance the cash portion
      of
      the CYMRI purchase price (see Note 2), are reflected as unsecured long term
      debt
      obligations and accrue interest at a rate of 10% per annum.





The
      Company's former President was not paid any salary for full-time services
      rendered prior to his resignation in July 2006. The Company estimated the value
      of the forgone salary at $12,500 per quarter through the second quarter of
      2006,
      and recorded such amounts as an expense and as a contribution to capital in
      the
      respective periods.







*-
          9
          -*


**(7)**  **Contingencies**





Two
      of
      CYMRI’s subsidiaries are defendants in certain lawsuits arising in the normal
      course of business. At the present time, it is not practical to determine the
      amount or likelihood of an unfavorable outcome to the Company’s consolidated
      financial position or results of operations in any of these cases. However,
      management believes that CYMRI’s subsidiaries have meritorious defenses in each
      case and are vigorously defending these matters.






*-
          10
          -*





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





The
      following discussion of our financial condition and results of operations should
      be read in conjunction with, and is qualified in its entirety by, the condensed
      consolidated financial statements and notes thereto included in Item 1 in this
      Quarterly Report on Form 10-QSB. This item contains forward-looking statements
      that involve risks and uncertainties. Actual results may differ materially
      from
      those indicated in such forward-looking statements.





**Forward-Looking
      Statements**





This
      Quarterly Report on Form 10-QSB and the documents incorporated herein by
      reference contain forward-looking statements that have been made pursuant to
      the
      provisions of the Private Securities Litigation Reform Act of 1995. Such
      forward-looking statements are based on current expectations, estimates, and
      projections about our industry, management beliefs, and certain assumptions
      made
      by our management. Words such as "anticipates," "expects," "intends," "plans,"
      "believes," "seeks," "estimates," variations of such words, and similar
      expressions are intended to identify such forward-looking statements. These
      statements are not guarantees of future performance and are subject to certain
      risks, uncertainties, and assumptions that are difficult to predict; therefore,
      actual results may differ materially from those expressed or forecasted in
      any
      such forward-looking statements. Unless required by law, we undertake no
      obligation to update publicly any forward-looking statements, whether as a
      result of new information, future events, or otherwise. However, readers should
      carefully review the risk factors set forth in other reports and documents
      that
      we file from time to time with the Securities and Exchange Commission,
      particularly the Quarterly Reports on Form 10-QSB, and future Annual Reports
      on
      Form 10-KSB and any Current Reports on Form 8-K.





**Overview
      and History**





Stratum
      Holdings, Inc. (formerly, Tradestar Services, Inc.) was incorporated in the
      State of Nevada on September 3, 2003 under the name Frontier Staffing, Inc.
      We
      were formed to acquire Tradestar Construction Services, Inc., a New Mexico
      corporation, which is a wholly-owned subsidiary operating as an employment
      staffing service specializing in the placement of both long-term and short-term
      skilled and unskilled construction labor to the New Mexico construction market.
      In January 2004, we acquired Tradestar Construction Services, Inc. in a
      stock-for-stock exchange. We issued a total of 6,400,000 shares of Common Stock
      in connection with this transaction.





In
      the
      construction services business, we develop, own, and operate employment service
      centers in specific regional areas specializing in the placement of skilled
      construction labor. We provide both skilled commercial craftsmen and general
      unskilled labor to major, non-union construction contractors in several of
      the
      fast-growing markets in the Southwestern U.S.





On
      July
      7, 2004, we filed a registration statement under cover of Form SB-2 with the
      SEC. This registration statement was declared effective by the SEC on February
      10, 2005. On March 30, 2005, we closed this public offering. We raised a total
      of $600,000 and sold a total of 2,000,000 shares of Common Stock. In October
      2005, we changed our name to Tradestar Services, Inc.


*-
          11
          -*





On
      May
      23, 2006, we acquired the outstanding common stock of The CYMRI Corporation
      (“CYMRI”) for total consideration of $12.6 million paid in a combination of
      cash, notes payable and Common Stock. CYMRI and its subsidiaries perform
      petroleum engineering services largely for customers in the United States and
      are engaged in the exploration and production of oil and natural gas from
      properties located in Texas and Louisiana. The deemed effective date of the
      CYMRI acquisition for accounting purposes was June 1, 2006. The effect of
      including CYMRI’s results of operations in the Company’s consolidated financial
      statements was to increase revenues for the three months ended March 31, 2007
      by
      $7,942,000 and to decrease net loss, after giving effect to the purchase
      accounting adjustments, by $219,000 ($0.01 per share).





On
      March
      2, 2007, we acquired the outstanding capital stock of Decca Consulting, Ltd.
      (“Decca”) for total consideration of $5.1 million paid in a combination of cash,
      notes payable and Common Stock. Decca provides consulting services for the
      Canadian energy industry. The deemed effective date of the Decca acquisition
      for
      accounting purposes was March 1, 2007. The effect of including Decca’s results
      of operations in the Company’s consolidated financial statements since March 1,
      2007 was to increase revenues for the three months ended March 31, 2007 by
      $1,956,000 and to decrease net loss, after giving effect to the purchase
      accounting adjustments, by $56,000 ($0.00 per share).





As
      a
      result of the CYMRI and Decca acquisitions, the Company has the following core
      business segments:





Ø
            Petroleum
                Engineering                                               
                -Houston,
                Texas


-
      Lafayette, Louisiana


-
      Calgary, Alberta





Ø
            Construction
                Staffing-
                Albuquerque, New Mexico


-
      Phoenix
      and Tempe, Arizona


-
      Las
      Vegas, Nevada








**Results
      of Operations**





The
      acquisitions of CYMRI and Decca have substantially changed the Company’s
      operating profile and shifted its focus from one of solely a construction
      services company to one of a company having a more diversified staffing segment
      with highly developed petroleum engineering services businesses in the U.S.
      and
      Canada and a still developing construction services business. The acquired
      petroleum engineering services businesses are established operations with staffs
      who have performed a wide variety of long term and short term projects for
      customers throughout North and South America over a lengthy history. These
      projects tend to be of a more specialized, technical nature than the work
      performed in the traditional construction services business. Additionally,
      the
      CYMRI acquisition has given the Company a non-core, capital-intensive petroleum
      exploration and production segment which is subject to the operational risks
      of
      oil and gas exploration as well as the financial risks of a commodity pricing
      environment. While much of the future financial and operational focus will
      be on
      petroleum engineering services, the Company will continue its efforts to grow
      its traditional construction services business by expanding services to clients
      in its existing markets and by opening new markets.





In
      its
      traditional construction services business, the Company has a limited operating
      history and experienced early period operating losses, similar to many startup
      ventures. However, the Company achieved its initial profitable operations in
      the
      construction services business in the year ended December 31, 2006. In the
      construction services business, our results of operations have been and may
      continue to be subject to variations. The results for a particular period may
      vary as a result of a number of factors including the overall state of the
      construction staffing segment of the economy, the demand for our services and
      products, economic conditions in our markets, and product enhancements by us
      or
      our competitors as well as other competitive conditions.


*-
          12
          -*





*Three
      months ended March 31, 2007 versus three months ended March 31, 2006* — Total
      revenues for the three months ended March 31, 2007 were $13,687,000 compared
      to
      $3,344,000 for the three months ended March 31, 2006.





Revenues
      from construction staffing services for
      the
      three months ended March 31, 2007 were $3,767,000 compared to $3,344,000 for
      the
      three months ended March 31, 2006. This increase is due primarily to the
      increase in customers in the two original construction branches in Albuquerque,
      New Mexico and Tempe, Arizona and the growth of new branches opened in Las
      Vegas, Nevada in August 2005, and Phoenix, Arizona in February 2006 .





Revenues
      from petroleum engineering services for
      the
      three months ended March 31, 2007 were $9,166,000, representing revenues of CYMRI’s petroleum engineering business,
      acquired effective June 1, 2006, for a total of three months, plus the revenues
      of Decca ,
      acquired effective March 1, 2007, for one month. Total billings for petroleum
      engineering services in this period were approximately
      7,110 man days at an average billing rate of approximately $1,290 per day.





Revenues
      from oil and gas sales for the three months ended March 31, 2007 were $685,000,
      representing revenues of CYMRI’s oil and
      gas production operations ,
      acquired effective June 1, 2006, for a total of three months. R evenues
      from oil production in this period were $509,000, reflecting volumes of 9,162
      barrels at an average price of $55.50 per barrel, while gas revenues
      were $176,000, reflecting volumes of 24,784 Mcf at an average price of $7.11
      per
      Mcf. These volumes declined approximately 20% from the fourth quarter of 2006.





Costs
      of
      construction staffing services for the three months ended March 31, 2007 was
      $2,927,000 versus $2,670,000 for the three months ended March 31, 2006. Cost
      of
      construction staffing services includes wages for temporary employees, federal
      and state payroll taxes, workers compensation and other direct costs. Costs
      of
      construction services are generally consistent, except for payroll taxes where
      the maximum contribution has been met and for workers compensation, which vary
      with each job site. Costs of construction services decreased as a percentage
      of
      revenues to approximately 78% for the three months ended March 31, 2007,
      compared to approximately 80% for the three months ended March 31, 2006, due
      to
      an increase in billing rates.





Costs
      of
      petroleum engineering services for
      the
      three months ended March 31, 2007 were $7,207,000, representing revenues of CYMRI’s petroleum engineering business,
      acquired effective June 1, 2006, for a total of three months, plus the
      cost s
      of
      Decca ,
      acquired effective March 1, 2007, for one month. Such
      direct costs of
      services, consisting primarily of compensation related costs of employees and
      consultants, represented
      approximately 79% of revenues, consistent with the blended historical
      percentages experienced by CYMRI’s s taffing
      services subsidiary, PEI,
      and
      Decca.





Lease
      operating expenses (“LOE”), including production taxes, were $373,000 for
      the
      three months ended March 31, 2007, representing LOE of CYMRI’s oil
      and
      gas production operations, acquired
      effective June 1, 2006, for a total of three months.





Depreciation,
      depletion and amortization (“DD&A”) expense for the three months ended March
      31, 2007 was $244,000 versus $4,000 for the three months ended March 31, 2006. This
      substantial increase reflects  DD&A of CYMRI’s oil and
      gas production operations, acquired
      effective June 1, 2006, for a total of three months.





Workover
      expenses for the three months ended March 31, 2007 were $191,000, representing
      workovers on CYMRI’s South
      Texas oil and gas properties, acquired
      effective June 1, 2006, for a total of three months.





*-
          13
          -*


Selling,
      general and administrative (“SG&A”) expenses for
      the
      three months ended March 31, 2007 were $2,540,000 compared to $534,000 for
      the
      three months ended March 31, 2006. This increase reflected SG&A
      expenses of approximately $1,355,000 applicable to CYMRI’s petroleum engineering and exploration and production operations, acquired
      effective June 1, 2006, for a total of three months, plus the SG&A
      expenses of
      Decca ,
      acquired effective March 1, 2007, for one month , with the
      remaining increase
      in SG&A
      expenses attributable
      to our traditional construction business. The latter increase was due to an increase
      in
      bad debt expense, largely resulting from Las Vegas. The major components of
      SG&A expenses include professional fees, administrative salaries and
      associated payroll costs, rent and telephone expenses.





Interest
      expense for the three months ended March 31, 2007 was $416,000 versus $35,000
      for the three months ended March 31, 2006. This
      substantial increase reflects interest
      expense on CYMRI’s long
      term debt applicable
      to CYMRI’s oil and
      gas production operations, acquired
      effective June 1, 2006, for a total of three months.





Income
      taxes were a benefit of $72,000
      for the three months ended March 31, 2007 versus zero for the three months
      ended
      March 31, 2006, and reflect a deferred benefit of 34% on a pre-tax loss of
      $212,000 in the three months ended March 31, 2007.




**Liquidity
      and Capital Resources**




*Operating*  *activities.* Cash
      flow from operating activities for the three months ended March 31, 2007
      reflected revenues, less operating expenses, of CYMRI as well as our
      construction services business for a total of three months plus one month of
      cash flow from Decca’s acquired operations. Cash flow from operating activities
      was also impacted by changes in working capital. Net cash flow provided by
      operating activities was $855,000 for the three months ended March 31, 2007
      versus $763,000 used in operating activities for the three months ended March
      31, 2006. These o perating
      cash flow amounts were net of changes in working capital, which resulted in
      net
      cash increases amounting to $540,000 and net cash decreases amounting to
      $896,000 in the three months ended March 31 , 2007
      and
      2006, respectively, due to changes in timing between the accrual and payment
      of
      accounts receivable and accounts payable.




*Investing*  *activities.* Net
      cash
      used in investing activities for
      the
      three months ended March 31, 2007 was $351,000 compared to $16,000 for the
      year
      ended December 31, 2005. The 2007 amount reflected cash expended for: (a) The
      cash portion of the Decca purchase
      price in the amount of $152,000; and (b) capital expenditures in the amount
      of
      $199,000, primarily for
      drilling and equipment costs incurred on CYMRI’s oil and
      gas properties. CYMRI’s
      capital expenditures were relatively low in the three
      months ended March 31, 2007, however, it is possible that CYMRI’s near
      term capital
      expenditures could substantially increase if it elects to participate in the
      drilling of a
      non-operated exploratory well in South Louisiana in which it has a 50% working
      interest. The well was originally spudded in 2006 and encountered mechanical
      problems, therefore, drilling was suspended. The operator is expected to propose
      the drilling of a new well in the second or third quarter of 2007.





*Financing
      activities.* ** Net
      cash
      used by financing activities for
      the
      three months ended March 31, 2007 was $414,000 compared to net cash provided
      by
      financing activities of $301,000 for the three months ended March 31, 2006. In
      t he
      three
      months ended March 31 , 2007,
      net
      proceeds of long term debt borrowings and stockholder
      advances provided cash in the amount of $281,000, payment of long term debt
      was
      $1,467,000 and
      private stock issuances provided
      cash in the amount of $772,000. In t he
      three
      months ended March 31 , 2006,
      net
      proceeds of stockholder
      advances and long
      term
      debt borrowings provided
      cash in the amount of $301,000.





*-
          14
          -*


The
      Company’s capital expenditure profile has changed significantly since the CYMRI
      acquisition. In our construction services business, capital expenditure
      requirements are relatively low, except for the periodic opening of new
      construction services centers. Likewise, capital expenditure requirements of
      CYMRI’s  s taffing
      services subsidiary, P etroleum
      Engineers, Inc. (“PEI”) are relatively
      low .
      However, CYMRI’s
      exploration and production business is highly capital intensive. In this
      business, expenditures for the drilling and equipping of oil and gas wells
      are
      typically required to maintain or increase existing production levels and
      production often declines in a relatively short period of time if maintenance
      capital is not invested timely. Further, acquisitions of additional lease
      acreage are often needed to drill new oil and gas wells. As is the case with
      most companies with oil and gas producing operations, the Company expects to
      finance its capital expenditure requirements through a combination of cash
      flow
      from operations, secured bank borrowings and other sources.





The
      CYMRI
      and Decca acquisitions have substantially increased the Company’s long term debt
      obligations (see Note 3, “Long Term Debt”). A substantial portion of our long
      term debt is in the form of a bank credit facility secured by our producing
      oil
      and gas properties. Borrowings under the bank credit agreement are subject
      to a
      borrowing base, which is periodically redetermined, and amounted to $6,035,000
      as of December 31, 2006. The terms of the bank credit agreement, as amended,
      require CYMRI to maintain certain financial covenants regarding working capital
      ratio, interest coverage level, the ratio of loan balance to loan balance plus
      stockholders’ equity, and the non-payment of dividends. Except for the violation
      of an interest coverage covenant, which the bank has agreed to forbear, the
      Company was in compliance with such financial covenants as of March 31, 2007.
      The Company’s periodic payment obligations under the bank credit facility are
      dependent upon a semi-annual evaluation of CYMRI’s producing oil and gas
      properties and its continued compliance with these financial covenants. As
      presently structured, borrowings outstanding under the bank credit facility
      in
      the amount of $5,750,000 are due in November 2007. The Company is considering
      various alternatives for the refinancing of this debt, including a possible
      disposition of the oil and gas properties securing such debt.




The
      terms
      of a second bank credit agreement, secured by accounts receivable of the
      petroleum and construction staffing services businesses, provide for a borrowing
      base of 85% of qualifying accounts receivable up to $7,000,000 and require
      the
      Company’s petroleum and construction staffing subsidiaries to maintain certain
      financial covenants with regard to minimum net worth and other equity amounts.
      As indicated in Note 3, the Company was not in compliance with the minimum
      net worth of its contruction staffing subsidiary and certain other equity
      related covenants as of March 31, 2007, however, the Company has obtained a
      waiver from the bank with respect to such covenants.  As a condition of the
      waiver, the bank is requiring an accelerated $500,000 principal payment by
      June
      30, 2007, which the Company expects to make. In conjunction with the acquisition
      of Decca (see Note 2, “Corporate Acquisitions”), the bank agreed to amend the
      credit facility to increase the maximum borrowings from $5,000,000 to $7,000,000
      and to provide for new borrowings secured by Decca’s accounts receivable in an
      amount not to exceed $4,000,000 (Cdn); the Company had made no borrowings under
      the Decca credit facility as of March 31, 2007. The maturity of the amended
      credit facility was also extended by one year to May 2010. Additionally, the
      bank provided a two year amortizing term loan in the amount of $1,500,000 in
      conjunction with the Decca acquisition.





To
      meet
      short term liquidity needs, the Company commenced a private offering of shares
      of Common Stock and Warrants to a group of Accredited Investors in October
      2006.
      In the fourth quarter of 2006, we sold a total of 314,286 shares of Common
      Stock
      to Accredited Investors at $1.75 per share for gross proceeds of $550,000 and
      issued one year Warrants to such Investors to purchase an additional 314,286
      shares of our Common Stock at $2.50 per share. In the first quarter of 2007,
      we
      sold a total of 385,714 shares of Common Stock to Accredited Investors at $1.75
      per share for gross proceeds of $675,000 and issued one year Warrants to such
      Investors to purchase an additional 385,714 shares of our Common Stock at $2.50
      per share. We are presently considering other sources of private or public
      debt
      or equity to meet our short-term and long-term capital needs.





**Growth
      Plans**





The
      Company seeks to increase shareholder value through an approach focused on
      both
      organic growth and acquisition opportunities in the energy and construction
      industries. Completion of the PEI/CYMRI acquisition in May 2006 has given us
      a
      scaleable “platform” to penetrate the energy industry to provide human capital
      solutions to our customers. Our management team has executive level contacts
      throughout the energy industry and the team members have experience in
      leveraging contacts in one industry sector to generate opportunities in other
      industry sectors, as well as expertise in closing and integrating acquisition
      opportunities.


*-
          15
          -*


In
      early
      February 2007, we launched our International Division, enabling significant
      expansion and diversification in the global energy services sector. We
      simultaneously announced the acquisition of Decca, a Canadian energy services
      consulting services firm (see Note 2, “Corporate Acquisitions”). While
      continuing our efforts to grow staffing services in the petroleum and
      construction industries through acquisitions and organic growth, we may consider
      a strategic sale of all or a portion of our oil and gas properties in order
      to
      reduce our debt. However, we have taken no committed actions to dispose of
      any
      assets.





**Recently
      Issued Accounting Pronouncements**





In
      February 2007, the Financial Accounting Standards Board ("FASB") issued
      Statement No. 159 " *The
      Fair Value Option for Financial Assets and Financial Liabilities—Including an
      amendment of FASB Statement No. 115* " ("SFAS
      159"), which allows measurement at fair value of eligible financial assets
      and
      liabilities that are not otherwise measured at fair value. SFAS 159 is effective
      for fiscal years beginning after November 15, 2007. We do not expect the
      adoption of SFAS 159 to have a material impact on our consolidated financial
      statements.





In
      September 2006, the FASB issued Statement No. 158 " *Employers’
      Accounting for Defined Benefit Pension and Other Postretirement Plans, an
      amendment of FASB Statements No. 87, 88, 106, and 132(R)* "
      ("SFAS
      158"), which requires companies to recognize the funded status of a defined
      benefit postretirement plan as an asset or liability in its balance sheet. 
SFAS 158 is effective for fiscal years ending after December 15, 2006. We do
      not
      expect the adoption of SFAS 158 to have an impact on us since we have no defined
      benefit plans.





In
      September 2006, the FASB issued SFAS No. 157, " *Fair
      Value Measurements* "
      ("SFAS
      157"), which defines fair value, establishes a framework for measuring fair
      value and expands disclosures about fair value measurements. This Statement
      applies under other accounting pronouncements that require or permit fair value
      measurements, the FASB having previously concluded in those accounting
      pronouncements that fair value is the relevant measurement attribute. SFAS
      157
      is effective for fiscal years beginning after December 15, 2007. We do not
      expect the adoption of SFAS 157 to have a material impact on our consolidated
      financial statements.





In
      July
      2006, the
      FASB issued
      Financial Interpretation No. 48, " *Accounting
      for Uncertainty in Income Taxes - an interpretation of FASB Statement
      No. 109* "
      ("FIN
      48"), to clarify certain aspects of accounting for uncertain tax positions,
      including issues related to the recognition and measurement of those tax
      positions. This interpretation is effective for fiscal years beginning after
      December 15, 2006. We are in the process of evaluating the impact of the
      adoption of this interpretation on our consolidated financial position, results
      of operations or cash flows.





In
      March 2006, the FASB issued SFAS No.156, " *Accounting
      for Servicing of Financial Assets* "
      ("SFAS
      156"), which requires all separately recognized servicing assets and servicing
      liabilities be initially measured at fair value. SFAS 156 permits, but does
      not
      require, the subsequent measurement of servicing assets and servicing
      liabilities at fair value. Adoption is required as of the beginning of the
      first
      fiscal year that begins after September 15, 2006. Early adoption is
      permitted. The adoption of SFAS 156 is not expected to have a material effect
      on
      our consolidated financial position, results of operations or cash flows.





In
      February 2006, the FASB issued SFAS No. 155, " *Accounting
      for Certain Hybrid Financial Instruments, an amendment of FASB Statements No.
      133 and 140* "
      ("SFAS
      155"). SFAS 155 clarifies certain issues relating to embedded derivatives and
      beneficial interests in securitized financial assets. The provisions of SFAS
      155
      are effective for all financial instruments acquired or issued after fiscal
      years beginning after September 15, 2006. We do not expect that the adoption
      of
      SFAS 155 will have a material impact on our consolidated financial position,
      results of operations or cash flows.








*-
          16
          -*


**Critical
      Accounting Policies and Estimates**





Our
      discussion and analysis of our financial condition and results of operations
      are
      based on consolidated financial statements which have been prepared in
      accordance with generally accepted accounting principles in the United States.
      The preparation of these financial statements requires us to make estimates
      and
      judgments that affect the reported amounts of assets, liabilities, revenues
      and
      expenses. We believe that certain accounting policies affect our more
      significant judgments and estimates used in the preparation of our consolidated
      financial statements as indicated below. See our Annual Report on Form 10-KSB
      for the year ended December 31, 2006 for a further description of our critical
      accounting policies and estimates.








**ITEM
      3.**  **CONTROLS
      AND PROCEDURES**





As
      of the
      date of this report, our Chief Executive Officer and our Chief Financial Officer
      evaluated the effectiveness of the design and operation of our disclosure
      controls and procedures pursuant to Rule 13a-15b under the Securities Exchange
      Act of 1934. Based on their review of our disclosure controls and procedures,
      they have concluded that our disclosure controls and procedures are effective
      in
      timely alerting each of them to material information relating to us that is
      required to be included in our periodic SEC filings. Further, there were no
      significant changes in the internal controls or in other factors that could
      significantly affect these disclosure controls after the evaluation date and
      the
      date of this report. Nor were there any significant deficiencies or material
      weaknesses in such disclosure controls and procedures requiring corrective
      actions. As a result, no corrective actions were taken.





Except
      for the impact of the Decca acquisition described in Note 2 of the Condensed
      Consolidated Financial Statements, the Company has made no changes in its
      disclosure controls and procedures in the most recent quarterly reporting
      period. As a result of the Decca acquisition on March 2, 2007, the Company
      is
      currently evaluating its disclosure controls and procedures on a consolidated
      company basis. Upon completion of that evaluation, the Company expects that
      certain key controls underlying its disclosure controls and procedures will
      be
      enhanced or modified due to administrative efficiencies achieved in certain
      support operations.





*-
          17
          -*





**PART
      II.**  **OTHER
      INFORMATION**








**ITEM
      1.**  **LEGAL
      PROCEEDINGS**





See
      Note
      7 to Condensed Consolidated Financial Statements.





**ITEM
      2.**  **UNREGISTERED
      SALES OF EQUITY SECURITIES AND USE OF PROCEEDS**





From
      January through March 2007, we sold an aggregate of 385,714 shares of Common
      Stock to three accredited investors at $1.75 per share for gross proceeds of
      $675,000. In this private offering, we also issued Warrants to such accredited
      investors to purchase an additional 385,714 shares of our Common Stock at $2.50
      per share for a one year period. In issuing the Common Stock and Warrants,
      the
      Company relied upon an exemption from registration under Section 4(2) of the
      Securities Act of 1933.





On
      March
      2, 2007, we acquired the outstanding capital stock of Decca Consulting, Ltd.
      for
      total consideration of $5.1 million paid in a combination of cash, notes payable
      and 828,572 shares of Common Stock, along with Warrants to purchase 200,000
      shares of Common Stock at $2.10 per share for a five year period. In issuing
      the
      Common Stock and Warrants, the Company relied upon an exemption from
      registration under Section 4(2) of the Securities Act of 1933.





**ITEM
      3.**  **DEFAULTS
      UPON SENIOR SECURITIES**





None.





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





None.





**ITEM
      5.**  **OTHER
      INFORMATION**





None.





**ITEM
      6.**  **EXHIBITS**





31.1
            Certification
                of Chief Executive Officer pursuant to Rule
                13a-14(a)/15(d)-14(a)31.2
            Certification
                of Chief Financial Officer pursuant to Rule
                13a-14(a)/15(d)-14(a)32.1
            Certification
                of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as
                adoptedpursuant
                to Section 906 of the Sarbanes-Oxley Act of 200232.2
            Certification
                of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as
                adoptedpursuant
                to Section 906 of the Sarbanes-Oxley Act of
                2002






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**SIGNATURES**





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




STRATUM HOLDINGS, INC.By:
            /s/ Richard
              A. Piske, IIIRichard
                A. Piske, III
              Chief
                Executive Officer






By:
            /s/ D.
              Hughes Watler, Jr.D.
                Hughes Watler, Jr.
              Chief
                Financial Officer





May
      15,
      2007






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