The Orc which took Sperling's sword from the dog appears to also have been slain...by a drake.
The Orc which took Sperling's sword from the dog appears to also have been slain...by a drake.
You should try and find the drake.
Drakes can be found hunting the aurochs-herds in the southern part of the Entwash Vale.
You should hunt for the drake that swallowed Sperling's sword.
You should search the drake's corpse for Sperling's sword.