Actually, I tried that before, but it didn't work running from the directory with the space in the directory name. But I just tried it again from the command line in a test directory and it worked.

Anyway, I tried it again adapting it to the script and it worked. I think the last time I tried I must have missed something else, being too complex or something else was at play.

Thanks again for the help!

Anyway this is the next version of the script:

#!/usr/bin/sh

user=`whoami | tr "[A-Z]" "[a-z]"`
rtime=`date +'%H.%M.%S %d-%m-%y'`
ENVIRON=`pwd`
find "$ENVIRON" -name "*.pde" -type f -exec egrep -ily "DMRG[ ]*3,1" {} \;| while read pde
   do
        directory=`dirname "$pde"`
echo $directory
        if [ -w "$directory" ] ; then        
            cp "$pde" "${pde}. pdb"
            cat "$pde" |  sed 's/\(DMRG[ ,]*3,\)1/\10/g' > ${pde}.tmp
            if [ -s "${pde}.tmp" ] ; then
                mv&n bsp;"${pde}.tmp" "$pde"
                echo  "PDE Conversion Success Log Generated at $rtime" \
                >&nb sp;/syd/devel/code/training/steves/pdeSCS.log
                echo  "$pde File has been converted Backup file is ${pde}.pd b"  \
                >>&n bsp;/syd/devel/code/training/steves/pdeSCS.log    
            else
                echo  "PDE Conversion Error Log Generated at $rtime" > pdeER R.log
                echo  "Failure writing ${pde}.tmp Backup file is ${pde}.pdb"
                echo  "Failure writing ${pde}.tmp Backup file is ${pde}.pdb" >>&n bsp;pdeERR.log
            fi
        else
            echo "$directory i s not writeable" 
        fi
   done