UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2011

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

For the transition period from _____ to _____

Commission File Number: 000-51712

PARK PLACE ENERGY CORP.
(Exact name of small business issuer as specified in its charter)

(403) 360-5375
Registrant’s telephone number, including area code

N/A
(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the 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 [X]    No [   ]

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
Yes [   ]    No [   ]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer,” “non-accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

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

State the number of shares outstanding of each of the issuer’s classes of common equity, as of the latest practicable date. 12,070,517 shares of common stock as of August 12, 2011.

PARK PLACE ENERGY CORP.

Quarterly Report On Form 10-Q
For The Quarterly Period Ended
June 30, 2011

INDEX

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements

The following unaudited interim financial statements of Park Place Energy Corp.(sometimes referred to as “we”, “us” or “our Company”) are included in this quarterly report on Form 10-Q:

PARK PLACE ENERGY CORP.
(An Exploration Stage Company)

CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in Canadian Dollars)
(unaudited)

JUNE 30, 2011

PARK PLACE ENERGY CORP.
CONSOLIDATED BALANCE SHEETS
(An Exploration Stage Company)
(Expressed in Canadian Dollars)
(Unaudited)

Nature and continuance of operations (Note 1)

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

PARK PLACE ENERGY CORP.
CONSOLIDATED STATEMENTS OF OPERATIONS, DEFICIT AND COMPREHENSIVE LOSS
(An Exploration Stage Company)
(Expressed in Canadian Dollars)
(Unaudited)

The accompanying notes are in integral part of these consolidated financial statements.

PARK PLACE ENERGY CORP.
(An Exploration Stage Company)
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Expressed in Canadian Dollars)
(Unaudited)

Supplemental disclosure with respect to cash flows (Note 8)

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

Additional information regarding stock options as of April 30, 2011, is as follows:

As of June 30, 2011 and December 31, 2010, the Company had no unrecognized compensation expense relating to unvested options.

The following weighted average assumptions were used for the Black Scholes valuation of stock options granted during period:

As at June 30, 2011, the following share purchase warrants were outstanding:

The Company has expensed all costs associated with its claim in Bulgaria to date.

Level 1 – quoted prices in active markets for identical assets or liabilities
Level 2 – quoted prices for similar assets and liabilities in active markets or inputs that are observable
Level 3 – inputs that are unobservable (for example cash flow modeling inputs based on assumptions)

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

This quarterly report on Form 10-Q contains forward-looking statements that involve risks and uncertainties. These statements relate to future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology including "could", "may", "will", "should", "expect", "plan", "anticipate", "believe", "estimate", "predict", "potential" and the negative of these terms or other comparable terminology. These statements are only predictions. Actual events or results may differ materially.

While these forward-looking statements, and any assumptions upon which they are based, are made in good faith and reflect our current judgment regarding the direction of our business, actual results will almost always vary, sometimes materially, from any estimates, predictions, projections, assumptions or other future performance suggested in this report.

Overview of our Business

We are an oil and natural gas company focusing on the exploration and development of gas primarily in Europe. From 2006 to 2010, we engaged in several exploration projects in the US, Canada and offshore. In 2009 and 2010, we disposed of all but one of our North American projects to refocus our exploration efforts. Historically, our operating strategy with respect to the projects that we have participated in was to utilize local drilling services companies to conduct services on our exploration properties. These arrangements require us to pay our proportionate share of costs for drilling or alternately to farm in an operator for a percentage interest in any oil or gas discoveries. In each of our projects we provide technical input and expertise on how best to develop the properties. As a way to keep our overhead down, we engage the services of consultants who have technical expertise depending on the nature of the exploration claim. Several of these projects have produced oil or gas while others were ultimately deemed unproductive.

In 2010, we revamped our business strategy to focus on obtaining European exploration properties for both conventional and unconventional gas (shale, tight gas and coal bed methane). We retained consultants with specialized technical expertise in unconventional gas exploration to assist us in locating, assessing and planning suitable exploration and development of potential opportunities. In November of 2010, we were awarded an exploration permit for the “Vranino 1-11 block” located in Dobroudja Basin by the Bulgarian Counsel of Ministers, with terms and conditions of the permit as follows:

• Five year term exploration program;

• Perforate and re-test the Vranino #1 well previously drilled;

• Initiate a comprehensive 2-D and 3-D seismic program over the license area,

• Drill and complete a 5 additional test wells in the eastern up-thrown block within the license area

Our minimum work commitment as required by the permit broken down by year is as follows:

To formulate our work program, we consulted with the previous operator, local geologists and others. The costs of the exploration plan may vary depending on a variety of factors, including, inter alia, the market price and availability of technical services in the local area, taxes, and transportation costs relating to delivering equipment to the exploration area.

Subsequent to the award of this claim, we have engaged in an assessment of drilling services companies in the local area suitable to engage to provide drilling services in the region. We have located several suitable service providers for drilling and other services which we intend to engage at the appropriate time. Local companies in Bulgaria will be used to provide services to the best extent possible. However, as the Bulgarian energy sector is relatively undeveloped, the availability of local drilling services specialized to unconventional gas exploration is limited. Park Place has determined that such expertise, services or equipment is available in Romania, Turkey and other surrounding regions. We have located suitable drilling services companies in Romania and Turkey that we may hire to perform the more difficult drilling involving unconventional gas hydrocarbon structures.

Our exploration of the Vranino 1-11 block has not yet commenced due to the fact the a competing bidder has disputed the award of the claim to Park Place. The appeal is expected to be heard in October of 2011 or early 2012. The Bulgarian Ministry of Economy, Energy and Tourism, continues to take the position that the permit was validly issued to Park Place and seeks to have the Court affirm the validity of the award.

Edam, Saskatchewan, Canada -In May 2011, we entered into a farm-in agreement with Croverro Energy Ltd. to drill, at minimum, three well holes on our Edam Saskatchewan property (see our 8-K dated May 8, 2011 for further details). On August 8, 2011, we received notice that the first well (which was spud June 8, 2011) was producing oil from the Waseca formation. Park Place has retained a 10% net interest while Croverro Energy has agreed to pay 100% of all costs associated with drilling and operating the wells. Park Place is very encouraged by these results and expects to have a full report of the results shortly.

Financing

Management intends to raise significant capital through financing activities over the next year.

On August 12, 2011, Management reserved 10,000,000 shares of its treasury stock which it intends to sell at a price of $.075/share for net proceeds of approximately $750,000. Park Place has received a full commitment for this funding and expects to close the offering no later than August 26, 2011 (the “August Offering”).

Park Place intends to conduct a major financing with the next twelve months to pay for its Plan of Operations.

Plan of Operations

Overview

Our Plan of Operations is to focus exploring and developing the Vranino 1-11 exploration claim in Bulgaria and acquiring interests in other exploration claims in Bulgaria or similar regions.

Management is in the process of expanding its Board of Directors and management team to accommodate the planned increase in operations and exploration activity.

Park Place will continue to pursue a positive conclusion to the current litigation relating to the Vranino 1-11 claim through any means available. We have obtained legal representation in Bulgaria to represent us in this matter. Our plan of Operations is highly contingent upon the results and timing of the litigation surrounding the Vranino permit.

Park Place intends to pay for the initial year of the Vranino exploration program utilizing funds received from the August Offering. Park Place plans intends to raise additional capital within the next twelve months to pay for the balance of the work program relating to Vranino 1-11 in Bulgaria. The work program is expected to conclude no later than in 2016. Subject to the positive conclusion of the appeal before the Supreme Administrative Court of Bulgaria, Management will undertake subsequent financing to obtain the additional funds required.

Utilizing funding from the August Offering Park Place intents to open a permanent office in Bulgaria in which to base its exploration activities. Park Place plans to hire a local geologist, a regional manager, and other staff on a full time basis. As the exploration program progresses, Park Place plans to hire additional employees. Park Place estimates it will cost at minimum $250,000 over 12 months to establish the office in Bulgaria.

Management intends to conduct additional 2-D and 3-D seismic processing, the reprocessing of historical seismic data, and the purchase of additional seismic data held by third parties. Park Place plans to perforate and test the existing Vranino #1 well over the next twelve months. Park Place estimates that the first year seismic program as described herein will cost $375,000.

We anticipate spending approximately $250,000 over the next 12 months in office and general expenses, as well as approximately $200,000 in professional and consulting fees.

Park Place anticipates disposing of its interest in the Edam property for cash consideration so that it may use the proceeds towards general corporate purposes in furtherance of its Vranino 1-11 claim in Bulgaria. Until the well results and production quantities are known, it is difficult to assess the potential selling price for its interest in the Edam claim.

While the Company awaits the outcome of legal in Bulgaria relating to the Vranino 1-11 claim, Park Place is actively seeking further exploration opportunities either through direct acquisition or joint venture agreements in the same region.

Working Capital

Based on our current plan of operations as set forth above, we estimate that we will require approximately $1,075,000 to pursue our plan of operations over the next 12 months. As at June 30, 2011, we had cash of $1,399. On August 11, 2011 we received additional working capital from share subscriptions totaling US$20,000. On August 3, 2011 we settled $64,829 in debt by issuing 498,692 common shares. We expect to receive proceeds of share subscriptions totaling $750,000 by issuing 10,000,000 common shares by August 26, 2011. Consequently, we anticipate requiring additional financing to pursue our plan of operations over the next 12 months.

We anticipate that additional funding will be in the form of equity financing from the sale of our common stock as set-out herein or otherwise. If we do not continue to obtain additional financing going forward, we will re-evaluate our plan of operations.

Results of Operations

The following summary of our results of operations should be read in conjunction with our financial statements for the quarter ended June 30, 2011 which are included herein.

Revenue

We did not have any oil and gas revenue for the six months ended June 30, 2011, nor for the six months ended June 30, 2010. We have not recorded any revenues yet relating to oil production from the Edan property which went into production in June 2011 as we have not received production results from the operator as of yet. We anticipate reporting revenues from this property during the next quarter. Our revenue relating to the Edan property will not be offset by direct costs, depletion or operating expenses as all costs are payable by the operator Croverro Energy Ltd. pursuant to the terms of the farm-in agreement.

Since inception, we have incurred oil and gas revenues of $1,619,047 relating to our successful exploration efforts and depletion costs of $ 1,235,574. We have written off expenditures of $4,209,312 relating to exploration efforts that did not yield productive results.

Expenses

Our expense for the six months ending June 30, 2011 total $ 138,431 compared to $ 420,722 for the same period in 2010. The significant reduction in expenses relates to the fact that we have been delayed in implementing our exploration program in Bulgaria which results from the appeal taken of the award of the claim by a competitive bidder.

Our primary expense categories are described below:

Office and General Expenses

Our office and general expenses decreased to $ 24,225 for the six months ended June 30, 2011 from $47,843 for the six months ended June 30, 2010.

Professional Fees

Our professional fees decreased to $ 42,036 for the six months ended June 30, 2011 from $89,625 for the six months ended June 30, 2010.

Consulting Expenses

Our management fees and consulting expenses decreased to $60,273 for the six months ended June 30, 2011 from $102,614 for the six months ended June 30, 2010.

Investor Relations Expenses

Our investor relations expense for the six months ended June 30, 2011 increased to $ 7,525 compared to $6,628 for the six months ended June 30, 2010.

Stock-Based Compensation Expenses

Our stock-based compensation expenses decreased to $nil for the six months ended June 30, 2011 from $ 163,000 for the six months ended June 30, 2010.

Loss

Our net loss before other items and taxes for the six months ended June 30, 2011 was $91,340, compared to $378,652 for the six months ended June 30, 2010. Our net loss is reduced as our expenses were reduced due to the delays in commencing exploration in Bulgaria.

Liquidity and Capital Resources

Overview

From May 4, 2006 (date of inception) to June 30, 2011, we raised net proceeds of $8,287,009 in cash from the issuance of common stock and share subscriptions received, $770,550 from loans payable for a total of $9,042,531 of cash provided by financing activities for the period.

We used net cash of $147,813 in operating activities for the six months ended June 30, 2011 compared to $73,150 for the same period in 2010. We used net cash of $4,816,824 in operating activities for the period from May 4, 2006 (date of inception) to June 30, 2011.

The following table summarizes our liquidity position as of June 30, 2011 (excluding Capital received after quarter-end):

We anticipate that we will require approximately $1,075,000 to pursue our plan of operations over the next 12 months. As at June 30, 2011, we had cash of $ 1,399 and a working capital deficit of $116,221. On August 11, 2011 we received additional working capital from share subscriptions totaling US$20,000. On August 3, 2011 we settled $64,829 debt by issuing 498,692 common shares. We expect to receive proceeds of share subscriptions totaling $750,000 by issuing 10,000,000 common shares by August 26, 2011. We require additional financing to pursue our plan of operations over the next 12 months, with amounts primarily depending upon the results of any cash flows from Edam oil revenues, and the actual costs of our first year exploration program in Bulgaria on Vranino 1-11. We anticipate raising additional funds over the next twelve months to pay for our exploration commitments in Bulgaria.

Over the next 12 months, we plan to primarily concentrate on exploring the Vranino 1-11 claim and associated projects.

Below is a summary of our anticipated expenditures over the next 12 months:

If we lose the Vranino 1-11 claim in Bulgaria then our anticipated expenditures will be significantly reduced.

Cash Flow from Investing Activities

Net cash from investing activities in the six months ended June 30, 2011 was $ nil compared to $44,140 used in investing activities in the six months ended June 30, 2010.

Cash Provided By Financing Activities

In the six months ended June 30, 2011, received cash of $145,550 compared to $125,550 in six months ended June 30, 2010.

Off-Balance Sheet Arrangements

There are no off balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources, which individually or in the aggregate is material to our investors.

Item 3.                Quantitative and Qualitative Disclosures About Market Risk

Not applicable because we are a smaller reporting company.

Item 4.                Controls and Procedures

Disclosure Controls and Procedures

David Johnson, our principal executive and our principal financial officer, is responsible for establishing and maintaining disclosure controls and procedures for our company.

Management has evaluated the effectiveness of our disclosure controls and procedures as of three months ended June 30, 2011 (under the supervision and with the participation of our principal executive officer and principal financial officer), pursuant to Rule 13a-15(b) promulgated under the Securities Exchange Act of 1934, as amended. Based on this evaluation, our principal executive officer and principal financial officer concluded that our company’s disclosure controls and procedures were effective as three months ended June 30, 2011.

No Changes in Internal Control over Financial Reporting

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

PART II – OTHER INFORMATION

Item 1.                Legal Proceedings

We currently are party to legal proceedings in Bulgaria where a competitive bidder, Overgas, seeks to overturn the Bulgarian Counsel of Minister’s award of the Vranino 1-11 exploration claim to us. The Ministry of Energy, Environment and Tourism continues to support the granting of the award to Park Place. The matter was originally scheduled to be heard in October 2011 however, we expect the matter be delayed to early 2012.

Item 1A.             Risk Factors

Not applicable because we are a smaller reporting company.

Item 2.                Unregistered Sales of Equity Securities and Use of Proceeds

On April 6, 2011, we entered into a Convertible Promissory Note (the “Note”), to evidence our promise to repay the noteholder (the “Holder”) $150,000 (the “Principal”), together with interest (the “Interest”) from April 6, 2011 at a rate of 10% per annum on the unpaid balance of the Principal. Pursuant to the terms of the Note, the Principal and the Interest thereon shall be due and payable in full on April 6, 2012 (the “Due Date”). The Note may be prepaid at any time without penalty.

Pursuant to the terms of the Note, the Principal and the Interest thereon is convertible, in whole and not in part, at the option of the lender at any time prior to the Due Date by notice to us into shares of the Company’s common stock at the conversion price equal to $0.04 per common share. Pursuant to the terms of the Note on or about May 4, 2011, we issued to the Holder 5,000,000 restricted shares of our common stock (the “Collateral Shares”), as collateral under the Note. Such Collateral Shares are being held in escrow by the Holder. Upon conversion by the Holder of the Principal and Interest into the Company’s common shares, or upon payment in full of the Note and all Interest thereon, the Collateral Shares shall be cancelled and returned to Treasury. We relied on Regulation S as an exemption from the registration requirements of the Securities Act for the issuance of the Note and the Collateral Shares to the Holder.

On May 27, 2011 the Company issued 500,000 common shares at a value of US$0.06 per share for payment of outstanding payables of $29,340. We relied on Regulation S as an exemption from the registration requirements of the Securities Act for the issuance of the shares.

On August 3, 2011, the Company issued 498,692 shares to settle debt with a fair value of $64,829. We relied on Regulation S as an exemption from the registration requirements of the Securities Act for the issuance of the shares.

On August 11, 2011 the Company issued 266,666 common shares at a value of US$0.075 per share for cash payment of $20,000. We relied on Regulation S as an exemption from the registration requirements of the Securities Act for the issuance of the shares.

On August 12, 2011 the Company issued 206,250 common shares at a value of $.08 per share for cash payment of $16,500. We relied on Regulation S as an exemption from the registration requirements of the Securities Act for the issuance of the shares.

Item 3.                Defaults Upon Senior Securities

None.

Item 4.                (Removed and Reserved)

Not applicable.

Item 5.                Other Information

None

Item 6.                Exhibits

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.

PARK PLACE ENERGYCORP.