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 March 31, 2014

[   ] 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)

(214) 220-4340
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 website, 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 [X] 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: 36,579,877 shares of common stock as of May 12, 2014.

PARK PLACE ENERGY CORP.

Quarterly Report On Form 10-Q
For The Quarterly Period Ended
March 31, 2014

INDEX

1

2

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

3

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

4

Supplementary cash flow information (Note 9)

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

5

The Company holds a 98,205 acre oil and gas exploration claim in the Dobroudja Basin located in northeast Bulgaria (the “Block”). The Company intends to conduct exploration for natural gas and test production activities over a five year period in accordance with or exceeding its minimum work program obligation, which includes five wells, and additional testing and work. Refer to Note 12.

6

Additional information regarding stock options as of March 31, 2014, is as follows:

The fair values for stock options granted have been estimated using the Black-Scholes option pricing model assuming no expected dividends and the following weighted average assumptions:

The fair value of stock options vested during the three months ended March 31, 2014 was $38,320 (2013 – $nil) which was recorded as stock-based compensation and charged to operations. The weighted average fair value of stock options granted during the three months ended March 31, 2014 was $0.19 (2013 – $nil) per option.

7

As at March 31, 2014, the following share purchase warrants were outstanding:

8

9

10

11

12

Pursuant to the License Agreement, the Company is obligated to make non-refundable annual area fee payments of $11,134 (15,897 BGN) payable in advance and incur minimum costs during the initial term as follows:

The Company is permitted to commence limited production during the exploration phase. After additional exploration work is completed on the area covered by the License Agreement, upon declaration of a commercial discovery. The duration of the exploitation concession may last for up to 35 years so long as minimum work commitments are satisfied.

13

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

The following discussion and analysis should be read in conjunction with our Unaudited Financial Statements and Notes thereto included herein and our Financial Statements and Notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2013 (the “Form 10-K”), along with Management’s Discussion and Analysis of Financial Condition and Results of Operations contained in the Form 10-K. Any terms used but not defined herein have the same meaning given to them in the Form 10-K. Our discussion and analysis includes forward-looking information that involves risks and uncertainties and should be read in conjunction with Risk Factors under Item 1A of Part II of this report, along with Forward-Looking Information at the end of this section for information on the risks and uncertainties that could cause our actual results to be materially different than our forward-looking statements.

Overview of our Business

Name and Organization

We were incorporated under the laws of the State of Nevada on August 27, 2004 under the name ST Online Corp. and in 2007, changed our name to Park Place Energy Corp. During 2013, we disposed of our 100% interest in two subsidiary corporations, Park Place Energy International Inc., a private company incorporated under the laws of the Province of British Columbia, Canada, and Park Place Energy (Canada) Inc., a corporation incorporated under the laws of British Columbia. As a result, we now have only one subsidiary at this time, BG Explorations EOOD, a company incorporated under the laws of Bulgaria, which is wholly-owned by the Company.

General

Park Place Energy Corp. is an energy company engaged in exploration for oil and natural gas, primarily in Bulgaria at present.

Throughout this Quarterly Report on Form 10-Q, the terms "Park Place" "we" "us," "the Company", "our" and "our company" refer to Park Place Energy Corp. and its subsidiaries.

Today, the operations of our Company and its subsidiary concentrate on natural gas exploration in the Dobrich region of northeast Bulgaria. Our goal is to become a producer of natural gas in Bulgaria.

Our head offices are located in Texas and we established a registered office in Bulgaria and satellite offices in British Columbia, Canada.

Our primary oil and gas exploration permit is located in the Dobrudja Basin, northeast Bulgaria, which was awarded to the Company in October 2010. The award of the exploration permit did not become effective until mid-2013, due to a dispute regarding the tender process that was resolved in our favor. The term of the initial period of the exploration permit is five years. This five-year period will commence once the Bulgarian regulatory authorities approve the Park Place work programs for the permit area. The initial term of the exploration permit may be extended up to an additional 5 years so long as we satisfy our minimum work commitments. Upon declaration of a commercial discovery, a portion of the exploration permit may be converted into an exploitation concession, which may have a duration of up to 35 years so long as we satisfy our minimum work commitments.

Our Website

Our website can be found at www.parkplaceenergy.com. Our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and amendments to those reports filed with or furnished to the U.S. Securities and Exchange Commission ("SEC"), pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 ("Exchange Act"), can be accessed free of charge by linking directly from our website under the "Investor Relations - SEC Filings" caption to the SEC's Edgar Database.

Bulgaria License

In 2010, we revamped our business strategy to focus on obtaining gas properties in Europe. We were attracted to the high price of natural gas and shortage of supply on the European continent. We also saw the possibility of prolonged depressed natural gas prices in North America.

14

In October of 2010, we were awarded our first exploration block in Europe, the “Vranino 1-11 Block” located in Dobrudja Basin, Bulgaria covering an area of 98,205 acres (397.42 square kilometers) by the Bulgarian Counsel of Ministers. Thereafter, on April 1, 2014, the Company entered into a license agreement titled “Agreement for Crude Oil and Natural Gas Prospecting and Exploration in Block 1-11 Vranino, situated in Dobrich District” with the Ministry of Economy and Energy of Bulgaria (the “License Agreement”).

Notwithstanding the execution of the License Agreement, under Bulgarian law, the exploration license granted therein will not become effective until all of the following conditions have been satisfied (the “License Conditions Precedent”): (i) the approval of the Company’s work programs by the Ministry of Environment as well as by the Ministry of Energy (the “Ministry Approvals”); and (ii) the posting of a bond by the Company, the amount of which must be approved by the Ministry of Energy, plus the payment of a signature bonus by the Company in the amount of 100,007 Euros, within thirty days after the Ministry Approvals.

The initial term of the License Agreement is five (5) years. This five-year period will commence after the License Conditions Precedent have been satisfied, which is expected to occur mid-2014. The License Agreement (or applicable legislation) provides for possible extension periods for up to 5 additional years during the exploration phase, as well as the conversion of the License Agreement to an exploitation concession, which can last up to 35 years. Such extensions and conversion are at the Company’s election, subject to the Company’s satisfaction of minimum work commitments and Government approval.

Under the License Agreement, the Company will submit a yearly work program that is subject to approval of the Bulgarian regulatory authorities. The Company’s commitment is to perform geological and geophysical exploration activities in the first 3 years of the initial term, followed by drilling activities in years 4 and 5 of the initial term. The Company is expected to drill approximately 32,800 feet (10,000 meters) of new wellbore (may be vertical, horizontal or diagonal) and conduct other exploration activities at certain intervals during the initial term. The Company has flexibility to adjust the yearly work program based on negotiations with the Bulgarian regulatory authorities.

If the Company is successful in its exploration efforts during the exploration phase, the Company would file to establish a geological discovery. The Company is permitted to commence limited production during the exploration phase. After additional exploration work is completed on the area covered by the License Agreement and upon declaration of a commercial discovery, the Company may, subject to Government approval, convert a portion of the License Agreement to an exploitation concession. The duration of the exploitation concession may last for up to 35 years so long as minimum work commitments are satisfied.

The costs of the exploration plan will vary depending on a variety of factors, including, inter alia, the market price and availability of services in the area, taxes, and transportation costs relating to delivering equipment to the area.

During the quarter, we continued to engage in the collection of historical data regarding the Bulgarian license block. We have accumulated a solid body of data that will assist us in making the exploration project successful. We have submitted our overall five year work program and our first year work program and budget to the government authorities for their approval.

Patents and Trademarks

We do not own, either legally or beneficially, any patent or trademark.

Research and Development Expenditures

We have not incurred any research or development expenditures since our incorporation.

Government Regulation

Our current or future operations, including exploration and development activities on our properties, require permits from various governmental authorities, and such operations are and will be governed by laws and regulations of the jurisdiction in which we are conducting business, which at the present time is Bulgaria. These laws and regulations concern exploration, development, production, exports, taxes, labor laws and standards, occupational health, waste disposal, toxic substances, land use, environmental protection and other matters. Compliance with these requirements may prove to be difficult and expensive. Due to our international operations, we are subject to the following issues and uncertainties that can affect our operations adversely:

• the risk of expropriation, nationalization, war, revolution, political instability, border disputes, renegotiation or modification of existing contracts, and import, export and transportation regulations and tariffs;

15

• laws of foreign governments affecting our ability to fracture stimulate oil or natural gas wells, such as the legislation enacted in Bulgaria in January 2012, discussed in greater detail below;
   
• the risk of not being able to procure residency and work permits for our expatriate personnel;
   
• taxation policies, including royalty and tax increases and retroactive tax claims;
   
• exchange controls, currency fluctuations and other uncertainties arising out of foreign government sovereignty over international operations;
   
• laws and policies of the United States affecting foreign trade, taxation and investment;
   
• the possibility of being subjected to the exclusive jurisdiction of foreign courts in connection with legal disputes and the possible inability to subject foreign persons to the jurisdiction of courts in the United States; and
   
• the possibility of restrictions on repatriation of earnings or capital from foreign countries.

Permits and Licenses

In order to carry out exploration and development of oil and natural gas interests or to place these into commercial production, we may require certain licenses and permits from various governmental authorities. There can be no guarantee that we will be able to obtain all necessary licenses and permits that may be required. In addition, such licenses and permits are subject to change and there can be no assurances that any application to renew any existing licenses or permits will be approved.

Repatriation of Earnings

Currently, there are no restrictions on the repatriation of earnings or capital to foreign entities from Bulgaria. However, there can be no assurance that any such restrictions on repatriation of earnings or capital from the aforementioned countries or any other country where we may invest will not be imposed in the future.

Environmental

The oil and natural gas industry is subject to extensive environmental regulations in Bulgaria. Environmental regulations establish standards respecting health, safety and environmental matters and place restrictions and prohibitions on emissions of various substances produced concurrently with oil and natural gas. The regulatory requirements cover the handling and disposal of drilling and production waste products and waste created by water and air pollution control procedures. These regulations may have an impact on the selection of drilling locations and facilities, potentially resulting in increased capital expenditures. In addition, environmental legislation may require those wells and production facilities to be abandoned and sites reclaimed to the satisfaction of local authorities. Such regulation has increased the cost of planning, designing, drilling, operating and, in some instances, abandoning wells. We are committed to complying with environmental and operation legislation wherever we operate.

There has been a recent surge in interest among the media, government regulators and private citizens concerning the possible negative environmental and geological effects of fracture stimulation. Some have alleged that fracture stimulation results in the contamination of aquifers and may even contribute to seismic activity. In January 2012, the government of Bulgaria enacted legislation that banned the fracture stimulation of oil and natural gas wells in the Republic of Bulgaria and imposed large monetary penalties on companies that violate that ban. Such legislation or regulations could impact our ability to drill and complete wells, and could increase the cost of planning, designing, drilling, completing and operating wells. We are committed to complying with legislation and regulations involving fracture stimulation wherever we operate.

Such laws and regulations not only expose us to liability for our own negligence, but may also expose us to liability for the conduct of others or for our actions that were in compliance with all applicable laws at the time those actions were taken. We may incur significant costs as a result of environmental accidents, such as oil spills, natural gas leaks, ruptures, or discharges of hazardous materials into the environment, including clean-up costs and fines or penalties. Additionally, we may incur significant costs in order to comply with environmental laws and regulations and may be forced to pay fines or penalties if we do not comply.

Competition

We operate in Bulgaria, where currently one Russian company supplies Bulgaria with virtually all gas being marketed and consumed in Bulgaria through a pipeline that runs through Ukraine from Russia. On a regional level, we compete with other oil and gas exploration companies and independent producers for license blocks and capital, which are actively seeking oil and gas properties throughout the world.

16

The principal area of competition is encountered in the financial ability of our Company to acquire acreage positions and drill wells to explore for oil and gas, then, if warranted, install production equipment. Competition for the acquisition of oil and gas license areas is high in Europe.

Therefore, we may or may not be successful in acquiring additional blocks in the face of this competition. Presently, we are not seeking additional license blocks.

From a general standpoint, we operate in the highly competitive areas of oil and natural gas exploration, development, production and acquisition with a substantial number of other companies, including U.S.-based and international companies doing business in each of the countries in which we operate. We face intense competition from independent, technology-driven companies as well as from both major and other independent oil and natural gas companies in each of the following areas:

• seeking oil and natural gas exploration licenses and production licenses and leases;
   
• acquiring desirable producing properties or new leases for future exploration;
   
• marketing oil and natural gas production;
   
• integrating new technologies; and
   
• contracting for drilling services and equipment and securing the expertise necessary to develop and operate properties.

Many of our competitors have substantially greater financial, managerial, technological and other resources than we do. To the extent competitors are able to pay more for properties than we are paying, we will be at a competitive disadvantage. Further, many of our competitors enjoy technological advantages over us and may be able to implement new technologies more rapidly than we can. Our ability to explore for and produce oil and natural gas prospects and to acquire additional properties in the future will depend upon our ability to successfully conduct operations, implement advanced technologies, evaluate and select suitable properties and consummate transactions in this highly competitive environment.

Employees and Directors

As of December 31, 2013, the Company has one employee, which is the Company’s chief financial officer; all of the other executive officers of Company work on a consulting basis. As of December 31, 2013, our business is generally conducted through our officers and directors and also through consultants of the company. A description of our officers’ and directors’ professional experience is contained on our website.

Working Capital

Based on our current plan of operations as set forth above, we estimate that we will require approximately $2,100,000 to pursue our plan of operations over the next 12 months. As at March 31, 2014, we had cash of $478,713 and working capital of $326,517.

The Company requires additional funds over the next twelve months to fully implement its business plan and cover its operating expenses. Management will evaluate various alternatives to obtain additional funding, which include, without limitation, financing through the sale of equity, borrowings from private lenders, or farm-outs or similar arrangements under which third parties would pay all or a portion of the costs to implement the Company’s business plan in exchange for an interest in assets of the Company. In connection with a possible financing through the sale of equity, the Company will consider a listing on a domestic or foreign stock exchange. There can be no certainty that these sources will provide the additional funds required for the next twelve months. If we do not continue to obtain additional financing or less than anticipated going forward, we will re-evaluate our plans.

17

Results of Operations

The following summary of our results of operations should be read in conjunction with our unaudited consolidated financial statements for the quarter ended March 31, 2014 which are included herein.

Revenue

We had oil and gas revenue of $nil for the three months ended March 31, 2014, compared to $nil for the three months ended March 31, 2013.

Since inception, we have earned oil and gas revenues of $1,532,065 relating to our successful exploration efforts and incurred depletion costs of $1,170,500 and production costs of $1,081,423. We have written off expenditures of $4,330,902 relating to exploration efforts that did not yield productive results.

Expenses

Our total operating expenses for the three months ending March 31, 2014 total $117,431 compared to $69,732 for the same period in 2013.

Our primary expense categories are described below:

General and Administrative Expenses

Our office and general expenses increased to $173,685 for the three months ended March 31, 2014 from $68,405 for the three months ending March 31, 2013.

Loss

Our net loss for the three months ending March 31, 2014 was $177,431 compared to $69,732 for the three months ending March 31, 2013.

Liquidity and Capital Resources

Overview

From May 4, 2006 (date of inception) to March 31, 2014, we raised net proceeds of $10,898,748 in cash from the issuance of common stock and share subscriptions received (net of repurchase of common stock) and $888,671 from loans payable (net of repayments of loans payable) for a total of $11,787,419 of cash provided by financing activities since inception.

We used net cash of $141,121 in operating activities for the three months ended March 31, 2014 compared to $52,486 for the same period in 2013. We used net cash of $4,042,792 in operating activities for the period from May 4, 2006 (date of inception) to March 31, 2014.

The following table summarizes our liquidity position as at March 31, 2014:

We anticipate that we will require approximately $2,100,000 to pursue our plan of operations over the next 12 months. As at March 31, 2014, we had cash of $478,713 and working capital of $326,517. We anticipate raising additional funds over the next twelve months to pay for our exploration commitments in Bulgaria and general and administrative expenses.

18

Cash Flow Used In Operating Activities

Net cash used in operating activities was $141,121 for the three months ended March 31, 2014 compared to $52,486 for the three months ended March 31, 2013.

Cash Flow from Investing Activities

Net cash used in investing activities for the three months ended March 31, 2014 was $155,448 compared to net cash of $5,537 provided by investing activities for the three months ending March 31, 2013.

Cash Provided By Financing Activities

For the three months ended March 31, 2014, cash provided by financing activities was $742,500 compared to $35,500 for the three months ended March 31, 2013.

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.

Forward-Looking Information

Certain statements in this Quarterly Report on Form 10-Q constitute “forward-looking statements” within the meaning of applicable U.S. securities legislation. Additionally, forward-looking statements may be made orally or in press releases, conferences, reports, on our website or otherwise, in the future, by us or on our behalf. Such statements are generally identifiable by the terminology used such as “plans,” “expects,” “estimates,” “budgets,” “intends,” “anticipates,” “believes,” “projects,” “indicates,” “targets,” “objective,” “could,” “should,” “may” or other similar words.

By their very nature, forward-looking statements require us to make assumptions that may not materialize or that may not be accurate. Forward-looking statements are subject to known and unknown risks and uncertainties and other factors that may cause actual results, levels of activity and achievements to differ materially from those expressed or implied by such statements, including the factors discussed under Item 1A. Risk Factors in our 2013 Annual Report on Form 10-K. Such factors include, but are not limited to, the following: fluctuations in and volatility of the market prices for oil and natural gas products; the ability to produce and transport oil and natural gas; the results of exploration and development drilling and related activities; global economic conditions, particularly in the countries in which we carry on business, especially economic slowdowns; actions by governmental authorities including increases in taxes, legislative and regulatory initiatives related to fracture stimulation activities, changes in environmental and other regulations, and renegotiations of contracts; political uncertainty, including actions by insurgent groups or other conflicts; the negotiation and closing of material contracts; future capital requirements and the availability of financing; estimates and economic assumptions used in connection with our acquisitions; risks associated with drilling, operating and decommissioning wells; actions of third-party co-owners of interests in properties in which we also own an interest; our ability to effectively integrate companies and properties that we acquire; our limited operating history; our history of operating losses; our lack of insurance coverage; and the other factors discussed in other documents that we file with or furnish to the U.S. Securities and Exchange Commission. The impact of any one factor on a particular forward-looking statement is not determinable with certainty as such factors are interdependent upon other factors and our course of action would depend upon our assessment of the future, considering all information then available. In that regard, any statements as to: future oil or natural gas production levels; capital expenditures; the allocation of capital expenditures to exploration and development activities; sources of funding for our capital expenditure programs; drilling of new wells; demand for oil and natural gas products; expenditures and allowances relating to environmental matters; dates by which certain areas will be developed or will come on-stream; expected finding and development costs; future production rates; ultimate recoverability of reserves, including the ability to convert probable and possible reserves to proved reserves; dates by which transactions are expected to close; future cash flows, uses of cash flows, collectability of receivables and availability of trade credit; expected operating costs; changes in any of the foregoing and other statements using forward-looking terminology are forward-looking statements, and there can be no assurance that the expectations conveyed by such forward-looking statements will, in fact, be realized.

Although we believe that the expectations conveyed by the forward-looking statements are reasonable based on information available to us on the date such forward-looking statements were made, no assurances can be given as to future results, levels of activity, achievements or financial condition.

19

Readers should not place undue reliance on any forward-looking statement and should recognize that the statements are predictions of future results, which may not occur as anticipated. Actual results could differ materially from those anticipated in the forward-looking statements and from historical results, due to the risks and uncertainties described above, as well as others not now anticipated. The foregoing statements are not exclusive and further information concerning us, including factors that potentially could materially affect our financial results, may emerge from time to time. We do not intend to update forward-looking statements to reflect actual results or changes in factors or assumptions affecting such forward-looking statements.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Not applicable because we are a smaller reporting company.

Item 4. Controls and Procedures Disclosure of Controls and Procedures

We carried out an evaluation of the effectiveness of our disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) as of December 31, 2013 (the “Evaluation Date”). This evaluation was carried out under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were not entirely effective as of the Evaluation Date as a result of the material weaknesses disclosed in our Annual Report on Form 10-K for the year ended December 31, 2013 (“2013 Annual Report”).

Notwithstanding the assessment that our internal control over financial reporting was not entirely effective and that there were material weaknesses as identified in our 2013 Annual Report, we believe that our consolidated financial statements contained in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2014 fairly present our financial condition, results of operations and cash flows in all material respects.

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 are not currently involved in any legal proceedings and we are unaware of any pending proceedings.

Item 1A. Risk Factors

Not applicable because we are a smaller reporting company. See risk factors described in Item 1A of the Company’s 2013 10-K.

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

As of March 5, 2014, the Company issued 4,516,430 shares of common stock at price of $0.20 per share for proceeds of $903,286. Further details of this offering are disclosed on form 8-K filed March 23, 2014.

Item 3. Defaults Upon Senior Securities

None.

Item 4. (Removed and Reserved)

Not applicable.

Item 5. Other Information

None

Item 6. Exhibits

20

21

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 ENERGY CORP.