10-Q

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, 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)

Nevada	71-0971567
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

300-840 6th Avenue SW
Calgary, Alberta, Canada	T2P 3E5
(Address of principal executive offices)	(Zip Code)

(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.

Large accelerated filer [ ]	Accelerated filer [ ]
Non-accelerated filer [ ] (Do not check if a smaller reporting company)	Smaller reporting company [ x ]

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. 5,598,909 shares of common stock as of May 13, 2011.

PARK PLACE ENERGY CORP.

Quarterly Report On Form 10-Q

For The Quarterly Period Ended

March 31, 2011

INDEX

PART I – FINANCIAL INFORMATION			4
	Item 1.	Financial Statements	4
	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	20
	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	23
	Item 4.	Controls and Procedures	23
PART II – OTHER INFORMATION			23
	Item 1.	Legal Proceedings	23
	Item 1A.	Risk Factors	23
	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	24
	Item 3.	Defaults Upon Senior Securities	24
	Item 4.	(Removed and Reserved)	24
	Item 5.	Other Information	24
	Item 6.	Exhibits	24

FORWARD-LOOKING STATEMENTS

This quarterly report on Form 10-Q contains forward-looking statements that involve risks and uncertainties. Forward-looking statements in this quarterly report include, among others, statements regarding our capital needs, business plans and expectations. Such forward-looking statements include, but are not limited to, statements with respect to the following:

• our need for additional financing;

• our exploration activities may not result in commercially exploitable quantities of oil and gas on our properties;

• the risks inherent in the exploration for oil and gas such as weather, accidents, equipment failures and governmental restrictions;

• our limited operating history;

• our history of operating losses;

• the potential for environmental damage;

• our lack of insurance coverage;

• the competitive environment in which we operate;

• the level of government regulation, including environmental regulation;

• changes in governmental regulation and administrative practices;

• our dependence on key personnel;

• conflicts of interest of our directors and officers;

• our ability to fully implement our business plan;

• our ability to effectively manage our growth; and

• other regulatory, legislative and judicial developments.

Forward-looking statements are made, without limitation, in relation to operating plans, property exploration and development, availability of funds, environmental reclamation, operating costs and permit acquisition. Any statements contained herein that are not statements of historical facts may be deemed to be forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “may”, “will”, “should”, “expect”, “plan”, “intend”, “anticipate”, “believe”, “estimate”, “predict”, “potential” or “continue”, the negative of such terms or other comparable terminology. Actual events or results may differ materially. In evaluating these statements, you should consider various factors, including the risks outlined in our annual report on Form 10-K for the year ended December 31, 2009, this quarterly report on Form 10-Q, and, from time to time, in other reports that we file with the Securities and Exchange Commission (the “SEC”). These factors may cause our actual results to differ materially from any forward-looking statement. Given these uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements.

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:

	Page
Consolidated Balance Sheets	5
Consolidated Statements of Operations and Deficit and Comprehensive Loss	6
Consolidated Statement of Stockholders’ Equity (Deficiency)	7
Consolidated Statements of Cash Flows	8
Notes to the Consolidated Financial Statements	9

PARK PLACE ENERGY CORP.

CONSOLIDATED BALANCE SHEETS

(An Exploration Stage Company)

(Expressed in Canadian Dollars)

(Unaudited)

		March 31,			December 31,
		2011			2010
ASSETS
Current
Cash	$	1,877		$	22
Receivables		6,087			5,680
Prepaid expenses		1,270			2,204
Total current assets		9,234			7,906
Fixed assets
Property and equipment, net		7,360			7,829
Oil and gas properties (Note 3)		76,691			76,860
Total assets	$	93,285		$	92,595
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable and accrued liabilities	$	91,984		$	169,835
Loan payable (Note 4)		81,500			-
Total current liabilities		173,484			169,835
Stockholders' equity
Common stock (Note 5)
Authorized                    40,000,000 par value $0.00001
Issued and outstanding                     5,598,909 common shares (December 31, 2010 – 5,598,909)		56			56
Additional paid-in capital (Note 5)		11,571,924			11,571,924
Accumulated other comprehensive income		228,535			228,480
Deficit accumulated during the exploration stage		(11,880,714	)		(11,877,700	)
Total stockholders’ equity		(80,199	)		(77,240	)
Total liabilities and stockholders’ equity	$	93,285		$	92,595

Nature and continuance of operations (Note 1)

Subsequent events (Note 10)

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

PARK PLACE ENERGY CORP.

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(An Exploration Stage Company)

(Expressed in Canadian Dollars)

(Unaudited)

		Cumulative
		Amounts
		From Inception			Three Months			Three Months
		May 4, 2006 to			Ended			Ended
		March 31,			March 31,			March 31,
		2011			2011			2010
REVENUE
Oil and gas	$	1,619,047		$	-		$	-
DIRECT COSTS
Depletion		1,235,574			-			-
Operating expenses		1,140,050			-			-
		(756,577	)		-			-
EXPENSES
Office and general		731,125			8,534			24,461
Depreciation		4,518			469			299
Exploration expenses		308,534			-			-
Foreign exchange loss		122,046			860			2,236
Professional fees		919,702			(544	)		20,047
Consulting		1,872,262			6,571			83,876
Investor relations		884,140			102			4,285
Management fees		631,638			-			-
Travel		192,719			-			-
Stock-based compensation (Note 5)		2,004,083			-			163,000
		(7,670,767	)		(15,992	)		(298,204	)
Loss before other items and income taxes		(8,427,344	)		(15,992	)		(298,204	)
OTHER ITEMS
Interest and other revenue		122,683			12,978			23,691
Gain on sale of oil and gas properties		381,166			-			-
Gain on sale of the marketable securities		4,635			-			-
Loss on sale of disposal of properties		(53,869	)		-			-
Loss on write-down of promissory note		(254,997	)		-			-
Gain on settlement of debt		341,777			-			-
Write off oil and gas costs and exploration advances		(4,244,676	)		-			-
Loss before income tax		(12,130,625	)		(3,014	)		(274,513	)
Future income tax recovery		291,060			-			-
Net loss for the period		(11,839,565	)		(3,014	)		(274,513	)
OTHER COMPREHENSIVE INCOME
Foreign currency translation adjustment		237,861			55			(3,093	)
COMPREHENSIVE LOSS	$	(11,601,704	)	$	(2,959	)	$	(277,606	)
Basic and diluted loss per share				$	(0.00	)	$	(0.08	)
Weighted average number of shares outstanding – basic and diluted					5,598,909			3,314,467

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

PARK PLACE ENERGY CORP.

CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY

(An Exploration Stage Company)

(Expressed in Canadian Dollars)

(Unaudited)

	Common Stock
												Deficit
									Accumulated			Accumulated
						Additional			Other			During the
	Number of					Paid-In			Comprehensive			Exploration
	Shares		Amount			Capital			Income			Stage			Total
December 31, 2007	1,100,011	$	330		$	7,932,363		$	114,837		$	(4,594,798	)	$	3,452,732
Issuance of common stock for cash	784,071		235			1,983,713			-			-			1,983,948
Issuance of common stock in settlement of debt	71,429		21			149,979			-			-			150,000
Issuance of common stock for consulting	183,333		56			560,702			-			-			560,758
Stock-based compensation	-		-			310,444			-			-			310,444
Share issuance costs	-		-			(69,465	)		-			-			(69,465	)
Cumulative translation adjustment	-		-			-			79,005			-			79,005
Net loss	-		-			-			-			(5,195,292	)		(5,195,292	)
December 31, 2008	2,138,844	$	642		$	10,867,736		$	193,842		$	(9,790,090	)	$	1,272,130
Issuance of common stock for cash	155,000		46			92,390			-			-			92,436
Cumulative translation adjustment	-		-			-			35,602			-			35,602
Stock-based compensation	-		-			109,806			-			-			109,806
Net loss	-		-			-			-			(1,806,007	)		(1,806,007	)
December 31, 2009	2,293,844	$	688		$	11,069,932		$	229,444		$	(11,596,097	)	$	(296,033	)
Issuance of common stock for cash	1,296,311		399			120,088			-			-			120,487
Issuance of common stock in settlement of debt	1,638,754		518			125,670			-			-			126,188
Issuance of common stock for consulting	370,000		111			184,519			-			-			184,630
Stock-based compensation	-		-			59,129			-			-			59,129
Cumulative translation adjustment	-		-			-			(964	)		-			(964	)
Warrants	-		-			10,926			-			-			10,926
Adjustment for par value	-		(1,660	)		1,660			-			-			-
Net loss	-		-			-			-			(281,603	)		(281,603	)
December 31, 2010	5,598,909	$	56		$	11,571,924		$	228,480		$	(11,877,700	)	$	(77,240	)
Cumulative translation adjustment	-		-			-			55			-			55
Net loss	-		-			-			-			(3,014	)		(3,014	)
March 31, 2011	5,598,909	$	56		$	11,571,924		$	228,535		$	(11,880,714	)	$	(80,199	)

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

PARK PLACE ENERGY CORP.

(An Exploration Stage Company)

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Expressed in Canadian Dollars)

		Cumulative Amounts
		From Inception			Three Months			Three Months
		May 4, 2006 to			Ended			Ended
		March 31,			March 31,			March 31,
		2011			2011			2010
CASH FLOW FROM OPERATING ACTIVITIES
Loss for the period	$	(11,839,565	)	$	(3,014	)	$	(274,513	)
Depreciation		4,518			469			299
Stock-based compensation		2,004,083			-			163,000
Warrants issued for consulting services		10,926			-			-
Interest accrued on notes payable		12,530			-			-
Impairment of oil and gas		2,924,647			-			-
Gain on sale of oil and gas interest		(381,166	)		-			-
Debt paid by issuance of common stock		376,049			-			-
Gain on sale of marketable securities		(4,635	)		-			-
Gain on settlement of debt		(341,777	)		-			-
Write off of exploration advances		37,558			-			-
Investor relation and consulting fees paid by					-			-
issuance of common stock		508,785			-			-
Depletion		1,235,574			-			-
Future income tax recovery		(291,060	)		-			-
Changes in non-cash working capital items:
Decrease (increase) in receivables		(6,087	)		(407	)		(4,342	)
Decrease (increase) in prepaid expenses		(1,310	)		934			(3,263	)
Decrease (increase) in accounts payable and
accrued liabilities		937,815			(76,637	)		136,252
Increase (decrease) in due to related parties		65,449			-			(48,513	)
Net cash used in operating activities		(4,747,666	)		(78,655	)		(31,080	)
CASH FLOW FROM INVESTING ACTIVITIES
Oil and gas interests		(3,741,761	)		-			-
Proceeds from oil and gas properties		50,000			-			-
Proceeds from sale of marketable securities		79,635			-			-
Exploration advances		(270,919	)		-			(36,172	)
Loan payable		(572,000	)		-			-
Cash acquired through recapitalization		320			-			-
Acquisition of property and equipment		(11,878	)		-			-
Net cash used in investing activities		(4,466,603	)		-			(36,172	)
CASH FLOW FROM FINANCING ACTIVITIES
Proceeds from issuance of capital stock		8,287,009			-			66,883
Proceeds from loans		706,500			81,500			-
Repurchase of common stock		(15,028	)		-			-
Net cash provided by financing activities		8,978,481			81,500			92,414
Effect of foreign exchange on cash		237,665			990			(3,093	)
Change in cash during the period		1,877			1,855			(3,462	)
Cash position, beginning of period		-			22			4,414
Cash position, end of period	$	1,877		$	1,877		$	952

Supplemental disclosure with respect to cash flows (Note 6)

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

PARK PLACE ENERGY CORP.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(An Exploration Stage Company)

(Expressed in Canadian Dollars)

MARCH 31, 2011

(Unaudited)

1.	NATURE AND CONTINUANCE OF OPERATIONS
	Park Place Energy Corp., formerly ST Online Corp. (the “Company”), was incorporated under the laws of the State of Nevada on August 27, 2004. On June 22, 2007, the Company entered into a Business Combination Agreement with Park Place Energy Inc., a private company incorporated under the laws of the Province of Alberta, Canada, and 0794403 B.C. Ltd., a British Columbia corporation and wholly-owned subsidiary of the Company.
	On July 6, 2007, the Company affected a forward split of its shares of common stock on the basis of eight new shares of common stock for each one share of common stock outstanding on that date and increased the authorized share capital from 100,000,000 shares of common stock to 800,000,000 shares of common stock. At the same time, the Company merged with a wholly-owned subsidiary, Park Place Energy Corp. which incorporated under the laws of the State of Nevada in contemplation of the acquisition of all of the issued and outstanding shares of Park Place Energy Inc. and the name of the Company was then changed to Park Place Energy Corp. On July 23, 2007, the Company effected a forward split of its shares of common stock on the basis of one and one-half new shares of common stock for each one share of common stock outstanding on that date and increased authorized share capital from 800,000,000 shares of common stock to 1,200,000,000 shares of common stock. Pursuant to the terms of the Business Combination Agreement, the Company issued to each shareholder of record of Park Place Energy Inc. at the time of the acquisition one share of our common stock for every two shares they held of Park Place Energy Inc. On August 31, 2009, the Company affected a forward split of its shares of common stock on a one old share for ten new shares basis on that date and increased the authorized share capital from 1,200,000,000 shares of common stock to 12,000,000,000 shares of common stock. Subsequent to December 31, 2009, the Company affected a reverse stock split of its common shares on a three hundred old shares for one new share basis, decreasing the authorized share capital from 12,000,000,000 common shares to 40,000,000 common shares. All references to number of shares outstanding, earnings per share, stock options and warrants have been adjusted to reflect the above mentioned stock splits.
	On July 30, 2007, the Company acquired Park Place Energy Inc. which was renamed to Park Place Energy (Canada) Inc. (“Park Place Canada”) on September 14, 2007. The business of the Company is now the acquisition and exploration of oil and gas properties. Park Place Energy Corp. held exploration interests in a property in Tennessee, USA. Park Place Canada holds the exploration interests in three properties in the provinces of British Columbia and Alberta, in Canada. For accounting purposes, the merger was treated as a recapitalization with Park Place Energy Inc. being the accounting acquirer and the go-forward financial statements reflect the history of Park Place Energy Inc. from its inception on May 4, 2006. The fiscal year-end of Park Place Energy Corp. was changed to December 31 from September 30.
	On November 22, 2007 a new private company, Park Place Energy (International) Inc. (“Park Place International”) was incorporated under the laws of British Columbia, Canada. This company is a wholly owned subsidiary of Park Place Energy Corp.
	On July 24, 2008, the Company acquired the interest in certain 5 Year Northern Petroleum and Natural Gas Leases located in Alberta, Canada. The Company sold this interest on April 6, 2010 for consideration of $50,000.
	These consolidated financial statements have been prepared on a going concern basis, which assumes the realization of assets and settlement of liabilities in the normal course of business. The Company has had a history of negative cash flows from operating activities. In addition, the Company has an accumulated deficit of $11,880,714 as of March 31, 2011. These considerations raise substantial doubt about the Company’s ability to continue as going concern. Accordingly, the Company will require continued financial support from its shareholders and creditors until it is able to generate sufficient cash flow from operations on a sustained basis. Failure to obtain the ongoing support of its stockholders and creditors may make the going concern basis of accounting inappropriate, in which case the Company’s assets and liabilities would need to be recognized at their liquidation values. These financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts and classification of liabilities that might arise from this uncertainty.

PARK PLACE ENERGY CORP.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(An Exploration Stage Company)

(Expressed in Canadian Dollars)

MARCH 31, 2011

(Unaudited)

2.	SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
	Recent accounting pronouncements
	In February 2010, the FASB issued Accounting Standards Update “ASU” 2010-09, Subsequent Events (Topic 855), amending ASC 855. ASU 2010-09 removes the requirement for an SEC filer to disclose a date relating to its subsequent events in both issued and revised financial statements. ASU 2010-09 also eliminates potential conflicts with the SEC’s literature. Most of ASU 2010-09 is effective upon issuance of the update. The adoption of this standard did not have a material impact on the Company’s financial position or results of operations.
	In January 2010, the FASB issued ASU 2010-06, Fair Value Measurements and Disclosures (Topic 820), Improving Disclosures about Fair Value Measurements, amending ASC 820. ASU 2010-06 requires entities to provide new disclosures and clarify existing disclosures relating to fair value measurements. The new disclosures and clarifications of existing disclosures are effective for interim and annual reporting periods beginning after December 15, 2009, except for the disclosures about purchases, sales, issuances, and settlements in Level 3 fair value measurements, which are effective for fiscal years beginning after December 15, 2010 and for interim periods within those fiscal years. The adoption of this standard did not have a material impact on the Company’s financial position or results of operations.
	In June 2009, the FASB issued ASC 810, which revised the consolidation guidance for variable interest entities. The amendments include: (1) the elimination of the exemption for qualifying special purpose entities, (2) a new approach for determining who should consolidate a variable-interest entity, and (3) changes to when it is necessary to reassess who should consolidate a variable-interest entity. ASC 810 is effective for the first annual reporting period beginning after November 15, 2009 and for interim periods within that first annual reporting period. The Company adopted FASB ASC 810 and the adoption of this standard had no material impact on our financial statements for the three month period ended March 31, 2011.
	In September 2009, the FASB issued authoritative guidance regarding multiple-deliverable revenue arrangements. This guidance addresses how to separate deliverables and how to measure and allocate consideration to one or more units of accounting. Specifically, the guidance requires that consideration be allocated among multiple deliverables based on relative selling prices. The guidance establishes a selling price hierarchy of (1) vendor specific objective evidence, (2) third-party evidence and (3) estimated selling price. This guidance is effective for annual periods beginning after June 15, 2010 but may be early adopted as of the beginning of an annual period. The Company is currently evaluating the effect that this guidance will have on its consolidated financial position and results of operations but does not expect its adoption to have a material impact on the Company’s financial reporting and disclosures.
	In July 2010, the FASB issued an Accounting Standards Update No. 2010-20, Receivables, Disclosure about the Credit Quality of Financing Receivables and Allowances for Credit Losses. The standard requires additional disclosure related to the credit quality of financing receivables, troubled debt restructurings and significant purchases or sales of financing receivables during the period. The standard requires that these disclosures and existing disclosures be presented on a disaggregated basis, similar to the manner that the entity uses to evaluate its credit losses. Disclosures of information as of the end of a reporting period are effective for interim and annual periods ending after December 15, 2010, and disclosures of activity that occurred during a reporting period are effective for interim and annual periods beginning after December 15, 2010. The Company has adopted this standard on January 1, 2010, and it will have no impact on our consolidated financial statements for the three month period ended March 31, 2011, due to the receivables being short-term in nature and are therefore not financing receivables.

PARK PLACE ENERGY CORP.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(An Exploration Stage Company)

(Expressed in Canadian Dollars)

MARCH 31, 2011

(Unaudited)

2.	SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont’d…)
	Recent accounting pronouncements (cont’d…)
	In December 2010, the FASB issued ASU 2010-29, which contains updated accounting guidance to clarify the acquisition date that should be used for reporting pro forma financial information when comparative financial statements are issued. This update requires that a company should disclose revenue and earnings of the combined entity as though the business combination(s) that occurred during the current year had occurred as of the beginning of the comparable prior annual reporting period only. This update also requires disclosure of the nature and amount of material, nonrecurring pro forma adjustments. The provisions of this update, which are to be applied prospectively, are effective for business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2010, with early adoption permitted. The impact of this update on the Company’s consolidated financial statements will depend on the size and nature of future business combinations.
3.	OIL AND GAS PROPERTIES

		As at		As at
		March 31,		December 31,
		2011		2010
OIL AND GAS INTERESTS
Unproven Properties
Canada	$	76,691	$	76,860
Total Unproved Properties	$	76,691	$	76,860
Total Proven and Unproved Properties	$	76,691	$	76,860

PARK PLACE ENERGY CORP.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(An Exploration Stage Company)

(Expressed in Canadian Dollars)

MARCH 31, 2011

(Unaudited)

3.	OIL AND GAS PROPERTIES (cont’d…)
	On January 28, 2010, the Company bought a 50% interest in an oil and gas exploration property located in Saskatchewan, Canada by issuing a US$150,000 note payable. This note payable was later settled by issuing 500,000 common shares of the company.
	On May 11, 2010, the Company assigned one-half of its 50% working interest in its Saskatchewan oil and gas property to a privately held exploration company. As consideration for the assignment, the Company received 750,000 shares of the private company. As the shares had no active market they were valued based on the consideration given up, US $75,000.
	On October 12, 2010 the Bulgarian Council of Ministers granted to the Company a permit for the exploration and prospecting of oil and natural gas properties known as the Vranino Blocks.
	On October 25, 2010 an appeal against the Bulgarian Council of Ministers decision to award the Vranino Block to Park Place was filed with the Supreme Administrative Court of Bulgaria.
4.	LOAN PAYABLE
	The Company has received a refundable $81,500 of a $150,000 convertible promissory note. The terms of the note are currently under negotiations.
5.	COMMON STOCK
	On July 6, 2007 the Company implemented a stock split of its common stock by issuing eight new shares for every one old share. Effective July 23, 2007 the Company implemented a further a stock split of its common stock by issuing one and a half new shares for every old share. On August 31, 2009, the Company affected a forward split of its shares of common stock on a one (1) old share for ten (10) new shares on that date and increased the authorized share capital from 1,200,000,000 shares of common stock to 12,000,000,000 shares of common stock. Subsequent to December 31, 2009, the Company affected a reverse stock split of its common shares on a three hundred old shares for one new share basis, decreasing the authorized share capital from 12,000,000,000 common shares to 40,000,000 common shares. Except as otherwise stated to the contrary in these financial statements, all references to shares and prices per shares have been adjusted to give retroactive effect to the stock splits.
	On February 14, 2008, the Company issued 147,857 units at a price of US$2.10 for gross proceeds of US$310,500. Each unit contained one share of common stock and one warrant exercisable at US$3.00 during the first year and US$4.50 in the second year.
	On February 26, 2008, the Company issued 25,000 shares of common stock for consulting services at a value of US$3.00 per share.
	On March 3, 2008, the Company issued 284,548 units at a price of US$2.10 for gross proceeds of US$597,550. Each unit contained one share of common stock and one warrant exercisable at US$3.00 during the first year and US$6.00 in the second year.

PARK PLACE ENERGY CORP.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(An Exploration Stage Company)

(Expressed in Canadian Dollars)

MARCH 31, 2011

(Unaudited)

5.	COMMON STOCK (cont’d…)
	On March 6, 2008, the Company issued 71,429 units at a price of US$2.10 to the holder’s of the loan payable as outlined in Note 4. Each unit contained one share of common stock and one warrant exercisable at US$3.00 during the first year and US$4.50 during the second year.
	In April, 2008, the Company issued 300,000 units at a price of US$3.00 per unit for gross proceeds of US$900,000. Each unit consisted of one common share and one share purchase warrant entitling the holder to purchase a common share up to one year at a price of US$6.00. The Company paid a Finder’s Fee of $45,000 and issued Finder’s Warrants with a fair value of $27,986 to acquire 15,000 common shares of the Company at US$3.00 for one year.
	On June 20, 2008, the Company issued 80,000 shares of common stock for consulting services at a value of US$2.70 per share.
	On July 3, 2008, the Company issued 49,167 shares of common stock at a price of US$3.00 for gross proceeds of US$147,500 and 2,500 shares of common stock at a price of US$4.50 for gross proceeds of US$11,250.
	On September 8, 2008, the Company issued 20,000 shares of common stock for consulting services at a value of US$3.75 per share.
	On September 8, 2008, the Company issued 58,333 shares of common stock for consulting services at a value of US$3.00 per share.
	On July 2, 2009, the Company issued 33,330 shares of common stock at a price of US$0.30 for gross proceeds of US$10,000.
	On July 16, 2009, the Company issued 44,334 shares of common stock at a price of US$0.60 for gross proceeds of US$26,600.
	On July 27, 2009, the Company issued 15,834 shares of common stock at a price of US$0.60 for gross proceeds of US$9,500.
	On August 13, 2009, the Company issued 10,918 shares of common stock at a price of US$0.60 for gross proceeds of US$6,550.
	On August 18, 2009, the Company issued 50,584 shares of common stock at a price of US$0.60 for gross proceeds of US$30,350.
	On January 15, 2010, the Company issued 21,667 common shares at a price of US$0.30 on the exercise of options for gross proceeds of US$6,500.
	On January 25, 2010, the Company issued 8,424 common shares at a price of US$0.45 on the exercise of options for gross proceeds of US$3,971.
	On January 28, 2010 the Company issued a total of 1,248,163 common shares at a value of US$0.07 per share for payment of outstanding payables of $169,235 (US$154,553), loans payable of $35,000, amounts due to related parties of $34,085 (US$32,101) and a note payable of $159,270 ($US150,000). A gain of $304,819 (US$287,078) was recorded

PARK PLACE ENERGY CORP.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(An Exploration Stage Company)

(Expressed in Canadian Dollars)

MARCH 31, 2011

(Unaudited)

5.	COMMON STOCK (cont’d…)
	On February 16, 2010, the Company issued 6,576 common shares at a price of US$0.45 and 21,786 of common shares at a price of US$0.51 on the exercise of options for gross proceeds of US$2,959 and US$11,111.
	On February 16, 2010 the Company issued 187,857 shares and warrants on the close of its unit offering for gross proceeds of US $39,450.
	On March 11, 2010, the Company issued 150,000 common shares at a value of US$0.06 in satisfaction of outstanding accounts payable of $46,197 (US$45,000). A gain of $ 36,958 (US$36,000) was reported as the difference in accounts payable settled and the fair market value of shares issued.
	On March 24, 2010 the Company affected a reverse stock split of its common shares on a three hundred old shares for one new share basis, decreasing the authorized share capital from 12,000,000,000 common shares to 40,000,000 common shares.
	On August 19, 2010, the Company completed a private placement issuing 850,000 common shares at a price of US $0.05 for gross proceeds of $42,500. The Company also issued 169,163 shares for the settlement of $8,718 (US$8,458) in accounts payable. A stock based compensation expense of US $27,066 was recorded for the difference between the market value of the Company’s shares when issued and the debt settlement value.
	On August 19, 2010, the Company issued 71,428 common shares at a price of US$0.21 for settlement of accounts payable of $15,460 (US$15,000).
	On November 10, 2010, the Company issued 200,000 restricted shares at a price of US$0.50 per share to a consultant pursuant to the terms of a consulting agreement.
	On November 10, 2010, the Company issued 170,000 restricted shares at a price of US$0.50 per share to a consultant pursuant to the terms of a consulting agreement.
	On November 29, 2010, the Company issued 200,000 common shares at a price of US$0.05 for gross proceeds of US$10,000.
	On January 5, 2011 the Company proposed to issue and sell by private placement up to 2,857,143 units in the capital of the Company at price of $0.07 per share for aggregate gross proceeds of up to $200,000. The Company reserved for issuance up to 2,857,143 Warrant Shares.
	Stock options
	The Company adopted an official incentive stock option plan as at October 11, 2007 whereby the total number of authorized options to be granted is up to a total of 200,000 Common Shares. Under the plan the exercise price of each option shall not be less than the market price of the Company’s stock as calculated immediately preceding the day of the grant. The vesting schedule for each option shall be specified by the Company at the time of grant.
	On June 24, 2009 the Company amended the stock option plan to increase common shares approved to 216,667.

PARK PLACE ENERGY CORP.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(An Exploration Stage Company)

(Expressed in Canadian Dollars)

MARCH 31, 2011

(Unaudited)

5. COMMON STOCK (cont’d…)

On January 25, 2010 the Company amended and restated its 2007 Stock Option Plan to increase the maximum number of common shares that may be reserved for issuance under the Plan from 216,667 common shares to 533,333 common shares.

As at March 31, 2011, the Company had outstanding stock options, enabling the holders to acquire further common shares as follows:

		Exercise
	Number	Price
	of Options	(US$)	Expiry Date
	294,881	0.51	January 25, 2012
Balance as at March 31, 2011	294,881

Stock option transactions are summarized as follows:

	March 31,			December 31,
	2011			2010
			Weighted				Weighted
			Average				Average
			Exercise				Exercise
	Number of		Price	Number of			Price
	Options		(US$)	Options			(US$)
Balance, beginning of the year	294,881	$	0.51	46,665		$	1.20
Granted	-		-	331,667			0.51
Exercised	-		-	(58,453	)		0 .42
Expired / cancelled	-		-	(24,998	)		1.78
Balance, end of period	294,881	$	0.51	294,881		$	0.51
Options exercisable, end of period	294,881	$	0.51	294,881		$	0.51

PARK PLACE ENERGY CORP.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(An Exploration Stage Company)

(Expressed in Canadian Dollars)

MARCH 31, 2011

(Unaudited)

5.	COMMON STOCK (cont’d…)
	During the three month period ended March 31, 2011 the Company granted Nil options of common stock (2010 – $331,667). The weighted average fair value of the options granted during the three month period ended March 31, 2011 is $Nil (2010 - $0.62) per option.
	The aggregate intrinsic value for the options vested as of March 31, 2011 is approximately $Nil (2010 - $Nil) and for total options outstanding is approximately $Nil (2010 - $Nil).
	Options – Stock-Based Compensation
	The following weighted-average assumptions were used for the Black-Scholes valuation of stock options granted during the year ended December 31:

	2010
Risk-free interest rate	1.18%
Expected life of options	2.00 years
Annualized volatility	271.77%
Dividend rate	0.00%

Warrants

As at March 31, 2010, the Company had outstanding warrants, enabling the holders to acquire further common shares as follows:

		Exercise
	Number	Price
	of Warrants	(US$)	Expiry Date
	187,857	0.26	January 16, 2012
	66,666	0.30	May 19, 2012
	33,333	0.60	July 2, 2011
Balance as March 31, 2011	287,856	0.31

Warrants transactions are summarized as follows:

PARK PLACE ENERGY CORP.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(An Exploration Stage Company)

(Expressed in Canadian Dollars)

MARCH 31, 2011

(Unaudited)

5. COMMON STOCK (cont’d…)

	March 31,			December 31,
	2011			2010
			Weighted				Weighted
			Average				Average
			Exercise				Exercise
	Number of		Price	Number of			Price
	Warrants		(US$)	Warrants			(US$)
Balance, beginning of year	287,856	$	0.31	537,167		$	4.20
Granted	-		-	254,523			0.27
							0.27
Expired / cancelled	-		-	(503,834	)		4.50
Balance, end of the period	287,856	$	0.31	287,856		$	0.31

During the three month period ended March 31, 2011 the Company issued no warrants.

The following weighted average assumptions were used for the Black Scholes valuation of stock options granted during the year ended December 31:

	2010
Risk-free interest rate	1.83%
Expected life of warrants	2 years
Annualized volatility	279.66%
Dividend rate	0.00%

6. SUPPLEMENTAL DISCLOSURE WITH RESPECT TO CASH FLOWS

		Cumulative
		Amounts from
		Inception
		on May 2,		Three Months		Year
		2006 to		Ended		Ended
		March 31,		March 31,		December 31,
		2011		2011		2010
Cash paid during the period for interest	$	-	$	-	$	-
Cash paid during the period for income taxes	$	-	$	-	$	-

PARK PLACE ENERGY CORP.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(An Exploration Stage Company)

(Expressed in Canadian Dollars)

MARCH 31, 2011

(Unaudited)

6.	SUPPLEMENTAL DISCLOSURE WITH RESPECT TO CASH FLOWS (cont’d…)
	Significant non-cash transaction during the three month period ended March 31, 2010 include:
	a)	The Company issued 1,248,163 shares of common stock at a price of $0.30 per share for payment of outstanding payables in the amount of US $374,449. A gain of US $287,078 was recorded as the difference between the market value of shares issued and the amount of debt settled.
	b)	The Company issued 150,000 shares of common stock at a price of $0.30 per share for payment of outstanding payables in the amount of US $45,000. A gain of US $36,000 was recorded as the difference between the market value of shares issued and the amount of debt settled.
	There are no significant non-cash transaction during the three month period ended March 31, 2011.
7.	RELATED PARTY TRANSACTIONS
	During the three month period ended March 31, 2011 the Company entered into the following transactions with related parties:
	The Company paid or accrued consulting fees of $3,571 (March 31, 2010 - $18,250) to the directors of the Company. The amount is unsecured, non-interest bearing and has no specific terms of repayment.
	Related party transactions are in the normal course of operations, occurring on terms and conditions that are similar to those of transactions with unrelated parties and, therefore, are measured at the exchange amount.
8.	SEGMENTED INFORMATION
	The Company's operations are in the resource industry in Canada and the United States.
	Geographical information is as follows:

		March 31,		December 31,
		2011		2010
Oil and gas properties
Canada	$	76,691	$	76,860
United States		-		-
	$	76,691	$	76,860

All of the Company’s oil and gas revenues were from Canada.

PARK PLACE ENERGY CORP.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(An Exploration Stage Company)

(Expressed in Canadian Dollars)

MARCH 31, 2011

(Unaudited)

9.	FINANCIAL INSTRUMENTS
	Financial instruments, including receivables, prepaids, accounts payable and accrued liabilities are carried at cost, which management believes approximates fair value due to the short-term nature of these instruments. Unless otherwise noted, it is management's opinion that the Company is not exposed to significant interest, currency or credit risks arising from these financial instruments. The company’s investments are classified as held-for-trading and are marked-to-market at each reporting date with the unrealized gains or losses being recognized in net income.
	Under GAAP, fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. A fair value hierarchy is also established, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. There are three levels of inputs that may be used to measure fair value:

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)

	At March 31, 2011 our cash and investments were measured using level one inputs.
10.	SUBSEQUENT EVENTS
	On April 6, 2011, the Company entered into a Convertible Promissory Note (the “Note”), to evidence the Company’s 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 the Company 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, the Company issued to the Holder 5,000,000 restricted shares of the Company’s 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. The Company relied on Regulation S as an exemption from the registration requirements of the Securities Act for the issuance of the Collateral Shares to the Holder.

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

The following discussion of our financial condition, changes in financial condition and results of operations for the three months ended March 31, 2011 and 2010 should be read in conjunction with our unaudited interim financial statements and related notes for the three months ended March 31, 2011 and 2010. The following discussion contains forward-looking statements that involve risks, uncertainties and assumptions. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of many factors, including, but not limited to, those set forth under the heading “Risk Factors” in our Annual Report on Form 10-K.

Overview of our Business

We are currently an exploration stage company engaged in exploring for conventional oil and natural gas. In the projects in which we hold interests, another party typically acts as the operator of the project. With respect to the projects that we participate in, we provide to the operator funding for our proportionate share of costs as well as technical input on how best to develop the property. As a way to keep our overhead down, we engage the services of consultants who have technical expertise to best represent our interests.

Plan of Operations

Overview

Our initial Plan of Operations for the next 12 months is to work with the Bulgarian Ministry of Economy, Energy and Tourism, as well as negotiate with Overgas Inc. directly, to attempt to find a positive conclusion to the current court case in front of the Supreme Administrative Court of Bulgaria. If the original permit is upheld or if the Company can enter into a Joint Venture agreement with Overgas Inc., we plan to undertake an exploration program in the Dobroudja Basin. The first year program includes perforating and testing the Vranino #1 well, and procuring a seismic program of the license area which will cost approximately $350,000. While the Company awaits the outcome in Bulgaria representatives are actively seeking further domestic and international exploration opportunities either through direct acquisition or joint venture agreements. We anticipate spending approximately $150,000 in the next 12 months in office and general expenses, as well as approximately $500,000 in professional, consulting and management fees.

Estimated Capital Costs

Based on our current plan of operations as set forth above, we estimate that we will require approximately $1.000,000 to pursue our plan of operations over the next 12 months. As at March 31, 2011, we had cash of $1,877 and a working capital deficit of $167,250. Consequently, we will require additional financing to pursue our plan of operations over the next 12 months. There can be no assurance that we will obtain any additional financing in the amounts required or on terms favorable to us. If we are unable to obtain additional financing, we may have to re-evaluate or abandon our business activities and revise our plan of operations.

We believe that debt financing will not be an alternative for funding as we do not have any significant tangible assets to secure any debt financing. We anticipate that additional funding will be in the form of equity financing from the sale of our common stock. However, we cannot provide investors with any assurance that we will be able to raise sufficient funding from the sale of our common stock to fund our plan of operations going forward. In the absence of such financing, our business plan will fail. Even if we are successful in obtaining equity financing, there is no assurance that we will obtain the funding necessary to pursue our business plan. If we do not continue to obtain additional financing going forward, we will be forced to re-evaluate or abandon our plan of operations.

Results of Operations

The following table sets forth our results of operations from inception on May 2, 2006 to March 31, 2011 as well as for the three month periods ended March 31, 2011 and 2010.

		Cumulative Amounts From Inception  May 4, 2006 to March 31, 2011			Three Months Ended March 31, 2011			Three Months Ended March 31, 2010
REVENUE
Oil and gas	$	1,619,047		$	-		$	-
DIRECT COSTS
Depletion		1,235,574			-			-
Operating expenses		1,140,050			-			-
		(756,577	)		-			-
EXPENSES
Office and general		731,125			8,534			24,461
Depreciation		4,518			469			299
Exploration expenses		308,534			-			-
Foreign exchange loss		122,046			860			2,236
Professional fees		919,702			(544	)		20,047
Consulting		1,872,262			6,571			83,876
Investor relations		884,140			102			4,285
Management fees		631,638			-			-
Travel		192,719			-			-
Stock-based compensation (Note 5)		2,004,083			-			163,000
		(7,670,767	)		(15,992	)		(298,204	)
Loss before other items and income taxes		(8,427,344	)		(15,992	)		(298,204	)
OTHER ITEMS
Interest and other revenue		122,683			12,978			23,691
Gain on sale of oil and gas properties		381,166			-			-
Gain on sale of the marketable securities		4,635			-			-
Loss on sale of disposal of properties		(53,869	)		-			-
Loss on write-down of promissory note		(254,997	)		-			-
Gain on settlement of debt		341,777			-			-
Write off oil and gas costs and exploration advances		(4,244,676	)		-			-
Loss before income tax		(12,130,625	)		(3,014	)		(274,513	)
Future income tax recovery		291,060			-			-
Net loss for the period		(11,839,565	)		(3,014	)		(274,513	)
OTHER COMPREHENSIVE INCOME
Foreign currency translation adjustment		237,861			55			(3,093	)

Revenue

Our oil and gas revenue for the three months ended March 31, 2011 was $nil, compared to $nil for the three months ended March 31, 2010. This revenue is offset by direct costs of $nil in depletion and $nil in operating expenses for the three months ended March 31, 2011, compared to $nil in depletion and $nil in operating expenses for the three months ended March 31, 2010.

Expenses

Our primary expense categories are described below:

Office and General Expenses

Our office and general expenses decreased to $8,534 for the three months ended March 31, 2011 from $24,461 for the three months ended March 31, 2010.

Professional Fees

Our professional fees decreased to ($544) for the three months ended March 31, 2011 from $20,047 for the three months ended March 31, 2010.

Consulting Expenses

Our consulting expenses decreased to $6,571 for the three months ended March 31, 2011 from $83,876 for the three months ended March 31, 2010.

Investor Relations Expenses

Our investor relations expense for the three months ended March 31, 2011decreased to $102 compared to $4,285 for the three months ended March 31, 2010.

Management Fees

Our management fees were $nil for the three months ended March 31, 2011 compared to $nil for the three months ended March 31, 2010.

Stock-Based Compensation Expenses

Our stock-based compensation expenses decreased to $nil for the three months ended March 31, 2011 from $163,000 for the three months ended March 31, 2010.

Loss

Our net loss before other items and taxes for the three months ended March 31, 2011 was $3,014, compared to $274,513 for the three months ended March 31, 2010. Our comprehensive loss for the three months ended March 31, 2011 was $2,959, compared to $277,606 for the three months ended March 31, 2010.

Liquidity and Capital Resources

		As at			As at
		March 31, 2011			December 31, 2010
		(Unaudited)			(Audited)
Cash	$	1,877		$	22
Working capital (deficit)		(167,250	)		(161,929	)
Total assets		93,285			92,595
Total liabilities		173,484			169,835
Shareholders’ equity (deficiency)		(80,199	)		(77,240	)

We anticipate that we will require approximately $1,000,000 to pursue our plan of operations over the next 12 months. As at March 31, 2011, we had cash of $1,877 and a working capital deficit of $167,250. Consequently, we will require additional financing to pursue our plan of operations over the next 12 months. There can be no assurance that we will obtain any additional financing in the amounts required or on terms favorable to us. If we are unable to obtain additional financing, we may have to re-evaluate or abandon our business activities and plan of operations.

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 our 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 common shares, or upon payment in full of the Note and all Interest thereon, the Collateral Shares shall be cancelled and returned to Treasury.

Cash Used in Operating Activities

Net cash used in operating activities in the three months ended March 31, 2011 was $78,655, compared to $31,080 in the three months ended March 31, 2010.

Cash Flow from Investing Activities

Net cash from investing activities in the three months ended March 31, 2011 was $nil, compared to $36,172 used in investing activities in the three months ended March 31, 2010.

Cash Provided By Financing Activities

In the three months ended March 31, 2011, we received cash of $81,500, compared to $92,414 in three months ended March 31, 2010.

Subsequent to the end of the period, on April 6, 2011, we entered into the Note referred to above, to evidence our promise to repay the Holder $150,000 together with interest from April 6, 2011 at a rate of 10% per annum on the unpaid balance of the principal.

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 March 31, 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 March 31, 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 not a party to any material legal proceedings and, to our knowledge, no such proceedings are threatened or contemplated.

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.

Item 3. Defaults Upon Senior Securities

None.

Item 4. (Removed and Reserved)

Not applicable.

Item 5. Other Information

None

Item 6. Exhibits

Articles of Incorporation and By-laws
3.1	Articles of Incorporation(1)
3.2	Bylaws(2)
3.3	Certificate of Change Effective August 31, 2009(7)
3.4	Certificate of Change Effective March 24, 2010(8)
Material Contracts
10.1	Amalgamation agreement dated July 30, 2007 among the Company, Park Place Energy Inc., and 0794403 B.C. Ltd. (1)
10.2	Farmout Agreement dated May 30, 2006 between Bounty Developments Ltd. and the Company(1)
10.3	Oil Sands Lease No. 7406080083 dated August 10, 2006 (1)
10.4	Oil Sands Lease No. 7406080084 dated August 10, 2006 (1)
10.5	Seismic Option Agreement dated September 22, 2006 among the Company, Bounty Developments Ltd. and Damascus Energy Inc. (1)
10.6	Farmout and Option Agreement dated September 25, 2006 between the Company and Patch Energy Inc. (1)
10.7	Farmout Participation and Option Agreement dated October 12, 2006 among the Company, Terra Energy Corp., Regal Energy Ltd. and Patch Energy Inc. (1)
10.8	Amendment Agreement dated November 2, 2006 among Pine Petroleum Limited, Tidewater Resources Inc. and the Company (1)
10.9	Letter Agreement dated March 27, 2007 between the Company and Great Northern Oilsands, Inc. (1)
10.10	Letter Agreement dated April 4, 2007 between the Company and Great Northern Oilsands, Inc. (1)
10.11	Letter Agreement dated April 30, 2007 between the Company and Great Northern Oilsands, Inc. (1)
10.12	Earning Agreement dated June 1, 2007 among the Company, Great Northern Oilsands Inc. and Tidewater Resources Inc. (1)
10.13	Letter Agreement dated July 6, 2007 between Britcana Energy Ltd. and the Company (1)
10.14	Letter Agreement dated November 30, 2007 between Great Northern Oilsands, Inc. and the Company (5)
10.15	Participation Agreement dated August 8, 2007 between Montello Resources Ltd. and Great Northern Oilsands, Inc. (5)
10.16	Consulting Agreement dated January 1, 2007 between the Company and David Stadnyk(1)
10.17	Change of Control Agreement dated December 1, 2007 between the Company and Merchant Equities Capital Corp. (5)
10.18	Park Place Energy Corp. 2007 Stock Option Plan (5)
10.19	Park Place Energy Corp. 2007 Stock Option Plan, as amended June 2009(10)

10.20	Purchase and Sale Agreement dated February 15, 2008 among the Company, Panther Minerals Inc. and Brasam Extracao Ltda.(3)
10.21	Amended Management Services Agreement dated April 10, 2008 between the Company and David Stadnyk (5)
10.22	Termination Agreement regarding the Worsley Area Properties between the Company and Bounty Developments Ltd. dated June 25, 2008(6)
10.23	Termination Agreement regarding the Atlee Buffalo Area Properties between the Company and Bounty Developments Ltd. dated June 25, 2008(6)
10.24	Offer to Purchase Agreement regarding the Kerrobert Area Properties between the Company and True Energy Inc. dated June 25, 2008(6)
10.25	Purchase and Sale Agreement between the Company and Brasam Extracao Minerals Ltda. dated June 26, 2008(6)
10.26	Petroleum and Natural Gas Lease dated July 24, 2008(6)
10.27	Termination Agreement regarding the Cecil (Eureka) Area Properties between the Company and Bounty Developments Ltd. dated March 30, 2009(6)
10.28	Seismic Earning Agreement dated August 19, 2009(7)
10.29	Purchase and Sale Agreement dated September 16, 2009(9)
10.30	Notice of Assignment(9)
10.31	Assignment Agreement dated May 11, 2010 with Canadian Rigger Energy Inc. (11)
10.32	Convertible Promissory Note dated April 6, 2011 with Pikka Asset Management Ltd (12)
14.1	Code of Ethics (4)
Subsidiaries of the Small Business Issuer
21.1	Subsidiaries of Small Business Issuer:
	Name of Subsidiary	Jurisdiction of Incorporation
	Park Place Energy (Canada) Inc.	British Columbia
	Park Place Energy (International) Inc.	British Columbia
Certifications
31.1	Certification of Chief Executive and Chief Financial Officer pursuant to Rule 13a-14 and Rule 15d-14(a), promulgated under the Securities and Exchange Act of 1934, as amended(12)
32.1	Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002(12)

Notes
(1)	Incorporated by reference from our Current Report on Form 8-K/A, filed with the SEC on August 8, 2007.
(2)	Incorporated by reference from our registration statement on Form SB-2, filed with the SEC on December 9, 2004.
(3)	Filed with our Current Report on Form 8-K, filed with the SEC on March 6, 2008.
(4)	Incorporated by reference from our Annual Report of Form 10-KSB, filed with the SEC on October 11, 2006.
(5)	Incorporated by reference from our Annual Report on Form 10-KSB, filed with the SEC on April 15, 2008.
(6)	Incorporated by reference from our Annual Report on Form 10-K, filed with the SEC on March 31, 2009.
(7)	Incorporated by reference from our Current Report on Form 8-K, filed with the SEC on September 3, 2009.
(8)	Incorporated by reference form our Current Report on Form 8-K, filed with the SEC on March 29, 2010.
(9)	Incorporated by reference form our Current Report on Form 8-K, filed with the SEC on November 11, 2009.
(10)	Incorporated by reference from our Annual Report on Form 10-K, filed with the SEC on April 15, 2010.
(11)	Incorporated by reference from our Current Report on Form 8-K, filed with the SEC on May 25, 2010.
(12)	Filed herewith.

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.

By:	“David Johnson”
	David Johnson
	President, Chief Executive Officer, Secretary,
	Treasurer and a Director
	(Principal Executive Officer and Principal Financial Officer)
	Date: May 13, 2011

EX-10.32

NEITHER THIS NOTE NOR THE SECURITIES INTO WHICH THIS NOTE IS CONVERTIBLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “U.S. SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE U.S. SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE U.S. SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS.

CONVERTIBLE PROMISSORY NOTE

Principal Amount: $150,000 USD	Original Issue Date: April 6, 2011
Due Date: April 6, 2012

For value received the undersigned PARK PLACE ENERGY INC. (the “Borrower” or the “Company”), at Suite 1220 – 666 Burrard Street, Vancouver, British Columbia, V6C 2X8, promises to pay to the order of Pikka Asset Management Ltd, (the “Lender” or the “Holder”), at 38 Herford St., London, England, (or at such other place as the Lender may designate in writing) the sum of $150,000 USD with interest from March 29, 2011 on the unpaid principal at the rate of 10.0% per annum.

1. Unpaid principal after the Due Date shown below shall accrue interest at a rate of 10.0% annually until paid.

2. The unpaid principal and accrued interest shall be payable in full on March 29, 2012. The note may be prepaid at anytime without penalty.

3. If any payment obligation under this Note is not paid when due, the remaining unpaid principal balance and any accrued interest shall become due immediately at the option of the Lender.

4. If any payment obligation under this Note is not paid when due, the Borrower promises to pay all costs of collection, including reasonable attorney fees, whether or not a lawsuit is commenced as part of the collection process.

5. If any of the following events of default occur, this Note and any other obligations of the Borrower to the Lender shall become due immediately, without demand or notice:

(a)	The failure of the Borrower to pay the principal and any accrued interest in full on or before the Due Date;
(b)	The filing of bankruptcy proceedings involving the Borrower as a debtor;
(c)	The application for the appointment of a receiver for the Borrower;
(d)	The making of a general assignment for the benefit of the Borrower's creditors;
(e)	The insolvency of the Borrower;

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6. If any one or more of the provisions of this Note are determined to be unenforceable, in whole or in part, for any reason, the remaining provisions shall remain fully operative.

7. All payments of principal and interest on this Note shall be paid in the legal currency of the United States. The Borrower waives presentment for payment, protest, and notice of protest and nonpayment of this Note.

8. The unpaid principal and accrued interest outstanding under this Note (together, the “Loan Amount”) shall be convertible, in whole and not in part, at the option of the Lender at any time prior to the Due Date by notice to the Company into shares of the Company’s common stock (each a “Common Share”) at the conversion price (the “Conversion Price”) per Common Share equal to $0.04, subject to adjustment in accordance with this Note.

Conversion Rights granted to Lender

9. Common Shares shall be issued to the Holder upon conversion in an amount equal to a fraction, the numerator of which is the Loan Amount so converted, and the denominator of which is the Conversion Price. All Common Shares so issued shall be deemed to have been issued as fully paid and non-assessable at the applicable Conversion Price.

10. The Holder may convert the Loan Amount by surrendering this Note to the Company at the Company’s head office, together with a conversion notice in the form attached hereto or any other written notice in a form satisfactory to the Company (the “Conversion Notice”), in either case duly executed by the Holder or his legal representative or attorney duly appointed by an instrument in writing. Thereupon the Holder shall be entitled to be entered in the books of the Company as the holder of the number of the underlying Common Shares into which this Note is convertible in accordance with its terms. As soon as practicable thereafter, the Company shall deliver to the Holder and, subject as aforesaid, his nominee(s) or assignee(s), a certificate or certificates for the Common Shares into which this Note is converted.

11. The date (the “Conversion Date”) on which this Note shall be deemed to be surrendered for conversion shall be the 3^rd business day following the receipt of the Conversion Notice from the Holder. If the Conversion Date is a day on which the register of the Company’s Common Shares is closed, the person or persons entitled to receive Common Shares shall become the holder or holders of record of such Common Shares as at the date on which such register is next reopened.

12. The Company will give to the Holder notice of the record date for a declaration of dividends, a rights offering or other distribution to the holders of Common Shares not less than ten business days before any such record date. If this Note is surrendered for conversion in accordance with this section, the Holder shall not be entitled to participate as a holder of the Common Shares issuable upon conversion if the record date for the distribution is prior to the Conversion Date.

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13. Conversion of the Loan Amount under this Note in accordance herewith shall operate to discharge the Company’s obligations with respect to repayment of the Loan Amount so converted, provided that delivery of the appropriate number of Common Shares issued upon such conversion is made by the Company. The Company shall not be bound to enquire into the title of the Holder, save as ordered by a court of competent jurisdiction or as required by statute. The Company shall not be bound to see to the execution of any trust affecting the ownership of this Note nor be charged with notice of any equity that may be subsisting in respect thereof, unless the Company has actual notice thereof. Upon conversion of this Note pursuant to the provisions hereof, this Note shall be forthwith delivered to and cancelled by the Company.

14. The Company shall not be required to issue fractional Common Shares upon the conversion of this Note. If any fractional interest in Common Shares would, except for the provisions hereof, be issuable upon the conversion of this Note, the number of Common Shares issued upon such conversion shall be rounded down to the next whole number of Common Shares and the Company shall not be required to make any payment in lieu of delivering any certificates of such fractional interest.

15. The Company covenants and agrees that during the period within which the conversion rights represented by this Note may be exercised, the Company shall at all times have authorized and reserved, a sufficient number of Common Shares to provide for the exercise of the conversion rights represented by this Note. The Company also covenants and agrees to issue and submit to its registrar and transfer agent as soon as practicable and, in any event, within three business days following receipt by the Company of the Conversion Notice, a Treasury Order directing the issuance of Common Shares in accordance with such Conversion Notice.

16. The Note and the Common Shares issuable upon exercise of the conversion rights hereunder (together, the “Subject Securities”) have not been, and will not be, registered under the United States Securities Act of 1933 (the “U.S. Securities Act”), as amended, or under any state securities laws, and will be “restricted securities” as defined in Rule 144(a)(3) under the U.S. Securities Act. Subject to certain exceptions, none of the Subject Securities nor any rights thereto or interest therein may be offered for purchase or sale, sold, transferred or otherwise disposed of, directly or indirectly, in the United States, its territories or possessions, or to or for the account or benefit of any “U.S. person” as that term is defined in Regulation S under the U.S. Securities Act.

17. The Holder understands and acknowledges that this Note may not be converted in the United States, or by or on behalf of a U.S. person or a person in the United States, unless an exemption is available from the registration requirements of the U.S. Securities Act and the securities laws of all applicable states, and the Holder has furnished an opinion of counsel of recognized standing in form and substance satisfactory to the Company to such effect; provided that the Holder will not be required to deliver an opinion of counsel at a time when the Holder is an “accredited investor” as defined in Rule 501(a) of Regulation D under the U.S. Securities Act (which definition, as it applies to certain natural persons, has been amended by the Dodd-Frank Wall Street Reform and Consumer Protection Act) in connection with its exercise for his own account of the conversion rights under this Note.

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18. In addition to the legend noted on the Conversion Notice attached to this Note, if required by applicable securities laws or regulations of any stock exchange or other applicable regulatory authority, the certificates for the Common Shares to be issued upon conversion of this Note shall bear such forms of legend as may be necessary to comply with all applicable laws and regulations.

Conversion price adjustment

19. The Conversion Price shall be subject to adjustment from time to time in the events and in the manner provided in section 20, as follows:

(a)	if during the Adjustment Period (as hereinafter defined) the Company shall:
	(i)	issue to all or substantially all the holders of the Common Shares, by way of a stock dividend or otherwise, Common Shares or Convertible Securities; or
	(ii)	subdivide its outstanding Common Shares into a greater number of shares; or
	(iii)	combine or consolidate its outstanding Common Shares into a smaller number of shares,
	(any of such events being herein called a “Common Share Reorganization”), the Conversion Price shall be adjusted effective immediately after the record date at which the holders of Common Shares are determined for the purposes of the Common Share Reorganization to a number which is the product of (1) the Conversion Price in effect on such record date and (2) a fraction:
	(iv)	the numerator of which is the number of Common Shares outstanding on such record date before giving effect to the Common Share Reorganization; and
	(v)	the denominator of which is the number of Common Shares outstanding after giving effect to such Common Share Reorganization;
(b)	if during the Adjustment Period the Company shall issue or distribute to all or substantially all the holders of Common Shares, (i) shares of any class other than Common Shares, or (ii) rights, options or warrants (other than pursuant to a stock option plan or employee share purchase plan adopted by the shareholders of the Company at a general meeting of shareholders of the Company), or (iii) evidences of indebtedness, or (iv) any other assets (excluding cash dividends paid in the ordinary course) and such issuance or distribution does not constitute a Common Share Reorganization (any of such events being herein called a “Special Distribution”), the Conversion Price shall be adjusted effective immediately after the record date at which the holders of Common Shares are determined for purposes of the Special Distribution to a price which is the product of (1) the Conversion Price in effect on such record date and (2) a fraction:

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(i)	the numerator of which shall be the difference between:
	(I)	the product of (i) the number of Common Shares outstanding on such record date and (ii) the Current Market Price (as hereinafter defined) of the Common Shares on such date; and
	(II)	the aggregate fair market value (as determined by the board of directors of the Company, whose determination shall be conclusive) of the shares, rights, options, warrants, evidences of indebtedness or other assets issued or distributed in the Special Distribution; and
(ii)	the denominator of which shall be the product of (A) the number of Common Shares outstanding on such record date and (B) the Current Market Price of the Common Shares on such date.

Any Common Shares owned by or held for the account of the Company shall be deemed not to be outstanding for the purpose of any such computation. To the extent that such distribution of shares, rights, options, warrants, evidences of indebtedness or assets is not so made or to the extent that any rights, options or warrants so distributed are not exercised, the Conversion Price shall be readjusted to the Conversion Price which would then be in effect based upon such shares, rights, options, warrants, evidences of indebtedness or assets actually distributed or based upon the number of Common Shares or Convertible Securities actually delivered upon the exercise of such rights, options or warrants, as the case may be, but subject to any other adjustment required hereunder by reason of any event arising after such record date;

(c)

if during the Adjustment Period there is a reorganization of the Company not otherwise provided for in subsection 19(a) or a consolidation or merger or amalgamation of the Company with or into another body corporate including a transaction whereby all or substantially all of the Company’s undertaking and assets become the property of any other corporation (any such event being herein called a “Capital Reorganization”), the Holder, if he has not converted the entire Loan Amount prior to the effective date of such Capital Reorganization, shall be entitled to receive and shall accept, upon the exercise of such right of conversion at any time after the effective date of such Capital Reorganization, in lieu of the number of Common Shares to which he was theretofore entitled upon conversion of this Note, the aggregate number of shares or other securities or property of the Company, or such continuing, successor or purchasing corporation, as the case may be, under the Capital Reorganization that the Holder would have been entitled to receive as a result of such Capital Reorganization if, on the effective date thereof, he had been the holder of the number of Common Shares to which immediately before such transaction he was entitled upon conversion of this Note. No such Capital Reorganization shall be carried into effect unless all necessary steps shall have been taken so that the Holder shall thereafter be entitled to receive such number of shares or other securities or property of the Company, or of such continuing successor or purchasing corporation, as the case may be, under the Capital Reorganization, subject to adjustment thereafter in accordance with provisions the same, as nearly as may be possible, as those contained in this section 0 or section 20;

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(d) if the Company reclassifies or otherwise changes the outstanding Common Shares, the conversion right shall be adjusted effective immediately upon such reclassification becoming effective so that Holder shall be entitled to receive such Common Shares as he would have received had the principal amount of this Note been converted immediately prior to such effective date, subject to adjustment thereafter in accordance with provisions of this Note, as nearly as may be possible as those contained in this section 0 or section 20.

20. The following rules and procedures are applicable to adjustments made pursuant to section 0:

(a)	the adjustments and readjustments provided for in herein are cumulative and, subject to subsection 20(b), apply (without duplication) to successive issues, subdivisions, combinations, consolidations, distributions and any other events which require adjustment of the Conversion Price or the number or kind of shares or securities issuable hereunder;
(b)	no adjustment in the Conversion Price shall be required unless such adjustment would result in a change of at least 1% in the Conversion Price then in effect, provided however, that any adjustments which, except for the provisions of this subsection 20(b) would otherwise have been required to be made, shall be carried forward and taken into account in any subsequent adjustment;
(c)	no adjustment in the Conversion Price shall be made in respect of any event described in subsections 19(a)(i), 19(b) or 19(c) if the Holder is entitled to participate in such event on the same terms, mutatis mutandis, as if the Holder had converted the entire Loan Amount immediately prior to the effective date or record date of such event;
(d)	no adjustment in the Conversion Price shall be made pursuant to subsection 0 in respect of the issue of Common Shares pursuant to:
	this Note; or

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(B) any stock option or purchase plan for officers, employees or directors of the Company outstanding or in existence as at the date hereof or any amendment to such plan;

	and any such issue shall be deemed not to be a Common Share Reorganization or a Special Distribution.
(e)	if a dispute arises with respect to adjustments of the Conversion Price, such dispute shall be conclusively determined by the auditors of the Company or if they are unable or unwilling to act, by such firm of independent public accountants as may be selected by the board of directors of the Company and acceptable to the Holder and any such determination shall be binding upon the Company and the Holder;
(f)	if the Company sets a record date to determine the holders of Common Shares for the purpose of entitling them to receive any dividend or distribution or any subscription or purchase rights and shall thereafter legally abandon its plans to pay or deliver such dividend, distribution or subscription or purchase rights, then no adjustment in the Conversion Price shall be required by reason of the setting of such record date; and
(g)	notwithstanding the provisions of section 0 the maximum adjustment in the Conversion Price resulting from any adjustment described in section 19(a) shall be limited to an increase or decrease of the Conversion Price by 250% of the original Conversion Price.

21. In any case where the application of the foregoing provisions results in a decrease of the Conversion Price taking effect immediately after the record date for a specific event, if the Loan Amount is converted after that record date and prior to completion of the event, the Company may postpone the issuance to the Holder of the Common Shares to which the Holder is entitled by reason of the decrease of the Conversion Price, but such Common Shares shall be so issued and delivered to the Holder upon completion of that event with the number of such Common Shares calculated on the basis of the Conversion Price on the exercise date adjusted for completion of that event. The Company shall deliver to the person or persons in whose name or names the Common Shares are to be issued an appropriate instrument evidencing his or their right to receive such Common Shares.

22. Subject to any requirement for a longer notice period pursuant to applicable securities legislation or stock exchange policy, at least 10 business days prior to the effective date or record date, as the case may be, of any event referred to in sections 0 or 20, whether or not the event requires or might require an adjustment in the conversion rights pursuant hereto, the Company shall give notice to the Holder of the particulars of such event and, if determinable, any adjustment. Such notice need only set forth such particulars as shall have been determined at the date that notice is given.

23. In case any adjustment for which a notice in section 22 has been given is not then determinable, the Company shall promptly after such adjustment is determinable give notice to the Holder of the adjustment.

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24. As used in this Note, the following terms, unless the context otherwise requires, shall have the following meanings:

(a)	“Adjustment Period” means the period from and including the date hereof to and including the last business day prior to the Due Date;
(b)	“business day” means any day which is not a Saturday, Sunday, or statutory holiday in the City of Vancouver;
(c)	“Convertible Security” means a security of the Company convertible into or exchangeable for or otherwise carrying the right to acquire Common Shares;
(d)	“Current Market Price” means, with reference to Common Shares, the average of the VWAPs for the 30 trading days immediately preceding the applicable date for determination of the Current Market Price;
(e)	“effective date” and “record date” shall mean the close of business on the relevant date;
(f)	VWAP” means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Shares are then listed or quoted on the NYSE Amex Equities exchange, the daily volume weighted average price of the Common Shares for such date (or the nearest preceding date) as reported by Bloomberg L.P. (based on a trading day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York City time); (b) if the Common Shares are not then traded on NYSE Amex Equities Exchange, the volume weighted average price of the Common Shares for such date (or the nearest preceding date) on the OTC Bulletin Board; (c) if the Common Shares are not then quoted for trading on the OTC Bulletin Board and if prices for the Common Shares are then reported in the “Pink Sheets” published by Pink OTC Markets Inc. (or a similar organization or agency succeeding to its functions of reporting prices), the most recent bid price per Common Share so reported; or (d) in all other cases, the fair market value of a share of Common Shares as determined by an independent appraiser selected in good faith by the Holder and reasonably acceptable to the Company, the fees and expenses of which shall be paid by the Company.

Security

25. As security for the indebtedness, liabilities and obligations of the Borrower to the Lender under this Agreement, upon the Lender delivering the Loan funds to the Borrower, the Borrower shall issue and deliver to the Lender 5,000,000 shares of restricted common stock in its capital (the “Shares” or “Share Collateral”), deliverable proportionately to delivery of funds; provided, that, upon the initial delivery of funds totalling $50,000 by Lender, Borrower shall deliver to Lender, in addition to the certificate or certificates representing the 1,500,000 Shares that collateralize such $50,000, a certificate or certificates representing the additional 3,500,000 Shares (the “Advance Collateral Shares”) that are to collateralize the additional $100,000.00 principal amount of the Loan and that will bear an appropriate legend to the effect that such Shares are issued subject to the terms of this Agreement.

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To the extent the Advance Collateral Shares held by the Lender are not allocated to collateralize further Installments of the Loan pursuant to this Agreement, the Lender hereby agrees that the Borrower, without any further consent of the Lender, may cancel, pursuant to Nevada Revised Statutes 78.250, the certificate or certificates representing such outstanding Advance Collateral Shares that are not so allocated to collateralize the Loan hereunder and the Lender will forthwith redeliver the certificates representing such Advance Collateral Shares to Borrower or Borrower’s transfer agent, as requested. The Shares shall be represented by stock certificates issued by the Borrower’s registrar and transfer agent in the name of the Lender, to be held in escrow by the Lender. 26. The Share Collateral shall have customary anti-dilution protection for forward stock splits, stock dividends and major corporate transactions. In the event of a reverse stock split or combination of shares, the number of shares of common stock constituting the Share Collateral will, immediately following such reverse stock split or combination of shares, be increased by a new issuance of common stock of the Company to that number of shares constituting the Share Collateral immediately prior to such reverse stock split or combination of shares. The certificates representing any share dividends that the Borrower pays during the term of the Loan with respect to the Shares being held in escrow shall be credited and delivered to the Lender and held by the Lender pursuant to the terms of this Agreement.

27. After the Note and all accrued Interest thereon are repaid in full, the Lender shall deliver the Shares that are the designated collateral for such Note to the Borrower for return to Borrower’s treasury. In such circumstances, the Lender shall provide the Borrower with such documentation as it may reasonably require for the cancellation and return to treasury of such Shares.

Disposal of Shares

28. The Lender shall not have the right to dispose of all or part of its interest in the Shares, except in accordance with the provisions of paragraph 30 of this Agreement upon the occurrence of an Event of Default.

Voting Rights

29. Unless a voting trust is signed, the Lender shall vote the Shares held by it in escrow.

Default

30. Any one or more of the following events will constitute an Event of Default, whether any such Event of Default is voluntary or involuntary or effected by operation of law or pursuant to or in compliance with any judgment, decree, or order of any court or any order, rule, or regulation of any administrative or governmental body:

31.

(a) default by the Borrower in the due payment of any amount payable under this Agreement or in the due and complete observance or performance of any other condition, covenant, or provision of this Agreement;

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(b)	the occurrence of a material adverse change in the financial position of the Borrower or in the value of the security held by the Lender for the Loan;
(c)	any action by the Borrower that constitutes a denial of the Lender's rights set forth in this Agreement;
(d)	an order is made or a petition is filed for the bankruptcy of the Borrower;
(e)	the Borrower commits an act of bankruptcy or makes a general assignment for the benefit of its creditors or otherwise acknowledges its insolvency;
(f)	the appointment of a receiver, receiver-manager, or receiver and manager of any part of the properties or assets of the Borrower;
(g)	the enforceability of any execution, or any other process of any court against the Borrower, or the levy of a distress or analogous process upon the properties or assets or any part thereof of the Borrower;
(h)	default by the Borrower in the performance of any contractual obligation to the Lender under any other agreement or legal instrument, whether or not collateral or supplemental to this Agreement;
(i)	the holder of any mortgage, charge, or encumbrance on any of the properties or assets or any part thereof of the Borrower does anything to enforce or realize on such mortgage, charge, or encumbrance;
(j)	if, at any time during the term of this Agreement, the Borrower is subject to a change of control. For the purposes of this subparagraph, a "change of control" shall be deemed to occur if:
	1)	any person, or group of persons acting in concert, other than any current control person(s), hold greater than 20% of the issued and outstanding shares in the capital stock of the Borrower;
	2)	there is a 50% or greater change in the composition of the Borrower’s Board of Directors, effected by stockholders of the Borrower other than with the consent of the current control person(s); or
(k)	any representation or warranty made in writing to the Lender by the Borrower made in this Agreement or in any certificate or other instrument delivered or to be delivered by or on behalf of the Borrower to the Lender in contemplation of this Agreement is incorrect in any material respect on the date as of which such representation or warranty was made or purported to be made; or

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(l) trading in the shares of common stock of the Borrower is suspended for more than 30 days by a regulatory authority.

Remedies on Default

32. After any Event of Default has occurred and continues for seven (7) days and at any time thereafter, provided that the Borrower has not theretofore remedied all outstanding Events of Default, the Lender may, in its discretion, declare this Agreement to be in default. At any time thereafter while the Borrower has not remedied all outstanding Events of Default, the Lender may, at its discretion and subject to compliance with any mandatory requirements of applicable law then in effect, exercise one or more of the following remedies:

(a)

declare the then outstanding balance of the Loan, Interest, costs, and all money owing by the Borrower to be immediately due and payable and such funds and liabilities will forthwith become due and payable without presentment, demand, protest, or other notice of any kind to the Borrower, all of which are hereby expressly waived; and/or

(b)

as Lender’s sole recourse, take possession of the Shares designated as collateral for the principal amount of the Loan that is in default for its sole benefit; provided, that, in the event of a trading halt in the common stock of Borrower or upon the occurrence of an Event of Default under Section 8.1 (d), (e), (f) or (l), the Loan shall be full recourse, and the Lender shall have all remedies available under applicable laws to enforce payment of amounts due under this Agreement, including a first security interest in all of the assets of Borrower. Upon the occurrence of any Event of Default, the Lender shall be deemed to be the registered and beneficial owner of a 100% right, interest and title to the Shares free of all charges, liens and encumbrances, other than any resale or other restrictions imposed by law.

Notices

33. Any notice required or permitted to be given hereunder shall be given by facsimile transmission or by personal delivery to the party for whom it is intended, addressed as follows:

(a)	to the Company at:
	Suite 1220-666 Burrard Street
	Vancouver, British Columbia
	V6C 2X8
	Attention:	President and Chief Executive Officer
		Fax: (604) 685-0078
(b)	to the Holder at its registered address as it appears in the records of the Company.

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34. Any notice given pursuant to section 33 shall be deemed to have been given and received on the date of delivery or, in the case of a facsimile transmission, at the time indicated on the transmission report. The Company or the Holder may, from time to time, notify the other in writing of a change of address which thereafter, until changed by like notice, shall be the address of the Company or the Holder, as the case may be, for all purposes of this Note.

35. No renewal or extension of this Note, delay in enforcing any right of the Lender under this Note, or assignment by Lender of this Note shall affect the liability or the obligations of the Borrower. All rights of the Lender under this Note are cumulative and may be exercised concurrently or consecutively at the Lender's option.

This Note shall be construed in accordance with the laws of the State of Nevada.

Signed this ______day of April 6, 2011.

Borrower:

PARK PLACE ENERGY INC..
Suite 1220-666 Burrard Street
Vancouver, British Columbia
V6C 2X8

By:
	DAVID JOHNSON
	President and Chief Executive Officer

Lender:

PIKKA ASSET MANAGEMENT LTD.
38 Herford Street
London
England

By:
	Authorized Signatory

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SCHEDULE A TO
NOTE CERTIFICATE

CONVERSION FORM

TO: PARK PLACE ENERGY INC. (the “Corporation”)

1.           The undersigned registered holder of the within Note hereby irrevocably elects to convert the said Note into Common Shares of the Corporation in accordance with the terms of the Note.

2.           The Common Shares are to be registered as follows:

Name:
	(print clearly)
Address in full:

3.           Certificates representing the Common Shares are to be sent by courier to:

Name:
	(print clearly)
Address in full:

Note: In the absence of instructions to the contrary, the securities will be issued in the name of or to the Holder and will be sent by first class mail to the last address of the Holder appearing in the records maintained by the Corporation.

4.           The undersigned represents, warrants and certifies as follows (one of the following must be checked):

(a) [ ]	the undersigned holder at the time of conversion of the Note is not in the United States, is not a “U.S. person” as defined in Regulation S under the United States Securities Act of 1933, as amended (the “U.S. Securities Act”) and is not converting the Note on behalf of, or for the account or benefit of a U.S. person or a person in the United States and did not execute or deliver this Conversion Form in the United States;
(b) [ ]	the undersigned holder is resident in the United States or is a U.S. person who is a resident of the jurisdiction referred to in the address appearing above, and is a U.S. Accredited Investor and has completed the U.S. Accredited Investor Status Certificate in the form attached to this Conversion Form; or
(c) [ ]	if the undersigned holder is resident in the United States or is a U.S. Person, the undersigned holder has delivered to the Corporation and the Corporation’s transfer agent an opinion of counsel (which will not be sufficient unless it is in form and substance satisfactory to the Corporation) or such other evidence satisfactory to the Corporation to the effect that with respect to the securities to be delivered upon conversion of the Note, the issuance of such securities has been registered under the U.S. Securities Act and applicable state securities laws or an exemption from the registration requirements of the U.S. Securities Act and applicable state securities laws is available.

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“United States” and “U.S. person” are as defined in Regulation S under the U.S. Securities Act.

Note: Certificates representing Common Shares will not be registered or delivered to an address in the United States unless Box 4(b) or 4(c) above is checked.

5.      If the undersigned has indicated that the undersigned is a U.S. Accredited Investor by marking alternative 4(b) above, the undersigned represents and warrants to the Corporation that:

(a)	the undersigned has such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of an investment in the Common Shares, and the undersigned is able to bear the economic risk of loss of his or her entire investment;
(b)	the undersigned is: (i) acquiring the Common Shares for his or her own account or for the account of one or more U.S. Accredited Investors with respect to which the undersigned is exercising sole investment discretion, and not on behalf of any other person; (ii) is purchasing the Common Shares for investment purposes only and not with a view to resale, distribution or other disposition in violation of United States federal or state securities laws; and (iii) in the case of the acquisition by the undersigned of the Common Shares as agent or trustee for any other person or persons (each a “Beneficial Owner”), the undersigned holder has due and proper authority to act as agent or trustee for and on behalf of each such Beneficial Owner in connection with the transactions contemplated hereby; provided that: (x) if the undersigned holder, or any Beneficial Owner, is a corporation or a partnership, syndicate, trust or other form of unincorporated organization, the undersigned holder or each such Beneficial Owner was not incorporated or created solely, nor is it being used primarily to permit purchases without a prospectus or registration statement under applicable law; and (y) each Beneficial Owner, if any, is a U.S. Accredited Investor; and
(c)	the undersigned has not converted the Note as a result of any form of general solicitation or general advertising, including advertisements, articles, notices or other communications published in any newspaper, magazine or similar media or broadcast over radio, television or other form of telecommunications, or any seminar or meeting whose attendees have been invited by general solicitation or general advertising.

6.           If the undersigned has marked alternative 4(b) or 4(c) above, the undersigned also acknowledges and agrees that:

(a) if the undersigned decides to offer, sell or otherwise transfer any of the Common Shares, the undersigned must not, and will not, offer, sell or otherwise transfer any of such securities directly or indirectly, unless:

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	(i) the sale is to the Corporation;
	(ii) the sale is made outside the United States in a transaction meeting the requirements of Rule 904 of Regulation S under the U.S. Securities Act and in compliance with applicable local laws and regulations;
	(iii) the sale is made pursuant to the exemption from the registration requirements under the U.S. Securities Act provided by Rule 144 thereunder and in accordance with any applicable state securities or “blue sky” laws; or
	(iv) such securities are sold in a transaction that does not require registration under the U.S. Securities Act or any applicable state laws and regulations governing the offer and sale of securities, and it has prior to such sale furnished to the Corporation an opinion of counsel reasonably satisfactory to the Corporation;
(b)	the Common Shares are “restricted securities” under applicable federal securities laws and that the U.S. Securities Act and the rules of the United States Securities and Exchange Commission provide in substance that the undersigned may dispose of the securities only pursuant to an effective registration statement under the U.S. Securities Act or an exemption therefrom;
(c)	the Corporation has no obligation to register any of the Common Shares or to take action so as to permit sales pursuant to the U.S. Securities Act (including Rule 144 thereunder);
(d)	the Corporation may make a notation on its records or giving instructions to any transfer agent of the Corporation in order to implement the restrictions on transfer set forth and described in this Conversion Form;
(e)	upon the issuance thereof, and until such time as the same is no longer required under the applicable requirements of the U.S. Securities Act or applicable U.S. state laws and regulations, the certificates representing the Common Shares, and all securities issued in exchange therefor or in substitution thereof, will bear a legend in substantially the following form:

THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “U.S. SECURITIES ACT”) OR APPLICABLE STATE SECURITIES LAWS. THESE SECURITIES MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED UNLESS THERE IS AN EFFECTIVE REGISTRATION STATEMENT UNDER THE U.S. SECURITIES ACT AND SUCH LAWS COVERING SUCH SECURITIES, OR THE COMPANY RECEIVES AN OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY STATING THAT SUCH OFFER, SALE, PLEDGE OR OTHER TRANSFER IS EXEMPT FROM THE REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF THE U.S. SECURITIES ACT AND SUCH LAWS. THE SECURITIES REPRESENTED BY THE CERTIFICATE CANNOT BE THE SUBJECT OF HEDGING TRANSACTIONS UNLESS SUCH TRANSACTIONS ARE CONDUCTED IN COMPLIANCE WITH THE U.S. SECURITIES ACT.;

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DATED the __________day of ________________, 20___.

If a Corporation, Partnership or Other Entity:	If an Individual:
Name of Entity	Signature
Type of Entity	Print or Type Name
Signature of Person Signing
Print or Type Name and Title of Person Signing

Instructions:

1. The registered Holder may exercise its right to receive Common Shares by completing this form and surrendering this form and the Note to the Corporation at its principal office at Suite 1220-666 Burrard Street, Vancouver, British Columbia, V6C 2X8, Attention: President and Chief Executive Officer, and such other documents as the Corporation may reasonably require.

2. If Box 4(c) is checked, any opinion tendered must be from counsel of recognized standing in form and substance reasonably satisfactory to the Corporation. Holders planning to deliver an opinion of counsel in connection with the conversion of the Note should contact the Corporation in advance to determine whether any opinion tendered will be acceptable to the Corporation.

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U.S. ACCREDITED INVESTOR STATUS CERTIFICATE
In connection with the conversion of a Note of PARK PLACE ENERGY INC. (the “Corporation”) by the holder, the holder hereby represents and warrants to the Corporation that the holder, and each beneficial owner (each a “Beneficial Owner”), if any, on whose behalf the holder is exercising such warrants, satisfies one or more of the following categories of Accredited Investor (please write “W/H” for the undersigned holder, and “B/O” for each beneficial owner, if any, on each line that applies):
______	(1)	An organization described in Section 501(c)(3) of the U.S. Internal Revenue Code, corporation, Massachusetts or similar business trust, or partnership, not formed for the specific purpose of acquiring the securities offered, with total assets in excess of US$5,000,000;
______	(2)	A trust with total assets in excess of US$5,000,000, not formed for the specific purpose of acquiring the securities offered, whose purchase is directed by a sophisticated person (being defined as a person who has such knowledge and experience in financial and business matters that he or she is capable of evaluating the merits and risks of the prospective investment);
______	(3)	A director or executive officer of the Corporation;
______	(4)	A natural person whose individual net worth, or joint net worth with that person’s spouse, at the time of his or her purchase exceeds US$1,000,000, excluding the net value of any primary residence and, if the amount due under mortgage(s) thereon exceeds the market value thereof and the lender has recourse against such person(s) or their other assets for the shortfall, such shortfall shall be deducted from the net worth;
______	(5)	A natural person who had an individual income in excess of US$200,000 in each of the two most recent years or joint income with that person’s spouse in excess of US$300,000 in each of those years and has a reasonable expectation of reaching the same income level in the current year; or
______	(6)	An entity in which all of the equity owners meet one or more of the categories set forth above.

EX-31.1

Exhibit 31.1

CERTIFICATION

I, David Johnson, certify that:

1.	I have reviewed this report on Form 10-Q for the quarterly period ended March 31, 2011 of Park Place Energy Corp.;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.	The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of the internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
	(a)	all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
	(b)	any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 13, 2011

“David Johnson”
By:	David Johnson
Title:	President, Chief Executive Officer, Secretary, Treasurer and a director
	(Principal Executive Officer and Principal Financial Officer)

EX-32.1

Exhibit 32.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER AND PRINCIPAL FINANCIAL OFFICER
PURSUANT TO 18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

The undersigned, David Johnson, the Chief Executive Officer, Secretary and Treasurer, of Park Place Energy Corp. (the “Company”), hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to his knowledge, the Quarterly Report on Form 10-Q for the period ended March 31, 2011, fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, and that the information contained in the Quarterly Report on Form 10-Q, as amended, fairly presents in all material respects the financial condition and results of operations of the Company.

“David Johnson”

David Johnson

President, Chief Executive Officer, Secretary, Treasurer and a director

(Principal Executive Officer and Principal Financial Officer)

Date: May 13, 2011

A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signatures that appear in typed form within the electronic version of this written statement required by Section 906, has been provided to Park Place Energy Corp. and will be retained by Park Place Energy Corp. and furnished to the Securities and Exchange Commission or its staff upon request.