XOTC:PKPL Quarterly Report 10-Q Filing - 3/31/2012

Effective Date 3/31/2012

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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, 2012

[ ] 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, 400 - 5th Avenue SW  
Calgary, Alberta, Canada T2P 0L6
(Address of principal executive offices) (Zip Code)

403-539-8710
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 [ x ] No [ ]

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

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 20,667,726 shares of common stock as of May 10, 2012.



PARK PLACE ENERGY CORP.
 
Quarterly Report On Form 10-Q
For The Quarterly Period Ended
March 31, 2012
 
INDEX

PART I – FINANCIAL INFORMATION
  Item 1. Financial Statements 2
  Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations 3
  Item 3. Quantitative and Qualitative Disclosures About Market Risk 7
  Item 4. Controls and Procedures 7
       
PART II – OTHER INFORMATION 8
  Item 1. Legal Proceedings 8
  Item 1A. Risk Factors 8
  Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 8
  Item 3. Defaults Upon Senior Securities 8
  Item 4. (Removed and Reserved) 8
  Item 5. Other Information 8
  Item 6. Exhibits 8

 



PART I – FINANCIAL INFORMATION

Item 1. Financial Statements

PARK PLACE ENERGY CORP.
(An exploration stage company)
Consolidated financial statements
March 31, 2012
(Expressed in Canadian dollars)
(unaudited)

  Index
Consolidated balance sheets F–1
Consolidated statements of operations F–2
Consolidated statements of cash flows F–3
Notes to the consolidated financial statements F–4

 

2



PARK PLACE ENERGY CORP.
(An exploration stage company)
Consolidated balance sheets
(Expressed in Canadian dollars)

    March 31,     December 31,  
    2012     2011  
     
    (unaudited)        
ASSETS            
Current assets            
   Cash   318,768     432,535  
   Amounts receivable   4,359     15,646  
   Prepaid expenses and deposits   12,606     17,558  
   Due from related party (Note 6)   3,200     3,200  
Total current assets   338,933     468,939  
   Property and equipment   6,315     6,768  
   Oil and gas properties (Note 3)   279,389     183,549  
Total assets   624,637     659,256  
             
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)            
Current liabilities            
   Accounts payable and accrued liabilities   91,100     61,328  
Total liabilities   91,100     61,328  
Nature of operations and continuance of business (Note 1)            
Commitments and contingencies (Note 7)            
Stockholders’ equity (deficit)            
   Common stock
   Authorized: 40,000,000 shares, par value US$0.00001
   Issued and outstanding: 20,667,581 shares (2011 – 20,667,581 shares)
 

212
   

212
 
   Additional paid-in capital   12,811,461     12,811,461  
   Accumulated other comprehensive income   201,541     195,570  
   Deficit accumulated during the exploration stage   (12,479,677 )   (12,409,315 )
Total stockholders’ equity   533,537     597,928  
Total liabilities and stockholders’ equity   624,637     659,256  

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

F-1



PARK PLACE ENERGY CORP.
(An exploration stage company)
Consolidated statements of operations
(Expressed in Canadian dollars)
(unaudited)

                Accumulated from  
    Three months     Three months     May 4, 2006  
    ended     ended     (date of inception)  
    March 31,     March 31,     to March 31,  
    2012     2011     2012  
       
                   
Oil and gas revenue   3,391         1,652,573  
                   
Direct costs                  
   Depletion           1,256,066  
   Production costs   3,311         1,166,893  
                   
Total direct costs   3,311         2,422,959  
               
    80         (770,386 )
                   
Expenses                  
                   
   Consulting   10,646     6,571     1,964,283  
   Depreciation   453     469     6,693  
   Exploration costs           308,534  
   Foreign exchange loss   (7,322 )   860     127,326  
   Impairment of oil and gas costs           4,304,265  
   Investor relations   375     102     909,022  
   Management fees   12,024         689,527  
   Office and general   16,878     8,534     754,398  
   Professional fees   33,791     (544 )   1,052,988  
   Stock-based compensation           2,014,106  
   Travel   3,597         207,296  
                   
Total expenses   70,442     15,992     12,338,438  
                   
Loss before other income (expense)   (70,362 )   (15,992 )   (13,108,824 )
                   
Other income (expense)                  
                   
   Accretion of discount on convertible note payable           (146,205 )
   Gain on marketable securities           4,635  
   Gain on sale of oil and gas properties           381,166  
   Gain on settlement of debt           346,663  
   Interest expense           (7,862 )
   Interest and other revenue       12,978     109,705  
   Loss on sale of oil and gas properties           (53,869 )
   Loss on write-down of promissory note           (254,997 )
                   
Total other income (expense)   -     12,978     379,236  
                   
Loss before income taxes   (70,362 )   (3,014 )   (12,729,588 )
                   
Deferred income tax recovery           291,060  
                   
Net loss for the period   (70,362 )   (3,014 )   (12,438,528 )
                   
Other comprehensive income (loss)                  
                   
   Foreign currency translation adjustment   5,971     55     210,977  
                   
Comprehensive loss   (64,391 )   (2,959 )   (12,227,551 )
                   
Loss per share, basic and diluted              
                   
Weighted average number of shares outstanding   20,667,581     5,598,909        

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

F-2



PARK PLACE ENERGY CORP.
(An exploration stage company)
Consolidated statements of cash flows
(Expressed in Canadian dollars)
(unaudited)

                Accumulated from  
    Three months     Three months     May 4, 2006  
    ended     ended     (date of inception)  
    March 31,     March 31,     to March 31,  
    2012     2011     2012  
       
                   
Operating activities                  
                   
   Net loss for the period   (70,362 )   (3,014 )   (12,438,528 )
                   
  Adjustments to reconcile net loss to net cash used in operating activities:            
       Accretion of discount on convertible note payable           146,205  
       Deferred income tax recovery           (291,060 )
       Depletion           1,256,066  
       Depreciation   453     469     6,693  
       Gain on sale of marketable securities           (4,635 )
       Gain on sale of oil and gas properties           (381,166 )
       Gain loss on settlement of debt           (346,663 )
       Impairment of oil and gas costs           2,984,236  
       Interest accrued on notes payable           20,392  
       Shares and warrants issued for services           386,975  
       Shares issued for consulting services           508,785  
       Stock-based compensation           2,014,106  
       Write-off of exploration advances           37,558  
                   
   Changes in operating assets and liabilities                  
       Amounts receivable   11,287     (407 )   (4,359 )
       Prepaid expenses and deposits   4,952     934     (12,646 )
       Accounts payable and accrued liabilities   29,772     (76,637 )   1,051,052  
       Due from related parties           62,249  
                   
Net cash used in operating activities   (23,898 )   (78,655 )   (5,004,740 )
                   
Investing activities                  
                   
   Cash acquired through recapitalization           320  
   Exploration advances           (270,919 )
   Loan receivable           (572,000 )
   Proceeds from sale of oil and gas properties           50,000  
   Proceeds from sale of marketable securities           79,635  
   Oil and gas properties expenditures   (95,840 )       (4,024,371 )
   Purchase of property and equipment           (13,008 )
                 
Net cash used in investing activities   (95,840 )       (4,750,343 )
                 
Financing activities                
                   
   Proceeds from loans payable       81,500     770,550  
   Proceeds from issuance of common stock/ subscriptions received           9,094,933  
   Repurchase of common stock           (15,028 )
                   
Net cash provided by financing activities       81,500     9,850,455  
                   
Effect of exchange rate changes on cash   5,971     (990 )   223,396  
                   
Change in cash   (113,767 )   1,855     318,768  
                   
Cash, beginning of period   432,535     22      
                   
Cash, end of period   318,768     1,877     318,768  

Supplementary cash flow information (Note 8)

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

F-3



PARK PLACE ENERGY CORP.
(An exploration stage company)
Notes to the consolidated financial statements
March 31, 2012
(Expressed in Canadian dollars)
(unaudited)

1.

Nature of Business and Continuance of Operations

   

The accompanying consolidated financial statements of Park Place Energy Corp. (the “Company”) should be read in conjunction with the consolidated financial statements and accompanying notes filed with the U.S. Securities and Exchange Commission in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2011. In the opinion of management, the accompanying financial statements reflect all adjustments of a recurring nature considered necessary to present fairly the Company’s financial position and the results of its operations and its cash flows for the periods shown.

   

The preparation of financial statements in accordance with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported. Actual results could differ materially from those estimates. The results of operations and cash flows for the periods shown are not necessarily indicative of the results to be expected for the full year.

   

These consolidated financial statements have been prepared on a going concern basis, which implies the Company will continue to realize its assets and discharge its liabilities in the normal course of business. The Company has a history of negative cash flows from operating activities and the continuation of the Company as a going concern is dependent upon the continued financial support from its shareholders, the ability of the Company to obtain necessary equity financing to continue operations, and the attainment of profitable operations. As at March 31, 2012, the Company has accumulated losses of $12,479,677 since inception. These factors raise substantial doubt regarding the Company’s ability to continue as a going concern. These financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

   
2.

Recent Accounting Pronouncements

   

The Company has implemented all new accounting pronouncements that are in effect and that may impact its financial statements and does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.

   
3.

Oil and Gas Properties


      March 31,     December 31,  
      2012     2011  
       
               
  Unproven Properties            
     Bulgaria   279,389     183,549  

The Company presently holds a 98,000 square kilometer exploration claim in the Dobroudja Basin located in northeast Bulgaria (the “Vranino Block”). The Company intends to conduct exploration activities over a 5 year period including seismic processing and the drilling of, at minimum, six test wells for a minimum cost of approximately US$5,000,000. On October 25, 2010, an appeal against the Bulgarian Council of Ministers decision to award the Vranino Block to the Company was filed with the Supreme Administrative Court of Bulgaria and is presently pending. The Company awaits the result of this appeal process prior commencing the exploration program.

4.

Stock Options

   

The following table summarizes the continuity of the Company’s stock options:


            Weighted     Weighted        
            average     average     Aggregate  
            exercise     remaining     intrinsic  
      Number     price     contractual life     value  
      of options     US$     (years)    
                           
  Outstanding, December 31, 2011   594,881     0.30              
                           
     Expired   (294,881 )   0.51              
     Outstanding and exercisable, March 31, 2012   300,000     0.10     4.63      

F-4



PARK PLACE ENERGY CORP.
(An exploration stage company)
Notes to the consolidated financial statements
March 31, 2012
(Expressed in Canadian dollars)
(unaudited)

4.

Stock Options (continued)

   

Additional information regarding stock options as of March 31, 2012, is as follows:


  Exercise  
Number of price  
 options US$ Expiry date
     
 300,000 0.10 November 21, 2016

As of March 31, 2012, the Company had no unrecognized compensation expense relating to unvested options.

   
5.

Share Purchase Warrants

   

The following table summarizes the continuity of share purchase warrants:


            Weighted  
            average  
            exercise  
      Number of     price  
      warrants     US$  
               
  Balance December 31, 2011   254,523     0.27  
               
     Expired   (187,857 )   0.26  
  Balance March 31, 2012   66,666     0.30  

As at March 31, 2012, the following share purchase warrants were outstanding:

  Exercise     
Number of price  
warrants US$ Expiry date
     
66,666 0.30 May 19, 2012

6.

Related Party Transactions

     
(a)

During the three months ended March 31, 2012, the Company incurred consulting fees of $nil (March 31, 2011 - $3,571) to the President of the Company.

     
(b)

During the three months ended March 31, 2012, the Company incurred management fees of $12,024 (US$12,000) (March 31, 2011 – $nil) to a company controlled by the President of the Company.

     
(c)

As at March 31, 2012, the amount of $3,200 (December 31, 2011 - $3,200) is due from a company controlled by the President of the Company which is non-interest bearing, unsecured, and due on demand.

     
(d)

As at March 31, 2012, the Company owed $5,690 (US$5,673) (December 31, 2011 - $5,308 (US$5,398)) to a company controlled by a director of the Company which is included in accounts payable and accrued liabilities. This amount owing is non-interest bearing, unsecured, and due on demand.

     
(e)

As at March 31, 2012, the Company owed $nil (December 31, 2011 - $1,967) to a company controlled by the President of the Company which is included in accounts payable and accrued liabilities. This amount owing is non-interest bearing, unsecured, and due on demand.

     
7.

Commitments and Contingencies

     
(a)

The Company’s Vranino 1-11 oil and gas exploration claim in Bulgaria is the subject of an appeal before the Supreme Administrative Court of Bulgaria whereas a competitive bidder seeks to overturn the award. The matter is ongoing and is awaiting trial.

     
(b)

The Company is obligated to perform a five year work program on the Vranino 1-11 block of North East Bulgaria which total cost is estimated at US$5,000,000, subject to the finalization of the permit award in favor of the Company.

F-5



PARK PLACE ENERGY CORP.
(An exploration stage company)
Notes to the consolidated financial statements
March 31, 2012
(Expressed in Canadian dollars)
(unaudited)

8.

Supplementary Cash Flow Information


                  Accumulated from  
      Three Months     Three Months     May 4, 2006 (date  
      Ended     Ended     of inception) to  
      March 31     March 31,     March 31,  
      2012     2011     2012  
         
                     
  Non-cash investing and financing activities:                  
     Common stock issued to settle debt           636,638  
     Common stock issued for conversion of note payable and interest           315,091  
     Marketable securities received for assignment of oil and gas interest           75,000  
                     
  Supplemental disclosures:                  
     Interest paid            
     Income taxes paid            

9.

Segmented Information

   

The Company’s operations are in the resource industry in Canada and Bulgaria. Geographical information is as follows:


  March 31, 2012   Canada     Bulgaria     Total  
     $      
  Revenue   3,391         3,391  
  Property and equipment   6,315         6,315  
  Oil and gas properties       279,389     279,389  

  March 31, 2011   Canada     Bulgaria     Total  
         
  Revenue            
  Property and equipment   7,360         7,360  
  Oil and gas properties   76,691         76,691  

F-6



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

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

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

Overview of our Business

Name and Organization

We were incorporated under the laws of the State of Nevada on August 27, 2004 under the name ST Online Corp. On June 22, 2007, we 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 wholly-owned subsidiary of our company incorporated under the laws of British Columbia. Pursuant to this business combination agreement, Park Place Energy Inc. and 0794403 B.C. Ltd. amalgamated under the provisions of the British Columbia Business Corporations Act and continued as Park Place Energy Inc., a company governed by the British Columbia Business Corporations Act.

On July 6, 2007, we completed a forward split of our 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, we merged with our wholly-owned subsidiary, Park Place Energy Corp. which we 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 our name was then changed to Park Place Energy Corp.

On July 23, 2007, we completed a forward split of our 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 the authorized share capital from 800,000,000 shares of common stock to 1,200,000,000 shares of common stock.

On July 30, 2007, pursuant to the terms of a business combination agreement, we issued to each shareholder of record of Park Place Energy Inc. one share of our common stock for every two shares they held of Park Place Energy Inc. As a result, we issued 8,995,662 shares of common stock (299,855 shares on a post March 24, 2010 reverse split basis) shares of common stock to the former shareholders of Park Place Energy Inc. Additionally, as part of this transaction, a total of 45,000,000 shares of our common stock (1,500,000 shares on a post March 24, 2010 reverse split basis) held by former principals of our company were surrendered for cancellation. We thereby acquired Park Place Energy Inc. For accounting purposes, the acquisition 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. As a result of the acquisition, the business of our company is now the acquisition and exploration of oil and gas properties.

On August 31, 2009, we completed a forward split of our shares of common stock on the basis of ten new shares of common stock for each one share of common stock outstanding 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.

On March 24, 2010, we completed a reverse split of our shares of common stock on the basis of one new share of common stock for each three hundred shares of common stock outstanding on that date and decreased our authorized share capital from 12,000,000,000 shares of common stock to 40,000,000 shares of common stock.

General

Park Place Energy Corp. is an exploration stage company engaged in exploring for oil and natural gas. Throughout this Quarterly Report on Form 10-Q, the terms "Park Place" "we" "us," "the Company", "our" and "our company" refer to Park Place Energy Corp. and its subsidiaries.

3


Today, the operations of our company and its subsidiaries concentrate on CBM and tight gas exploration and development in the Dobrich region in north eastern Bulgaria. Our goal is to become a recognized producer of gas in Bulgaria and in CBM property acquisition, exploration, development and production in Europe. Our principal business offices are located at Suite 300, 4-5th Avenue SW, Calgary, AB, Canada, T2P 0L6 and our telephone number is (403) 537-8710.

We currently have interests in oil and gas properties in the Canadian province of Saskatchewan and in Eastern Bulgaria. See “Properties” for more information about our interests. 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 in the Dobroudja Basin. The Permit is for a five year period. On October 25, 2010 an appeal against the Bulgarian Council of Ministers decision was filed with the Supreme Administrative Court of Bulgaria by a competitive bidder.

Park Place believes that good environmental, social, health and safety performance is an integral part of our business success. Our commitment to these principles is demonstrated by the fact that we have had no lost-time accidents in over six years and no major environmental incidents. We conduct our business with respect and care for our employees, contractors, communities, and the environments in which we operate. Our vision is zero harm to people and the environment while creating value for our shareholders as well as for Bulgaria, including the regions and communities within which we operate. We have a commitment to be a good corporate citizen of the countries in which our properties are located, striving to emphasize and utilize very high levels of local personnel, services, and equipment.

Our Website

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

Vranino 1-11 exploration block, Bulgaria

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

  • Five year term exploration program;

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

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

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

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

Year Exploration activity Budgeted cost
Year 1 Complete the Vranino #1 well, Identify existing seismic lines that would be good candidates for reprocessing, Purchase and reprocess existing seismic data. $350,000
Year 2 Design and make initial arrangements for acquisition of 2-D seismic, Acquisition of new 2-D high resolution seismic; Process and interpret 2-D seismic; Incorporate data (2-D) into geologic model; Design and make initial arrangements for new 3-D high resolution seismic acquisition $275,000
Year 3 Acquisition of new 3-D high resolution seismic; Process and interpret 3-D seismic; Incorporate data (3-D) into geologic model. $350,000
Year 4 Design drilling program; Drill and complete first of five wells; Test and evaluate production; Design drilling program for remaining four wells of 5- Spot based on results of evaluation of first well. $800,000

4



Year 5 Drill and complete remaining four wells of 5-Spot; Design gathering system for five wells; Prepare Summary Report of project results. $3,050,000
  Total estimated work program budget $4,825,000

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

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

Our exploration of the Vranino 1-11 block has not yet commenced due to the fact the a competing bidder has disputed the award of the claim to Park Place. The Company is currently awaits a decision from the court following the March 2012 hearing.

Plan of Operations

Overview

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

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

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

Park Place plans intends to raise additional capital within the next twelve months to pay for the balance of the work program relating to Vranino 1-11 in Bulgaria. The work program is expected to conclude no later than in 2017. Subject to the positive conclusion of the appeal before the Supreme Administrative Court of Bulgaria, management will undertake subsequent financings as required.

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

We anticipate spending approximately $250,000 over the next 12 months in office and general expenses.

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

Working Capital

Based on our current plan of operations as set forth above, we estimate that we will require approximately $625,000 to pursue our plan of operations over the next 12 months. As at March 31, 2012, we had cash of $318,768 and working capital of $247,833.

We anticipate that additional funding will be in the form of equity financing from the sale of our common stock will be required to complete our plan of operations. If we do not continue to obtain additional financing going forward, we will reevaluate our plans.

5


Results of Operations

The following summary of our results of operations should be read in conjunction with our financial statements for the quarter ended March 31, 2012 which are included herein.

Revenue

We had oil and gas revenue of $3,391 for the three months ended March 31, 2012, compared to $nil for the three months ended March 31, 2011.

Since inception, we have earned oil and gas revenues of $1,652,573 relating to our successful exploration efforts and incurred depletion costs of $1,256,066 and production costs of $1,166,893. We have written off expenditures of $4,304,265 relating to exploration efforts that did not yield productive results.

Expenses

Our total operating expenses for the three months ending March 31, 2012 total $70,442 compared to $15,992 for the same period in 2011.

Our primary expense categories are described below:

Office and General Expenses

Our office and general expenses increased to $16,878 for the three months ended March 31, 2012 from $8,534 for the three months ended March 31, 2011.

Professional Fees

Our professional fees increased to $33,791 for the three months ended March 31, 2012 from ($544) for the three months ended March 31, 2011.

Management and Consulting

Our management and consulting fees increased to $22,670 for the three months ended March 31, 2012 from $6,571 for the three months ended March 31, 2011.

Investor Relations Expenses

Our investor relations expense for the three months ended March 31, 2012 increased to $375 compared to $102 for the three months ended March 31, 2011.

Loss

Our net loss before other items for the three months ended March 31, 2012 was $70,362, compared to $15,992 for the three months ended March 31, 2011.

Liquidity and Capital Resources

Overview

From May 4, 2006 (date of inception) to March 31, 2012, we raised net proceeds of $9,079,905 in cash from the issuance of common stock and share subscriptions received, $770,550 from loans payable for a total of $9,850,455 of cash provided by financing activities for the period.

We used net cash of $23,898 in operating activities for the three months ended March 31, 2012 compared to $78,655 for the same period in 2011. We used net cash of $5,004,740 in operating activities for the period from May 4, 2006 (date of inception) to March 31, 2012.

6


The following table summarizes our liquidity position as of March 31, 2012:

    As at     As at  
    March 31, 2012     December 31, 2011  
    (Unaudited)     (Audited)  
Cash $ 318,768   $ 432,535  
Working capital   247,833     407,611  
Total assets   624,637     659,256  
Total liabilities   91,100     61,328  
Shareholders’ equity   533,537     597,928  

We anticipate that we will require approximately $625,000 to pursue our plan of operations over the next 12 months. As at March 31, 2012, we had cash of $318,768 and working capital of $247,833. We require additional financing to pursue our plan of operations over the next 12 months, with amounts primarily depending upon the outcome of the pending court case, and the actual costs of our first year exploration program in Bulgaria on Vranino 1-11. If we lose the Vranino 1-11 claim in Bulgaria then our anticipated expenditures will be significantly reduced. We anticipate raising additional funds over the next twelve months to pay for our exploration commitments in Bulgaria.

Cash Flow from Investing Activities

Net cash used in investing activities in the three months ended March 31, 2012 was $95,840 compared to $nil used in investing activities in the three months ended March 31, 2011.

Cash Provided By Financing Activities

For the three months ended March 31, 2012, received cash of $nil compared to $81,500 for the three months ended March 31, 2011.

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 of Controls and Procedures

We carried out an evaluation of the effectiveness of our disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) as of March 31, 2012 (the “Evaluation Date”). This evaluation was carried out under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were not effective as of the Evaluation Date as a result of the material weaknesses disclosed in our Annual Report on Form 10-K for the year ended December 31, 2011 (the “2011 Annual Report”).

Notwithstanding the assessment that our internal control over financial reporting was not effective and that there were material weaknesses as identified in our 2011 Annual Report, we believe that our financial statements contained in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2012 fairly present our financial condition, results of operations and cash flows in all material respects.

No Changes in Internal Control over Financial Reporting

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

7


PART II – OTHER INFORMATION

Item 1. Legal Proceedings

We currently are party to legal proceedings in Bulgaria where a competitive bidder, Overgas, seeks to overturn the Bulgarian Counsel of Minister’s award of the Vranino 1-11 exploration claim to us. The Ministry of Energy, Environment and Tourism continues to support the granting of the award to Park Place. The Company is currently waiting for the court’s decision following our final court hearing March 2012.

Item 1A. Risk Factors

Not applicable because we are a smaller reporting company.

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

None,

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)

10.33

Consulting agreement between the Company and 1651993 Alberta Ltd. (12)

14.1

Code of Ethics (4)

Subsidiaries of the Small Business Issuer

21.1

Subsidiaries of Small Business Issuer:


Name of Subsidiary
Park Place Energy (Canada) Inc.
Park Place Energy (International) Inc.

Jurisdiction of Incorporation
British Columbia
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 ENERGY CORP.

By: “David Johnson”  
  David Johnson  
  President, Chief Executive Officer, Secretary,  
  Treasurer and a Director  
  (Principal Executive Officer and Principal Financial Officer)  
  Date: May 10, 2012  


XOTC:PKPL Quarterly Report 10-Q Filling

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