U.S.
      SECURITIES AND EXCHANGE COMMISSION





Washington,
      D.C. 20549





**FORM
      10-QSB**








(Mark
      One)




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




For
      the
      quarterly period ended March 31, 2006





[ 
               ]
            TRANSITION
                REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIESEXCHANGE
                ACT OF 1934





For
      the
      transition period from _______ to _______





Commission
      file number 333-127185





**MORGAN
      CREEK ENERGY CORP.**


(Exact
      name of small business issuer as specified in its charter)







NEVADA
            20-1777817(State
                or other jurisdiction of
                incorporation of organization)
            (I.R.S.
                Employer Identification
                No.)








10120
      S.
      Eastern Avenue


Suite
      200


Henderson,
      Nevada 89052


(Address
      of Principal Executive Offices)





(702)
      566-1307


(Issuer's
      telephone number)




n/a


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





Check
      whether the issuer (1) filed all reports required to be filed by Section 13
      or
      15(d) of the Exchange Act during the past 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
o




Indicate
      by checkmark whether the registrant is a shell company (as defined in Rule
      12b-2
      of the Exchange Act).




Yes
oNo
x




Applicable
      only to issuers involved in bankruptcy proceedings during the preceding five
      years.


N/A




1


Check
      whether the Registrant filed all documents required to be filed by Section
      12,
      13 and 15(d) of the Exchange Act after the distribution of securities under
      a
      plan confirmed by a court.


Yes
o  No o







Applicable
      only to corporate issuers





State
      the
      number of shares outstanding of each of the issuer's classes of common equity,
      as of the latest practicable date:





Class


Outstanding
      as of May 14, 2006 10,167,700





Common
      Stock, $.001 par value





Transitional
      Small Business Disclosure Format (check one) Yes oNo x

























2









Index
            Page
                #ITEM 1.
            INTERIM FINANCIAL STATEMENTS
            4BALANCE
              SHEETS
            5INTERIM
              STATEMENTS OF OPERATIONS
            6INTERIM
              STATEMENTS OF CASH FLOWS
            7NOTES TO INTERIM FINANCIAL
              STATEMENTS
            8ITEM
              2.
            MANAGEMENT'S
              DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION OR PLAN OF OPERATION
            14ITEM
              3.
            CONTROLS
              AND PROCEDURES
            19PART
              II.
            OTHER
              INFORMATION
            19ITEM
              1.
            LEGAL
              PROCEEDINGS
            19ITEM
              2.
            CHANGES
              IN SECURITIES AND USE OF PROCEEDS
            19ITEM
              3.
            DEFAULTS
              UPON SENIOR SECURITIES
            19ITEM
              4.
            SUBMISSION
              OF MATTERS TO A VOTE OF SECURITY HOLDERS
            19ITEM
              5.
            OTHER
              INFORMATION
            19ITEM
              6.
            EXHIBITS
              AND REPORTS ON FORM 8-K
            22SIGNATURES
            22





3


**PART
      1. FINANCIAL INFORMATION**





**ITEM
      1. FINANCIAL STATEMENTS**




**MORGAN
        CREEK ENERGY CORP.**
 
 (An
        Exploration Stage Company)
 
 **INTERIM
        FINANCIAL STATEMENTS**
 
 **MARCH
        31, 2006**
 
 **(unaudited)**
 
 
  
 **BALANCE
                SHEETS**
              5**INTERIM
                STATEMENTS OF OPERATIONS**
              6**INTERIM
                STATEMENTS OF CASH FLOWS**
              7**NOTES
                TO INTERIM FINANCIAL STATEMENTS**
              8
 
  
  
  
  
   4
 
 
 **MORGAN
        CREEK ENERGY CORP.**
 (An
        Exploration Stage Company)
 
 **BALANCE
        SHEETS**
 
 March
                  31,
                2006
              
              December
                  31,
                2005**ASSETS**
              
              (unaudited)**CURRENT
                  ASSETS**Cash
              
              $
              39,688
              
              $
              7,110Due
                  from related party (Note 5)
              
              
              -
              
              
              200,00039,688
              
              
              207,110**OIL
                  AND GAS PROPERTIES**,
                  unproved****(Note
                  3)
              
              
              300,000
              
              
              300,000$
              339,688
              
              $
              507,110**LIABILITIES
                  AND STOCKHOLDERS’ EQUITY****CURRENT
                  LIABILITIES******Accounts
                  payable and accrued liabilities
              
              $
              10,085
              
              $
              16,015****Due
                  to related parties (Note 5)
              
              
              40,542
              
              
              10,00050,627
              
              
              26,015**STOCKHOLDERS’
                  EQUITY**(Note
                  4)Common
                  stock, 100,000,000
                  shares authorized with $0.001 par valueIssued
                  andoutstanding10,167,700
                  common shares (December 31, 2005 - 10,167,700)
              
              
              10,168
              
              
              10,168Additional
                  paid-in-capital
              
              
              698,682
              
              
              698,682Deficit
                  accumulated during exploration stage
              
              
              (419,789
              )
              
              (227,755
              )289,061
              
              
              481,095$
              339,688
              
              $
              507,110
 **GOING
          CONCERN** (Note
          1)
 
 The
        accompanying notes are an integral part of these interim financial
        statements.
  5
  **MORGAN
        CREEK ENERGY CORP.**
 (An
        Exploration Stage Company)
 
 **INTERIM
        STATEMENTS OF OPERATIONS**
 (unaudited)
 
 For
                  three
                months
                  ended
                March
                  31,
                2006
              
              For
                  three months ended
                March
                  31,
                2005
              
              October
                  19, 2004 (inception) to March 31,
                2006**GENERAL
                  AND ADMINISTRATIVE EXPENSES**Office
                  and general
              
              $
              180,954
              
              $
              251,234
              
              $
              335,859Professional
                  fees
              
              
              11,080
              
              
              23,208
              
              
              83,930**NET
                  LOSS FOR THE PERIOD**
              
              $
              (192,034
              )
              $
              (274,442
              )
              $
              (419,789
              )**BASIC
                  AND DILUTED LOSS PER COMMON SHARE**
              
              $
              (0.02
              )
              $
              (0.03
              )**WEIGHTED
                AVERAGE NUMBER OF COMMON****SHARES
                O****UTSTANDING**
              
              
              10,167,700
              
              
              10,115,589
 
  
  
 
 
 The
        accompanying notes are an integral part of these interim financial
        statements.
  6
  **MORGAN
        CREEK ENERGY CORP.**
 (An
        Exploration Stage Company)
 
 **INTERIM
        STATEMENTS OF CASH FLOWS**
 (unaudited)
 
 For
                  the three month period
                ended
                  March 31,
                2006
              
              For
                  the three month period
                Ended
                  March 31, 2005
              
              October
                  19, 2004 (inception) to
                March
                  31,
                2006**CASH
                  FLOWS USED IN OPERATING ACTIVITIES**Net
                  loss for the period
              
              $
                  (192,034)
              
              $
                  (274,442)
              
              $
                  (419,789)Changes
                  in working capital assets and liabilities:-
                  Due from related party
              
              200,000
              
              -
              
              --
                  Due to related parties
              
              (9,458)
              
              -
              
              542-
                  accounts payable and accrued liabilities
              
              (5,930)
              
              (5,134)
              
              10,085**NET
                  CASH USED IN OPERATING ACTIVITIES**
              
              (7,422)
              
              (279,576)
              
              (409,162)**CASH
                  FLOWS FROM INVESTING ACTIVITIES**Acquisition
                  of oil and gas properties
              
              -
              
              -
              
              (300,000)**NET
                  CASH FLOWS USED IN INVESTING ACTIVITIES**
              
              -
              
              -
              
              (300,000)**CASH
                  FLOWS FROM FINANCING ACTIVITIES******Advance
                  from related party
              
              40,000
              
              -
              
              40,000Proceeds
                  on sale of common stock
              
              -
              
              35,000
              
              708,850**NET
                  CASH PROVIDED BY FINANCING ACTIVITIES**
              
              40,000
              
              35,000
              
              748,850**INCREASE
                  (DECREASE) IN CASH**
              
              32,578
              
              (244,576)
              
              39,688**CASH,
                  BEGINNING OF PERIOD**
              
              
              7,110
              
              
              370,499
              
              
              -**CASH,
                  END OF PERIOD**
              
              $
              39,688
              
              $
              125,923
              
              $
              39,688
 
 **SUPPLEMENTAL
                  CASH FLOW INFORMATION:**Cash
                  paid for interest
              
              $
              -
              
              $
              -
              
              $
              -Cash
                  paid for income taxes
              
              $
              -
              
              $
              -
              
              $
              -Common
                  stock issued for oil and gas property (Note 3)
              
              $
              -
              
              $
              -
              
              $
              600,000
 
  The
        accompanying notes are an integral part of these interim financial
        statements.
 
  7
  **MORGAN
        CREEK ENERGY CORP.**
 (An
        Exploration Stage Company)
 NOTES TO INTERIM
      FINANCIAL STATEMENTS   **NOTE
        1 - NATURE OF OPERATIONS AND BASIS OF PRESENTATION**
 
 Morgan
        Creek Energy Corp. (the “Company”) is an exploration stage company that was
        organized to enter into the oil and gas industry. The Company intends to
        locate,
        explore, acquire and develop oil and gas properties in the United States
        and
        within North America.
 
 During
        fiscal 2004, the Company completed the acquisition of prospects in the Arkoma
        Basin in the State of Oklahoma, including a 75% working interest and a 56.25%
        net revenue interest in approximately 560 gross acres of two petroleum and
        natural gas leases (the "Hurley Lease" and the “Chapman Lease”). The Company
        plans to enter certain well bores on the subject leases to test certain target
        zones for contain coal bed methane gas. If testing provides evidence of gas
        quality and sufficient production quantities, the Company plans to raise
        capital
        to undertake a drilling program to establish up to six wells, and production
        infrastructure and pipeline. If drilling results are not according to geological
        analysis, the Company will seek to acquire other prospective lands for
        exploration.
 
 **Going
        concern**
 The
        Company commenced operations on October 19, 2004 and has not realized any
        revenues since inception. The Company has a deficit accumulated to March
        31,
        2006 in the amount of $419,789. The ability of the Company to continue as
        a
        going concern is dependent on raising capital to fund its business plan and
        ultimately to attain profitable operations. Accordingly, these factors raise
        substantial doubt as to the Company’s ability to continue as a going concern.
        The Company is funding its initial operations by way of private placements
        of
        common stock and advances from related parties.
 
 **Unaudited
        Interim Financial Statements**
 The
        accompanying unaudited interim consolidated financial statements have been
        prepared in accordance with generally accepted accounting principals for
        interim
        financial information and with the instructions to Form 10-QSB of Regulation
        S-B. They do not include all information and footnotes required by United
        States
        generally accepted accounting principles for complete financial statements.
        However, except as disclosed herein, there have been no material changes
        in the
        information disclosed in the notes to the financial statements for the year
        ended December 31, 2005 included in the Company’s Annual Report on Form 10-KSB
        filed with the Securities and Exchange Commission. The interim unaudited
        financial statements should be read in conjunction with those financial
        statements included in the Form 10-KSB. In the opinion of Management, all
        adjustments considered necessary for a fair presentation, consisting solely
        of
        normal recurring adjustments, have been made. Operating results for the three
        months ended March 31, 2006 are not necessarily indicative of the results
        that
        may be expected for the year ending December 31, 2006.
  **NOTE
        2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES**
 
 **Organization**
 The
        Company was incorporated on October 19, 2004 in the State of Nevada. The
        Company’s fiscal year end is December 31.
 
 **Basis
        of presentation**
 These
        financial statements are presented in United States dollars and have been
        prepared in accordance with United States generally accepted accounting
        principles.
 
 **Oil
        and gas properties**
 The
        Company follows the full cost method of accounting for its oil and gas
        operations whereby all costs related to the acquisition of methane, petroleum,
        and natural gas interests are capitalized. Under this method, all productive
        and
        non-productive costs incurred in connection with the exploration for and
        development of oil and gas reserves are capitalized. Such costs include land
        and
        lease acquisition costs, annual carrying charges of non-producing properties,
        geological and geophysical costs, costs of drilling and equipping productive
        and
        non-productive wells, and direct exploration salaries and related benefits.
        Proceeds from the disposal of oil and gas properties are recorded as a reduction
        of the related capitalized costs without
 
 8
 **MORGAN
        CREEK ENERGY CORP.**
 (An
        Exploration Stage Company)
 NOTES
        TO INTERIM FINANCIAL
        STATEMENTS
 **NOTE
        2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
        (continued)**
 
 recognition
        of a gain or loss unless the disposal would result in a change of 20 percent
        or
        more in the depletion rate. The Company currently operates solely in the
        U.S.A.
 
 Depreciation
        and depletion of proved oil and gas properties is computed on the
        units-of-production method based upon estimates of proved reserves, as
        determined by independent consultants, with oil and gas being converted to
        a
        common unit of measure based on their relative energy content.
 
 **Oil
        and Gas Properties (continued)**
 The
        costs
        of acquisition and exploration of unproved oil and gas properties, including
        any
        related capitalized interest expense, are not subject to depletion, but are
        assessed for impairment either individually or on an aggregated basis. The
        costs
        of certain
 unevaluated
        leasehold acreage are also not subject to depletion. Costs not subject to
        depletion are periodically assessed for possible impairment or reductions
        in
        value. If a reduction in value has occurred, costs subject to depletion are
        increased or a charge is made against earnings for those operations where
        a
        reserve base is not yet established.
 
 Estimated
        future removal and site restoration costs are provided over the life of proven
        reserves on a units-of-production basis. Costs, which include production
        equipment removal and environmental remediation, are estimated each period
        by
        management based on current regulations, actual expenses incurred, and
        technology and industry standards. The charge is included in the provision
        for
        depletion and depreciation and the actual restoration expenditures are charged
        to the accumulated provision amounts as incurred.
 
 The
        Company applies a ceiling test to capitalized costs which limits such costs
        to
        the aggregate of the estimated present value, using a ten percent discount
        rate
        of the estimated future net revenues from production of proven reserves at
        year
        end at market prices less future production, administrative, financing, site
        restoration, and income tax costs plus the lower of cost or estimated market
        value of unproved properties. If capitalized costs are determined to exceed
        estimated future net revenues, a write-down of carrying value is charged
        to
        depletion in the period.
 
 **Asset
        retirement obligations**
 The
        Company has adopted the provisions of SFAS No. 143, "Accounting for Asset
        Retirement Obligations." SFAS No. 143 requires the fair value of a
        liability for an asset retirement obligation to be recognized in the period
        in
        which it is incurred if a reasonable estimate of fair value can be made.
        The
        associated asset retirement costs are capitalized as part of the carrying
        amount
        of the related oil and gas properties. As of March 31, 2006 management has
        determined that there are no material asset retirement obligations.
 
 **Use
        of estimates**
 The
        preparation of financial statements in conformity with generally accepted
        accounting principles requires management to make estimates and assumptions
        that
        affect the reported amounts of assets and liabilities and disclosure of
        contingent assets and liabilities at the date of the financial statements
        and
        the reported amounts of revenues and expenses during the period. Actual results
        could differ from those estimates.
 
 **Financial
        instruments**
 The
        fair
        value of the Company’s financial assets and financial liabilities approximate
        their carrying values due to the immediate or short-term maturity of these
        financial instruments.
 
 **Loss
        per common share**
 Basic
        earnings per share includes no dilution and is computed by dividing income
        available to common stockholders by the weighted average number of common
        shares
        outstanding for the period. Dilutive earnings per share reflects the potential
        dilution of securities that could share in the earnings of the Company. Because
        the Company does not have any potentially dilutive securities, fully diluted
        loss per share is equal to basic loss per share.
 
 9
 **MORGAN
        CREEK ENERGY CORP.**
 (An
        Exploration Stage Company)
 NOTES
        TO INTERIM FINANCIAL
        STATEMENTS
  **NOTE
        2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
        (continued)**
 
 **Income
        taxes**
 The
        Company follows the liability method of accounting for income taxes. Under
        this
        method, deferred tax assets and liabilities are recognized for the future
        tax
        consequences attributable to differences between the financial statement
        carrying amounts of
 existing
        assets and liabilities and their respective tax balances. Deferred tax assets
        and liabilities are measured using enacted or substantially enacted tax rates
        expected to apply to the taxable income in the years in which those differences
        are expected to be recovered or settled. The effect on deferred tax assets
        and
        liabilities of a change in tax rates is recognized in income in the period
        that
        includes the date of enactment or substantive enactment. As at March 31,
        2006
        the Company had net operating loss carryforwards, however, due to the
        uncertainty of realization, the Company has provided a full valuation allowance
        for the deferred tax assets resulting from these loss
        carryforwards.
 
 **Stock-Based
        Compensation**
 On
        January 1, 2006, the Company adopted SFAS No. 123 (revised 2004) (SFAS
        No. 123R), *Share-Based
        Payment* ,
        which
        addresses the accounting for stock-based payment transactions in which an
        enterprise receives employee services in exchange for (a) equity
        instruments of the enterprise or (b) liabilities that are based on the fair
        value of the enterprise’s equity instruments or that may be settled by the
        issuance of such equity instruments. In January 2005, the Securities and
        Exchange Commission (SEC) issued Staff Accounting Bulletin
        (SAB) No. 107, which provides supplemental implementation guidance for
        SFAS No. 123R. SFAS No. 123R eliminates the ability to account for
        stock-based compensation transactions using the intrinsic value method under
        Accounting Principles Board (APB) Opinion No. 25, *Accounting
        for Stock Issued to Employees* ,
        and
        instead generally requires that such transactions be accounted for using
        a
        fair-value-based method. The Company uses the Black-Scholes-Merton (“BSM”)
        option-pricing model to determine the fair-value of stock-based awards under
        SFAS No. 123R, consistent with that used for pro forma disclosures under
        SFAS No. 123, *Accounting
        for Stock-Based Compensation* .
        The
        Company has elected the modified prospective transition method as permitted
        by
        SFAS No. 123R and accordingly prior periods have not been restated to
        reflect the impact of SFAS No. 123R. The modified prospective transition
        method requires that stock-based compensation expense be recorded for all
        new
        and unvested stock options, restricted stock, restricted stock units, and
        employee stock purchase plan shares that are ultimately expected to vest
        as the
        requisite service is rendered beginning on January 1, 2006 the first day
        of the
        Company’s fiscal year 2006. Stock-based compensation expense for awards granted
        prior to January 1, 2006 is based on the grant date fair-value as determined
        under the pro forma provisions of SFAS No. 123.
 
 Prior
        to
        the adoption of SFAS No. 123R, the Company measured compensation expense
        for its employee stock-based compensation plans using the intrinsic value
        method
        prescribed by APB Opinion No. 25. The Company applied the disclosure
        provisions of SFAS No. 123 as amended by SFAS No. 148, *Accounting
        for Stock-Based Compensation - Transition and Disclosure,* as if
        the fair-value-based method had been applied in measuring compensation expense.
        Under APB Opinion No. 25, when the exercise price of the Company’s employee
        stock options was equal to the market price of the underlying stock on the
        date
        of the grant, no compensation expense was recognized.
 
 To
        March
        31, 2006 the Company has not granted any stock options and has not recorded
        any
        stock-based compensation.
 
 10
 **MORGAN
          CREEK ENERGY CORP.**
 (An
          Exploration Stage Company)
 NOTES TO INTERIM
        FINANCIAL STATEMENTS
  **NOTE
        2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
        (continued)**
  In
          February 2006, the FASB issued SFAS No. 155, “Accounting for Certain Hybrid
          Financial Instruments-an amendment of FASB Statements No. 133 and 140”, to
          simplify and make more consistent the accounting for certain financial
          instruments. SFAS No. 155 amends SFAS No. 133, “Accounting for Derivative
          Instruments and Hedging Activities”, to permit fair value remeasurement for any
          hybrid financial instrument with an embedded derivative that otherwise
          would
          require bifurcation, provided that the whole instrument is accounted for
          on a
          fair value basis. SFAS No. 155 amends SFAS No. 140, “Accounting for the
          Impairment or Disposal of Long-Lived Assets”, to allow a qualifying
          special-purpose entity to hold a derivative financial instrument that pertains
          to a beneficial interest other than another derivative financial instrument.
          SFAS No. 155 applies to all financial instruments acquired or issued after
          the
          beginning of an entity's first fiscal year that begins after September
          15, 2006,
          with earlier application allowed. This standard is not expected to have
          a
          significant effect on the Company’s future reported financial position or
          results of operations.
 In
            March
            2006, the FASB issued SFAS No. 156, "Accounting for Servicing of
            Financial Assets, an amendment of FASB Statement No. 140, Accounting
            for
            Transfers and Servicing of Financial Assets and Extinguishments of
            Liabilities". This statement requires all separately recognized servicing
            assets and servicing liabilities be initially measured at fair value,
            if
            practicable, and permits for subsequent measurement using either fair
            value
            measurement with changes in fair value reflected in earnings or the amortization
            and impairment requirements of Statement No. 140. The subsequent measurement
            of
            separately recognized servicing assets and servicing liabilities at fair
            value
            eliminates the necessity for entities that manage the risks inherent
            in
            servicing assets and servicing liabilities with derivatives to qualify
            for hedge
            accounting treatment and eliminates the characterization of declines
            in fair
            value as impairments or direct write-downs. SFAS No. 156 is effective
            for an entity's first fiscal year beginning after September 15,
            2006.  This adoption of this statement is not expected to have a
            significant effect on the Company’s future reported financial position or
            results of operations.
  **NOTE
        3 - OIL AND GAS PROPERTIES**
 
 **Hurley-Chapman
        Prospect**
 By
        agreement dated December 17, 2004, the Company acquired a 75% working interest,
        56.25% net revenue interest from its founding shareholder, in two sections
        (560
        acres) production held acreage in Okfuskee County, Oklahoma (the “Hurley-Chapman
        Prospect”) with the intention to develop coal bed methane gas producing wells.
        The lease is unproved and was acquired for a cash payment of $300,000 and
        for
        the issuance of 6,000,000 shares at valued at $600,000. (Refer to Note
        5).
 
 For
        accounting purposes the Company has recorded the acquisition of the oil and
        gas
        interests at the related party vendor’s cost of $300,000 and the issuance of the
        6,000,000 shares valued at $600,000 has been recorded as a capital
        distribution.
 
 **NOTE
        4 - STOCKHOLDERS’ EQUITY**
 
 The
        Company’s capitalization is 100,000,000 common shares with a par value of $0.001
        per share.
  To
        March
        31, 2006 the Company has not granted any stock options and has not recorded
        any
        stock-based compensation.
 
 **Private
        Placements**
 On
        November 26, 2004 the Company issued 1,550,000 shares of common stock at
        $0.10
        per share for proceeds of $155,000.
  On
        December 15, 2004 the Company issued 1,887,500 shares of common stock at
        $0.10
        per share for proceeds of $188,750 and 660,200 shares of common stock at
        $0.50
        per share for proceeds of $330,100.
 
 On
        March
        9, 2005 the Company issued 70,000 shares of common stock at a price of $0.50
        per
        share for proceeds of $35,000.
 
 11
 **MORGAN
        CREEK ENERGY CORP.**
 (An
        Exploration Stage Company)
 NOTES
        TO INTERIM FINANCIAL
        STATEMENTS
  **NOTE
        5 - RELATED PARTY TRANSACTIONS**
 
 During
        the period ended March 31, 2006 the Company incurred consulting expenses
        of
        $160,000 (2005-$nil) of which $42,500 (2004-$nil) was for assisting the Company
        to obtain a listing on the Frankfurt Exchange - $35,000 in administration
        fee as
        per contract and a further $75,000 (2005-$nil) for an Investor awareness
        mailing
        program in Germany and $7,500 (2005 - $nil) to update and change the Company’s
        web site and other identity related items with International Market Trend,
        Inc.
        (“IMT”). An officer and director of IMT, a private company, is also an officer
        and director of a corporate shareholder of the Company and has a family member
        that is a shareholder of the Company. An additional $15,000 was paid to an
        officer and director for management fees (2005-$nil).
 During
          the period ended March 31, 2006, the Company received an advance of $40,000
          from
          an officer and director of IMF. This advance is unsecured, non-interest
          bearing
          and has no fixed terms of repayment.
 During
        the year ended December 31, 2005 the Company paid $200,000 (2004-$nil) to
        American News Publishing Inc. (“ANP”) for Investor relations services. An
        officer and director of ANP, a private company, is also an officer and director
        of a corporate shareholder of the Company. The services were cancelled and
        ANP
        agreed to return the $200,000 to the Company. On January 20, 2006 the funds
        were
        repaid to the Company in full.
 
 During
        the period ending December 31, 2004 the Company purchased an oil and gas
        property interest from the founding shareholder. (Refer to Note 3).
 
 **NOTE
        6 - INCOME TAXES**
 
 The
        Company has adopted FASB No. 109 for reporting purposes. As of March 31,
        2006,
        the Company had net operating loss carry forwards of approximately $420,000
        that
        may be available to reduce future years’ taxable income. These carry forwards
        will begin to expire, if not utilized, commencing in 2023. Future tax benefits
        which may arise as a result of these losses have not been recognized in these
        financial statements, as their realization is determined not likely to occur
        and
        accordingly, the Company has recorded a valuation allowance for the deferred
        tax
        asset relating to these tax loss carry forwards.
 
 The
        Company reviews its valuation allowance requirements on an annual basis based
        on
        projected future operations. When circumstances change and this causes a
        change
        in management’s judgment about the recoverability of future tax assets, the
        impact of the change on the valuation allowance is generally reflected in
        current income.
 
 A
        reconciliation of income tax computed at the federal and state statutory
        tax
        rates and the Company’s effective tax rate is as follows
 
 Three
                  month period ended
                March
                  31,
                2006
              Three
                  month period ended
                March
                  31,
                2005Federal
                  income tax provision at statutory rate
              (35.0)%
              (35.0)%States
                  income tax provision at statutory rates, net of federal income
                  tax
                  effect
              (7.0)
              (7.0)Total
                  income tax provision
              (42.0)%
              (42.0)%
 12
 **MORGAN
            CREEK ENERGY CORP.**
 (An
            Exploration Stage Company)
 NOTES TO INTERIM
          FINANCIAL STATEMENTS
  **NOTE
          6 - INCOME TAXES (continued)**
 
 The
        tax
        effects of temporary differences that give rise to the Company’s future tax
        asset (liability) are as follows:
 
 March
                  31,
                2006
              
              December
                  31,
                2005Loss
                  carry forwards
              $
              175,980
              $
              115,266Valuation
                  allowance
              
              (175,980)
              
              (115,266)$
              -
              $
              -
 
 As
        the
        criteria for recognizing future income tax assets have not been met due to
        the
        uncertainty of realization, a valuation allowance of 100% has been recorded
        for
        the current and prior period.
 
 **NOTE
        7 - SUBSEQUENT EVENTS**
 
 On
        April
        3, 2006 the board of directors approved a stock option plan authorizing
        5,000,000 stock options at $0.50 per share. The Company issued on the same
        day
        2,000,000 share options at $0.50 per share for a 5 year term to officers,
        directors and significant consultants to the Company.
 
 On
        May
        10, 2006 the board of directors approved a 2 for 1 forward stock split to
        be
        effective May 22, 2006.






























13


Statements
      made in this Form 10-QSB that are not historical or current facts are
      "forward-looking statements" made pursuant to the safe harbor provisions of
      Section 27A of the Securities Act of 1933 (the "Act") and Section 21E of the
      Securities Exchange Act of 1934. These statements often can be identified by
      the
      use of terms such as "may," "will," "expect," "believe," "anticipate,"
      "estimate," "approximate" or "continue," or the negative thereof. We intend
      that
      such forward-looking statements be subject to the safe harbors for such
      statements. We wish to caution readers not to place undue reliance on any such
      forward-looking statements, which speak only as of the date made. Any
      forward-looking statements represent management's best judgment as to what
      may
      occur in the future. However, forward-looking statements are subject to risks,
      uncertainties and important factors beyond our control that could cause actual
      results and events to differ materially from historical results of operations
      and events and those presently anticipated or projected. We disclaim any
      obligation subsequently to revise any forward-looking statements to reflect
      events or circumstances after the date of such statement or to reflect the
      occurrence of anticipated or unanticipated events. Please note that throughout
      this Quarterly Report, and unless otherwise noted, the words “we”, “our” or the
“Company” refer to Lexington Resources, Inc.





**ITEM
      2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION OR PLAN OF
      OPERATION**





**GENERAL**





Morgan
      Creek Energy Corp. is a corporation organized under the laws of the State of
      Nevada. After the effective date of our registration statement filed with the
      Securities and Exchange Commission (February 14, 2006), we commenced trading
      on
      the Over-the-Counter Bulletin Board under the symbol “MCRE:OB”. We are engaged
      in the business of exploration of oil and gas bearing properties in the United
      States. Our shares are also traded on the Frankfurt Stock Exchange in Germany
      under the symbol “M6C”.





Please
      note that throughout this Quarterly Report, and unless otherwise noted, the
      words "we," "our," "us," the "Company," or "Morgan Creek," refers to Morgan
      Creek Energy Corp.





**Recent
      Developments**





**Forward
      Stock Split**





On
      May
      10, 2006, our Board of Directors pursuant to minutes of written consent in
      lieu
      of a special meeting authorized and approved a forward stock split of two for
      one of our total issued and outstanding shares of common stock (the “Forward
      Stock Split”).





The
      Forward Stock Split will be effectuated based on market conditions and upon
      a
      determination by our Board of Directors that the Forward Stock Split is in
      our
      best interests and of the shareholders. In our judgment the Forward Stock Split
      will result in an increase in our trading float of shares of common stock
      available for sale resulting in facilitation of investor liquidity and trading
      volume potential. The intent of the Forward Stock Split is to increase the
      marketability of our common stock.





The
      Forward Stock Split will be effectuated with a record date of May 22, 2006
      upon
      filing the appropriate documentation with NASDAQ. The Forward Stock Split will
      increase our issued and outstanding shares of common stock from 10,167,700
      to
      approximately 22,452,338 shares of common stock. The common stock will continue
      to be $0.001 par value.





14


**ITEM
      2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION OR PLAN OF
      OPERATION - continued**




**CURRENT
      BUSINESS OPERATIONS**





**Oil
      and Gas Properties**





We
      are a
      natural resource exploration and production company currently engaged in the
      exploration, acquisition and development of oil and gas properties in the United
      States. We acquired a 75% working interest and a 56.25% net revenue interest
      in
      two separate petroleum and natural gas targeted leases, known as the Hurley
      and
      Chapman leases, in approximately 560 gross acres located in the Arkoma Basin
      in
      the State of Oklahoma for the development and production of coal bed methane
      gas
      (collectively, the “Leases” and, individually, the Hurley Lease originally dated
      December 16, 1983 (the “Hurley Lease”), and the Chapman Lease originally dated
      December 21, 1983 (the "Chapman Lease"). The Leases are unproved and were
      acquired for a cash payment of $300,000 and for the issuance to Geneva Energy
      Corp., our founding shareholder (“Geneva”), of 6,000,000 shares of our
      restricted common stock valued at $600,000. The Leases are held by production
      and are validly existing and in good standing.





**Chapman
      Lease**





The
      Chapman Lease encompasses approximately 240 acres in Okfuskee County, State
      of
      Oklahoma. We have acquired a 75% working interest and a 56.25% net revenue
      interest. The term of the Chapman Lease was originally for three years, and
      is
      currently held indefinitely by production. The Chapman lease is currently
      producing minor quantities of oil from existing wells. As long as the lease
      produces any oil or gas as demonstrated by any marketed quantities of oil or
      gas, the lease will be deemed to be valid and thus, "held by production" and
      no
      further costs will be incurred by us as lessee.





The
      unitization of the Chapman Lease is the spacing of wells in any 640 acre section
      of land. The unitization of the Chapman Lease is currently one gas well for
      each
      640 acres and one oil well for each 80 acres. The Chapman Lease includes all
      potential oil or gas producing zones extending from the surface to and including
      the Senora Sand zones.





We
      obtained a Reserve and Economic Evaluation letter dated December 21, 2004
      prepared by Fletcher Lewis Engineering, Inc. (the “Reserve and Economic
      Evaluation”), which provides information relating to work to be conducted on the
      Chapman Lease and the fact that the Chapman Lease has had no proved developed
      producing reserves. As a result, our future revenues may be limited or
      non-existent. Below is a summary of the key points addressed in the Reserve
      and
      Economic Evaluation:





·
            Henryetta
                Coal located throughout the leases at approximately 1701 feet deep
                and a
                thickness of approximately 2 to 3
                feet;


·
            Henryetta
                Coal is stratigraphically equivalent to the Croweburg
                Coal;


·
            Croweburg
                Coal successfully completed 60 miles northeast of this
                location;


·
            Croweburg
                Coal is typically 1.5 to 3 feet thick with initial test rates of
                30 to 50
                mcf per day;


·
            No
                tests available to confirm whether the Henryetta Coal will be
                productive;


·
            Recompletion
                cost of $50,000 without frac makes Chapman Lease ideal to test productive
                capability of Henryetta Coal; and


·
            Insufficient
                data exists regarding potential of deeper
                rights.





15


**ITEM
      2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION OR PLAN OF
      OPERATION - continued**




**Hurley
      Lease**





The
      Hurley Lease encompasses approximately 320 acres in Okfuskee County, State of
      Oklahoma. We have acquired a 75% working interest and a 56.25% net revenue
      interest. The term of the Hurley Lease was originally for one year, and is
      currently held indefinitely by production. The Hurley Lease is currently
      producing minor quantities of oil from existing wells. As long as the lease
      produces any oil or gas as demonstrated by marketed quantities of oil or gas,
      the Hurley Lease will be deemed to be valid and thus “held by production” and no
      further costs will be incurred by us.





The
      unitization of the Hurley Lease is the spacing of wells in any 640 acre section
      of land. The unitization of the Hurley Lease is currently one gas well for
      each
      640 acres and one oil well for each 80 acres. The Hurley Lease includes all
      potential oil or gas producing zones extending from the surface to and including
      the Senora Sand zones.





**RESULTS
      OF OPERATION**





**Three-Month
      Period Ended March 31, 2006 Compared to Three-Month Period Ended March 31,
      2005**




Our
      net
      loss for the three-month period ended March 31, 2006 was approximately
      ($192,034) compared to a net loss of ($274,442) during the three-month period
      ended March 31, 2005 (a decrease of $82,408). During the three-month periods
      ended March 31, 2006 and 2005, respectively, we did not record any income.
      During the three-month period ended March 31, 2006, we recorded operating
      expenses of $192,034 compared to operating expenses of $274,442 incurred in
      the
      same period, consisting primarily of: (i) $180,954 in office and general
      expenses; and (ii) $11,080 in professional fees. General and administrative
      expenses generally include corporate overhead, financial and administrative
      contracted services and consulting costs.





General
      and administrative expenses incurred during the three-month period ended March
      31, 2006 decreased from the three-month period ended March 31, 2005 primarily
      due to the decrease in operating costs associated with the acquisition and
      development of oil and gas properties and overall corporate activity associated
      with the legal and administrative costs of the Registration Statement.





Of
      the
      $180,954 incurred as general and administrative expenses during the three-month
      period ended March 31, 2006, an aggregate of $160,000 was incurred by us payable
      to International Market Trend, Inc. (“IMT”), for: (i) assistance in obtaining a
      listing on the Frankfurt Exchange ($42,500); (ii) administration fees pursuant
      to the contractual relationship ($35,000); (iii) creation of an investor
      awareness mailing program in Germany ($75,000); and (iv) updating and changing
      our web site and other identity related items ($7,500). As of March 31, 2006,
      we
      owed IMT $543 in direct expenses. An officer and director of IMT, a private
      company, is also an officer and director of one of our corporate shareholders
      and has a family member that is also one of our shareholders.





Our
      net
      loss during the three-month period ended March 31, 2006 was approximately
      ($192,034) or ($0.02) per share compared to a net loss of ($274,442) or ($0.03)
      during the three-month period ended March 31, 2005. The weighted average number
      of shares outstanding was 10,167,700 for the three-month period ended March
      31,
      2006 compared to 10,115,589 for the three-month period ended March 31, 2005.





16


**ITEM
      2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION OR PLAN OF
      OPERATION - continued**




**LIQUIDITY
      AND CAPITAL RESOURCES**





Our
      financial statements have been prepared assuming that we will continue as a
      going concern and, accordingly, do not include adjustments relating to the
      recoverability and realization of assets and classification of liabilities
      that
      might be necessary should we be unable to continue in operation.





**Three-Month
      Period Ended March 31, 2006**





As
      of the
      three-month period ended March 31, 2006, our current assets were $39,688 and
      our
      current liabilities were $50,627, resulting in a working capital deficit of
      $10,939. As at the three-month period ended March 31, 2006, current assets
      were
      comprised of cash in the amount of $39,688. As at the three-month period ended
      March 31, 2006, current liabilities were comprised of: (i) $40,542 due to
      related parties; and (ii) $10,085 in accounts payable and accrued liabilities.





As
      at the
      three-month period ended March 31, 2006, our total assets were $339,688
      comprised of: (i) $39,688 in current assets; and (ii) $300,000 in carrying
      value
      of unproved oil and gas properties. The decrease in total assets during the
      three-month period ended March 31, 2006 from $507,110 as at the three-month
      period ended March 31, 2005 was primarily to the recording of $200,000 due
      from
      a related party at March 31, 2005.





As
      at the
      three-month period ended March 31, 2006, our total liabilities were $50,627
      comprised of current liabilities. The increase in total liabilities during
      the
      three-month period ended March 31, 2006 from $26,015 as at the three-month
      period ended March 31, 2006 was primarily due to the increase in amounts due
      to
      related parties.





Stockholders'
      equity decreased from $481,095 for the three-month period ended March 31, 2005
      to $289,061 for the three-month period ended March 31, 2006.





We
      have
      not generated positive cash flows from operating activities. For the three-month
      period ended March 31, 2006, net cash flows used in operating activities was
      $7,422 compared to net cash flows used in operating activities for the
      three-month period ended March 31, 2005 of $279,576, consisting primarily of
      a
      net loss of ($192,034) and the amount of $200,000 due from a related party.





Net
      cash
      flow used in investing activities was -0- for the three-month periods ended
      March 31, 2006 and 2005, respectively.





Net
      cash
      flows provided by financing activities was $40,000 for the three-month period
      ended March 31, 2006 compared to net cash flows provided by financing activities
      for the three-month period ended March 31, 2005 of $35,000, received from
      proceeds on the sale of our common stock.





We
      expect
      that working capital requirements will continue to be funded through a
      combination of our existing funds, debt instruments and advances, and further
      issuances of securities. Our working capital requirements are expected to
      increase in line with the growth of our business.





17


**ITEM
      2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION OR PLAN OF
      OPERATION - continued**




**PLAN
      OF OPERATION AND FUNDING**





Existing
      working capital, further advances and debt instruments, and anticipated cash
      flow are expected to be adequate to fund our operations over the next six
      months. We have no lines of credit or other bank financing arrangements.
      Generally, we have financed operations to date through the proceeds of the
      private placement of equity and debt instruments. In connection with our
      business plan, management anticipates additional increases in operating expenses
      and capital expenditures relating to: (i) oil and gas operating properties;
      (ii)
      possible drilling initiatives on current properties and future properties;
      and
      (iii) future property acquisitions. We intend to finance these expenses with
      further issuances of securities, and debt issuances. Thereafter, we expect
      we
      will need to raise additional capital and generate revenues to meet long-term
      operating requirements. Additional issuances of equity or convertible debt
      securities will result in dilution to our current shareholders. Further, such
      securities might have rights, preferences or privileges senior to our common
      stock. Additional financing may not be available upon acceptable terms, or
      at
      all. If adequate funds are not available or are not available on acceptable
      terms, we may not be able to take advantage of prospective new business
      endeavors or opportunities, which could significantly and materially restrict
      our business operations.





The
      independent auditors' report accompanying our December 31, 2005 and December
      31,
      2004 financial statements contains an explanatory paragraph expressing
      substantial doubt about our ability to continue as a going concern. The
      financial statements have been prepared "assuming that we will continue as
      a
      going concern," which contemplates that we will realize our assets and satisfy
      our liabilities and commitments in the ordinary course of business.





**MATERIAL
      COMMITMENTS**





As
      of the
      date of this Quarterly Report, we do not have any material commitments for
      the
      current fiscal year.





**OFF-BALANCE
      SHEET ARRANGEMENTS**





As
      of the
      date of this Quarterly Report, we do not have any 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
      that
      are material to investors. The term “off-balance sheet arrangement” generally
      means any transaction, agreement or other contractual arrangement to which
      an
      entity unconsolidated with us is a party, under which we have: (i) any
      obligation arising under a guaranteed contract, derivative instrument or
      variable interest; or (ii) a retained or contingent interest in assets
      transferred to such entity or similar arrangement that serves as credit,
      liquidity or market risk support for such assets.

















18


**ITEM 3.
       CONTROLS AND PROCEDURES**





Our
      management is responsible for establishing and maintaining a system of
      disclosure controls
      and procedures
      (as defined in Rule 13a-15(e) and 15d-15(e) under the Exchange Act) that is
      designed to ensure that information required to be disclosed by us in the
      reports that we file or submit under the Exchange Act is recorded, processed,
      summarized and reported, within the time periods specified in the Commission’s
      rules and forms. Disclosure controls
      and procedures
      include, without limitation, controls
      and procedures
      designed to ensure that information required to be disclosed by an issuer in
      the
      reports that it files or submits under the Exchange Act is accumulated and
      communicated to the issuer’s management, including its principal executive
      officer or officers and principal financial officer or officers, or persons
      performing similar functions, as appropriate to allow timely decisions regarding
      required disclosure.





In
      accordance with Exchange Act Rules 13a-15 and 15d-15, an evaluation was
      completed under the supervision and with the participation of our management,
      including Mr. Douglas Humphreys, our Chief Executive Officer, and Mr. Grant
      Atkins, our Chief Financial Officer, of the effectiveness of the design and
      operation of our disclosure controls
      and procedures
      as of the end of the period covered by this Quarterly Report. Based on that
      evaluation, our management including the Chief Executive Officer and Principal
      Financial Officer, concluded that our disclosure controls
      and procedures
      are effective, to provide reasonable assurance that information required to
      be
      disclosed in our reports filed or submitted under the Exchange Act is recorded,
      processed, summarized, and reported within the time periods specified in the
      Commission’s rules and forms. There have been no changes to our internal controls
      over financial reporting (as defined in Rule 13a-15(f) and 15d-15(f) under
      the
      Securities Exchange Act of 1934) that occurred during our three-month quarterly
      period ended March 31, 2006, that materially affected, or were reasonably likely
      to materially affect, our internal controls
      over financial reporting.





**Audit
      Committee Report**





The
      Board
      of Directors has established an audit committee. The members of the audit
      committee are Mr. Steven Jewett, Mr. D. Bruce Horton and Mr. Grant Atkins.
      Two
      of the three members of the audit committee are “independent” within the meaning
      of Rule 10A-3 under the Exchange Act. The audit committee was organized in
      November 20, 2004 and operates under a written charter adopted by our Board
      of
      Directors.





The
      audit
      committee has reviewed and discussed with management our unaudited financial
      statements as of and for the three-month period ended March 31, 2006. The audit
      committee has also discussed with Dale Matheson Carr-Hilton LaBonte the matters
      required to be discussed by Statement on Auditing Standards No. 61,
      Communication with Audit Committees, as amended, by the Auditing Standards
      Board
      of the American Institute of Certified Public Accountants. The audit committee
      has received and reviewed the written disclosures and the letter from Dale
      Matheson Carr-Hilton LaBonte required by Independence Standards Board Standard
      No. 1, Independence Discussions with Audit Committees, as amended, and has
      discussed with Dale Matheson Carr-Hilton LaBonte their
      independence.





Based
      on
      the reviews and discussions referred to above, the audit committee has
      recommended to the Board of Directors that the unaudited financial statements
      referred to above be included in our Quarterly Report on Form 10-QSB for the
      three-month period ended March 31, 2006 filed with the Securities and Exchange
      Commission.





19





**PART
      II. OTHER INFORMATION**





**ITEM
      1. LEGAL PROCEEDINGS**





Management
      is not aware of any legal proceedings contemplated by any governmental authority
      or any other party involving us or our properties. As of the date of this
      Quarterly Report, no director, officer or affiliate is (i) a party adverse
      to us
      in any legal proceeding, or (ii) has an adverse interest to us in any legal
      proceedings. Management is not aware of any other legal proceedings pending
      or
      that have been threatened against us or our properties.





**ITEM
      2. CHANGES IN SECURITIES AND USE OF PROCEEDS**





No
      report
      required.





**ITEM
      3. DEFAULTS UPON SENIOR SECURITIES**





No
      report required.





**ITEM
      4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS**




No
      report
      required.





**ITEM
      5. OTHER INFORMATION**





No
      report
      required.





**ITEM
      5. OTHER INFORMATION**





**2006
      STOCK OPTION PLAN**





On
      April
      3, 2006, our Board of Directors authorized an approved a 2006 stock option
      plan
      (the “Stock Option Plan”).




The
      purpose of the Stock Option Plan is to enhance our long-term stockholder value
      by offering opportunities to our directors, officers, employees and eligible
      consultants to acquire and maintain stock ownership in order to give these
      persons the opportunity to participate in our growth and success, and to
      encourage them to remain in our service.





The
      Stock
      Option Plan is to be administered by our Board of Directors or a committee
      appointed by and consisting of one or more members of the Board of Directors,
      which shall determine (i) the persons to be granted Stock Options under the
      Stock Option Plan; (ii) the number of shares subject to each option, the
      exercise price of each Stock Option; and (iii) whether the Stock Option shall
      be
      exercisable at any time during the option period of ten (10) years or whether
      the Stock Option shall be exercisable in installments or by vesting only. The
      Stock Option Plan, as amended, provides authorization to the Board of Directors
      to grant Stock Options to purchase a total number of shares of Common Stock
      of
      the Company, not to exceed 5,000,000 shares as at the date of adoption by the
      Board of Directors of the Stock Option Plan. At the time a Stock Option is
      granted under the Stock Option Plan, the Board of Directors shall fix and
      determine the exercise price at which shares of our Common Stock may be
      acquired.





20


**2006
      STOCK OPTION PLAN - continued**




In
      the
      event an optionee ceases to be employed by or to provide services to us for
      reasons other than cause, retirement, disability or death, any Stock Option
      that
      is vested and held by such optionee generally may be exercisable within up
      to
      ninety (90) calendar days after the effective date that his position ceases,
      and
      after such 90-day period any unexercised Stock Option shall expire. In the
      event
      an optionee ceases to be employed by or to provide services to us for reasons
      of
      retirement, disability or death, any Stock Option that is vested and held by
      such optionee generally may be exercisable within up to one-year after the
      effective date that his position ceases, and after such one-year period any
      unexercised Stock Option shall expire.





No
      Stock
      Options granted under the Stock Option Plan will be transferable by the
      optionee, and each Stock Option will be exercisable during the lifetime of
      the
      optionee subject to the option period of ten (10) years or limitations described
      above. Any Stock Option held by an optionee at the time of his death may be
      exercised by his estate within one (1) year of his death or such longer period
      as the Board of Directors may determine.





The
      exercise price of a Stock Option granted pursuant to the Stock Option Plan
      shall
      be paid in full to us by delivery of consideration equal to the product of
      the
      Stock Option in accordance with the requirements of the Nevada Revised Statutes.
      Any Stock Option settlement, including payment deferrals or payments deemed
      made
      by way of settlement of pre-existing indebtedness from the Company may be
      subject to such conditions, restrictions and contingencies as may be determined.





**Incentive
      Stock Options**





The
      Stock
      Option Plan further provides that, subject to the provisions of the Stock Option
      Plan and prior shareholder approval, the Board of Directors may grant to any
      key
      individuals who are our employees eligible to receive options one or more
      incentive stock options to purchase the number of shares of common stock
      allotted by the Board of Directors (the "Incentive Stock Options"). The option
      price per share of common stock deliverable upon the exercise of an Incentive
      Stock Option shall be at least 100% of the fair market value of the common
      shares of the Company, and in the case of an Incentive Stock Option granted
      to
      an optionee who owns more than 10% of the total combined voting power of all
      classes of our stock, shall not be less than 100% of the fair market value
      of
      our common shares. The option term of each Incentive Stock Option shall be
      determined by the Board of Directors, which shall not commence sooner than
      from
      the date of grant and shall terminate no later than ten (10) years from the
      date
      of grant of the Incentive Stock Option, subject to possible early termination
      as
      described above.





During
      the three-month period ended March 31, 2006, our Board of Directors authorized
      the grant of an aggregate of 2,000,000 Stock Options exercisable at $0.50 per
      share for a five-year term to certain of our officers, directors and significant
      consultants.





21


**ITEM
      6. EXHIBITS AND REPORTS ON FORM 8-K**





Reports
      on Form 8-K:





None.





Exhibits:





10.1
            2006
                Stock Option Plan of Morgan Creek Energy
                Corp.





31.1
            Certification
                of Chief Executive Officer pursuant to SecuritiesExchange
                Act of 1934 Rule 13a-14(a) or
                15d-14(a).





31.2
            Certification
                of Chief Financial Officer pursuant to SecuritiesExchange
                Act of 1934 Rule 13a-14(a) or
                15d-14(a).





32.1
              Certifications
                  pursuant to Securities Exchange Act of 1934 Rule 13a-14(b)
                  or 15d-14(b) and 18 U.S.C. Section 1350, as adopted pursuant
                  toSection
                  906 of the Sarbanes-Oxley Act of 2002.




**SIGNATURES**





In
      accordance with the requirements of the Exchange Act, the registrant caused
      this report to be signed on its behalf by the undersigned, thereunto duly authorized.







MORGAN
              CREEK
              ENERGY CORP.Date: May
              14,
              2006
            By:
            /s/ Douglas
              HumphreysDouglas
              HumphreysPresident
              and
              Chief Executive Officer  MORGAN
              CREEK
              ENERGY CORP.Date: May
              14,
              2006
            By:
            /s/ Grant
              AtkinsGrant
              AtkinsChief
              Financial Officer










22