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, 2007


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


                 For the transition period from _____ to _______


                         Commission file number 0-25455


                            MORGAN CREEK ENERGY CORP.
        _________________________________________________________________
        (Exact name of small business issuer as specified in its charter)


         NEVADA                                                 201777817
_______________________________                              ___________________
(State or other jurisdiction of                               (I.R.S. Employer
incorporation of organization)                               Identification No.)


                             10120 S. Eastern Avenue
                                    Suite 200
                             Henderson, Nevada 89052
                    ________________________________________
                    (Address of Principal Executive Offices)


                                 (702) 566-1307
                           ___________________________
                           (Issuer's telephone number)


      Securities registered pursuant to Section 12(b) of the Exchange Act:

                                      None
                                ________________
                                (Title of class)


      Securities registered pursuant to Section 12(g) of the Exchange Act:

                         Common Stock, Par Value $0.001
                         ______________________________
                                (Title of class)


Indicate by check mark whether the issuer (1) has filed all reports  required to
be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of 1934 during
the preceding 12 months (or for such shorter period that the issuer was required
to file such reports),  and (2) has been subject to such filing requirements for
the past 90 days.

                                 Yes [X] No [ ]


<PAGE>


Indicate by check mark if disclosure of delinquent  filers  pursuant to Item 405
of Regulation S-K (Section 229.405 of this chapter) is not contained herein, and
will not be contained, to the best of issuer's knowledge, in definitive proxy of
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB. [X]

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

                                 Yes [ ] No [X]


          Applicable Only to issuers Involved in Bankruptcy Proceedings
                        During the Preceding Five Years.

                                       N/A

Indicate by check mark  whether the issuer has filed all  documents  and reports
required to be filed by Section 12, 13 and 15(d) of the Securities  Exchange Act
of 1934 subsequent to the distribution of securities under a plan confirmed by a
court.

                                 Yes [ ] No [ ]


                    Applicable Only to Corporate Registrants

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

Class                                  Outstanding as of May 4, 2007

Common Stock, $.001 par value                 29,814,905

Transitional Small Business Disclosure Format (Check one:)

                                 Yes [ ] No [X]


                                       2


<PAGE>


INDEX                                                                       PAGE

PART I. FINANCIAL INFORMATION                                                 4

ITEM 1. INTERIM FINANCIAL INFORMATION                                         4

        BALANCE SHEETS                                                        6

        STATEMENTS OF OPERATIONS                                              7

        STATEMENTS OF CASH FLOWS                                              8

        NOTES TO FINANCIAL STATEMENTS                                         9

ITEM 2. MANAGEMENT'S DUSCISSION AND ANALYSIS FO FINANCIAL
        CONDITION OR PLAN OF OPERATION                                       16

ITEM 3. CONTROLS AND PROCEDURES                                              20

PART II.OTHER INFORMATION                                                    21

ITEM 1. LEGAL PROCEEDINGS                                                    21

ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS                            21

ITEM 3. DEFAULTS UPON SENIOR SECURITIES                                      22

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS                  22

ITEM 5. OTHER INFORMATION                                                    22

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K                                     22

SIGNATURES                                                                   23


                                       3


<PAGE>


                                     PART I

ITEM 1. FINANCIAL STATEMENTS

                            MORGAN CREEK ENERGY CORP.

                              FINANCIAL STATEMENTS

                                 MARCH 31, 2007
                                   (Unaudited)




























                                       4


<PAGE>



                            MORGAN CREEK ENERGY CORP.

                         (An Exploration Stage Company)

                              FINANCIAL STATEMENTS

                                 MARCH 31, 2007
                                   (UNAUDITED)























BALANCE SHEETS

STATEMENTS OF OPERATIONS

STATEMENTS OF CASH FLOWS

NOTES TO FINANCIAL STATEMENTS


                                       5


<PAGE>

<TABLE>
<CAPTION>


                            MORGAN CREEK ENERGY CORP.
                         (An Exploration Stage Company)

                                 BALANCE SHEETS

                                                                                     March 31,         December 31,
                                                                                       2007               2006
__________________________________________________________________________________________________________________
                                                                                    (unaudited)
<S>                                                                                 <C>                <C>
                                     ASSETS

CURRENT ASSETS
   Cash                                                                             $     5,778        $     5,824
   Prepaid                                                                               13,755             13,755
__________________________________________________________________________________________________________________
                                                                                         19,543             19,579

NON CURRENT ASSET
   Restricted cash (Note 7)                                                              25,000                  -
__________________________________________________________________________________________________________________

OIL AND GAS PROPERTIES, unproven (Note  3)                                              375,860            310,070
__________________________________________________________________________________________________________________

                                                                                    $   420,393        $   329,649
==================================================================================================================

                      LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES
     Accounts payable and accrued liabilities                                       $    65,250        $   119,735
     Due to related parties  (Note 6)                                                   686,386            353,493
__________________________________________________________________________________________________________________
                                                                                        751,636            473,228
__________________________________________________________________________________________________________________

GOING CONCERN (Note 1)

STOCKHOLDERS' EQUITY(DEFICIT) (Note 4)
Common stock, 100,000,000 shares authorized with $0.001 par value
Issued and outstanding
     29,814,905 common shares (December 31, 2006 - 29,814,905)                           29,815             29,815
     Additional paid-in-capital                                                       3,972,363          3,972,363
     Deficit accumulated during exploration stage                                    (4,333,421)        (4,145,757)
__________________________________________________________________________________________________________________
                                                                                       (331,243)          (143,579)
__________________________________________________________________________________________________________________
                                                                                    $   420,393        $   329,649
==================================================================================================================


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

</TABLE>


                                       6


<PAGE>

<TABLE>
<CAPTION>

                            MORGAN CREEK ENERGY CORP.
                         (An Exploration Stage Company)

                            STATEMENTS OF OPERATIONS
                                   (UNAUDITED)


                                                                                                  October 19, 2004
                                                    Three months ended     Three months ended     (inception) to
                                                      March 31, 2007         March 31, 2006       March 31, 2007
__________________________________________________________________________________________________________________
<S>                                                    <C>                    <C>                   <C>

GENERAL AND ADMINISTRATIVE EXPENSES
     Investor relations                                $         -            $    75,000           $   152,954
     Consulting fees                                        44,378                 77,500               482,845
     Management fees                                        61,739                 15,000               373,446
     Management fees - stock based compensation                  -                      -             1,527,170
     Impairment of oil and gas properties
        (Note 3(a ),(b),(c) and (d))                             -                      -             1,273,410
     Office and general                                     26,945                 13,454               227,050
     Professional fees                                      54,602                 11,080               296,546
__________________________________________________________________________________________________________________

NET LOSS                                               $  (187,664)           $  (192,034)          $(4,333,421)
==================================================================================================================

BASIC AND DILUTED LOSS PER COMMON SHARE                $     (0.00)           $     (0.00)
=============================================================================================

WEIGHTED AVERAGE NUMBER OF COMMON
SHARES OUTSTANDING-BASIC AND DILUTED                    29,814,905             40,670,800
=============================================================================================


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

</TABLE>


                                       7


<PAGE>

<TABLE>
<CAPTION>

                            MORGAN CREEK ENERGY CORP.
                         (An Exploration Stage Company)

                            STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)

                                                                                                           October 19, 2004
                                                             Three months ended     Three months ended      (inception) to
                                                               March 31, 2007         March 31, 2006        March 31, 2007
___________________________________________________________________________________________________________________________
<S>                                                              <C>                    <C>                  <C>

CASH FLOWS FROM OPERATING ACTIVITIES
  Net loss for the period                                        $(187,664)             $(192,034)           $(4,333,421)
  Adjustments to reconcile net loss to net cash
     used in operating activities:
     - Stock based compensation                                          -                      -              1,527,170
     - Impairment of oil and gas properties                              -                      -              1,273,410
     - Prepaid expenses                                                  -                      -                (13,755)
     - Due from related parties                                          -                200,000                      -
     - Due to related parties                                       32,675                 (9,458)                33,886
    - Accounts payable and accrued liabilities                     (81,767)                (5,930)                65,250
___________________________________________________________________________________________________________________________

NET CASH USED IN OPERATING ACTIVITIES                             (236,756)                (7,422)            (1,447,460)
___________________________________________________________________________________________________________________________

CASH FLOWS FROM INVESTING ACTIVITIES
  Acquisition of oil and gas properties, net of recovery           (65,790)                     -             (1,299,270)
   Restricted cash deposits                                        (25,000)                                      (25,000)
___________________________________________________________________________________________________________________________

NET CASH FLOWS USED IN INVESTING ACTIVITIES                        (90,790)                     -             (1,324,270)
___________________________________________________________________________________________________________________________

CASH FLOWS FROM FINANCING ACTIVITIES
    Proceeds on sale of common stock                                     -                      -              2,125,008
    Advances from related parties                                  327,500                 40,000                652,500
___________________________________________________________________________________________________________________________

NET CASH PROVIDED BY FINANCING ACTIVITIES                          327,500                 40,000              2,777,508
___________________________________________________________________________________________________________________________

INCREASE (DECREASE)  IN CASH                                           (46)                32,578                  5,778

CASH, BEGINNING OF PERIOD                                            5,824                  7,110                      -
___________________________________________________________________________________________________________________________

CASH, END OF PERIOD                                              $   5,778              $  39,688            $     5,778
===========================================================================================================================

SUPPLEMENTAL CASH FLOW INFORMATION AND
  NONCASH INVESTING AND FINANCING ACTIVITIES:
     Cash paid for interest                                      $       -              $       -            $         -
     Cash paid for income taxes                                  $       -              $       -            $         -
     Common stock issued for acquisition of oil and gas
        property (Note 3)                                        $       -              $       -            $   950,000


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

</TABLE>


                                       8


<PAGE>


                            MORGAN CREEK ENERGY CORP.
                         (An Exploration Stage Company)

                          NOTES TO FINANCIAL STATEMENTS
                                 MARCH 31, 2007
                                   (unaudited)
________________________________________________________________________________


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.  The primary  activity and focus of the Company is its
leases  in  Texas  ("Quachita  Prospect").  To date  the  Company  has  acquired
approximately  2,281  gross acres and is planning to drill its first well on the
property, the Boggs 1 by the end of May 2007.

GOING CONCERN
The Company  commenced  operations  on October 19, 2004 and has not realized any
revenues since  inception.  As of March 31, 2007 the Company has a total deficit
of $4,333,421 and a working capital  deficiency of $707,103.  The ability of the
Company to continue as a going  concern is dependent on raising  capital to fund
ongoing  operations  and carry out 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.  To date the Company has
funded 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 has been no material changes in the
information  disclosed  in the notes to the  financial  statements  for the year
ended  December 31, 2006 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, 2007 are not  necessarily  indicative of the results that
may be expected for the year ending December 31, 2007.

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. The Company's financial statements are
presented in US dollars.

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  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.


                                       9


<PAGE>


                            MORGAN CREEK ENERGY CORP.
                         (An Exploration Stage Company)

                          NOTES TO FINANCIAL STATEMENTS
                                 MARCH 31, 2007
                                   (unaudited)
________________________________________________________________________________


NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
________________________________________________________________________________

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

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.  Significant  areas  requiring  management's
estimates  and  assumptions  are  the   determination   of  the  fair  value  of
transactions  involving  common  stock and  financial  instruments.  Other areas
requiring estimates include deferred tax balances and asset impairment tests.

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,  diluted loss per
share is equal to basic loss per share.


                                       10


<PAGE>


                            MORGAN CREEK ENERGY CORP.
                         (An Exploration Stage Company)

                          NOTES TO FINANCIAL STATEMENTS
                                 MARCH 31, 2007
                                   (unaudited)
________________________________________________________________________________


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 December  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.


RECENT ACCOUNTING PRONOUNCEMENTS

In December 2006, the FASB issued FSP EITF 00-19-02, Accounting for Registration
Payment Arrangements ("FSP 00-19-2") which addresses accounting for registration
payment  arrangements.  FSP 00-19-2 specifies that the contingent  obligation to
make future payments or otherwise  transfer  consideration  under a registration
payment  arrangement,  whether  issued as a separate  agreement or included as a
provision of a financial  instrument  or other  agreement,  should be separately
recognized and measured in accordance  with FASB Statement No. 5, Accounting for
Contingencies. FSP 00-19-2 further clarifies that a financial instrument subject
to a registration payment arrangement should be accounted for in accordance with
other applicable generally accepted accounting  principles without regard to the
contingent  obligation to transfer  consideration  pursuant to the  registration
payment  arrangement.   For  registration  payment  arrangements  and  financial
instruments  subject to those  arrangements  that were entered into prior to the
issuance of EITF 00-19-2,  this  guidance is effective for financial  statements
issued for fiscal years  beginning  after December 15, 2006 and interim  periods
within  those  fiscal  years.  The Company has  determined  the  adoption of FSP
00-19-2 will not have a significant impact upon its financial position,  results
of operations or cash flows.

In February  2007,  the FASB issued  SFAS No.  159,  "The Fair Value  Option for
Financial Assets and Financial Liabilities".  This Statement permits entities to
choose to measure many financial assets and financial liabilities at fair value.
Unrealized  gains and losses on items for which the fair  value  option has been
elected are  reported in earnings.  SFAS No. 159 is  effective  for fiscal years
beginning after November 15, 2007. The Company is currently assessing the impact
of SFAS No. 159 on its financial position and results of operations.


                                       11


<PAGE>


                            MORGAN CREEK ENERGY CORP.
                         (An Exploration Stage Company)

                          NOTES TO FINANCIAL STATEMENTS
                                 MARCH 31, 2007
                                   (unaudited)
________________________________________________________________________________


NOTE 3 - OIL AND GAS PROPERTIES
________________________________________________________________________________

(a) QUACHITA PROSPECT
The Company leased various properties totalling  approximately 2,281 gross acres
within  the  Quachita  Trend  within the state of Texas for a three year term in
consideration  for $312,963.  The Company has a 100% Working  Interest and a 77%
N.R.I. in the leases.

(b) PETERS RANCH LEASE
On January  30,  2007 the  Company  acquired a 100%  working  interest,  77% net
revenue interest,  in two fully equipped South Texas oil leases;  the Mata lease
in Webb County and the Peters Ranch located in Duval County for $55,000. Each 40
acre lease is expected to be productive  after  completion of the rework program
and the addition of extra equipment.  Subsequent to the period on April 23, 2007
the Company reached an agreement to sell the property for $65,000.

________________________________________________________________________________
NOTE 4 - STOCKHOLDERS' EQUITY
________________________________________________________________________________

(a)      SHARE CAPITAL
The Company's  capitalization  is 100,000,000  common shares with a par value of
$0.001 per share.

On May 10, 2006, the directors of the Company  approved a special  resolution to
undertake a forward  split of the common  stock of the Company on a 2 new shares
for 1 old share basis whereby  10,167,700  common shares were issued pro-rata to
shareholders of the Company as of the record date on May 10, 2006.

On July 26, 2006, the directors of the Company approved a special  resolution to
undertake a further  forward split of the common stock of the Company on a 2 new
shares for 1 old share  basis  whereby  20,335,400  common  shares  were  issued
pro-rata to shareholders of the Company as of the record date on August 8, 2006.

All references in these financial  statements to number of common shares,  price
per share and weighted average number of common shares  outstanding prior to the
2:1 forward  stock split on May 10, 2006 and the 2:1 forward  split on August 8,
2006 have been adjusted to reflect  these stock splits on a  retroactive  basis,
unless otherwise noted.

On December 19, 2006 a founding  shareholder of the Company returned  12,000,000
restricted  shares of common stock to treasury and the shares were  subsequently
cancelled  by  the  Company.  The  shares  were  returned  to  treasury  for  no
consideration to the shareholder

(b)      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.

On October 16, 2006 the Company  completed  a private  placement  consisting  of
944,105  units with each unit  comprised  of one common share at $1.50 per share
for  proceeds  of  $1,416,158.  The units  consist of one  common  share and one
non-transferable  share purchase warrant  exercisable at $3.00 per share for the
period  commencing on October 16, 2006 and ending on the day which is earlier of
24 months from the date of issuance of the units or 18 months from the effective
date of a planned registration statement. Of this private placement,  563,333 of
the units  issued  were in  exchange  for  $845,000  previously  advanced to the
Company by a  shareholder.  The estimated fair value of the warrants at the date
of grant of $592,210 was determined using the Black-Scholes option pricing model
with an expected life of 2 years,  risk free interest rate of 4.49%,  a dividend
yield of 0% and an expected volatility of 153%.


                                       12


<PAGE>


                            MORGAN CREEK ENERGY CORP.
                         (An Exploration Stage Company)

                          NOTES TO FINANCIAL STATEMENTS
                                 MARCH 31, 2007
                                   (unaudited)
________________________________________________________________________________


NOTE 4 - STOCKHOLDERS' EQUITY (CONTINUED)
________________________________________________________________________________

 (c)     SHARE PURCHASE WARRANTS
There were 944,105 share purchase warrants issued and outstanding as of December
31, 2006. Share purchase warrants outstanding as of March 31, 2007 are:

______________________________________________________________________

            Weighted    Number of          Weighted average
Exercise    average     warrants to        remaining In
 price       price      purchase shares    contractual life (in years)
______________________________________________________________________

 $3.00       $3.00          944,105                   1.80
______________________________________________________________________


A summary of the  Company's  stock  purchase  warrants  as of March 31, 2007 and
changes during the period is presented below:

________________________________________________________________________________

                                            Weighted average   Weighted average
                                Number of    exercise Price      remaining In
                                Warrants       per share       contractual life
                                                                  (in years)
________________________________________________________________________________

Outstanding at December, 2006    944,105              -                 -
Issued                                 -              -                 -
Expired                                -              -                 -
Exercised                              -              -                 -
BALANCE  MARCH 31, 2007          944,105         $ 3.00              1.50
________________________________________________________________________________


NOTE 5 - STOCK OPTION PLAN
________________________________________________________________________________

On April 3, 2006 the Board of  Directors of the Company  ratified,  approved and
adopted a Stock  Option Plan for the Company in the amount of  5,000,000  shares
with an exercisable period up to 10 years. In the event an optionee ceases to be
employed by or to provide  services to the Company for reasons other than cause,
any Stock  Option  that is vested and held by such  optionee  maybe  exercisable
within up to ninety  calendar  days after the  effective  date that his position
ceases. No Stock Option granted under the Stock Option Plan is transferable. Any
Stock  Option held by an optionee at the time of his death may be  exercised  by
his estate  within one year of his death or such  longer  period as the Board of
Directors  may  determine.  On December  12, 2006 the Board of  Directors of the
Company ratified and approved under the Company's existing Stock Option Plan the
issuance of 1,850,000 shares for five years at $1.10 per share.

On December 12, 2006, the Company  granted  1,350,000  stock options to officers
and  directors  and 500,000  options to  management  of the Company at $1.10 per
share.  The term of these options are five years.  The total fair value of these
options  at the  date of  grant  was  $1,527,170,  or  $1,114,421  and  $412,749
respectively,  and was estimated  using the  Black-Scholes  option pricing model
with an expected life of 3 years, a risk free interest rate of 4.49%, a dividend
yield of 0% and  expected  volatility  of 187% and has been  recorded as a stock
based compensation expense in the year.

A summary of the Company's stock options as of March 31, 2007 and changes during
the period ended is presented below:  There were 1,850,000 stock options granted
in fiscal 2006.


________________________________________________________________________________

                                             Weighted average   Weighted average
                                 Number of    exercise Price      remaining In
                                 Options        per share       contractual life
                                                                   (in years)
________________________________________________________________________________

Outstanding at December 31, 2006 1,850,000            -                  -
Granted                                  -            -                  -
Exercised                                -            -                  -
OUTSTANDING AT MARCH 31, 2007    1,850,000        $1.10               4.70
________________________________________________________________________________


                                       13


<PAGE>


                            MORGAN CREEK ENERGY CORP.
                         (An Exploration Stage Company)

                          NOTES TO FINANCIAL STATEMENTS
                                 MARCH 31, 2007
                                   (unaudited)
________________________________________________________________________________


NOTE 6 - RELATED PARTY TRANSACTIONS
________________________________________________________________________________

INTERNATIONAL MARKET TREND, INC. ("IMT")
An officer  and  director of IMT, a private  company,  is a  shareholder  of the
Company.  During the period ended March 31, 2007 the Company paid IMT consulting
expenses of $30,000 (2005 - $20,000). In addition during the period IMT advanced
the Company  $6,000.  As of March 31, 2007 the  Company  owed IMT $26,164  which
amount is unsecured  and  non-interest  bearing,  and has no specific  repayment
terms.

During the period  ended March 31, 2007 a  shareholder  of the Company  advanced
$321,500 to the Company.  The balance owing to this  shareholder as of March 31,
2007 was  $646,500  and  bears  interest  at 8% per  annum  and has no  specific
repayment terms. As of March 31, 2007 total accrued interest was $13,722.

MANAGEMENT FEES
During the period ended March 31, 2007, the Company paid an officer and director
$30,000 for management fees (March 2006 -$15,000).

As part of their  compensation  agreement  the  Company's  chief  Geologist  and
Operations Manager (hereafter  referred to as "Executives") each receives and is
assigned at time of acquisition up to a 1.5% overriding  royalty interest in any
oil and gas  properties  which are directly  introduced by the Executives to the
Company.  During the period  ended March 31, 2007 the Company  recorded  related
additional  compensation to the Executives of the estimated fair value of $1,739
(March 2006 - $nil).

NOTE 7 - RESTRICTED CASH
________________________________________________________________________________

Restricted  cash  consists  of  amounts  restricted  for more than 12 months and
accordingly is included in  non-current  assets.  Restricted  cash consists of a
$25,000 operating bond for the Company held by the Railroad Commission of Texas.

NOTE 8 - INCOME TAXES
________________________________________________________________________________

The Company has adopted the FASB No. 109 for reporting purposes.  As of December
31, 2006,  the Company had net operating  loss carry  forwards of  approximately
$2,618,600  that may be available to reduce future years' taxable income through
2026.  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
carryforwards.

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:

                                     Year ended            Year ended
                                  December 31, 2006     December 31, 2005
________________________________________________________________________________

Federal income tax provision
   at statutory rate                    35.0%                 35.0%
States income tax provision
   at statutory rates, net of
   federal income tax effect             3.0%                  7.0%
________________________________________________________________________________

Total income tax provision              38.0%                 42.0%
________________________________________________________________________________


                                       14


<PAGE>


                            MORGAN CREEK ENERGY CORP.
                         (An Exploration Stage Company)

                          NOTES TO FINANCIAL STATEMENTS
                                 MARCH 31, 2007
                                   (unaudited)
________________________________________________________________________________


NOTE 8 - INCOME TAXES (CONTINUED)
________________________________________________________________________________

The actual income tax provisions differ from the expected amounts  calculated by
applying  the  combined  federal  and state  corporate  income  tax rates to the
Company's loss before income taxes.  The components of these  differences are as
follows:

<TABLE>
<CAPTION>
                                                        2006              2005
_________________________________________________________________________________
<S>                                                 <C>               <C>

Loss before income taxes                            $ (3,918,002)     $  (204,026)
Corporate tax rate                                         38.00%           42.00%
_________________________________________________________________________________

Expected tax expense (recovery)                       (1,488,841)         (85,690)

Decrease resulting from:
   Non-deductible stock option expenses                  580,325                -
   Valuation allowance                                   908,516           85,690
_________________________________________________________________________________
Future income tax provision (recovery)              $          -      $         -
=================================================================================

The Company's deferred tax asset is as follows:

                                                        2006              2005
_________________________________________________________________________________

Long-term deferred tax asset
   Net operating loss carry forwards                $    995,063      $    95,657
Valuation allowance                                     (995,063)         (95,657)
_________________________________________________________________________________
                                                    $          -      $         -
=================================================================================

</TABLE>


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 year.


                                       15


<PAGE>


                           FORWARD LOOKING STATEMENTS

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.


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.

CURRENT BUSINESS OPERATIONS

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 and within North  America.  Our primary  activity and focus is our
leases in Texas ("Quachita  Prospect").  To date, we have acquired approximately
2,281 gross  acres.  We acquired a 100%  working  interest and a 77% net revenue
interest  in natural  gas  targeted  Quachita  Prospect  leases.  The leases are
unproven and were acquired for approximately $312,963.

OIL AND GAS PROPERTIES

QUACHITA PROSPECT

As of March 31, 2007,  we leased  approximately  2,281 acres within the Ouachita
Trend in the State of Texas for a three-year term in  consideration of $312,963,
which was paid during 2006 (the "Ouachita Lease"). We had previously  identified
seven separate potential areas of exploration interest and have carried out wide
scale leasing on the first of these  targets.  As of the date of this  Quarterly
review


                                       16


<PAGE>


Report,  we intend to secure all immediate rights relating to oil and gas in the
areas providing  control over any potential major  structural play that develops
as a result of this in-depth exploration.

As of the date of this Quarterly  Report, we have received a permit for drilling
of the twin well on the  Quachita  Prospect.  The site has been  cleared and the
rathhole has been drilled.  We anticipate  further  drilling will resume by June
2007.

         SOUTH TEXAS PROSPECT

On  approximately  January 30, 2007, we acquired a 100% working  interest in two
fully  equipped  oil  leases  located  in  the  State  of  Texas  for  aggregate
consideration  of  $55,000.  The Mata lease is  located  in Webb  County and the
Peters  Ranch lease is located in Duval County  (collectively,  the "South Texas
Lease").  As of the date of this Quarterly  Report, we anticipate that the South
Texas Leases will be productive  after  completion of the rework program and the
addition of extra equipment.  On April 23, 2007, we reached an agreement to sell
our working interest in the South Texas Lease for $65,000.


RESULTS OF OPERATION

We have incurred  recurring  losses to date. 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.

We expect we will  require  additional  capital to meet our long term  operating
requirements. We expect to raise additional capital through, among other things,
the sale of equity or debt securities.

THREE MONTH  PERIOD  ENDED MARCH 31, 2007  COMPARED TO THREE MONTH  PERIOD ENDED
MARCH 31, 2006

Our net loss for the three-month  period ended March 31, 2007 was  approximately
($187,664)  compared to a net loss of  $192,034  during the  three-month  period
ended March 31, 2006 (a decrease  of  $4,370).  During the  three-month  periods
ended March 31, 2007 and March 31, 2006, we did not generate any revenue.

During the  three-month  period  ended March 31, 2007,  we incurred  general and
administrative  expenses of approximately $187,664 compared to $192,034 incurred
during the three-month period ended March 31, 2006 (a decrease of $4,370). These
general and administrative expenses incurred during the three-month period ended
March 31, 2007  consisted of: (i) consulting  fees of $44,378  (2006:  $77,500);
(ii)  management  fees of $61,739 (2006:  $15,000);  (iii) office and general of
$26,945 (2006:  $13,454); and (iv) professional fees of $54,602 (2006: $11,080).
During  the  three-month  period  ended  March  31,  2007,  we did not incur any
expenses  associated  with  investor  relations as compared to $75,000  incurred
during the three-month period ended March 31, 2006.

General and administrative expenses incurred during the three-month period ended
March 31, 2007 compared to the three-month period ended March 31, 2006 decreased
primarily due to the decrease in expenses associated with investor relations and
consulting fee. During 2006,  investor  relation expenses were incurred relating
to corporate  marketing and pertaining to investor  awareness.  Consulting  fees


                                       17


<PAGE>


decreased during the three-month  period ended March 31, 2007 due to decrease in
use  of  contract  services.  However,  management  fees  increased  during  the
three-month  period ended March 31, 2007  compared to  three-month  period ended
March 31, 2006  primarily  due to emphasis  on reliance of  managerial  services
provided by our officers.  General and administrative expenses generally include
corporate overhead, financial and administrative contracted services, marketing,
and consulting costs.

Of the  $187,664  incurred as general  and  administrative  expenses  during the
three-month  period ended March 31,  2007,  we incurred  consulting  expenses of
$30,000 payable to International  Market Trend, Inc. ("IMT").  In addition,  IMT
advanced us $6,000  during the  three-month  period ended March 31, 2007.  As of
March 31, 2007, we owed IMT $26,164, which is unsecured and non-interest bearing
and has no definite  repayment terms. An officer and director of IMT is also one
of our shareholders.

Of the  $187,664  incurred as general  and  administrative  expenses  during the
three-month  period ended March 31,  2007,  an aggregate of $30,000 was incurred
payable to a certain officer and director in management and consulting  fees. We
also incurred  additional  compensation  to our Chief  Geologist and  Operations
Manager in accordance with certain contractual arrangements that in the event we
acquire an oil and gas property  which was directly  introduced  to us by either
our  Chief  Geologist  or  Operations  Manager,  we  will  assign  up to a  1.5%
overriding  royalty  interest.  Therefore,  during the three-month  period ended
March 31, 2007, we recorded additional compensation of $1,739.

Our net loss during the  three-month  period ended March 31, 2007 was ($187,664)
or ($0.00) per share  compared to a net loss of  ($192,034) or ($0.00) per share
during the three-month  period ended March 31, 2006. The weighted average number
of shares  outstanding was 29,814,905 for the three-month period ended March 31,
2007 compared to 40,670,800 for the three-month period ended March 31, 2006.

LIQUIDITY AND CAPITAL RESOURCES

THREE-MONTH PERIOD ENDED MARCH 31, 2007

As at the  three-month  period  ended March 31,  2007,  our current  assets were
$19,533 and our current  liabilities were $751,636,  which resulted in a working
capital  deficiency of ($732,103).  As at the three-month period ended March 31,
2007,  current  assets were  comprised  of: (i) $5,778 in cash;  (ii) $13,755 in
prepaid.  As at the three-month period ended March 31, 2007, current liabilities
were comprised of: (i) $65,250 in accounts payable and accrued liabilities;  and
(ii) $686,386 due to related parties.

As at the  three-month  period  ended  March 31,  2007,  our total  assets  were
$420,393  comprised  of: (i)  $44,533 in current  assets;  and (ii)  $375,860 in
unproven  oil and gas  properties.  The  increase  in total  assets  during  the
three-month period ended March 31, 2007 from fiscal year ended December 31, 2006
was primarily due to the increase in valuation of the recently acquired unproven
oil and gas  properties  and the increase in  restricted  cash  consisting  of a
$25,000 operating bond held by the Railroad Commission of Texas.

As at the three-month  period ended March 31, 2007, our total  liabilities  were
$751,636 comprised entirely of current liabilities.  The increase in liabilities
during the  three-month  period  ended  March 31,  2007 from  fiscal  year ended


                                       18


<PAGE>


December  31, 2006 was  primarily  due to the increase in amounts due to related
parties. See " - Material Commitments."

Stockholders'  equity decreased from $143,579 for fiscal year ended December 31,
2006 to ($331,243) for the three-month period ended March 31, 2007.

CASH FLOWS FROM OPERATING ACTIVITIES

We have not generated  positive cash flows from  operating  activities.  For the
three-month  period  ended  March 31,  2007,  net cash flows  used in  operating
activities was ($236,756), consisting primarily of a net loss of ($187,664). Net
cash flows used in  operating  activities  was  adjusted by $32,675 to reconcile
costs due to related parties and by ($81,767) to reconcile  accounts payable and
accrued liabilities.

For the three-month period ended March 31, 2006, net cash flow used in operating
activities was $(7,422),  consisting primarily of a net loss of $(192,034).  The
change in net cash flows used in  operating  activities  during the  three-month
period  ended March 31, 2007 from the  three-month  period  ended March 31, 2006
related  primarily to the  adjustment by $200,000 to reconcile  amounts due from
related parties.

CASH FLOWS FROM INVESTING ACTIVITIES

For the  three-month  period  ended  March  31,  2007,  net cash  flows  used in
investing  activities was ($90,790) consisting of $65,790 for acquisition of the
oil and gas properties and $25,000 for the restricted  cash deposit  relating to
the bond held by the Railroad Commission of Texas. There were no cash flows from
investing activities in the three-month period ended March 31, 2006.

CASH FLOWS FROM FINANCING ACTIVITIES

We have  financed  our  operations  primarily  from either  advancements  or the
issuance of equity and debt instruments.  For the three-month period ended March
31, 2007,  net cash flows from  financing  activities  was $327,500  compared to
$40,000 for the three-month period ended March 31, 2006 pertaining  primarily to
proceeds received from advances from related parties.

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

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


                                       19


<PAGE>


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.

During  fiscal year ended  December  31, 2006,  we engaged in private  placement
offerings under  Regulation D and Regulation S of the Securities Act pursuant to
which we received gross proceeds of $1,416,157,  of which $845,000  consisted of
settlement of debt relating to amounts  previously  advanced to us by one of our
shareholders.

MATERIAL COMMITMENTS

During the  three-month  period  ended March 31, 2007,  one of our  shareholders
advanced  an  aggregate  of $321,500  to us. As of March 31,  2007,  we owe this
shareholder  an aggregate of $646,500,  which is subject to interest at the rate
of 8% per annum and has no definite repayment terms. As of March 31, 2007, total
accrued interest was $13,722.

PURCHASE OF SIGNIFICANT EQUIPMENT

We do not intend to purchase any  significant  equipment  during the next twelve
months.

OFF-BALANCE SHEET ARRANGEMENTS

As of the date of this  Annual  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.

GOING CONCERN

The independent auditors' report accompanying our December 31, 2006 and December
31, 2005  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.

ITEM III. 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


                                       20


<PAGE>


similar functions,  as appropriate to allow timely decisions  regarding required
disclosure.

An evaluation was conducted under the supervision and with the  participation of
our management,  including Marcus Johnson,  our Chief Executive  Officer ("CEO")
and D. Bruce Horton,  our Chief Financial Officer ("CFO"),  of the effectiveness
of the design and  operation of our  disclosure  controls and  procedures  as of
March 31, 2007. Based on that evaluation,  Messrs.  Johnson and Horton concluded
that our disclosure  controls and  procedures  were effective as of such date to
ensure that information  required to be disclosed in the reports that we file or
submit under the Exchange Act, is recorded,  processed,  summarized and reported
within the time periods  specified in SEC rules and forms.  Such  officers  also
confirm  that  there  was no  change  in our  internal  control  over  financial
reporting during the three-month period ended March 31, 2007 that has materially
affected,  or is reasonably  likely to materially  affect,  our internal control
over financial reporting.

AUDIT COMMITTEE REPORT

The Board of Directors has  established an audit  committee.  The members of the
audit  committee  are Mr.  Marcus  Johnson,  Mr.  Steven Jewett and Mr. D. Bruce
Horton. One of the three members of the audit committee is "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 financial
statements as of and for the three-month  period ended March 31, 2007. The audit
committee  has also  discussed  with Dale Matheson  Carr-Hilton  LaBonte LLP 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 LLP  required  by  Independence  Standards  Board
Standard No. 1, Independence Discussions with Audit Committees,  as amended, and
has discussed with Dale Matheson Carr-Hilton LaBonte LLP their independence.

Based on the reviews and discussions  referred to above, the audit committee has
recommended to the Board of Directors that the financial  statements referred to
above be included  in our  Quarterly  Report on Form 10-QSB for the  three-month
period ended March 31, 2007 filed with the Securities and Exchange Commission.


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.


                                       21


<PAGE>


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 6. EXHIBITS AND REPORTS ON FORM 8-K

         Exhibits:

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

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

         32.1 Certification of Chief Executive  Officer  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 to Section 906 of the
              Sarbanes-Oxley Act of 2002.

         32.1 Certification of Chief Financial  Officer  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 to Section 906 of the
              Sarbanes-Oxley Act of 2002.


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<PAGE>


                                   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.


Dated: May 7, 2007                           By: /s/ MARCUS M. JOHNSON
                                             ________________________________
                                             Marcus M Johnson, President and
                                             Chief Executive Officer


Dated: May 7, 2007                           By: /s/ D. BRUCE HORTON
                                             ________________________________
                                             D. Bruce Horton, Chief Financial
                                             Officer



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