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 June 30, 2006





[ 
]
      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 333-127185





**MORGAN
      CREEK ENERGY CORP.**


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









NEVADA
            201777817(State
                or other jurisdiction of
                incorporation of organization)
            (I.R.S.
                EmployerIdentification
                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 o   
No 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 August 14, 2006


40,670,800





Common
      Stock, $.001 par value





Transitional
      Small Business Disclosure Format (check one)





Yes  o
      No x










2


**MORGAN
        CREEK ENERGY CORP.**
 (An
        Exploration Stage Company)
 Table
        of Contents


PagePART
              I.
            FINANCIAL
                INFORMATION
            4ITEM
                1. INTERIM FINANCIAL STATEMENTS
            4BALANCE
                SHEETS
            4INTERIM
                STATEMENTS OF OPERATIONS
            5INTERIM
                STATEMENTS OF CASH FLOWS
            6NOTES
                TO INTERIM FINANCIAL STATEMENTS
            7ITEM
              2.
            MANAGEMENT'S
                DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION OR PLAN OF OPERATION
            13ITEM
              3.
            CONTROLS
                AND PROCEDURES
            19PART
              II.
            OTHER
                INFORMATION
            20ITEM
              1.
            LEGAL
                PROCEEDINGS
            20ITEM
              2.
            CHANGES
                IN SECURITIES AND USE OF PROCEEDS
            20ITEM
              3.
            DEFAULTS
                UPON SENIOR SECURITIES
            20ITEM
              4.
            SUBMISSION
                OF MATTERS TO A VOTE OF SECURITY HOLDERS
            20ITEM
              5.
            OTHER
                INFORMATION
            20ITEM
              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)





**BALANCE
      SHEETS**





June
                30,
              2006
            
            
            December
                31,
              2005**ASSETS**
            
            
            (unaudited)**CURRENT
                ASSETS**Cash
            
            $
            4,207
            
            $
            7,110Due
                from related party (Note 5)
            
            
            -
            
            
            200,0004,207
            
            
            207,110**OIL
                AND GAS PROPERTIES**,
                unproved****(Note
                3)
            
            
            404,000
            
            
            300,000$
            408,207
            
            $
            507,110**LIABILITIES
                AND STOCKHOLDERS’ EQUITY****CURRENT
                LIABILITIES******Accounts
                payable and accrued liabilities
            
            $
            123,476
            
            $
            16,015****Due
                to related parties (Note 5)
            
            
            70,817
            
            
            10,000194,293
            
            
            26,015**GOING
                CONCERN**(Note 1)**STOCKHOLDERS’
                EQUITY**(Note
                4)Common
                stock, 100,000,000
                shares authorized with $0.001 par valueIssued
                  and outstanding 40,670,800 common shares (December 31, 2005 -
                  40,670,800)
            
            
            40,671
            
            
            10,168Additional
                paid-in-capital
            
            
            668,179
            
            
            698,682Deficit
                accumulated during exploration stage
            
            
            (494,936
            )
            
            (227,755
            )213,914
            
            
            481,095$
            408,207
            
            $
            507,110




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


4


**MORGAN
      CREEK ENERGY CORP.**


(An
      Exploration Stage Company)





**INTERIM
      STATEMENTS OF OPERATIONS**


(unaudited)





Three
                  months
                    ended
                  June
                    30,
                  2006
                
                
                Three
                  months
                    ended June 30,
                  2005
                
                
                Six
                  months
                    ended
                  June
                    30,
                  2006
                
                
                Six
                  Months
                    ended
                  June
                    30,
                  2005
                
                
                October
                    19, 2004 (inception) to June 30,
                  2006**GENERAL
                    AND ADMINISTRATIVE EXPENSES**Advertising
                    and
                    investor relations
                
                $
                430
                
                $
                -
                
                $
                82,930
                
                $
                250,000
                
                $
                132,500Consulting
                    expenses
                
                
                30,000
                
                
                20,000
                
                
                107,500
                
                
                20,000
                
                
                197,500Management
                    Fees
                
                
                10,000
                
                
                -
                
                
                25,000
                
                
                -
                
                
                25,000Office
                    and general
                
                
                1,827
                
                
                4,620
                
                
                7,781
                
                
                5,854
                
                
                23,116Professional
                    fees
                
                
                32,890
                
                
                2,067
                
                
                43,970
                
                
                25,275
                
                
                116,820**NET
                    LOSS FOR THE PERIOD**
                
                $
                (75,147
                )
                $
                (26,687
                )
                $
                (267,181
                )
                $
                (301,129
                )
                $
                (494,936
                )**BASIC
                    AND DILUTED LOSS PER COMMON SHARE**
                
                $
                (0.00
                )
                $
                (0.00
                )
                $
                (0.00
                )
                $
                (0.00
                )**WEIGHTED
                    AVERAGE NUMBER OF COMMON**
                  **SHARES
                    O****UTSTANDING**
                
                
                40,670,800
                
                
                40,670,800
                
                
                40,670,800
                
                
                40,568,480
 The
        accompanying notes are an integral part of these interim financial
        statements.


5


**MORGAN
      CREEK ENERGY CORP.**


(An
      Exploration Stage Company)





**INTERIM
      STATEMENTS OF CASH FLOWS**


(unaudited)





Six
              months
                Ended
              June
                30,
              2006
            
            
            Six
              monthsEnded
              June
                30,
              2005
            
            
            October
                19, 2004 (inception) to
              June
                30,
              2006**CASH
                FLOWS USED IN OPERATING ACTIVITIES**Net
                loss for the period
            
            $
            (267,181
            )
            $
            (301,129
            )
            $
            (494,936
            )Changes
                in working capital assets and liabilities:-
                Return of prepaid expenses from related party
            
            
            200,000
            
            
            -
            
            
            --
                Due to related parties
            
            
            10,817
            
            
            -
            
            
            10,817-
                accounts payable and accrued liabilities
            
            
            3,461
            
            
            998
            
            
            19,476**NET
                CASH USED IN OPERATING ACTIVITIES**
            
            
            (52,903
            )
            
            (300,131
            )
            
            (464,643
            )**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
            
            
            50,000
            
            
            -
            
            
            60,000Proceeds
                on sale of common stock
            
            
            -
            
            
            35,000
            
            
            708,850**NET
                CASH PROVIDED BY FINANCING ACTIVITIES**
            
            
            50,000
            
            
            35,000
            
            
            768,850**INCREASE
                (DECREASE) IN CASH**
            
            
            (2,903
            )
            
            (265,131
            )
            
            4,207**CASH,
                BEGINNING OF PERIOD**
            
            
            7,110
            
            
            370,499
            
            
            -**CASH,
                END OF PERIOD**
            
            $
            4,207
            
            $
            105,368
            
            $
            4,207





**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.





6
 
 **MORGAN
        CREEK ENERGY CORP.**
 (An
        Exploration Stage Company)
 
 **NOTES
        TO INTERIM FINANCIAL STATEMENTS**
 **JUNE
                  30, 2006**
                **(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.





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 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. During the three months ended June 30, 2006 the
      Company reached an agreement to acquire an additional oil and gas prospect
      in
      Seminole County, Oklahoma (the “Vamoosa Prospect”). Effective May 10, 2006 the
      Company completed a common stock share forward split by the issuance of 2 new
      shares for each 1 outstanding share of the Company’s common stock. Effective
      August 8, 2006, the Company completed a further common stock share forward
      split
      by the issuance of 2 new shares for each 1 outstanding share of the Company’s
      common stock.





**Going
      Concern**


The
      Company commenced operations on October 19, 2004 and has not realized any
      revenues since inception. As of June 30, 2006 The Company has a total deficit
      of
      $494,936 and a working capital deficit of $213,914. 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 has 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 six
      months ended June 30, 2006 are not necessarily indicative of the results that
      may be expected for the year ending December 31, 2006.





**Comparative
      figures**


Certain
      comparative figures have been reclassified in order to conform to the current
      period’s financial statement presentation.




**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.


7
 
 **MORGAN
        CREEK ENERGY CORP.**
 (An
        Exploration Stage Company)
 
 **NOTES
        TO INTERIM FINANCIAL STATEMENTS**
 **JUNE
                  30, 2006**
                **(unaudited)**


**NOTE
      2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
      (continued)**





**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.





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 is 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 June 30, 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.





8
 
 **MORGAN
        CREEK ENERGY CORP.**
 (An
        Exploration Stage Company)
 
 **NOTES
        TO INTERIM FINANCIAL STATEMENTS**
 **JUNE
                  30, 2006**
                **(unaudited)**




**NOTE
      2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
      (continued)**





**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 reflect 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.





**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 June 30, 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
      June
      30, 2006 the Company has not granted any stock options and has not recorded
      any
      stock-based compensation.





9
 
 **MORGAN
        CREEK ENERGY CORP.**
 (An
        Exploration Stage Company)
 
 **NOTES
        TO INTERIM FINANCIAL STATEMENTS**
 **JUNE
                  30, 2006**
                **(unaudited)**


**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 common shares (pre May and August 2006 stock splits)
      valued at $600,000.





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 common shares (pre May and August 2006 stock splits) valued at
      $600,000 has been recorded as a capital distribution.





**Vamoosa
      Prospect**


By
      agreement dated May 10, 2006, the Company acquired a 100% working interest,
      78%
      net revenue interest for a 520 acres oil and gas prospect in Seminole County,
      Oklahoma. The lease is unproved and was acquired for $104,000 plus a one percent
      overriding royalty interest to the seller.





**NOTE
      4 - STOCKHOLDERS’ EQUITY**





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
      April
      3, 2006 the Board of Directors of the Company ratified, approved and adopted
      a
      2006 Stock Option Plan for the Company in the amount of 5,000,000 shares.





On
      April
      3, 2006 the Company indicated that it intended to issue 2,000,000 options to
      officers and directors of the Company. Upon further review, the Board of
      Directors of the Company determined to not proceed with the issuance of these
      grants.





To
      June
      30, 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**
 **JUNE
                  30, 2006**
                **(unaudited)**


**NOTE
      5 - RELATED PARTY TRANSACTIONS**





**International
      Market Trend, Inc. (“IMT”)**


An
      officer and director of IMT, a private company, is also a shareholder of the
      Company. During the six months ended June 30, 2006 the Company paid IMT
      consulting expenses of $107,500 (2005-$20,000), including $42,500 (2005-$nil)
      for assisting the Company to obtain a listing on the Frankfurt Exchange and
      $65,000 for administration fees as per contract. During the same period, the
      Company paid IMT another $75,000 (2005-$nil) for implementing an investor
      awareness mailing program in Germany, $7,500 (2005 - $nil) for updating the
      Company’s web site and other identity related items as well as approximately
      $1,200 for telephone and office expenses. As of June 30, 2006 the Company owed
      IMT $20,387, which is unsecured and non-interest bearing, and has no definite
      repayment terms.





During
      the six month period ended June 30, 2006 certain shareholders of the Company
      and
      an officer and director of IMT advanced $50,000 to the Company. These advances
      are non-interest bearing, unsecured and have no definite repayment
      terms.





**Managing
      director**


During
      the six months ended June 30, 2006, the Company paid an officer and director
      $25,000 for management fees (2005-$nil). As of June 30, 2006 the Company owed
      this officer and director $430 for reimbursable expenses.





**American
      News Publishing Inc. (“ANP”)**


During
      the year ended December 31, 2005 the Company paid $200,000 to ANP for Investor
      relations services. 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. An officer and director of ANP, a private company, is also
      an
      officer and director of a corporate shareholder of the Company.





**NOTE
      6 - INCOME TAXES**





The
      Company has adopted FASB No. 109 for reporting purposes. As of June 30, 2006,
      the Company had net operating loss carry forwards of approximately $494,936
      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.





**NOTE
      7 - SUBSEQUENT EVENTS**





(a)  On
      July
      10, 2006 the Company entered into a letter of intent to acquire a 25% Working
      interest, 18.25% Net Revenue Interest, in the “Bayou Choctaw” oil and gas
      project in Iberville Parish, in the State of Louisiana for:





(i)  $250,000
      ($125,000 paid on July 19, 2006) and 200,000 (post August 8, 2006 split)
      restricted common shares which will have piggy back registration rights;
      and


(ii)  reimbursement
      of initial costs estimated at $162,500; and


(iii)  participation
      in a 3D-seismic survey which is estimated to cost approximately $425,000.





The
      acquisition is subject to final due diligence.





11
 
 **MORGAN
        CREEK ENERGY CORP.**
 (An
        Exploration Stage Company)
 
 **NOTES
        TO INTERIM FINANCIAL STATEMENTS**
 **JUNE
                  30, 2006**
                **(unaudited)**




**NOTE 7 - SUBSEQUENT EVENTS
      (continued)**


(b)  On
      July
      24, 2006 the Company acquired a 100% Working Interest, 74% Net Revenue Interest,
      in the “Browder” Barnett Shale oil and gas project in Cooke County, in the State
      of Texas. The lease is unproven and was acquired for $146,820.


(c)  During
      July and August of 2006 a certain shareholder of the Company advanced $330,000
      to the Company. These advances are non-interest bearing and have no definite
      repayment terms.
























































12


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**





**August
      8, 2006 Forward Stock Split**





On
      July
      26, 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 “August 2006
      Forward Stock Split”).





The
      August 2006 Forward Stock Split was effectuated based on market conditions
      and
      upon a determination by our Board of Directors that the August 2006 Forward
      Stock Split was in our best interests and of the shareholders. In our judgment
      the August 2006 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 August 2006
      Forward Stock Split is to increase the marketability of our common
      stock.


13




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




The
      August 2006 Forward Stock Split was effectuated with a record date of August
      8,
      2006 upon filing the appropriate documentation with NASDAQ. The August 2006
      Forward Stock Split increased our issued and outstanding shares of common stock
      from 20,335,400 to approximately 40,670,800 shares of common stock. The common
      stock will continue to be $0.001 par value.





**May
      2006 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 “May 2006
      Forward Stock Split”).





The
      May
      2006 Forward Stock Split was effectuated based on market conditions and upon
      a
      determination by our Board of Directors that the May 2006 Forward Stock Split
      was in our best interests and of the shareholders. In our judgment the May
      2006
      Forward Stock Split resulted 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 May 2006 Forward Stock Split
      was
      to increase the marketability of our common stock.





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





**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 common shares (pre May
      and August 2006 stock splits) 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 Chapman Lease includes
      all
      potential oil or gas producing zones extending from the surface to and including
      the Senora Sand zones.


14




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 Hurley Lease includes all potential
      oil or gas producing zones extending from the surface to and including the
      Senora Sand zones.





**Vamoosa
      Lease**





On
      approximately May 10, 2006, we entered into an agreement to acquire a 100%
      working interest and a 78% net revenue interest in an approximate 520 acre
      oil
      and gas prospect located in Seminole County, Oklahoma (the “Vamoosa Lease”). The
      Vamoosa Lease is unproven and we have an agreement to acquire the lease acreagee
      for $104,000 plus a one percent (1%) overriding royalty interest to the seller.





**Bayou
      Choctaw Lease**





On
      approximately July 10, 2006, we entered into a letter of intent to acquire
      a 25%
      working interest and an 18.25% net revenue interest in the Bayou Choctaw oil
      and
      gas project located in Iberville Parish in the State of Louisiana (the “Bayou
      Choctaw Lease”). According to the terms and provisions of the letter of intent,
      we are to: (i) pay an aggregate of $250,000, of which $125,000 was paid on
      July
      19, 2006; (ii) issue an aggregate of 200,000 post August Forward Stock Split
      shares of our common stock; (iii) reimburse initial costs estimated at $162,500
      for our prorata portion; and (iv) participate in a 3D-seismic survey during
      which is estimated to cost approximately $425,000 for our prorata
      portion.





As
      of the
      date of this Quarterly Report, the acquisition is subject to completion of
      final
      due diligence.





**Browder
      Barnett Shale Lease**





On
      approximately July 24, 2006, we acquired a 100% working interest and 74% net
      revenue interest in the Browder Barnett shale oil and gas prospect in Cooke
      County in the State of Texas (the “Browder Lease”). The Browder Lease is
      unproven and was acquired for $146,820.





**RESULTS
      OF OPERATION**





**Six-Month
      Period Ended June 30, 2006 Compared to Six-Month Period Ended June 30, 2005**




Our
      net
      loss for the six-month period ended June 30, 2006 was approximately ($267,181)
      compared to a net loss of ($301,129) during the six-month period ended June
      30,
      2005 (a decrease of $33,948). During the six-month periods ended June 30, 2006
      and 2005, respectively, we did not record any income.
      During the six-month period ended June 30, 2006, we recorded operating expenses
      of $267,181 compared to operating expenses of $301,129 incurred in the same
      period, consisting primarily of: (i) $107,500 (2005: $20,000) in consulting
      expenses; (ii) $82,930 (2005: $250,000) in advertising and investor relations;
      (iii) $25,000 (2005: $-0-) in management fees; (iv) $7,781 (2005: $5,854) in
      office and general expenses; and (ii) $43,969 (2005: $25,275) in professional
      fees. General and administrative expenses generally include corporate overhead,
      financial and administrative contracted services and consulting costs.


15


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


Consulting
      expenses, management fees and professional fees incurred during the six-month
      period ended June 30, 2006 increased from the six-month period ended June 30,
      2005 primarily due to the increase 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. Advertising and investor relations fees incurred during the six-month
      period ended June 30, 2006 decreased from the six-month period ended June 20,
      2005 primarily from the decrease in fees associated with an existing investor
      awareness program.





Of
      the
      $267,181 incurred as general and administrative expenses during the six-month
      period ended June 30, 2006, an aggregate of $191,200 was incurred by us payable
      to International Market Trend, Inc. (“IMT”), for: (i) consulting expenses
      ($107,500)inclusive of $42,500 for assistance in obtaining a listing on the
      Frankfurt Exchange and $65,000 for administration fees pursuant to the
      contractual relationship; (ii) creation of an investor awareness mailing program
      in Germany ($75,000); (iii) updating and changing our web site and other
      identity related items ($7,500); and (iv) reimbursement of telephone and office
      expenses ($1,200). As of June 30, 2006, we owed IMT $20,387, which is unsecured
      and non-interest bearing and has no specific repayment terms. An officer and
      director of IMT, a private company, is also one of our shareholders.





During
      the six-month period ended June 30, 2006, we incurred an aggregate of $25,000
      in
      managerial fees to Grant Atkins, our Chief Financial Officer and one of our
      directors, for services rendered. As at June 30, 2006, we owed Mr. Atkins
      $430.





Our
      net
      loss during the six-month period ended June 30, 2006 was approximately
      ($267,181) or ($0.00) per share compared to a net loss of ($301,129) or ($0.00)
      during the six-month period ended June 30, 2005. The weighted average number
      of
      shares outstanding was 40,670,800 for the six-month period ended June 30, 2006
      compared to 40,568,480 for the six-month period ended June 30, 2005.





**Three-Month
      Period Ended June 30, 2006 Compared to Three-Month Period Ended June 30, 2005**




Our
      net
      loss for the three-month period ended June 30, 2006 was approximately ($75,147)
      compared to a net loss of ($26,687) during the three-month period ended June
      30,
      2005 (an increase of $48,460). During the three-month periods ended June 30,
      2006 and 2005, respectively, we did not record any income. During the
      three-month period ended June 30, 2006, we recorded operating expenses of
      $75,147 compared to operating expenses of $26,687 incurred in the same period,
      consisting primarily of: (i) $30,000 (2005: $20,000) in consulting expenses;
      (ii) $430 (2005: $-0-) in advertising and investor relations; (iii) $10,000
      (2005: $-0-) in management fees; (iv) $1,827 (2005: $4,620) in office and
      general expenses; and (ii) $32,890 (2005: $2,067) in professional fees.


16


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


Consulting
      expenses, management fees and professional fees incurred during the three-month
      period ended June 30, 2006 increased from the three-month period ended June
      30,
      2005 primarily due to the increase 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.





Our
      net
      loss during the three-month period ended June 30, 2006 was approximately
      ($75,147) or ($0.00) per share compared to a net loss of ($26,687) or ($0.00)
      during the three-month period ended June 30, 2005. The weighted average number
      of shares outstanding was 40,670,800 for both three-month periods ended June
      30,
      2006 and 2005, respectively.





**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.





**Six-Month
      Period Ended June 30, 2006**





As
      of the
      six-month period ended June 30, 2006, our current assets were $4,207 and our
      current liabilities were $194,293, resulting in a working capital deficit of
      $190,086. As at the six-month period ended June 30, 2006, current assets were
      comprised of cash in the amount of $4,207. As at the six-month period ended
      June
      30, 2006, current liabilities were comprised of: (i) $70,817 due to related
      parties; and (ii) $123,476 in accounts payable and accrued liabilities.





As
      at the
      six-month period ended June 30, 2006, our total assets were $408,207 comprised
      of: (i) $4,207 in current assets; and (ii) $404,000 in carrying value of
      unproved oil and gas properties. The decrease in total assets during the
      six-month period ended June 30, 2006 from $507,110 as at fiscal year ended
      December 31, 2005 was primarily due to the recording of $200,000 due from a
      related party at December 31, 2005.





As
      at the
      six-month period ended June 30, 2006, our total liabilities were $194,293
      comprised of current liabilities. The increase in total liabilities during
      the
      six-month period ended June 30, 2006 from $26,015 as at fiscal year ended
      December 31, 2005 was primarily due to the increase in amounts due under oil
      and
      gas lease purchases, amounts due to related parties, accounts payable, and
      accrued liabilities.





Stockholders'
      equity decreased from $481,095 for fiscal year ended December 31, 2005 to
      $213,914 for the six-month period ended June 30, 2006.





We
      have
      not generated positive cash flows from operating activities. For the six-month
      period ended June 30, 2006, net cash flows used in operating activities was
      ($52,903) compared to net cash flows used in operating activities for the
      six-month period ended June 30, 2005 of ($300,131), consisting primarily of
      a
      net loss of ($267,181) adjusted by $200,000 due from a related party.





Net
      cash
      flow used in investing activities was $-0- for the six-month periods ended
      June
      30, 2006 and 2005, respectively.


17




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




Net
      cash
      flows provided by financing activities was $50,000 for the six-month period
      ended June 30, 2006 compared to net cash flows provided by financing activities
      for the six-month period ended June 30, 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.





**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 have the following material commitment for
      the
      current fiscal year.





During
      July and August 2006, one of our shareholders advanced an aggregate of $330,000
      to us. The advances are non-interest bearing and have no specific or definite
      repayment terms.





**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 six-month quarterly
      period ended June 30, 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 six-month period ended June 30, 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
        six-month period ended June 30, 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.




**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 six-month period ended June 30, 2006, we indicated that we intended to
      issue
      2,000,000 options to certain of our officers and directors. Upon further review,
      our Board of Directors determined to not proceed with the grants of these
      options.







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ITEM 6. EXHIBITS AND REPORTS ON FORM
      8-K





Reports
      on Form 8-K:





None.





Exhibits:





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: August
              11, 2006
            By:
            /s/ Douglas
              HumphreysDouglas
              HumphreysTitle: Douglas
              Humphreys, President and Chief
              Executive Officer  Date: August
              11, 2006
            By:
            /s/ Grant
              AtkinsGrant
              AtkinsTitle: Grant
              Atkins, Chief Financial Officer




22