Document:

Filed by Automated Filing Services Inc. (604) 609-0244 - Park Place Energy Inc. - Exhibit 10.1

	BOUNTY DEVELOPMENTS LTD.
      

	1250, 340 – 12 Ave. S.W. 
Calgary, AB 
T2R 1L5 
	  	Tel (403) 264-4994 
	  	Fax (403) 266-6031 

May 30, 2006 

Park Place Energy Inc., 
1220-666 Burrard St.,

Vancouver, B.C. V6C 2X8 

Attention:         David
Stadnyk 

Dear Sir: 

	Re: 	FARMOUT AGREEMENT
    
	  	NE 26-22-7 W4M
  
	  	ATLEE-BUFFALO, ALBERTA
      
	 	OUR FILE: AC-212-003
    

Bounty Developments Ltd. (“Bounty”) is the holder of the title
documents covering the Farmout Lands described in Schedule “A” and has agreed to
farmout a portion of its interests in the Farmout Lands to Park Place Energy
Inc. on the following terms and conditions: 

1.      DEFINITIONS 

Each capitalized term used in this Head Agreement will have the
meaning given to it in the Farmout and Royalty Procedure, and in addition: 

	a) 	
      “Contract Depth” means a measured subsea depth of 450
      metres or 15 metres below the base of the Medicine Hat formation,
      whichever occurs first;

	 	 
	b) 	
      “Farmee” means Park Place Energy Inc.;

	 	 
	c) 	
      “Farmor” means Bounty Developments Ltd. (as to an
      undivided 100% working interest in the Farmout Lands);

	 	 
	
      d) 
	
      “Mutual Interest Lands” means any interest in any parcel
      of petroleum and natural gas rights falling within one mile around NE
      Section 26, Twp. 22, Rge. 7, W4M.

2.      SCHEDULES 

The following Schedules are attached hereto and made part of
this Agreement: 

	a) 	
      Schedule “A” which describes the Title Documents, the
      Farmout Lands, and the Encumbrances and all renewals, extensions,
      continuations or documents of titles issued in substitution for
    same;

	 	 
	b) 	
      Schedule “B”, which is the election sheet for the 1997
      CAPL Farmout & Royalty Procedure (the “Farmout and Royalty Procedure”)
      which procedure, along with the elections, is incorporated by reference
      into this agreement as fully as if it were attached hereto;

	 	 
	c) 	
      Schedule”C”, which is the election sheet for the 1990
      CAPL Operating Procedure (the “Operating Procedure”) and the 1996 PASC
      Accounting Procedure (the “Accounting Procedure”) which procedures, along
      with the elections, are incorporated by reference into this agreement as
      fully as if they were attached hereto;

	 	 
	d) 	
      Schedule “D” which specifies the types of drilling
      information required to be supplied pursuant to the Farmout & Royalty
      Procedure; and

	 	 
	e) 	
      Schedule “E” which is a copy of the Gross Overriding
      Royalty Agreement with Bright Spark Enterprises
Inc.

3.      FARMEE’S CASH PAYMENT

In consideration of the Farmee being granted the opportunity to
earn an interest in the Farmout Lands under the terms of this agreement and in
recognition of land acquisition and related costs which the Farmor has incurred,
the Farmee shall make a payment to the Farmor in the amount of $35,849 which
payment shall be unconditional and non-refundable. If the Farmee fails to make
this payment by 5 p.m. on June 2, 2006, then the Farmee’s right to earn an
interest in the Farmout Lands shall terminate and it shall have no further
rights under this agreement. 

4.      TEST WELLS 

a)      Farmee shall
spud 2 test wells (collectively the “Test Wells”; individually the “Test Well”),
at locations to be selected by the Farmor on the Farmout Lands, as soon as
reasonably practicable but no later than October 1, 2007. Farmee shall then
diligently and continuously drill each of the Test Wells to Contract Depth at
its sole cost, as specified below. In the event surface access to the drill site
cannot be reasonably obtained by the required date because of surface 

2

conditions, weather conditions, rig availability or regulatory
approval, there shall be an extension to the commencement date which shall be
reasonable under the circumstances. For each of the Test Wells, if production of
petroleum substances in paying quantities is indicated, the Farmee shall equip
this Test Well and thereafter use its best efforts to produce and dispose of the
said substances. 

b)      The Farmee
shall be solely responsible for the costs to drill, complete, evaluate, equip
and tie in or abandon each of the Test Wells. 

c)      Upon the
requirements for the Test Wells as set out above and in Article 3.00 of the
Farmout and Royalty Procedure being fulfilled, the Farmee will earn the
following interest in the Farmout Lands, to the base of the deepest formation
penetrated and fully logged in the Test Well: 

	 	(i) 	
      100% of Farmor’s 100% Working Interest in the Farmout
      Lands, subject to the Farmor’s Overriding Royalty reserved in Article 5.00
      of the Farmout and Royalty Procedure which Overriding Royalty would be
      convertible to a 50% Working Interest after
Payout.

d)      If it is only
possible to obtain regulatory approval to drill one of the Test Wells, the
Farmee shall not be required to spud, drill and fulfill its other obligations
with respect to the other Test Well, and upon fulfilling these requirements as
set out above with regard to one Test Well, the Farmee shall earn that interest
in the Farmout Lands specified in sub-clause 4(c) above. 

5.      OPERATORSHIP AND OPERATIONS

The Farmor, as agent for the Farmee, shall act as the initial
Operator for all operations contemplated by this Agreement. The operations and
this agreement shall be governed by the Farmout and Royalty Procedure, the
Operating Procedure and the Accounting Procedure, subject to the elections
herein incorporated and this head agreement. Notwithstanding Schedule “C”
hereof, and in addition to any charges permitted thereunder, Farmor shall be
entitled to charge an administrative fee of 10% on the monthly costs of
operating the Test Wells which fee shall not exceed $100 in any one month. 

6.      AREA OF MUTUAL INTEREST

Article 8.00 of the Farmout & Royalty Procedure will be in
effect for the Mutual Interest Lands from the Effective Date until the end of
one year after the drilling rig release date of the last of the Test Wells.
Subject to Article 8.00 the Parties will have the right to participate in an
acquisition of Mutual Interest Lands in the following percentages: 

3

Farmor-50% 

Farmee-50% 

The 1% N/C GORR to Bright Spark Enterprises Inc. included in
the Encumbrances will apply to the Mutual Interest Lands and shall be paid by
the Parties in proportion to their participating interest. 

7.      AMENDMENT TO THE
LIMITATIONS ACT 

The two year period for seeking a remedial order under section
3(1)(a) of the Limitations Act, R.S.A. 2000, c. L-12, as amended, for any
claim (as defined in that Act) arising in connection with this Agreement
is extended to: 

a. for claims disclosed by an audit, two years after the time
this agreement permits that audit to be performed ; or 

b. for all other claims, four years. 

8.      ADDRESSES FOR
NOTICES 

The parties’ addresses for notices are:

Bounty Developments Ltd.

1250, 340 – 12th Avenue S.W. 
Calgary, AB
T2R 1L5

fax # (403) 266-6031 

Attention: Jon Clark 

Park Place Energy Inc

1220-666 Burrard St., 
Vancouver, B.C. V6C 2X8 
Fax# (604) 688-5390

Attention: David Stadnyk 

9.      MISCELLANEOUS

	 	a) 	
      Each of the parties represents and warrants that it now
      has or is entitled to have good right, full power and absolute authority
      to enter

4

	 		
      into this Agreement.

	 	 	 
	 	b) 	
      In the event of a conflict between any term or condition
      of this Head Agreement and any Schedule attached hereto, the term or
      condition of this Head Agreement shall prevail.

	 	 	 
	 	c) 	
      Any reference in this Head Agreement to “hereunder”,
      “herein” and “hereof” refer to the provision of this Head Agreement and
      unless otherwise stated, any reference to a clause, subclause, or Schedule
      refers to the clauses, subclauses or Schedule of this Head
    Agreement.

	 	 	 
	 	d) 	
      This Agreement supersedes all other agreements,
      documents, writings and verbal understandings among the parties, or any of
      them, relating to the Farmout Lands.

	 	 	 
	 	e) 	
      This agreement enures to the benefit of the Parties and
      their respective successors and assigns.

10.     
COUNTERPART EXECUTION 

This Agreement may be executed in counterpart. All of those
executed counterpart pages when taken together will constitute the Agreement.

If this reflects your understanding of the terms and conditions
agreed upon respecting this Agreement please sign and return one counterpart
execution page to complete our copy of the Agreement. 

Yours truly, 
BOUNTY DEVELOPMENTS LTD. 

/s/ Paul S. Clark 
Paul S. Clark 
Land Manager

Agreed to this 30th day of May, 2006. 

PARK PLACE ENERGY INC. 

Per: /s/ David Stadnyk 

5

Schedule “A” 

Attached to and forming part of a Farmout Agreement dated
May 30, 2006 between Bounty Developments Ltd. (Farmor) and Park Place Energy
Inc. (Farmee) 

Farmout Lands 

NE Section 26, Twp. 22, Rge. 7, W4M 
Petroleum and Natural
Gas to the base of the Medicine Hat SD as designated in DRRZD 12 
Interval: 1
312.00 -1 582.00 Feet 
Key Well: 00/06-30-014-04W4/0 
Log Type: Induction
Gamma Ray 

Title Documents

Alberta Crown PNG Lease No. 0405060367

Term Commencement Date: June 16, 2005 

Encumbrances 

1% N/C GORR – Bright Spark Enterprises Inc. 

Crown Lessor Royalty 

6

Schedule “B”

Attached to and forming part of a Farmout Agreement dated
May 30, 2006 between Bounty Developments Ltd. (Farmor) and Park Place Energy
Inc. (Farmee) 

1997 CAPL FARMOUT & ROYALTY PROCEDURE ELECTIONS AND
AMENDMENTS 

	Subclause 1.01 (f) 	- 	Effective
      Date                  
       -                   
      May 17, 2006 
	 	 	 
	Subclause 1.01 (t) 	- 	Payout
      -                  
      Alternate          
           A 
	(if Article 6.00 applies) 	  	 
	 	 	 
	Subclause 1.01 (bb) 	- 	Delete the following from the definition:

	 	 	 
			“which area will be determined as of the
      drilling rig release date of that Earning Well” 
	 	 	 
	Clause 1.02 	- 	Incorporation of Provisions from 1990 CAPL
      Operating Procedure 
	 	 	 
	  	  	(i)             
      Insurance (311) Alternate     B 
	 	 	 
	Article 4.00 (Option Wells) 	 	will_____ /will not    X
      apply. 
	 	 	 
	Article 5.00 (Overriding Royalty) 	 	                   
      will X /will not ______ apply. 

Subclause 5.01A, Quantification of Overriding Royalty
(if applicable). 

	 	(i) 	Crude oil
      (a)          
       -          
      Alternate    1 
	 	  	If Alternate 1 applies, 15 %
  
	 	  	If Alternate 2 applies, N/A

	 	  	 
	 	(ii) 	Other
      (b)                
       -          
      Alternate    1
	 	  	If Alternate 1 applies, 15
      % 
	 	  	If Alternate 2 applies, n/a
      % in 
	 	  	(i) and n/a % in (ii)
  

Subclause 5.04B, Permitted Deductions (if applicable).
Alternate 1 only

Article 6.00 (Conversion of Overriding Royalty) will X
/will not_____ apply. 
Conversion to 50% of Working Interest in Subclause
6.04A

7

Schedule “C” 

Attached to and forming part of a Farmout Agreement dated
May 30, 2006 between Bounty Developments Ltd. (Farmor) and Park Place Energy
Inc. (Farmee) 

	CAPL OPERATING PROCEDURE - 1990 	 
	Clause 311 	Insurance
      Election:                                                            
      B 
	  	 
	Clause 604 	Marketing
      Fee:                                                      
                   A
    
	  	 
	Clause 903 	Casing Point
      Election:                                                       
      A 
	  	 
	Clause 1007 	Penalty for Independent Operations: 
	  	1.               
      Development
      Wells:                                       
      300% 
	  	2.               
      Exploratory
      Wells:                               
                  500%
    
	  	 
	Clause 1010 	Exceptions to Clause
      1007:                                 
                     
      (iv)               
      180 days 
	  	 
	Clause 2202 	Address for
      Notices:                                                           
      Set out in Head 
	  	                                                                                 
                      Agreement
    
	  	 
	Clause 2401 	Disposition of
      Interests:                                                      
      A 
	  	 
	Clause 2404 	Recognition Upon Assignment: 
	  	CAPL Assignment Procedure to take precedence
  
	  	 
	1996 PASC ACCOUNTING PROCEDURE 	 
	Clause 105. 	Operating Fund 10% 
	  	 
	Clause 110. Approvals 	Clause n/a; 2 ; 75 %

	  	 
	Clause 112. Expenditure Limitations 	(a) excess of
      $25,000.00                                                     
      (c) excess of 
	  	                                                                                                 
      $25,000.00 
	  	 
	Clause 202. Employee Benefits 	(b) exceed 25% 
	  	 
	Clause 213. Camp & Housing 	(b) shall _____/shall not X 
	  	 
	Clause 216. Warehouse Handling 	5% 
	  	 
	Clause 221. Allocation Options 	n/a 
	  	 
	Clause 302.
      Overhead Rates: 	(a)
      Exploration Project: n/a percent OR 
	  	1.               
      5% ; $50,000. 
	  	2.               
      3% ; $100,000. 
	  	3.               
      1% 
	  	(b) Drilling of a Well: n/a percent OR
    
	  	1.               
      5%; $ 50,000. 
	  	2.               
      3%; $l00,000. 
	  	3.               
      1% 
	  	(c) Initial Construction Project: n/a percent
      OR 
	  	1.               
      5%; $ 50,000. 
	  	2.               
      3%; $100,000. 
	  	3.               
      1% 
	  	(d) Construction Project: n/a percent OR
    
	  	1.               
      5% of the first $ 50,000. 
	  	2.               
      3% of the next $100,000. 
	  	3.               
      1% 
	  	(e) Operation and Maintenance:
  

8

	  	              
      1.               
      n/a; 
	  	              
      2.               
      $250 per Producing well per month; or 
	  	              
      3.               
      n/a 
	  	 
	Clause 406. Dispositions 	$25,000.00 

9

Schedule “D”

Attached to and forming part of a Farmout Agreement dated
May 30, 2006 between Bounty Developments Ltd. (Farmor) and Park Place Energy
Inc. (Farmee) 

WELL REQUIREMENTS 

	PRIOR TO SPUD
      	# COPIES 	 	AFTER DRILLING 	# 
	COPIES 	  	 	  	  
	  	  	 	  	  
	Geological Program 	1 	 	Drill Stem Test Reports 	2 
	Drilling Program 	1 	 	Final Analysis 	1 
	Survey Plan 	1 	 	Final Prints of Logs 	1 
	Application to Drill 	1 	 	Final Geological Report 	1 
	Well License 	1 	 	Final Drilling Report 	1 
	  	  	 	(Plus Diskettes if available) 	  

	DURING DRILLING
      	# COPIES 	 	COMPLETION & PRODUCTION 	 
	# COPIES 	  	 	  	  
	  	  	 	  	  
	Daily Drilling Reports 	1 	 	Completion Program 	1 
	Sample Descriptions 	1 	 	Daily Completion Records 	1 
	Core Descriptions 	1 	 	Final Completion/Workover 	  
	Report 	1 	 	  	  
	Preliminary Analysis 	1 	 	Final Prints of Logs 	1 
	Field Prints 	1 	 	Initial Production Logs 	1 

Note: Sample cuttings are not required unless otherwise
specified, provided the Operator’s set will be available for examination. 

	DAILY DRILLING REPORTS: 	Fax daily - 266-6071 
	  	e-mail to jonclark@bountydev.com
      and bounty@bountydev.com 
	 	 
	DAILY GEOLOGICAL REPORTS: 	Fax daily - 
	  	e-mail to jonclark@bountydev.com
      and bounty@bountydev.com 
	  	 
	DAILY COMPLETION REPORTS: 	Fax daily - 266-6031 
	  	e-mail to jonclark@bountydev.com
      and bounty@bountydev.com 

NOTICE OF INTENTION TO ABANDON MAY BE DIRECTED TO: 

10

Kelly Adams 

ALL WELL DATA MAY BE FORWARDED
TO:                            
Kelly Adams 

11

Schedule “E” 

Attached to and forming part of a Farmout Agreement dated
May 30, 2006 between Bounty Developments Ltd. (Farmor) and Park Place Energy
Inc. (Farmee) 

OVERRIDING ROYALTY AGREEMENT 

THIS AGREEMENT made as of the 16th day of June, 2005

BETWEEN: 

  
    
      
        BRIGHT SPARK ENTERPRISES INC. a body corporate,
          having an office at the City of Calgary in the Province of Alberta (hereinafter
          referred to as the "Royalty Owner") 

      

    

  

OF THE FIRST PART 

- and - 

  
    
      
        BOUNTY DEVELOPMENTS LTD., a body corporate,
          having an office at the City of Calgary in the Province of Alberta (hereinafter
          referred to as the "Grantor") 

      

    

  

OF THE SECOND PART 

          WHEREAS
the Grantor holds an interest in the Royalty Lands and Leases as hereinafter
defined; and WHEREAS, in consideration of good and valuable consideration
received, the Grantor has agreed to grant and to pay to the Royalty Owner an
Overriding Royalty effective as of the date hereof, the terms and conditions of
which are provided for in this agreement. 

          NOW
THEREFORE this Agreement witnesseth that in consideration of the mutual
covenants and agreements set forth and contained herein, the parties agree as
follows: 

1.      DEFINITIONS 

In this Agreement, including this clause, unless the context
otherwise requires: 

	(a) 	
      "Condensate" means a mixture of mainly pentanes and
      heavier hydrocarbons that may be contaminated with sulphur compounds, that
      is

12

		
      recovered or is recoverable at a Well from an underground
      reservoir and that may be gaseous in its virgin reservoir state but is
      liquid at the condition under which its volume is measured or
      estimated;

	 	 
	(b) 	
      "Crude Oil" means a mixture mainly of pentanes and
      heavier hydrocarbons that may be contaminated with sulphur compounds, that
      is recovered or is recoverable at a Well from an underground reservoir and
      that is liquid at the conditions under which its volume is measured or
      estimated, and includes all other hydrocarbon mixtures so recovered or
      recoverable except natural gas or Condensate;

	 	 
	(c) 	
      "Current Market Value" means the price at which Petroleum
      Substances are sold by the Grantor calculated at the Royalty Determination
      Point, which price is not unreasonable having regard to market conditions
      applicable to similar production in arm's length transactions at the time
      of such disposition including, without restricting the generality of the
      foregoing, such factors as the volumes available, the kind and quality of
      Petroleum Substances to be sold, the effective date of the sale, the term
      of the sale agreement, the point of sale of the Petroleum Substances and
      the type of transportation service available for the delivery of the
      Petroleum Substances to be sold;

	 	 
	(d) 	
      "Leases" means the respective documents of title and any
      extension or renewal of such documents pursuant to which the Grantor holds
      an interest in the Royalty Lands;

	 	 
	(e) 	
      "Overriding Royalty" means the overriding royalty granted
      pursuant to Clause 2 hereof;

	 	 
	(f) 	
      "Petroleum Substances" means Crude Oil, Condensate,
      natural gas and related hydrocarbons and all other substances produced in
      association therewith but only to the extent that the same are granted by
      the Leases;

	 	 
	(g) 	
      "Raw Gas" has the meaning prescribed by the
      Regulations;

	 	 
	(h) 	
      "Regulations" means all statutes, laws, rules, orders,
      regulations or directives in effect from time to time and made by any
      governmental authority having jurisdiction over the Royalty Lands and the
      operations to be conducted thereon;

	 	 
	(i) 	
      "Royalty Determination Point" means the first point of
      measurement downstream from the wellhead after the initial treatment of
      the produced substances for the separation and removal of basic sediment
      and water from the Petroleum Substances;

13

	(j) 	
      "Royalty Lands" means the specified undivided working
      interest(s) in the lands set forth in Schedule "A";

	 	 
	(k) 	
      "Spacing Unit" means the area allocated to a Well (or the
      area which would be allocated to a well, but for a plan of unitization)
      pursuant to the Regulations for the purpose of producing Petroleum
      Substances; and

	 	 
	(l) 	
      "Well" means any well on the Royalty Lands or on lands
      pooled with the Royalty Lands.

2.      GRANT OF OVERRIDING
ROYALTY 

Grantor hereby grants to the Royalty Owner an interest in
respect of the Petroleum Substances within, upon or under the Royalty Lands
equal to one (1%) percent of the gross monthly production produced from the
Royalty Lands. 

3.      QUANTIFICATION OF
OVERRIDING ROYALTY 

If Royalty Owner does not take possession of and separately
dispose of its share of Petroleum Substances, the Overriding Royalty shall be
quantified and paid on the gross proceeds of the sale of such Petroleum
Substances without any deductions, except the following, namely: 

	(a) 	
      with respect to Crude Oil and Condensate, a proportionate
      share of the actual costs of transportation from the Royalty Determination
      Point to market connection;

	 	 
	(b) 	
      with respect to Petroleum Substances other than Crude Oil
      and Condensate, a proportionate share of the cost of transportation,
      gathering and processing, providing that such costs are no greater than
      those allowed from time to time by the Crown in the right of the Province
      of Alberta in calculating its royalty.

4.      OVERRIDING ROYALTY
TAKEN IN KIND 

	(a) 	
      The Royalty Owner shall have the right to take in kind
      the Royalty Owner's share of Petroleum Substances. Such right may be
      exercised separately with respect to Condensate, Crude Oil, Raw Gas, and
      any other individual Petroleum Substance. In the case of Crude Oil and
      Condensate, such right when exercised shall be done on a minimum of thirty
      (30) days notice to the Grantor. In the case of all other Petroleum
      Substances such right when exercised shall be done on a minimum of six (6)
      months notice to the Grantor. If the Royalty Owner, however, signifies in
      writing its consent to the sale of any of the Royalty Owner's share of
      Petroleum Substances under a contract made by the Grantor providing for a
      minimum term in excess of the said respective notice periods, the Royalty
      Owner's right to

14

		
      take in kind any Petroleum Substances subject to such
      contract shall be suspended during the term of such contract. The Royalty
      Owner may cease to take in kind any Petroleum Substances upon giving the
      Grantor the same minimum notice as provided above for the Royalty Owner to
      take such Petroleum Substances in kind as aforesaid. The right to take in
      kind or to cease to take in kind may be exercised from time to time
      subject only to the foregoing provisions of this Subclause.

	 	 
	(b) 	
      When the Royalty Owner is taking in kind the Royalty
      Owner's share of any Petroleum Substances, the Grantor shall at no cost to
      the Royalty Owner remove basic sediment and water therefrom in accordance
      with good oilfield practice, and:

	 	(i)	
      in respect to Crude Oil and Condensate: the Grantor shall
      deliver the Royalty Owner's share to the Royalty Owner, or its nominee, at
      the tank outlets, or comparable delivery point, in accordance with usual
      and customary pipeline and shipping practice, free and clear of all
      charges whatsoever except to the extent that the Royalty Determination
      Point is an earlier point in which case the costs of moving product from
      the Royalty Determination Point to the delivery point will be deductible
      by the Grantor from the Overriding Royalty. The Royalty Owner shall have
      the right to use free of charge a share of the Grantor's lease tankage and
      storage facilities to store a maximum of ten (10) days accumulation of the
      Royalty Owner's share of Crude Oil and Condensate; and

	 	 	 
	 	(ii) 	
      in respect to Raw Gas: the Grantor shall deliver the
      Royalty Owner's share to the Royalty Owner, or its nominee, at the Royalty
      Determination Point of the relevant well, provided that to the extent the
      Royalty Owner so requests on reasonable notice to the Grantor and the
      Grantor can reasonably comply with such request, the Grantor shall gather,
      compress, transport, treat and process such share of Raw Gas along with
      the Grantor's share of Raw Gas from the applicable well or wells and
      deliver to the Royalty Owner at their relevant plant outlet, the Royalty
      Owner's Overriding Royalty share of marketable gas and other Petroleum
      Substances obtained from such share of Raw Gas, in which event, the
      Royalty Owner shall be responsible for:

	 	A. 	
      its proportionate share of the costs of gathering,
      compressing, transporting, treating and processing such Raw Gas where the
      Grantor or an Affiliate thereof does not own such facilities;
  or

15

	 	B. 	
      where the Grantor or an Affiliate thereof owns such
      facilities, such fee as may be agreed upon by the Grantor and the Royalty
      Owner for the use of such facilities to make marketable the Royalty
      Owner's Overriding Royalty share of Raw Gas.

5.      CONDUCT OF OPERATIONS

	(a) 	
      Grantor shall be entitled to use a proportionate share of
      the Royalty Owner's share of Petroleum Substances as may be reasonably
      necessary for its drilling and production operations with respect to the
      Royalty Lands, excluding Petroleum Substances used for tertiary recovery
      operations. Grantor shall not be liable to Royalty Owner for Petroleum
      Substances which are unavoidably lost. Petroleum Substances so used or
      lost shall be excluded when quantifying the Overriding Royalty.

	 	 
	(b) 	
      The Grantor shall have the right to commingle Petroleum
      Substances produced from the Royalty Lands with Petroleum Substances
      produced from other lands, provided reasonable methods are used to
      determine the proper measurement of production of Petroleum Substances
      from the Royalty Lands.

	 	 
	(c) 	
      Nothing contained in this Agreement shall be a deemed or
      implied covenant by the Grantor to develop the Royalty Lands.

	 	 
	(d) 	
      The Grantor shall carry on (or cause to be carried on)
      all operations on the Royalty Lands diligently and in a good and
      workmanlike manner consistent with good oilfield
  practice.

6.      MAINTENANCE OF LEASES

Grantor shall comply with all the covenants and conditions
contained in the Leases insofar as they relate to the Royalty Lands and shall do
all things necessary to maintain the Leases in full force and effect during the
term of this Agreement including, without limitation, timely payment of all
rentals, all renewal and extension fees, all taxes, all payments in lieu of
actual production and royalties due or becoming due in respect of the Royalty
Lands and the Leases. 

7.      POOLING 

The Grantor shall have the authority to pool the Petroleum
Substances in a zone underlying all or a portion of the Royalty Lands to the
extent required to form a Spacing Unit in such zone, but only if such pooling
allocates to that portion of the Royalty Lands included in the Spacing Unit that
proportion of the total production of Petroleum Substances from the Spacing Unit
which the surface area of that 

16

portion of the Royalty Lands placed in the Spacing Unit bears
to the total surface area of the Spacing Unit. The Grantor shall thereafter give
written notice to the Royalty Owner describing the extent to which the Royalty
Lands are being pooled and describing the Spacing Unit with respect to which
they are so pooled. 

8.      UNITIZATION 

The Grantor shall not include the Royalty Lands or any part or
parts thereof in a Unit Agreement or a Unit Operating Agreement for the unitized
development and/or operation thereof with other lands without the consent of the
Royalty Owner, which shall not be unreasonably withheld. Upon any such
unitization, the Overriding Royalty shall be quantified on the basis of the
production allocated to each Spacing Unit on the Royalty Lands under the plan of
unitization and not upon the basis of actual production from the Royalty Lands.
Further, each Spacing Unit for which production is allocated shall be deemed to
have on Well thereon, regardless of the actual number of Wells. 

9.      BOOKS AND RECORDS

	(a) 	
      The Grantor shall keep true and current books, records
      and accounts showing the quantity of Petroleum Substances produced from or
      allocated to the Royalty Lands and the sales and disposition made thereof
      from time to time. The books, records, vouchers and accounts maintained by
      the Grantor shall be open to inspection at all reasonable times during
      business hours by any officer, agent or employee appointed or authorized
      by the Royalty Owner, in writing, to examine the same. All information
      obtained by the Royalty Owner pursuant to this clause shall be treated as
      confidential and shall not be disclosed to third persons without the prior
      written consent of the Grantor.

	 	 
	(b) 	
      By the last day of each month, beginning with the first
      month following the month in which production of Petroleum Substances from
      the Royalty Lands is obtained after the date hereof, Grantor shall submit
      to Royalty Owner a statement showing the quantity and kind of Petroleum
      Substances produced, deemed to be produced or allocated to, saved and sold
      from or used off the Royalty Lands in the immediately preceding calendar
      month, together with a quantification of Royalty Owner's share of
      Petroleum Substances for such immediately preceding calendar month. When
      Royalty Owner does not take and separately dispose of its share of
      Petroleum Substances, the said statement shall also include the sale price
      for such Petroleum Substances and the gross proceeds received therefrom,
      accompanied by a cheque payable to Royalty Owner for its share of such
      proceeds. A copy of Grantor's governmental production statement for the
      month for which the Overriding Royalty is quantified as aforesaid and
      also, with respect to Crown Leases, a copy of the government royalty
      statement with respect to the Leases, shall

17

		
      accompany each royalty statement to Royalty Owner. Any
      information contained in such governmental production statement or royalty
      statement need not be repeated in the statement to Royalty
Owner.

	 	 
	(c) 	
      Royalty Owner, upon notice to Grantor, shall have the
      right to audit Grantor's accounts and records for any given calendar year,
      insofar as they relate to any matter or item relating to this Agreement
      bearing on the Overriding Royalty, within the twenty-four (24) month
      period following the end of that calendar year. any payment made or
      statement rendered by Grantor hereunder which is not disputed by Royalty
      Owner on or before the last day of the twenty-sixth (26th) month following
      the end of the calendar year shall be deemed to be
  correct.

10.      ASSIGNMENT BY GRANTOR

The Grantor may assign any legal or equitable interest in this
Agreement, the Royalty Lands, the Leases or any portion or portions thereof and
in the event of such assignment, the Grantor shall continue to be bound by all
of the conditions and provisions of this Agreement as if there had been no
assignment until such time as the Royalty Owner shall have been served with a
written undertaking by the assignee (or assignees) directly enforceable by the
Royalty Owner, to perform and be bound thereafter by all of the terms and
provisions of this Agreement to the same extent and degree with respect to the
interest which has been assigned to it, as it would have been if such assignee
(or assignees) had been a party to this Agreement instead of the Grantor. 

11.      ASSIGNMENT BY ROYALTY
OWNER 

The Royalty Owner may at any time assign its interest in the
Overriding Royalty upon notice thereof to the Grantor, provided that if at any
time the Overriding Royalty should become owned by more than one party, the
Grantor shall have the right to require the assignees of the Overriding Royalty
to appoint in writing an agent to represent all of the assignees of the
Overriding Royalty and to receive all statements and payments (if any) of the
Overriding Royalty. If the assignees of the Overriding Royalty fail to appoint
an agent hereunder within thirty (30) days of any request to do so by Grantor,
Grantor may withhold the Overriding Royalty until such time as an agent is
appointed. 

12.      ROYALTY OWNER'S LIEN

	(a) 	
      The Royalty Owner shall be entitled to and shall have a
      first and paramount lien upon the Grantor's share of all Petroleum
      Substances from time to time produced from the Royalty Lands to secure the
      payment of the Overriding Royalty. Such lien shall not operate to release
      the Grantor from personal liability for monies due to the Royalty Owner.
      Such lien shall not attach to the Grantor's share of Petroleum Substances
      sold or

18

		
      otherwise disposed of from the Royalty Lands, but
      immediately upon default occurring in payment by the Grantor of monies
      payable to the Royalty Owner such lien shall operate as an assignment to
      the Royalty Owner of the consideration thereafter payable to the Royalty
      Owner for the Petroleum Substances sold, up to the amount owed to the
      Royalty Owner and not so paid by the Grantor.

	 	 
	(b) 	
      Service of a copy of this agreement upon any purchaser of
      Petroleum Substances together with written notice from the Royalty Owner
      shall constitute written authorization on the part of the Grantor for such
      purchaser to pay the Royalty Owner the proceeds from any sale or sales of
      the Grantor's share of Petroleum Substances up to the amount owed to the
      Royalty Owner by the Grantor, and such purchaser is authorized to rely
      solely upon the statement of the Royalty Owner as to the amount owed to
      the Royalty Owner by the Grantor.

13.      NOTICES 

	(a) 	
      Whether or not so stipulated herein, delivery of all
      notices and communications (hereinafter called "notices") required or
      permitted hereunder shall be in writing. Notices may be given:

	 	 	 
		(i) 	
      personally, by delivering the notice to the party on whom
      it is to be served at that Party's address for service, which notice shall
      be deemed received by the addressee when actually delivered as aforesaid
      if such delivery is during normal business hours provided that if a notice
      is not delivered during the addressee's normal business hours, such notice
      shall be deemed to have been received by such party at the commencement of
      the next ensuing business day following the date of delivery; or

	 	 	 
		(ii) 	
      by facsimile (or by any other like method by which a
      written or recorded message may be sent) directed to the party on whom it
      is to be served at that party's address for service, which notice shall be
      deemed received by the respective addressees thereof: (i) when actually
      received by it, if received within normal business hours; or (ii) at the
      commencement of the next ensuing business day following transmission
      thereof, if such notice is not received during such normal business hours;
      or

	 	 	 
		(iii) 	
      by mailing them first class mail (air mail if to or from
      a location outside Canada) double registered post, postage prepaid,
      directed to the party on whom it is to be served, at that party's address
      for service, which notice shall be

19

deemed to be received by the addressee
at noon, local time, on the earlier of the actual date of receipt or the fourth
(4th) day (excluding Saturdays, Sundays and statutory holidays) following the
mailing thereof; provided that, if postal service is interrupted or operating
with unusual or imminent delay, notice shall not be served by such means during
such interruption or period of delay. 

	(b) 	
      Where, in this Agreement, a time period is established
      within which a party must respond, elect or otherwise communicate with
      respect to a notice so received the time shall commence to run when the
      notice is deemed to be received as hereinbefore provided. Any time period
      which expires on a Saturday, Sunday or statutory holiday shall be extended
      to expire on the next normal business day.

	 	 
	(c) 	
      The address of each of the respective parties hereto
      shall be as follows:

Bounty Developments Ltd. 
1250, 340
- 12 Avenue S.W. 
Calgary, Alberta 
T2R 1L5 

Bright Spark Enterprises Inc. 
72
Calandar Rd N.W. 
Calgary, Alberta 
T2L 0P7 

	(d) 	
      Any party may change its address for service by notice to
      the other parties.

14.      TERM 

This Agreement shall remain in force and effect so long as the
Grantor or any successor in interest retains an interest in the Royalty Lands.

15.      GENERAL 

	 	(a) 	
      The parties will from time to time and at all times
      hereafter, without further consideration, do such further acts and deliver
      all such further assurances, deeds and documents as shall reasonably be
      required in order to fully perform and carry out the terms of this
      Agreement.

	 	 	 
	 	(b) 	
      This Agreement constitutes the entire agreement between
      the parties with respect to the subject matter of this Agreement
  and

20

	 		
      supersedes all prior contracts, agreements and
      understandings between the parties in this regard. No modification or
      alteration of this Agreement shall be binding unless executed in writing
      by these parties. There are no representations, warranties, collateral
      agreements or conditions affecting this transaction other than as are
      expressed or referred to herein in writing.

	 	 	 
	 	(c) 	
      The terms and conditions of this Agreement shall be
      binding upon and shall enure to the benefit of the parties hereto and
      their respective successors and assigns.

	 	 	 
	 	(d) 	
      Time is of the essence of this Agreement.

	 	 	 
	 	(e) 	
      The headings contained in this Agreement are intended for
      convenience of reference only and shall form no part of this
    Agreement.

	 	 	 
	 	(f) 	
      The words herein contained which impart the singular
      number or the masculine gender shall be read and construed as applying to
      the plural and each and every corporate, male or female party thereto and
      to its and their heirs, executors, administrators, successors and assigns,
      as the case or context requires.

	 	 	 
	 	(g) 	
      This Agreement shall be governed by and interpreted in
      accordance with the laws of the Province of Alberta. The parties hereby
      irrevocably attorn to the jurisdiction of the Courts of the Province of
      Alberta for the determination of all matters arising hereunder.

	 	 	 
	 	(h) 	
      The Schedules attached to this Agreement are incorporated
      by reference as fully as though contained in the body hereof. Wherever any
      term or condition, expressed or implied, of such Schedules conflicts or is
      at variance with any terms or conditions of this Agreement, such term or
      condition of this Agreement shall prevail.

IN WITNESS WHEREOF the parties have executed this Agreement as
of the date first above written. 

	BOUNTY DEVELOPMENTS LTD. 	BRIGHT SPARK ENTERPRISES INC. 
	 	 
	/s/ Jon Clark 	/s/ Kelly Adams

21

Schedule "A" 

Attached to and Forming Part of Gross Overriding Royalty
Agreement dated June 16, 2005 between Bounty Developments Ltd. and Bright Spark
Enterprises Inc. 

	LEASES 	ROYALTY LANDS 	INTEREST 
	  	  	  
	Alberta Crown PNG Lease 	NE/4 Sec 26 Twp 22 Rge 7 	100%, subject to 
	No. 0405060367 	W4M 	Crown Lessor 
	  	Atlee Buffalo Area, AB 	Royalty 

22Filed by Automated Filing Services Inc. (604) 609-0244 - Park Place Energy Inc. - Exhibit 10.2

SUBSCRIPTION FOR FLOW-THROUGH COMMON SHARE SHARES 

TO:                            
Park Place Energy Inc. (the "Corporation") 

The undersigned (hereinafter referred to as the
"Subscriber") hereby irrevocably subscribes for and agrees to purchase
the number of common share Shares of the Corporation (the "Shares") to be
issued as Flow-Through Shares set forth below for the aggregate subscription
price set forth below (the "Aggregate Subscription Price"), representing
a subscription price of $_____ per Share, upon and subject to the terms and
conditions set forth in "Terms and Conditions of Subscription for Flow-Through
Shares of Park Place Energy Inc." attached hereto as Schedule “A” (the
"Subscription Agreement").

	 	 	 
	_________________________________________________	 	Number of Shares: ________________________________
	(Name of Subscriber - please print) 	 	 
	 	 	 
	By:   _____________________________________________	 	 
	         (Authorized
      Signature) 	 	Aggregate Subscription Price: $ ______________________
	 	 	 
	_________________________________________________	 	 
	(Official Capacity or Title – please print) 	 	 
	 	 	Disclosed Beneficial Purchaser
      Information: 
	_________________________________________________	 	 
	(Please print name of individual whose signature appears above
      if different than the name of the subscriber printed above.) 		If the Subscriber is signing as agent for
      a principal and is not a trust company or trust corporation purchasing as
      trustee or agent for accounts fully managed by it or a person acting on
      behalf of a fully managed account managed by it, and in each case
      satisfying the criteria set forth in National Instrument 45- 106, complete
      the following and ensure that Exhibit 1 is completed on behalf of such
      principal ("Disclosed Beneficial Purchaser"): 
	 	 
	_________________________________________________	 
	(Subscriber's Address) 	 
	 	 
	_________________________________________________	 
	 	 	 
	 	 	_________________________________________________
	_________________________________________________	 	(Name of Principal) 
	(Telephone Number) (E-mail Address) 	 	 
	 	 	_________________________________________________
	_________________________________________________	 	(Principal's Address) (E-mail Address) 
	(Social Insurance Number or Tax Identification Number) 	 	 
	 	 	_________________________________________________
	 	 	(Social Insurance Number or Tax Identification
      Number) 
	 	 	 
	 	 	 
	 	 	 
	Register the Shares as set forth below: 	 	Deliver the Shares as set forth
      below: 
	 	 	 
	_________________________________________________	 	_________________________________________________
	(Name) 	 	(Name) 
	 	 	 
	_________________________________________________	 	_________________________________________________
	(Account reference, if applicable) 	 	(Account reference, if applicable) 
	 	 	 
	_________________________________________________	 	_________________________________________________
	(Address) 	 	(Contact Name) 
	 	 	 
	_________________________________________________	 	_________________________________________________
	 	 	(Address) 
	 	 	 
	 	 	_________________________________________________
	 	 	 

ACCEPTANCE: The Corporation hereby accepts the
subscription as set forth above on the terms and conditions contained in this
Subscription Agreement. 

________________________________, 2006 

	PARK PLACE ENERGY INC. 	Subscription No: 

	 
	By:  
      ____________________________________________________

This is the first page of an agreement comprised of 8
pages (not including Exhibits). 

- 2 - 

SCHEDULE "A" 
TERMS AND CONDITIONS OF SUBSCRIPTION
FOR FLOW-THROUGH SHARES 

  OF PARK PLACE ENERGY INC.

Terms of the Offering 

1.        The Subscriber
acknowledges (on its own behalf and, if applicable, on behalf of each person on
whose behalf the Subscriber is contracting) that this subscription is subject to
rejection, acceptance or allotment by the Corporation in whole or in part. 

2.        The Subscriber
acknowledges (on its own behalf and, if applicable, on behalf of each person on
whose behalf the Subscriber is contracting) that the Shares subscribed for by it
hereunder form part of a larger issuance and sale by the Corporation on a
private placement basis of up to ___________ Shares at a subscription price of
$_____ per Unit (the "Offering"). 

3.        The Subscriber
acknowledges (on its own behalf and, if applicable, on behalf of each person on
whose behalf the Subscriber is contracting) that this Offering is not subject to
any minimum subscription level, and therefore (i) any funds invested are
available to the Corporation immediately upon closing and need not be refunded
to the Subscriber if the project or program for which the proceeds will be used
does not proceed, and (ii) the Subscriber may be the only purchaser of Shares
under this Offering. 

Representations, Warranties and Covenants by Subscriber

4.        The Subscriber (on
its own behalf and, if applicable, on behalf of each person on whose behalf the
Subscriber is contracting) represents, warrants and covenants to the Corporation
(and acknowledges that the Corporation is relying thereon) that: 

	(a) 	
      it has been independently advised that the Corporation is
      not a reporting issuer and restrictions with respect to trading in the
      Shares imposed by applicable securities legislation, confirms that no
      representation (written or oral) has been made to it by or on behalf of
      the Corporation with respect thereto, acknowledges that it is aware of the
      characteristics of the Shares, the risks relating to an investment therein
      and of the fact that it may not be able to resell the Shares except in
      accordance with limited exemptions under applicable securities legislation
      and regulatory policy until expiry of the applicable hold period or
      restricted period and compliance with the other requirements of applicable
      law; and it agrees that any certificates representing the Shares will bear
      a legend indicating that the resale of such securities is restricted;
      and

	 	 	 
	(b) 	
      it has not received or been provided with, nor has it
      requested, nor does it have any need to receive, any offering memorandum,
      any prospectus, sales or advertising literature, or any other document
      (other than an annual report, annual information form, interim report,
      information circular or any other continuous disclosure document, other
      than an offering memorandum, the content of which is prescribed by statute
      or regulation) describing or purporting to describe the business and
      affairs of the Corporation which has been prepared for delivery to, and
      review by, prospective purchasers in order to assist it in making an
      investment decision in respect of the Shares; and

	 	 	 
	(c) 	
      it has not become aware of any advertisement in printed
      media of general and regular paid circulation (or other printed public
      media), radio, television or telecommunications or other form of
      advertisement (including electronic display) with respect to the
      distribution of the Shares; and

	 	 	 
	(d) 	
      unless it is purchasing under subparagraph 4(e), it is
      purchasing the Shares as principal for its own account, not for the
      benefit of any other person, for investment only and not with a view to
      the resale or distribution of all or any of the Shares, it is resident in
      the jurisdiction set out as the "Subscriber's Address" on the face page
      hereof and it fully complies with one or more of the criteria set forth
      below:

	 	 	 
		(i) 	
      it is resident in Canada and the aggregate
      acquisition cost of the Shares subscribed for by it is not less than
      $150,000 and, if it is not an individual, the Subscriber was not created
      or used solely to purchase or hold securities in reliance on prospectus or
      dealer registration exemptions available under securities laws in these
      jurisdictions; or

	 	 	 
		(ii) 	
      it is resident in Canada and it is an
      "accredited investor", as such term is defined in National
      Instrument 45-106 entitled "Prospectus and Registration Exemptions"
      ("NI 45-106"), it was not created or used solely to purchase or
      hold securities as an accredited investor as described in paragraph (m) of
      the definition of "accredited investor" in NI 45-106 and has concurrently
      executed

- 3 - 

	 		
      and delivered a Representation Letter in the form
      attached to this Subscription Agreement as Exhibit 1 and specifically
      represents and warrants that one or more of the categories set forth in
      Appendix A attached to the Representation Letter correctly, and in all
      respects, describes the undersigned, and will describe the undersigned as
      at the Closing Date (as defined in paragraph 10 hereof), and the
      undersigned has so indicated by initialling the category which so
      describes it; or

	 	 	 
	 	(iii) 	
      it is resident in any province or territory in Canada
      except Ontario (and if a resident of Saskatchewan, complete Form 45-106
      F5) and is one of the following and the Subscriber has so indicated by
      initialling the applicable paragraph:

	 	____	(I) 	
      a "director", "executive officer" or "control
        person" (as such terms are defined in NI 45-106 and reproduced in
        Appendix A to Exhibit 1 of this Subscription Agreement) of the Corporation,
        or of an affiliate of the Corporation; or

	 	 	 	 
	 	____	(II) 	
      a "spouse" (as such term is defined in NI 45-106
        and reproduced in Appendix A to Exhibit 1 of this Subscription Agreement),
        parent, grandparent, brother, sister or child of any person referred to
        in subparagraph (I) above; or

	 	 	 	 
	 	____	(III) 	
      a parent, grandparent, brother, sister or child of the
        spouse of any person referred to in subparagraph (I) above; or

	 	 	 	 
	 	____	(IV) 	
      a "close personal friend" of any person referred
        to in subparagraph (I) above and, if requested by the Corporation, will
        provide a signed statement describing the relationship with any such persons.
        For the purposes of this subparagraph (IV), "close personal friend" means
        that the Subscriber or, if applicable, the Disclosed Beneficial Purchaser,
        has known such individual well enough and for a sufficient period of time
        and in a sufficiently close relationship (where such relationship is direct
        and extends beyond being a relative or a member of the same organization,
        association or religious group or a client, customer or former client
        or customer or being a close personal friend of a close personal friend
        of such individual) to be in a position to assess the capabilities and
        the trustworthiness of such individual; or

	 	 	 	 
	 	____	(V) 	
      a "close business associate" of any person referred
        to in subparagraph (I) above and, if requested by the Corporation, will
        provide a signed statement describing the relationship with any of such
        persons. For the purposes of this subparagraph (V) "close business associate"
        means that the subscriber or, if applicable, the Disclosed Beneficial
        Purchaser, has had sufficient prior business dealings with such individual
        (where such relationship is direct and extends beyond being a casual business
        associate or a person introduced or solicited for the purpose of purchasing
        securities or a client, customer or former client or customer or being
        a close business associate of a close business associate of such individual)
        to be in a position to assess the capabilities and trustworthiness of
        such individual; or

	 	 	 	 
	 	____	(VI) 	
      a "founder" (as such term is defined in NI 45-106
        and reproduced in Appendix A to Exhibit 1 of this Subscription Agreement)
        of the Corporation or a spouse, parent, grandparent, brother, sister,
        child, close personal friend or close business associate of a founder
        of the Corporation;

	 	 	 	 
	 	____	(VII) 	
      a parent, grandparent, brother, sister or child of the
        spouse of a founder of the Corporation; or

	 	 	 	 
	 	____	(VIII) 	
      a person or company of which a majority of the voting
        securities are beneficially owned by, or a majority of directors are,
        persons or companies described in subparagraphs (I) through (VII) above;
        or

	 	 	 	 
	 	____	(IX) 	
      a trust or estate of which all of the beneficiaries
        or a majority of the trustees or executors are persons or companies described
        in subparagraphs (I) through (VII) above; or

- 4 - 

	 	(iv) 	
      it is resident in Canada and it is one of the
      following and the Subscriber has so indicated by initialling the
      applicable paragraph:

	 	____	(I) 	
      an employee, "executive officer",
      "director" or "consultant" (as such term is defined in NI
      45-106 and reproduced in Appendix A to Exhibit 1 of this Subscription
      Agreement) of the Corporation and participation in the trade is voluntary,
      or

	 	 	 	 
	 	____	(II) 	
      an employee, "executive officer",
      "director" or "consultant" of a "related entity" (as
      such term is defined in NI 45-106 and reproduced in Appendix A to Exhibit
      1 of this Subscription Agreement) of the Corporation and participation in
      the trade is voluntary; or

	 	 	 	 
	 	____	(III) 	
      a "permitted assign" (as such term is defined in
      NI 45-106 and reproduced in Appendix A to Exhibit 1 of this Subscription
      Agreement) of a person referred to in paragraphs (I) or (II) and
      participation in the trade is voluntary; or

	 	 	 	 
	 	____	(IV) 	
      a trustee, custodian or administrator acting as agent on
      behalf of, or for the benefit of, one of the persons or companies
      described in subparagraphs (I) through (III) above for the purpose of
      facilitating the trade and participation in the trade is voluntary;
    or

	 	(v) 	
      it is resident in Ontario and is one of the following and
      the Subscriber has so indicated by initialling the applicable
      paragraph:

	 	____	(i) 	
      a "founder" (as such term is defined in NI 45-106
      and reproduced in Appendix A to Exhibit 1 of this Subscription Agreement)
      of the Corporation; or

	 	 	 	 
	 	____	(ii) 	
      an "affiliate" (as such term is defined in NI
      45-106 and reproduced in Appendix A to Exhibit 1 of this Subscription
      Agreement) of a founder of the Corporation; or

	 	 	 	 
	 	____	(iii) 	
      a "spouse", (as such term is defined in NI 45-106
      and reproduced in Appendix A to Exhibit 1 of this Subscription Agreement)
      parent, grandparent, brother, sister or child of the spouse of an
      executive officer, director or founder of the Corporation; or

	 	 	 	 
	 	____	(iv) 	
      a person that is the "control person" (as such
      terms are defined in NI 45-106 and reproduced in Appendix A to Exhibit 1
      of this Subscription Agreement) of the
Corporation;

	 	(vi) 	
      it is a resident of any jurisdiction other than a
      province or territory of Canada, and

	 	 	 	 
	 		(A) 	
      the sale of Shares to the Subscriber hereunder is in
      compliance with the requirements of all applicable laws in the
      jurisdiction of its residence and does not give rise to any registration
      requirements in such jurisdiction or any requirements for the delivery of
      a prospectus, offering memorandum or similar disclosure document to the
      Subscriber; and

	 	 	 	 
	 		(B) 	
      the Subscriber will provide such evidence of compliance
      with all matters described in (A) above as the Corporation may request;
      or

	(e) 	
      if it is not purchasing as a principal, it is duly
      authorized to enter into this Subscription Agreement and to execute and
      deliver all documentation in connection with the purchase on behalf of
      each beneficial purchaser, each of whom is purchasing as principal for its
      own account, not for the benefit of any other person, and not with a view
      to the resale or distribution of all or any of the Shares, it acknowledges
      that the Corporation and the Agent is required by law to disclose to
      certain regulatory authorities the identity of each beneficial purchaser
      of Shares for whom it may be acting, and it and each beneficial purchaser
      is resident in the jurisdiction set out as the "Subscriber's Address
      and:

	 	(A) 	
      subject to securities laws applicable to the Subscriber,
      if it is acting as agent for one or more Disclosed Beneficial Principals,
      each of such principals is purchasing as principal for its own account,
      not for the benefit of any other person, for investment only, and not with
      a

- 5 - 

	 		
      view to the resale or distribution of all or any of the
      Shares, and each of such principals complies with subparagraphs (i),
      (ii), (iii), (iv), (v), (vi) or (vii) of paragraph 3(d) hereof as are
      applicable to it by virtue of its place of residence or by virtue of the
      securities laws of such place being applicable to the Subscriber;
  or

	 	 	 
	 	(B) 	
      it is an "accredited investor" as such term is defined in
      paragraphs (p) or (q) of the definition of "accredited investor" in NI
      45-106 and reproduced in Appendix A to Exhibit 1 of this Subscription
      Agreement (provided, however, that it is not a trust company or trust
      corporation registered under the laws of Prince Edward Island that is not
      registered or authorized under the Trust and Loan Companies Act
      (Canada) or under comparable legislation in another jurisdiction in
      Canada) and has concurrently executed and delivered a Representation
      Letter in the form attached hereto as Exhibit 1 and has initialled
      Appendix A thereto indicating that Subscriber satisfies one of the
      categories of "accredited investor" set out in paragraphs (p) or (q) of
      Appendix A thereto; and

	(f) 	
      it acknowledges that:

	 	 	 
		(i) 	
      no securities commission or similar regulatory authority
      has reviewed or passed on the merits of the Shares; and

	 	 	 
		(ii) 	
      there is no government or other insurance covering the
      Shares; and

	 	 	 
		(iii) 	
      there are risks associated with the purchase of the
      Shares; and

	 	 	 
		(iv) 	
      there are restrictions on the Subscriber's ability to
      resell the Shares and it is the responsibility of the Subscriber to find
      out what those restrictions are and to comply with them before selling the
      Shares; and

	 	 	 
		(v) 	
      the Corporation has advised the Subscriber that the
      Corporation is relying on an exemption from the requirements to provide
      the Subscriber with a prospectus and to sell securities through a person
      or company registered to sell securities under the Securities Act
      (Alberta) and other applicable securities laws and, as a consequence
      of acquiring the Shares pursuant to this exemption, certain protections,
      rights and remedies provided by the Securities Act (Alberta) and
      other applicable securities laws, including statutory rights of rescission
      or damages, will not be available to the Subscriber; and

	 	 	 
	(g) 	
      it is aware that the Shares have not been and will not be
      registered under the United States Securities Act of 1933, as
      amended ("U.S. Securities Act") or any state securities laws and
      that these securities may not be offered or sold in the United States
      without registration under the U.S. Securities Act and applicable laws of
      all applicable states or compliance with requirements of an exemption from
      registration and acknowledges that the Corporation has no present
      intention of filing a registration statement under the U.S. Securities Act
      in respect of the Shares; and

	 	 	 
	(h) 	
      the Shares have not been offered to the Subscriber in the
      United States, and the individuals making the order to purchase the Shares
      and executing and delivering this Subscription Agreement on behalf of the
      Subscriber were not in the United States when the order was placed and
      this Subscription Agreement was executed and delivered; and

	 	 	 
	(i) 	
      it is not a U.S. Person (as such term is defined in
      Regulation S under the U.S. Securities Act, which definition includes, but
      is not limited to, an individual resident in the United States, an estate
      or trust of which any executor or administrator or trustee, respectively,
      is a U.S. Person and any partnership or corporation organized or
      incorporated under the laws of the United States) and is not purchasing
      the Shares on behalf of, or for the account or benefit of, a person in the
      United States or a U.S. Person; and

	 	 	 
	(j) 	
      it undertakes and agrees that it will not offer or sell
      the Shares in the United States unless such securities are registered
      under the U.S. Securities Act and the securities laws of all applicable
      states of the United States or an exemption from such registration
      requirements is available, and further that it will not resell the Shares,
      except in accordance with the provisions of applicable securities
      legislation, regulations, rules, policies and orders and stock exchange
      rules; and

- 6 - 

	(k) 	
      if a corporation, partnership, unincorporated association
      or other entity, it has the legal capacity to enter into and be bound by
      this Subscription Agreement and further certifies that all necessary
      approvals of directors, shareholders, partners or otherwise have been
      given and obtained; and

	 	 
	(l) 	
      if an individual, it is of the full age of majority and
      is legally competent to execute this Subscription Agreement and take all
      action pursuant hereto; and

	 	 
	(m) 	
      this Subscription Agreement has been duly and validly
      authorized, executed and delivered by and constitutes a legal, valid,
      binding and enforceable obligation of the Subscriber; and

	 	 
	(n) 	
      in the case of a subscription by it for Shares acting as
      agent for a beneficial purchaser, it is duly authorized to execute and
      deliver this Subscription Agreement and all other necessary documentation
      in connection with such subscription on behalf of such principal and this
      Subscription Agreement has been duly authorized, executed and delivered by
      or on behalf of, and constitutes a legal, valid, binding and enforceable
      agreement of, such principal; and

	 	 
	(o) 	
      it has such knowledge in financial and business affairs
      as to be capable of evaluating the merits and risks of its investment and
      it, or, where it is not purchasing as principal, each beneficial
      purchaser, is able to bear the economic risk of loss of its investment;
      and

	 	 
	(p) 	
      it understands that Shares are being offered for sale
      only on a "private placement" basis and that the sale and delivery of the
      Shares is conditional upon such sale being exempt from the requirements
      under applicable securities laws as to the filing of a prospectus or
      delivery of an offering memorandum or upon the issuance of such orders,
      consents or approvals as may be required to permit such sale without the
      requirement of filing a prospectus or delivering an offering memorandum
      and, as a consequence (i) it is restricted from using most of the civil
      remedies available under applicable securities legislation; (ii) it may
      not receive information that would otherwise be required to be provided to
      it under applicable securities legislation; and (iii) the Corporation is
      relieved from certain obligations that would otherwise apply under
      applicable securities legislation; and

	 	 
	(q) 	
      if required by applicable securities legislation,
      regulations, rules, policies or orders or by any securities commission,
      stock exchange or other regulatory authority, the Subscriber will execute,
      deliver, file and otherwise assist the Corporation in filing, such
      reports, undertakings and other documents with respect to the issue of the
      Shares including, without limitation in the case of an accredited investor
      resident in or otherwise subject to applicable securities laws of a
      jurisdiction in Canada, a Representation Letter in the form attached
      as Exhibit 1; and

	 	 
	(r) 	
      it will not resell the Shares except in accordance with
      the provisions of applicable securities legislation and stock exchange
      rules, if applicable, in the future; and

	 	 
	(s) 	
      the entering into of this Subscription Agreement and the
      completion of the transactions contemplated hereby will not result in a
      violation of any of the terms or provisions of any law applicable to the
      Subscriber, or if the Subscriber is not a natural person, any of the
      Subscriber's constating documents, or any agreement to which the
      Subscriber is a party or by which it is bound; and

	 	 
	(t) 	
      the Subscriber acknowledges that it has been encouraged
      to obtain independent legal, income tax and investment advice with respect
      to its subscription for the Shares and accordingly, has had an opportunity
      to acquire an understanding of the meanings of all terms contained herein
      relevant to the Subscriber for purpose of giving the representations,
      warranties and covenants under this Subscription
  Agreement.

Matters Relating to the Flow-Through
Shares

5.        In addition to
other terms defined herein, for the purposes of Sections 5, 6, 7 and 8 hereof,
the following words and phrases have the following meanings: 

	(a) 	
      "Canadian Development Expense(s)" or "CDE"
      means Canadian development expense described in paragraph (a) or (b) of
      the definition of "Canadian development expense" in subsection 66.2(5) of
      the Act or would be described in paragraph (f) of such definition if the
      words "any of paragraphs (a) to (e)" in that paragraph were read as
      "paragraphs (a) and (b)", excluding amounts which are prescribed to
      constitute "Canadian exploration and development overhead expenses" under
      the Tax Act, the amount of any assistance described in paragraphs
      66(12.62)(a) and 66(12.601)(c) of the Tax Act;

- 7 - 

	(b) 	
      "Canadian Exploration Expense(s)" or "CEE"
      means Canadian exploration expense described in the definition of
      "Canadian exploration expense" in subsection 66.1(6) of the Tax Act and,
      when renounced under subsection 66(12.66) of the Act, means CEE described
      in paragraphs (a) and (d) of the definition of "Canadian exploration
      expense" in subsection 66.1(6) of the Tax Act or that would be described
      in paragraph (h) of such definition if the reference therein to
      "paragraphs (a) to (d) and (f) to (g.1)" were a reference to "paragraphs
      (a) and (d)", excluding amounts which are prescribed to constitute
      "Canadian exploration and development overhead expenses" under the Tax
      Act, the amount of any assistance described in paragraph 66(12.6)(a) of
      the Tax Act and any expense described in paragraph 66(12.6)(b.1) of the
      Tax Act;

	 	 	 
	(c) 	
      "Commitment Amount" means an amount equal to $0.40
      multiplied by the number of Shares subscribed and paid for pursuant to
      this Subscription Agreement;

	 	 	 
	(d) 	
      "Expenditure Period" means the period commencing
      on the date of acceptance by the Corporation of this Subscription
      Agreement and ending on the earlier of:

	 	 	 
		(i) 	
      the date on which the Commitment Amount has been fully
      expended in accordance with the terms hereof; and

	 	 	 
		(ii) 	
      December 31, 2007;

	 	 	 
	(e) 	
      "Principal Business Corporation" means a
      principal-business corporation as defined in subsection 66(15) of the Tax
      Act;

	 	 	 
	(f) 	
      "Qualifying CDE" means CDE incurred by the
      Corporation which is eligible for renunciation as CEE under subsection
      66(12.601) of the Tax Act;

	 	 	 
	(g) 	
      "Qualifying Expenditures" means expenses that are
      Qualifying CDE and CEE at the date they are incurred;

	 	 	 
	(h) 	
      "Tax Act" means the Income Tax Act
      (Canada), together with any and all regulations promulgated
      thereunder, as amended from time to time.

6.        The Corporation
hereby represents and warrants to the Subscriber (on its own behalf and, if
applicable, on behalf of each person on whose behalf the Subscriber is
contracting) and acknowledges that the Subscriber is relying thereon that: 

	(a) 	
      the Corporation has the full corporate right, power and
      authority to incur and renounce to the Subscriber, Qualifying Expenditures
      in an amount equal to the Commitment Amount; and

	 	 
	(b) 	
      the incurring and renunciation of Qualifying Expenditures
      to the Subscriber pursuant hereto, does not and will not constitute a
      breach of or default under the constating documents of the Corporation or
      any law, regulation, order or ruling applicable to the Corporation or any
      agreement, contract or indenture to which the Corporation is a party or by
      which it is bound; and

	 	 
	(c) 	
      the Corporation has no reason to believe that it will be
      unable to incur during the Expenditure Period or that it will be unable to
      renounce to the Subscriber effective on or before December 31, 2006,
      Qualifying Expenditures in an aggregate amount equal to the Commitment
      Amount and the Corporation has no reason to expect any reduction of such
      amount by virtue of subsection 66(12.73) of the Tax Act; and

	 	 
	(d) 	
      upon issuance pursuant to the provisions hereof, the
      Shares will be "flow through shares" as defined in subsection 66(15) of
      the Tax Act and will not constitute "prescribed shares" for the purpose of
      Regulation 6202.1 of the Tax Act except as a consequence solely of one or
      more agreements, arrangements, obligations or undertakings as contemplated
      by such provisions in respect of the Shares to which, or in respect of
      which, the Corporation is not a party and in respect of which the
      Corporation has no knowledge.

	 	 
	(e) 	
      as of the date hereof, the taxable capital amount of the
      Corporation, as that expression is defined in paragraph 66(12.6011) of the
      Tax Act, does not exceed $15,000,000 for the purposes of determining the
      Corporation's right to renounce Qualifying CDE to the
  Subscriber.

- 8 - 

7.        The Corporation
covenants and agrees with the Subscriber (on its own behalf and, if applicable,
on behalf of each person on whose behalf the Subscriber is contracting): 

	(a) 	
      to incur, during the Expenditure Period, Qualifying
      Expenditures in such amount as enables the Corporation to renounce to the
      Subscriber, in accordance with the Tax Act and this Subscription
      Agreement, Qualifying Expenditures in an amount equal to the Commitment
      Amount; and

	 	 
	(b) 	
      to renounce to the Subscriber, effective on or before
      December 31, 2006, Qualifying Expenditures incurred during the Expenditure
      Period, as required under the Tax Act and this Subscription Agreement, in
      an amount equal to the Commitment Amount; and

	 	 
	(c) 	
      to deliver to the Subscriber, not later than March 31,
      2007, a statement setting forth the aggregate amounts of such Qualifying
      Expenditures renounced to the Subscriber; and

	 	 
	(d) 	
      that all Qualifying Expenditures renounced to the
      Subscriber pursuant to this Subscription Agreement will be Qualifying
      Expenditures incurred by the Corporation that, but for the renunciation to
      the Subscriber, the Corporation would be entitled to deduct in computing
      its income for the purposes of Part I of the Tax Act; and

	 	 
	(e) 	
      that if the amount renounced to the Subscriber hereunder
      is reduced pursuant to subsection 66(12.73) of the Tax Act, and as the
      sole recourse to the Subscriber for such reduction, the Corporation shall
      indemnify the Subscriber as to, and pay in settlement thereof to the
      Subscriber, an amount equal to the amount of any tax payable under the Tax
      Act (and under any corresponding provincial legislation) by the Subscriber
      as a consequence of such reduction; and

	 	 
	(f) 	
      that if the Corporation does not renounce to the
      Subscriber Qualifying Expenditures equal to the Commitment Amount
      effective on or before December 31, 2006, and as the sole recourse to the
      Subscriber for such failure, the Corporation shall indemnify the
      Subscriber as to, and pay in settlement thereof to the Subscriber, an
      amount equal to the amount of any tax payable under the Tax Act (and under
      any corresponding provincial legislation) by the Subscriber as a
      consequence of such failure; and

	 	 
	(g) 	
      that the Corporation is a Principal Business Corporation
      and will maintain its status as a Principal Business Corporation
      throughout the Expenditure Period; and

	 	 
	(h) 	
      to file all prescribed forms required under the Tax Act
      necessary to renounce Qualifying Expenditures equal to the Commitment
      Amount to the Subscriber effective on or before December 31, 2006 and to
      provide the Subscriber with a copy of all such forms as are required to be
      provided thereto, all on a timely basis; and

	 	 
	(i) 	
      that the Corporation will not be subject to the
      provisions of subsection 66(12.67) of the Tax Act in a manner which
      impairs its ability to renounce Qualifying Expenditures to the Subscriber
      in an amount equal to the Commitment Amount; and

	 	 
	(j) 	
      that the Corporation shall incur and renounce Qualifying
      Expenditures pursuant to this Subscription Agreement and all other
      agreements with other persons providing for the issue of Shares entered
      into by the Corporation on the Closing Date (collectively the "Other
      Agreements") pro rata by number of Shares issued or to be issued pursuant
      thereto before incurring and renouncing Qualifying Expenditures pursuant
      to any other agreement which the Corporation has entered into, or shall
      enter into after the Closing Date with any person with respect to the
      issue of common shares of the Corporation which are "flow-through shares"
      as defined in subsection 66(15) of the Tax Act; and

	 	 
	(k) 	
      that if the Corporation is required under the Tax Act to
      reduce Qualifying Expenditures previously renounced to the Subscriber, the
      reduction shall be made pro rata by the number of Shares issued or to be
      issued pursuant to this Subscription Agreement to the reduction made under
      the Other Agreements; and

	 	 
	(l) 	
      that in the event that the Corporation cannot renounce to
      the Subscriber Qualifying Expenditures equal to the Commitment Amount, the
      Corporation shall renounce such lesser amount as is permitted and, to the
      extent the Corporation has incurred expenses which are capable of
      renunciation, but which are not Qualifying Expenditures, the Corporation
      shall, if agreed to by the Subscriber, renounce such expenses to the
      Subscriber, without any prejudice to any other rights the Subscriber may
      have under this Subscription Agreement; and

- 9 - 

	(m) 	
      to keep proper books, records and accounts, including
      books, records and accounts of all Qualifying Expenditures and all
      transactions affecting the Commitment Amount and the Qualifying
      Expenditures and to make such books, records and accounts available for
      inspection or audit by or on behalf of a Subscriber at the Subscriber's
      expense. 

	  	
       

	8. 	
      The Subscriber covenants, agrees and represents and
      warrants to the Corporation that 

	  	
       

	(a) 	
      neither the Subscriber, nor the beneficial purchaser, as
      the case may be, has or will knowingly enter into any agreement or
      arrangement which will cause the Shares to be or become "prescribed
      shares" for purposes of the Tax Act; and 

	  	
       

	(b) 	
      if the Subscriber or beneficial purchaser, as the case
      may be, is a corporation, trust or partnership, it does not and will not
      knowingly have, in respect of a renunciation of Qualifying Expenditures
      hereunder, a "prohibited relationship" with the Corporation within the
      meaning of subsection 66(12.671) of the Tax Act. 

	  	
       

	(c) 	
      it deals at arm's length with the Corporation within the
      meaning of the Income Tax Act (Canada) and will continue to do deal at
      arm's length with the Corporation at all material times.

Closing 

9.        The Subscriber
agrees to deliver to the Corporation, not later than 5:00 p.m. (Alberta time) on
the day that is two business days before the Closing Date (as defined below):
(a) this duly completed and executed Subscription Agreement; (b) all other
documents contemplated herein, as contemplated by paragraph 3(q) hereof; and (c)
a certified cheque or bank draft in the amount of the Aggregate Subscription
Price.

10.        The sale of the
Shares pursuant to this Subscription Agreement will be completed at the offices
of the Corporation, in Calgary, Alberta at 10:00 a.m. or such other time as is
established by the Corporation (the "Closing Time") on ___________ or
such other date as is established by the Corporation (the "Closing
Date"). If this Subscription Agreement is rejected in whole or in part, the
Subscriber acknowledges that the unused portion of the subscription amount will
be promptly returned to it without interest.

11.        The Corporation
shall be entitled to rely on delivery of a facsimile copy of executed
subscriptions, and acceptance by the Corporation of such facsimile subscriptions
shall be legally effective to create a valid and binding agreement between the
Subscriber and the Corporation in accordance with the terms hereof. In addition,
this Subscription Agreement may be executed in counterparts, each of which shall
be deemed to be an original and all of which shall constitute one and the same
document. 

General 

12.        The Subscriber,
on its own behalf and (if applicable) on behalf of others for whom it is
contracting hereunder, agrees that the representations, warranties and covenants
of the Subscriber herein will be true and correct both as of the execution of
this Subscription Agreement and as of the Closing Time and will survive the
completion of the issuance of the Shares. The representations, warranties and
covenants of the Subscriber herein are made with the intent that they be relied
upon by the Corporation and their respective counsel in determining the
eligibility of a purchaser of Shares and the Subscriber agrees to indemnify and
save harmless the Corporation and its respective affiliates, shareholders,
directors, officers, employees and agents against all losses, claims, costs,
expenses and damages or liabilities which any of them may suffer or incur which
are caused or arise from a breach thereof. The Subscriber undertakes to
immediately notify the Corporation at Park Place Energy Inc., 1220 - 666 Burrard
Street, Vancouver, B.C. V6C 2X8, Attention: David Stadnyk, of any change in any
statement or other information relating to the Subscriber set forth herein which
takes place prior to the Closing Time. 

13.        The Subscriber
acknowledges and agrees that all costs incurred by the Subscriber (including any
fees and disbursements of any special counsel retained by the Subscriber)
relating to the sale of the Shares to the Subscriber shall be borne by the
Subscriber. 

14.        The contract
arising out of this Subscription Agreement and all documents relating thereto
shall be governed by and construed in accordance with the laws of the Province
of Alberta and the federal laws of Canada applicable therein. The parties
irrevocably attorn to the exclusive jurisdiction of the courts of the Province
of Alberta. Time shall be of the essence hereof. 

- 10 - 

15.        The Subscriber,
on its own behalf and, if applicable, on behalf of others for whom it is
contracting hereunder, agrees that this subscription is made for valuable
consideration and may not be withdrawn, cancelled, terminated or revoked by the
Subscriber, on its own behalf and, if applicable, on behalf of others for whom
it is contracting hereunder. 

16.        The invalidity,
illegality or unenforceability of any provision of this Subscription Agreement
shall not affect the validity, legality or enforceability of any other provision
hereof. 

17.        The headings used
in this Subscription Agreement have been inserted for convenience of reference
only and shall not affect the meaning or interpretation of this Subscription
Agreement or any provision hereof. 

18.        This Subscription
Agreement represents the entire agreement of the parties hereto relating to the
subject matter hereof and there are no representations, covenants or other
agreements relating to the subject matter hereof except as stated or referred to
herein.

19.        The covenants,
representations and warranties contained herein shall survive the closing of the
transactions contemplated hereby. 

20.        Neither this
Subscription Agreement nor any provision hereof shall be modified, changed,
discharged or terminated except by an instrument in writing signed by the party
against whom any waiver, change, discharge or termination is sought. 

21.        In this
Subscription Agreement (including attachments), references to "$" or "Cdn. $"
are to Canadian dollars. 

22.        The Subscriber
acknowledges that this Subscription Agreement and the Schedules hereto require
the Subscriber to provide certain personal information to the Corporation. Such
information is being collected by the Corporation for the purposes of completing
this private placement, which includes, without limitation, determining the
Subscriber's eligibility to purchase the Shares under applicable securities
legislation, preparing and registering certificates representing Shares to be
issued to the Subscriber and completing filings required by any stock exchange
or securities regulatory authority. The Subscriber's personal information may be
disclosed by the Corporation to: (a) stock exchanges or securities regulatory
authorities, (b) the Corporation's registrar and transfer agent, (c) any
government agency, board or other entity, (d) Canada Revenue Agency; and (e) any
of the other parties involved in this private placement, including legal
counsel, and may be included in record books in connection with the Offering. By
executing this Subscription Agreement, the Subscriber is deemed to be consenting
to the foregoing collection, use and disclosure of the Subscriber's personal
information. The Subscriber also consents to the filing of copies or originals
of any of the Subscriber's documents described in Section 3(q) of this
Subscription Agreement as may be required to be filed with any stock exchange or
securities regulatory authority in connection with the transactions contemplated
hereby. 

23.        The Subscriber
represents and warrants that the Aggregate Subscription Price which will be
advanced by the Subscriber to the Corporation hereunder will not represent
proceeds of crime for the purposes of the Proceeds of Crime (Money
Laundering) and Terrorist Financing Act (Canada) (the "PCMLA")
and the Subscriber acknowledges that the Corporation may in the future be
required by law to disclose the Subscriber's name and other information relating
to this Agreement and the Subscriber's subscription hereunder, on a confidential
basis, pursuant to the PCMLA. To the best of its knowledge (i) none of the
subscription funds to be provided by the Subscriber (A) have been or will be
derived from or related to any activity that is deemed criminal under the law of
Canada, the United States of America, or any other jurisdiction, or (B) are
being tendered on behalf of a person or entity who has not been identified to
the Subscriber, and (ii) it shall promptly notify the Corporation if the
Subscriber discovers that any of such representations ceases to be true, and to
provide the Corporation with appropriate information in connection therewith.

24.        The Subscriber
acknowledges that the personal information provided to the Corporation in this
Subscription Agreement and the Exhibits hereto may be provided to the Ontario
Securities Commission (the "OSC") pursuant to the authority granted to the OSC
in securities legislation for the purposes of the administration and enforcement
of the securities legislation of Ontario. For further information or to make
inquiries regarding this indirect collection of personal information, the
Subscriber may contact the Administrative Assistant to the Director of Corporate
Finance of the OSC, at telephone (416) 593-8086. 

EXHIBIT 1 

REPRESENTATION LETTER 

(FOR ACCREDITED INVESTORS) 

TO:       
PARK PLACE ENERGY INC. (the "Corporation") 

                In
connection with the agreement to purchase common shares of the Corporation
("Shares") by the undersigned subscriber or, if applicable, the principal
on whose behalf the undersigned is purchasing as agent (the "Subscriber"
for the purposes of this Exhibit 1), the Subscriber hereby represents, warrants,
covenants and certifies to the Corporation that: 

	1. 	
      The Subscriber is resident in Canada, or is subject to
      the laws of a jurisdiction of Canada;

	 	 
	2. 	
      The Subscriber is purchasing the Shares as principal for
      its own account or complies with the provisions of paragraph 4(e)(A) or
      4(e)(B) of the Subscription Agreement;

	 	 
	3. 	
      The Subscriber is an "accredited investor" within the
      meaning of National Instrument 45-106 "Prospectus and Registration
      Exemptions" by virtue of satisfying the indicated criterion as set out in
      Appendix A to this Representation Letter; and

	 	 
	4. 	
      Upon execution of this Representation Letter by the
      Subscriber, this Representation Letter shall be incorporated into and form
      a part of the Subscription Agreement.

Dated: _________________________, 2006

_____________________________________________________
Print
name of Subscriber 

By:    _________________________________________________
         
Signature 

          
_________________________________________________
          
Print name of Signatory (if different from Subscriber) 

           _________________________________________________
          
Title 

IMPORTANT: PLEASE INITIAL THE APPLICABLE PROVISION IN

APPENDIX A ON THE NEXT PAGE 

APPENDIX A 

PLEASE MARK YOUR INITIALS BESIDE THE CATEGORY OF "ACCREDITED
INVESTOR" TO WHICH YOU BELONG. 

Accredited Investor (defined in National Instrument
45-106 ("NI 45-106")) means: 

	_______	(a) 	
      a Canadian financial institution, or a Schedule III
      bank;

	 	 	 
	_______	(b) 	
      the Business Development Bank of Canada incorporated
      under the Business Development Bank of Canada Act
  (Canada);

	 	 	 
	_______	(c) 	
      a subsidiary of any person referred to in paragraphs (a)
      or (b), if the person owns all of the voting securities of the subsidiary,
      except the voting securities required by law to be owned by directors of
      that subsidiary;

	 	 	 
	_______	(d) 	
      a person registered under the securities legislation of a
      jurisdiction of Canada as an adviser or dealer, other than a person
      registered solely as a limited market dealer under one or both of the
      Securities Act (Ontario) or the Securities Act (Newfoundland
      and Labrador);

	 	 	 
	_______	(e) 	
      an individual registered or formerly registered under the
      securities legislation of a jurisdiction of Canada as a representative of
      a person referred to in paragraph (d);

	 	 	 
	_______	(f) 	
      the Government of Canada or a jurisdiction of Canada, or
      any crown corporation, agency or wholly owned entity of the Government of
      Canada or a jurisdiction of Canada;

	 	 	 
	_______	(g) 	
      a municipality, public board or commission in Canada and
      a metropolitan community, school board, the Comité de gestion de la taxe
      scolaire de l’île de Montréal or an intermunicipal management board in
      Québec;

	 	 	 
	_______	(h) 	
      any national, federal, state, provincial, territorial or
      municipal government of or in any foreign jurisdiction, or any agency of
      that government;

	 	 	 
	_______	(i) 	
      a pension fund that is regulated by either the Office of
      the Superintendent of Financial Institutions (Canada) or a pension
      commission or similar regulatory authority of a jurisdiction of
    Canada

	 	 	 
	_______	(j) 	
      an individual who, either alone or with a spouse,
      beneficially owns, directly or indirectly, financial assets having an
      aggregate realizable value that before taxes, but net of any related
      liabilities, exceeds $1,000,000;

	 	 	 
	_______	(k) 	
      an individual whose net income before taxes exceeded
      $200,000 in each of the two most recent calendar years or whose net income
      before taxes combined with that of a spouse exceeded $300,000 in each of
      the two most recent calendar years and who, in either case, reasonably
      expects to exceed that net income level in the current calendar
    year;

	 	 	 
	 		
      (Note: If individual accredited investors wish to
      purchase through wholly- owned holding companies or similar entities, such
      purchasing entities must qualify under paragraph (t) below, which must be
      initialled)

	 	 	 
	_______	(l) 	
      an individual who, either alone or with a spouse, has net
      assets of at least $5,000,000;

	 	 	 
	_______	(m) 	
      a person, other than an individual or investment fund,
      that has net assets of at least $5,000,000 as shown on its most recently
      prepared financial statements, provided that such person has not been
      created or used solely to purchase or hold securities as an accredited
      investor;

	 	 	 
	_______	(n) 	
      an investment fund that distributes or has distributed
      its securities only to

- 2 - 

	 	(A) 	
      a person that is or was an accredited investor at the
      time of the distribution,

	 	 	 
	 	(B) 	
      a person that acquires or acquired securities in the
      circumstances referred to in sections 2.10 [Minimum amount
      investment], and 2.19 [Additional investment in investment funds]
      of NI 45-106, or

	 	 	 
	 	(C) 	
      a person described in paragraph (A) or (B) that acquires
      or acquired securities under section 2.18 [Investment fund
      reinvestment] of NI 45-106;

	_______	(o) 	
      an investment fund that distributes or has distributed
      securities under a prospectus in a jurisdiction of Canada for which the
      regulator or, in Québec, the securities regulatory authority, has issued a
      receipt;

	 	 	 
	_______	(p) 	
      a trust company or trust corporation registered or
      authorized to carry on business under the Trust and Loan Companies Act
      (Canada) or under comparable legislation in a jurisdiction of Canada
      or a foreign jurisdiction, acting on behalf of a fully managed account
      managed by the trust company or trust corporation, as the case may
    be;

	 	 	 
	_______	(q) 	
      a person acting on behalf of a fully managed account
      managed by that person, if that person

	 	 	 
	 		
      (A)        is
      registered or authorized to carry on business as an adviser or the
      equivalent under the securities legislation of a jurisdiction of Canada or
      a foreign jurisdiction,

	 	 	 
	_______	(r) 	
      a registered charity under the Income Tax Act
      (Canada) that, in regard to the trade, has obtained advice from an
      eligibility adviser or an adviser registered under the securities
      legislation of the jurisdiction of the registered charity to give advice
      on the securities being traded;

	 	 	 
	_______	(s) 	
      an entity organized in a foreign jurisdiction that is
      analogous to any of the entities referred to in paragraphs (a) to (d) or
      paragraph (i) in form and function;

	 	 	 
	_______	(t) 	
      a person in respect of which all of the owners of
      interests, direct, indirect or beneficial, except the voting securities
      required by law to be owned by directors, are persons that are accredited
      investors;

	 	 	 
	_______	(u) 	
      an investment fund that is advised by a person registered
      as an adviser or a person that is exempt from registration as an adviser;
      or

	 	 	 
	_______	(v) 	
      a person that is recognized or designated by the
      securities regulatory authority or, except in Ontario and Québec, the
      regulator as

	 	(A) 	
      an accredited investor, or 

	 	  	
       

		(B) 	
      an exempt purchaser in Alberta or British Columbia after
      NI 45-106 comes into force. 

NOTE: The investor must initial beside the applicable
portion of the above definition. 

For the purposes hereof: 

"affiliate" means an issuer connected with another
issuer because 

	 	(a) 	
      one of them is the subsidiary of the other;

	 	 	 
	 	(b) 	
      each of them is controlled by the same person;
  or

	 	 	 
	 	(c) 	
      for the purposes of Saskatchewan securities law, both are
      subsidiaries of the same issuer;

- 3 - 

"beneficial ownership" of securities by a person occurs

	 	(a) 	
      for the purposes of British Columbia securities law, when
      such securities are beneficially owned by

	 	 	 	 
	 		(A) 	
      an issuer controlled by that person; or

	 	 	 	 
	 		(B) 	
      an affiliate of that person or an affiliate of an issuer
      controlled by that person;

	 	 	 	 
	 	(b) 	
      for the purposes of Alberta securities law, when such
      securities are beneficially owned by

	 	 	 	 
	 		(A) 	
      a company controlled by that person or an affiliate of
      that company;

	 	 	 	 
	 		(B) 	
      an affiliate of that person; or

	 	 	 	 
	 		(C) 	
      through a trustee, legal representative, agent or other
      intermediary of that person;

"Canadian financial institution" means

	 	(a) 	
      an association governed by the Cooperative Credit
      Associations Act (Canada) or a central cooperative credit society for
      which an order has been made under section 473(1) of that Act,
or

	 	 	 
	 	(b) 	
      a bank, loan corporation, trust company, trust
      corporation, insurance company, treasury branch, credit union, caisse
      populaire, financial services cooperative, or league that, in each case,
      is authorized by an enactment of Canada or a jurisdiction of Canada to
      carry on business in Canada or a jurisdiction in
Canada;

"consultant" means, for an issuer, a person, other than
an employee, executive officer, or director of the issuer or of a related entity
of the issuer, that

	 	(a) 	
      is engaged to provide services to the issuer or a related
      entity of the issuer, other than services provided in relation to a
      distribution,

	 	 	 
	 	(b) 	
      provides the services under a written contract with the
      issuer or a related entity of the issuer, and

	 	 	 
	 	(c) 	
      spends or will spend a significant amount of time and
      attention on the affairs and business of the issuer or a related entity of
      the issuer and includes, for an individual consultant, a corporation of
      which the individual consultant is an employee or shareholder, and a
      partnership of which the individual consultant is an employee or
      partner;

"control person" means 

	 	(a) 	
      for the purposes of Alberta securities law, any person or
      company that holds or is one of a combination of persons or companies that
      holds

	 	 	 	 
	 		(i) 	
      a sufficient number of any of the securities of an issuer
      so as to affect materially the control of the issuer, or

	 	 	 	 
	 		(ii) 	
      more than 20% of the outstanding voting securities of an
      issuer except where there is evidence showing that the holding of those
      securities does not affect materially the control of the issuer;

	 	 	 	 
	 	(b) 	
      for the purposes of British Columbia securities
    law,

	 	 	 	 
	 		(i) 	
      a person who holds a sufficient number of the voting
      rights attached to all outstanding voting securities of an issuer to
      affect materially the control of the issuer, or

	 	 	 	 
	 		(ii) 	
      each person in a combination of persons, acting in
      concert by virtue of an agreement, arrangement, commitment or
      understanding, which holds in total a sufficient number of
  the

- 4 - 

voting rights attached to all
outstanding voting securities of an issuer to affect materially the control of
the issuer, 

and, if a person or combination of
persons holds more than 20% of the voting rights attached to all outstanding
voting securities of an issuer, the person or combination of persons is deemed,
in the absence of evidence to the contrary, to hold a sufficient number of the
voting rights to affect materially the control of the issuer; 

"director" means 

	 	(a) 	
      a member of the board of directors of a company or an
      individual who performs similar functions for a company, and

	 	 	 
	 	(b) 	
      with respect to a person that is not a company, an
      individual who performs functions similar to those of a director of a
      company;

"executive officer" means, for an issuer, an individual
who is

	 	(a) 	
      a chair, vice-chair or president,

	 	 	 
	 	(b) 	
      a vice-president in charge of a principal business unit,
      division or function including sales, finance or production,

	 	 	 
	 	(c) 	
      an officer of the issuer or any of its subsidiaries and
      who performs a policy-making function in respect of the issuer,
  or

	 	 	 
	 	(d) 	
      performing a policy-making function in respect of the
      issuer;

"financial assets" means 

	 	(a) 	
      cash,

	 	 	 
	 	(b) 	
      securities, or

	 	 	 
	 	(c) 	
      a contract of insurance, a deposit or an evidence of a
      deposit that is not a security for the purposes of securities
      legislation;

"foreign jurisdiction" means a country other than Canada
or a political subdivision of a country other than Canada; 

"founder" means, in respect of an issuer, a person who,

	 	(a) 	
      acting alone, in conjunction or in concert with one or
      more other persons or companies, directly or indirectly, takes the
      initiative in founding, organizing or substantially reorganizing the
      business of the issuer, and

	 	 	 
	 	(b) 	
      at the time of the proposed trade, is actively involved
      in the business of the issuer;

"fully managed account" means an account of a client for
which a person makes the investment decisions if that person has full discretion
to trade in securities for the account without requiring the client's express
consent to a transaction; 

"investment fund" means a mutual fund or non-redeemable
investment fund, and, for greater certainty in British Columbia, includes an
employee venture capital corporation that does not have a restricted
constitution , and is registered under Part 2 of the Employee Investment
Act (British Columbia), R.S.B.C. 1996 c. 112, and whose business objective
is making multiple investments and a venture capital corporation registered
under Part 1 of the Small Business Venture Capital Act (British
Columbia), R.S.B.C. 1996 c.429 whose business objective is making multiple
investments; 

"jurisdiction" means a province or territory of Canada
except when used in the term "foreign jurisdiction"; 

- 5 - 

"local jurisdiction" means the jurisdiction in which the
applicable securities regulatory authority is situate; 

"individual" means a natural person, but does not
include 

	 	(a) 	
      a partnership, unincorporated association, unincorporated
      syndicate, unincorporated organization or a trust, or

	 	 	 
	 	(b) 	
      a natural person in the person's capacity as trustee,
      executor, administrator or other legal
representative;

"mutual fund" includes an issuer of securities that
entitles the holder to receive on demand, or within a specified period after
demand, an amount computed by reference to the value of a proportionate interest
in the whole or in part of the net assets, including a separate fund or trust
account, of the issuer of the securities, and, for the purposes of British
Columbia securities law, also includes 

	 	(a) 	
      an issuer described in an order that the British Columbia
      Securities Commission may make pursuant to section 3.2 of the
      Securities Act (British Columbia); and

	 	 	 
	 	(b) 	
      an issuer that is in a class of prescribed
  issuers,

but does not include an issuer, or a class of issuers,
described in an order that the British Columbia Securities Commission may make
under section 3.1 of the Securities Act (British Columbia); 

"non-redeemable investment fund" means an issuer, 

	 	(a) 	
      whose primary purpose is to invest money provided by its
      securityholders,

	 	 	 	 
	 	(b) 	
      that does not invest,

	 	 	 	 
	 		(A) 	
      for the purpose of exercising or seeking to exercise
      control of an issuer, other than an issuer that is a mutual fund or a
      nonredeemable investment fund, or

	 	 	 	 
	 		(B) 	
      for the purpose of being actively involved in the
      management of any issuer in which it invests, other than an issuer that is
      a mutual fund or a non-redeemable investment fund, and

	 	 	 	 
	 	(c) 	
      that is not a mutual fund;

"person" includes

	 	(a) 	
      an individual,

	 	 	 
	 	(b) 	
      a corporation,

	 	 	 
	 	(c) 	
      a partnership, trust, fund and an association, syndicate,
      organization or other organized group of persons, whether incorporated or
      not, and

	 	 	 
	 	(d) 	
      an individual or other person in that person’s capacity
      as a trustee, executor, administrator or personal or other legal
      representative;

"regulator" means, for the local jurisdiction, the
Executive Director or Director as defined under securities legislation of the
local jurisdiction; 

"related entity" means, for an issuer, a person that
controls or is controlled by the issuer or that is controlled by the same person
that controls the issuer; 

"related liabilities" means: 

- 6 - 

	 	(a) 	
      liabilities incurred or assumed for the purpose of
      financing the acquisition or ownership of financial assets; or

	 	 	 
	 	(b) 	
      liabilities that are secured by financial
  assets;

"Schedule III bank" means an authorized foreign bank
named in Schedule III of the Bank Act (Canada); 

"securities legislation" means 

	 	(a) 	
      for British Columbia, the Securities Act (British
      Columbia) and the regulations, rules and forms under such Act and the
      blanket rulings and orders issued by the British Columbia Securities
      Commission;

	 	 	 
	 	(b) 	
      for Alberta, the Securities Act (Alberta) and the
      regulations and rules under such Act and the blanket rulings and orders
      issued by the Alberta Securities Commission;

"securities regulatory authority" means 

	 	(a) 	
      the British Columbia Securities Commission;

	 	 	 
	 	(b) 	
      the Alberta Securities
Commission;

"spouse" means an individual who, 

	 	(a) 	
      is married to another individual and is not living
      separate and apart within the meaning of the Divorce Act (Canada),
      from the other individual,

	 	 	 
	 	(b) 	
      is living with another individual in a marriage-like
      relationship, including a marriage-like relationship between individuals
      of the same gender, or

	 	 	 
	 	(c) 	
      in Alberta, is an individual referred to in paragraph (a)
      or (b), or is an adult interdependent partner within the meaning of the
      Adult Interdependent Relationships Act
(Alberta);

"voting security" means any security which: 

	 	(a) 	
      is not a debt security; and

	 	 	 
	 	(b) 	
      carries a voting right either under all circumstances or
      under some contingency that has occurred and is
  continuing;

All monetary references are in Canadian Dollars.

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00127-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00127-of-00352.parquet"}]]