Leonard E. Neilson
                                 Attorney at Law
                            8160 South Highland Drive
                                    Suite 209
                                Sandy, Utah 84093
Phone:  (801) 733-0800                                 Fax:  (801) 733-0808



                                 April 17, 2001



Securities and Exchange Commission
Office of Document Control
450 Fifth Street N.W.
Washington, D.C. 20549

VIA:  EDGARLink
---------------

         Re:      Trans Energy, Inc.
                  File No.  0-23530
                  Form 10-KSB (for the period ended December 31, 2000)

To Whom It May Concern:

         Please find herewith transmitted by EDGARLink, the Form 10-KSB filed on
behalf of Trans Energy, Inc. for the fiscal year ended December 31, 2000.

         Please direct all correspondences concerning this filing and
Trans Energy, Inc. to this office.

                                                   Yours truly,

                                                   /s/ Leonard E. Neilson
                                                   ----------------------
                                                       Leonard E. Neilson
:ae
Attachment

<PAGE>

                UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-KSB
                                   (Mark One)
     [X] Annual  Report  Pursuant  to  Section  13 or  15(d)  of The  Securities
         Exchange Act of 1934

                   For the Fiscal Year Ended December 31, 2000

     [ ] Transition  Report  Pursuant  to Section 13 or 15(d) of The  Securities
         Exchange Act of 1934

                         Commission File Number 0-23530

                               TRANS ENERGY, INC.
                 (Name of small business issuer in its charter)

             Nevada                                         93-0997412
(State or other jurisdiction of                          (I.R.S. Employer
incorporation or organization)                           Identification No.)

         210 Second Street, P.O. Box 393, St. Marys, West Virginia 26170
               (Address of principal executive offices) (Zip Code)

Issuer's telephone no.:  (304) 684-7053

Securities registered pursuant to Section 12(b) of the Exchange
Act:   None

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

         Check whether the issuer (1) filed all reports  required to be filed by
Section 13 or 15(d) of the  Exchange  Act during the past 12 months (or for such
shorter period that the  registrant was required to file such reports),  and (2)
has been subject to such filing  requirements for the past 90 days. Yes [X] No [
]

         Check if there is no  disclosure  of  delinquent  filers in response to
Item 405 of  Regulation  S-B contained in this form,  and no disclosure  will be
contained,  to the best of the  Registrant's  knowledge,  in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB. [X]

         State the issuer's revenues for its most recent fiscal year.
$ 1,125,257

         State  the  aggregate   market  value  of  the  voting  stock  held  by
non-affiliates  computed by  reference to the price at which the stock was sold,
or the average bid and ask prices of such stock as of a specified date within 60
days. $10,505,228 (Based on price of $.0625 on April 12, 2001)

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

                 Class                   Outstanding as of December 31, 2000
                 -----                   -----------------------------------
         Common Stock, Par Value
           $.001 per share                         172,028,189

                       DOCUMENTS INCORPORATED BY REFERENCE
                                      NONE

Transitional Small Business Disclosure Format.   Yes [ ]  No [X]

                                       -1-

<PAGE>


<TABLE>
<CAPTION>

                                                TRANS ENERGY, INC.

                                                 TABLE OF CONTENTS

                                                                                                          Page
                                                                                                          ----

                                                                          PART I

<S>               <C>                                                                                       <C>
Item 1.           Description of Business .......................................................            3

Item 2.           Description of Property........................................................           12

Item 3.           Legal Proceedings..............................................................           14

Item 4.           Submission of Matter to a Vote of
                  Security Holders...............................................................           17

                                                                         PART II

Item 5.           Market for Common Equity and Related
                  Stockholder Matters............................................................           17

Item 6.           Management's Discussion and Analysis or
                  Plan of Operation..............................................................           18

Item 7.           Financial Statements...........................................................           21

Item 8.           Changes in and Disagreements with Accountants
                  on Accounting and Financial Disclosure.........................................           48

                                                                        PART III

Item 9.           Directors, Executive Officers, Promoters and
                  Control persons; Compliance with Section 16(a)
                  of the Exchange Act............................................................           48

Item 10.          Executive Compensation.........................................................           50

Item 11.          Security Ownership of Certain Beneficial
                  Owners and Management..........................................................           50

Item 12.          Certain Relationships and Related Transactions                                            51

                                                                         PART IV

Item 13.          Exhibits and Reports on Form 8-K...............................................           53

                  SIGNATURES.....................................................................           54

</TABLE>


                                       -2-

<PAGE>


                                     PART I

Item 1.           Description of Business


History

         Trans Energy,  Inc., a Nevada corporation (the "Company" or "TSRG"), is
primarily engaged in the transportation, marketing and production of natural gas
and oil, and also conducts exploration and development  activities.  The Company
owns an interest 3 oil and gas wells in West Virginia, owns and operates one oil
well in Wyoming, and owns an interest in 7 oil wells in Wyoming that it does not
operate.  The Company  also owns and  operates an aggregate of over 100 miles of
three-inch,  four-inch and six-inch gas  transmission  lines located within West
Virginia in the Counties of Ritchie,  Tyler and Pleasants.  This pipeline system
gathers the natural gas produced  from these wells and from wells owned by third
parties.  The Company  also has  approximately  18,000  acres under lease in the
Powder River Basin in Campbell, Crook and Weston Counties, Wyoming. In 2000, the
Company  participated  in the drilling of four drill downs to the Benson Sand in
West Virginia.

         On March 6, 1998,  the Company  entered  into an  agreement to purchase
from GCRL Energy, Ltd. ("GCRL") all of GCRL's interest in the Powder River Basin
in Campbell and Crook  Counties,  Wyoming,  consisting  of interests in five (5)
wells, four (4) of which are producing, interests in 30,000 leasehold acres, and
interests  in  approximately  seventy-three  miles  of  3-D  seismic  data.  The
properties  include three  producing  fields from  Minnelusa  Sandstone and were
discovered  on 3-D  seismic.  The  Company  made  an  initial  payment  for  the
properties of $332,500 and the balance of $2,987,962  was paid for with proceeds
from the sale of Convertible  Debentures.  During 1999, the Sagebrush 3 well was
drilled in the Sagebrush field in Campbell County Wyoming.  It will be used as a
water  injector well to increase  production in the Sagebrush #1 and #2 existing
producing  wells.  It is  anticipated  that  the  Sagebrush  #3 will be put into
operation as an injector well during the summer of 2001.

         The  Company's  principal  executive  offices are located at 210 Second
Street,  P.O. Box 393, St. Marys,  West Virginia 26170, and its telephone number
is (304) 684-7053.

Business Development

         In 2000,  management  observed  that the Trenton - Black River deep gas
field in the  Appalachian  Basin in West  Virginia.  experienced  much  success.
Accordingly,  because of the  potential of this field the Company has decided to
focus much of its efforts to this area.  In 1999,  the Company  sold many of its
Appalachian  Basin assets and  purchased  51% of a producing  well in the Powder
River Basin in Wyoming. The Company then focused its attention toward developing
its acreage in the Powder  River Basin in Wyoming and  drilling  for deep gas in
the Trenton-Black River area.

         The  Company's  business  strategy  is  to  economically  increase  its
reserves,  production  and  sale of gas  and  oil  from  existing  and  acquired
properties  in the Powder  River Basin and  Appalachian  Basin and  elsewhere in
order  to  maximize  shareholders'  return  over the long  term.  The  Company's
strategic location in West Virginia

                                       -3-

<PAGE>



enables  the Company to  actively  pursue the  acquisition  and  development  of
producing  properties in that area that will enhance the Company's  revenue base
without proportional increases in overhead costs.

         In  September  1993,  the Company  acquired  certain oil and gas assets
including  wells and pipelines,  in exchange  solely for shares of the Company's
authorized  but  previously   unissued  common  stock.  These  acquisitions  are
summarized below:

         Tyler Construction Company, Inc.

         In September 1993, the Company acquired an interest equal to 65% of the
total outstanding  shares of Tyler Construction  Company ("Tyler  Construction")
from Loren E. Bagley,  the Company's  President  and a director,  and William F.
Woodburn,  the  Company's  Vice  President of Operations  and a director.  Tyler
Construction  owns and operates a natural gas gathering  pipeline system serving
the  industrialized  Ohio Valley.  Tyler  Construction also owns and operates 27
miles of six-inch pipeline and 10 miles of four-inch pipeline.

         Tyler  Construction's trunk line system consists of a six-inch pipeline
that begins at the town of St. Marys,  West Virginia,  located on the Ohio River
in the County of Pleasants in western West Virginia,  and proceeds  twenty-seven
miles due east to Bradden  Station,  West Virginia.  Near Bradden  Station,  the
pipeline  intercepts major transmission lines of Equitable Natural Gas, Dominion
Transmission,  Inc. and Eastern American Energy. An intercepting line consisting
of ten miles of  four-inch  pipeline  begins at a point  eight miles east of St.
Marys and proceeds  north 10 miles to an  industrial  park  located  seven miles
south of  Sistersville,  West Virginia.  At this point,  gas is delivered to OSI
Specialties  (formerly Union Carbide) and Consolidated  Aluminum  Corporation of
America under a marketing agreement with Sancho.  Pursuant to its agreement with
Sancho,  the Company has the right to sell  natural gas subject to the terms and
conditions of a 15-year contract, as amended, that Sancho entered into with Hope
Gas, Inc. ("Hope") in 1988. This agreement is a flexible volume supply agreement
whereby the Company  receives the full price which Sancho  receives  less a $.05
per Mcf marketing fee paid to Sancho. The price of the natural gas is based upon
the residential gas index and the Inside F.E.R.C. Index.

         Spencer Wells

         Also in September 1993, the Company acquired from Dennis L. Spencer all
rights,  title and interest to six  producing  oil and gas wells located in West
Virginia,  in exchange for the Company shares.  Five of the wells  identified as
"Fowler," "Goff," "Locke," "McGill" and "Workman" are situated in Ritchie County
in a proven  reservoir  field.  The remaining  well  identified as "Spencer," is
located  in Tyler  County.  All six wells were  completed  in 1991 and have been
producing oil and gas through the date hereof. In 1999, five of these wells were
sold to an  unaffiliated  third party and in 2000, the sixth well was sold to an
unaffiliated third party.

                                       -4-

<PAGE>



         The Pipeline, Ltd.

         Also in September 1993, the Company acquired from Tyler Pipeline,  Inc.
("Tyler  Pipeline") all rights,  title and interest in the natural gas gathering
pipeline  system known as The Pipeline,  Ltd.  (the name of the pipeline,  not a
legal entity), a four-inch pipeline that begins at Twiggs,  West Virginia,  nine
miles east of St. Marys, West Virginia where it intercepts Tyler  Construction's
trunk  line  system and  proceeds  due south for a  distance  of six miles.  The
Pipeline, Ltd. system is used for purchasing gas from third party producers. Mr.
Woodburn,  Vice  President and a director of the Company,  is also President and
owns 50% of Tyler Pipeline. Mr. Bagley, President and a director of the Company,
also owns 50% of Tyler Pipeline.

         Ritchie County Gathering Systems, Inc.

         In September 1993, the Company  acquired all the issued and outstanding
capital  stock of  Ritchie  County  Gathering  Systems,  Inc.,  a West  Virginia
corporation  ("Ritchie  County  Gathering").  Ritchie County  Gathering owns and
operates a four-inch natural gas gathering line which begins five miles south of
Cairo,  West  Virginia  at  Rutherford,  and  proceeds  due south for 4.6 miles,
crossing Mellon Ridge and ending at Macfarlan Creek approximately 1/2 mile north
of the South Fork of the Hughes River. The Ritchie County Gathering  pipeline is
used for  purchasing gas from third party  producers and delivering  such gas to
Hope.

         Powder River Basin Wyoming

         On March 6, 1998,  the Company  entered  into an  agreement to purchase
from GCRL Energy, Ltd. ("GCRL") all of GCRL's interest in the Powder River Basin
in Campbell and Crook  Counties,  Wyoming,  consisting  of interests in five (5)
wells, four (4) of which are producing, interests in 30,000 leasehold acres, and
interests  in  approximately  seventy-three  miles  of  3-D  seismic  data.  The
properties  include three  producing  fields from  Minnelusa  Sandstone and were
discovered  on 3-D  seismic.  The  Company  made  an  initial  payment  for  the
properties of $50,000 and the balance of  $2,987,962  was paid for with proceeds
from the sale of the Company's Debentures.

         The following table sets forth information  concerning the existing oil
production per day of the producing wells located on the GCRL property.
<TABLE>
<CAPTION>

                                     Gross Bbls.
Name of Well                         Oil Per Day                Net % to TSRG                     Net Bbls. to TSRG
------------                        ------------                -------------                     -----------------

<S>                                         <C>                       <C>                               <C>
Sagebrush Fed #1                            56                        48.8%                             27
Sagebrush Fed #2                            45                        47.5%                             21
Pinon Fee #1                                30                        51.2%                             15
Sandbar Boley 31-36                         10                        27.8%                              3
 includes Sandbar State
 1-36 and 2-36
Wolff 1-35                                   7                          68%                              5
                                           ---                        -----                             --
        TOTAL                              148                                                          71
</TABLE>

                                       -5-

<PAGE>


Current Business Activities

         The Company is actively engaged in the operation of its oil and natural
gas  properties  and in the  transportation  and  marketing  of its  natural gas
through its transmission systems in West Virginia.  Management has expressed its
desire to acquire  additional  oil and natural gas properties and to become more
involved in exploration  and  development,  specifically  in the Trenton - Black
river deep gas field in West Virginia. Management intends to continue to develop
and  increase the  production  from the oil and natural gas  properties  that it
currently owns.

         Although the Company will continue to transport and market  natural gas
through its various  pipelines,  there are no current plans to acquire or to lay
any additional  pipeline  systems in 2001. Apart from the three wells drilled in
the Powder  River Basin in Wyoming and the one well  drilled in the Powder River
basin in Wyoming  (Sagebrush  #3)) and the four re-entry Benson wells drilled in
West  Virginia,  the Company has not  participated  in any new wells in the last
three years.

Powder River Basin Wyoming - Prima

         On December 28,  1996,  the Company  purchased  420 acres in the Powder
River  basin in the State of Wyoming  for  $50,000  from an  unaffiliated  third
party.  Included in the purchase price was a condition that the previous  owners
would provide all of the geologic and  geophysical  work as part of the purchase
price.  On  February  3, 1997 the Company  leased an  additional  480 acres that
joined with its acreage  position.  The target  formation is the Minnelusa  "B1"
sand.  There  presently  are no  producing  wells on such  acreage and no proved
reserves located on the acreage owned by the Company.

         Five  two-dimensional   ("2-D")  seismic  lines  and  a  6-square  mile
three-dimensional  ("3-D") seismic program have been shot across the acreage now
held by the Company. Unlike 2-D seismic testing which provides a cross-sectional
view  of  the   subsurface   of  the  Earth,   3-D  testing   provided  a  full,
three-dimensional view of the subsurface. Such views allow for greater precision
in the  location of  potential  drilling  sites.  3-D testing  allows  potential
drillers  to  obtain  accurate  estimates  of the  size of oil  and gas  bearing
structures  and the  profile of the  structure.  2-D  testing  only  informs the
driller that an oil and gas bearing  structure is in a particular area,  without
giving  information  as to size and shape.  Without an accurate  estimate of the
size of the oil  and gas  bearing  structures,  it is  difficult  to  accurately
estimate the reserves in the structure,  and,  thus,  the economic  viability of
drilling  into a  particular  structure.  Without  an  accurate  profile  of the
structure, a driller may not hit the most economic portion of the structure.

         Water pressure  primarily is responsible for the movement of oil within
the area of the  Company's  acreage.  Where  water  pressure is the cause of oil

                                       -6-

<PAGE>


movement,  finding the apex of the oil bearing  structure is is the cause of oil
movement,  finding the apex of the oil bearing  structure is critical.  Drilling
into the apex of such a structure  usually assures that a maximum amount of oil,
and a minimal  amount of water,  will be recovered  from a well.  Hitting such a
zone  elsewhere  than at the apex will  result in a lower  proportion  of oil to
water and reduced rates of recovery.

         The Company  completed  the drilling of the Fowler 22-8 in January 1998
and  determined  the well to be a dry hole and was plugged.  The Company did not
drill additional wells on this acreage during 1998, 1999, or 2000.

Powder River Basin Wyoming - Wolffe Prospect

         On May 27, 1997,  the Company  purchased a 30% working  interest in the
Wolffe  Prospect  in the Powder  River  Basin in  Campbell  County,  Wyoming for
$65,000 from an unaffiliated  third party.  Included in the purchase price was a
30% working  interest in the Wolffe #1-35 well and 30% interest in 240 acres. In
October  1997,  the  Company  participated  in its share of the  drilling of the
Horizon 32-35 well.  The target  formation was the Minnelusa "B1" sand. The well
was  determined to be a dry hole and plugged.  On November 15, 1999, the Company
purchased for $16,000 an additional 51% working  interest in the Wolff 1-35 well
from Renor Exploration Limited.

Sistersville

         Effective June 1, 1995, the Company purchased approximately 2,200 acres
in a  known  producing  field  located  near  Sistersville,  West  Virginia  for
$100,000.  The  Sistersville  field  has been in  operation  since  the  1890's,
although  at a very low  level  for the past ten  years.  To date the  field has
produced over 13 million barrels of oil. The field contains  portions of the Big
Injun  and  Keener  sands  formations,  both  well  known  oil and  gas  bearing
formations, which are the zones the Company intends to explore. These formations
are approximately 1,700 feet deep.  Recoverable reserves of oil in the field are
estimated at several million barrels.

         The Company has observed the success of oil and gas  exploration in the
Sistersville  field by other entities after expensive  studies.  The preliminary
studies  conducted  by the seller of the  Sistersville  property  to the Company
indicating  substantial reserves were included in the purchase price paid by the
Company  for  the  Sistersville  acreage.  The  Company  drilled  a well  on its
Sistersville  acreage in April 1997.  On December 3, 1999,  the Company sold the
Sistersvilee field for $125,000 to an unaffiliated third party.

Vulcan Energy Corporation.

         During  March 1997,  the Company  ceased  operations  of Vulcan  Energy
Corporation ("Vulcan"), its 80% owned subsidiary, engaged in the lease crude oil
gathering and marketing in Southeast Texas.


                                       -7-

<PAGE>



Research and Development

         The  Company  has not  allocated  funds  for  conducting  research  and
development  activities and, due to the nature of the Company's business,  it is
not anticipated that funds will be allocated for research and development in the
immediate future.

Marketing

         The Company operates  exclusively in the oil and gas industry.  Natural
gas  production  from wells  owned by the Company is  generally  sold to various
intrastate  and  interstate   pipeline   companies  and  natural  gas  marketing
companies.  Sales are  generally  made on the spot  market  or under  short-term
contracts (one year or less) providing for variable or market sensitive  prices.
These  prices  often are tied to  natural  gas  futures  contracts  as posted in
national publications.

         Natural gas delivered  through the Company's  pipeline  network is sold
through the Sancho Oil and Gas Corporation ("Sancho") contract to the industrial
facilities near Sistersville,  West Virginia,  or to Hope, a local utility. Some
of the gas is sold at a fixed  price on a year long basis and some at a variable
price per month per Mcf.  Under its contract  with  Sancho,  the Company has the
right to sell  natural  gas  subject  to the terms and  conditions  of a 15-year
contract, as amended, that Sancho entered into with Hope in 1988. This agreement
is a flexible  volume  supply  agreement  whereby the Company  receives the full
price which Sancho  charges the end user less a $.05 per Mcf  marketing fee paid
to  Sancho.  The  price of the  natural  gas is based  upon the  greater  of the
residential  gas commodity  index and published  Inside  F.E.R.C.  Index, at the
Company's  option,  for the  first  1,500  Mcf  purchased  per  day by Hope  and
thereafter the price is the Inside F.E.R.C. Index. The residential gas commodity
index does not  directly  fluctuate  with the overall  price of natural gas. The
Inside F.E.R.C. Index fluctuates monthly with the change in the price of natural
gas. While such option provides  certain price  protection for the Company there
can be no assurance  that prices paid by the Company to suppliers  will be lower
than the price which the Company would receive under the Hope arrangement. Prior
to June 1, 1996, the price was the  residential gas commodity index and when the
market price of gas rose above such index, the Company's ability to purchase gas
from third parties was adversely effected.

         The Company sells its oil  production to third party  purchasers  under
agreements at posted field prices.  These third parties  purchase the oil at the
various locations where the oil is produced.

         Although management believes that the Company is not dependent upon any
one customer,  its  marketing  arrangement  with Sancho Oil and Gas  Corporation
accounted  for  approximately  30% of the  Company's  revenue for the year ended
December 31, 2000, and  approximately  30% for the year ended December 31, 1999.
This marketing agreement is in effect until September 1, 2008.


                                       -8-

<PAGE>



         In addition to the natural gas produced by the Company's wells, it also
purchased approximately 275 Mcf of natural gas per day in 2000.

Competition

         TSRG  is in  direct  competition  with  numerous  oil and  natural  gas
companies, drilling and income programs and partnerships exploring various areas
of the  Appalachian  and Powder River Basins and  elsewhere,  and  competing for
customers.  Many  competitors  are large,  well-known  oil and gas and/or energy
companies,  although no single entity  dominates  the  industry.  Many of TSRG's
competitors  possess greater financial and personnel  resources enabling them to
identify and acquire more economically desirable energy producing properties and
drilling prospects than TSRG. Additionally, there is competition from other fuel
choices  to supply  the  energy  needs of  consumers  and  industry.  Management
believes  that there  exists a viable  market  place for  smaller  producers  of
natural  gas and oil and for  operators  of  smaller  natural  gas  transmission
systems.

         Under its contract with Sancho,  TSRG has the right to sell natural gas
subject to the terms and  conditions  of a 15-year  contract,  as amended,  that
Sancho  entered  into with Hope in 1988.  This  agreement  is a flexible  volume
supply agreement whereby TSRG receives the full price which Sancho receives less
a $.05 per Mcf  marketing  fee paid to Sancho.  The price of the  natural gas is
based upon indices that include the residential gas commodity charge of Hope and
the Inside F.E.R.C.  Index.  Were it not for the  relationship  between Hope and
Sancho,  Hope would  compete  directly  with TSRG for the sale of gas to certain
customers, specifically OSI Specialities, Inc. and Ormet Aluminum Company.

Government Regulation

         The oil and gas industry is extensively regulated by federal, state and
local  authorities.  The scope and  applicability  of  legislation is constantly
monitored for change and expansion.  Numerous agencies,  both federal and state,
have issued  rules and  regulations  binding on the oil and gas industry and its
individual members, some of which carry substantial penalties for noncompliance.
To date,  these  mandates have had no material  effect on the Company's  capital
expenditures, earnings or competitive position.

         Legislation  and  implementing  regulations  adopted or  proposed to be
adopted by the  Environmental  Protection Agency ("EPA") and by comparable state
agencies,  directly and indirectly affect the Company's operations.  The Company
is required to operate in compliance with certain air quality  standards,  water
pollution limitations, solid waste regulations and other controls related to the
discharging of materials into, and otherwise  protecting the environment.  These
regulations  also relate to the rights of adjoining  property  owners and to the
drilling and production operations and activities in connection with the storage
and transportation of natural gas and oil.


                                       -9-

<PAGE>



         The Company may be required to prepare and present to federal, state or
local  authorities  data  pertaining  to the effect or impact that any  proposed
operations  may  have  upon  the  environment.   Requirements  imposed  by  such
authorities  could be costly,  time-  consuming and could delay  continuation of
production or exploration activities.  Further, the cooperation of other persons
or  entities  may be required  for the Company to comply with all  environmental
regulations.  It is  conceivable  that future  legislation  or  regulations  may
significantly   increase  environmental   protection   requirements  and,  as  a
consequence,  the Company's activities may be more closely regulated which could
significantly increase operating costs. However, management is unable to predict
the cost of future  compliance with  environmental  legislation.  As of the date
hereof,  management  believes that the Company is in compliance with all present
environmental  regulations.  Further,  the Company believes that its oil and gas
explorations do not pose a threat of introducing  hazardous  substances into the
environment.  If such event  should  occur,  the Company  could be liable  under
certain  environmental  protection statutes and laws. The Company does presently
carry insurance for environmental liability.

         The Company's  exploration  and  development  operations are subject to
various  types of  regulation  at the  federal,  state  and local  levels.  Such
regulation  includes the  requirement of permits for the drilling of wells,  the
regulation of the location and density of wells,  limitations  on the methods of
casing wells,  requirements  for surface use and  restoration of properties upon
which wells are drilled,  and governing the  abandonment  and plugging of wells.
Exploration  and production  are also subject to property  rights and other laws
governing the correlative rights of surface and subsurface owners.

         The Company is subject to the requirements of the  Occupational  Safety
and  Health  Act,  as well as other  state  and  local  labor  laws,  rules  and
regulations.  The cost of compliance with the health and safety  requirements is
not expected to have a material  impact on the  Company's  aggregate  production
expenses.  Nevertheless,  the Company is unable to predict the ultimate  cost of
compliance.

         Although  past  sales of  natural  gas and oil were  subject to maximum
price controls,  such controls are no longer in effect. Other federal, state and
local  legislation,  while not directly  applicable to the Company,  may have an
indirect effect on the cost of, or the demand for, natural gas and oil.

Employees

         As of the date  hereof the Company  employs  seven  people  full- time,
consisting of two  executives,  two marketing  and clerical  persons,  and three
production persons. Management presently anticipates hiring additional employees
as the business warrants and as funds are available.



                                      -10-

<PAGE>



Facilities

         The Company's  operations  currently occupy  approximately 4,000 square
feet of office  space in St.  Marys,  West  Virginia,  which it shares  with its
subsidiary  Tyler  Construction  Company,  Inc.  and  Ritchie  County  Gathering
Systems, Inc. The Company leases an aggregate of approximately 4,000 square feet
from an  unaffiliated  third  party  under a verbal  arrangement  for $1,400 per
month,  inclusive of  utilities.  Management  believes  that its present  office
facilities are adequate for the Company's current business operations.

Industry Segments

         No  information  is presented as to industry  segments.  The Company is
presently  engaged in the principal  business of the  exploration,  development,
production,  transportation  and marketing of natural gas and oil.  Reference is
made to the  statements  of  operations  contained  in the  Company's  financial
statements  included  herewith  for a statement  of the  Company's  revenues and
operating profit (loss) for the past two fiscal years.

Item 2.  Description of Property

         The Company's properties consist essentially of the working and royalty
interests  owned by the Company in various oil and gas wells and leases  located
in West Virginia. The Company's proved reserves for the years ended December 31,
2000, 1999 and 1998 are set forth below:

<TABLE>
<CAPTION>

                                          December 31,
                                ----------------------------------
                                 2000                  1999                  1998
                                --------           -----------           -----------
<S>                            <C>                   <C>                   <C>
Natural Gas (MMcf)
     Developed                                                               912,428
     Undeveloped                                                             801,654
     Total Proved                    -                    -                1,714,082
Crude Oil (MBbl)
     Developed                 1,173,632             1,225,648             1,504,813
     Undeveloped                 210,610               210,610               200,721
     Total Proved              1,348,242             1,436,258             1,705,534
</TABLE>

         These  estimates  are bases  primarily  on the reports of Sam M. Deal &
Associates,  independent  petroleum  engineers.  Such reports are, by their very
nature, inexact and subject to changes and revisions.  Proved developed reserves
are  reserves  expected  to be  recovered  from  existing  wells  with  existing
equipment and operating methods.  Proved undeveloped reserves are expected to be
recovered  from new wells drilled to known  reservoirs on undrilled  acreage for
which  existence  and  recoverability  of such  reserves can be  estimated  with
reasonable   certainty,   or  from  existing  wells  where  a  relatively  major
expenditure is required to establish  production.  No estimates of reserves have
been included in any reports to any federal agency other than the Securities and
Exchange  Commission.  See SFAS 69 Supplemental  Disclosures included as part of
the Consolidated Financial Statements of the Company.


                                      -11-

<PAGE>



         Set forth in the following schedule is the average sales price per unit
of oil, expressed in barrels ("bbl"),  and of natural gas, expressed in thousand
cubic feet ("mcf"), produced by the Company for the past three fiscal years.

<TABLE>
<CAPTION>

                                                             Years ended December 31,
                                               -----------------------------------------------------------
Average sales price:                            2000                       1999                      1998
-------------------                            ------                     ------                    ------
<S>                                            <C>                        <C>                       <C>
         Gas (per mcf)                         $ 6.08                     $ 3.04                    $ 2.70
         Oil (per bbl)                          24.67                      13.83                     10.04
   Average cost of
     production:
         Gas (per mcf)                         $ 1.20                       1.31                      1.38
         Oil (per bbl)                           3.38                       7.52                      8.28
</TABLE>

         The Company has not filed any  estimates  of total,  proved net oil and
gas reserves  with any federal  authority  or agency since the  beginning of the
Company's last fiscal year.

         The following schedule sets forth the capitalized costs relating to oil
and gas producing activities by the Company for the past three fiscal years.
<TABLE>
<CAPTION>

                                                                      Years ended December 31,
                                                   -----------------------------------------------------------
                                                        2000                   1999                  1998
                                                   -------------         -------------        ----------------
<S>                                                  <C>                    <C>                    <C>
Proved oil and gas
 producing properties
 and related lease
 and well equipment                                  $4,950,399             $4,730,577             $5,894,561
Unproved oil and gas
 properties                                             180,000                180,000              3,347,825
Accumulated depreciation
 and depletion                                       (1,706,648)               (25,930)              (527,140)
                                                     -----------            -----------             ----------
Net Capitalized Costs                                $3,423,751             $4,884,647              $8,715,246
                                                     ===========            ==========              ==========
</TABLE>

         The following schedule  summarizes changes in the standardized  measure
of discounted future net cash flows relating to the Company's proved oil and gas
reserves.

<TABLE>
<CAPTION>

                                                                        Years ended December 31,
                                                       -----------------------------------------------------------
                                                            2000                 1999                    1998
                                                       --------------      ---------------         ---------------

<S>                                                       <C>                  <C>                       <C>
Standardized measure,
 beginning of year                                        $5,216,987           $9,495,694                $3,534,828
Oil and gas sales, net
 of production costs                                             -               (313,619)                (433,412)
Sales of mineral in place                                 (1,611,730)          (3,965,088                     -
Purchases                                                        -                    -                  5,289,539
Net change due to revisions
 in quantity estimates                                           -                    -                  1,104,739
                                                                                                         ----------
Standardized measure,
 end of year                                              $4,425,778           $5,216,987               $9,495,694
                                                          ===========          ===========              ===========

</TABLE>

                                      -12-

<PAGE>




         The Company  does not  anticipate  investing  in or  purchasing  assets
and/or property for the purpose of capital gains. It is the Company's  intention
to purchase  assets  and/or  property for the purpose of  enhancing  its primary
business  operations.  The Company is not limited as to the percentage amount of
the Company's assets it may use to purchase any additional assets or properties.

Item 3.           Legal Proceedings

         Certain  material  pending legal  proceedings to which the Company is a
party or to which any of its property is subject is set forth below.

         On March 12,  1997,  a complaint  entitled F. Worthy  Walker vs.  Loren
Bagley,  William Woodburn,  Mark Woodburn,  Trans Energy, Inc. and Vulcan Energy
Corporation,  was filed in the District Court of Dallas, Texas (# 9702304C). The
complaint  alleges that the Company  breached certain  contracts  related to Mr.
Walker's  employment  with Vulcan  Energy  Corporation,  and seeks  punitive and
exemplary damages.  The Company denies all allegations and intends to vigorously
defend its position.  Management  believes  that the results of the  proceedings
will not have a material adverse effect on the Company. On February 17, 1998 the
Company and the above named  defendants  filed a  countersuit  against F. Worthy
Walker alleging breach of contract, fraud and fraudulent inducement, conversion,
and breach of fiduciary duty and seeks punitive damages. The Company settled the
action in January 2000 for 100,000 shares of the Company's common stock.

         On February  7, 2001,  the United  States  Bankruptcy  Court,  Southern
District of Texas, entered an Order Granting Motion to Dismiss Chapter 7 Case in
the action entitled In Re: Trans Energy, Inc., Case No. 00-39496-H4-7. The Order
dismissed the involuntary  bankruptcy action  instituted  against the Company on
October  16,  2000.  The sole  petitioning  creditor  named  in the  Involuntary
Petition was Western Atlas International,  Inc. ("Western"). An Order for Relief
Under Chapter 7 was entered by the Court on November 22, 2000.

         On April 23, 2000, the 189th  District  Court of Harris  County,  Texas
entered an Agreed Final Judgment in favor of Western  against the Company in the
amount of  $600,665.36,  together with post judgment  interest at 10% per annum.
Following  the  judgment,  Western  and  the  Company  entered  into  settlement
negotiations  concerning  the  Company's  satisfaction  of the judgment  through
payments over a four to five month period together with the pledge of collateral
on certain unencumbered assets. Previously, on or about July 9, 1998, a judgment
had been entered in the 152nd District Court of Harris County, Texas against the
Company in favor of Baker Hughes Oilfield  Operations,  Inc. d/b/a/ Baker Hughes
Inteq. Western Geophysical ("Baker"), a division of Western Atlas International,
Inc., in the amount of  $41,142.00,  together  with interest and attorney  fees.
This  judgment  was  outstanding  at the time of the  filing of the  Involuntary
Petition.

                                      -13-

<PAGE>



         During its  negotiations  with Western for  settlement of the Judgment,
the Company made a $200,000 "good faith payment" to Western's counsel on October
23, 2000.  On December  12,  2000,  Joe Hill was named as the Chapter 7 Trustee.
Subsequently, Western's counsel delivered the $200,000 to the Trustee.

         On January 19, 2001,  the Company filed with the  Bankruptcy  Court the
Motion to Dismiss Chapter 7 Case. The reasons cited by the Company in support of
its Motion to Dismiss  included,  but were not  limited  to, (i) the Texas Court
being an improper venue for the action, and (ii) the Company never receiving the
Involuntary  Petition and Summons notifying it of the action. In anticipation of
the Bankruptcy Court dismissing the Involuntary  Petition,  on February 2, 2001,
the Company  entered into a  Settlement  Agreement  with Baker  Hughes  Oilfield
Operation,  Inc., d/b/a/ Baker Hughes Inteq. Western Geophysical,  a division of
Western Atlas International,  Inc. (the "Baker Entities"). In entering its order
on  February 7, 2001 to dismiss  the  action,  the Court  ordered the Trustee to
retain $17,694.80 for satisfaction of administrative  fees and expenses,  and to
pay to Western  and Baker the sum of  $182,736.66,  on behalf of the Company and
pursuant to the terms of the Settlement Agreement.

         The Settlement  Agreement provided that, subject to the approval of the
Bankruptcy  Court, the Company agreed to pay to the Baker Entities  $759,664.31,
plus interest at 10%. In addition to the $200,000  payable from the escrow,  the
Company  agreed to pay to the Baker  Entities an initial  payment of $117,260.71
within  fifteen  days from the date of the  Dismissal  Order (due  February  21,
2001).  The Company also agreed to make  additional  payments of $100,000  every
thirty days following the initial payment,  with the first payment due beginning
no later  than  March 23,  2001,  continuing  until the  total  obligation  plus
interest is paid in full.  Further,  the Company  pledged as collateral  certain
properties,  personal  property  and  fixtures  and two  directors  each pledged
750,000 shares of the Company's common stock which they personally own.

         A  foreign  judgment  was filed  with the  Circuit  Court in  Pleasants
County,  West  Virginia  for a judgment  against  the  Company  rendered  by the
District  Court in Harris  County,  Texas.  The  judgment  was for $41,142  plus
prejudgment  interest and attorney's  fees of $13,500.  The Company  settled the
action in February 2000.

         The Company has been advised by the Securities and Exchange  Commission
(the  "Commission")  that the Commission is investigating  certain activities by
the Company (In the Matter of Trans Energy,  Inc., C-3481). The Company believes
that the investigation concerns disclosure requirements by the Company regarding
certain press releases and the involuntary  bankruptcy action instituted against
the Company in October 2000. The Company is cooperating  with the  investigation
and certain officers have given their  depositions.  As of the date hereof,  the
investigation remains open.


                                      -14-

<PAGE>




         On April 10, 2000, a Bellevue  resources,  Inc. recorded and served its
Notice and Statement of Lien in the Sixth Judicial  District,  Campbell  County,
Wyoming,  against  the  Company for non-  payment of  services.  The Company has
recorded a liability  of $78,651  which is included in the  Company's  financial
statements for the year ended December 31, 2000 under accounts payable.

         On September  22, 2000,  Tioga  Lumber  Company  obtained a judgment of
$43,300 plus  interest in the Circuit Court of Pleasants  County,  West Virgina,
against  Tyler  Construction  Company  for breach of  contract.  The Company has
accrued $47,741 which is included in the Company's financial  statements for the
year ended December 31, 2000 under accounts payable.

         On  February  13,  2001,  Ross  Forbus  obtained a judgment of $428,018
against the Company to satisfy a promissory note previously  entered into by the
Company with Mr.  Forbus on April 8, 1996.  The Company has recorded the balance
in notes payable at December 31, 2000. For additional information, see Note 3 to
the attached financial statements.

Item 4.           Submission of Matters to a Vote of Security Holders

         No matters were submitted to a vote of the Company's Securities Holders
during the fourth quarter of the Company's fiscal year ending December 31, 2000.

                                     PART II

Item 5.           Market for Common Equity and Related Stockholder Matters

         The  Company's  common stock is quoted on the OTC Bulletin  Board under
the symbol  "TSRG." Set forth in the table below are the quarterly  high and low
prices of the  Company's  common  stock as  obtained  from the Nasdaq  Small-Cap
Market and the OTC Bulletin  Board for the past two fiscal years  obtained  from
published quotations.

                                        High                         Low
                                        ----                         ---
  1999
          First Quarter                $ 1.25                    $   .50
          Second Quarter               $ 1.03                    $   .19
          Third Quarter                $  .50                    $   .19
          Fourth Quarter               $  .31                    $   .10
  2000
          First Quarter                $  .35                    $  .065
          Second Quarter               $  .22                    $   .10
          Third Quarter                $ .155                    $ .0156
          Fourth Quarter               $  .31                    $   .04


                                      -15-

<PAGE>


         As of December 31, 2000, there were approximately 262 holders of record
of the common stock,  which figure does not take into account those shareholders
whose  certificates  are held in the  name of  broker-dealers  or other  nominee
accounts.

Dividend Policy

         The  Company  has  not   declared  or  paid  cash   dividends  or  made
distributions  in the past, and the Company does not anticipate that it will pay
cash dividends or make  distributions  in the  foreseeable  future.  The Company
currently  intends  to retain  and  reinvest  future  earnings  to  finance  its
operations.

Recent Sales of Unregistered Securities

         A description of recent sales of  unregistered  securities can be found
in the  Consolidated  Statements  of  Stockholders'  Equity  and  Note 11 to the
Consolidated  Financial Statements which can be found elsewhere within this Form
10-KSB.

         On September 10, 1998,  the Company  closed an offering of  convertible
debentures  whereby the Company  realized  gross  proceeds  of  $4,625,400.  The
proceeds were used to acquire the GCRL  interests and related  expenses.  Shares
issuable  upon  conversion  of the  Debentures  are  subject  to a  registration
statement that has been filed with the Commission.

         During 1999,  the Company  issued 440,000 shares of its common stock in
exchange for services  rendered to the Company  valued at an average of $.59 per
share,  or an aggregate of $260,000.  The Company also issued  94,000 shares for
services and  conversion  of debt valued at an average of $.98 per share,  or an
aggregate  of  $92,200.   The  Company  further  issued  4,398,929  shares  upon
conversion of convertible  debentures valued at $529,166,  or an average of $.12
per share.

         In 2000,  the Company  issued  1,691,287  share of its common stock for
cash at $.05 per share,  or an  aggregate  of $83,000.  The Company  also issued
11,722,383  shares for services and  conversion  of debt valued at an average of
$.12 per share,  or an  aggregate  of  $1,422,923.  The Company  further  issued
151,930,606   shares  upon  conversion  of  convertible   debentures  valued  at
$5,653,991, or an average of $.04 per share.

         Except for the conversion of debentures, issuances of securities by the
Company were made in reliance upon the  exemption  from  registration  under the
Securities  Act of 1933,  as  amended,  provided  by  Section  4(2)  thereunder.
Issuances of shares  conversion  of  debentures  was  pursuant to the  exemption
provided by Section 3(a)(9) of said Act.

                                      -16-

<PAGE>

Item 6.           Management's Discussion and Analysis or Plan of Operation




         The  following  information  should  be read in  conjunction  with  the
consolidated  financial statements and notes thereto appearing elsewhere in this
Form 10-KSB.

                              Results of Operations

         The following  table sets forth the  percentage  relationship  to total
revenues of principal items contained in the Company's  Statements of Operations
for the two most recent  fiscal  years ended  December 31,  2000,  and 1999.  It
should be noted that percentages  discussed  throughout this analysis are stated
on an approximate basis.

<TABLE>
<CAPTION>
                                                                                       Fiscal Years Ended
                                                                                          December 31,
                                                                                     2000             1999
                                                                                    ------           ------
<S>                                                                                  <C>              <C>
Total revenues........................................................               100%             100%
Total costs and expenses..............................................               343              392
Total other income (expenses).........................................              (126)            (285)
Loss before taxes and gain and
  extraordinary items ................................................              (369)            (577)
Income taxes..........................................................                 -                -
Extraordinary items...................................................                24                -
Net (loss)............................................................               345             (577)
</TABLE>


For the Year Ended December 31, 2000 Compared to the Year Ended
December 31, 1999

         Total  revenues  of  $1,125,257  for the year ended  December  31, 2000
("2000")  increased 3% when compared to $1,092,899  for the year ended  December
31, 1999 ("1999"). In 2000, oil made up 70% of total revenues compared to 37% in
1999. Accordingly, gas sales decreased from 63% of sales in 1999 to 30% in 2000.
This  increase in oil revenues  was due to the Gulf Canada  interests in Wyoming
which produces oil and not natural gas.

         The Company  had a net loss of  $4,144,703  for 2000  compared to a net
loss of $6,298,333 in 1999. The Company's total costs and expenses decreased 10%
in 2000 and, as a percentage of revenues, decreased from 392% in 1999 to 343% in
2000. The cost of oil and gas decreased 33% in 2000 due to lower purchases and a
set price.  As a percentage of revenues,  cost of oil decreased from 46% in 1999
to 30% 2000 due to increased oil selling  prices in 2000.  Selling,  general and
administrative  expenses increased 188% in 2000 when compared to 1999, primarily
due to additional amortization on pre- paid advertising and marketing.  Salaries
and wages  increased  41% in 2000 due to the  exercise  of  options  granted  to
employees  for  services  rendered.  Depreciation,  depletion  and  amortization
decreased  87% in 2000 from  1999 due to the  Company  not  having  any  prepaid
marketing and  advertising  costs.  Interest  expense in 2000 decreased 45% from
1999 due to conversion of debentures during the year.


                                      -17-

<PAGE>




Net Operating Losses

         The Company has accumulated  approximately $16,000,000 of net operating
loss  carryforwards  as of December 31, 2000, which may be offset against future
taxable  income  through  2020.  The use of these losses to reduce future income
taxes will depend on the  generation of sufficient  taxable  income prior to the
expiration  of the net  operating  loss  carryforwards.  In the event of certain
changes in control of the  Company,  there will be an annual  limitation  on the
amount of net operating loss carryforwards which can be used. No tax benefit has
been reported in the financial  statements  for the year ended December 31, 2000
because  the  potential  tax  benefits  of the loss  carryforward  is  offset by
valuation allowance of the same amount.

                         Liquidity and Capital Resources

         Historically,  the Company's  working capital needs have been satisfied
through its  operating  revenues and from  borrowed  funds.  Working  capital at
December 31, 2000 was a negative  $4,550,117 compared with a negative $9,115,862
at December 31, 1999. This change was primarily  attributed to the conversion of
certain debentures into commons stock in 2000 . The Company  anticipates meeting
its  working  capital  needs  during the 2001  fiscal  year with  revenues  from
operations and possibly from capital raised through the sale of either equity or
debt securities. The Company has no other current agreements or arrangements for
additional  funding and there can be no assurance such funding will be available
to the Company or, if available,  it will be on acceptable or favorable terms to
the Company.

         As of December 31, 2000, the Company had total assets of $4,299,654 and
stockholders'  deficit of $985,635  compared to total assets of  $5,291,159  and
total stockholders' deficit of $4,630,435 at December 31, 1999.

         In 1998,  the  Company  issued  $4,625,400  face  value  of 8%  Secured
Convertible  Debentures  Due March 31, 1999. A portion of the proceeds were used
to acquire the GCRL properties and interest in Wyoming. During 2000, all but one
of the remaining  outstanding  debentures  were converted into commons stock. At
December 31, 2000,  the Company owed $331,462 in connection  with the debentures
consisting of $50,000 for a debenture and $281,462 in penalties and interest.

         Because the Company has generated  significant  losses from  operations
through  December 31, 2000,  and has a working  capital  deficit at December 31,
2000,  there exists  substantial  doubt about its ability to continue as a going
concern. Revenues have not been sufficient to cover operating costs and to allow
the Company to continue as a going concern.  Potential  proceeds from the future
sale of  common  stock,  other  contemplated  debt  and  equity  financing,  and


                                      -18-

<PAGE>


increases in operating revenues from new development would enable the Company to
continue as a going  concern.  There can be no assurance that the Company can or
will be able to complete any debt or equity  financing.  If these  endeavors are
not  successful,  management is committed to meeting the  operational  cash flow
needs of the Company.

         In the opinion of management,  inflation has not had a material  effect
on the operations of the Company.

Risk Factors and Cautionary Statements

         Forward-looking  statements  in this  report are made  pursuant  to the
"safe harbor"  provisions  of the Private  Securities  Litigation  Reform Act of
1995.  The  Company  wishes to advise  readers  that  actual  results may differ
substantially from such forward-looking  statements.  Forward-looking statements
involve  risks and  uncertainties  that  could  cause  actual  results to differ
materially from those expressed in or implied by the statements,  including, but
not limited to, the following:  the ability of the Company to secure  additional
financing,  the  possibility  of success in the  Company's  drilling  endeavors,
competitive  factors,  and other risks detailed in the Company's periodic report
filings with the Securities and Exchange Commission.

Recent Accounting Pronouncements

         In June 1999, the Financial  Accounting Standards Board ("FASB") issued
SFAS No. 133,  "Accounting for Derivative  Instruments and Hedging  Activities,"
which was later amended by SFAS No. 137 "Accounting  for Derivative  Instruments
and Hedging  Activities - Deferral of the Effective  Date of FASB No. 133." SFAS
No. 133  established  standards for the  accounting and reporting for derivative
instruments,   including  certain  derivative   instruments  embedded  in  other
contracts, and hedging activities.  The statement generally requires recognition
of gains and  losses on hedging  instruments,  based on changes in fair value or
the  earnings  effect of a forecasted  transaction.  SFAS No. 133, as amended by
SFAS No. 137, is effective  for all fiscal  quarters of fiscal  years  beginning
after June 15, 2000.  Management  does not believe that SFAS No. 133 or SFAS No.
137 will have a material impact on the Company's financial statements.

Item 7.                    Financial Statements

         The Company's financial statements as of and for the fiscal years ended
December  31, 2000 and 1999 have all been  examined to the extent  indicated  in
their  report  by H J &  Associates,  LLP,  formerly  Jones,  Jensen &  Company,
independent  certified public accountants,  and have been prepared in accordance
with generally accepted accounting  principles and pursuant to Regulation S-B as
promulgated  by the  Securities  and  Exchange  Commission.  The  aforementioned
financial  statements  are  included  herein in  response to Item 7 of this Form
10-KSB.

                                      -19-

<PAGE>


                               TRANS ENERGY, INC.
                                AND SUBSIDIARIES

                        CONSOLIDATED FINANCIAL STATEMENTS

                                December 31, 2000


                                      -20-

<PAGE>



         McGLADREY NETWORK                      American Institute of
         -----------------
An Independently Owned Member                    Certified Public
         Worldwide Services                        Accountants
  Through RSM International
                                                Utah Association of
                                                 Certified Public
                                                    Accountants

                                                SEC Practice Section
                                                 Private Companies
                                                  Practice Section

                            H J & ASSOCIATES, L.L.C.
                  CERTIFIED PUBLIC ACCOUNTANTS AND CONSULTANTS

                          INDEPENDENT AUDITORS' REPORT
                          ----------------------------


Board of Directors
Trans Energy, Inc. and Subsidiaries
St. Marys, West Virginia

We have audited the  accompanying  consolidated  balance  sheet of Trans Energy,
Inc.  and  Subsidiaries  as of December  31,  2000 and the related  consolidated
statements of operations, stockholders' equity (deficit), and cash flows for the
years ended December 31, 2000 and 1999. These consolidated  financial statements
are the  responsibility of the Company's  management.  Our  responsibility is to
express an  opinion  on these  consolidated  financial  statements  based on our
audits.

We  conducted  our  audits  in  accordance  with  generally   accepted  auditing
standards.  Those standards require that we plan and perform the audit to obtain
reasonable  assurance about whether the  consolidated  financial  statements are
free of material  misstatement.  An audit includes  examining,  on a test basis,
evidence  supporting the amounts and disclosures in the  consolidated  financial
statements.  An audit also includes assessing the accounting principles used and
significant  estimates  made by  management,  as well as evaluating  the overall
consolidated  financial  statement  presentation.  We  believe  that our  audits
provide a reasonable basis for our opinion.

In our opinion, the consolidated  financial statements referred to above present
fairly, in all material respects,  the consolidated  financial position of Trans
Energy,  Inc.  and  Subsidiaries  as of December  31, 2000 and the  consolidated
results of their  operations  and their cash flows for the years ended  December
31, 2000 and 1999, in conformity with generally accepted accounting principles.

The accompanying  consolidated  financial statements have been prepared assuming
that the Company will continue as a going concern. As discussed in Note 8 to the
financial  statements,   the  Company  has  generated  significant  losses  from
operations  which  raises  substantial  doubt about its ability to continue as a
going concern. Management's plans in regards to these matters are also described
in Note 8. The consolidated  financial statements do not include any adjustments
that might result from the outcome of this uncertainty.



HJ & Associates, LLC
Salt Lake City, Utah
April 11, 2001

               50 South Main Street, Suite 1450 * Salt Lake City,
                     Utah 84144 * Telephone (801) 328-4408 *
                            Facsimile (801) 328-4461

                                      -21-

<PAGE>



                       TRANS ENERGY, INC. AND SUBSIDIARIES
                           Consolidated Balance Sheet

                                     ASSETS
                                     ------

                                                           December 31,
                                                              2000
                                                            ----------
CURRENT ASSETS

  Accounts receivable, net (Note 1)                         $   71,006
                                                            ----------

     Total Current Assets                                       71,006
                                                            ----------

PROPERTY AND EQUIPMENT (Note 2)

  Vehicles                                                      59,013
  Machinery and equipment                                       10,092
  Pipelines                                                  2,254,908
  Well equipment                                                49,155
  Wells                                                      3,315,019
  Leasehold acreage                                            180,000
  Accumulated depreciation                                  (1,706,648)
                                                            ----------

     Total Fixed Assets                                      4,161,539
                                                            ----------

OTHER ASSETS

  Restricted cash (Note 2)                                      65,689
  Deposits                                                       1,420
                                                            ----------

     Total Other Assets                                         67,109
                                                            ----------

     TOTAL ASSETS                                           $4,299,654
                                                            ==========

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

                                      -22-
<PAGE>

                       TRANS ENERGY, INC. AND SUBSIDIARIES
                     Consolidated Balance Sheet (Continued)


                 LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
                 ----------------------------------------------


                                                                  December 31,
                                                                     2000
                                                                 ------------
CURRENT LIABILITIES

   Cash overdraft                                                $     11,608
   Accounts payable - trade                                         1,444,692
   Accrued expenses                                                   638,466
   Salaries payable                                                   367,998
   Notes payable - current portion (Note 3)                         1,538,855
   Related party payables (Note 4)                                    288,042
   Debentures payable (Note 11)                                       331,462
                                                                 ------------

     Total Current Liabilities                                      4,621,123
                                                                 ------------

NET LIABILITIES IN EXCESS OF THE ASSETS OF
 DISCONTINUED OPERATIONS (Note 7)                                       5,400
                                                                 ------------

LONG-TERM LIABILITIES

   Notes payable (Note 3)                                             658,766
                                                                 ------------

     Total Long-Term Liabilities                                      658,766
                                                                 ------------

     Total Liabilities                                              5,285,289
                                                                 ------------

COMMITMENTS AND CONTINGENCIES (Note 7)

STOCKHOLDERS' EQUITY (DEFICIT) (Note 6)

   Preferred stock; 10,000,000 shares authorized at $0.001 par
    value; 300 shares issued and outstanding                             --
   Common stock; 300,000,000 shares authorized at $0.001 par
    value; 172,028,189 shares issued and outstanding                  172,027
   Capital in excess of par value                                  22,608,733
   Accumulated deficit                                            (23,766,395)
                                                                 ------------

     Total Stockholders' Equity (Deficit)                            (985,635)
                                                                 ------------

     TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)        $  4,299,654
                                                                 ============

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

                                      -23-
<PAGE>

                       TRANS ENERGY, INC. AND SUBSIDIARIES
                      Consolidated Statements of Operations

                                                        For the Years Ended
                                                            December 31,
                                                  -----------------------------
                                                          2000            1999
                                                  ------------    ------------

REVENUES                                          $  1,125,257    $  1,092,899
                                                  ------------    ------------

COSTS AND EXPENSES

  Cost of oil and gas                                  340,950         506,518
  Salaries and wages                                   383,142         271,114
  Depreciation, depletion and amortization             330,469       2,523,043
  Selling, general and administrative                2,772,591         979,340
                                                  ------------    ------------

     Total Costs and Expenses                        3,827,152       4,280,015
                                                  ------------    ------------

LOSS FROM OPERATIONS                                (2,701,895)     (3,187,116)
                                                  ------------    ------------

OTHER INCOME (EXPENSE)

  Other income                                          14,850          14,184
  Interest expense                                    (437,470)       (793,840)
  Loss on sale and valuation of assets (Note 2)     (1,020,188)     (2,331,561)
                                                  ------------    ------------

     Total Other Income (Expense)                   (1,442,808)     (3,111,217)
                                                  ------------    ------------

LOSS FROM OPERATIONS BEFORE INCOME TAXES,
 EXTRAORDINARY ITEMS AND MINORITY INTERESTS         (4,144,703)     (6,298,333)
                                                  ------------    ------------

INCOME TAXES (Note 1)                                     --              --
                                                  ------------    ------------

EXTRAORDINARY ITEM

  Gain on disposition of debt                          266,092            --
                                                  ------------    ------------

MINORITY INTERESTS                                        --              --
                                                  ------------    ------------

NET LOSS                                          $ (3,878,611)   $ (6,298,333)
                                                  ============    ============

BASIC LOSS PER SHARE

  Continuing operations                           $      (0.05)   $      (1.90)
  Gain on release of debt                                 0.00            --
                                                  ------------    ------------

                                                  $      (0.05)   $      (1.90)
                                                  ============    ============

WEIGHTED AVERAGE NUMBER OF SHARES
 OUTSTANDING                                        77,197,928       3,319,421
                                                  ============    ============

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

                                      -24-
<PAGE>

                       TRANS ENERGY, INC. AND SUBSIDIARIES
            Consolidated Statements of Stockholders' Equity (Deficit)
<TABLE>
<CAPTION>
                                                                                                Capital in
                                            Preferred Stock             Common Stock             Excess of      Accumulated
                                          Shares       Amount       Shares         Amount        Par Value        Deficit
                                       ------------   -------   ------------    ------------    ------------   ------------
<S>                                    <C>            <C>          <C>          <C>             <C>            <C>
Balance, December 31, 1998                     --     $  --        2,174,817    $      2,174    $ 14,373,809   $(13,589,451)

Common stock issued for services
 at $0.59 per share                            --        --          440,000             440         259,560           --

Common stock issued for services
 and conversion of debt to equity at
 $0.98 per share                               --        --           94,000              94          92,106           --

Common stock issued for conversion
 of debentures, penalty and interest
 at $0.12 per share                            --        --        4,398,929           4,399         524,767           --

Net loss for the year ended
 December 31, 1999                             --        --             --              --              --       (6,298,333)
                                       ------------   -------   ------------    ------------    ------------   ------------

Balance, December 31, 1999                     --        --        7,107,746           7,107      15,250,242    (19,887,784)

Common stock issued for cash
 at $0.05 per share                            --        --        1,691,287           1,691          81,309           --

Common stock issued for services
 and conversion of debt to equity
 at $0.12 per share                            --        --       11,722,383          11,722       1,411,201           --

Common stock issued for conversion
 of debentures, penalty and interest
 at $0.04 per share                            --        --      151,930,606         151,931       5,502,060           --

Cancellation of common stock                   --        --         (423,833)           (424)            424           --

Preferred stock issued for
 acquisition                                    300      --             --              --           300,000           --

Discount for beneficial conversion
 feature of preferred stock                    --        --             --              --            60,000           --

Warrants granted below
 market value                                  --        --             --              --             3,497           --

Net loss for the year ended
 December 31, 2000                             --        --             --              --              --       (3,878,611)
                                       ------------   -------   ------------    ------------    ------------   ------------

Balance, December 31, 2000                      300   $  --      172,028,189    $    172,027    $ 22,608,733   $(23,766,395)
                                       ============   =======   ============    ============    ============   ============
</TABLE>

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

                                      -25-
<PAGE>

                       TRANS ENERGY, INC. AND SUBSIDIARIES
                      Consolidated Statements of Cash Flows
<TABLE>
<CAPTION>
                                                                    For the Years Ended
                                                                        December 31,
                                                              --------------------------
                                                                     2000           1999
                                                              -----------    -----------
CASH FLOWS FROM OPERATING ACTIVITIES:
<S>                                                           <C>            <C>
  Net loss                                                    $(3,878,611)   $(6,298,333)
  Adjustments to reconcile net loss to net cash (used) by
   operating activities:
    Depreciation, depletion and amortization                      330,469      2,523,043
    Loss on valuation of wells                                  1,022,387           --
    Loss (gain) on disposition of assets                           (2,199)     2,331,561
    Common stock issued for services                            1,334,579        283,700
    Gain on disposition of debt                                  (266,092)          --
  Changes in operating assets and liabilities:
    Decrease (increase) in accounts receivable                     56,148        122,374
    (Increase) decrease in restricted cash                        196,400       (262,089)
    Decrease (increase) in prepaid and other current assets         2,372         21,232
    Increase in accounts payable and accrued expenses             864,233      1,150,379
                                                              -----------    -----------

       Net Cash (Used) by Operating Activities                   (340,314)      (128,133)
                                                              -----------    -----------

CASH FLOWS FROM INVESTING ACTIVITIES:

  Proceeds from sale of property and equipment                     12,000        525,000
  Expenditures for property and equipment                        (269,520)      (185,165)
                                                              -----------    -----------

       Net Cash Provided (Used) by Investing Activities          (257,520)       339,835
                                                              -----------    -----------

CASH FLOWS FROM FINANCING ACTIVITIES:

  Increase in cash overdraft                                       11,608           --
  Common stock issued for cash                                     83,000           --
  Proceeds from related parties                                   126,572        153,469
  Principal payments on notes payable                            (116,715)      (387,694)
  Proceeds from notes payable                                     479,892         36,000
                                                              -----------    -----------

      Net Cash Provided (Used) by Financing Activities        $   584,357    $  (198,225)
                                                              -----------    -----------
</TABLE>

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

                                      -26-
<PAGE>

                       TRANS ENERGY, INC. AND SUBSIDIARIES
                Consolidated Statements of Cash Flows (Continued)
<TABLE>
<CAPTION>
                                                      For the Years Ended
                                                         December 31,
                                                --------------------------
                                                       2000           1999
                                                -----------    -----------
<S>                                             <C>            <C>
NET INCREASE (DECREASE) IN CASH                 $   (13,477)   $    13,477

CASH AND CASH EQUIVALENTS,  BEGINNING OF YEAR        13,477           --
                                                -----------    -----------

CASH AND CASH EQUIVALENTS,  END OF YEAR         $      --      $    13,477
                                                ===========    ===========

CASH PAID FOR:

  Interest                                      $      --      $    87,939
  Income taxes                                  $      --      $      --

NON-CASH FINANCING ACTIVITIES:

  Common stock issued for services              $ 1,334,579    $   283,700
  Common stock issued for debt                  $ 5,742,335    $   597,666
  Note payable issued for vehicle               $     6,532    $      --
</TABLE>

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

                                      -27-
<PAGE>


<PAGE>



                       TRANS ENERGY, INC. AND SUBSIDIARIES
                 Notes to the Consolidated Financial Statements
                           December 31, 2000 and 1999


NOTE 1 -      SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

              a. Organization

              The Company was originally  incorporated  in the State of Idaho on
              January 16,  1964.  On January 11, 1988,  the Company  changed its
              name to Apple  Corporation.  In 1988, the Company acquired oil and
              gas leases and other assets from Ben's Run Oil Company (a Virginia
              limited  partnership) and has since engaged in the business of oil
              and gas production.

              On  November  5,  1993,  the  Board  of  Directors  caused  to  be
              incorporated in the State of Nevada, a new corporation by the name
              of Trans  Energy,  Inc.,  with the specific  intent of effecting a
              merger  between  Trans  Energy,  Inc. of Nevada and Apple Corp. of
              Idaho,  for the sole  purpose  of  changing  the  domicile  of the
              Company to the State of Nevada.  On November 15, 1993, Apple Corp.
              and  the  newly  formed  Trans  Energy,  Inc.  executed  a  merger
              agreement whereby the shareholders of Apple Corp. exchanged all of
              their issued and  outstanding  shares of common stock for an equal
              number of shares of Trans Energy, Inc. common stock. Trans Energy,
              Inc. was the surviving corporation and Apple Corp. was dissolved.

              b. Accounting Method

              The Company uses the  successful  efforts method of accounting for
              oil  and  gas  producing  activities.  Costs  to  acquire  mineral
              interests  in  oil  and  gas   properties,   to  drill  and  equip
              exploratory  wells  that find  proved  reserves,  and to drill and
              equip   development   wells  are   capitalized.   Costs  to  drill
              exploratory wells that do not find proved reserves, geological and
              geophysical  costs,  and costs of carrying and retaining  unproved
              properties are expensed.

              Unproved oil and gas properties that are individually  significant
              are  periodically  assessed for impairment of value, and a loss is
              recognized  at the time of  impairment  by providing an impairment
              allowance.  Other unproved  properties are amortized  based on the
              Company's  experience of successful  drilling and average  holding
              period.  Capitalized  costs of producing  oil and gas  properties,
              after  considering  estimated  dismantlement and abandonment costs
              and estimated salvage values,  are depreciated and depleted by the
              unit-of-production  method.  Support  equipment and other property
              and equipment are depreciated over their estimated useful lives.

                                      -28-

<PAGE>



                       TRANS ENERGY, INC. AND SUBSIDIARIES
                 Notes to the Consolidated Financial Statements
                           December 31, 2000 and 1999


NOTE 1 -      SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

              b.  Accounting Method (Continued)

              On the sale or retirement of a complete unit of a proved property,
              the cost and  related  accumulated  depreciation,  depletion,  and
              amortization  are eliminated from the property  accounts,  and the
              resultant gain or loss is recognized. On the retirement or sale of
              a  partial  unit  of  proved  property,  the  cost is  charged  to
              accumulated  depreciation,  depletion,  and  amortization  with  a
              resulting gain or loss recognized in income.

              On the sale of an entire interest in an unproved property for cash
              or cash equivalent, gain or loss on the sale is recognized, taking
              into  consideration  the amount of any recorded  impairment if the
              property had been assessed individually.  If a partial interest in
              an unproved  property is sold, the amount received is treated as a
              reduction of the cost of the interest retained.

              The Company has elected a calendar year end.

              c. Basic Loss per Share of Common Stock

              The basic loss per share of common  stock is based on the weighted
              average number of shares issued and outstanding at the date of the
              consolidated financial statements. Fully diluted loss per share of
              common stock is not disclosed as the common stock  equivalents are
              antidilutive in nature.

              All  references  to shares  have been  retroactively  restated  to
              reflect a 1-for-4 reverse stock split.
                                                      2000               1999
                                              -----------------     ------------

Numerator:
  Loss from operations                        $       (4,144,703)   $(6,298,333)
                                              ==================    ===========
  Gain on disposition of debt                 $          266,092    $      --
                                              ==================    ===========

Denominator - weighted average shares                 77,197,928      3,319,421

Net loss per share:
  Loss from Operations                        $            (0.05)   $     (1.90)
                                              ==================    ===========
  Gain on disposition of debt                 $             0.00    $      --
                                              ==================    ===========

              d. Provision for Taxes

              At  December  31,  2000,   the  Company  had  net  operating  loss
              carryforwards  of  approximately  $16,000,000  that may be  offset
              against  future  taxable  income  through 2020. No tax benefit has
              been  reported in the  consolidated  financial  statements  as the
              Company  believes  that  the  carryforwards  will  expire  unused.
              Accordingly,  the potential tax benefits of the net operating loss
              carryforwards  are  offset by a  valuation  allowance  of the same
              amount.



                                      -29-

<PAGE>



                       TRANS ENERGY, INC. AND SUBSIDIARIES
                 Notes to the Consolidated Financial Statements
                           December 31, 2000 and 1999


NOTE 1 -      SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

              d.  Provision for Taxes (Continued)

              The income tax benefit differs from the amount computed at federal
              statutory rates of approximately 38% as follows:

<TABLE>
<CAPTION>
                                                                                       For the Years Ended
                                                                                           December 31,
                                                                            --------------------------------------
                                                                                  2000                1999
                                                                            ------------------  ------------------

<S>                                                                         <C>                 <C>
              Income tax benefit at statutory rate                          $          384,508  $        2,270,071
              Change in valuation allowance                                           (384,508)         (2,270,071)
                                                                            ------------------  ------------------

                                                                            $           -       $           -
                                                                            ==================  ==================
</TABLE>

              Deferred tax assets (liabilities) are comprised of the following:

<TABLE>
<CAPTION>
                                                                                        For the Years Ended
                                                                                           December 31,
                                                                            --------------------------------------
                                                                                  2000                1999
                                                                            ------------------  ------------------

<S>                                                                         <C>                 <C>
              Income tax benefit at statutory rate                          $        6,088,868  $        5,704,359
              Change in valuation allowance                                         (6,088,868)         (5,704,359)
                                                                            ------------------  ------------------

                                                                            $           -       $           -
                                                                            ==================  ==================
</TABLE>

              Due to the change in ownership provisions of the Tax Reform Act of
              1986,  net operating  loss  carryforwards  for Federal  income tax
              reporting  purposes  are subject to annual  limitations.  Should a
              change in ownership occur, net operating loss carryforwards may be
              limited as to use in future years.

              e. Cash Equivalents

              The  Company  considers  all  highly  liquid  investments  with  a
              maturity  of  three  months  or  less  when  purchased  to be cash
              equivalents.

              f. Principles of Consolidation

              The consolidated  financial statements include the Company and its
              wholly owned subsidiaries, Prima Oil Company, Inc., Ritchie County
              Gathering  Systems,  Inc.  and its  65%  owned  subsidiary,  Tyler
              Construction Company,  Inc. All significant  intercompany accounts
              and transactions have been eliminated.

              g. Presentation

              Certain 1999  balances  have been  reclassified  to conform to the
              presentation of the 2000 consolidated financial statements.

                                      -30-

<PAGE>



                       TRANS ENERGY, INC. AND SUBSIDIARIES
                 Notes to the Consolidated Financial Statements
                           December 31, 2000 and 1999

NOTE 1 -      SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

              h. Depreciation

              Fixed  assets  are  stated  at  cost.  Depreciation  on  vehicles,
              machinery and  equipment  and is provided  using the straight line
              method over expected  useful lives of five years.  Depreciation on
              pipelines and well equipment is provided  using the  straight-line
              method over the expected useful lives of fifteen years.  Wells are
              being  depreciated  using  the  units-of-production  method on the
              basis of total estimated units of proved reserves.

              i. Estimates

              The  preparation  of  financial   statements  in  conformity  with
              generally accepted  accounting  principles  requires management to
              make estimates and assumptions that affect the reported amounts of
              assets and  liabilities  and  disclosure of contingent  assets and
              liabilities  at the  date  of the  financial  statements  and  the
              reported  amounts of revenues  and expenses  during the  reporting
              period. Actual results could differ from those estimates.

              j.  Long Lived Assets

              All long lived assets are evaluated yearly for impairment per SFAS
              121. Any  impairment  in value is  recognized as an expense in the
              period when the impairment occurs.

              k.  Changes in Accounting Principles

              The Company has adopted the  provisions of FASB  Statement No. 138
              "Accounting  for  Certain   Derivative   Instruments  and  Hedging
              Activities, (an amendment of FASB Statement No. 133.)" Because the
              Company had  adopted the  provisions  of FASB  Statement  No. 133,
              prior to June 15, 2000, this statement is effective for all fiscal
              quarters  beginning  after June 15,  2000.  The  adoption  of this
              principle  had no material  effect on the  Company's  consolidated
              financial statements.

              The Company has adopted the  provisions of FASB  Statement No. 140
              "Accounting  for Transfers  and Servicing of Financial  Assets and
              Extinguishments  of  Liabilities  (a replacement of FASB Statement
              No.  125.)"  This  statement  provides  accounting  and  reporting
              standard for  transfers  and  servicing  of  financial  assets and
              extinguishments  of  liabilities.  Those  standards  are  based on
              consistent  application of a financial-  components  approach that
              focuses on control. Under that approach, the transfer of financial
              assets,  the Company recognized the financial and servicing assets
              it controls  and the  liabilities  it has  incurred,  derecognizes
              financial   assets  when   control  has  been   surrendered,   and
              derecognizes   liabilities  when   extinguished.   This  statement
              provides  consistent  standards  for  distinguishing  transfers of
              financial  assets that are sales from  transfers  that are secured
              borrowings.   This   statement  is  effective  for  transfers  and
              servicing of financial assets and  extinguishments  of liabilities
              occurring  after March 31, 2001.  This  statement is effective for
              recognition and reclassification of collateral and for disclosures
              relating to securitization  transactions and collateral for fiscal
              years  ending  after  December  15,  2000.  The  adoption  of this
              principle  had no material  effect on the  Company's  consolidated
              financial statements.

                                      -31-

<PAGE>



                       TRANS ENERGY, INC. AND SUBSIDIARIES
                 Notes to the Consolidated Financial Statements
                           December 31, 2000 and 1999

NOTE 1 -      SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

              k.  Changes in Accounting Principles (Continued)

              The Company has adopted the provisions of FIN 44  "Accounting  for
              Certain    Transactions    Involving   Stock    Compensation   (an
              interpretation  of APB Opinion No.  25.)" This  interpretation  is
              effective  July 1,  2000.  FIN 44  clarifies  the  application  of
              Opinion No. 25 for only  certain  issues.  It does not address any
              issues  related to the  application  of the fair  value  method in
              Statement  No.  123.  Among other  issues,  FIN 44  clarifies  the
              definition  of employee for  purposes of applying  Opinion 25, the
              criteria   for   determining   whether  a  plan   qualifies  as  a
              noncompensatory  plan,  the  accounting   consequence  of  various
              modifications  to the terms of a previously  fixed stock option or
              award, and accounting for an exchange of stock compensation awards
              in a business  combination.  The adoption of this principle had no
              material   effect   on  the   Company's   consolidated   financial
              statements.

              l.  Accounts Receivable

              Accounts  receivable are shown net of an allowance for bad debt of
              $1,800 at December 31, 2000.

              m.  Preferred Stock

              The Company has authorized  10,000,000  shares of $0.001 par value
              preferred  stock.  The preferred stock shall have preference as to
              dividends  and  to  liquidation  of  the  Company.  The  board  of
              directors has determined that the 300 preferred shares outstanding
              at  December  31, 2000 valued at  $300,000  are  convertible  into
              common  stock  at a 20%  discount  from the  closing  price of the
              common stock on the date of conversion and bears interest at prime
              plus 1% (9% at December  31,  2000).  The  conversion  discount of
              $60,000 has been recorded and is included in the selling,  general
              and  administrative  amount  in  the  consolidated   statement  of
              operations at December 31, 2000.

NOTE 2 -      PROPERTY AND EQUIPMENT

              The Company acquired oil and gas leases from Ben's Run Oil Company
              (a Virginia  limited  partnership) in 1988 along with other assets
              and  liabilities  in exchange for shares of the  Company's  common
              stock.  The assets  were  recorded at  predecessor  cost since the
              former  owners of Ben's Run Oil  Company  became  the  controlling
              shareholders  of the Company.  The assets  acquired had been fully
              amortized or depreciated.  Therefore, they were recorded at a cost
              of $0.

              In January of 1989, the Company acquired  interests in oil and gas
              producing properties from Black Petroleum  Corporation (Black). In
              exchange for the  interests  acquired,  the Company paid  $100,000
              cash,   160,790  shares  of  common  stock  and  assumed   certain
              liabilities  of Black.  The value of the stock issued was based on
              the estimated  fair market value of the  properties  acquired less
              cash paid and liabilities  assumed. The purchase price for oil and
              gas properties totaled $2,015,109.

              On November 15, 1994,  the Company  acquired six oil and gas wells
              at a cost of $1,082,222  and other  equipment  totaling  $8,710 in
              exchange for shares of the Company's common stock. All assets were
              recorded at their market value (which was  approximately  the same
              as book value) at the time of  acquisition  based on the  purchase
              method of accounting.

                                      -32-

<PAGE>



                       TRANS ENERGY, INC. AND SUBSIDIARIES
                 Notes to the Consolidated Financial Statements
                           December 31, 2000 and 1999


NOTE 2 -      PROPERTY AND EQUIPMENT (Continued)

              Based upon the reserve  estimates,  depletion and  depreciation on
              these  properties and the related  equipment is computed under the
              units-of-production  method  as  required  by  generally  accepted
              accounting principles. In 1994 and 1993, the Company refurbished a
              number of wells.  In 1995,  the Company  obtained a reserve  study
              which  showed  that  the oil  and gas  reserves  are  higher  than
              originally  reported because the fix-up work allowed the producing
              wells to produce  greater  quantities and put some  non-productive
              wells into  production.  In 1998, the Company  obtained an updated
              reserve report following the sale of 10 wells in West Virginia.

              On July 2, 1999, the Company sold the remaining  Black wells and 5
              of the 7 Heath wells and well equipment  associated  with them for
              $400,000. The Company had a net basis of $2,577,627 which resulted
              in a loss on sale of assets of  $2,177,627.  Pursuant  to the sale
              agreement,  the Company  established  an escrow  account  which is
              being used to pay back royalties,  property  taxes,  and severance
              taxes  associated  with the wells which were sold.  The balance in
              the restricted cash account was $65,689 at December 31, 2000.

              On November 29, 1999, the Company sold the Sistersville  wells and
              acreage for  $125,000.  The Company had a basis in these assets of
              $278,934 which resulted in a loss on sale of assets of $153,934.

              At December 31, 1999, the Company owned the following wells: Heath
              #2 with a basis  of  $36,577,  Wolfe  with a basis of  $65,000,  2
              Spencer  wells  with a basis of  $372,000  and a portion of 7 Gulf
              Canada wells with a basis of $3,230,812. Additionally, the Company
              has  allocated  $180,000 to the Gulf Canada  leasehold  acreage in
              Wyoming.

              During 2000, the Company  determined that the fair market value of
              the Wyoming property and wells as well as two additional wells had
              been impaired. A loss on the valuation of $658,891 was recorded to
              reflect the discount to fair market value.

              During  2000,  the  Company  invested  $257,231  for a 75% working
              interest in five wells known as Estlack #1, and Nolan #1, 2, 3 and
              4. The Company  obtained a reserve  report showing the net present
              value of proved reserves was $820,521.

              During 2000, the Company sold vehicles for a total of $12,000. The
              Company recorded a gain of $2,199 as a result of the sale.


                                      -33-

<PAGE>



                       TRANS ENERGY, INC. AND SUBSIDIARIES
                 Notes to the Consolidated Financial Statements
                           December 31, 2000 and 1999

<TABLE>
<CAPTION>

NOTE 3 -      LONG-TERM DEBT

<S>                                                                                          <C>
              The Company had the  following  debt  obligations  at December 31,
2000:

              New York Life, secured by cash value in policy, interest payable
               annually at 7.25% interest rate.                                               $          26,706

              First National Bank of St. Marys, $9,244 payable monthly, 12.5%
               interest rate, secured by equipment and personal guarantee of officers.                  432,072

              Union  Bank of Tyler  County,  interest  at 11.5%  due  quarterly,
               renewable, due on demand, secured by equipment and personal
               guarantee of officers.                                                                    19,733

              Union Bank of Tyler  County,  principal  and interest  payments of
               $799 due monthly,  interest  rate of 14%, due September 25, 2004,
               secured by
               vehicle and personal guarantee of officers.                                               27,666

              Wesbanco, interest payable quarterly, prime +2%, due
               on demand, secured by officers' personal assets.                                         300,000

              Note payable to an individual, due on demand, bearing interest at
               9.75%, interest payments due monthly, unsecured.                                         292,078

              Union Bank of Tyler County, principal and interest payments of $230
               due monthly, interest at 16.0%, secured by vehicle of the Company                          6,099

              Note due to a private individual, due on demand with interest
               at 20%, secured by personal guarantee of officers.                                       200,919

              Note due to an individual,  payable in various payments  beginning
               March 1,  2001  with  interest  at  10.0%,  secured  by  personal
               guarantee
               of officer.                                                                              428,018

              Note payable to Raven Group, bearing interest at 10%, due on
               demand, unsecured.                                                                       325,000

              Note payable to individual, bearing interest at 7.00%,
              due on demand, secured by personal guarantee of officers.                                  60,744

              Note  payable to Core  Laboratories,  bearing  interest at 10.00%,
               requiring monthly payments of $351, due August 1, 2004,
               and unsecured.                                                                            13,587

              Note payable to RR Donnelley, payments of $3,244 of
               principal and interest at 10.0% due June 30, 2002, unsecured.                             64,969
                                                                                              -----------------

                          Total                                                                       2,197,621

                          Less Current Portion                                                       (1,538,855)
                                                                                              -----------------

                          Total Long-Term Debt                                                $         658,766
                                                                                              =================
</TABLE>

                                      -34-

<PAGE>



                       TRANS ENERGY, INC. AND SUBSIDIARIES
                 Notes to the Consolidated Financial Statements
                           December 31, 2000 and 1999

NOTE 3 -      LONG-TERM DEBT (Continued)

              Future maturities of long-term debt are as follows:

             2001                                  $       1,538,855
             2002                                            300,183
             2003                                             83,690
             2004                                             88,807
             2005                                             89,823
             2006 and thereafter                              96,263
                                                   -----------------

                  Total                            $       2,197,621
                                                   =================

NOTE 4 -      RELATED PARTY TRANSACTIONS

              a. Marketing Agreement - Sancho

              Natural gas delivered  through the Company's  pipeline  network is
              sold  either  to  Sancho  Oil and Gas  Corporation  ("Sancho"),  a
              company owned by the President of the Company,  at the  industrial
              facilities near Sistersville,  West Virginia,  or to Hope, a local
              utility,  on a year  long  basis  ending  January  31,  2001  at a
              variable  price per month per Mcf. Under its contract with Sancho,
              the Company has the right to sell natural gas subject to the terms
              and  conditions  of a 20-year  contract,  as amended,  that Sancho
              entered  into  with Hope in 1988.  This  agreement  is a  flexible
              volume  supply  agreement  whereby the Company  receives  the full
              price  which  Sancho  charges  the end user  less a $0.05  per Mcf
              marketing fee paid to Sancho.

              b.  Receivables

              The  Company  has  various  receivables  from and  payables to the
              officers and  companies of the  officers.  These amounts have been
              grouped  together  with a net payable of $288,042 at December  31,
              2000.  The net payable bears interest at 10%, is due on demand and
              unsecured.

NOTE 5 -      ECONOMIC DEPENDENCE AND MAJOR CUSTOMERS

              The  Company's  marketing  arrangement  with Sancho  accounted for
              approximately  47% of the  Company's  revenue  for the year  ended
              December 31,  1999.  This  marketing  agreement is in effect until
              December 1, 2008.  Another customer also generated sales in excess
              of 10% of the Company's  total sales.  Sales to this customer made
              up approximately 49% of net revenues in 1999.

NOTE 6 -      STOCKHOLDERS' EQUITY

              In 2000, the Company issued  1,691,287  shares of common stock for
              cash of $83,000.  The Company issued  11,722,383  shares of common
              stock for services and conversion of debt at  approximately  $0.12
              per  share or a total  of  $1,422,923.  The  Company  also  issued
              151,930,606 shares of common stock to convert debentures, interest
              and  penalties  at  approximately  $0.04 per share or  $5,653,991.
              Additionally, the Company canceled 423,833 shares of common stock.

              In 1999,  the Company  issued  440,000  shares of common stock for
              services  valued at  $260,000.  The  services  were  valued at the
              closing price of the stock on the date of issue.

              In 1999,  the Company issued 94,000 shares of common stock for the
              conversion  of $68,500 of debt and $23,700 of services.  The stock
              was valued at the closing price on the dates of issuance.

                                      -35-

<PAGE>



                       TRANS ENERGY, INC. AND SUBSIDIARIES
                 Notes to the Consolidated Financial Statements
                           December 31, 2000 and 1999

NOTE 6 -      STOCKHOLDERS' EQUITY (Continued)

              In 1999, the Company issued  4,398,929  shares of common stock for
              the conversion of $469,064 of the debentures payable,  and $60,102
              of accrued penalties and interest.  The stock was converted at 70%
              of the 5-day moving average price prior to the date of conversion.
              The 30%  discount  was  recognized  in 1998 upon  issuance  of the
              debentures.

              In 1998,  the Company  issued  248,812  shares of common stock for
              $360,750 of  services.  The Company also issued  36,364  shares of
              common stock to  reimburse a party for $60,000  which was advanced
              to the Company.  The Company issued 473,833 shares of common stock
              for  prepaid   closing   fees  related  to  the  issuance  of  the
              convertible debentures (Note 11). In 1998, officers of the Company
              contributed accrued salaries of $208,210 to the Company.

NOTE 7 -      COMMITMENTS AND CONTINGENCIES

              On March 12, 1997, a complaint entitled F. Worthy Walker vs. Loren
              Bagley,  William Woodburn,  Mark Woodburn,  Trans Energy, Inc. and
              Vulcan  Energy  Corporation,  was filed in the  District  Court of
              Dallas, Texas (# 9702304C). The complaint alleges that the Company
              breached certain contracts related to Mr. Walker's employment with
              Vulcan  Energy  Corporation,  and  seeks  punitive  and  exemplary
              damages.  The  Company  denies  all  allegations  and  intends  to
              vigorously  defend  its  position.  Management  believes  that the
              results of the proceedings will not have a material adverse effect
              on the Company.  On February  17, 1998,  the Company and the above
              named  defendants  filed a  countersuit  against F. Worthy  Walker
              alleging  breach of  contract,  fraud and  fraudulent  inducement,
              conversion,  and  breach  of  fiduciary  duty and  seeks  punitive
              damages.  This  action  was  subsequently  settled  with a  former
              officer of the Company  delivering  100,000 shares of common stock
              which were valued at $5,400 as settlement in full.

              A foreign  judgement  has been  filed  with the  circuit  court in
              Pleasants County, West Virginia for a judgment against the Company
              rendered  by the  District  Court in  Harris  County,  Texas.  The
              judgment is for $41,142 plus  prejudgment  interest and attorney's
              fees of  $13,500.  No action  has been  taken to  collect  on this
              judgment.

              On February 7, 2001, the United States Bankruptcy Court,  Southern
              District  of Texas,  entered an Order  Granting  Motion to Dismiss
              Chapter 7 Case in the action  entitled In Re: Trans Energy,  Inc.,
              Case  No.  00-39496-H4-7.  The  Order  dismissed  the  involuntary
              bankruptcy  action  instituted  against the Company on October 16,
              2000.  The sole  petitioning  creditor  named  in the  Involuntary
              Petition was Western Atlas  International,  Inc.  ("Western").  An
              Order  for  Relief  Under  Chapter 7 was  entered  by the Court on
              November 22, 2000.

              On April 23,  2000,  the 189th  District  Court of Harris  County,
              Texas entered an Agreed Final Judgment in favor of Western against
              the Company in the amount of $600,665, together with post judgment
              interest at 10% per annum. Following the judgment, Western and the
              Company  entered  into  settlement   negotiations  concerning  the
              Company's  satisfaction  of the judgment  through  payments over a
              four to five month period  together  with the pledge of collateral
              on certain  unencumbered assets.  Previously,  on or about July 9,
              1998, a judgment had been entered in the 152nd  District  Court of
              Harris County,  Texas against the Company in favor of Baker Hughes
              Oilfield  Operations,  Inc.  d/b/a/  Baker Hughes  Inteq.  Western
              Geophysical  ("Baker"), a division of Western Atlas International,
              Inc.,  in the  amount  of  $41,142,  together  with  interest  and
              attorney  fees.  This judgment was  outstanding at the time of the
              filing of the Involuntary Petition.

              During  its  negotiations  with  Western  for  settlement  of  the
              Judgment,  the Company  made a $200,000  "good  faith  payment" to
              Western's  counsel on October 23, 2000. On December 12, 2000,  Joe
              Hill was named as the Chapter 7 Trustee.  Subsequently,  Western's
              counsel delivered the $200,000 to the Trustee.

                                      -36-

<PAGE>



                       TRANS ENERGY, INC. AND SUBSIDIARIES
                 Notes to the Consolidated Financial Statements
                           December 31, 2000 and 1999


NOTE 7 -      COMMITMENTS AND CONTINGENCIES (Continued)

              On January 19, 2001, the Company filed with the  Bankruptcy  Court
              the Motion to Dismiss  Chapter 7 Case.  The  reasons  cited by the
              Company in support of its Motion to Dismiss included, but were not
              limited to, (i) the Texas  Court  being an improper  venue for the
              action,  and (ii) the  Company  never  receiving  the  Involuntary
              Petition and Summons  notifying it of the action.  In anticipation
              of the Bankruptcy  Court dismissing the Involuntary  Petition,  on
              February 2, 2001, the Company entered into a Settlement  Agreement
              with Baker Hughes  Oilfield  Operations,  Inc. d/b/a/ Baker Hughes
              Inteq.   Western   Geophysical,   a  division  of  Western   Atlas
              International,  Inc. (the "Baker Entities"). In entering its order
              on February 7, 2001 to dismiss the action,  the Court  ordered the
              Trustee to retain $17,695 for satisfaction of administrative  fees
              and expenses, and to pay to Western and Baker the sum of $182,737,
              on  behalf  of  the  Company  and  pursuant  to the  terms  of the
              Settlement Agreement.

              The Settlement Agreement provided that, subject to the approval of
              the  Bankruptcy  Court,  the  Company  agreed  to pay to the Baker
              Entities  $759,664,  plus  interest  at 10%.  In  addition  to the
              $200,000 payable from the escrow, the Company agreed to pay to the
              Baker Entities an initial  payment of $117,261 within fifteen days
              from the date of the Dismissal Order (due February 21, 2001).  The
              Company also agreed to make additional  payments of $100,000 every
              thirty days following the initial payment,  with the first payment
              due beginning no later than March 23, 2001,  continuing  until the
              total  obligation  plus  interest  is paid in full.  Further,  the
              Company  pledged  as  collateral  certain   properties,   personal
              property  and  fixtures and two  directors  each  pledged  750,000
              shares of the Company's common stock which they personally own.

              The  Company  has been  advised  by the  Securities  and  Exchange
              Commission (the "Commission") that the Commission is investigating
              certain  activities by the Company (In the Matter of Trans Energy,
              Inc.,  C-3481).   The  Company  believes  that  the  investigation
              concerns disclosure  requirements by the Company regarding certain
              press releases and the involuntary  bankruptcy  action  instituted
              against the Company in October  2000.  The Company is  voluntarily
              cooperating with the investigation and certain officers have given
              their  depositions.  As of  the  date  hereof,  the  investigation
              remains open.

              On September  22,  2000, a company  obtained a judgment of $46,300
              plus  interest  against Tyler  Construction  Company for breach of
              contract.  The Company has  accrued  $47,741  which is included in
              accounts payable at December 31, 2000.

              On April 10,  2000,  a company  recorded and served its Notice and
              Statement of Lien again the Company for  non-payment  of services.
              The Company has recorded a liability of $78,651  which is included
              in accounts payable at December 31, 2000.  Subsequent to year end,
              the  Company  entered  into a  settlement  agreement  wherein  the
              Company  will  transfer  a  portion  of  the  Powder  River  Basin
              leasehold acreage for settlement of the liability.

              On February 13, 2001,  Ross Forbus obtained a judgment of $428,018
              against  the  Company  to  satisfy a  promissory  note  previously
              entered into by the Company with Mr. Forbus on April 8, 1996.  The
              Company has recorded the balance in notes  payable at December 31,
              2000 (see Note 3).

              The Company pays $1,600 per month for leased office space which is
              on a month-to-month basis.

                                      -37-

<PAGE>



                       TRANS ENERGY, INC. AND SUBSIDIARIES
                 Notes to the Consolidated Financial Statements
                           December 31, 2000 and 1999


NOTE 8 -      GOING CONCERN

              The Company's consolidated financial statements are prepared using
              generally  accepted  accounting  principles  applicable to a going
              concern  which   contemplates   the   realization  of  assets  and
              liquidation of  liabilities in the normal course of business.  The
              Company has incurred cumulative  operating losses through December
              31, 2000, and has a working  capital deficit at December 31, 2000.
              Revenues have not been sufficient to cover its operating costs and
              to allow it to continue as a going concern. The potential proceeds
              from the sale of common stock,  other contemplated debt and equity
              financing,   and   increases  in  operating   revenues   from  new
              development  would  enable  the  Company  to  continue  as a going
              concern. There can be no assurance that the Company can or will be
              able to complete  any debt or equity  financing.  If these are not
              successful,  management  is committed  to meeting the  operational
              cash flow needs of the Company. (See also Notes 10 and 11)

NOTE 9 -      CONVERTIBLE DEBENTURES

              On September 10, 1998, the Company  completed a debenture issue of
              $4,625,400  face value of 8% Secured  Convertible  Debentures  due
              March 31, 1999 (the  "Debentures")  Interest shall accrue upon the
              date of issuance  until  payment in full of the  principal sum has
              been made or duly provided for.  Holders of the  Debentures  shall
              have the  option,  at any time,  until  maturity,  to convert  the
              principal  amount  of  their  Debenture,  or  any  portion  of the
              principal  amount  which is at least  $10,000  into  shares of the
              Company's  Common Stock at a conversion price for each share equal
              to the lower of (a) seventy  percent  (70%) of the market price of
              the  Company's  Common Stock  averaged  over the five trading days
              prior to the date of  conversion,  or (b) the market  price on the
              issuance date of the  Debentures.  Any accrued and unpaid interest
              shall be  payable,  at the  option of the  Company,  in cash or in
              shares of the Company's  Common Stock valued at the then effective
              conversion price.

              Pursuant to the terms of the Debentures, the Company has agreed to
              file a registration  statement with the Commission to register the
              shares of the Company's Common Stock into which the Debentures may
              be converted.  Upon  effectiveness of the registration  statement,
              the  shares  of  the  Company's   Common  Stock   underlying   the
              Debentures,  when issued, will be deemed registered securities and
              will not be restricted as to the resale of such securities. If the
              Company fails to file its registration statement within forty-five
              (45) days from the closing of the Debenture offering,  the Company
              may be  obligated to increase by up to fifteen  percent  (15%) the
              number of shares issuable upon conversion to each holder.

              The  Company  has  accrued  and fully  amortized a discount on the
              Debentures of $1,445,480  to  compensate  for the seventy  percent
              (70%) bid  conversion  and  contributed  this amount to additional
              paid-in capital. The Company has also accrued an additional amount
              of $963,653 as a penalty  payable to compensate for the non-filing
              of the  registration  statement  penalty  of 15%  and  for  the 5%
              discount  on the  conversion  of the  debentures  penalty and have
              added these  amounts to the  debenture  payable as of December 31,
              1999. In 1999, the Company converted $469,064 of the debenture and
              $60,102 of the  penalties and interest  into  4,398,929  shares of
              common stock.

              In  2000,  the  Company  converted   $1,547,655  of  interest  and
              penalties   and   $4,106,337  of  the   debentures   payable  into
              151,930,606  shares of common  stock.  At December 31,  2000,  the
              Company owed $331,462 on the debentures  consisting of $50,000 for
              a debenture and $281,462 in penalties and interest.


                                      -38-

<PAGE>



                       TRANS ENERGY, INC. AND SUBSIDIARIES
                 Notes to the Consolidated Financial Statements
                           December 31, 2000 and 1999

NOTE 10 -     BUSINESS SEGMENTS

              Effective  December  31, 1998,  the Company  adopted SFAS No. 131,
              "Disclosure   about   Segments  of  an   Enterprise   and  Related
              Information."  Prior period  amounts have been restated to conform
              to the  requirements of this statement.  The Company  conducts its
              operations  principally as oil and gas sales with Trans Energy and
              Prima Oil and pipeline  transmission with Ritchie County and Tyler
              Construction.

              Certain financial information  concerning the Company's operations
              in different industries is as follows:

<TABLE>
<CAPTION>

                                                                          Trans        Ritchie
                                                       For the           Energy         County
                                                      Years Ended       and Prima      and Tyler      Corporate
                                                     December 31,          Oil        Construction    Unallocated
                                                     ------------     -----------     ------------    -----------

<S>                                                       <C>      <C>             <C>             <C>
              Oil and gas revenue                         2000     $      796,390  $      328,867  $      -
                                                          1999            526,255         566,644         -

              Operating loss applicable to
               industry segment                           2000          3,429,277         449,336         -
                                                          1999          5,177,452         248,104         -

              General corporate expenses
               not allocated to industry
               segments                                   2000             -               -              -
                                                          1999             -               -             872,777

              Interest expense                            2000           (380,165)        (57,305)        -
                                                          1999           (689,172)       (104,668)        -

              Other income (expenses)                     2000             14,850          -              -
                                                          1999             14,184          -              -

              Assets                                      2000          2,666,228         895,638         -

              Depreciation and
               amortization                               2000            221,705         108,764          -
                                                          1999             57,535         108,770      2,356,738

              Property and equipment
               acquisitions                               2000     $      288,341          -              -
</TABLE>



                                      -39-

<PAGE>



                       TRANS ENERGY, INC. AND SUBSIDIARIES
                 Notes to the Consolidated Financial Statements
                           December 31, 2000 and 1999

NOTE 11 -     OUTSTANDING STOCK OPTIONS

              The Company applies  Accounting  Principles  Board ("APB") Opinion
              25,  "Accounting  for Stock  Issued  to  Employees,"  and  related
              Interpretations  in accounting  for all stock option plans.  Under
              APB Opinion 25,  compensation cost is recognized for stock options
              granted to employees when the option price is less than the market
              price of the underlying common stock on the date of grant.

              FASB  Statement 123,  "Accounting  for  Stock-Based  Compensation"
              ("SFAS  No.  123"),  requires  the  Company  to  provide  proforma
              information  regarding  net  income and net income per share as if
              compensation  costs for the Company's stock option plans and other
              stock awards had been determined in accordance with the fair value
              based method prescribed in SFAS No. 123. The Company estimates the
              fair  value of each  stock  award at the  grant  date by using the
              Black-Scholes  option  pricing model with the  following  weighted
              average assumptions used for grants, respectively;  dividend yield
              of zero  percent  for all  years;  expected  volatility  of  246%;
              risk-free interest rates of 6.15 percent and expected lives of 0.1
              years.

              Under the accounting provisions of SFAS No. 123, the Company's net
              loss would have been  changed by the pro forma  amounts  indicated
              below:
<TABLE>
<CAPTION>

                                                                                        December 31,
                                                                           --------------------------------------
                                                                                 2000               1999
                                                                           ------------------  ------------------
              Net loss:
<S>                                                                        <C>                 <C>
                As reported                                                $       (3,878,611) $      (6,298,333)
                Pro forma                                                  $       (3,891,476) $      (6,298,333)

              Basic loss per share:
                As reported                                                $            (0.06) $           (1.90)
                Pro forma                                                  $            (0.06) $           (1.90)
</TABLE>

              A summary of the status of the Company's  stock option plans as of
              December 31, 2000 and changes during the year is presented below:
<TABLE>
<CAPTION>

                                                                                               December 31, 2000
                                                                                                   Weighted
                                                                                                   Average
                                                                                    Shares      Exercise Price
                                                                           ------------------  ----------------

<S>                                                                        <C>                  <C>
              Outstanding, December 31, 1999                                           795,057  $           0.50

                  Granted                                                            2,000,000             0.125
                  Canceled                                                              -                 -
                  Exercised                                                         (2,000,000)           (0.125)
                                                                            ------------------  ----------------

              Outstanding, December 31, 2000                                           795,057  $           0.50
                                                                            ------------------  ----------------

              Exercisable, December 31, 2000                                           795,057  $           0.50
                                                                            ------------------  ----------------
</TABLE>



                                      -40-

<PAGE>



                       TRANS ENERGY, INC. AND SUBSIDIARIES
                 Notes to the Consolidated Financial Statements
                           December 31, 2000 and 1999


NOTE 11 -         OUTSTANDING STOCK OPTIONS (Continued)
<TABLE>
<CAPTION>

                                                            Outstanding                      Exercisable
                                         -----------------------------------------------------------------------
                                                            Weighted
                                                             Average       Weighted                    Weighted
                                             Number         Remaining      Average       Number        Average
                                         Outstanding       Contractual     Exercise    Exercisable     Exercise
              Exercise Prices              at 12/31/00        Life           Price       at 12/31/00     Price
              ---------------            -------------  --------------  ------------  ------------  ------------

             <S>                               <C>                <C>   <C>                <C>      <C>
              $ 0.50                           795,057            3.00  $       0.50       795,057  $       0.50
</TABLE>

              The 2,000,000  options  granted in 2000 was issued to employees of
              the Company.  The options were exercisable at $0.125 per share and
              were fully vested on the grant date.  The exercise price was equal
              to the  market  price  on the  date  of  issuance.  The  employees
              immediately  exercised  the  2,000,000  options  with the exercise
              price being converted for prior services rendered.

              The  795,057  options  were  issued at $0.50 which is equal to the
              market price on the date of issuance. All options are fully vested
              and have a five year period to be exercised.  The options were not
              issued pursuant to an employee stock option plan.

                                      -41-

<PAGE>



                       TRANS ENERGY, INC. AND SUBSIDIARIES
                 Notes to the Consolidated Financial Statements
                           December 31, 2000 and 1999


S.F.A.S. 69  SUPPLEMENTAL DISCLOSURES

<TABLE>
<CAPTION>

(1)                       Capitalized Costs Relating to
                        Oil and Gas Producing Activities
                                                                                          December 31,
                                                                             -------------------------------------
                                                                                  2000               1999
                                                                             -----------------   -----------------

<S>                                                                          <C>                 <C>
         Proved oil and gas producing properties and related
          lease and well equipment                                           $       4,950,399   $       4,730,577
         Unproved oil and gas properties                                               180,000             180,000
         Accumulated depreciation and depletion                                     (1,706,648)            (25,930)
                                                                             -----------------   -----------------

         Net Capitalized Costs                                               $       3,423,751   $       4,884,647
                                                                             =================   =================
</TABLE>


(2)                    Costs Incurred in Oil and Gas Property
              Acquisition, Exploration, and Development Activities

<TABLE>
<CAPTION>

                                                                                       For the Years Ended
                                                                                          December 31,
                                                                             -------------------------------------
                                                                                 2000                1999
                                                                             -----------------   -----------------
<S>                                                                          <C>                 <C>
         Acquisition of Properties
            Proved                                                           $         257,231   $          -
            Unproved                                                                    -                   -
         Exploration Costs                                                              -                   -
         Development Costs                                                              -                   -
</TABLE>


The Company does not have any investments accounted for by the equity method.


(3)                         Results of Operations for
                              Producing Activities

<TABLE>
<CAPTION>
                                                                                       For the Year Ended
                                                                                          December 31,
                                                                             -------------------------------------
                                                                                 2000                1999
                                                                             -----------------   -----------------

<S>                                                                          <C>                 <C>
         Sales                                                               $         788,224   $         408,532

         Production costs                                                              (18,623)            (53,375)
         Depreciation and depletion                                                   (197,857)            (20,000)
         Income tax expenses                                                            -                   -
                                                                             -----------------   -----------------

         Results of operations for producing activities
          (excluding the activities of the pipeline transmission
          operations, corporate overhead and interest costs)                 $         570,744   $         335,157
                                                                             =================   =================
</TABLE>


                                      -42-

<PAGE>



                       TRANS ENERGY, INC. AND SUBSIDIARIES
                      S.F.A.S. 69 Supplemental Disclosures
                           December 31, 2000 and 1999
                                   (Unaudited)

<TABLE>
<CAPTION>

S.F.A.S.  69 SUPPLEMENTAL DISCLOSURES (CONTINUED)

(4)                     Reserve Quantity Information

                                                                                     Oil              Gas
                                                                                     BBL               MCF
                                                                             -----------------  ----------------

         Proved developed and undeveloped reserves

<S>                                                                           <C>                   <C>
         Balance, December 31, 1998                                                  1,705,534         1,714,082

         Revisions of previous estimates                                                -                 -
         Improved recovery                                                              -                 -
         Purchases of minerals in place                                                 -                 -
         Extensions and discoveries                                                     -                 -
         Production                                                                    (68,555)          (36,437)
         Sales of minerals in place                                                   (200,721)       (1,677,645)
                                                                             ------------------------- ----------

         End of the year 1999                                                        1,436,258            -
                                                                             -----------------  ----------------

         Revisions of previous estimates                                                 -                -
         Improved recovery                                                               -                -
         Purchases of minerals in place                                                    454           356,196
         Extensions and discoveries                                                      -                  -
         Production                                                                     (87,958)            -
         Sales of minerals in place                                                      -                  -
                                                                             ------------------  -----------------

         End of the year 2000                                                        1,348,754           356,196
                                                                             ==================  =================

         Proved developed reserves:
                                                                                       Oil                Gas
                                                                                       BBL                 MCF
                                                                             ------------------  -----------------

           Beginning of the year 2000                                                1,436,258            -
           End of the year 2000                                                      1,348,754           356,196
</TABLE>


         During 1998,  1996,  1995, 1992, 1991 and 1990, the Company had reserve
         studies  and  estimates  prepared  on  its  various   properties.   The
         difficulties and  uncertainties  involved in estimating  proved oil and
         gas reserves makes comparisons between companies difficult.  Estimation
         of reserve  quantities  is subject to wide  fluctuations  because it is
         dependent on judgmental  interpretation  of geological and  geophysical
         data.


                                      -43-

<PAGE>



                       TRANS ENERGY, INC. AND SUBSIDIARIES
                      S.F.A.S. 69 Supplemental Disclosures
                           December 31, 2000 and 1999
                                   (Unaudited)
<TABLE>
<CAPTION>

S.F.A.S.  69 SUPPLEMENTAL DISCLOSURES (CONTINUED)

(5)                     Standardized Measure of Discounted
                        Future Net Cash Flows Relating to
                           Proved Oil and Gas Reserves

                              At December 31, 2000

                                                                                                  Trans Energy
                                                                                                      and
                                                                                                   Subsidiaries
                                                                                              ----------------
<S>                                                                                            <C>
         Future cash inflows                                                                   $     18,793,524
         Future production and development costs                                                     (6,768,854)
         Future income tax expense                                                                   (4,061,312)
                                                                                               ----------------
         Future net cash flows                                                                        7,963,358
         10% annual discount for estimated timing of cash flows                                      (3,537,580
                                                                                               ----------------

         Standardized measure of discounted future net cash flows                              $      4,425,778
                                                                                               ================

                              At December 31, 1999

                                                                                                  Trans Energy
                                                                                                   and
                                                                                                 Subsidiaries
         Future cash inflows                                                                   $     25,609,146
         Future production and development costs                                                     (9,223,633)
         Future income tax expense                                                                   (5,534,180)
                                                                                               ----------------
         Future net cash flows                                                                       10,851,333
         10% annual discount for estimated timing of cash flows                                      (5,634,346)
                                                                                               ----------------

         Standardized measure of discounted future net cash flows                              $      5,216,987
                                                                                               ================
</TABLE>

         Future income taxes were  determined  by applying the statutory  income
         tax rate to future pre-tax net cash flow relating to proved reserves.

         The following schedule  summarizes changes in the standardized  measure
         of  discounted  future  net cash flow  relating  to proved  oil and gas
         reserves:
<TABLE>
<CAPTION>

                                                                                    For the Years Ended
                                                                                        December 31,
                                                                          --------------------------------------
                                                                                 2000             1999
                                                                          ------------------   -----------------

<S>                                                                       <C>                  <C>
         Standardized measure, beginning of year                          $        5,216,987   $       9,495,694
         Oil and gas sales, net of production costs                                   -                 (313,619)
         Sales of mineral in place                                                (1,611,730)         (3,965,088)
         Purchases                                                                   820,521              -
         Net change due to revisions
           in quantity estimates                                                      -                   -
         Accretion of discount items                                                  -                   -
                                                                          ------------------   -----------------

         Standardized measure, end of year                                $        4,425,778   $       5,216,987
                                                                          ==================   =================
</TABLE>


                                      -44-

<PAGE>



                       TRANS ENERGY, INC. AND SUBSIDIARIES
                      S.F.A.S. 69 Supplemental Disclosures
                           December 31, 2000 and 1999
                                   (Unaudited)


S.F.A.S.  69 SUPPLEMENTAL DISCLOSURES (CONTINUED)

         The  above   schedules   relating  to  proved  oil  and  gas  reserves,
         standardized measure of discounted future net cash flows and changes in
         the standardized measure of discounted future net cash flows have their
         foundation  in  engineering  estimates of future net revenues  that are
         derived from proved reserves and prepared using the prevailing economic
         conditions. These reserve estimates are made from evaluations conducted
         by independent geologists,  of such properties and will be periodically
         reviewed based upon updated  geological and production date.  Estimates
         of proved  reserves are inherently  imprecise.  The above  standardized
         measure  does not  include  any  restoration  costs due to the fact the
         Company does not own the land.

         Subsequent  development  and production of the Company's  reserves will
         necessitate  revising the present estimates.  In addition,  information
         provided in the above schedules does not provide definitive information
         as the results of any particular  year but,  rather,  helps explain and
         demonstrate the impact of major factors affecting the Company's oil and
         gas producing activities.  Therefore,  the Company suggests that all of
         the aforementioned  factors concerning  assumptions and concepts should
         be  taken  into   consideration   when  reviewing  and  analyzing  this
         information.


                                      -45-

<PAGE>



Item 8.           Changes in and Disagreements with Accountants on
                  Accounting and Financial Disclosure

         This Item is not Applicable.

                                    PART III

Item 9.           Directors, Executive Officers, Promoters and Control
                  Persons; Compliance with Section 16(a) of the
                  Exchange Act

         The following  table sets forth the names,  ages, and offices held with
the Company by it's directors and executive officers:
<TABLE>
<CAPTION>

      Name                                  Position                       Director Since                     Age
---------------                         ----------------                   --------------                     ---
<S>                                     <C>                                <C>                                <C>
Loren E. Bagley                         President, C.E.O.                  August 1991                        58
                                         and Director
William F. Woodburn                     Vice President                     August 1991                        59
                                         and Director
John B. Sims                            Director                           January 1988                       75
Gary F. Lawyer                          Director                           December 1997                      53
</TABLE>

         All directors hold office until the next annual meeting of stockholders
and until their  successors  have been duly elected and qualified.  There are no
agreements  with  respect to the  election  of  directors.  The  Company has not
compensated its directors for service on the Board of Directors or any committee
thereof,  but directors are reimbursed  for expenses  incurred for attendance at
meetings of the Board of Directors  and any committee of the Board of Directors.
Executive  officers are  appointed  annually by the Board of Directors  and each
executive  officer  serves  at the  discretion  of the Board of  Directors.  The
Executive  Committee of the Board of Directors,  to the extent  permitted  under
Nevada law,  exercises  all of the power and authority of the Board of Directors
in the management of the business and affairs of the Company between meetings of
the Board of Directors.

         The business  experience of each of the persons listed above during the
past five years is as follows:

         Loren E. Bagley has been  Executive Vice President of the Company since
August,  1991, and became President and C.E.O. in September,  1993. From 1979 to
the present,  Mr. Bagley has been self  -employed in the oil and gas industry as
president,  C.E.O. or vice president of various corporations which he has either
started or purchased,  including  Ritchie  County  Gathering  Systems,  Inc. Mr.
Bagley's  experience  in the oil and gas  industry  includes  acting  as a lease
agent, funding and drilling of oil and gas wells, supervising production of over
175 existing  wells,  contract  negotiations  for  purchasing  and  marketing of
natural  gas  contracts,  and  owning a well  logging  company  specializing  in
analysis of wells.  Prior to becoming involved in the oil and gas industry,  Mr.
Bagley  was  employed  by the  United  States  government  with the  Agriculture
Department.  Mr. Bagley  attended Ohio University and Salem College and earned a
B.S. Degree.

         William F. Woodburn has served as Vice President in charge of
Operations and a director of the Company since August, 1991 and has

                                      -46-

<PAGE>



been actively engaged in the oil and gas business in various  capacities for the
past twenty years. For several years prior to 1991, Mr. Woodburn  supervised the
production  of oil and natural gas and managed the pipeline  operations of Tyler
Construction  Company,  Inc.  and  Tyler  Pipeline,   Inc.  Mr.  Woodburn  is  a
stockholder and serves as President of Tyler Construction Company,  Inc., and is
also a stockholder of Tyler  Pipeline,  Inc. which owns and operates oil and gas
wells in addition to natural gas pipelines,  and Ohio Valley Welding, Inc. which
owns a fleet of heavy equipment that services the oil and gas industry. Prior to
his  involvement in the oil and gas industry,  Mr.  Woodburn was employed by the
United  States Army Corps of  Engineers  for twenty four years and was  Resident
Engineer on several  construction  projects.  Mr.  Woodburn  graduated from West
Virginia University with a B.S. in civil engineering.

         John B. Sims served as President,  C.E.O. and a director of the Company
from 1988 to September,  1993 and currently is a director.  Prior to joining the
Company and from 1984 to 1988, Mr. Sims was the General Partner of Ben's Run Oil
Company  which was acquired by the Company in January,  1988.  Mr. Sims has also
been the general  partner for fourteen  limited  partnerships  from 1977 to 1984
drilling a total of twenty eight wells.  Prior to his involvement in the oil and
gas business,  Mr. Sims was a real estate  developer for twenty years as well as
an exclusive real estate broker for Ednam Forrest in Charlottesville,  Virginia.
During 1994, Mr. Sims  voluntarily  initiated a personal  bankruptcy  proceeding
pursuant  to Chapter 7 of the United  States  Bankruptcy  Code.  Pursuant to the
terms of such proceeding,  Mr. Sims was discharged of certain of his debts which
were incurred as a consequence  of his personal  guarantees of certain  business
related  debts,  not  related to the  Company,  upon which the  primary  obligor
defaulted.

         Gary F. Lawyer became a director of the Company in December 1997.  Gary
F. Lawyer has been President and a major shareholder of GeoSense,  Inc. which is
an international oil and gas  exploration/exploitation and production consulting
company based in Englewood,  Colorado  since 1991.  Prior to founding  GeoSense,
Inc., Mr. Lawyer has been employed in several executive and managerial positions
with various  energy  companies for the past 25 years.  Mr. Lawyer  received his
Master of Science degree in Geology from Brigham Young University.

Item 10.          Executive Compensation

         The  Company  does  not  have a  bonus,  profit  sharing,  or  deferred
compensation plan for the benefit of its employees,  officers or directors,  nor
has the Company entered into employment contracts with any of the aforementioned
persons.

Cash Compensation

         The  following  table  sets  forth  all cash  compensation  paid by the
Company for  services  rendered to the Company for the years ended  December 31,


                                      -47-

<PAGE>



2000,  1999 and 1998, to the Company's  Chief  Executive  Officer.  No executive
officer of the Company has earned a salary  greater than  $100,000  annually for
any of the periods depicted.

                           Summary Compensation Table
                                                          Other         All
                                                          Annual       Other
Name and                                                  Compen-      Compen-
Principal Position      Year     Salary      Bonus        sation       sation
------------------      ----     ------      -----        ------       ------
Loren E. Bagley,        2000      $   -0-    $ -0-        $ -0-        $ -0-
President, C.E.O.       1999      $   -0-    $ -0-        $ -0-        $ -0-
                        1998      $   -0-    $ -0-        $ -0-        $ -0-

Item 11.          Security Ownership of Certain Beneficial Owners and
                  Management

         The following  table sets forth  information,  to the best knowledge of
the Company as  December  31,  2000,  with  respect to each person  known by the
Company to own  beneficially  more than 5% of the Company's  outstanding  common
stock, each director and all directors and officers as a group.

Name and Address                      Amount and Nature of         Percent
of Beneficial Owner                   Beneficial Ownership        of Class(1)
-------------------                   --------------------        -----------
Loren E. Bagley *                       2,074,527(2)                   %
  210 Second Street
  St. Marys, WV 26170
William F. Woodburn *                   2,067,394(3)               10.2%
  210 Second Street
  St. Marys, WV 26170
John B. Sims *                           302,614(4)                1.0%
  210 Second Street
  St. Marys, WV 26170
Gary F. Lawyer *                         175,000(5)                 .6%
  21430 Timtam Circle
  Parker, CO 80134
All directors and executive              905,698(6)                8.7%
  officers as a group
  (4 persons in group)

*  Director and/or executive officer

Note:  Unless otherwise  indicated in the footnotes below, TSRG has been advised
that each person above has sole voting power over the shares indicated above.
(1)      Based upon 172,028,189  shares of common stock  outstanding on December
         31,  2000,but does not take into  consideration  stock options owned by
         certain  officers and  directors  entitling  the holders to purchase an
         aggregate  of 675,000  shares of common  stock and which are  currently
         exercisable.  Therefore,  for purposes of the table above,  172,703,189
         shares of common  stock are  deemed  to be issued  and  outstanding  in
         accordance  with Rule 13d-3  adopted  by the  Securities  and  Exchange
         Commission  under the  Securities  Exchange  Act of 1934,  as  amended.
         Percentage  ownership is calculated  separately  for each person on the
         basis of the actual  number of  outstanding  shares as of December  31,

                                      -48-

<PAGE>


         2000 and assumes the exercise of stock options held by such person (but
         not by anyone else) exercisable within sixty days.
(2)      Includes  312,500 shares that may be acquired by Mr. Bagley pursuant to
         stock options exercisable at $.50 per share and 50,000 shares of common
         stock held in the name of Carolyn S.  Bagley,  wife of Loren E. Bagley,
         over which Ms. Bagley retains voting power.
(3)      Includes  312,500 shares that may be acquired by Mr. Woodburn  pursuant
         to stock  options  exercisable  at $.50 per share and 31,250  shares of
         common  stock  in the name of Janet L.  Woodburn,  wife of  William  F.
         Woodburn, over which shares Ms. Woodburn retains voting power.
(4)      Includes  25,000  shares that may be  acquired by Mr. Sims  pursuant to
         stock options exercisable at $.50 per share and 13,807 shares of common
         stock held jointly with Virginia Sims, wife of John B. Sims.
(5)      Includes  25,000 shares that may be acquired by Mr. Lawyer  pursuant to
         stock options exercisable at $.50 per share.
(6)      Includes  675,000  shares  that may be  acquired  by certain  directors
         pursuant to stock options exercisable at $.50 per share.

Item 12.          Certain Relationships and Related Transactions

           During the last two  fiscal  years,  there have been no  transactions
between the Company and any officer, director, nominee for election as director,
or any  shareholder  owning  greater  than five  percent  (5%) of The  Company's
outstanding  shares,  nor  any  member  of  the  above  referenced  individuals'
immediate family, except as set forth below.

         (a) Loren E. Bagley is  President of Sancho,  a principal  purchaser of
The Company's  natural gas. Mr.  Bagley's wife,  Carolyn S. Bagley is a director
and owner of 33% of the outstanding capital stock of Sancho.  Under its contract
with Sancho,  the Company has the right to sell natural gas subject to the terms
and conditions of a 20-year contract,  as amended, that Sancho entered into with
Hope in 1988. This agreement is a flexible volume supply  agreement  whereby the
Company  receives  the full  price  which  Sancho  receives  less a $.05 per Mcf
marketing  fee paid to Sancho.  The price of the  natural  gas is based upon the
greater of the residential gas commodity index or the published  Inside F.E.R.C.
Index,  at The  Company's  option,  for the first 1,500 Mcf purchased per day by
Hope and thereafter the price is the Inside F.E.R.C.  Index. The residential gas
commodity  index does not directly  fluctuate  with the overall price of natural
gas. The Inside F.E.R.C.  Index fluctuates  monthly with the change in the price
of natural gas.  While such option  provides  certain price  protection  for the
Company  there can be no assurance  that prices paid by the Company to suppliers
will be lower than the price  which the  Company  would  receive  under the Hope
arrangement.  During 2000, the Company paid Sancho an aggregate of approximately
$2,147 pursuant to such contract.

         (b) On  May  7,  1996,  the  Company  borrowed  $100,000  from  William
Stevenson. Such amount is repayable in one installment of principal and interest
of $110,000 on November 7, 1996. Messrs. Bagley, William F. Woodburn and John B.
Sims are jointly and severally liable with the Company for the repayment of such

                                      -49-

<PAGE>



obligation.  Such obligation is secured by the pledge of 50,000 shares of Common
Stock  owned by Mr.  Woodburn's  wife,  Janet  L.  Woodburn.  The  loan  remains
outstanding.

         (c) A company owned by an officer of the Company's  former  subsidiary,
Vulcan Energy Corporation ("Vulcan"),  owns the remaining 20% of Vulcan's common
stock.  The  management  company is entitled to a management fee of $252,000 per
year and 20% of net profits  before taxes less 20% of the principal  paid to the
seller  of  Vulcan.  This 20% net  profits  interest  has had no  effect  on the
Company's consolidated financial statements because the subsidiary generated net
losses  through  December 31, 1996.  Because the  operations of Vulcan have been
discontinued (see Note 9 to Financial Statements),  management believes that the
Company  has no  obligation  related  to this  management  agreement  in  future
periods.

         The Company occupies approximately 4,000 square feet of office space in
St.  Marys,  West  Virginia,   which  it  shares  with  its  subsidiaries  Tyler
Construction  Company,  Inc. and Ritchie County Gathering Systems, Inc. Prior to
1997,  the office  space was paid for by Sancho and the Company  used the office
space rent free.  The Company  believes  that the  foregoing  transactions  with
Sancho were made on terms no less favorable to the Company than those  available
from unaffiliated third parties.

         It is the  Company's  policy  that  any  future  material  transactions
between it and members of its management or their  affiliates  shall be on terms
no less favorable than those available from unaffiliated third parties.



                                      -50-

<PAGE>



                                     PART IV

Item 13.                  Exhibits and Reports on Form 8-K

         (a)      Exhibits

Exhibit No.                        Exhibit Name
-----------             --------------------------------

  *2.1       Stock Acquisition Agreement between the Company and Loren
                  E. Bagley and William F. Woodburn
  *2.2       Asset Acquisition Agreement between the Company and Dennis
                  L. Spencer
  *2.3       Asset Acquisition Agreement between the Company and Tyler
                  Pipeline, Inc.
  *2.4       Stock Exchange Agreement between the Company and Ritchie
             County Gathering Systems, Inc.
  *2.5       Plan and Agreement of Merger between Trans Energy, Inc.
             (Nevada) and Apple Corp. (Idaho), to facilitate the change
             of the Company's corporate domicile to Nevada
 **2.6       Agreements related to acquisition of Vulcan Energy
             Corporation
  *3.1       Articles of Incorporation and all amendments pertaining
             thereto, for Apple Corp., an Idaho corporation
  *3.2       Articles of Incorporation for Trans Energy, Inc., a Nevada
                  corporation
  *3.3       Articles of Merger for the States of Nevada and Idaho
  *3.4       By-Laws
  *4.1       Specimen Stock Certificate
 *10.1       Marketing Agreement with Sancho Oil and Gas Corporation
 *10.2       Gas Purchase Agreement with Central Trading Company
 *10.3       Price Agreement with Key Oil Company
 *21.1       Subsidiaries Schedule
 *99.1       Reserve Estimate and Evaluation of oil and gas properties
 *99.2       Reserve Estimate and Evaluation for Dennis L. Spencer wells

 * Previously  filed as Exhibit to Form 10-SB. ** Previously filed as Exhibit to
Form 8-K dated August 7, 1995.

(b)          No reports were filed on Form 8-K for the three month period
ended December 31, 2000.

                                      -51-

<PAGE>



                                   SIGNATURES

             In  accordance  with Section 13 or 15(d) of the  Exchange  Act, the
Registrant  caused  this  report to be signed on its behalf by the  undersigned,
thereunto duly authorized.

                                             TRANS ENERGY, INC.


                                  BY:     /S/  LOREN E. BAGLEY
                                     ------------------------------
                                               LOREN E. BAGLEY,
                                               President and C.E.O.

Dated:  April 17, 2001

             In  accordance  with the Exchange  Act, this report has been signed
below by the following persons on behalf of the Registrant and in the capacities
and on the dates indicated.
<TABLE>
<CAPTION>

       Signature                                Title                                                    Date
       ---------                                -----                                                    ----
<S>                                             <C>                                                 <C>
                                                President, C.E.O. and
                                                Director                                             April 17, 2001
/S/  LOREN E. BAGLEY                            Principal Financial Officer
---------------------------
     Loren E. Bagley

                                                Vice President and
                                                Director                                             April 17, 2001
/S/  WILLIAM F. WOODBURN                        Chief Accounting Officer
----------------------------
     William F. Woodburn


                                                                                                     April 17, 2001
/S/  JOHN B. SIMS                               Director
---------------------------
     John B. Sims



                                                                                                     April 17, 2001
/S/  GARY F. LAWYER                             Director
----------------------------
     Gary F. Lawyer
</TABLE>

                                      -52-

<PAGE>