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

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

                For the Fiscal Year Ended December 31, 1997

          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   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.    

     State the issuer's revenues for its most recent fiscal year. 
 $ 1,115,037.

     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.  $5,180,661  (Based on price of
$1.25 on April 8, 1998 and 4,144,529 shares held by non-affiliates)

     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 March 31, 1998

     Common Stock, Par Value
       $.001 per share                                    5,663,215
          
                    DOCUMENTS INCORPORATED BY REFERENCE
                                   NONE

Transitional Small Business Disclosure Format.   Yes    No 
<PAGE>

                            TRANS ENERGY, INC.

                             TABLE OF CONTENTS

                                                           Page

                                  PART I

Item 1.   Description of Business  . . . . . . . . . .       1

Item 2.   Description of Property. . . . . . . . . . .      11

Item 3.   Legal Proceedings. . . . . . . . . . . . . .      13

Item 4.   Submission of Matter to a Vote of 
          Security Holders . . . . . . . . . . . . . .      14

                                  PART II

Item 5.   Market for Common Equity and Related
          Stockholder Matters. . . . . . . . . . . . .      14

Item 6.   Management's Discussion and Analysis or 
          Plan of Operation. . . . . . . . . . . . . .      15

Item 7.   Financial Statements . . . . . . . . . . . .      17

Item 8.   Changes in and Disagreements with Accountants
          on Accounting and Financial Disclosure . . .      38

                                 PART III

Item 9.   Directors, Executive Officers, Promoters and 
          Control persons; Compliance with Section 16(a)
          of the Exchange Act. . . . . . . . . . . . .      38

Item 10.  Executive Compensation . . . . . . . . . . .      39

Item 11.  Security Ownership of Certain Beneficial 
          Owners and Management. . . . . . . . . . . .      40

Item 12.  Certain Relationships and Related Transactions    41

                                  PART IV

Item 13.  Exhibits and Reports on Form 8-K . . . . . .      42

SIGNATURES . . . . . . . . . . . . . . . . . . . . . .      43















                                    -i-
<PAGE>

                                  PART I

Item 1.   Description of Business

History

     Trans Energy, Inc. (the "Company") is primarily engaged in the
transportation, marketing and production of natural gas and oil,
and also conducts exploration and development activities.  The
Company owns and operates 105 oil and gas wells and 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, Doddridge, and Pleasants, which
pipeline system gathers the gas emanating from certain of such
wells and from wells owned by third parties.  The Company has
approximately 2,200 leasehold acres in the Sistersville, West
Virginia field which forms part of the Keener and Big Injun sands
geological formations, and 800 acres in the Powder River Basin in
Crook County, Wyoming, none of which has contributed to the
revenues of the Company to date.

     The Company was originally organized on January 16, 1964 under
the laws of the State of Idaho as Alter Creek Mining Company, Inc. 
In January, 1988, the Company entered into a transaction whereby it
acquired certain assets, consisting of oil and gas leases, and
certain liabilities of Ben's Run Oil Company, a partnership formed
in 1984 (hereinafter "Ben's Run") and owned by Stanley P. Wilcox
and John B. Sims, in exchange for 390,000 shares (post-split as
hereinafter defined) of authorized but previously unissued common
stock of the Company.  In connection with the transaction, the
Company changed its corporate name to Apple Corp.

     On January 30, 1989, the Company acquired from Black Petroleum
Corporation, a Massachusetts corporation (hereinafter "Black
Petroleum"), certain interests in gas and oil producing properties,
consisting of over 100 gas and oil wells located in Texas,
Oklahoma, Kansas and West Virginia, and assumed certain liabilities
related to said properties in exchange for $100,000 in cash,
160,790 shares (post-split) of the Company's authorized but
previously unissued common stock, and a 3/16 override on all wells
more than fifty percent (50%) owned.  Pursuant to this transaction,
Black Petroleum also received certain anti-dilution rights relating
to its percentage ownership of the Company's common stock and a
stock purchase warrant to acquire additional shares of the
Company's common stock.  Both the anti-dilution provisions and the
stock purchase warrant expired in January, 1994.  The Company
subsequently disposed of several of the wells retaining only wells
located in West Virginia.

     At the Company's Special Meeting of Shareholders held
September 22, 1993, the shareholders approved the following:  (i) 
the proposal to effect a reverse stock split on the outstanding
shares of the Company's common stock on a two (2) shares for
five (5) shares basis;  (ii)  the proposal to acquire certain oil
and gas assets and capital stock in exchange solely for shares of
the Company's common stock (as further described below); and (iii) 
the proposal to effect the necessary corporate action to change the
domicile of the Company from the State of Idaho to the State of
Nevada and to change the corporate name to Trans Energy, Inc.  All
subsequent references to the Company's common stock refer to post-
split shares.

     On November 5, 1993, the Board of Directors incorporated a new
corporation in the State of Nevada in 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.  The sole purpose
of the merger was to change the domicile of the Company to the
State of Nevada.  On November 15, 1993, Apple Corp. and the newly
formed Trans Energy, Inc. of Nevada executed a merger agreement
whereby the shareholders of Apple Corp. exchange 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.  The
sole shareholder of Trans Energy, Inc. holding one share of common
stock prior to the merger, returned his share to the Company for
cancellation.  As a result of the transaction, the Company became
a corporation domiciled in Nevada and the Idaho corporation (Apple
Corp.) was dissolved.  Shareholders who owned shares of Apple Corp.
common stock prior to November 15, 1993, became the owners of Trans
Energy, Inc. (Nevada) common stock.

     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

     The Company has engaged in limited developmental drilling and
no exploratory drilling in the last three years.  Exploratory
drilling involves drilling wells in areas where there are no proven
reserves of gas or oil, to find a new commercially productive area
in a field previously found to be productive or to significantly
extend a known field.  Development drilling involves the drilling
of wells within proven areas of an oil and gas reservoir to depths
where hydrocarbons are known to exist.  Exploratory drilling
involves a higher degree of risk of failure than developmental
drilling, although there can be no assurance that a developmental
well will yield commercial quantities of oil and gas.   In 1997,
the Company participated in two developmental drilling projects. 
One well was drilled to the Big Injun formation underlying the
Company's Sistersville, West Virginia acreage and one well was
drilled on the Company's acreage in the Powder River Basin in
Wyoming.

     The Company has operated primarily in the Appalachian Basin
principally in Northwestern West Virginia.  In Northwestern West
Virginia, shallow wells drilled to a depth of up to 6,000 feet are
characterized by long producing lives with low-volume production
from low permeability reservoirs with a thickness ranging from 10
to 40 feet.  A typical shallow well will encounter commercial gas
production from between 4 and 10 separate and distinct production
horizons including Big Injun, Gordon, Wier and Benson.  Due to
mechanical and technical limitations, it is usually possible to
produce only up to 2 to 5 of these formations simultaneously, and
consequently, necessitates either the drilling of a twin well or
recompletion of the original well at a later date where multiple
productive formations are penetrated.

     The Company intends to focus its activities in the Appalachian
Basin, which is geographically one of the largest gas and oil
producing regions and also in the Powder River Basin in Wyoming. 
Operators in the Appalachian Basin historically have experienced
high drilling success rates in the formations of the Basin, with
wells generally producing for more than 25 years although at low
production volumes.  The Appalachian Basin is located in close
proximity to the largest gas markets in the United States and,
historically, this has generally resulted in wellhead gas prices
somewhat higher than those prices received in the Gulf Coast and
the Mid-Continent producing regions.

     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 Appalachian Basin and elsewhere in order
to maximize stockholders' return over the long term.  The Company's
strategic location in West Virginia 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.  The Company has directed
its attention to Appalachian Basin properties in which it will have
a significant ownership interest and will serve as operator.

     To accomplish this strategy, the Company has focused on
increasing its gas and oil revenues through well recompletions,
property acquisitions and exploitation programs.  Since 1992, the
Company's proven reserves of natural gas and oil have increased by
an aggregate of 71% to 1,789 MMcf and 1% to 199 MBbl, respectively. 
There can be no assurance, however, that the Company will be able
to continue to expand its proven reserves of natural gas and oil.

     Following the acquisition of the Ben's Run oil and gas leases
in 1988, the Company became actively engaged in the operation of
oil and gas wells.  However, revenue realized by the Company's oil
and gas sales decreased annually from 1990.  Early in 1993,
management determined that an overall evaluation of the Company's
properties was proper and that it would be in the best interest of
the Company to consolidate its current holdings and make new
acquisitions.

     At  the  Company's Special Meeting of Shareholders held
September 22, 1993, the Board of Directors presented a plan to the
shareholders whereby the Company would acquire, pursuant to four
separate agreements, certain oil and gas assets, including wells
and pipelines, in exchange solely for shares of the Company's
authorized but previously unissued common stock.  Shareholders
approved the acquisitions, which are summarized below:

     Tyler Construction Company, Inc.

     Pursuant to the Stock Acquisition Agreement executed September
22, 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.  The value of such assets was recorded
at $318,988.  Tyler Construction owns and operates a natural gas
gathering pipeline system serving the industrialized Ohio Valley. 
Tyler Construction owns and operates 27 miles of six-inch pipeline
and 10 miles of four-inch pipeline.

     In exchange for the 65% interest, the Company issued to
Messrs.  Bagley and Woodburn, the holders of the 65 shares of Tyler
Construction equaling 65% of its total outstanding shares, 750,000
shares of the Company's authorized but previously unissued common
stock.  The remaining 35% interest in Tyler Construction is owned
by Ecological Energy, Inc., a third party not otherwise affiliated
with the Company.

     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 Carnegie Natural Gas,
Consolidated Natural Gas and Columbia Natural Gas.  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 20-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 on September 22, 1993, the Company acquired from Mr.
Dennis L. Spencer all rights, title and interest to six producing
oil and gas wells located in West Virginia, in exchange for 500,000
shares (post-split) of the Company's authorized but previously
unissued common stock.  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.  The value of such assets was recorded at $1,082,000.

     The Pipeline, Ltd.

     Also on September 22, 1993, the Company entered into the Asset
Acquisition Agreement with Tyler Pipeline, Inc. ("Tyler Pipeline")
whereby the Company acquired all rights, title and interest in the
natural gas gathering pipeline system known as The Pipeline, Ltd.,
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.  The value of such
assets was recorded at $4,086.

     In exchange for assets of The Pipeline, Ltd. (the name of the
pipeline, not a legal entity), the Company issued to Tyler Pipeline
250,000 shares of the Company's common stock.  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.

     Pursuant to the Stock Exchange Agreement executed on September
22, 1993, the Company acquired all the issued and outstanding
capital stock of Ritchie County Gathering Systems, Inc., a West
Virginia corporation ("Ritchie County Gathering"), in exchange for
500,000 shares (post-split) of the Company's authorized but
previously unissued common stock.  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.  The value of such assets was recorded at $59,130.

Recent Business Developments - Proposed Merger With Natural Gas
Technologies, Inc.

     On March 24, 1998, the Company entered into a Plan and
Agreement of Merger with National Gas Technologies, Inc. ("NGT"),
a Dallas, Texas based exploration company, pursuant to which NGT
will be merged with and into the Company with the Company being the
surviving corporate entity.  The merger will be accomplished by way
of the exchange of 100% of the issued and outstanding shares of NGT
common stock and preferred stock for shares of the Company's common
stock.  The exchange ratio will result in the present NGT
shareholders owning at least 75% of the total number of issued and
outstanding shares of the Company's common stock immediately after
the completion of the merger.  The merger is subject to shareholder
approval of both corporations and the effectiveness of the
Company's registration statement on Form S-4.

     Upon completion of the merger, NGT's Vice President, Michael
Stewart, shall serve as President, Chief Operating Officer and a
director of the Company.  The Board of Directors shall consist of
seven directors after completion of the merger.  The Company's
current President, Loren E. Bagley, shall continue to serve as
Chairman of the Board.  In addition to Mr. Bagley and Mr. Stewart,
additional directors to be appointed by the Company shall be
William F. Woodburn and John Sims and the additional directors to
be appointed by NGT shall be Warren Donohoe and Sonja Fletcher. 
The seventh director has not yet been determined, however, such
director will be appointed prior to completion of the merger by the
mutual agreement of NGT and the Company.  Until the merger is
completed, both corporations are being managed pursuant to a joint
committee consisting of Mr. Bagley and Mr. Stewart.

     On March 6, 1998, the Company entered into an agreement with
GCRL Energy, Ltd. ("GCRL") to purchase all of GCRL's interest in
the Powder River Basin in Wyoming, consisting of interests in five
(5) producing wells, interests in 30,000 leasehold acres, and
interests in seventy-two miles of 3-D seismic.

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 Powder
River Basin in Wyoming.  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 1998.

     Apart from the two wells drilled in 1997, the Company has not
drilled any new wells in the last three years. No new drilling is
projected except in the Wyoming and Sistersville areas discussed
below.

Powder River Basin Wyoming

     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 arc no producing wells on
such acreage and no proven 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 or the Company's acreage.  Where water pressure
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 intends to drill additional wells on its
acreage during 1998.

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. 

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.  The Company is currently
evaluating the results of this well.

Vulcan Energy Corporation.

     During March 1997, the Company announced plans to cease
operations and attempt to sell Vulcan Energy Corporation
("Vulcan"), its 80% owned subsidiary, engaged in the lease crude
oil gathering and marketing in Southeast Texas.  Financial
information with respect to discontinued operations is presented in
Note 9 to the consolidated financial statements.



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 either to Sancho Oil and Gas Corporation ("Sancho") at the
industrial facilities near Sistersville, West Virginia, or to  Hope
on a year long basis ending January 31, 1999 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 $.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 47% of the
Company's revenue for the year ended December 31, 1997, and
approximately 45% for the year ended December 31, 1996.  This
marketing agreement is in effect until September 1, 2003.  The
majority of the balance of the gas sold by the Company is marketed
under a one year contract with Hope.  The price under the agreement
is set monthly and gas is sold as available with no volume
requirements or restrictions.  Sales to this customer made up
approximately 49% of net revenues in 1997.  No other single
customer accounts for more than 10% of the Company's business.

     In addition to the natural gas produced by the Company's
wells, it also purchased  approximately 700 Mcf of natural gas per
day in 1997.

Competition

     The Company is in direct competition with numerous oil and
natural gas companies and drilling and income programs and
partnerships exploring various areas of the Appalachian Basin 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 the Company's competitors
possess greater financial and personnel resources enabling them to
identify and acquire more economically desirable energy producing
properties and drilling prospects than the Company.  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, 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 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 the Company for the sale of gas to certain customers,
specifically OSI Specialities, Inc. and Consolidated Aluminum of
America, Inc.

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.

     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.

     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.

     While past sales of natural gas and oil were subject to
maximum price controls, such controls are no longer in effect.  In
any case, the deregulated price of natural gas under current market
conditions tends to be substantially lower than most regulated
ceilings.  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 ten people full-
time, consisting of two executives, three marketing and clerical
person, and five production persons.  Management presently
anticipates hiring additional employees as the business warrants
and as funds are available.

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 subsidies 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 operates and receives gas and oil revenues from
105 wells.  Of these wells, 85 gross wells (wells in which a
working interest is owned) are gas wells and represent 77 net
wells.  A net well is deemed to exist when the sum of fractional
ownership working interests in gross wells equals one.  The
remaining 20 gross wells are oil wells which represent 18 net
wells.  A total of 28 wells are considered to have multiple
completions, one or more completions in the same bore hole.  It is
the Company's policy to acquire existing wells and to continually
review its holdings and either add new wells or dispose of existing
wells.  Seventy-five percent of the Company's wells are shallow
wells with depths of less than 3,000 feet.  The remaining wells are
Devonian shale wells with a depth of greater than 4,000 feet. 
Appalachian Basin development wells have relatively high success
rates and are characterized by low permeability and low porosity,
thereby resulting in relatively low production rates and long
producing lives of over 25 years.  The Company's ownership interest
varies from well to well with the composite ownership working
interest in the wells at approximately 91% at the end of 1997.

     The Company's producing wells hold approximately 5,636 gross
acres under lease, which the Company believes include a substantial
number of promising development prospects.  In addition, the
Company's has approximately 800 acres under lease in Wyoming.  The
Company's Sistersville acreage consists of approximately 2,200
acres and has been extensively explored by numerous oil and gas
operators and has proven undeveloped reserves.

     The Company's productive wells are situated on 5,636 gross
acres (acres upon which a working interest is owned) which
represent 5,412 net acres.  A net acre is deemed to exist when the
sum of fractional ownership working interests in gross acres equals
one.

     Substantially all of the Company's interests are held pursuant
to leases from third parties.  Title to properties is subject to
royalty, over-riding royalty, carried, net profits, working and
other similar interests and contractual arrangements customary in
the oil and gas industry, liens incident to operating agreements,
liens relating to amounts owed to the operator, liens for current
taxes not yet due and other encumbrances.  The Company believes
that such burdens neither materially detract from the value of such
properties nor the respective interests therein, or materially
interfere with their use in the operation of the business.

     As is customary in the industry in the case of undeveloped
properties, little investigation of record title is made at the
time of lease acquisition (other than a preliminary review of local
records).  Investigations, including a title opinion of local
counsel, are generally made prior to the consummation of an
acquisition of larger properties and before commencement of
drilling operations.

Estimated Proven Reserves.

     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 proven
reserves for the years ended December 31, 1997, 1996 and 1995 are
set forth below:
                                 December 31,                    
                       1997         1996        1995  
Natural Gas (MMcf)
  Developed           979,662      875,705     988,000
  Undeveloped         801,654      801,654     801,654
  Total Proved      1,781,316    1,677,359   1,789,654
Crude Oil (MBbl)
  Developed            30,870       16,343      19,070
  Undeveloped         180,000      180,000     180,000
  Total Proved        210,870      196,343     199,070

    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.

    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.

                             Year ended December 31,                 
Average sales price:    1997           1996           1995 
    Gas (per mcf)      $ 2.95         $ 3.56         $ 2.02
    Oil (per bbl)       16.44          19.22          16.44
Average cost of production:
    Gas (per mcf)        1.09         $ 1.02         $ 1.12
    Oil (per bbl)        6.54           6.12           6.72

    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.
                                                           
                                Years ended December 31,          
                           1997           1996           1995   
Proved oil and gas 
 producing properties
 and related lease 
 and well equipment    $4,122,311     $3,799,387     $3,733,388 
Accumulated depreciation 
 and depletion           (433,799)      (407,934)      (390,540)
Net Capitalized Costs  $3,688,512     $3,391,453     $3,342,848 

    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.

                                 Years ended December 31,    
                           1997           1996           1995   
    
Standardized measure, 
 beginning of year     $3,611,702     $4,063,885     $3,602,626 
Oil and gas sales, net 
 of production costs      (76,874)      (452,183)      (107,818)
Sales of mineral in place    -              -              -    
Quantity estimates made      -              -           569,077 
Standardized measure, 
 end of year            $3,534,828    $3,611,702     $4,063,885 

    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

    There are no material pending legal proceedings to which the
Company is a party or to which any of its property is subject
except as set forth below.

    On December 30, 1996, a complaint entitled R&K Oil Company,
Inc. vs. Trans Energy, Inc. was filed in the United States District
Court, Western District of Texas, Midland/Odessa Division
(# MO96CA197).  The complaint alleges that the Company owes R&K Oil
Company, Inc. $131,978 as a result of business transacted by the
Company's subsidiary, Vulcan Energy Corporation.  Management
believes that the results of the proceedings will not have a
material adverse effect on the Company.  This complaint was
dismissed on June 3, 1997.

    On May 14, 1997, a complaint entitled R&K Oil Company, Inc.
vs. Vulcan Energy Corporation and Trans Energy, Inc. was filed in
District Court, Andrews County, Texas, 109th Judicial District
(File #14,430).  The complaint alleges the Company owes R&K Oil
Company, Inc. $126,978 as a result of business transacted by Vulcan
Energy Corporation.  The complaint also seeks $500,000 for breach
of contract.  Trans Energy denies all allegations.

    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.  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.

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, 1997.

                                  PART II

Item 5.  Market for Common Equity and Related Stockholder Matters

    Prior to October 1994 the Company's common stock traded on a
limited basis in the over-the-counter market and quotations, when
available, were published on the OTC Bulletin Board under the
symbol "TSRG", and in the National Quotation Bureau, Inc. ("NQB")
"pink sheets" under Trans Energy, Inc.  In October 1994, the
Company's common stock was accepted for trading on the Nasdaq
Small-Cap Market and is currently listed 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 for the past two fiscal years.

                                   High            Low
         1996
              First Quarter       $ 3.50         $ 2.63
              Second Quarter      $ 6.00         $ 2.50
              Third Quarter       $ 5.25         $ 2.88
              Fourth Quarter      $ 6.25         $ 3.25
         1997
              First Quarter       $ 6.56         $ 2.00
              Second Quarter      $ 3.28         $ 1.25
              Third Quarter       $ 2.00         $  .63
              Fourth Quarter      $ 2.00         $  .63
         1998
              First Quarter       $ 1.67         $  .50
              Second Quarter(1)   $ 1.25         $ 1.00
                                        
          (1)  Through April 8, 1998

     As of December 31, 1997, there were 193 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.

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.

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.  Please note that results of
operations for the 1996 fiscal year have been restated.

Recent Accounting Pronouncements

     The Financial Accounting Standards Board has issued Statement
of Financial Accounting Standard ("SFAS") No. 128, "Earnings Per
Share" and Statement of Financial Accounting Standards No. 129
"Disclosures of Information About an Entity's Capital Structure." 
SFAS No. 128 provides a different method of calculating earnings
per share than is currently used in accordance with Accounting
Principles Board Opinion No. 15, "Earnings Per Share." SFAS No. 128
provides for the calculation of "Basic" and "Dilutive" earnings per
share.  Basic earnings per share includes no dilution and is
computed by dividing income available to common shareholders by the
weighted average number of common shares outstanding for the
period.  Diluted earnings per share reflects the potential dilution
of securities that could share in the earnings of an entity,
similar to fully diluted earnings per share.  SFAS No. 129
establishes standards for disclosing information about an entity's
capital structure.  SFAS No. 128 and SFAS No. 129 are effective for
financial statements issued for periods ending after December 15,
1997.  Their implementation is not expected to have a material
effect on the financial statements.

     The Financial Accounting Standards Board has also issued SFAS
No. 130, "Reporting Comprehensive Income" and SFAS No. 131,
"Disclosures about Segments of an Enterprise and Related
Information." SFAS No. 130 establishes standards for reporting and
display of comprehensive income, its components and accumulated
balances.  Comprehensive income is defined to include all changes
in equity except those resulting from investments by owners and
distributors to owners.  Among other disclosures, SFAS No. 130
requires that all items that are required to be recognized under
current accounting standards as components of comprehensive income
be reported in a financial statement that displays with the same
prominence as other financial statements.  SFAS No. 131 supersedes
SFAS No. 14 "Financial Reporting for Segments of a Business
Enterprise."  SFAS No. 131 establishes standards on the way that
public companies report financial information about operating
segments in annual financial statements and requires reporting of
selected information about operating segments in interim financial
statements issued to the public.  It also establishes standards for
disclosure regarding products and services, geographic areas and
major customers.  SFAS No. 131 defines operating segments as
components of a company about which separate financial information
is available that is evaluated regularly by the chief operating
decision maker in deciding how to allocate resources and in
assessing performance.

     SFAS 130 and 131 are effective for financial statements for
periods beginning after December 15, 1997 and requires comparative
information for earlier years to be restated.  Because of the
recent issuance of the standard, management has been unable to
fully evaluate the impact, if any the standard may have on future
financial statement disclosures.  Results of operations and
financial position, however, will be unaffected by implementation
of the standard.

                           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, 1997, and 1996.  It should be noted that percentages
discussed throughout this analysis are stated on an approximate
basis.
                                            Fiscal Years Ended  
                                                December 31,
                                              1997      1996 
Total revenues . . . . . . . . . . . .        100%      100%
Total costs and expenses . . . . . . .        245       151 
Total other income (expenses). . . . .        (33)     (109)
Net income (loss) before taxes and 
  minority interest. . . . . . . . . .       (178)     (160)
Income taxes . . . . . . . . . . . . .          -         - 
Net loss from discontinued operations.         (4)     (139)
  Minority interest. . . . . . . . . .          0         3 
Net income (loss). . . . . . . . . . .       (182)     (296)
                              

For the Year Ended December 31, 1997 Compared to the Year Ended
December 31, 1996.

    Total revenues of $1,115,037 for the year ended December 31,
1997 ("1997") compared to $1,236,740 for the year ended December
31, 1996 ("1996").  The decline in revenues was 10% in total and
was the result of several factors.  First, there was a decline in
the market price of gas during 1997.  Second, much of the gas for
which the Company had contracted to purchase was set at a price
higher than the Company's customers, principally Sancho and Hope,
would pay.  Thus, as permitted under the contracts between the
Company and its third party suppliers, the Company declined to
purchase the gas.  This decision resulted in lower sales, but
avoided additional losses for the Company.  The decline in sales
was primarily attributable to one customer.  In 1997, oil made up
3% of total revenues as compared to only 4% in 1996.  Accordingly,
gas sales increased from 96% of sales in 1996 to 98% in 1997.

    The Company had a net loss of $2,029,450 for 1997.  The
Company's total costs and expenses increased from 151% of sales in
1996 to 245% of sales in 1997.  The cost of oil and gas increased
from 64% of sales in 1996 to 67% of sales in 1997.  Selling,
general and administrative expenses also increased 80% due in part
to the issuance of stock by the Company for services rendered.
Salaries and wages increased 96% due to the Company's executives
receiving a salary which is being accrued by the Company.
Depreciation, depletion and amortization increased 95% in 1997 from
1996 due to the amortization of offering costs in a capital raising
transaction.  Interest expense in 1997 decreased 78% over 1996 due
to decreased loans by the Company.

Net Operating Losses

    The Company has accumulated approximately $8,740,161 of net
operating loss carryforwards as of December 31, 1997, which may be
offset against future taxable income through the year 2012 when the
carryforwards expire.  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, 1997 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, 1997 was a negative $1,922,427
compared with a negative $583,240 at December 31, 1996.  This
change was primarily attributed to increased expenditures by the
Company and its operating losses.  The Company anticipates meeting
its working capital needs during the 1998 fiscal year with revenues
from operations.

    As of December 31, 1997, the Company had total assets of
$5,680,601 and stockholders' equity of $2,012,481 compared to total
assets of $5,500,343 and total stockholders' equity of $2,219,746
as of December 31, 1996.  For this same period, cash decreased from
$481,846 to $185,881 on December 31, 1997, and total current assets
decreased from $777,204 to $362,483 due to the decrease in cash. 
Total current liabilities increased from $1,360,444 to $2,284,912
on December 31, 1997 primarily due to an increase in accounts
payable from $685,711 to $1,250,017 at December 31, 1997.

    The Company's current portion of its long-term debt is
$898,098.  The Company currently anticipates that it will be able
to provide for its debt obligations and repayments coming due
during fiscal 1997 from revenues generated by the Company.

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

<PAGE>
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. 

Item 7.       Financial Statements

    The Company's financial statements as of and for the fiscal
years ended December 31, 1997 and 1996 have all been examined to
the extent indicated in their report by 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.
<PAGE>






                       INDEPENDENT AUDITORS' REPORT


Board of Directors 
Trans Energy, Inc.
Las Vegas, Nevada

We have audited the accompanying consolidated balance sheet of
Trans Energy, Inc. and subsidiaries as of December 31, 1997 and the
related consolidated statements of operations, stockholders'
equity, and cash flows for the years ended December 31, 1997 and
1996.  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, 1997 and the consolidated results of their operations
and their cash flows for the years ended December 31, 1997 and
1996, 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.



Jones, Jensen & Company
Salt Lake City, Utah
March 25, 1998
<PAGE>

                            TRANS ENERGY, INC.
                        Consolidated Balance Sheet
                                     

                                  ASSETS

                                                    December 31,
                                                        1997            

CURRENT ASSETS

  Cash                                              $  185,881 
  Accounts receivable                                  175,161
  Prepaid and other current assets                       1,441 

     Total Current Assets                              362,483 

PROPERTY AND EQUIPMENT (Note 2)

  Vehicles                                              94,589 
  Machinery and equipment                               10,092 
  Pipelines                                          2,231,308 
  Well equipment                                       271,882 
  Wells                                              3,850,429
  Leasehold acreage                                    597,221
  Accumulated depreciation                          (1,742,136)

     Total Fixed Assets                              5,313,385 

OTHER ASSETS

  Loan acquisition costs                                 4,733 
 
     Total Other Assets                                  4,733 

   TOTAL ASSETS                                     $5,680,601 
<PAGE>

                            TRANS ENERGY, INC.
                  Consolidated Balance Sheet (Continued)


                   LIABILITIES AND STOCKHOLDERS' EQUITY

                                                    December 31,
                                                       1997            
CURRENT LIABILITIES

  Accounts payable - trade                          $1,250,017 
  Accrued expenses                                      72,195 
  Salaries payable                                      64,602
  Notes payable - current portion (Note 3)             898,098     

     Total Current Liabilities                       2,284,912 

NET LIABILITIES IN EXCESS OF ASSETS OF 
 DISCONTINUED OPERATIONS (Note 9)                      340,821

LONG-TERM LIABILITIES

  Notes payable (Note 3)                               792,387 

     Total Long-Term Liabilities                       792,387 

     Total Liabilities                               3,418,120 

MINORITY INTERESTS                                     250,000 

COMMITMENTS AND CONTINGENCIES (Note 7)

STOCKHOLDERS' EQUITY (Note 6)

  Common Stock:  30,000,000 shares authorized
   at $0.001 par value; 
   5,663,215 shares issued and outstanding               5,663 
  Capital in excess of par value                    10,746,979 
  Accumulated deficit                               (8,740,161)

     Total Stockholders' Equity                      2,012,481 

     TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY     $5,680,601 
<PAGE>

                            TRANS ENERGY, INC.
                   Consolidated Statements of Operations

                                           For the Years Ended      
                                                December 31,          
                                              1997        1996           

OIL AND GAS SALES                         $1,115,037   $ 1,236,740

COSTS AND EXPENSES

  Cost of oil and gas                        748,757       787,136 
  Salaries and wages                         203,940       104,078
  Depreciation, depletion and amortization   325,206       165,830
  Selling, general and administrative       1,453,954      803,810

     Total Costs and Expenses               2,731,857    1,860,854

LOSS FROM CONTINUING OPERATIONS            (1,616,820)    (624,114)

OTHER INCOME (EXPENSE)

  Other income                                 10,229           73
  Interest expense                           (281,867)  (1,276,465)
  Gain (loss) on disposition of assets          1,500      (50,000)
  Bad debt expense                           (100,000)     (16,000)

     Total Other Income (Expense)            (370,138)  (1,342,392)

NET LOSS FROM CONTINUING OPERATIONS BEFORE
 INCOME TAXES AND MINORITY INTERESTS       (1,986,958)  (1,966,506)

INCOME TAXES (Note 1)                            -            -      

NET LOSS FROM CONTINUING OPERATIONS BEFORE
 MINORITY INTERESTS                        (1,986,958)  (1,966,506)

NET LOSS FROM DISCONTINUED OPERATIONS
   (Note 9)                                   (42,492)  (1,711,877)

NET LOSS BEFORE MINORITY INTERESTS         (2,029,450)  (3,678,383)

MINORITY INTERESTS                               -          39,393

NET LOSS                                  $(2,029,450) $(3,638,990)

NET LOSS PER SHARE

  Continuing operations                   $     (0.44)  $    (0.59)
  Discontinued operations                        -           (0.53)

                                          $     (0.44)  $    (1.12)
<PAGE>

                             TRANS ENERGY, INC.
              Consolidated Statements of Stockholders' Equity


                                                        Capital in      
                                      Common Shares      Excess of  Accumulated
                                   Shares      Amount    Par Value    Deficit 

Balance, December 31, 1995       3,174,122   $   3,174  $ 5,629,734 $(3,071,721)

Common stock issued for 
 debenture at $0.90 per share       55,555          56       49,944        - 

Common stock issued for
 services at $2.67 per share         9,000           9       23,991        - 

Common stock warrants 
 issued                               -           -         774,000        -

Cancellation of common 
 stock options issued for
 services                             -           -        (275,000)       - 

Shareholder loans contributed
 to capital                           -           -         250,000        -

Issuance of common stock for
 cash at $5.36 per share           585,366         585    3,137,415        -  

Common stock offering costs           -           -        (663,451)       - 

Net loss for the year ended
 December 31, 1996                    -           -            -     (3,638,990)

Balance, December 31, 1996       3,824,043       3,824    8,926,633  (6,710,711)

Common stock issued for services
 at $1.41 per share                350,000         350      491,837        - 

Common stock issued for cash
 at $0.96 per share              1,489,172       1,489    1,428,511        - 

Contribution of capital by
 shareholders                         -           -          49,998        - 

Common stock offering costs           -           -        (150,000)       -  

Net loss for the year ended
 December 31, 1997                    -           -            -     (2,029,450)

Balance, December 31, 1997       5,663,215   $   5,663  $10,746,979 $(8,740,161)
<PAGE>

                              TRANS ENERGY, INC.
                    Consolidated Statements of Cash Flows


                                                  For the Years Ended      
                                                      December 31,          
                                                    1997        1996           
CASH FLOWS FROM OPERATING ACTIVITIES:                              

  Net loss                                     $(2,029,450) $(3,638,990)
  Adjustments to Reconcile Net Loss to Cash
   Provided by Operating Activities:
    Depreciation and depletion                     325,206      165,830
    Minority interest                              250,000      (39,393)
    (Gain) loss on disposition of assets            (1,500)      50,000
    Bad debt expense                               100,000       16,000
    Common stock issued for services               492,837       24,000 
    Stock options canceled for services 
      not performed                                   -        (275,000)
    Loss on discontinued operations               (477,896)   1,190,800
  Changes in Operating Assets and Liabilities:
    Decrease (increase) in accounts receivable     (39,404)     (73,290)
    Decrease (increase) in prepaid and other
      current assets                                58,160      (59,601)
    Decrease (increase) in deposits                   -             355
    Decrease (increase) in loan acquisition cost      -         876,065
    Increase (decrease) in accounts payable and 
     accrued expenses                              721,716      243,223

     Cash Provided (Used) by Operating Activities (600,331)  (1,520,001)

CASH FLOWS FROM INVESTING ACTIVITIES:

  Expenditures for property and equipment         (918,685)    (152,206)

    Cash Provided (Used) by Investing Activities $(918,685)  $ (152,206)
<PAGE>

                              TRANS ENERGY, INC.
              Consolidated Statements of Cash Flows (Continued)


                                                  For the Years Ended       
                                                      December 31,           
                                                     1997        1996           
CASH FLOWS FROM FINANCING ACTIVITIES:                              

  Principal payments on related party advances  $  (605,190)  $     -     
  Proceeds from sale of common stock              1,429,350    3,138,000
  Payment of deferred offering costs                   -        (388,451)
  Proceeds from related party advances                 -         204,110
  Principal payments on notes payable              (211,109)    (899,606)
  Proceeds from notes payable                       610,000      100,000

    Cash Provided (Used) by Financing Activities  1,223,051    2,154,053

NET INCREASE (DECREASE) IN CASH                    (295,965)     481,846

CASH AND CASH EQUIVALENTS,
  BEGINNING OF YEAR                                 481,846         -     

CASH AND CASH EQUIVALENTS,
  END OF YEAR                                   $   185,881  $   481,846

CASH PAID FOR:

  Interest                                      $   279,525  $   184,381
  Income taxes                                  $      -     $      -     

NON-CASH FINANCING ACTIVITIES:

  Common stock issued for services              $   492,837  $    24,000
  Stock options issued (cancelled) for services $      -     $  (275,000)
  Conversion of debentures to equity            $      -     $    50,000
  Common stock warrants                         $      -     $   774,000
  Shareholder loans contributed to capital      $    49,998  $   250,000
<PAGE>

                              TRANS ENERGY, INC.
               Notes to the Consolidated Financial Statements 
                          December 31, 1997 and 1996

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. 

       On August 7, 1995, the Company purchased 80 percent of the issued
       and outstanding stock of Vulcan Energy Corporation (Vulcan), a
       Texas corporation, for $1,100,000 including the assumption of
       $300,000 in debt for a customer of Vulcan.  Vulcan was located in
       the State of Texas and was engaged in the oil gathering and
       marketing business.  In March 1997, the Company decided to cease
       the operations of Vulcan.  Accordingly, the results of operations
       along with the net liabilities of Vulcan have been reflected as
       discontinued operations in the accompanying consolidated
       financial statements.  See Note 9 for further discussion.

       b. Accounting Method

       The Company's consolidated financial statements are prepared
       using the accrual method of accounting.  The successful efforts
       method of accounting is used for oil and gas exploration and
       production activities which states that total net capitalized
       costs, as a minimum test, may not exceed future undiscounted net
       cash flows.  In any period that total net capitalized costs
       exceed future undiscounted net cash flows, the excess will be
       charged to current operations.  The Company has elected a
       calendar year end.

       c. Net Loss per Share of Common Stock

       The net 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.  Only primary net loss per
       share of common stock is disclosed in the accompanying
       consolidated statements of operations as fully diluted loss per
       share is anti-dilutive.

       d. Provision for Taxes

       At December 31, 1997, the Company had net operating loss
       carryforwards of approximately $8,740,000 that may be offset
       against future taxable income through 2012.  No tax benefit has
       been reported in the consolidated financial statements, because
       the potential tax benefits of the net operating loss
       carryforwards is offset by a valuation allowance of the same
       amount.
<PAGE>

                              TRANS ENERGY, INC.
               Notes to the Consolidated Financial Statements 
                         December 31, 1997 and 1996 


NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

       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 subsidiary, Ritchie County Gathering Systems, Inc.,
       its 65% owned subsidiary, Tyler Construction Company, Inc. and
       its 50% owned and now discontinued subsidiary, Sundance, LLC. 
       All significant intercompany accounts and transactions have been
       eliminated. 

       g. Presentation

       Certain 1996 balances have been reclassified to conform to the
       presentation of the 1997 consolidated financial statements.

       h. Depreciation

       Fixed assets are stated at cost.  Depreciation on vehicles,
       pipelines, machinery, equipment and well equipment is provided
       using the straight line method over expected useful lives of five
       to 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.

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.
<PAGE>

                              TRANS ENERGY, INC.
                Notes to the Consolidated Financial Statements
                          December 31, 1997 and 1996

NOTE 2 - PROPERTY AND EQUIPMENT (Continued)

       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.  

       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.  

       During 1994, the Company purchased leasehold acreage in Ohio
       known as Rose Run for $287,000.  The acreage was purchased from
       shareholders of the Company in part for forgiveness of
       receivables from those shareholders.  
<PAGE>

                              TRANS ENERGY, INC.
                Notes to the Consolidated Financial Statements
                          December 31, 1997 and 1996


NOTE 3 - LONG-TERM DEBT

       The Company had the following debt obligations at December 31, 1997:

    Calhoun County Bank, secured by oil and gas well interests, 
     payable in monthly installments of $1,859 including interest at 
     variable rates, (lender's base rate of 9.75% as of December 31, 
     1997), matures April 12, 1999.                                      22,354

    Calhoun County Bank, secured by oil and gas well interests, payable 
     in monthly installments of $269 including interest at variable rates, 
     (lender's base rate of 9.75% as of December 31, 1997), matures 
     April 12, 1999.                                                      4,072

    Calhoun County Bank, secured by oil and gas well  interests, payable 
     in monthly installments of $1,300 including interest at variable rates, 
     (lender's base rate of 9.75% as of December 31, 1997), matures 
     April 12, 1999.                                                     30,133

    New York Life, secured by cash value in policy, interest payable 
     annually at 7.25% interest rate.                                    21,800

    First National Bank of St. Marys, $9,244 payable monthly, 12.5% 
     interest rate, secured by equipment.                               592,979

    Union Bank of Tyler County, interest at 11.5% due quarterly, 
     renewable, due on demand, secured by equipment.                     19,756

    Note due private company, principal and interest of $163 payable 
     monthly, interest rate of 10.75%, secured by vehicle.                1,573

    Bank of Paden City, interest payable quarterly, prime +2%, due
     on demand, secured by officers personal assets.                    268,234

    Note payable to an individual, due on demand, bearing interest at
     9.75%, unsecured.                                                  292,078
    
    Bank of Paden City, secured by vehicles, various maturity dates, 
     principal and interest due monthly at 9.25% to 10.25%.              28,779

    Note due to a private individual, due November 7, 1996 with interest 
     at 20%, unsecured.                                                 100,000

    Note due to an individual, due August 1999 with interest at 7.50%,
     requiring monthly payments of $3,000, secured by personal guarantee
     of officer.                                                        250,232

    Note due to an individual, due on demand with interest at 
     7.00%, unsecured.                                                   58,495

         Total                                                        1,690,485

         Less Current Portion                                          (898,098)

         Total Long-Term Debt                                        $  792,387 
<PAGE>

                              TRANS ENERGY, INC.
                Notes to the Consolidated Financial Statements
                          December 31, 1997 and 1996


NOTE 3 - LONG-TERM DEBT (Continued)

    Future maturities of long-term debt are as follows:

       1997                                            $  898,098 
       1998                                               279,273 
       1999                                                53,167 
       2000                                                56,586          
       2001                                                62,346          
       2002 and thereafter                                341,015 

            Total                                      $1,690,485 

NOTE 4 - RELATED PARTY TRANSACTIONS

    a. Management Agreement

    A company owned by an officer of the Company's 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 since the subsidiary has generated net
    losses through December 31, 1996.  Since the operations of Vulcan
    Energy have been discontinued (see Note 9), management believes
    that the Company has no obligation related to this management
    agreement as of December 31, 1996 or in future periods.

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, 1997.  This marketing agreement is in effect until
    December 1, 2003.  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 1997.

NOTE 6 - COMMON STOCK, OPTIONS AND WARRANTS

    On January 15, 1995, the Company issued 100,000 shares of its
    common stock to a consultant for services rendered.  The shares
    were valued at $1.50 per share which was the average trading
    price when issued.

    On October 1, 1995, the Company issued an option to a consultant
    to purchase 100,000 shares of its common stock at $0.001 per
    share.  The option was valued at the difference between the
    exercise price and the trading price of the shares.  Accordingly,
    the Company incurred $275,000 of consulting fees in 1995.  On
    March 29, 1996, the consultant returned the option for
    cancellation.  The option was not exercised and was cancelled
    without consideration, therefore the cancellation was accounted
    for as a decrease of capital in excess of par value and the
    related asset during 1996.


                              TRANS ENERGY, INC.
                Notes to the Consolidated Financial Statements
                          December 31, 1997 and 1996

NOTE 6 - COMMON STOCK, OPTIONS AND WARRANTS (Continued)

    During 1995, debentures having a total face value of $45,000 were
    converted into 50,000 shares of the Company's common stock,
    valued at $0.90 per share.  Remaining debentures with a total
    face value of $50,000 were converted into 55,555 shares of the
    Company's common stock in 1996, also valued at $0.90 per share. 
    As an incentive to the debenture holders for extending the  due
    date of the debentures due on December 31, 1995, they were given
    the right to receive the number of post-split shares they were to
    have received pre-split.  The value of the additional shares
    issued, $202,032, has been recorded as loan costs and amortized
    over the period until the debentures were converted in 1996.

    The Company also received $5,000 during December of 1995 for the
    purchase of 500,000 bridge warrants at $0.01 per warrant.  The
    bridge warrants were valued at the average trading price when
    issued and expensed during the year ended December 31, 1995 in
    the amount of $1,345,000.  The bridge warrants are convertible
    into 1 share of common stock at $0.50 per share for up to
    eighteen months.  With the completion of the public offering
    discussed below, the $0.50 common stock conversion option of the
    bridge warrants terminated and the bridge warrants automatically
    converted into 2 redeemable warrants exercisable at 110% of the
    offering price. The Company issued 48,750 additional stock
    warrants as compensation for the sale of the bridge warrants
    which were later surrendered to the Company for no consideration. 
    
    The Company issued an additional 300,000 bridge warrants in March
    1996 in conjunction with the completion of a $600,000 bridge
    financing.  The Company issued 30,000 additional bridge warrants
    in conjunction for the sale of bridge units containing the
    unsecured notes and bridge warrants which were later returned to
    the Company for no consideration.  These bridge warrants were
    exercisable for 18 months from the date of issuance and entitled
    the holder thereof to purchase 1 share of common stock at $0.50
    per share.  The bridge warrants were valued at the average
    trading price when issue and were being amortized to interest
    expense over 12 months.  With the completion of the public
    offering discussed below, the $0.50 common stock conversion
    option of these bridge warrants terminated and the bridge
    warrants converted into 2 redeemable warrants exercisable at 110%
    of the offering price.  Accordingly, the remaining unamortized
    portion was expensed at December 31, 1996.

    The Company issued 9,000 shares of common stock during 1996 to an
    individual as compensation for services rendered totaling $24,000
    representing a per share price of $2.67 which approximated the
    fair market value of the shares on the date they were authorized
    to be issued.

    In December 1996, the Company completed a public offering of its
    common stock issuing 585,366 shares while receiving total
    proceeds of $3,138,000 or $5.36 per share.  Related costs
    associated with this offering totalled $663,451 which has been
    charged to capital in excess of par value in the accompanying
    consolidated financial statements.

    In September 1996, two officers, directors and shareholders of
    the Company agreed to a reduction in amounts payable to them by
    the Company totaling $250,000 which have previously been
    accounted for as advances from related parties.  This amount has
    been contributed to capital in excess of par value in the
    accompanying consolidated financial statements.

    In 1997, the Company completed the sale of 8% cumulative
    convertible debentures due March 25, 2000, netting cash proceeds
    to the Company of $1,430,000.  The terms of the convertible
    debentures enable the holder to convert the debentures into
    common stock of the Company at any time after 45 days at a price
    based on a percentage of the quoted market price depending on
    when the debentures are converted.  The debentures were converted
    to 1,489,172 shares of common stock in 1997.


                              TRANS ENERGY, INC.
                Notes to the Consolidated Financial Statements
                          December 31, 1997 and 1996

NOTE 7 - COMMITMENTS AND CONTINGENCIES

    Several vendors of Vulcan Energy, Inc., the discontinued
    operation, have filed legal action against Vulcan Energy and the
    Company alleging breach of contract and non-payment of
    outstanding obligations.  Those vendors are also seeking other
    damages and assessments.  The Company has included in the net
    liabilities of the discontinued operations of Vulcan Energy,
    amounts which they believe are owing to those vendors.  These
    actions are still in the discovery stage and the Company is
    attempting to negotiate settlements with those vendors.  The
    Company believes that the amounts accrued in the accompanying
    consolidated financial statements are adequate to satisfy these
    claims.

    A former officer of Vulcan Energy has filed suit against the
    Company, its officers and directors and Vulcan Energy, asserting
    a claim against these parties based upon a breach of contract and
    fraud in connection with his employment with Vulcan Energy.  The
    parties to this action have filed response vigorously contesting
    the allegations and have filed a countersuit to this action. 
    Management believes that the Company and the ultimate outcome of
    these actions and their possible effects on the consolidated
    financial statements cannot be readily determined.

    The Company pays $1,400 per month for leased office space which
    is on a month-to-month basis.

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, 1997, and has a working capital deficit at December 31, 1997. 
    Revenues have not been sufficient to cover its operating costs
    and to allow it to continue as a going concern.  During 1995, the
    Company purchased an 80% equity ownership of Vulcan Energy
    Corporation, replaced management and recapitalized Vulcan Energy
    with a $200,000 working capital infusion.  However, the Company
    discontinued the operations of Vulcan Energy during 1997,
    incurring a substantial loss from discontinued operations. 
    Management believes that despite the discontinued operations of
    Vulcan Energy and recurring operating losses, the potential
    proceeds from the sale of common stock, other contemplated debt
    and equity financing, and increases in operating revenues from
    new development and  the merger with Natural Gas Technologies
    will enable the Company to continue as a going concern.  (See
    also Notes 10 and 11)

NOTE 9 - VULCAN ENERGY, INC. - DISCONTINUED OPERATIONS

    In March 1997, the Company discontinued the operations of Vulcan
    Energy, Inc., its 80% owned subsidiary.  Accordingly, net
    liabilities in excess of assets, totaling $340,821, have been
    reflected separately in the accompanying consolidated balance
    sheet as of December 31, 1997.   The net operating loss of Vulcan
    Energy, Inc. for the year ended December 31, 1996 amounting to
    $1,711,877 has been reflected separately in the accompanying
    consolidated statements of operations and include estimated
    losses on disposition of Vulcan Energy, Inc.

NOTE 10 - JOINT VENTURE

    The Company has entered into a joint venture with Natural Gas
    Technologies, Inc. (NGT) to form Sundance Producers, LLC.  This
    joint venture will be engaged in oil and gas production
    activities in Wyoming.
<PAGE>

                              TRANS ENERGY, INC.
                Notes to the Consolidated Financial Statements
                          December 31, 1997 and 1996


NOTE 11 - SUBSEQUENT EVENTS

    Acquisition of Subsidiary

    The Company has entered into a plan and agreement of merger with
    Natural Gas Technologies, Inc. (NGT).  It is expected that this
    merger will qualify as a tax free reorganization within the
    meaning of Section 368(9)(1)(A) of the Internal Revenue Code. 
    The merger is expected to be accomplished by way of exchanging
    100% of the issued and outstanding NGT common stock and NGT
    series 1994-B preferred stock for fully registered shares of
    common stock of the Company at the exchange ratio.  The exchange
    ratio will be 2.785 shares of the Companys  common stock for one
    share of NGT common or preferred stock.  It is intended that the
    shareholders of NGT will own 75% of the issued and outstanding
    shares of the Company immediately after the exchange.

    Acquisition of Leasehold Interest

    The Company has entered into a purchase and sale agreement with
    GCRL Energy Ltd. wherein the Company will pay $3,325,000 for
    leasehold interests located in Wyoming and for Seismic data
    associated with those leasehold interests.
<PAGE>

                              TRANS ENERGY, INC.
                    S.F.A.S.  69  Supplemental Disclosures
                          December 31, 1997 and 1996
                                 (Unaudited)


S.F.A.S. 69  SUPPLEMENTAL DISCLOSURES


    (1)                 Capitalized Costs Relating to
                       Oil and Gas Producing Activities
                                       
                                                             December 31,       
                                                           1997        1996  

       Proved oil and gas producing properties and 
        related lease and well equipment               $ 4,122,311  $ 3,799,387
       Accumulated depreciation and depletion             (433,799)    (407,934)

       Net Capitalized Costs                           $ 3,688,512  $ 3,391,453


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

                                              
                                               For the Years Ended      
                                                    December 31,         
                                                 1997         1996 
       Acquisition of Properties
          Proved                              $  65,000  $   -     
          Unproved                              573,479      -     
       Exploration Costs                        164,900      -      
       Development Costs                        280,206      -      


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

       (3)                Results of Operations for
                             Producing Activities

                                                                    
                                                For the Year Ended        
                                                    December 31,         
                                                1997          1996   

       Sales                                  $ 390,922  $  452,183 

       Production costs                        (120,190)   (115,112)
       Depreciation and depletion               (25,865)    (13,916)

       Results of operations for producing
        activities (excluding corporate 
        overhead and interest costs)          $ 244,867  $  323,155
<PAGE>

                              TRANS ENERGY, INC.
                    S.F.A.S.  69  Supplemental Disclosures
                          December 31, 1997 and 1996
                                 (Unaudited)


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

       (4)               Reserve Quantity Information

                                                  Oil        Gas   
                                                  BBL        MCF   

       Balance, December 31, 1996               196,343   1,677,359 

         Production                              (1,343)   (125,210)
         Purchased and developed                 15,870     229,167

       Balance, December 31, 1997               210,870   1,781,316 

       Proved developed reserves:
                                                  Oil          Gas   
                                                  BBL          MCF  

         Beginning of the year 1997             196,343   1,677,359 
         End of the year 1997                   210,870   1,781,316 

         Beginning of the year 1996             199,070   1,789,654 
         End of the year 1996                   196,343   1,677,359 


       During 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.
<PAGE>

                              TRANS ENERGY, INC.
                    S.F.A.S.  69  Supplemental Disclosures
                          December 31, 1997 and 1996
                                 (Unaudited)

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, 1996

                                                       Trans Energy
                                                           and      
                                                       Subsidiaries 
       Future cash inflows                             $17,638,619     
       Future production and development costs         (6,332,264)
       Future net inflows before income taxes          11,306,355 
       Future income tax expense                       (3,844,161)
       Future net cash flows                            7,462,194 
       10% annual discount for estimated timing of 
        cash flows                                     (3,850,492)

       Standardized measure of discounted future 
        net cash flows                                $ 3,611,702     

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

                             At December 31, 1997

                                                       Trans Energy
                                                           and      
                                                       Subsidiaries 
       Future cash inflows                            $17,407,048     
       Future production and development costs         (6,249,130 
)      Future net inflows before income taxes          11,157,918 
       Future income tax expense                       (3,793,693)
       Future net cash flows                            7,364,225 
       10% annual discount for estimated timing of
        cash flows                                     (3,829,397)

       Standardized measure of discounted future 
        net cash flows                                $ 3,534,828     

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

                                                       For the Years Ended
                                                            December 31,
                                                        1997           1996 

    Standardized measure, beginning of year        $ 3,611,702    $ 4,063,885
    Oil and gas sales, net of production costs        (390,922)      (452,183)
    Sales of mineral in place                             -              -      
    Quantity estimates made                            314,048           -     

    Standardized measure, end of year              $ 3,534,828    $ 3,611,702
<PAGE>

                              TRANS ENERGY, INC.
                    S.F.A.S.  69  Supplemental Disclosures
                          December 31, 1997 and 1996
                                 (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 with the
    assumption of current pricing and current costs of production for
    oil and gas produces in future periods.  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. 
<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:

   Name                     Position         Director Since     Age
Loren E. Bagley          President, C.E.O.   August 1991         55
                          and Director 
William F. Woodburn      Vice President      August 1991         56
                          and Director
John B. Sims             Director            January 1988        72
Gary F. Lawyer           Director            December 1997       50

   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 been
actively engaged in the oil and gas business in various capacities for
the past fifteen 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, 1995, 1996 and 1997, 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,          1997  $ 18,000   $ -0-  $ -0-   $ -0-
 President, C.E.O.        1996      -0-      -0-    -0-     -0-
                          1995      -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 March 31, 1998, 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,
and is adjusted to reflect the two shares for five shares reverse stock
split effected by the Company on September 22, 1993.

Name and Address            Amount and Nature of             Percent
of Beneficial Owner         Beneficial Ownership           of Class(1)

Loren E. Bagley *              469,575(2)(6)                  8.2%
210 Second Street
St. Marys, WV 26170

William F. Woodburn *          498,108(3)(6)                  8.7%
210 Second Street
St. Marys, WV 26170

John B. Sims *                     55,228(4)                  1.0%
210 Second Street
St. Marys, WV 26170

Gary F. Lawyer *                        0                       0%
21430 Timtam Circle
Parker, CO 80134

Karla Spencer                     595,775                    10.5%
P.O. Box 24
Alma, WV 26320

Black & Company                   417,334(5)                  7.4%
75 Federal Street
Boston, MA 02110

All directors and executive     1,022,911                    17.7%
officers as a group
(4 persons in group)
                                        
*  Director and/or executive officer

 Note: Unless otherwise indicated in the footnotes below, the Company
       has been advised that each person above has sole voting power
       over the shares indicated above.

(1)    Based upon 5,663,215 shares of common stock outstanding on April 10,
       1998.
(2)    Includes 125,000 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 200,000 shares of common stock in the name of Janet L.
       Woodburn, wife of William F. Woodburn, over which shares Ms.
       Woodburn retains voting power.  Does not include 100,000 shares of
       common stock owned by Mark D. Woodburn, son of William F. Woodburn,
       over which shares William F. Woodburn disclaims any voting control.
(4)    Includes 55,228 shares of common stock held jointly with Virginia
       Sims, wife of John B. Sims.
(5)    Black & Company is a holding company for the benefit of those
       shareholders of Black Petroleum Corporation.
(6)    Does not include options to purchase 50,000 shares of common stock
       each in the name of Loren E. Bagley and William F. Woodburn.

Item 12.    Certain Relationships and Related Transactions

   During the Company's last three 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) As of December 31, 1997, the Company had no related party loans
outstanding.  Total loan payables as of December 31, 1996 were $605,190. 
Any loan made to a related party is made at the discretion of and upon
approval by the Executive Committee of the Board of Directors.  Of such
amount, commencing February 1995 through June 1996, members of the
Company's management extended an aggregate of $448,583 in loans to the
Company for the purpose of providing the Company with working capital. 
All such loans are unsecured, are on an interest free basis and are
repayable in one installment on June 15, 1998.

   (b) 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 66% 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 1997, the Company paid Sancho an aggregate of approximately $5,600
pursuant to such 20-year contract.

   (c) 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 obligation.  Such obligation is secured
by the pledge of 200,000 shares of Common Stock owned by Mr. Woodburn's
wife, Janet L. Woodburn.

   The Company also 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.


                                    PART V

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
 27       Financial Data 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)         The Company did not file any reports on Form 8-K for the three
            month period ended December 31, 1997.
<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    
                                                (Signature)
                                          LOREN E. BAGLEY,
                                          President and C.E.O.

Dated:  April 15, 1998


   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. 

       Signature               Title                                 Date     

                                                      
                             President, C.E.O. and                    
                             Director                           April 15, 1998
/S/  Loren E. Bagley         Principal Financial Officer
      (Signature)
   Loren E. Bagley

                             Vice President and   
                             Director                           April 15, 1998
/S/  William F. Woodburn     Chief Accounting Officer
      (Signature)
   William F. Woodburn


                                                                April 15, 1998
/S/  John B. Sims            Director
     (Signature)
     John B. Sims



                                                                April 15, 1998
/S/  Gary F. Lawyer          Director
     (Signature)
     Gary F. Lawyer