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


                                   FORM 10-KSB

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

                   For the Fiscal Year Ended December 31, 2006

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

                         Commission File Number 0-23530

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

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

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

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

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

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

     Check  whether  the issuer (1) filed all  reports  required  to be filed by
Section 13 or 15(d) of the  Exchange  Act during the past 12 months (or for such
shorter period that the  registrant was required to file such reports),  and (2)
has been subject to such filing requirements for the past 90 days. Yes[X] No[ ]0

     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/A or any amendment to this Form 10-KSB/A. [X]

     Indicate  by check mark  whether  the  registrant  is a shell  company  (as
defined in Rule 12b-2 of the Exchange Act). Yes [ ] No [X]

     State the issuer's revenues for its most recent fiscal year. $ 1,420,802

     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.
$1,233,094 (Based on price of $1.70 per share on March 29, 2007)

         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 29, 2007
-----------------------                      ----------------------------------
Common Stock, Par Value                              9,450,565
  $.001 per share

                       DOCUMENTS INCORPORATED BY REFERENCE

     A description of "Documents Incorporated by Reference" is contained in Part
III, Item 13.

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


<PAGE>

<TABLE>
<CAPTION>

                                             TRANS ENERGY, INC.

                                             TABLE OF CONTENTS

                                                                                               Page
                                                                                               ----

                                                   PART I

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

Item 2.           Description of Property..................................................     13

Item 3.           Legal Proceedings........................................................     15

Item 4.           Submission of Matter to a Vote of Security Holders.......................     15

                                                   PART II



Item 5.           Market for Common Equity and Related Stockholder Matters.................     15

Item 6.           Management's Discussion and Analysis or Plan of Operation................     16

Item 7.           Financial Statements.....................................................     19

Item 8.           Changes in and Disagreements with Accountants on Accounting and
                  Financial Disclosure.....................................................     19

Item 8A.          Controls and Procedures..................................................     19

Item 8B.          Other Information........................................................     19

                                                PART III

Item 9.           Directors, Executive Officers, Promoters and Control persons;
                  Compliance with Section 16(a) of the Exchange Act........................     20

Item 10.          Executive Compensation...................................................     21

Item 11.          Security Ownership of Certain Beneficial Owners and Management...........     22

Item 12.          Certain Relationships and Related Transactions...........................     22

Item 13.          Exhibits.................................................................     23

Item 14.          Principal Accountant Fees and Services...................................     24

                  Signatures...............................................................     25

</TABLE>

                                                  -2-

<PAGE>

                                     PART I

Item 1.  Description of Business

History

     Trans  Energy,  Inc.  is  engaged  in  the  exploitation,  development  and
production  of natural gas and oil, and, to a lesser  extent,  the marketing and
transportation of natural gas. We own and operate  approximately 245 oil and gas
wells in West Virginia. We also own and operate an aggregate of over 20 miles of
4-inch and 6-inch gas  transmission  lines  located  within West Virginia in the
counties of Ritchie and Tyler.  We also have  approximately  20,000  gross acres
under lease in West Virginia primarily in the counties of Wetzel and Marion.

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

Recent Events

     Sale of Arvilla
     ---------------

     On April 7, 2006, we finalized the agreement to sell our well servicing and
maintenance  business  in  exchange  for shares of Trans  Energy  common  stock,
certain  natural gas properties and other  considerations,  which  agreement was
initially  entered into on January 3, 2006.  Terms of the sale were satisfied on
March 31, 2006.  Part of the reason for the sale was the  inability of our board
of  directors  to agree on the  direction  of Trans  Energy  with  Arvilla  as a
significant subsidiary.  Under the terms of the definitive agreement and through
our wholly  owned  subsidiary,  Arvilla,  Inc.  Trans Energy sold to Clarence E.
Smith  and  Rebecca  L.  Smith,  both  directors  of Trans  Energy,  100% of the
outstanding  membership  interests  of Arvilla  Oilfield  Services,  LLC, a West
Virginia limited liability company ("AOS").

     AOS provides well servicing,  workover and related transportation  services
to  independent  oil and natural gas  producers in the  northeast  region of the
United  States.  It  also  performs  ongoing  maintenance  and  major  overhauls
necessary to optimize the level of production  from existing oil and natural gas
wells and provides certain ancillary services during the drilling and completion
of new wells. AOS offers its services in Ohio, Pennsylvania, New York, Virginia,
Kentucky and West Virginia and also owns a fleet of well service equipment.

     We  originally  acquired AOS from Clarence and Rebecca Smith on January 31,
2005 through a merger of our  subsidiary,  Trans Energy  Acquisitions,  with and
into Arvilla,  Inc., with Arvilla being the surviving  entity. As consideration,
we issued  1,185,024  shares of our common stock, of which 1,042,821 shares were
issued to the Smiths,  both of whom became  directors of Trans Energy  following
the acquisition.  AOS's  operations were previously  conducted as Arrow Oilfield
Service  Company,  a division of Belden & Blake  Corporation,  a privately  held
company  engaged  in the  exploration,  development  and  production  of oil and
natural gas. In June 2004, the Smiths  acquired Arrow Oilfield  Service  Company
from Belden & Blake and created Arvilla Oilfield Services,  LLC as the operating
entity.  Subsequently,  the Smiths created  Arvilla,  Inc. that acquired all the
membership  interests of Arvilla  Oilfield  Services in order to facilitate  its
acquisition by Trans Energy.

     As a result of consummating the definitive agreement,  Clarence and Rebecca
Smith  returned to us 521,411  shares of their Trans Energy  common  stock.  The
Smiths have also  conveyed to Trans Energy all of their  interest in and to five
oil and gas wells located in Tyler County,  West Virginia.  Assignments  for the
wells  originally was to be held in escrow pending  satisfaction by Trans Energy
of two promissory  notes in the aggregate  amount of $763,000 payable to AOS and
to Arvilla Pipeline  Construction Co., Inc., a separate entity owned by Clarence
and Rebecca  Smith.  However,  pursuant  to the First  Amendment  to  Definitive
Agreement, the parties agreed that the wells would be transferred at the closing
and we agreed to pay AOS $176,239 on or before  April 30, 2006,  and pay Arvilla
Pipeline $115,000 on or before April 30, 2006. To secure these payments by Trans
Energy,  Clarence and Rebecca Smith held a lien on a certain Deed of Trust until
the debt was satisfied.

     Upon execution of the definitive agreement,  Clarence Smith resigned as our
Chief  Executive  Officer,  but  remained  on our board of  directors  until the
closing.  At the closing,  both Clarence and Rebecca Smith resigned as directors
of Trans Energy and Arvilla,  Inc.  Clarence and Rebecca  Smith have also agreed
not to sell an amount of their  remaining  Trans Energy common stock during each
calendar  quarter on or after March 22, 2006, in an aggregate  amount greater of

                                      -3-
<PAGE>

(i) 50,000  shares  (adjusted for stock splits or stock  dividends;  or (ii) one
percent of the total outstanding shares of Trans Energy common stock on the date
of any such sale.

     Finally,  the closing of the transaction  was expressly  conditioned on the
receipt of a fairness  opinion from a qualified  independent  party stating that
the  transactions  contemplated  by the definitive  agreement were fair to Trans
Energy and our  stockholders.  That  opinion was issued and  delivered  to Trans
Energy on March 31, 2006.

     Sale of Wyoming Wells and Properties
     ------------------------------------

     In April 2006, we finalized a definitive  Agreement for Sale of Oil and Gas
Properties  related  to the sale of all of our  holdings  in  Wyoming  including
certain wells,  overriding royalties and undeveloped acreage located in Campbell
County,  Wyoming.  The assets were sold at public auction  through the Oil & Gas
Asset Clearinghouse in Houston,  Texas. The gross sales price for the properties
was $1,003,000.

     The wells sold by us, all located in Campbell County, Wyoming, included the
Pinion Fee #1, Sagebrush  Federal #1, Sagebrush Federal #2, Sagebrush Federal #3
(injector),  Boley #31-36 Sandbar,  State #1-36 Sandbar and State #2-36 Sandbar.
Also  included in the sales were an overriding  royalty on two wells  (Sagebrush
Federal #1 and  Sagebrush  Federal #2) and Tract  TR4-B,  and 2,530  undeveloped
acres, also located in Campbell County, Wyoming.

     Purchase of Marion County West Virginia wells and acreage
     ---------------------------------------------------------

     On August 14, 2006, Trans Energy,  Inc. entered into an Assignment and Bill
of Sale (the  "Agreement ") with George  Hillyer,  Trustee of Texas Energy Trust
Company, a Delaware Business Trust ("Tetco"),  BOK Operating Company, a Delaware
corporation  ("BOK"),  and Prima  Oil  Company,  Inc.,  a  Delaware  corporation
("Prima") that is wholly owned by Trans Energy.  TETCO and BOK are  collectively
referred  to as the  "Seller."  Under the terms of the  Agreement,  the  Sellers
agreed to sell, assign and convey to Trans Energy all of Sellers' rights,  title
and interest in the assets of Cobham Gas Industries,  Inc. ("Cobham")  including
approximately 120 wells , both producing and  non-producing  (referred to herein
as the "Wells"), leases, pipelines,  equipment and rolling stock (the "Assets").
Also assigned and conveyed to Trans Energy are certain  rights-of-way  and roads
that may be needed to maintain, produce and abandon the conveyed Wells.

     In  consideration  for the  acquisition  of assets,  Trans  Energy paid Mr.
Hillyer and BOK, the sole owner of Cobham,  $600,001  and one million  shares of
Trans  Energy  common  stock.  The shares of common stock are subject to certain
restrictions regarding the future sale of the shares.

     Purchase of Dewhurst wells and acreage in Wetzel County, West Virginia
     ----------------------------------------------------------------------

     On September 28, 2006, Trans Energy,  Inc. completed the acquisition of the
J.B. Dewhurst oil and gas lease, consisting of a 100% working interest and 87.5%
net revenue  interest in seven wells  located on 2,200 acres in Grant  District,
Wetzel County, West Virginia. The purchase price for the lease was $800,000 that
was paid at the closing.

     The lease was acquired from Tom O'Donnell,  Bay Oil Company, LLC and Beacon
Lombard  Corporation.  Conveyance of the lease is by good and sufficient general
warranty  assignment,  free and clear of all liens and encumbrances and includes
the  entire  working  interest,  all  wells,  personal  property,  fixtures  and
improvements located on the lease.

     Sale of Leatherwood Assets
     --------------------------

     On January 9, 2007 Trans Energy,  Inc. completed the assignment for cash to
Leatherwood,  Inc.,  a  Pennsylvania  corporation,  of six oil  and/or gas wells
located in Mannington District, Marion County, West Virginia. The assigned wells
are  designated  as follows:  O.N. Koen No. 1, Moffett No. 2, Simon Moore No. 3,
Simon Moore No. 1, Simon Moore No. 2 and W.T. Morris No. 2.

    Trans Energy assigned all of its right, title, operating rights and interest
in and to the  aforementioned  wells,  including the absolute  right to produce,
operate and maintain the wells. The assignment is by good and sufficient general
warranty  assignment,  free and clear of all liens and encumbrances and includes
the entire working interest, all wells, equipment,  personal property, gathering
and distribution  pipelines and other fixtures and  improvements  located on the
property.

     Leatherwood  becomes  responsible  for the plugging and  abandoning  of the
acquired  wells,  as  necessary,  and for any  reclamation  of the  lands  after

                                      -4-
<PAGE>


plugging and abandoning  operations  are completed.  All plugging and abandoning
operations will be done in accordance with the applicable  rules and regulations
of the State of West Virginia or other jurisdictional authorities.

     Upon effectiveness of the assignment of the lease, all production, revenue,
costs,  expenses and other  liabilities  attributable to the assigned wells will
belong to  Leatherwood.  For a period of one year following the effective  date,
Trans Energy will have the right,  at its sole cost and  expense,  to permit and
drill one or more oil and gas wells located on two of the assigned properties.

     Purchase of acreage in Kansas
     -----------------------------

     On January 10, 2007,  Trans Energy acquired from National Gulf  Production,
Inc. of Giddings,  Texas,  75% of National Gulf's rights and interests in and to
certain oil and gas leases  covering the oil and gas in and under certain tracts
of land containing  approximately  3,120 acres located in Trego County,  Kansas.
National Gulf  originally  acquired the leases  pursuant to a farmout  agreement
with Wevco Production,  Inc. In connection with the agreement,  Trans Energy and
National Gulf will acquire certain 3-D seismic data on the subject leases.

     In consideration for the leases Trans Energy will pay its proportionate 75%
of the farmout fee, or approximately $146,250, plus its proportionate 75% of the
seismic   acquisition,   processing   and   interpretation   cost,  a  total  of
approximately $285,000. The final seismic cost will be adjusted when completed.

     The lease has a reservation by Wevco of an overriding  royalty  interest of
3.5% and the right, but not the obligation, to participate up to 25% at cost, in
the wells  drilled  by  National  Gulf and Trans  Energy.  There will also be an
overriding royalty interest of 1% to the Project  Geophysicist and National Gulf
will retain an overriding  royalty  interest of 2%,  resulting in an 81% working
interest. National Gulf will also earn a 6.15% carried working interest.

     Upon completion of each well capable of commercial production, Trans Energy
will be entitled to receive an assignment of its  proportionate  share of the 20
acre  producing  unit,  or other unit size as may be  directed or allowed by the
State.  This  assignment  will be made  without  warranty  of title,  express or
implied.

     From the date of the agreement Trans Energy and National Gulf will have one
year to drill the first well and will also have an option  for six months  after
completion of any well to drill another well,  until all drillable 20 acre units
in the leases are drilled.  In the event Trans  Energy and National  Gulf do not
drill the first well within one year,  or do not drill  subsequent  wells within
the prescribed six month periods, then this agreement terminates with respect to
all  undrilled  areas,  unless such  failure to perform is due to an act of God,
labor disputes,  riots, or any other cause beyond the control of the parties. In
such an event,  the required time to perform would be extended for the period of
the interruption.

     Trans  Energy and  National  Gulf will  enter  into a  mutually  acceptable
participation  and  operating  agreement,  whereby  National  Gulf  will  be the
Operator and will drill and operate the wells that are drilled on the leases.

Business History

     Our business strategy is to economically increase reserves,  production and
the sale of natural gas and oil from  existing  and acquired  properties  in the
Appalachian Basin and elsewhere,  in order to maximize shareholders' return over
the long term.  Our strategic  location in West Virginia  enables us to actively
pursue the acquisition and development of producing properties in that area that
will enhance our revenue base without proportional increases in overhead costs.

     We operate oil and natural gas  properties and transport and market natural
gas through  our  transmission  systems in West  Virginia.  Although  management
desires to acquire  additional oil and natural gas properties and to become more
involved in exploration and development, this can only be accomplished if we can
secure future  funding.  Management  intends to continue to develop and increase
the  production  from oil and natural gas  properties  that we currently own. We
will continue to transport and market natural gas through our pipelines.  During
2004 we sold approximately 7.6 miles of our 6-inch pipeline and approximately 10
miles of our 4-inch pipeline for cash and other consideration.  In 2004, we sold
approximately 3 miles of 6-inch pipeline and  approximately  5.7 miles of 4-inch
pipeline.

                                      -5-
<PAGE>

     Cobham Gas Industries, Inc.
     ---------------------------

     On November 5, 2004,  we  finalized  an  agreement  with Texas Energy Trust
Company,  a Delaware  Business Trust with offices in Irving,  Texas,  whereby we
acquired  certain oil and gas leases and leasehold  interests  located in Wetzel
and Marion Counties,  West Virginia, and other assets. Our acquisition of Cobham
includes its two subsidiaries,  Penine Resources,  Inc. and Belmont Energy, Inc.
The  acquisition  was  accomplished  by our wholly owned  subsidiary,  Prima Oil
Company,  Inc.,  acquiring  from  Texas  Energy  Trust  100% of the  issued  and
outstanding  shares (2,100  shares) of Cobham Gas  Industries,  Inc., a Delaware
corporation.  Under the  terms of the  agreement,  we  acquired  certain  wells,
leases, pipelines, gas purchase agreements,  oil hauling agreements,  equipment,
right of ways and other  miscellaneous  items  related to the leases  located in
West Virginia.  A total of 229 wells were  acquired,  of which 98 are producing,
located on  approximately  15,000  leased acres.  Among the assets  acquired are
certain vehicles and heavy equipment and various other drilling equipment.

     In  consideration  for the acquired  property,  we paid a purchase price of
$892,344, of which approximately  $489,000 is payable in cash and the balance in
244,633 shares of restricted Trans Energy common stock, post-split, to be issued
following the  effectiveness of our one share for 150 shares reverse stock split
in January 2005. An initial payment of $250,000 was paid at the closing with the
remaining balance to be paid quarterly in equal  installments  beginning January
1, 2005, with the final payment due October 1, 2005.

     The wells are situated in well defined  fields  producing  from the shallow
Devonian formation.  Big Injun, Gordon and Thirty Foot are sands in the Devonian
foundation  that have produced  substantial  natural gas in West  Virginia.  The
field/acreage   positions   consist  of  three   specific   areas;   Mannington,
Smithfield/Wallace  and Dents Run. The  Mannington  field  consists of 107 wells
encompassing  4,573  acres.  These wells are Big Injun wells,  at  approximately
2,900 - 3,000 feet in depth,  dependent  on  elevation.  The  Smithfield/Wallace
field consists of 92 wells encompassing 9,223 acres. The majority of these wells
are Big Injun  wells,  although  there are  several  Gordon  wells in the field.
Management  believes  that future  development  can expand the Gordon and Bayard
play. The Dents Run field consists of 30 wells  encompassing  1,097 acres. These
wells are completed through the Thirty Foot sand.

     On September 1, 2005,  together with our wholly owned  subsidiary Prima Oil
Company,  Inc.,  we finalized  the sale of certain  assets to Texas Energy Trust
Company and its trustee,  George  Hillyer  ("Buyer").  These assets  include the
following:

     *   Certain  leases for the  production  of oil and  natural gas located in
         Marion County, West Virginia (the "Marion County Leases");

     *   Certain oil or natural gas wells  located on the Marion  County  Leases
         (the "Marion  County  Wells"),  together  with all of the equipment and
         other  tangible  personal  property  physically  attached to any of the
         wells,  including all pipelines,  rights of way,  easements,  well head
         equipment and leasehold estates;

     *   Certain  vehicles  and other  equipment,  parts,  inventories  and hand
         tools;

     *   Miscellaneous  well logs,  maps,  production  data,  sales  records and
         histories, royalty payment records and other information concerning the
         Marion County Leases and Marion County Wells;

     *   A $50,000  reclamation  bond pursuant to which all of the Marion County
         Wells, and others, are permitted;

     *   Certain cash and trade accounts receivable  generated by the operations
         and results of operations of the Marion County Leases and Marion County
         Wells, realized on or after August 1, 2005; and

     *   All the outstanding  capital common stock of Cobham Gas Industries held
         by Trans Energy, Inc. or any of our affiliates.

                                      -6-
<PAGE>

     In consideration  for the above referenced  assets,  the Buyer provided the
following to us:

     *   The return to us of 244,633 shares of Trans Energy,  Inc.  common stock
         initially  issued to Buyer in January  2005 and which  shares are to be
         valued  at the  closing  price  per  share of our  common  stock on the
         closing date;

     *   The return to us of all of Buyer's options,  warrants and future rights
         to acquire any securities of Trans Energy or any of our affiliates;

     *   We retain  the  right to use  through  December  31,  2005 the  $50,000
         reclamation  bond in order to comply with certain West Virginia bonding
         requirements; and

     *   Buyer will assume  responsibility  for the payment of certain  loans in
         the amount of  $96,839,  the  liabilities  related to the  plugging  of
         certain of the Marion County Wells,  all expenses related to operation,
         maintenance  and  ownership of the Marion  County Leases and the Marion
         County Wells incurred on or after August 1, 2005.

     In addition to the above,  we have agreed to fulfill the remaining  payment
obligations to Buyer under that certain agreement dated November 5, 2004, and we
will retain  responsibility  for the payment of certain  debts related to Cobham
Gas Industries.

     Powder River Basin Wyoming
     --------------------------

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

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

                                  Gross Bbls.         Net %            Net Bbls.
Name of Well                    Oil Per Day          to TENG          to TENG
------------                    -----------          -------          -------
Sagebrush Flat (one unit)             61                42.15%         26
Pinon Fee #1                          19                51.2%           9
Swartz Draw                           27                27.7%           7
                                  ------                             ----
        Total                        107                               42

     In April 2006, we finalized a definitive  Agreement for Sale of Oil and Gas
Properties  related  to the sale of  certain  wells,  overriding  royalties  and
undeveloped acreage located in Campbell County, Wyoming. The assets were sold at
public auction through the Oil & Gas Asset Clearinghouse in Houston,  Texas. The
gross sales price for the properties is $1,003,000.

     The wells sold by us, all located in Campbell County, Wyoming,  include the
Pinion Fee #1, Sagebrush  Federal #1, Sagebrush Federal #2, Sagebrush Federal #3
(injector),  Boley #31-36 Sandbar,  State #1-36 Sandbar and State #2-36 Sandbar.
Also  included in the sales were  overriding  royalties on two wells  (Sagebrush
Federal #1 and  Sagebrush  Federal #2) and Tract  TR4-B,  and 2,530  undeveloped
acres, also located in Campbell County.

Current Business Activities

     We operate our oil and  natural gas  properties  and  transport  and market
natural  gas  through  our  transmission  systems  in  West  Virginia.  Although
management  desires to acquire  additional oil and natural gas properties and to
become more involved in exploration and development, this can only be


                                      -7-

<PAGE>

accomplished if we can secure future funding.  Management intends to continue to
develop and increase the production from the oil and natural gas properties that
it currently owns.

     We will  continue to transport  and market  natural gas through our various
pipelines in 2007.

During 2006,  we drilled 4 new wells in Doddridge  County,  West Virginia to the
Gordon formation. The four new wells were the Lyon #2, Lyon #3, Lyon #4 and Lyon
#6 of which we own a 100% working interest in each well.

Research and Development

     We have  not  allocated  funds  for  conducting  research  and  development
activities.  We do not anticipate  allocating funds for research and development
in the immediate future.

Marketing

     We operate exclusively in the oil and gas industry.  Natural gas production
from wells owned by us 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  our  pipeline  network is sold  through a
contract  with  Sancho Oil and Gas  Corporation  to  Dominion  Hope Gas, a local
utility.  Some of the gas is sold at a fixed price on a year long basis and some
at a variable price per month per Mcf.  Under our contract with Sancho,  we have
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 in 1988.  This
agreement  is a flexible  volume  supply  agreement  whereby we receive the full
price which Sancho  charges the end user less a $.05 per Mcf  marketing fee paid
to Sancho.  In  addition  to the  natural  gas  produced  by our wells,  we also
purchased approximately 876 Mcf of natural gas per day in 2005.

     The natural gas from our Wetzel  County wells is sold to East  Resources or
Equitable Gas. The gas from our Doddridge  County wells is sold to Dominion Hope
through a Trans Energy, Inc. contract.

     We sell our 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  we are  not  dependent  upon  any one
customer,  our marketing arrangement with Sancho accounted for approximately 77%
of our revenue for the year ended December 31, 2006, and  approximately  77% for
2005. This marketing agreement is in effect until September 1, 2008.

Competition

     We are in direct  competition  with numerous oil and natural gas companies,
drilling and income  programs and  partnerships  exploring  various areas of the
Appalachian  Basin and elsewhere  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 our competitors  possess greater  financial and
personnel  resources  enabling  them to identify and acquire  more  economically
desirable   energy  producing   properties  and  drilling   prospects  than  us.
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.

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,


                                      -8-

<PAGE>

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 our capital expenditures,
earnings or competitive position.

     Legislation and implementing  regulations adopted or proposed to be adopted
by the  Environmental  Protection  Agency  and  by  comparable  state  agencies,
directly and indirectly,  affect our  operations.  We are 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.

     We 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 us to comply with all environmental regulations.  It is conceivable
that future legislation or regulations may significantly  increase environmental
protection  requirements  and,  as a  consequence,  our  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  we  are  in
compliance with all present environmental regulations.  Further, we believe that
our oil and gas  explorations  do not pose a  threat  of  introducing  hazardous
substances into the environment.  If such event should occur, we could be liable
under certain  environmental  protection  statutes and laws. We presently  carry
insurance for environmental liability.

     Our 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.

     We are 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 our aggregate  production expenses.  Nevertheless,  we
are unable to predict the ultimate cost of compliance.

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

Employees

     As of the end of our fiscal year on December 31, 2006, we employed  fifteen
full-time employees,  consisting of four executives, four marketing and clerical
persons, and seven production employees.

     None of our employees are members of any union,  nor have they entered into
any collective bargaining agreements. We believe  that our relationship with our
employees is good. With the successful  implementation  of our business plan, we
may seek additional  employees in the next year to handle anticipated  potential
growth.


                                      -9-
<PAGE>


Facilities

     We currently occupy  approximately 4,000 square feet of office space in St.
Marys, West Virginia,  which we share with our subsidiaries,  Tyler Construction
Company  and  Ritchie  County  Gathering  Systems.  We  lease  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.

     In addition,  we acquired a new lease of approximately 2,000 square feet of
office  space  in   Parkersburg,   West  Virginia,   which  we  share  with  our
subsidiaries,  Tyler Construction  Company and Ritchie County Gathering Systems.
This office is dedicated to our financial  operations.  We lease an aggregate of
approximately 2,000 square feet from an unaffiliated third party under a written
lease agreement for $1,450 per month, inclusive of utilities.

Industry Segments

     We are  presently  engaged  in two  industry  segments.  The  first  is the
transportation  and  marketing  of  natural  gas  and  oil;  the  second  is the
exploratijn,  development,  and production of natural gas and oil.  Reference is
made to Note 15, contained in the financial statements included herewith for the
disclosure of our segmented revenues,  expenses, and operating loss for the past
two fiscal years.

Risk Factors

     You should carefully  consider the risks and uncertainties  described below
and  other  information  in  this  report.  If  any of the  following  risks  or
uncertainties  actually occur, our business,  financial  condition and operating
results,  would likely suffer.  Additional  risks and  uncertainties,  including
those that are not yet identified or that we currently  believe are  immaterial,
may also  adversely  affect  our  business,  financial  condition  or  operating
results.

     We have a history of losses and may realize future losses.
     ---------------------------------------------------------------------------
     As a result of our revenue  decreasing  approximately  7% during the fiscal
year ended  December 31,  2006,  we may not achieve,  or  subsequently  maintain
profitability  if  anticipated  revenues do not increase in the future.  We have
experienced operating losses,  negative cash flow from operations and net losses
in each quarterly and annual period for the past several  years.  As of December
31, 2006, our net operating loss  carryforward was approximately $25 million and
our accumulated  deficit was approximately $33 million. We expect to continue to
incur significant expenses in connection with

     *   exploration and development of new and existing properties;
     *   costs of sales and marketing efforts;
     *   construction of gathering system infrastructure;
     *   additional personnel; and
     *   increased general and administrative expenses.

     Accordingly,  we will need to generate  significant revenues to achieve and
attain, and eventually sustain  profitability.  If revenues do not increase,  we
may be unable to attain or sustain profitability on a quarterly or annual basis.
Any of these factors could cause the price of our stock to decline.

          We have a  significant  working  capital  deficit  that  makes it more
          difficult to obtain capital necessary for our operations and which may
          have an adverse effect on our future business.
          ----------------------------------------------------------------------

                                      -10-
<PAGE>


     As of December 31, 2006, we had a working capital deficit of $2,318,875. If
our  business  does not produce  positive  working  capital in the  future,  our
business and financial  condition would most likely be materially and negatively
impacted.

     It may be necessary  for us to seek  additional  funding,  which may not be
     available on terms favorable to us, or at all.
     ---------------------------------------------------------------------------
     Management  believes  that we may need to seek  additional  funding  in the
future to provide sufficient working capital and funds for capital expenditures.
If we cannot meet future capital requirements through realized revenues from our
ongoing  business,  we may have to raise  additional  capital by borrowing or by
selling  equity or  equity-linked  securities,  which would dilute the ownership
percentage of our existing stockholders.  Also, these securities could also have
rights,  preferences  or  privileges  senior  to  those  of  our  common  stock.
Similarly,  if we raise  additional  capital by issuing debt  securities,  those
securities may contain covenants that restrict us in terms of how we operate our
business,  which could also affect the value of our common  stock.  If we borrow
more  money,  we will  have  to pay  interest  and may  also  have to  agree  to
restrictions  that  limit  operating  flexibility.  We may not be able to obtain
funds needed to finance  operations  at all, or may be able to obtain funds only
on very unattractive terms.  Management may also explore other alternatives such
as a joint venture with other oil and gas companies. There can be no assurances,
however, that we will conclude any such transaction.

     There are many competitors in the oil and gas industry.
     ---------------------------------------------------------------------------
     We encounter many competitors in the oil and gas industry  including in the
exploration  and  development  of  properties  and  the  sale  of oil  and  gas.
Management  expects  competition  to continue to intensify  in the future.  Many
existing and potential  competitors  have greater  financial  resources,  larger
market  share and more  customers  than us, which may enable them to establish a
stronger  competitive  position than we have. If we fail to address  competitive
developments  quickly  and  effectively,  we will  not be  able to grow  and our
business will be adversely affected.

     Our operating  results are likely to fluctuate  significantly and cause our
     stock price to be volatile  which could cause the value of your  investment
     in our shares to decline.
     ---------------------------------------------------------------------------
     Quarterly   and  annual   operating   results   are  likely  to   fluctuate
significantly  in the  future  due to a variety  of  factors,  many of which are
outside of our control.  If operating  results do not meet the  expectations  of
securities  analysts and investors,  the trading price of our common stock could
significantly  decline which may cause the value of your  investment to decline.
Some of the factors that could affect quarterly or annual  operating  results or
impact the market price of our common stock include:

     *   our ability to develop properties and to market our oil and gas;
     *   the timing and amount of, or cancellation  or  rescheduling  of, orders
         for our oil and gas;
     *   our  ability  to  retain  key  management,   sales  and  marketing  and
         engineering personnel;
     *   a decrease in the prices of oil and gas; and
     *   changes in costs of exploration or marketing oil and gas.

     Due to these and other factors, quarterly and annual revenues, expenses and
results  of   operations   could  vary   significantly   in  the   future,   and
period-to-period  comparisons should not be relied upon as indications of future
performance.

     Our  business  could  be  adversely   affected  by  any  adverse   economic
     developments in the oil and gas industry and/or the economy in general.
     ---------------------------------------------------------------------------
     The oil and gas  industry is  susceptible  to  significant  change that may
influence our business  development  due to a variety of factors,  many of which
are outside our control. Some of these factors include:

     *   varying demand for oil and gas;
     *   fluctuations in price;
     *   competitive factors that affect pricing;
     *   attempts to expand into new markets;
     *   the timing and magnitude of capital expenditures, including costs
         relating to the expansion of operations;
     *   hiring and retention of key personnel;
     *   changes in generally  accepted  accounting  policies,  especially those
         related to the oil and gas industry; and
     *   new government legislation or regulation.

                                      -11-
<PAGE>


Any of the above factors or a  significant  downturn in the oil and gas industry
or with  economic  conditions  generally,  could have a  negative  effect on our
business and on the price of our common stock.

     Our future success  depends on retaining  existing key employees and hiring
     and  assimilating  new key  employees.  The  loss of key  employees  or the
     inability to attract new key  employees  could limit our ability to execute
     our growth strategy,  resulting in lost  profitability and a slower rate of
     growth.
     ---------------------------------------------------------------------------
     Our  future  success  depends,  in part,  on the  ability to retain our key
employees  including  executive  officers.  Also,  we do  not  carry,  nor do we
anticipate  obtaining,  "key  man"  insurance  on our  executives.  It  would be
difficult  for us to replace any one of these  individuals.  In addition,  as we
grow  we may  need  to  hire  additional  key  personnel.  We may not be able to
identify and attract  high quality  employees  or  successfully  assimilate  new
employees into our existing management structure.

     If we are unable to manage  our  growth  effectively,  our  operations  and
     financial performance could be adversely affected.
     ---------------------------------------------------------------------------
     The  ability  to  manage  and  operate  our  business  as  we  execute  our
anticipated  growth will require effective  planning.  Significant future growth
could strain our internal  resources,  leading to a lower quality of service and
other  problems  that could  adversely  affect our  financial  performance.  Our
ability to manage future growth effectively will also require us to successfully
attract, train, motivate, retain and manage new employees and continue to update
and improve our operational,  financial and management  controls and procedures.
If we do not manage our growth  effectively,  our operations  could be adversely
affected,  resulting  in slower  growth  and a failure  to  achieve  or  sustain
profitability.

     Going concern issue.
     ---------------------------------------------------------------------------
     Our ability to continue as a going concern is dependant upon our ability to
achieve a  profitable  level of  operations.  We may need,  among other  things,
additional  capital  resources  which we will seek  through  loans from banks or
other forms of financing.

Risks relating to ownership of our common stock

     The price of our common stock is extremely  volatile and  investors may not
     be able to sell their shares at or above their purchase price, or at all.
     ---------------------------------------------------------------------------
     Our common stock is presently  traded on the OTC Bulletin  Board,  although
there is no  assurance  that a viable  market  will  continue.  The price of our
shares in the public market is highly  volatile and may fluctuate  substantially
because of:

     *    actual or anticipated fluctuations in our operating results;
     *    changes in or failure to meet market expectations;
     *    conditions and trends in the oil and gas industry; and
     *    fluctuations in stock market price and volume,  which are particularly
          common among securities of small capitalization companies.

     Future sales or the potential for sale of a substantial number of shares of
our common  stock could cause the market  value to decline and could  impair our
ability to raise capital through subsequent equity offerings.

     If we do not generate  necessary cash from our operations to finance future
business,  we may need to raise  additional  funds  through  public  or  private
financing  opportunities.  The  issuance of a  substantial  number of our common
shares to individuals  or in the public  markets,  or the perception  that these
sales may occur, could cause the market price of our common stock to decline and
could  materially  impair  our  ability  to raise  capital  through  the sale of
additional  equity  securities.  Any such  issuances  would  dilute  the  equity
interests of existing stockholders.

     We do not intend to pay dividends.
     ---------------------------------------------------------------------------
     To date,  we have never  declared or paid a cash  dividend on shares of our
common stock.  We currently  intend to retain any future earnings for growth and
development of business and,  therefore,  do not anticipate paying any dividends
in the foreseeable future.

                                      -12-
<PAGE>

<PAGE>

     Possible "Penny Stock" Regulation.
     ---------------------------------------------------------------------------
     Trading of our  common  stock on the OTC  Bulletin  Board may be subject to
certain provisions of the Securities  Exchange Act of 1934, commonly referred to
as the "penny  stock" rule. A penny stock is generally  defined to be any equity
security  that has a market price less than $5.00 per share,  subject to certain
exceptions.  If our stock is deemed to be a penny  stock,  trading  in our stock
will be subject to additional  sales practice  requirements  on  broker-dealers.
These may require a broker dealer to:

     *   make a  special  suitability  determination  for  purchasers  of  penny
         stocks;
     *   receive the purchaser's written consent to the transaction prior to the
         purchase; and
     *   deliver to a prospective purchaser of a penny stock, prior to the first
         transaction,  a risk  disclosure  document  relating to the penny stock
         market.

     Consequently,  penny stock rules may restrict the ability of broker-dealers
to trade and/or maintain a market in our common stock.  Also,  many  prospective
investors  may not  want to get  involved  with  the  additional  administrative
requirements,  which may have a material  adverse  effect on the  trading of our
shares.

Item 2.       Description of Property

     Our properties  consist  essentially of working and royalty interests owned
by us in various  oil and gas wells and leases  located  in West  Virginia.  Our
proved  reserves for the years ended  December  31, 2006,  2005 and 2004 are set
forth below:
                                                 December 31,
                                --------------------------------------------
                                    2006             2005            2004
                                -----------      -----------     -----------
Natural Gas (mmcf)
    Developed                    13,161,354           4,263        542,955
    Undeveloped                        --               --            --
                                -----------      -----------     -----------
     Total Proved                13,161,354           4,263        542,955
                                ===========      ===========     ===========
Crude Oil (Bbl)
    Developed                     1,340,964          215,844       106,649
    Undeveloped                        --               --              --
                                -----------      -----------     -----------
     Total Proved                 1,340,964          215,844       106,649
                                ===========      ===========     ===========

Productive Gas Wells

     The following  summarizes the Company's  productive oil and gas wells as of
December 31, 2006.  Productive  wells are  producing  wells and wells capable of
production.  Gross wells are the total  number of wells in which the Company has
an interest.  Net wells are the sum of the Company's  fractional interests owned
in the gross wells.
                                                       Gross          Net
                                                   -------------  ------------
                Oil and gas wells, West Virginia            245           245
                                                   -------------  ------------
                                                            245           245
                                                   =============  ============
Oil and Gas Acreage

     The following table sets forth the undeveloped  leasehold acreage, by area,
held by the  Company as of December  31,  2006.  Undeveloped  acres are acres on
which wells have not been  drilled or completed to a point that would permit the
production of commercial quantities of oil and gas, regardless of whether or not
such acreage contains proved reserves. Gross acres are the total number of acres
in which  the  Company  has a  working  interest.  Net  acres are the sum of the
Company's  fractional interests owned in the gross acres. In certain leases, the
Company's  ownership  varies at different  depths;  therefore,  the net acres in
these leases are calculated using the lowest ownership interest at any depth.

                                                   Gross           Net
                                               -------------  ------------
                West Virginia, approximately          20,000        20,000
                                               -------------  ------------
                                                      20,000        20,000
                                               =============  ============

     The  estimates  for 2005 and 2004 are based  primarily  on the  reports  of
Robert L. Richards (Wyoming), Geologist and presently an officer and director of
Trans Energy, and Mark V. Schumacher, PE (West Virginia). The estimates for 2006
are based upon the report of Schlumberger  Technology  Corporation,  independent
petroleum consultants, dated February 27, 2007.

                                      -13-
<PAGE>


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  SEC.  See  SFAS  69  Supplemental  Disclosures  included  as  part  of  our
consolidated financial statements.

     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 us for the past three fiscal years. The increase
in the cost of oil production in 2006 is attributed to expenses incurred putting
water flood into operation.
                                          Years ended December 31,
                                --------------------------------------------
Average sales price:
                                    2006             2005           2004
                                -----------      -----------     -----------

    Gas (per mcf)               $     6.78       $     10.28     $      7.40
    Oil (per bbl)                    47.26             56.20           30.24

Average cost of production:

    Gas (per mcf)                      --                --              --
    Oil (per bbl)               $    16.28       $     16.19           14.19

     We have not filed any  estimates of total,  proved net oil and gas reserves
with any federal  authority  or agency  since the  beginning  of our last fiscal
year.

     The following schedule sets forth the capitalized costs relating to oil and
gas producing activities by us for the past three fiscal years.

                                          Years ended December 31,
                                --------------------------------------------
                                    2006             2005           2004
                                -----------      -----------     -----------

Proved oil and gas
  producing properties
  and related lease
  and well equipment            $ 6,208,786      $ 6,134,651     $ 7,093,676
Unproved oil and gas
  properties                         10,156           64,004          95,945
Accumulated depreciation
  and depletion                  (1,569,997)      (4,038,399)     (3,870,874)
                                -----------      -----------     -----------

Net Capitalized Costs           $ 4,648,945      $ 2,160,256     $ 3,318,747
                                ===========      ===========     ===========

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

                                          Years ended December 31,
                                --------------------------------------------
                                    2006             2005           2004
                                -----------      -----------     -----------

Standardized measure,
  beginning of year             $23,044,241      $ 4,438,836     $ 1,864,377
Oil and gas sales, net
  of production costs              (580,885)        (392,855)       (125,966)
Sales of mineral in place              --               --              --
Purchases                              --               --         2,375,205
Net change due to revisions
  in quantity estimates
  and accretion of discount       4,913,361       18,998,260         325,220
                               ------------      -----------     -----------
Standardized measure,
  end of year                  $ 27,376,717      $23,044,241     $ 4,438,836
                               ============      ===========     ===========

                                      -14-
<PAGE>

     We do not anticipate  investing in or purchasing assets and/or property for
the purpose of capital  gains.  It is our  intention to purchase  assets  and/or
property for the purpose of enhancing our primary  business  operations.  We are
not limited as to the percentage amount of our assets we may use to purchase any
additional assets or properties.


Item 3.       Legal Proceedings

     Certain  material  pending legal  proceedings to which we are a party or to
which any of our property is subject is set forth below.

     On September 22, 2000,  Tioga Lumber Company obtained a judgment of $43,300
plus interest in the Circuit Court of Pleasants County,  West Virginia,  against
Tyler  Construction  Company for breach of contract.  On February  28, 2002,  we
reached a negotiated  payment  schedule with Tioga and made the initial payment.
We believe  that we have  satisfied  the  balance  owed to Tioga of  $26,233.58,
although the judgment has not yet been released. We are proceeding to secure the
release of the judgment.

     On July 28, 1999, Core  Laboratories,  Inc. obtained a judgment against the
Company for  non-payment of an account  payable.  The judgment calls for monthly
payments of $351 and is bearing  interest at 10.00% per annum.  At December  31,
2006,  the  Company had accrued a balance of $14,062  plus  accrued  interest of
$7,250 which is included in judgments payable.  The balance due on this judgment
including the related interest was paid in full on February 28, 2007.

     On July 1, 1998,  RR Donnelly  obtained a judgment  against the Company for
non-payment  of accounts  payable.  The judgment  calls for monthly  payments of
$3,244 and is bearing  interest at 10.00% per annum.  At December 31, 2006,  the
Company has accrued a balance of $63,705 plus accrued  interest of $33,029 which
is included in judgments  payable.  Each of the  judgments  were paid in full on
February  28,  2007.  The balance  due on this  judgment  including  the related
interest was paid in full on February 28, 2007.

 We may be engaged in various other lawsuits and claims, either as plaintiff
or defendant,  in the normal course of business.  In the opinion of  management,
based upon advice of counsel,  the ultimate  outcome of these  lawsuits will not
have a material impact on our financial position or results of operations.


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

No matters were submitted to a vote of our securities  holders during the fourth
quarter of the fiscal year ended December 31, 2006.


                                    PART II

Item 5.       Market for Common Equity and Related Stockholder Matters

     Our common stock is quoted on the OTC Bulletin Board under the symbol TENG.
Prior to the  effectiveness  of our reverse stock split on January 28, 2005, our
stock  traded  under the  symbol of TSRG.  Set forth in the table  below are the
quarterly  high and low  prices of our  common  stock as  obtained  from the OTC
Bulletin  Board for the past two fiscal years and adjusted for the one share for
150 shares reverse stock split.

                                       High        Low
                                    --------     --------
              2006
              ----
                  First Quarter     $   0.90     $   0.58
                  Second Quarter    $   0.70     $   0.50
                  Third Quarter     $   0.85     $   0.51
                  Fourth Quarter    $   1.00     $   0.66
              2005
              ----
                  First Quarter     $   2.55     $   1.55
                  Second Quarter    $   1.97     $   0.70
                  Third Quarter     $   1.85     $   1.10
                  Fourth Quarter    $   1.75     $   0.71

                                      -15-
<PAGE>

     As of March 29, 2007, there were approximately 388 holders of record of our
common stock,  which figure does not take into account those  shareholders whose
certificates are held in the name of broker-dealers or other nominee accounts.

Dividend Policy

     We have not declared or paid cash  dividends or made  distributions  in the
past,  and we do not  anticipate  that  we  will  pay  cash  dividends  or  make
distributions  in the  foreseeable  future.  We  currently  intend to retain and
reinvest future earnings to finance 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.

Results of Operations

     The  following  table  sets  forth  the  percentage  relationship  to total
revenues of principal  items  contained in the  statements  of operations of the
consolidated  financial  statements  included  herewith  for the two most recent
fiscal  years  ended  December  31,  2006 and  2005.  It  should  be noted  that
percentages  discussed  throughout  this  analysis are stated on an  approximate
basis.
<TABLE>
<CAPTION>
                                                                             Fiscal Years Ended
                                                                                 December 31,
                                                                            ----------------------
                                                                             2006             2005
                                                                            -----            -----
<S>                                                                         <C>               <C>
Total revenues........................................................      100%              100%
Total costs and expenses..............................................      151               115
Total other income (expenses).........................................       19                (6)
Loss before income  taxes and discontinued operations ................      (32)              (21)
Discontinued operations...............................................      (27)               --
Income taxes..........................................................       --                --
Net (loss)............................................................      (59)              (21)
</TABLE>

For the Year Ended  December  31, 2006  Compared to the Year Ended  December 31,
2005

     Total  revenues of $1,420,802 for the year ended December 31, 2006 ("2006")
decreased  7%  compared  to  $1,526,728  for the year ended  December  31,  2005
("2005"),  due primarily to the loss of the Cobham  revenues for 2005  partially
offset by the increase of oil and gas prices in 2006.  In 2006,  oil made up 25%
of total revenues  compared to 23% in 2005, and gas  represented 75% of revenues
in 2006 compared to 77% in 2005 The changes were considered minimal representing
only a slight difference in percentage points.

     We had an operating  loss of $1,685,316  for 2006 compared to our operating
loss of  $951,813  in  2005.  Total  operating  expenses  increased  25% in 2006
primarily due to the 141% increase in selling, general and administrative. These
increases were offset by a 40%% decrease in production costs for the period. The
increase in selling,  general and  administrative  expenses was primarily due to
the  recording of  $1,686,450 in expense for the value of common stock issued to
employees and consultants.  As we reorganized our management team after the sale
of Arvilla we found it  necessary  to issue  shares to  attract  the  caliber of
people  we need  to move  the  Company  forward.  We do not  expect  this  stock
compensation  expense  to  reoccur  in 2007.  We  realized a loss on the sale of
assets of $178,393 in 2005 compared to a gain of $678,319 in 2006.

     Other income (expenses) as a percentage of revenues increased from negative
7% in 2005 to a positive  7% in 2006.  This  change is  attributed  to a gain on
extinguishment  of debt in 2006 offset by an increase in interest  expense  from
$126,885  in 2005 to  $221,210  in 2006  due to the  borrowing  of debt for well
drilling  and  improvement.  We  realized  a gain on  extinguishment  of debt of
$315,365 in 2006, compared to $9,685 in 2005.


     Our net loss for 2006 was  $2,948,528  versus a net loss of $1,050,119  for
2005.  The increase in net loss in 2006 is primarily  attributed  to increase in
general  and  administrative  expenses  as  described  above  and the loss  from
disposal of discontinued operations of $1,541,142.

                                      -16-
<PAGE>

     Net Operating Losses
     --------------------

     We  have  accumulated  approximately  $25  million  of net  operating  loss
carryforwards  as of  December  31,  2006,  which may be offset  against  future
taxable  income  through  2026.  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,  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, 2006 because the
potential tax benefits of the loss carryforward is offset by valuation allowance
of the same amount.

Liquidity and Capital Resources

     Historically,  working  capital  needs  have  been  satisfied  through  our
operating  revenues and from  borrowed  funds.  Our working  capital  deficit at
December  31,  2006 was  $2,610,953  compared  with a deficit of  $3,012,700  at
December 31, 2005. We anticipate  meeting  working capital needs during the 2007
fiscal year with  revenues  from  operations  and possibly  from capital  raised
through the sale of either equity or debt  securities.  We have no other current
agreements or arrangements for additional  funding and there can be no assurance
such funding will be available to us, or if  available,  such funding will be on
acceptable or favorable terms to us.

     As  of  December  31,  2006,  we  had  total  assets  of   $6,251,409   and
stockholders'  equity of $710,396  compared to total assets of  $10,934,424  and
total  stockholders'  equity of $497,076 at December 31,  2005.  The decrease in
total  assets and  increase in  stockholders'  equity at December  31, 2006 is
attributed  to the  disposal  of Arvilla and the  settlement  of debt for common
stock. We have recorded a long-term liability of $190,364 as an asset retirement
obligation  that relates to, in part,  the  estimated  cost to plug wells in the
event it becomes necessary.

     Because  we have  generated  significant  losses  from  operations  through
December 31, 2006 and have a working capital deficit at December 31, 2006, there
exists  substantial  doubt about our  ability to  continue  as a going  concern.
Revenues have not been  sufficient to cover  operating  costs and to allow us to
continue as a going concern.  Potential  proceeds from the future sale of common
stock, other contemplated debt and equity financing,  and increases in operating
revenues from new  development  would enable us to continue as a going  concern.
There can be no  assurance  that we can or will be able to complete  any debt or
equity financing.

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

Forward-Looking and Cautionary Statements

     This report  includes  "forward-looking  statements"  within the meaning of
Section 27A of the  Securities  Act of 1933,  and Section 21E of the  Securities
Exchange  Act of 1934.  These  forward-looking  statements  may  relate  to such
matters as  anticipated  financial  performance,  future  revenues or  earnings,
business prospects,  projected ventures, new products and services,  anticipated
market  performance  and similar  matters.  When used in this report,  the words
"may,"  "will,"  "expect,"  "anticipate,"   "continue,"  "estimate,"  "project,"
"intend,"  and similar  expressions  are  intended  to identify  forward-looking
statements  regarding events,  conditions,  and financial trends that may affect
our future  plans of  operations,  business  strategy,  operating  results,  and
financial position. We caution readers that a variety of factors could cause our
actual  results  to differ  materially  from the  anticipated  results  or other
matters expressed in forward-looking statements.  These risks and uncertainties,
many of which are beyond our control, include:

                                      -17-
<PAGE>


     *   the sufficiency of existing capital  resources and our ability to raise
         additional capital to fund cash requirements for future operations;
     *   uncertainties  involved  in the  rate of  growth  of our  business  and
         acceptance of any products or services;
     *   volatility  of the stock  market,  particularly  within the  technology
         sector; and
     *   general economic conditions.

     Although we believe the  expectations  reflected  in these  forward-looking
statements are reasonable,  such  expectations  cannot guarantee future results,
levels of activity, performance or achievements.

Recent Accounting Pronouncements

     In  September  2006,  the  Financial   Accounting  Standards  Board  issued
Statement of Financial  Accounting  Standards No. 157, "Fair Value Measurements"
which defines fair value,  establishes  a framework for measuring  fair value in
generally accepted  accounting  principles (GAAP), and expands disclosures about
fair value measurements.  Where applicable, SFAS No. 157 simplifies and codifies
related   guidance  within  GAAP  and  does  not  require  any  new  fair  value
measurements.  SFAS No. 157 is effective  for  financial  statements  issued for
fiscal years beginning after November 15, 2007, and interim periods within those
fiscal years.  Earlier  adoption is encouraged.  The Company does not expect the
adoption of SFAS No. 157 to have a significant  effect on its financial position
or results of operation.

     In  June  2006,  the  Financial  Accounting  Standards  Board  issued  FASB
Interpretation  No.  48,  "Accounting  for  Uncertainty  in  Income  Taxes  - an
interpretation  of FASB  Statement  No. 109",  which  prescribes  a  recognition
threshold and measurement  attribute for the financial statement recognition and
measurement of a tax position taken or expected to be taken in a tax return. FIN
48 also  provides  guidance  on  de-recognition,  classification,  interest  and
penalties,  accounting in interim periods,  disclosure and transition. FIN 48 is
effective for fiscal years  beginning  after December 15, 2006. The Company does
not expect the  adoption  of FIN 48 to have a material  impact on its  financial
reporting,  and the Company is  currently  evaluating  the impact,  if any,  the
adoption of FIN 48 will have on its disclosure requirements.

                                      -18-
<PAGE>


Item 7.   Financial Statements

     Our financial  statements as of and for the fiscal years ended December 31,
2006 and 2005 have been  examined  to the extent  indicated  in their  report by
Malone & Bailey,  PC and H J & Associates,  LLC,  independent  certified  public
accountants,  respectively,  and have been prepared in accordance with generally
accepted accounting  principles and pursuant to Regulation S-B as promulgated by
the SEC. The  aforementioned  financial  statements are included herein starting
with page F-1.

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

     On September 8, 2006, HJ & Associates, LLC was terminated as the certifying
accountant. HJ & Associates, LLC has served from the inception of the Company as
the  certifying  accountant.  From the date on  which  HJ &  Associates  LLC was
engaged  until  the date HJ &  Associates,  LLC was  terminated,  there  were no
disagreements with HJ & Associates,  LLC on any matter of accounting  principles
or practices,  financial statement  disclosure,  or auditing scope or procedure,
which disagreements, if not resolved to the satisfaction of HJ & Associates, LLC
would have caused HJ & Associates,  LLC to make  reference to the subject matter
of the  disagreements  in connection with any reports it would have issued,  and
there were no "reportable  events" as that term is defined in Item 304(a)(1)(iv)
of Regulation S-B.

     On September 8, 2006,  the Company  entered into an engagement  letter with
Malone & Bailey, PC to assume the role of its new certifying accountant.  During
the two most recent fiscal years and the subsequent interim periods prior to the
engagement of Malone & Bailey,  PC, the Registrant did not consult with Malone &
Bailey,  PC  with  regard  to the  application  of  accounting  principles  to a
specified  transaction,  either  completed  or  proposed;  or the  type of audit
opinion that might be rendered on the  Company's  financial  statements;  or any
matter that was either the subject of a disagreement  or a reportable  event (as
described in Item 304(a)(1)(iv) of Regulation S-B).

     The decision to change  principal  auditors and the  engagement  of the new
principal  auditor was  recommended  and approved by the  Registrant's  Board of
Directors.

Item 8A. Controls and Procedures

     As of the end of the period covered by this annual  report,  we carried out
an evaluation,  under the supervision and with the  participation of management,
including  our chief  executive  officer  and chief  financial  officer,  of the
effectiveness  of the  design  and  operation  of our  disclosure  controls  and
procedures  as  defined  in Rules  13a-15(e)  and  15d-15(e)  of the  Securities
Exchange Act of 1934. In designing and evaluating  the  disclosure  controls and
procedures,  management  recognizes  that there are inherent  limitations to the
effectiveness of any system of disclosure controls and procedures, including the
possibility of human error and the  circumvention  or overriding of the controls
and procedures.  Accordingly,  even effective disclosure controls and procedures
can only  provide  reasonable  assurance  of  achieving  their  desired  control
objectives.  Additionally,  in evaluating and implementing possible controls and
procedures, management is required to apply its reasonable judgment.

     Based upon the required  evaluation,  our chief executive officer and chief
financial officer concluded as of December 31, 2006, our disclosure controls and
procedures  were not effective in timely  alerting them to material  information
relating to the company  required to be  disclosed  by us in the reports that we
file or submit under the Exchange Act to be recorded, processed, summarized and
reported  within the time periods  specified  in the SEC's rules and forms.  Our
auditors had several  adjusting entries for the year ended December 31, 2006. We
are working to improve our processes and our communications with our auditors.

There have been no significant  changes in our internal  controls over financial
reporting or in other factors that could significantly  affect internal controls
over financial reporting subsequent to the date we carried out our evaluation.

Item 8B. Other Information

None.

Reports on Form 8-K

     Since the beginning of our fiscal fourth quarter commencing October 1, 2006
through  the date of this  report,  we have  filed  current  reports on Form 8-K
reporting the following:

         October  9, 2006 -  reporting  under  Item 3.02 that  Trans  Energy has
         Issued an aggregate  of 4,247,461  shares of common stock to 13 persons
         for debt owed and services rendered.

                                      -19-
<PAGE>


         January  7, 2007 -  reporting  under  Item 2.01 the  completion  of the
         assignment for cash of all rights, title and interest in six oil and/or
         gas wells to Leatherwood, Inc., a Pennsylvania corporation.
         Reporting  also the  acquisition  of 75% of the rights and interests in
         certain  oil  and  gas  leases  in and  under  certain  tracts  of land
         containing approximately 3,120 acres located in Trego County, Kansas.


                                    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 by our
directors and executive officers:

<TABLE>
<CAPTION>

     Name                    Position                      Director Since       Age
     ----                    --------                      --------------       ---
<S>                          <C>                             <C>               <C>
     James K. Abcouwer       C.E.O., President and Chairman  April 2006         52
     Loren E. Bagley         Vice President and Director     August 1991        64
     William F. Woodburn     Secretary / Treasurer           August 1991        64
                              Chief Operating Officer
                              and Director
     Robert L. Richards      Director                        September 2001     59
     John G. Corp            Director                        February 2005      46
</TABLE>

     On January 6, 2006, our board of directors elected James K. Abcouwer as our
new President and Chief  Executive  Officer.  On April 27, 2006 Mr. Abcouwer was
elected as a member of the board of directors and its Chairman.

     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.  We have not  compensated
our 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 and any committee  thereof.  Executive officers are appointed annually
by the Board and each  executive  officer serves at the discretion of the Board.
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 in the
management of the business and affairs of Trans Energy  between  meetings of the
Board.

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

     James K. Abcouwer became President and C.E.O. in January 2006. Mr. Abcouwer
has 25 years of  experience in the energy  industry and is the former C.E.O.  of
Columbia  Natural  Resources,  Inc., an independent  natural gas producer in the
Appalachian  Basin. He has also served as President and C.E.O.  of EnergyUSA,  a
unit of  NiSource  Inc.  Mr.  Abcouwer is a 1975  graduate of the United  States
Military   Academy  at  West   Point,   and   received  a  Masters  in  Business
Administration degree from Harvard Business School in 1982. Additionally,  he is
co-owner of Northstar Energy Corp. of Charleston,  W Va., an independent oil and
gas development company.

                                      -20-
<PAGE>


     Loren E. Bagley served as our President and C.E.O.  from  September 1993 to
September  2001, at which time he resigned as President  and was appointed  Vice
President.  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.

     John G. Corp became a director on February 28, 2005. Mr. Corp has more than
25 years of extensive  experience in drilling,  production and oilfield  service
operations in the  Appalachian  Basin.  Prior to joining Trans Energy,  Inc., he
held various management  positions with Belden & Blake Corp. from 1987-2004.  He
has a BS degree in Petroleum  Engineering  from Marietta (Ohio) College and is a
member of the Society of Petroleum Engineers, the Ohio Oil & Gas Association and
is  chairman of the  Technical  Advisory  Committee  or the Ohio  Department  of
Natural Resources.

     William F.  Woodburn has served as our Vice  President  from August 1991 to
September  2001,  at which time he resigned as Vice  President and was appointed
Secretary /  Treasurer.  In January  2006,  Mr.  Woodburn was named as our Chief
Operating  Officer.  Mr.  Woodburn has been actively  engaged in the oil and gas
business in various  capacities  for the past twenty  years.  For several  years
prior to 1991, Mr. Woodburn supervised the production of oil and natural gas and
managed the pipeline  operations of Tyler Construction  Company,  Inc. and Tyler
Pipeline,  Inc. Mr.  Woodburn is a stockholder  and serves as President of Tyler
Construction  Company,  Inc., and is also a stockholder of Tyler Pipeline,  Inc.
which owns and operates oil and gas wells in addition to natural gas  pipelines,
and Ohio  Valley  Welding,  Inc.  which  owns a fleet of  heavy  equipment  that
services the oil and gas industry.  Prior to his  involvement in the oil and gas
industry, Mr. Woodburn was employed by the United States Army Corps of Engineers
for  twenty  four  years  and was  Resident  Engineer  on  several  construction
projects.  Mr. Woodburn  graduated from West Virginia  University with a B.S. in
civil engineering.

     Robert L. Richards became a director and was appointed President and C.E.O.
in September 2001. On February 28, 2004, Mr. Richards  relinquished his position
as C.E.O.,  but remained as a director.  From 1982 to the  present,  he has been
President of Robert L. Richards,  Inc. a consulting geologist firm with 27 years
experience in the  petroleum  industry.  He has also served as a geologist  with
Exxon,   exploration   geologist  with  Union  Texas  Petroleum,   and  regional
exploration manager for Carbonit Exploration,  Inc. From 2000 to the present, he
has been President and C.E.O.  of Derma - Rx, Inc., a formulator and marketer of
skin care products.  Also,  from 1992 to August 2000, Mr. Richards was C.E.O. of
Kaire  Nutraceuticals,  Inc., a developer and marketer of health and nutritional
products.  Mr.  Richards served as Vice President of Continental Tax Corporation
from March 1989 to August 1992. He has five and one-half years experience in the
United States Air Force as an Instructor Pilot. Mr. Richards holds a B.S. degree
in geology from Brigham Young University.


Item 10. Executive Compensation

     We  currently  have a bonus and profit  sharing  compensation  plan for the
benefit of  employees  and  officers of the  company.  The program is  primarily
focused on senior officers,  but certain elements of the plan are made available
to key  managers  and to any  employee in certain  circumstances.  In  addition,
management  is  presently in the process of  developing a deferred  compensation
plan for employees  and officers of the company,  which will be presented to the
board of directors later in 2007. We currently have an employment  contract with
Mr.  Abcouwer  with  a two  year  term  that  includes  bonus  compensation  for
accomplishment of certain objectives related to value creation and enhancement.

     For the fiscal year ended  December 31, 2006, our Chief  Executive  Officer
was paid cash  compensation of $120,000.  No other executive  officers  received
cash compensation greater than $60,000 in any of the past three fiscal years.

                                      -21-
<PAGE>


Item 11. Security Ownership of Certain Beneficial Owners and Management

     The following table sets forth information, to the best of our knowledge as
December 31, 2006,  with respect to each person known by us to own  beneficially
more than 5% of our  outstanding  common stock,  each director and all directors
and  officers as a group.  Unless  otherwise  noted,  the address of each person
listed  below is that of Trans  Energy,  210  Second  Street,  St.  Marys,  West
Virginia 26170.

Name and Address                         Amount and Nature of    Percent
of Beneficial Owner                      Beneficial Ownership    of Class(1)
-------------------                      --------------------    -----------
James K. Abcouwer  *                            1,467,610(2)       15.5%
Robert L. Richards *                              261,754(3)        2.8%
Loren E. Bagley *                               1,191,874(4)       12.6%
William F. Woodburn *                           1,746,626(5)       18.5%
John G. Corp.*                                     45,000           0.5%
All directors and executive officers
  a group (5 persons)                                               49.9%
----------------------
     *   Indicates director and/or executive officer at December 31, 2006

     (1) Based upon 9,450,565 shares of common stock  outstanding.  (2) Includes
         1,287,500 shares of common stock held in the name of the Abcouwer
         Family Limited Partnership Trust.
     (3) Includes 80,087 shares held in the name of Argene Richards, wife of Mr.
         Richards.
     (4) Includes  33,543 shares held in the name of Carolyn S. Bagley,  wife of
         Mr. Bagley, over which Mrs. Bagley retains voting power.
     (5) Includes  133,670 shares in the name of Janet L. Woodburn,  wife of Mr.
         Woodburn,  over which shares Mrs.  Woodburn  retains voting power,  and
         314,070  in the  name of a  corporation  in  which  William  and  Janet
         Woodburn are officers and shareholders.



Item 12.      Certain Relationships and Related Transactions

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

     Loren E.  Bagley is  President  of Sancho,  a  principal  purchaser  of our
natural gas. Mr. Bagley's wife, Carolyn S. Bagley is a director and owner of 33%
of the outstanding  capital stock of Sancho.  Under our contract with Sancho, we
have 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 in 1988.
This agreement is a flexible volume supply agreement whereby we receive 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 our option,  for the
first 1,500 Mcf  purchased per day by Hope Gas 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 us there can be no assurance that
prices  paid by us to  suppliers  will be lower  than the  price  which we would
receive under the Hope Gas arrangement. During 2006, we paid Sancho an aggregate
of approximately $20,195 pursuant to such contract.

                                      -22-
<PAGE>


     It is our  policy  that any  future  material  transactions  between us and
members of management or their  affiliates  shall be on terms no less  favorable
than those available from unaffiliated third parties.



Item 13.      Exhibits

     Exhibits

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

     2.1(1)    Stock  Acquisition  Agreement  between  Trans Energy and Loren E.
               Bagley and William F. Woodburn
     2.2(1)    Asset  Acquisition  Agreement  between Trans Energy and Dennis L.
               Spencer
     2.3(1)    Asset  Acquisition  Agreement  between  Trans  Energy  and  Tyler
               Pipeline, Inc.
     2.4(1)    Stock Exchange  Agreement between Trans Energy and Ritchie County
               Gathering Systems, Inc.
     2.5(1)    Plan and Agreement of Merger between Trans Energy,  Inc. (Nevada)
               and  Apple  Corp.  (Idaho),  to  facilitate  the  change  of  our
               corporate domicile to Nevada
     2.6(2)    Agreements related to acquisition of Vulcan Energy Corporation
     2.7(5)    Agreement and Plan of  Reorganization  with Arvilla,  Inc. 3.1(1)
               Articles of Incorporation and all amendments  pertaining thereto,
               for Apple Corp., an Idaho corporation
     3.2(1)    Articles  of  Incorporation  for  Trans  Energy,  Inc.,  a Nevada
               corporation
     3.3(1)    Articles  of Merger  for the  States of Nevada  and Idaho  3.4(1)
               By-Laws
     4.1(1)    Specimen  Stock  Certificate  10.1(1)  Marketing  Agreement  with
               Sancho Oil and Gas  Corporation  10.2(1) Gas  Purchase  Agreement
               with Central Trading Company
     10.3(1)   Price Agreement with Key Oil Company
     10.4(3)   Settlement Agreement and Mutual Release
     10.5(4)   Agreement with Texas Energy Trust Company
     10.6(4)   Assignment  and  Agreement  with Texas Energy  Trust  Company and
               Cobham Gas Industries, Inc.
     10.7(7)   Asset Purchase Agreement with Texas Energy Trust Company.
     10.8(8)   Definitive Agreement to sell Arvilla Oilfield Services, LLC
     10.9(9)   First Amendment to Definitive Agreement
     21.1(6)   Subsidiaries of Registrant (Revised)
     31.1      Certification   of  C.E.O.   Pursuant   to  Section  302  of  the
               Sarbanes-Oxley Act of 2002
     31.2      Certification of Principal Accounting Officer Pursuant to Section
               302 of the Sarbanes-Oxley Act of 2002
     32.1      Certification  of C.E.O.  Pursuant to 18 U.S.C.  Section 1350, as
               Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
     32.2      Certification  of  Principal  Accounting  Officer  Pursuant to 18
               U.S.C.  Section 1350,  as Adopted  Pursuant to Section 906 of the
               Sarbanes-Oxley Act of 2002
     99.1(1)   Reserve Estimate and Evaluation of oil and gas properties
     99.2(1)   Reserve Estimate and Evaluation for Dennis L. Spencer wells

----------------------

     (1)  Previously  filed as exhibit to Form 10-SB.
     (2)  Previously filed as exhibit to Form 8-K dated August 7, 1995.
     (3)  Previously filed as exhibit to Form 8-K file January 23, 2004.
     (4)  Previously filed as exhibit to Form 8-K filed November 11, 2004.

                                      -23-
<PAGE>

     (5)  Previously filed as exhibit to the Preliminary  Information  Statement
          pursuant to Section 14C filed with the SEC on December 8, 2004.
     (6)  Previously filed as exhibit to Form 10-KSB for year ended December 31,
          2004 filed April 27, 2005.
     (7)  Previously  filed as exhibit to Form 8-K dated  September 1, 2005.
     (8)  Previously  filed as  exhibit to Form 8-K dated  January 3, 2006.
     (9)  Previously filed as exhibit to Form 8-K filed April 13, 2006

Item 14. Principal Accountants Fees and Services

     We do not  have an audit  committee  and as a result  our  entire  board of
directors performs the duties of an audit committee. Our board of directors will
approve in advance the scope and cost of the engagement of an auditor before the
auditor  renders audit and non-audit  services.  As a result,  we do not rely on
pre-approval policies and procedures.

     Audit Fees
     ----------

     The aggregate fees billed by our independent auditors,  Malone & Bailey, PC
and H J & Associates,  LLC for professional  services  rendered for the audit of
our annual  financial  statements  included in our Annual Reports on Form 10-KSB
for the years ended  December 31, 2006 and 2005, and for the review of quarterly
financial  statements  included in our Quarterly  Reports on Form 10-QSB for the
quarters ending March 31, June 30 and September 30, 2006 and 2005, were:

                                   2006            2005
                               -----------      ---------
Malone & Bailey PC             $    38,500      $     -0-
HJ& Associates, LLC            $    97,249      $ 105,000

     Audit Related Fees
     ------------------

     For the years ended  December 31, 2006 and 2005,  there were no fees billed
for assurance and related  services by Malone & Bailey,  PC or H J & Associates,
LLC relating to the performance of the audit of our financial  statements  which
are not reported under the caption "Audit Fees" above.

     Tax Fees
     --------

     For the years ended  December  31,  2006 and 2005,  fees billed by Malone &
Bailey,  PC or H J & Associates,  LLC,  respectively,  for tax  compliance,  tax
advice and tax planning were $-0- and $2,300, respectively.

     We do not use the  auditors for  financial  information  system  design and
implementation. These services, which include designing or implementing a system
that  aggregates  source data  underlying the financial  statements or generates
information  that is  significant  to our  financial  statements,  are  provided
internally  or by other  service  providers.  We do not engage the  auditors  to
provide compliance outsourcing services.

     The board of directors has  considered the nature and amount of fees billed
by Malone & Bailey, PC and H J & Associates, LLC and believes that the provision
of services for activities unrelated to the audit is compatible with maintaining
Malone & Bailey, PC's and H J & Associates, LLC's independence.


                                      -24-
<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/ JAMES K. ABCOUWER
             --------------------------------------------
                  James K. Abcouwer,
                  President and C.E.O.

Dated: April 17, 2007

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

<TABLE>
<CAPTION>

         Signature                                         Title                          Date
         ---------                                         -----                          ----




<S>                                           <C>                                   <C>
/S/ JAMES K. ABCOUWER                         President, C.E.O. and Chairman        April 17, 2007
----------------------------------            (Principal Executive Officer)
         James K. Abcouwer




/S/ LISA A. CORBITT                            Principal Financial                   April 17, 2007
----------------------------------             and Accounting Officer
         Lisa A. Corbitt




/S/ LOREN E. BAGLEY                             Vice President and Director           April 17, 2007
----------------------------------
         Loren E. Bagley




/S/  JOHN G. CORP                               Director                              April 17, 2007
----------------------------------
         John G. Corp




/S/  WILLIAM F. WOODBURN                        Secretary, Treasurer,                 April 17, 2007
----------------------------------              C.O.O. and Director
         William F. Woodburn




/S/ ROBERT L. RICHARDS                          Director                              April 17, 2007
----------------------------------
         Robert L. Richards

</TABLE>


                                                -27-



                       TRANS ENERGY, INC. AND SUBSIDIARIES

                        CONSOLIDATED FINANCIAL STATEMENTS

                                 C O N T E N T S


Reports of Independent Registered Public Accounting Firms ................ F-2

Consolidated Balance Sheet ............................................... F-4

Consolidated Statements of Operations .................................... F-6

Consolidated Statements of Stockholders' Equity .......................... F-7

Consolidated Statements of Cash Flows .................................... F-8

Notes to the Consolidated Financial Statements ........................... F-10





                                       F-1


<PAGE>


             REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM



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

We have audited the  accompanying  consolidated  balance  sheet of Trans Energy,
Inc.  and  Subsidiaries  (the  Company) as of December  31, 2006 and the related
consolidated  statements of operations,  stockholders' equity and cash flows for
the  year  then  ended.   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 audit.

We  conducted  our audit in  accordance  with  standards  of the Public  Company
Accounting Oversight Board (United States). 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 audit  provides a  reasonable  basis for our
opinion.

In our opinion, the consolidated  financial statements referred to above present
fairly, in all material  respects,  the financial  position of the Company as of
Decemger 31, 2006 and the results of their  operations  and their cash flows for
the year then ended,  in conformity  with United States  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 2 to the
consolidated financial statements,  the Company has generated significant losses
from  operations,  has an accumulated  deficit of $33,026,735  and has a working
capital  deficit of  $2,610,953  at December 31,  2006,  which  together  raises
substantial  doubt about the Company's  ability to continue as a going  concern.
Management's plans in regards to these matters are also described in Note 2. The
consolidated  financial  statements  do not include any  adjustments  that might
result from the outcome of this uncertainty.





/s/ Malone & Bailey, PC
----------------------------
www.malone-bailey.com
Houston, Texas
April 12, 2007



                                      F-2


             REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM



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

We have audited the accompanying  consolidated statements of operations,  stock-
holders'  equity and cash flows of Trans  Energy,  Inc.  and  Subsidiaries  (the
Company)  for the year ended  December 31, 2005.  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 audit.

We  conducted  our audit in  accordance  with  standards  of the Public  Company
Accounting Oversight Board (United States). 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 audit  provides a  reasonable  basis for our
opinion.

In our opinion, the consolidated  financial statements referred to above present
fairly,  in all material  respects,  the results of operations and cash flows of
the Company for the year ended  December 31,  2005,  in  conformity  with United
States 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
December 31, 2005 consolidated  financial statements,  the Company had generated
significant  losses from operations,  had an accumulated  deficit of $30,078,207
and had a working  capital  deficit of  $3,012,700  at December 31, 2005,  which
together raises  substantial  doubt about the Company's ability to continue as a
going concern. Management's plans in regards to these matters are also described
in Note 8 to the  December  31,  2005  financial  statements.  The  consolidated
financial  statements do not include any adjustments  that might result from the
outcome of this uncertainty.





/s/ HJ & Associates, LLC
----------------------------
HJ & Associates, LLC

Salt Lake City, Utah
May 23, 2006



                                       F-3


                       TRANS ENERGY, INC. AND SUBSIDIARIES
                           Consolidated Balance Sheet

                                     ASSETS

                                                                   December 31,
                                                                           2006
                                                                 --------------
CURRENT ASSETS
   Cash                                                          $      208,815
   Accounts receivable, related parties                                 275,272
   Accounts receivable, net                                             569,600
   Prepaid expenses                                                      22,500
                                                                 --------------

     Total Current Assets                                             1,076,187
                                                                 --------------

PROPERTY AND EQUIPMENT, Net of accumulated
   depreciation of $84,510                                              490,753
                                                                 --------------

Oil and gas properties, using successful efforts accounting:
   Proved properties                                                  4,816,138
   Unproved properties                                                   10,156
   Pipelines                                                          1,392,648
   Accumulated depreciation, depletion and amortization              (1,569,997)
                                                                 --------------
   Net oil and gas properties                                         4,648,945
                                                                 --------------

OTHER ASSETS                                                             35,524
                                                                 --------------

       TOTAL ASSETS                                              $    6,251,409
                                                                 ==============






                 See notes to consolidated financial statements.

                                      F-4


<PAGE>



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

                      LIABILITIES AND STOCKHOLDERS' EQUITY

                                                                  December 31,
                                                                      2006
                                                                 --------------
CURRENT LIABILITIES

   Accounts payable - trade                                      $    1,165,846
   Related party payables                                               237,347
   Accrued expenses                                                     357,781
   Judgments payable                                                    118,046
   Notes payable - current portion                                    1,258,381
   Notes payable - related parties                                      549,739
                                                                 --------------

     Total Current Liabilities                                        3,687,140
                                                                 --------------

LONG-TERM LIABILITIES

   Notes payable, net                                                 1,663,509
   Asset retirement obligation                                          190,364
                                                                 --------------

     Total Long-Term Liabilities                                      1,853,873
                                                                 --------------

       Total Liabilities                                              5,541,013
                                                                 --------------

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' EQUITY

   Preferred stock; 10,000,000 shares authorized at $0.001 par
    value; -0- shares issued and outstanding                                 --
   Common stock; 500,000,000 shares authorized at $0.001 par
    value; 9,450,565 shares issued and outstanding                        9,451
   Additional paid-in capital                                        33,727,680
   Accumulated deficit                                              (33,026,735)
                                                                 --------------

     Total Stockholders' Equity                                         710,396
                                                                 --------------

     TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                  $    6,251,409
                                                                 ==============



                 See notes to consolidated financial statements.

                                       F-5
<PAGE>
                       TRANS ENERGY, INC. AND SUBSIDIARIES
                      Consolidated Statements of Operations

                                                        For the Years Ended
                                                             December 31,
                                                        2006           2005
                                                    -----------     -----------

REVENUES                                            $ 1,420,802     $ 1,526,728
                                                   -----------     -----------

OPERATING EXPENSES

  Production costs                                      534,065         893,457
  Depreciation and amortization                         322,989         297,693
  Selling, general and administrative                 2,927,383       1,108,998
  (Gain) loss on disposition of assets                 (678,319)        178,393
                                                    -----------     -----------
    Total Operating Expenses                          3,106,118       2,478,541
                                                    -----------     -----------

LOSS FROM OPERATIONS                                 (1,685,316)       (951,813)
                                                    -----------     -----------
OTHER INCOME (EXPENSE)

  Other income                                               --           2,871
  Gain on extinguishment of debt                        315,365           9,665
  Interest expense                                     (221,210)       (131,185)
                                                    -----------     -----------
  Total Other Income (Expense)                           94,155        (118,649)
                                                    -----------     -----------

LOSS BEFORE INCOME TAXES                             (1,591,161)     (1,070,462)

INCOME TAXES                                                 --              --
                                                    -----------     -----------

LOSS FROM CONTINUING OPERATIONS                      (1,591,161)     (1,070,462)

INCOME FROM DISCONTINUED OPERATIONS                     183,775          20,343
LOSS FROM DISPOSAL OF DISCONTINUED OPERATIONS        (1,541,142)             --
                                                    -----------     -----------
NET LOSS                                            $(2,948,528)    $(1,050,119)
                                                    ===========     ===========

LOSS PER SHARE - BASIC AND DILUTED

  Continuing operations                             $     (0.25)    $     (0.22)
  Discontinued operations                                 (0.21)             --
                                                    -----------     -----------
    Total                                           $     (0.46)    $     (0.22)
                                                    ===========     ===========

WEIGHTED AVERAGE NUMBER OF COMMON SHARES
 OUTSTANDING                                          6,432,839       4,678,294
                                                    ===========     ===========




                 See notes to consolidated financial statements.

                                       F-6

<PAGE>
<TABLE>
<CAPTION>

                                                TRANS ENERGY, INC. AND SUBSIDIARIES
                                          Consolidated Statements of Stockholders' Equity



                                     Common Stock
                              --------------------------    Capital in
                                                            Excess of       Treasury      Accumulated
                                  Shares         Amount     Par Value        Stock          Deficit          Total
                               ------------   -----------   ------------   -----------    ------------    ------------
<S>                              <C>         <C>           <C>            <C>            <C>              <C>
Balance, December 31, 2004       3,555,074   $     3,555   $ 27,854,647   $      --      $(29,028,088)    $(1,169,886)

Common stock issued for
  services                          50,000            50         92,450          --              --            92,500

Fractional shares issued in
  reverse stock split                  382          --             --            --              --                --

Common stock issued for
  acquisition                    1,185,024         1,185      2,368,863          --              --         2,370,048

Contributed services                  --            --          250,000          --              --           250,000

Common stock issued for debt       141,668           142        254,858          --              --           255,000

Treasury shares received for
  assets                              --            --             --        (286,467)           --          (286,467)

Common stock issued for
  services                          20,000            20         35,980          --              --            36,000

Net loss for the year                 --            --             --            --        (1,050,119)     (1,050,119)
                               ------------   -----------   ------------   -----------    ------------    ------------


Balance, December 31, 2005       4,952,148         4,952     30,856,798      (286,467)    (30,078,207)        497,076

Treasury shares received for
  subsidiary                           --            --             --       (302,418)           --          (302,418)

Treasury shares cancelled         (766,044)         (766)      (588,119)      588,885            --                --

Common stock issued for
  acquisition                    1,000,000         1,000        679,000          --              --           680,000

Common stock issued for
  services                       2,807,000         2,807      1,683,643          --              --         1,686,450

Common stock issued for
  cash                             337,500           338        269,662          --              --           270,000

Common stock issued for debt     1,119,961         1,120        608,016          --              --           609,136

Fair value of options granted         --            --          196,159          --              --           196,159

Imputed interest on notes
  Payable to related parties          --            --           22,521          --              --            22,521

Net loss for the year                 --            --             --            --        (2,948,528)     (2,948,528)
                               ------------   -----------   ------------   -----------    ------------    -----------

Balance, December 31, 2006       9,450,565   $     9,451    $ 33,727,680   $     --      $(33,026,735)    $   710,396
                              ============   ============   ============   ===========    ============    ===========



                                       See notes to consolidated  financial statements.
</TABLE>
                                                             F-7

<TABLE>
<CAPTION>
                                                TRANS ENERGY, INC. AND SUBSIDIARIES
                                               Consolidated Statements of Cash Flows
                                                                            For the Years Ended
                                                                         December 31,
                                                                    2006             2005
                                                               -------------    -------------
CASH FLOWS FROM OPERATING ACTIVITIES:

<S>                                                            <C>              <C>
   Net loss                                                    $  (2,948,528)   $  (1,050,119)
    Adjustments to reconcile net loss to net cash used by
     operating activities:
    (Income) loss from discontinued operations                      (183,775)         (20,343)
    Loss on disposal of discontinued operations                    1,541,142               --
    Depreciation, depletion and amortization                         322,989          297,693
    Accretion expense                                                 14,126           37,650
    (Gain) loss on disposition of assets                            (678,319)         176,037
    Gain on debt distinguishment                                    (315,365)              --
    Share-based compensation                                       1,882,609          378,500
    Imputed interest on loans payable to related parties              22,521               --
   Changes in operating assets and liabilities:
    Accounts receivable                                              551,824         (742,779)
    Prepaid expenses and other assets                                 (9,620)          37,407
    Accounts payable                                              (1,138,564)         823,054
    Related party payables                                            43,435          136,303
    Accrued expenses                                                (122,672)          15,510
                                                               -------------    -------------
     Net Cash Provided (Used) by Operating Activities:
     Continuing operations                                        (1,018,197)          88,913
     Discontinued operations                                         183,775          298,045
                                                               -------------    -------------
     Net Cash Provided (Used) by Operating Activities               (834,422)         386,958
                                                               -------------    -------------

CASH FLOWS FROM INVESTING ACTIVITIES:

   Proceeds from sale of oil and gas properties                      951,724          203,280
   Expenditures for oil and gas properties                        (2,624,488)              --
   Expenditures for property and equipment                          (511,091)         (33,670)
                                                               -------------    -------------

    Net Cash Provided (Used) by Investing Activities              (2,183,855)         169,610
                                                               -------------    -------------

CASH FLOWS FROM FINANCING ACTIVITIES:

   Proceeds from notes payable                                     2,408,627               --
   Repayments of notes payable                                      (291,111)        (196,972)
   Loan fees paid                                                    (27,994)              --
   Proceeds from notes payable - related parties                     450,000               --
   Repayments of notes payable - related parties                     (21,688)              --
   Common stock issued for cash                                      270,000               --
                                                               -------------    -------------

   Net Cash Provided (Used) by Financing Activities                2,787,834         (196,972)
                                                               -------------    -------------

NET INCREASE (DECREASE) IN CASH                                     (230,443)         359,596

CASH, BEGINNING OF YEAR                                              439,258           79,662
                                                               -------------     ------------

CASH, END OF YEAR                                              $     208,815     $    439,258
                                                               =============     ============


                        See notes to consolidated financial statements.
</TABLE>

                                             F-8
<PAGE>


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

                                                         For the Years Ended
                                                             December 31,
                                                         2006           2005
                                                     ------------   ------------
CASH PAID FOR:

  Interest                                           $    214,713   $    129,034
  Income taxes                                       $         --   $         --

NON-CASH INVESTING AND FINANCING ACTIVITIES:

2006:
     The Company  acquired oil and gas  properties  for 1,000,000  shares of its
     common stock valued at $680,000.

     The Company  received  521,411 shares of its common stock as  consideration
     for Arvilla,  Inc.  valued at $469,270.  The Company assumed a note payable
     for $291,239 as part of the sale of Arvilla, Inc.

     The  Company  issued  1,119,961  shares  of its  common  stock  for debt of
$608,016.

2005:
     The  Company  disposed  of a  portion  of  Cobham  Gas  Industries,  Penine
     Resources,  Inc., and Belmont  Energy,  Inc. The Company  received  244,633
     shares of its common stock valued at $286,467 for net assets of $857,100.

     The  Company  issued  141,668  shares  of common  stock for debt  relief of
     $255,000.

     The Company issued 1,185,024  shares of common stock for Arvilla,  Inc. for
     net assets of $2,370,048.



                 See notes to consolidated financial statements.

                                       F-9


<PAGE>


                       TRANS ENERGY, INC. AND SUBSIDIARIES
                 Notes to the Consolidated Financial Statements
                           December 31, 2006 and 2005

NOTE 1 -  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

          Organization

          The  Company  was  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.

          Principles of Consolidation

          The  consolidated  financial  statements  include  the Company and its
          wholly-owned  subsidiaries,  Prima Oil Company,  Inc.,  Ritchie County
          Gathering Systems,  Inc., Tyler Construction  Company,  Inc, and Tyler
          Energy,  Inc.  In  addition,  the  consolidated  financial  statements
          include two of the  Company's  other  subsidiaries,  Arvilla  Oilfield
          Services,  LLC which was disposed of  subsequent  to December 31, 2005
          and  has  been  presented  as   "discontinued   operations"  in  these
          consolidated  financial  statements.   All  significant   intercompany
          accounts and transactions have been eliminated.

          Oil and Gas Properties

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

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

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


                                      F-10
<PAGE>

                       TRANS ENERGY, INC. AND SUBSIDIARIES
                 Notes to the Consolidated Financial Statements
                           December 31, 2006 and 2005

NOTE 1 -  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

          Oil and Gas Properties (Continued)

          On the sale of an entire interest in an unproved  property for cash or
          cash equivalent,  gain or loss on the sale is recognized,  taking into
          consideration  the amount of any recorded  impairment  if the property
          had been assessed individually.

          If a partial  interest  in an unproved  property  is sold,  the amount
          received  is  treated  as a  reduction  of the  cost  of the  interest
          retained.

          Loss per Share of Common Stock

          The  basic  loss per share of  common  stock is based on the  weighted
          average number of shares issued and outstanding during the year. Fully
          diluted  loss per  share is the  same as basic  loss per  share as the
          common stock equivalents are antidilutive in nature.

                                                      For the Years Ended
                                                          December 31,
                                                  ----------------------------
                                                      2006            2005
                                                  -----------    -------------


           Numerator:
           Loss from operations                   $(1,591,161)   $  (1,070,462)
           Discontinued operations                 (1,357,367)          20,343
                                                  -----------    -------------

              Net Loss                            $(2,948,528)   $  (1,050,119)
                                                  ===========    =============

          Denominator - weighted average shares     6,795,734        4,678,294
                                                  ===========    =============

          Net loss per share:
           Continuing operations                  $     (0.25)   $       (0.22)
           Discontinued operations                      (0.21)            --
                                                  -----------    -------------

              Total Loss Per Share                $     (0.46)   $       (0.22)
                                                  ===========    =============

          Provision for Taxes

          Deferred taxes are provided on a liability method whereby deferred tax
          assets  are  recognized  for  deductible  temporary   differences  and
          operating  loss  and  tax  credit   carryforwards   and  deferred  tax
          liabilities   are  recognized  for  taxable   temporary   differences.
          Temporary differences are the differences between the reported amounts
          of assets and liabilities and their tax bases. Deferred tax assets are
          reduced by a valuation  allowance  when, in the opinion of management,
          it is more  likely than not that some  portion or all of the  deferred
          tax assets will not be realized.

          Deferred  tax assets and  liabilities  are adjusted for the effects of
          changes in tax laws and rates on the date of enactment.

          Revenue Recognition Policy

          The Company  recognizes  gas revenues  upon delivery of the gas to the
          customers'  pipeline  from the  Company's  pipelines  when recorded as
          received by the customer's meter. The Company  recognizes oil revenues
          when pumped and metered by the customer.

                                      F-11

<PAGE>

                       TRANS ENERGY, INC. AND SUBSIDIARIES
                 Notes to the Consolidated Financial Statements
                           December 31, 2006 and 2005

NOTE 1 -  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

          Property and Equipment

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

          Estimates

          The preparation of financial  statements in conformity with accounting
          principles generally accepted in the United States of America 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.

          Long-Lived Assets

          The Company reviews  long-lived  assets and  identifiable  intangibles
          whenever events or circumstances indicate that the carrying amounts of
          such assets may not be fully  recoverable.  The Company  evaluates the
          recoverability  of long-lived assets by measuring the carrying amounts
          of the assets against the estimated undiscounted cash flows associated
          with these  assets.  At the time such  evaluation  indicates  that the
          future  undiscounted  cash flows of certain  long-lived assets are not
          sufficient  to recover  the  assets'  carrying  value,  the assets are
          adjusted to their fair values (based upon discounted cash flows).

          Accounts Receivable

          Accounts  receivable are carried at the expected net realizable value.
          The  allowance  for  doubtful   accounts  is  based  on   management's
          assessment of the collectibility of specific customer accounts and the
          aging of the accounts receivables.  If there were a deterioration of a
          major customer's creditworthiness, or actual defaults were higher than
          historical  experience,  our  estimates of the  recoverability  of the
          amounts  due to us could be  overstated,  which  could have a negative
          impact on operations.

          Recent Accounting Pronouncements

          The  Company  does not  expect the  adoption  of any  recently  issued
          accounting pronouncements to have a significant effect on its material
          position or results of operations.

                                      F-11


<PAGE>


                       TRANS ENERGY, INC. AND SUBSIDIARIES
                 Notes to the Consolidated Financial Statements
                           December 31, 2006 and 2005

NOTE 1 -  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

          Share Based Compensation

         As permitted by FASB  Statement  No. 123  "Accounting  for  Stock Based
         Compensation",  the Company elected to measure and record  compensation
         cost  relative  to  employee  stock  option  costs in  accordance  with
         Accounting  Principles Board ("APB") Opinion 25,  "Accounting for Stock
         Issued to Employees,"  and related  interpretations  and make pro forma
         disclosures  of net income and  earnings per share as if the fair value
         method of valuing stock options had been applied. Under APB Opinion 25,
         compensation  cost is recognized for stock options granted to employees
         when the option price is less than the market  price of the  underlying
         common stock on the date of grant.

              In January 2006,  the Company  adopted the provisions of Statement
              of Financial  Accounting  Standards No. 123R. Under FASB Statement
              123R, the Company  estimates the fair value of each stock award at
              the grant date by using the  Black-Scholes  option  pricing  model
              with the following  weighted average  assumptions used for grants,
              respectively;  dividend  yield  of zero  percent  for  all  years;
              expected volatility of 68.35% and 68.72%;  risk-free interest rate
              of 5.00% and 4.08%  and  expected  lives of 10 years for the years
              ended December 31, 2006 and 2005, respectively.

         Had  compensation  cost for the  Company's  stock  options  granted  to
         directors and  employees  been based on the fair value as determined by
         the  Black-Scholes  option  pricing  model at the grant  date under the
         accounting  provisions of SFAS No. 123, the Company would have recorded
         an additional expense of $837,416,  pertaining to the vested portion of
         the options,  for the year ended  December  31, 2005.  Also under these
         same provisions,  the Company's net loss would have been changed by the
         pro forma amounts indicated below:
                                                     For the Year Ended
                                                      December 31, 2005
             Net loss:                               -------------------
                As reported                            $  (1,050,119)
                Pro forma                              $  (1,887,535)
              Basic loss per share:
                As reported                            $       (0.22)
                Pro forma                              $       (0.40)

          Reclassifications

          Certain amounts in prior financial  statements have been  reclassified
          to conform to the 2006 financial statement presentation.

NOTE 2 -  GOING CONCERN

The Company's consolidated financial statements are prepared using United States
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, 2006 of $33,026,735  and has a working  capital deficit at
December 31, 2006 of $2,610,953.

                                      F-13
<PAGE>

                       TRANS ENERGY, INC. AND SUBSIDIARIES
                 Notes to the Consolidated Financial Statements
                           December 31, 2006 and 2005

NOTE 2 -  GOING CONCERN (Continued)

Revenues have not been  sufficient to cover its operating  costs and to allow it
to continue as a going concern.  The potential  proceeds from the sale of common
stock,  sale of  drilling  programs,  and  other  contemplated  debt and  equity
financing, and increases in operating revenues from new development and business
acquisitions would enable the Company to continue as a going concern.  There can
be no  assurance  that the Company  can or will be able to complete  any debt or
equity financing. The Company's consolidated financial statements do not include
any adjustments that might result from the outcome of this uncertainty.

NOTE 3 -  DISCONTINUED OPERATIONS

          On January 3, 2006 the Company entered into a definitive  agreement to
          sell its well servicing and  maintenance  business,  Arvilla  Oilfield
          Services,  LLC, a West Virginia limited liability company, to Clarence
          E. Smith and Rebecca L. Smith,  both  directors of the  Company.  As a
          result of consummating the definitive agreement,  Clarence and Rebecca
          Smith  returned to the Company  521,411  shares of Trans Energy common
          stock.  Clarence and Rebecca Smith also conveyed to the Company all of
          their  interest  in and to five  oil and gas  wells  located  in Tyler
          County,  West Virginia.  Upon  execution of the definitive  agreement,
          Clarence Smith resigned as our Chief Executive  Officer,  but remained
          on our board of  directors  until the closing  effective  on March 31,
          2006. On April 7, 2006 both  Clarence and Rebecca Smith  resigned from
          the board of directors.

          The Company has  accounted  for the  financial  statements  of Arvilla
          Oilfield Services, LLC as discontinued  operations and recorded a loss
          from  discontinued operations of $1,541,141,  which is included in the
          statement of operations for the year ended December 31, 2006.

          The accompanying  financial  statements have been presented to reflect
          the  operations of Arvilla Oil Field  Services,  LLC as  discontinued.
          Operating  results for the years ended  December 31, 2006 and 2005 are
          as follows:
                                                     2006               2005
                                              ----------------   ---------------
               Revenues                      $       2,684,858    $  10,218,520
               Cost of sales                        (1,471,481)      (6,679,099)
               General and administrative             (988,655)      (3,251,257)
               Other income (expense)                  (40,947)        (267,821)
                                              ----------------    --------------

                 Net income                 $         183,775    $       20,343
                                             =================    ==============

NOTE 4 -  PROPERTY AND EQUIPMENT

          At December 31, 2006, property and equipment consisted of:

                Vehicles                                     $       159,693
                Machinery and equipment                              381,050
                Furniture and Fixtures                                31,695
                Leasehold improvements                                 2,825
                Accumulated depreciation                             (84,510)
                                                              --------------
                  Total Fixed Assets                          $      490,753
                                                              ==============


NOTE 5 -  OIL AND GAS PROPERTIES

          On April 12, 2006 the Company  finalized a  definitive  agreement  for
          sale of certain wells,  overriding  royalties and undeveloped  acreage
          located in Campbell  County,  Wyoming.  The assets were sold at public
          auction through the Oil & Gas Asset  Clearinghouse in Houston,  Texas.
          The gross  sales price for the  properties  was  $1,003,000,  with net
          proceeds of $951,725 to the Company.

          On August 14, 2006,  the Company  purchased  various oil and gas wells
          and  interests  as well as equipment  in West  Virginia for  1,000,000
          shares of the  Company's  common  stock valued at $680,000 and cash of
          $660,000.

NOTE 6 -  JUDGMENTS PAYABLE

          On July 28, 1999, Core Laboratories,  Inc. obtained a judgment against
          the Company for non-payment of an account payable.  The judgment calls
          for  monthly  payments  of $351 and is bearing  interest at 10.00% per
          annum.  At  December  31,  2006,  the Company had accrued a balance of
          $14,062  plus  accrued  interest  of  $7,250,  which are  included  in
          judgments  payable.  The balance due on this  judgment  including  the
          related interest was paid in full on February 28, 2007.

          On July 1, 1998, RR Donnelly  obtained a judgment  against the Company
          for  non-payment of accounts  payable.  The judgment calls for monthly
          payments  of $3,244 and is bearing  interest  at 10.00% per annum.  At
          December 31,  2006,  the Company has accrued a balance of $63,705 plus
          accrued interest of $33,023,  which is included in judgments  payable.
          Each of the  judgments  were paid in full on February  28,  2007.  The
          balance due on this judgment  including the related  interest was paid
          in full on February 28, 2007.

                                      F-14
<PAGE>

                      TRANS ENERGY, INC. AND SUBSIDIARIES
                 Notes to the Consolidated Financial Statements
                           December 31, 2006 and 2005

NOTE 7 - LONG-TERM DEBT

   The Company had the following debt obligations at December 31, 2006:
<TABLE>
<CAPTION>

<S>                                                                                    <C>
   Note  payable to an  individual,  due on demand,  bearing  interest at 9.25%,
    interest payments due monthly, secured by equipment                                 $ 292,078

   Union Bank of Tyler County, principal and interest payments
    of $324 due monthly with interest at 6.25%, unsecured                                   7,581

   Wesbanco, due on demand, interest at prime +1%, secured by
    officers' personal assets                                                             248,343

   Union Bank of Tyler County, principal and interest payments of
    $326 due monthly, interest at 5.0%, secured by a vehicle                                6,536

   United Bank, principal and interest payments of
    $8,899 due monthly, interest at 8.75%, secured by equipment                           157,197

   Union Bank of Tyler  County,  principal  and  interest  payments  of $122 due
    monthly with interest at 7.50%, secured by vehicle                                      2,809

   Union Bank of Tyler  County,  principal  and  interest  payments  of $677 due
    monthly with interest at 6.50%, secured by vehicle                                     20,924

   Union Bank of Tyler  County,  principal  and  interest  payments  of $514 due
    monthly with interest at 7.75%, secured by vehicle                                     15,290

   Union Bank of Tyler  County,  principal  and  interest  payments  of $208 due
    monthly with interest at 7.90%, secured by vehicle                                      4,058

   Union Bank of Tyler  County,  principal  and  interest  payments  of $580 due
    monthly with interest at 7.75%, secured by vehicle                                     14,819

   United Bank,  principal and interest payments  beginning July 2007 of $35,083
    due monthly with interest at 8.75%, secured by wells                                1,700,000

   Huntington  National Bank,  principal and interest payments beginning October
    2008 of $95,051 due monthly with interest at 7.50%, secured by wells, unused
    credit facility of $2,547,745 as of December 31, 2006                                 452,255
                                                                                      -----------
               Total                                                                    2,921,890
               Less Current Portion                                                    (1,258,381)
                                                                                      -----------
               Total Long-Term Debt                                                  $  1,663,509
                                                                                     ============
   Future maturities of long-term debt are as follows:
               2007                                                                   $ 1,258,381
               2008                                                                       577,746
               2009                                                                       326,389
               2010                                                                       313,542
               2011                                                                       313,542
               Thereafter                                                                 132,290
                                                                                       ----------
            Total                                                                     $ 2,921,890
                                                                                     ===========

</TABLE>

                                       F-15
<PAGE>


                      TRANS ENERGY, INC. AND SUBSIDIARIES
                 Notes to the Consolidated Financial Statements
                           December 31, 2006 and 2005

NOTE 8 -  ASSET RETIREMENT OBLIGATION

          The following is a description  of the changes to the Company's  asset
          retirement obligation for 2006 and 2005:

            Asset retirement obligation
              at beginning of year                 $    799,393   $  1,571,749
            Acquisition of oil and gas properties       312,963             --
            Disposition of subsidiary                        --       (810,006)
            Accretion expense                            15,144         37,650
            Revision in cost estimates                 (937,136)            --
                                                   ------------   ------------
            Asset retirement obligation
              at end of year                       $    190,364   $    799,393
                                                   ============   ============

NOTE 9 -  PROVISION FOR TAXES

          At December 31, 2006, the Company had net operating loss carryforwards
          of approximately $25,000,000 that may be offset against future taxable
          income  from the year  2006  through  2026.  No tax  benefit  has been
          reported in the December 31, 2006  consolidated  financial  statements
          since the potential tax benefit is offset by a valuation  allowance of
          the same amount.

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

          Net  deferred tax assets  consist of the  following  components  as of
          December 31, 2006 and 2005:
                                                      2006             2005
                                               ---------------  ---------------
              Deferred tax assets:
                NOL carryover                  $     9,586,971  $     9,874,400
                Accrued expenses                        82,589          283,800
                                               ---------------- ---------------
              Total deferred tax assets              9,669,560       10,158,200
              Valuation allowance                   (9,669,560)     (10,158,200)
                                               ---------------- ---------------

              Net deferred tax asset           $          --  $            --
                                               ================ ===============

          The  income  tax  provision  differs  from the  amount of  income  tax
          determined by applying the U.S.  federal and state income tax rates of
          39% to pretax income from  continuing  operations  for the years ended
          December 31, 2006 and 2005 due to the following:
                                                      2006            2005
                                                --------------  --------------

              Book income                       $     (582,302) $     (409,546)
              Other                                     71,672          (7,934)
              Stock and options for services           704,828          50,115
              Contributed services                        --            97,500
              Capital loss carryover                  (280,416)         68,654
              Accrued expenses                        (201,211)          6,049
              Valuation allowance                      287,429         195,162
                                                --------------- --------------

                                                $         --  $           --
                                                =============== ==============

                                      F-16
<PAGE>


NOTE 10 - COMMITMENTS

          On July 24,  2006,  the Company  entered into a one year lease for its
          corporate  office.  Rent  of  $1,450  is  due  monthly.  Future  lease
          obligations as of December 31, 2006 are $8,700.

NOTE 11 - STOCKHOLDERS' EQUITY

          Preferred Stock -The Company has authorized 10,000,000 shares of $.001
          par value preferred  stock.  The preferred stock shall have preference
          as to dividends and to liquidation of the Company.

          Common Stock - The Company has authorized  500,000,000 shares of $.001
          par value common stock.

          In January 2005,  the Company issued 50,000 shares of common stock for
          services valued at $92,500.

          In January 2005, the Company issued  1,185,024  shares of common stock
          for an acquisition of a subsidiary valued at $ 2,370,048.

          In 2005, key employees of the Company  contributed  services valued at
          $250,000.

          In July 2005,  the Company  issued  141,668 shares of the common stock
          for debt relief of $255,000.

          In August  2005,  the Company  received  244,633  shares of the common
          stock of the  Company in return for the sale of certain  assets of the
          Company.  These shares have been  accounted for as treasury stock at a
          cost basis of $286,467.

          In December 2005, the Company issued 20,000 shares of common stock for
          consulting services valued at $36,000.

          In April 2006, the Company received 521,411 shares of the common stock
          of the Company in return for the sale of certain assets of the Company
          at a cost basis of $469,270.  The Company then  cancelled  the 766,044
          shares held in treasury.

          In August 2006,  the Company issued  1,000,000  shares of common stock
          for an acquisition of oil and gas properties valued at $ 680,000.

          In October 2006, the Company issued  2,807,000  shares of common stock
          for consulting services valued at $1,686,450, 337,500 shares of common
          stock for cash of $270,000  and  1,119,961  shares of common stock for
          debt of $609,136.

NOTE 12 - STOCK OPTIONS

          A  summary  of  the  status  of  the  options  granted  under  various
          agreements at December 31, 2006 and 2005, and changes during the years
          then ended is presented below:
<TABLE>
<CAPTION>

                                             December 31, 2006          December 31, 2005
                                            ---------------------------------------------
                                                    Weighted              Weighted
                                                Average Exercise       Average Exercise
                                               Shares      Price     Shares         Price
                                            ----------------------   --------------------
<S>                                             <C>      <C>        <C>       <C>
         Outstanding at beginning of year       553,324  $   1.95        --   $        --
         Granted                                950,000      0.65   553,324          1.95
         Exercised                                   --        --        --            --
         Forfeited                                   --        --        --            --
         Expired                                     --        --        --            --
                                            -----------   -------- -------- -------------
         Outstanding at end of year           1,503,324   $  1.13   553,324 $        1.95
                                            ===========   ======== ======== =============
</TABLE>

                                      F-17
<PAGE>

       A summary of the status of the options  granted under various  agreements
       at December 31, 2006 is presented below:
<TABLE>
<CAPTION>

                                    Options Outstanding              Options Exercisable
                                    -------------------              --------------------
                                        Weighted-       Weighted-   Weighted-
                                         Average         Average     Average
          Range of          Number       Remaining       Exercise     Number     Exercise
       Exercise Prices    Outstanding Contractual Life    Price     Exercisable   Price
       ---------------    ----------- ----------------   --------   -----------  --------
<S>             <C>           <C>       <C>           <C>              <C>          <C>
                $.065         950,000   9.50 years    $ 0.65           950,000      $0.65
                $1.95         553,324   7.75 years    $ 1.95           553,324      $1.95
                          -----------                                ---------
                            1,503,324                                1,503,324
                          ===========                                =========
</TABLE>

NOTE 13 - RELATED PARTY TRANSACTIONS

          a. Marketing Agreement - Sancho

          Natural gas delivered  through the Company's  pipeline network is sold
          either  to  Sancho  Oil  and Gas  Corporation  ("Sancho"),  a  company
          controlled  by the Vice  President of the Company,  at the  industrial
          facilities  near  Sistersville,  West Virginia,  or to Dominion Gas, a
          local utility,  on an on-going basis 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 Dominion Gas in 1988.  This
          agreement is a flexible  volume supply  agreement  whereby the Company
          receives the full price which Sancho charges the end user less a $0.05
          per Mcf marketing fee paid to Sancho.

          b. Well Drilling and Operating Agreement

          In June 2000,  the Company  entered into a well drilling and operating
          agreement with Sancho Oil and Gas  Corporation  ("Sancho"),  a company
          controlled by the Vice President of the Company, on an on-going basis.
          Sancho provided seven drill-down  wells located in Tyler County,  West
          Virginia  and the Company was to pay 100% of the cost of drilling  and
          completing the well including any topside  equipment  needed and other
          related equipment. The Company received 75% of the working interest in
          each of the wells completed.

          c. Receivables and Payables

          The Company has various  payables to the officers and companies of the
          officers.  These amounts have been grouped together with a net payable
          of $379,616 and receivable of $554,100 at December 31, 2006.

NOTE 14 - ECONOMIC DEPENDENCE AND MAJOR CUSTOMERS

          The  Company's   marketing   arrangement  with  Sancho  accounted  for
          approximately  100% of Tyler  Construction  Company's  revenue for the
          years ended December 31, 2006 and 2005. This marketing agreement is in
          effect until December 1, 2008. Another customer also generated 100% of
          Ritchie County sales in 2006 and 2005.

                                      F-18
<PAGE>

NOTE 15 - BUSINESS SEGMENTS

          The Company  conducts its operations  principally as oil and gas sales
          with Trans  Energy,  Prima Oil,  and  Cobham Gas & Oil,  Inc.,  Penine
          Resources,  Inc., and Belmont Energy,  Inc. and pipeline  transmission
          with Ritchie County and Tyler Construction.

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

                          For the
                        Years Ended   Oil and Gas         Pipeline           Corporate
                        December 31,     Sales           Transmission        Unallocated
                        ------------ ------------        ------------        -----------
<S>                       <C>         <C>                 <C>                 <C>
Oil and gas revenue       2006        $ 1,192,083         $   228,719         $     --
                          2005          1,271,165             255,563               --
Operating (loss) income
applicable to  industry
segment                   2006         (1,336,567)           (348,749)              --
                          2005           (766,516)             (6,902)              --

Interest expense          2006           (188,148)            (33,062)              --
                          2005            (98,980)            (30,054)              --

Other income (expense)    2006             74,544              19,611               --
                          2005           (269,346)            (27,698)              --
Assets (net of
 intercompany accounts)   2006          5,514,899             736,510               --
                          2005          2,570,645           1,605,263           6,672,688
Depreciation and
 depletion                2006            206,277             116,712                --
                          2005            224,187              73,506                --
Property and equipment
 acquisitions             2006          3,982,661                --                  --
                          2005             33,670                --             2,370,048
</TABLE>

NOTE 16 - SUBSEQUENT EVENTS

     On  January  9,  2007 the  Company  completed  the  assignment  for cash to
Leatherwood,  Inc.,  of six oil and/or gas wells located in West  Virginia.  The
Company  assigned  all of its  right,  title,  operating  rights  and  interest,
including the absolute right to produce, operate and maintain the wells.

     Also  on  January  10,  2007,  the  Company  acquired  from  National  Gulf
Production,  Inc. 75% of National  Gulf's rights and interests in and to certain
oil and gas leases  covering the oil and gas in and under certain tracts of land
containing approximately 3,120 acres located in Trego County, Kansas for cash of
$285,000.

     On February 7, 2007,  the Company  entered into an agreement with P.D. Farr
to purchase all rights,  title and  interests in the 384 acre Ezra Hays Lease in
West Virginia including , but not limited to, oil and gas wells, associated well
equipment,  interest in the natural gas sales  pipeline,  all rights to Dominion
Gas sales meter and all pertinent  rights-of-way  for $138,000.  On December 16,
2006 the Company paid the sum of $10,000 as a down payment to be applied against
the agreed to sales price as stated above, leaving an unpaid balance of $128,000
due in installments, to be paid in full by July 10, 2007.

                                      F-19

<PAGE>


                       TRANS ENERGY, INC. AND SUBSIDIARIES
                      Supplemental Oil and Gas Disclosures
                                (Unaudited)
         Capitalized Costs Relating to Oil and Gas Producing Activities
<TABLE>
<CAPTION>

                                                                        December 31,
                                                                      2006       2005
                                                                 ------------------------
<S>                                                              <C>         <C>
         Proved oil and gas producing properties and related
          lease and well equipment                               $ 6,208,786 $ 6,134,651
         Unproved oil and gas properties                              10,156      64,004
         Accumulated depreciation and depletion                   (1,569,997) (4,038,399)
                                                                 ----------- -----------
         Net Capitalized Costs                                   $ 4,648,945 $ 2,160,256
                                                                 =========== ===========

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

                                                                    For the Years Ended
                                                                        December 31,
                                                                 ------------------------
                                                                    2006           2005
                                                                 ------------------------
         Acquisition of Properties
           Proved                                                $1,280,001 $          --
           Unproved                                                 660,000            --
         Exploration Costs                                               --            --
         Development Costs                                          984,359        33,670

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

         Results of Operations for Producing Activities

                                                                    For the Year Ended
                                                                        December 31,
                                                              ---------------------------
                                                                   2006         2005
                                                              ---------------------------

         Sales                                                $ 1,420,802   $  1,526,728
         Production costs                                        (534,065)      (893,457)
         Depreciation and depletion                              (322,184)      (232,951)
         Income tax expenses                                           --             --
                                                              --------------------------
         Results of operations for producing activities
          (excluding the activities of the pipeline transmission
          operations, corporate overhead and interest costs)  $   564,553   $    400,320
                                                              ==========================

</TABLE>



                                      F-20

<PAGE>

<TABLE>
<CAPTION>

                       TRANS ENERGY, INC. AND SUBSIDIARIES
                      Supplemental Oil and Gas Disclosures
                               (Unaudited)


         Reserve Quantity Information

                                                                    Oil            Gas
                                                                    BBL            MCF
                                                        ---------------  -------------
<S>                                                             <C>              <C>
         Proved developed and undeveloped reserves
         End of the year 2005                                   215,844          4,263

         Revisions of previous estimates                      1,126,713     13,290,952
         Improved recovery                                           --             --
         Purchases of minerals in place                              --             --
         Extensions and discoveries                                  --             --
         Production                                              (1,593)      (133,861)
         Sales of minerals in place                                  --             --
                                                       ----------------  -------------
         End of the year 2006                                 1,340,964     13,161,354
                                                       ================  =============
         Proved developed reserves:
                                                               Oil               Gas
                                                               BBL               MCF
                                                       ----------------  -------------

           End of the year 2006                               330,570       3,310,161
           End of the year 2005                               215,844           4,263
</TABLE>

         During the years  ended  December  31,  2006 and 2005,  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.

         Standardized Measure of Discounted Future Net Cash Flows Relating to
         Proved Oil and Gas Reserves
<TABLE>
<CAPTION>
                                                                    December 31,
                                                      ----------------------------------
                                                             2006               2005
                                                             ----               ----
<S>                                                   <C>                 <C>
         Future cash inflows                          $   166,383,422     $   36,322,180
         Future production and development costs          (50,080,837)        (7,990,879)
         Future production tax expense                     (8,319,171)                --
                                                        ---------------   ---------------
         Future net cash flows                            107,983,414         28,331,301
         Discounted for estimated timing of cash
         flows                                            (80,606,697)        (5,287,060)
                                                        ---------------   ---------------
         Standardized measure of discounted future
         net cash flows                               $    27,376,717     $    23,044,241
                                                        ===============   ===============
</TABLE>

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

                                            F-21


<PAGE>

                       TRANS ENERGY, INC. AND SUBSIDIARIES
                      Supplemental Oil and Gas Disclosures
                           December 31, 2006 and 2005
                                   (Unaudited)


         The following schedule  summarizes changes in the standardized  measure
         of  discounted  future  net cash flow  relating  to proved  oil and gas
         reserves:
<TABLE>
<CAPTION>
                                                            For the Years Ended
                                                                 December 31,
                                                            2006               2005
                                                   ------------------   ----------------
<S>                                                <C>                  <C>
         Standardized measure, beginning of year   $       23,044,241   $      4,438,836
         Oil and gas sales, net of production costs          (580,885)          (392,855)
         Sales of mineral in place                                 --                 --
         Purchases                                                 --                 --
         Net change due to revisions in quantity estimates  4,367,637         18,750,298
         Accretion of discount items                          545,724            247,962
                                                   ------------------   ----------------

         Standardized measure, end of year         $       27,376,717   $     23,044,241
                                                   ==================   ================
</TABLE>

         The  above   schedules   relating  to  proved  oil  and  gas  reserves,
         standardized measure of discounted future net cash flows and changes in
         the standardized measure of discounted future net cash flows have their
         foundation  in  engineering  estimates of future net revenues  that are
         derived from proved reserves and prepared using the prevailing economic
         conditions. These reserve estimates are made from evaluations conducted
         by independent geologists,  of such properties and will be periodically
         reviewed based upon updated  geological and production data.  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.



                                      F-22