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

                              Amendment No. 2

                                    to

                                FORM 10-QSB/A

[X]         QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
                    THE SECURITIES EXCHANGE ACT OF 1934

                 For the Quarter Ended September 30, 1996

                                    OR

[  ]     TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                      SECURITIES EXCHANGE ACT OF 1934

        For the transition period from              to            

                      Commission File Number  0-23530

                            TRANS ENERGY, INC.
     (Exact name of small business issuer as specified 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)

Registrant's telephone no., including area code:  (304)  684-7053

     Check whether the issuer (1) filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934
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       

                   APPLICABLE ONLY TO CORPORATE ISSUERS

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

          Class                            Outstanding as of 
                                              December 9, 1996
                    
Common Stock, $.001 par value                    3,238,677

<PAGE>
                             TABLE OF CONTENTS

Heading                                                   Page  
                      PART I.  FINANCIAL INFORMATION

Item 1.   Financial Statements . . . . . . . . . . . . .    1
                                                             
          Consolidated Balance Sheets -- September 30, 
          1996 and December 31, 1995 . . . . . . . . . .    2

          Consolidated Statements of Operations -- 
          three months ended September 30, 1996 and
          1995, and nine months ended September 30,
          1996 and 1995. . . . . . . . . . . . . . . . .    4

          Consolidated Statements of Stockholders' Equity   6

          Consolidated Statements of Cash Flows --
          three months ended September 30,1996 and
          1995, and nine months ended September 30,
          1996 and 1995. . . . . . . . . . . . . . . . .    7

          Notes to Consolidated Financial Statements . .    9

Item 2.   Management's Discussion and Analysis and 
          Results of Operations. . . . . . . . . . . . .   23

                        PART II. OTHER INFORMATION

Item 1.   Legal Proceedings. . . . . . . . . . . . . . .   27

Item 2.   Changes In Securities. . . . . . . . . . . . .   27

Item 3.   Defaults Upon Senior Securities. . . . . . . .   27

Item 4.   Submission of Matters to a Vote of 
          Securities Holders . . . . . . . . . . . . . .   27

Item 5.   Other Information. . . . . . . . . . . . . . .   27

Item 6.   Exhibits and Reports on Form 8-K . . . . . . .   27

          SIGNATURES . . . . . . . . . . . . . . . . . .   28














                                    -i-

<PAGE>
                                  PART I

Item 1.  Financial Statements

     The following unaudited Consolidated Financial Statements for
the period ended September 30, 1996, have been prepared by the
Company.













                           TRANS  ENERGY,  INC.

                           FINANCIAL STATEMENTS

                 September 30, 1996 and December 31, 1995

<PAGE>
                            TRANS ENERGY, INC.
                        Consolidated Balance Sheets
                                     
                                  ASSETS
                                (Restated)   
                                       December 31, September 30,     
                                            1995       1996                
                                                    (Unaudited)               
CURRENT ASSETS

 Cash                                    $    -     $  151,939     
 Accounts receivable - trade (Note 1)      328,012     305,573 
 Inventory (Note 1)                         15,956       6,605 

   Total Current Assets                    343,968     464,117 

FIXED ASSETS (Note 2)

 Land                                       35,000      35,000 
 Building                                   65,000      65,000 
 Vehicles                                  113,244     141,010 
 Machinery and equipment                   588,493     617,322 
 Pipeline                                2,107,740   2,107,740 
 Well equipment                            290,972     290,972 
 Wells                                   3,178,916   3,204,829 
 Leasehold acreage                         263,500     263,500 
 Accumulated depreciation               (1,458,009) (1,608,426)

   Total Fixed Assets                    5,184,856   5,116,947 

OTHER ASSETS

 Deferred stock offering costs (Note 1)    275,000      71,091
 Goodwill, net (Note 1)                    728,013     581,806 
 Deposits                                      355         491 
 Bond (Note 4)                              50,000      50,000 
 Loan acquisition costs                    108,187     387,000 
 Loan - related party (Note 6)              14,899       1,340 

   Total Other Assets                    1,176,454   1,091,728 

   TOTAL ASSETS                         $6,705,278  $6,672,792     

<PAGE>
                            TRANS ENERGY, INC.
                        Consolidated Balance Sheets


                   LIABILITIES AND STOCKHOLDERS' EQUITY
                                 (Restated)

                                        December 31, September 30,
                                            1995        1996       
                                                      (Unaudited)  
CURRENT LIABILITIES

 Accounts payable - trade               $  521,438  $  902,976 
 Interest payable                           58,981      45,624 
 Accrued expenses                           71,231     121,459 
 Long-term debt - current portion (Note 3) 554,540   1,040,169     

   Total Current Liabilities             1,206,190   2,110,228 

LONG-TERM LIABILITIES

 Loans payable - related parties (Note 6)  683,586     633,722          
 Notes payable (Note 3)                  2,214,922   1,886,947 

   Total Long-Term Liabilities           2,898,508   2,520,669

   Total Liabilities                     4,104,698   4,630,897

MINORITY INTERESTS (Note 1)                 39,393        -     

STOCKHOLDERS' EQUITY (Note 9)

 Common Stock:  30,000,000 shares
    authorized  at $0.001 par value; 
    3,174,122 and 3,238,677 shares
    issued and outstanding, respectively     3,174       3,239 
 Capital in excess of par value          5,629,734   6,452,669 
 Accumulated deficit                    (3,071,721) (4,414,013)

   Total Stockholders' Equity            2,561,187   2,041,895

   TOTAL LIABILITIES AND STOCKHOLDERS'
         EQUITY                         $6,705,278  $6,672,792          

<PAGE>
                            TRANS ENERGY, INC.
                   Consolidated Statements of Operations

                       For the Three Months     For the Nine Months      
                        Ended September 30,      Ended September 30,  
                        1995       1996            1995       1996
REVENUES              (Unaudited) (Unaudited)  (Unaudited) (Unaudited)
                                  (Restated)               (Restated)
  Oil and gas sales     $825,380  $1,895,025   $ 2,082,597  $ 4,202,029
  Other                     -          1,474           347        1,474 

    Total Revenues       825,380   1,896,499     2,082,944    4,203,503     

COSTS AND EXPENSES

  Cost of oil and gas
    produced             672,551   1,962,691     1,558,484    3,786,826 
  Salaries and wages      50,742      27,598       211,828      102,995 
  Depreciation and
   depletion              44,379      99,944       135,505      293,450  
  Selling, general and
   administrative        144,615     204,493       346,165      660,221 

Total Costs and Expenses 912,287   2,294,726     2,251,982    4,843,492

     Net Income (Loss) 
      from Operations    (86,907)   (398,227)     (169,038)    (639,989)

OTHER INCOME (EXPENSE)

  Interest               (60,870)   (295,546)     (130,790)    (751,252)

    Total Other Income
       (Expense)         (60,870)   (295,546)     (130,790)    (751,252)

NET INCOME (LOSS) BEFORE 
 INCOME TAXES AND MINORITY 
 INTERESTS AND
 EXTRAORDINARY INCOME
 (LOSS)                 (147,777)   (693,773)     (299,828)  (1,391,241)

INCOME TAXES                -           -             -            -      

NET INCOME (LOSS) BEFORE 
 MINORITY INTERESTS AND
 EXTRAORDINARY INCOME
 (LOSS)                 (147,777)   (693,773)     (299,828)  (1,391,241)

MINORITY INTERESTS        10,187         (38)       (9,552)      39,393 

NET INCOME (LOSS) BEFORE
 EXTRAORDINARY INCOME
 (LOSS)                 (137,590)   (693,811)     (309,380)  (1,351,848)

EXTRAORDINARY INCOME (LOSS)
 Forgiveness of debt        -           -             -          20,000 
 Early payoff of debt       -           -             -         (10,444)
TOTAL EXTRAORDINARY 
 INCOME (LOSS)              -           -             -           9,556

NET INCOME (LOSS)      $(137,590) $ (693,811)    $(309,380) $(1,342,292)

<PAGE>
                            TRANS ENERGY, INC.
                   Consolidated Statements of Operations

                         For the Three Months  For the Nine Months      
                          Ended September 30,  Ended September 30,    
                            1995      1996       1995       1996 
                        (Unaudited)(Unaudited)(Unaudited)(Unaudited)
                                   (Restated)            (Restated)
PRIMARY EARNINGS (LOSS)
 PER SHARE

NET INCOME (LOSS) BEFORE
 EXTRAORDINARY INCOME   $  (0.04)  $  (0.21)   $  (0.09)  $  (0.42)

EXTRAORDINARY INCOME         -          -           -          NIL 

NET INCOME (LOSS)       $  (0.04)  $  (0.21)   $  (0.09)  $  (0.42)

FULLY DILUTED EARNINGS
 (LOSS) PER SHARE

NET INCOME (LOSS) BEFORE
 EXTRAORDINARY INCOME   $  (0.04)  $  (0.21)   $  (0.09)  $  (0.42)

EXTRAORDINARY INCOME         -          -           -          NIL  

NET INCOME (LOSS)       $  (0.04)  $  (0.21)   $  (0.09)  $  (0.42)

<PAGE>
                             TRANS ENERGY, INC.
              Consolidated Statements of Stockholders' Equity
                                  (Restated)                         
                                              Capital in   
                                    Common Shares       Excess of    Accumulated
                                  Shares     Amount     Par Value      Deficit
Balance,
 December 31, 1994               3,024,122  $  3,024    $3,612,852  $  (866,643)

Common stock issued for
 services at $1.50 per share       100,000       100       149,900         -

Common stock issued on 
 conversion of debentures at
 $0.90 per share                    50,000        50        44,950         -

Stock options issued for services     -         -          275,000         - 
 (Note 8)

Common stock warrants issued
 (Note 8)                             -         -        1,345,000         - 

Extension of debentures (Note 5)      -         -          202,032         - 

Net loss for the year ended
 December 31, 1995                    -         -             -      (2,205,078)

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

Common stock issued for debenture   55,555        56        49,944         -
  (Unaudited)

Common stock issued for services     9,000         9        23,991         -
  (Unaudited)

Common stock warrants issued
 (Note 8) (Unaudited)                 -         -          774,000         -

Cancellation of stock options issued
  for services (Note 8) (Unaudited)   -         -         (275,000)        -  

Shareholders loans contributed
 to capital (Unaudited)               -         -          250,000         -

Net loss for the nine months ended
  September 30, 1996 (Unaudited)      -         -             -      (1,342,292)

Balance, September 30, 1996 
  (Unaudited)                    3,238,677  $  3,239    $6,452,669  $(4,414,013)

<PAGE>
                              TRANS ENERGY, INC.
                    Consolidated Statements of Cash Flows


                                For the Three Months      For the Nine Months
                                 Ended September 30,      Ended September 30,
                                   1995        1996        1995        1996
CASH FLOWS FROM 
 OPERATING ACTIVITIES:         (Unaudited) (Unaudited)  (Unaudited) (Unaudited)
                                           (Restated)               (Restated)
  Net income (loss)            $ (137,590) $ (693,811)  $ (384,380) $(1,342,292)
  Adjustments to Reconcile 
   Net Income to Cash
   Provided by Operating 
              Activities:
    Depreciation and depletion     44,379      64,765      135,505      371,129
    Minority interest             (10,187)         38        9,552      (39,393)
    Common stock issued for
     services                        -           -         150,000       24,000
  Changes in Operating Assets 
   and Liabilities:
    Decrease (increase) in 
     accounts receivable          188,841      35,440      220,553       22,439 
    Decrease (increase) in 
     inventory                       -        323,910         -           9,351
    Decrease (increase) in 
     deposits                        -           -              23         (136)
    Decrease (increase) in loan 
     acquisition costs            (37,638)    193,500      (36,712)     367,587
    Increase (decrease) in
     accounts payable and
      accrued expenses           (271,406)    307,401     (328,806)     484,862 
    Increase (decrease) in 
     interest payable               4,706       9,464       18,428      (13,357)

   Cash Provided (Used) 
    by Operating Activities      (218,895)    240,707     (215,837)    (115,810)
 CASH FLOWS FROM 
 INVESTING ACTIVITIES:

  Purchase of subsidiary         (450,000)       -        (450,000)        -
  Increase in notes
   receivable                      (2,870)       -          (5,451)        - 
  Expenditures for property 
   and equipment                 (522,456)    (44,169)    (573,766)     (82,508)

   Cash Provided (Used) 
    by Investing Activities    $ (975,326)   $(44,169) $(1,029,217)   $ (82,508)

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

                               For the Three Months    For the Nine Months     
                                Ended September 30,     Ended September 30,   
                                  1995        1996        1995        1996 
CASH FLOWS FROM FINANCING 
 ACTIVITIES:                   (Unaudited) (Unaudited) (Unaudited) (Unaudited)
                                           (Restated)              (Restated)
  Payment of deferred stock
   offering costs              $  (75,000) $  (31,591) $  (75,000)  $  (71,091)
  Borrowings of long-term debt  1,303,052        -      1,420,622      551,309
  Loans to related parties           -         (1,313)       -          13,559 
  Borrowings from related parties    -        111,820        -         200,135
  Principal payments on
   long-term debt                    -       (142,550)    (72,372)    (343,655)

      Cash Provided (Used) by 
       Financing Activities     1,228,052     (63,634)  1,273,250      350,257 

NET INCREASE (DECREASE) 
 IN CASH                           33,831     132,904      28,196      151,939 

CASH AND CASH EQUIVALENTS,
  BEGINNING OF PERIOD               1,468      19,035       7,103         - 

CASH AND CASH EQUIVALENTS,
  END OF PERIOD                  $ 35,299    $151,939    $ 35,299     $151,939 

CASH PAID FOR:

  Interest                       $ 60,870    $ 92,582    $125,090     $260,938 
  Income taxes                   $   -       $   -       $   -        $   - 

NON-CASH FINANCING ACTIVITIES:

  Common stock issued for
   services                      $   -       $   -       $150,000     $ 24,000
  Conversion of debentures to
   equity                        $   -       $   -       $   -        $ 50,000
  Warrants issued for loan
   acquisition costs             $   -       $   -       $    -       $774,000 
  Shareholder loans contributed
   to capital                    $   -       $250,000    $    -       $250,000 

<PAGE>

                            TRANS ENERGY, INC.
              Notes to the Consolidated Financial Statements 
                 December 31, 1995 and September 30, 1996

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

       a.  Organization

       The Company was originally incorporated in the State of
       Idaho on January 16, 1964 under the name of Alter Creek
       Mining Company, Inc.

       The Company was engaged in mining activities in the 1960's. 
       The Company was inactive for several years but started up
       operations again in August of 1987.  The Articles of
       Incorporation were reinstated on September 4, 1987.  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.

       At a meeting on September 22, 1993, the shareholders
       approved a reverse stock split of  the outstanding common
       shares at a rate of 2 shares for every 5 shares
       outstanding.  This reduced the outstanding shares to
       1,024,122.  All references to shares outstanding and
       earnings per share have been retroactively restated to
       reflect the reverse stock split.

       The shareholders also approved the acquisition of certain
       oil and gas assets and stock in exchange for stock of the
       Company.  On November 15, 1993, the following shares were
       issued; 250,000 shares of common stock to the shareholders
       of The Pipeline, Ltd, 500,000 shares of common stock to the
       shareholders of Ritchie County Gathering Systems, Inc. and
       750,000 shares to the majority shareholders of Tyler
       Construction Company, Inc.  The acquisition was accounted
       for as a combination under the purchase method of
       accounting using predecessor cost.  Predecessor cost was
       used because the owners of the acquiring company are
       substantially the same as the owners of the acquired
       companies.  In other words, they are considered to be co-
       promoters.

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

       On November 15, 1993, the Company also purchased certain
       oil and gas assets of Dennis Spencer.  The purchase price
       was 500,000 shares of the Company's common stock.  This
       acquisition of the subsidiary has been accounted for using
       the purchase method of accounting which is based on the
       market value of the assets acquired at the time of
       acquisition.  As a result of these transactions, there were
       3,024,122 shares of common stock issued and outstanding at
       December 31, 1994.

<PAGE>
                            TRANS ENERGY, INC.
              Notes to the Consolidated Financial Statements 
                 December 31, 1995 and September 30, 1996

NOTE 1 - SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES (Continued)

       b.  Accounting Method

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

       Oil purchased for resale is recorded at cost and carried in
       inventory when it is collected from the supplier.  The sale
       is recorded when the oil is delivered to the pipeline.

       c.  Prior Period Adjustments

       The results of operations for the three and nine months
       ended September 30, 1996 have been rested to correct the
       application of accounting principles related to the
       treatment of the value of additional shares pursuant to the
       extension of convertible debentures and the valuation of
       Bridge Warrants issued in March 1996.  The effect of the
       related adjustments increased net loss before extraordinary
       items by $158,321 and    $579,783     for the three
       and nine months ended September 30, 1996, respectively. 
       Primary and fully diluted loss per share for the three and
       nine months ended September 30, 1996 both increased before and
       after extraordinary income (loss) by $(0.04) and    $(0.18)     per
       share, respectively,     as a result of the related adjustments.  The 
       effect of the adjustments on primary and fully diluted income (loss) 
       per share for extraordinary income (loss) was negligible for the three
       and nine month periods ended September 30, 1996.    

       d.  Loss per Share of Common Stock

       The loss per share of common stock is based on the weighted
       average number of shares issued and outstanding at the date
       of the financial statements.  

       e.  Provision for Taxes

       At December 31, 1995, and September 30, 1996 the Company
       had net operating loss carryforwards totaling approximately
       $3,100,000 and $4,400,000, respectively, may be offset
       against future taxable income through 2011.  No tax benefit
       has been reported in the financial statements, because the
       potential tax benefits of the net operating loss
       carryforwards is offset by a valuation allowance of the
       same amount.

       f.  Cash Equivalents

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

       g. Principles of Consolidation

       The consolidated financial statements include the Company
       and its wholly owned subsidiaries, Ritchie County Gathering
       Systems, The Pipeline Ltd., Dennis Spencer Wells, its 65%
       owned subsidiary, Tyler Construction Company, Inc. and its
       80% owned subsidiary, Vulcan Energy Corporation.  All
       significant intercompany accounts and transactions have
       been eliminated. 

<PAGE>
                             TRANS ENERGY, INC.
               Notes to the Consolidated Financial Statements
                  December 31, 1995 and September 30, 1996

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

       h. Depreciation

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

       i. Accounts Receivable

       Accounts receivable are shown net of the allowance for
       doubtful accounts.  This amount was determined to be $9,700
       at December 31, 1995 and September 30, 1996 after writing
       off all accounts determined to be uncollectible.

       j. Inventory

       Inventory at December 31, 1995 and September 30, 1996
       consists of crude oil held for resale and is stated at the
       lower of cost (computed on a first-in, first-out basis) or
       market.

       k. Goodwill

       Goodwill was recorded from the purchase of Vulcan Energy
       Corporation on August 7, 1995 (see Note 2).  The amount is
       amortized using the straight-line method over a useful life
       of five years.  Accumulated amortization at December 31,
       1995 and September 30, 1996 was $63,240 and $206,209,
       respectively.

       l. Deferred Stock Offering Costs

       The Company has capitalized the costs incurred in connection
       with its proposed stock offering.  The costs will be charged
       to paid-in capital upon completion of the offering.

NOTE 2 - FIXED ASSETS

       The Company acquired oil and gas leases from Ben's Run Oil
       Company (a Virginia limited partnership) in 1988 along with
       other assets and liabilities in exchange for shares of the
       Company's common stock. 

       The assets were recorded at predecessor cost since the
       former owners of Ben's Run Oil Company became the
       controlling shareholders of the Company.  The assets
       acquired had been fully amortized or depreciated. 
       Therefore, they were recorded at a cost of $0.

       In January of 1989 the Company acquired interests in oil and
       gas producing properties from Black Petroleum Corporation
       (Black). In exchange for the interests acquired, the Company
       paid $100,000 cash, 160,790 shares of common stock and
       assumed certain liabilities of Black.  The value of the
       stock issued was based on the estimated fair market value of
       the properties acquired less cash paid and liabilities
       assumed.  The purchase price for oil and gas properties
       totaled $2,015,109.  The purchase price also included the
       payment of an 18 3/4 percent override royalty on all future
       revenues from the properties in which Black had a 50 percent
       or greater interest and 25 percent of the net revenues of
       all properties in which Black had a less than 50 percent
       interest together with an agreement affecting all future
       issuances of capital stock by the Company.  This agreement
       requires that, at all times, Black is entitled to maintain
       a 20 percent equity interest in the Company.  This
       requirement expired on January 30, 1994.  The cost of the
       Black properties was recorded net of the royalty.  The
       acquisition included interests in wells located in Texas,
       Oklahoma, Kansas, and West Virginia.  Shortly after the
       acquisition from Black, the Company sold its interests in
       all the wells located in Texas, Oklahoma and Kansas for a
       total of $37,920 in cash.  The Company then had a formal
       study

<PAGE>
                            TRANS ENERGY, INC.
              Notes to the Consolidated Financial Statements
                 December 31, 1995 and September 30, 1996

NOTE 2 - FIXED ASSETS (Continued)

       and appraisal of the oil and gas reserves performed on the
       West Virginia properties.  Based upon this study and
       appraisal, the Company estimated the fair market value of
       the properties to be $2,015,109 at the time of acquisition. 
       However, due to the uncertainties involved in estimating
       oil and gas reserves, there is no assurance that the
       Company will fully recover this amount recorded as the
       investment in the properties.
  
       On November 15, 1994, the Company acquired six oil and gas
       wells at a cost of $1,082,222 and other equipment totaling
       $8,710 from Dennis Spencer in exchange for shares of the
       Company's common stock.  All assets were recorded at their
       market value (which was approximately the same as book
       value) at the time of acquisition based on the purchase
       method of accounting.  
       Based upon the reserve estimates, depletion and
       depreciation on these properties and the related equipment
       is computed under the units-of-production method as
       required by generally accepted accounting principles.  In
       1994 and 1993, the Company refurbished a number of wells. 
       In 1995, the Company obtained a reserve study which showed
       that the oil and gas reserves are higher than originally
       reported because the fix-up work allowed the producing
       wells to produce greater quantities and put some non-
       productive wells into production.  

       During 1994, the Company purchased leasehold acreage in
       Ohio known as Rose Run for $287,000.  The acreage was
       purchased from shareholders of the Company in part for
       forgiveness of receivables from those shareholders.  The
       balance of the purchase price of $135,867 is carried on the
       books as a related party loan payable.

       On August 7, 1995, the Company purchased 80 percent of the
       issued and outstanding stock of Vulcan Energy Corporation,
       a Texas corporation, for $1,100,000 including the
       assumption of $300,000 in debt to a customer of Vulcan. 
       Vulcan will continue to operate as a subsidiary of the
       Company.  Vulcan Energy is located twenty miles southwest
       of San Antonio and is engaged in the oil gathering and
       marketing business.

NOTE 3 - LONG-TERM DEBT

       The Company had the following debt obligations at December
       31, 1995 and September 30, 1996:
                                                    December 31,   September 30,
                                                       1995            1996 
                                                                   (Unaudited)
    Convertible Debentures (Note 5)                   $   50,000   $      - 

    
    Bank of Paden City, secured by gas pipeline, interest
      and principal payments of $1,846 due monthly at
      9.0% interest beginning March 1994.                  7,505          -     

    Calhoun County Bank, secured by oil and gas well
      interests, payable in monthly installments of $3,136
      including interest at variable rates, (lender's base
      rate of 9.75% as of December 31, 1995) matures
      September 1, 1996.                                  59,472        53,166

    Balance forward                                   $  116,977      $ 53,116

<PAGE>
                            TRANS ENERGY, INC.
              Notes to the Consolidated Financial Statements
                 December 31, 1995 and September 30, 1996

NOTE 3 - LONG-TERM DEBT (Continued)
                                                     December 31,  September 30,
                                                        1995           1996 
                                                                   (Unaudited)

    Balance forward                                  $  116,977     $   53,116

    Calhoun County Bank, secured by oil and gas well
      interests, payable in monthly installments of 
      $1,029 including interest at variable rates, 
      (lender's base rate of 9,75% as of December 
      31, 1995) matures February 13, 1996.                9,164          7,539

    Calhoun County Bank, secured by oil and gas well
      interests, payable in monthly installments of $3,651
      including interest at variable rates, (lender's base
      rate of 9,75% as of December 31, 1995) matures
      February 19, 1996.                                 43,359         36,455

    New York Life, secured by cash value in policy,  
     principal and interest payments of $480 per
     month at 7.25% interest rate.                       18,617         18,617

    Wesbanco Bank, secured by oil and gas wells, 
     principal and interest payments of $841 at 
     12.5% interest rate, matures October 11, 1997.      17,328         10,218

    Wesbanco Bank, secured by vehicle, principal
     and interest payments of $155 at 10.25%
     interest rate, matures September 30, 1997.           3,115          1,979

    First National Bank of St. Marys, $9,244 payable
      monthly, 12.5% interest rate, secured by
      equipment.                                        657,632        635,382

    Union Bank of Tyler County, interest at 11.5%
      due quarterly, renewable, secured by equipment.    19,810         19,810

    Note due private company, principal and interest
      of $163 payable monthly, interest rate of
      10.75%, secured by vehicle.                         4,997          3,825

    United National Bank, interest payable quarterly,
      variable rate (prime 1% or 9.75% as of 
      December 31, 1995), principal payment
      of $50,000 due annually, secured by equipment.    285,000        285,000

    Note due private individual, secured by officers'
      personal guarantee, due March 15, 1997,
      interest due monthly at 12%.                      100,000        100,000

    Balance forward                                  $1,275,999     $1,171,941

<PAGE>
                            TRANS ENERGY, INC.
              Notes to the Consolidated Financial Statements
                 December 31, 1995 and September 30, 1996

NOTE 3 -      LONG-TERM DEBT (Continued)
                                                    December 31,   September 30,
                                                       1995           1996   
                                                                    (Unaudited)
    Bank of Paden City, secured by officers'
      personal assets, demand note, interest
      payments due monthly at 9.75%.                   100,000         100,000

    Note due private individual, secured by
      officers' personal guarantee, due May 31,
      1997, interest due monthly at 12%.               150,000         150,000

    Note due private company, secured by officers'
      personal assets, due on October 15, 1997,
      with interest at 18%.                            135,000          92,725

    Note due private company, secured by officers
      guarantee, due September 30, 1997,
      with interest at 18%.                            100,000          53,200

    Notes due Secured Promissory Note Holders, 
      secured by accounts receivable, due April
      24, 1997, with interest at 12%.                  300,000         600,000

    Note payable to Ross Forbus in equal monthly
      installments of $6,529 with interest at 7.5%,
      secured by assets of subsidiary, matures on
      September 22, 2005.                              545,909         491,317

    Bank of Paden City, secured by officers personal
      assets, matures on August 19, 1996, interest
      due monthly at 10%.                               30,200          30,200

    Demand Note due Petrol Marketing Corporation
      on October 31, 1995 with no stated interest rate. 50,000          50,000

    Commercial Bank, secured by officers guarantee, 
      due September 28, 1996, with interest at 11.25%.    -             12,995

    Bank of Paden City, secured by officers guarantee,
      due December 5, 1996 with interest at 10%.          -             20,000

    Note due private individual, secured by officers
     guarantee, due November 7, 1996, with interest
     at 20%.                                              -            100,000

    Various equipment purchase contracts secured
      by vehicles.                                      82,354          54,688

         Less Current Portion                         (554,540)     (1,040,169)

         Total Long-Term Debt                       $2,214,922     $ 1,886,947


<PAGE>
                            TRANS ENERGY, INC.
              Notes to the Consolidated Financial Statements
                 December 31, 1995 and September 30, 1996

NOTE 3 - LONG-TERM DEBT (Continued)

    In March 1996 the Company completed a bridge financing of
    $600,000 of Unsecured Notes and 330,000 Bridge Warrants. 
    Of the $600,000 in Unsecured Notes, $270,000 of the
    previously secured note holders converted to Unsecured Note
    holders.  Under the terms of the Unsecured Notes, Interest
    is accrued at the rate of 12% per annum.  The principal is
    due and payable upon completion of the Company's proposed
    public offering or on March 321, 1997.  See Note 8 for a
    discussion regarding the Bridge Warrants.

    Schedule of Maturities

       1996                                 $554,540 
       1997                                  954,785 
       1998                                  160,735 
       1999                                  143,938        
       2000 and thereafter                   955,464 

          Total                           $2,769,462 

NOTE 4 - BOND

    Under the laws of the state of West Virginia, the Company
    is required to place funds in a deposit account with the
    state when drilling for oil and gas reserves.  The Company
    placed $50,000 in this reserve fund.  This fund has been
    established to cover future site restoration, dismantlement
    and abandonment costs.  No additional restoration costs
    have been recorded due to the fact the Company does not own
    the land and its involvement will be minimal.

NOTE 5 - CONVERTIBLE DEBENTURES

    The Company assumed obligations on debentures issued by
    Ben's Run Oil Co. During 1988.  The remaining debenture
    having a total face value of $50,000, was due on April 1,
    1996.  Subsequent to December 31, 1995, the $50,000
    debenture was converted into 55,555 shares of common stock. 
    As an incentive to the debenture holder for extending the
    due date of the debenture, on December 1, 1995 they were
    given the right to receive the number of post-split shares
    they were to have received pre-split.  The value of the
    additional shares issued has been recorded as loan costs
    and amortized over the period until the debenture was
    converted.

NOTE 6 - RELATED PARTY TRANSACTIONS

    a.  Loans

    At the end of December 1995, there were several related
    party loans payable and loans receivable outstanding.  The
    receivable amount is non-interest bearing and considered
    short-term in nature.  The payable amount is also non-
    interest bearing and considered long-term in nature.  Loans
    receivable at December 31, 1995 and September 30, 1996
    totalled $14,899 and $1,340, respectively.  Loans payable
    at December 31, 1995 and September 30, 1996 totalled
    $683,586, and $633,722, respectively.  In the third quarter
    of 1996, $250,000 of the loans payable were contributed to
    capital.

<PAGE>
                            TRANS ENERGY, INC.
              Notes to the Consolidated Financial Statements
                 December 31, 1995 and September 30, 1996

NOTE 6 - RELATED PARTY TRANSACTIONS (Continued)

    b.  Management Agreement

    A Company owned by an officer of The Company's subsidiary
    Vulcan Energy Corporation (Vulcan) owns the remaining 20%
    of Vulcan's stock.  The management company is entitled to
    a management fee of $252,000 per year and 20% of net
    profits before taxes loss 20% of the principal paid to the
    seller of Vulcan.  This 20% net profits interest has had no
    effect on the Company's financial statements since the
    subsidiary has generated a net loss up through September
    30, 1996.

NOTE 7 - ECONOMIC DEPENDENCE AND MAJOR CUSTOMERS

    The Company is provided its office space at no cost by
    Sancho Oil and Gas Corporation (Sancho),a company owned by
    one of its major shareholders.  The Company's marketing
    arrangement with Sancho accounted for approximately 45% of
    the Company's revenue for the year ended December 31, 1995. 
    This marketing agreement is in effect until December 1,
    2003. Another customer also generated sales in excess of
    10% of the Company's total sales.  Sales to this customer
    made up approximately 14% of net revenues in 1995.   No
    other single customer accounted for more than 10% of the
    Company's business.

    In addition to the natural gas produced by the Company's
    wells, it also purchased natural gas.  Approximately 33% of
    the amount purchased by the Company was from Key Oil
    pursuant to a certain marketing agreement.  No other
    supplier accounted for more than 10% of the Company's
    natural gas purchasers.

NOTE 8 - COMMON STOCK, OPTIONS AND WARRANTS

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

    The Company also received $5,000 during December of 1995
    for the purchase of 500,000 Bridge Warrants at $0.01 per
    Warrant.  The Company issued 48,750 additional Bridge
    Warrants as compensation for the sale of the Bridge
    Warrants which were later surrendered to the Company for no
    consideration.  The Bridge Warrants were valued at the
    average trading price when issued and expensed to interest
    during the year ended December 31, 1995. The Bridge
    Warrants are convertible into 1 share of common stock at
    $0.50 per share for up to eighteen months.  Upon the
    effective registration of the Company's proposed stock
    offering (Note 10), the $0.50 common stock conversion
    option of the Bridge Warrants will terminate and the Bridge
    Warrants will automatically convert into 2 Redeemable
    Warrants exercisable at 110% of the proposed offering price
    which will be approximately $5.00 per share.

    In connection with the extension of the due date of a note
    payable the Company granted the noteholder a warrant to
    purchase up to 50,000 shares of the company's common stock
    at $2.25 per share.

    The Company issued 330,000 Bridge Warrants in March 1996 in
    conjunction with the completion of a $600,000 bridge
    financing composed of Unsecured Notes (See Note 3).  

<PAGE>
                            TRANS ENERGY, INC.
              Notes to the Consolidated Financial Statements
                 December 31, 1995 and September 30, 1996

NOTE 8 - COMMON STOCK, OPTIONS AND WARRANTS (Continued)

    These Bridge Warrants are exercisable for 18 months form
    the date of issue and entitle the holder thereof to
    purchase 1 share of common stock at $0.50 per share.  The
    Bridge Warrants were valued at the average trading price
    when issued and are being amortized to interest expense
    over 12 months.  Upon the effective registration for the
    Company's proposed stock offering (Note 10), the $0.50
    common stock conversion option of these Bridge Warrants
    will terminate and the Bridge Warrants will automatically
    convert into 2 Redeemable Warrants exercisable at 110% of
    the proposed offering price which will be approximately
    $5.00 per share.  If the Bridge Warrants are converted, the
    unamortized balance of the cost will be expensed
    immediately.

NOTE 9 - COMMITMENTS AND CONTINGENCIES

    The Company leases office space at its Dallas location
    under a one year noncancellable operating lease at $1,747
    per month.  The lease term expires in February 1997.

NOTE 10 - GOING CONCERN

    The Company's financial statements are prepared using
    generally accepted accounting principles applicable to a
    going concern which contemplates the realization of assets
    and liquidation of liabilities in the normal course of
    business. The Company has incurred operating losses for the
    years ended December 31, 1995, 1994 and 1993.  Revenues
    have not been sufficiently established to cover its
    operating costs and to allow it to continue as a going
    concern.  The Company, having recently purchased an 80%
    equity ownership of Vulcan Energy Corporation (the
    Subsidiary), has replaced management and recapitalized the
    Subsidiary with a $200,000 working capital infusion.  The
    Company has also entered into a letter of intent with L.B.
    Saks, Inc., a New York investment firm, to do an
    underwriting for a minimum of $3,000,000.  The Company
    believes that the acquisition and the proceeds from the
    public offering will help the Company continue as a going
    concern.

NOTE 11 - OTHER TRANSACTIONS

    a.  Line of Credit

    In 1996, the Company obtained a $1,000,000 line of credit
    with a lending institution.  Interest accrues on the unpaid
    balance at varying rates depending on the outstanding
    balance.  The line of credit will be used by Vulcan to
    secure purchases of oil.

    b.  Forgiveness of Debt

    In February 1996, $20,000 of the management fee payable by
    Vulcan was forgiven by the management company.

NOTE 12 - CONSOLIDATED PROFORMA STATEMENTS OF OPERATIONS

    The historical information contained herein has been
    consolidated on a proforma basis.  The purchase of oil and
    gas assets from Vulcan Energy Corporation as described in
    Notes 1 and 2 was effective August 7, 1995.  The purchase
    has been presented as though it was effective January 1,
    1995.  All significant accounting policies for Vulcan
    Energy Corporation are the same as the Company's as defined
    in Note 1.  No proforma adjustments for depreciation and
    depletion have been recorded because the market value of
    Vulcan Energy Corporation is approximately the same as
    predecessor cost.

<PAGE>
                              TRANS ENERGY, INC.
                Notes to the Consolidated Financial Statements
                   December 31, 1995 and September 30, 1996

NOTE 12 - CONSOLIDATED PROFORMA STATEMENTS OF OPERATIONS (Continued)


                                             For the Year Ended
                                              December 31, 1995 

                          Vulcan             Trans      
                          Energy          Energy and                  Proforma
                         Corporation      Subsidiaries  Adjustments   Combined
                                          (Restated)                 (Restated)
    OIL AND GAS SALES    $1,622,955       $ 2,828,162  $     -      $ 4,451,117

    COST AND EXPENSES

      Cost of oil and gas 1,493,811         2,392,907        -        3,886,718
      Salaries and wages    142,444           178,558        -          321,002
      Depreciation and
       depletion             11,303           228,692     105,500       345,495
      Selling, general and
       administrative        59,993         1,833,338        -        1,893,331

         Total Costs and
               Expenses   1,707,551         4,633,495     105,500     6,446,546

    INCOME (LOSS) 
        FROM OPERATIONS     (84,596)       (1,805,333)   (105,500)   (1,995,429)

    OTHER INCOME (EXPENSE)

      Interest income           697               444        -            1,141
      Interest expense       (1,004)         (347,282)   (112,006)     (460,292)
      Gain on disposition
       of assets              7,683             2,046        -            9,729
      Bad debt expense         (500)          (44,550)       -          (45,050)

         Total Other Income 
            (Expense)         6,876          (389,342)   (112,006)     (494,472)

    NET INCOME (LOSS) BEFORE
     MINORITY INTERESTS     (77,720)       (2,194,675)   (217,506)   (2,489,901)

    MINORITY INTERESTS         -              (10,403)       -          (10,403)

    NET INCOME (LOSS)     $ (77,720)      $(2,205,078) $ (217,506)  $(2,500,304)

    EARNINGS (LOSS)
       PER SHARE          $   (0.02)      $     (0.71) $    (0.07)  $     (0.80)

<PAGE>
                              TRANS ENERGY, INC.
                    S.F.A.S.  69  Supplemental Disclosures
                   December 31, 1995 and September 30, 1996
                                 (Unaudited)


S.F.A.S. 69  SUPPLEMENTAL DISCLOSURES


    (1)                 Capitalized Costs Relating to
                       Oil and Gas Producing Activities
                                       
                                             December 31,        September 30,
                                                 1995                 1996 
                                                                  (Unaudited)
    Proved oil and gas producing properties 
     and related lease and well equipment     $3,733,388          $3,759,301
    Accumulated depreciation and depletion      (390,540)           (431,976)

    Net Capitalized Costs                     $3,342,848          $3,327,325


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

                                   For the              For the Nine  
                                   Year Ended           Months Ended 
                                  December 31,          September 30, 
                                    1995                1996      
                                                       (Unaudited)
    Acquisition of Properties
       Proved                     $    -               $    -      
       Unproved                     100,000                 -      
    Exploration Costs                  -                    -      
    Development Costs                  -                  25,913 


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




<PAGE>
                              TRANS ENERGY, INC.
                    S.F.A.S.  69  Supplemental Disclosures
                   December 31, 1995 and September 30, 1996
                                 (Unaudited)

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

    (3)                   Results of Operations for
                             Producing Activities

                                            For the      For the Nine   
                                           Year Ended    Months Ended 
                                           December 31,  September 30, 
                                                1995        1996       
                                                          (Unaudited)

    Sales                                     $205,152    $ 253,692 

    Production costs                          (110,141)    (136,202)
    Depreciation and depletion                 (10,556)      (9,952)

    Results of operations
     for producing activities
     (excluding corporate
     overhead and interest
     costs)                                   $ 84,455    $ 107,538 


    (4)                  Reserve Quantity Information

                                                 Oil         Gas   
                                                 BBL         MCF     
    Proved developed and undeveloped reserves:

    Balance, December 31, 1994                 200,485    1,457,405 

        Production                              (1,103)     (89,874)
           Quantity estimates made                (312)     422,123

    Balance, December 31, 1995                 199,070    1,789,654
      (Unaudited)

        Production                              (2,208)     (72,306)
        Quantity estimates made                   -            -      

    Balance, September 30, 1996                196,862    1,717,348 

       Proved developed reserves:
                                                  Oil        Gas     
                                                  BBL        MCF     

         Beginning of the year 1995            200,485    1,457,405
         End of the year 1995                  199,070    1,789,654
         Beginning of the year 1996            199,070    1,789,654
         End of September 1996                 196,862    1,717,348

<PAGE>
                              TRANS ENERGY, INC.
                     S.F.A.S 69 Supplemental Disclosures
                   December 31, 1995 and September 30, 1996

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

(4)                Reserve Quantity Information (Continued)

During 1995, 1992, 1991 and 1990, the Company had reserve studies and
estimates prepared on the various properties acquired from Black
Petroleum Corporation.  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.

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

                             At December 31, 1995

                                                       Trans Energy
                                                           and      
                                                       Subsidiaries 
Future cash inflows                                     $19,846,963
Future production and development costs                  (7,125,060)
Future net inflows before income taxes                   12,721,903
Future income tax expense                                (4,325,447)
Future net cash flows                                     8,396,456
10% annual discount for estimated timing of cash flows   (4,332,571)

Standardized measure of discounted future net cash flows $4,063,885


                            At September 30, 1996
                                 (Unaudited)
                                                       Trans Energy
                                                           and      
                                                       Subsidiaries 
Future cash inflows                                     $19,358,130
Future production and development costs                  (6,937,592)
Future net inflows before income taxes                   12,420,538
Future income tax expense                                (4,222,983)
Future net cash flows                                     8,197,555
10% annual discount for estimated timing of cash flows   (4,251,160)

Standardized measure of discounted future net cash flows $3,946,395 

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

<PAGE>
                              TRANS ENERGY, INC.
                     S.F.A.S 69 Supplemental Disclosures
                   December 31, 1995 and September 30, 1996

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

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

                                            For the        For the Nine  
                                           Year Ended      Months Ended
                                           December 31,    September 30,  
                                               1995            1996       
                                                            (Unaudited)

Standardized measure, beginning of year     $ 3,602,626    $ 4,063,885     
Oil and gas sales, net of production costs     (107,818)      (117,490)
Sales of mineral in place                          -              -      
Quantity estimates made                         569,077           -      

Standardized measure, end of period          $4,063,885    $ 3,946,395     

The above schedules relating to proved oil and gas reserves,
standardized measure of discounted future net cash flows and changes in
the standardized measure of discounted future net cash flows have their
foundation in engineering estimates of future net revenues that are
derived from proved reserves and with the assumption of current pricing
and current costs of production for oil and gas produces in future
periods.  These reserve estimates are made from evaluations conducted by
Sam M. Deal, and independent geologist, of such properties and will be
periodically reviewed based upon updated geological and production date. 
Estimates of proved reserves are inherently imprecise.  The above
standardized measure does not include any restoration costs due to the
fact the Company does not own the land.

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

(6)                     Earnings (Loss) Per share Data

                                             December 31,    September 30, 
                                                1995              1996       
                                                              (Unaudited) 
                                             (Restated)       (Restated)
Primary earnings (loss) per share
  Weighted average outstanding shares          3,116,435        3,233,298
  Income (loss) before extraordinary income  $     (0.71)     $     (0.42)
  Extraordinary income                       $      -         $      NIL

Fully diluted earnings (loss) per share
  Weighted average outstanding shares          3,182,415        3,233,298
  Income (loss) before extraordinary income  $     (0.71)     $     (0.42)
  Extraordinary income                       $      -         $      NIL

<PAGE>
Item 2.  Management's Discussion and Analysis of Financial
         Condition and Results of Operations

    The following table sets forth the percentage relationship to
total revenues of principal items contained in the Company's
Consolidated Statements of Operations for the three month and nine
month periods ended September 30, 1996 and 1995.  It should be
noted that percentages discussed throughout this analysis are
stated on an approximate basis.

                          Three Months Ended     Nine Months Ended
                             September 30,         September 30,
                          1996           1995    1996       1995
                             (Unaudited)            (Unaudited) 
Total revenues . . . . .   100%          100%    100%        100%
Total costs and expenses . 137           118     133         114 
Net income (loss) before
  income taxes, minority
  interest and
  extraordinary income
  (loss). . . . . . . . .  (37)          (18)    (33)        (14)
Income taxes . . . . . .    (0)           (0)     (0)         (0) 
Minority interest. . . .    (0)            1       1          (1)
Extraordinary income (loss)  -             -     Nil           -
Net income (loss). . . .   (37)           (17)   (32)        (15)
                       

Results of Operations

    The reults of operations for the three months and nine months
ended September 30, 1996 have been restated.  Please refer to Note 1c
to the accompanying financial statements.

    Total revenues for the three month period ended September 30,
1996 ("third quarter of 1996") and the nine month period ended
September 30, 1996 ("first nine months of 1996"), increased 130%
and 102%, respectively, as compared to the corresponding periods
for 1995 ("third quarter of 1995" and "first nine months of 1995",
respectively).  This increase is primarily attributed to the
acquisition by the Company of Vulcan Energy Corp. ("Vulcan") on
August 7, 1995  and a decrease in new drilling activities for
oil and gas wells in the areas serviced by the Company's pipelines,
leading to reliance on existing wells with diminishing volumes of
recoverable oil and gas.  During the first nine months of 1996,
the Company  arranged  a line of credit to Vulcan  from
United Factors, L.L.C. ("United Factors")  which has allowed
Vulcan to purchase larger quantities of oil than it was
historically able to finance.  The increase in revenues is also due
to the increase in the market prices for natural gas and oil in
1996.  

    Total costs and expenses as a percentage of total revenues
increased for the third quarter of 1996 as compared to the
corresponding 1995 period, and also increased for the first nine
months of 1996 as compared to the first nine months of 1995. 
Actual costs and expenses for the third quarter of 1996 and first
nine months of 1996 increased  166% and 1353%, respectively,
as compared to the corresponding 1995 periods.  These increases are
primarily attributed to the 192% increase in cost of oil and gas
sales for the third quarter of 1996, and the 143% increase in the
cost of oil and gas sales for the first nine months of 1996. 
Because the increase in the costs of sales was larger than the
increase in sales, the Company's loss from operations increased
from $86,907 to  $398,227, and from $169,038 to 
$639,989  in the comparative three month and nine month
periods of 1996.

    Salaries and wages decreased 46% and 51% for the third quarter
of 1996 and first nine months of 1996, respectively, due to the
issuance by the Company in 1995 of common stock for additional
compensation for  services rendered to the Company valued at
$150,000.  Depreciation and depletion increased 125% for the third
quarter of 1996 and 117% for the first nine months of 1996,
respectively, because of the goodwill acquired in the Vulcan
purchase. Interest increased 386% for the third quarter of
1996 and  474% for the first nine months of 1996,
respectively, as compared to the respective corresponding periods
in 1995, attributed to the debt incurred in the Vulcan acquisition,
 the additional debt incurred for working capital,  and the
issuance of Bridge Warrants in the Company's March 1996 bridge
financing.  Selling  general and administrative expenses
increased  41%  for the third quarter of 1996 and  91%
for  the first nine months of 1996 as compared to the
corresponding 1995 periods, reflecting increased overhead due to
the Company's expanded oil sale operations. 

    For the nine months year ended September 30, 1996, the Company
derived its revenues from the following sources:
                                                  Percentage of
                                                   Revenues for 
                                  Nine Months       Nine Months
                                    Ended              Ended
                             September 30, 1996  September 30, 1996
Gas Pipeline Sales              $  732,162               17%
Vulcan Energy Sales              3,217,649               77%
Other Production Sales             253,692                6%

  The Company's subsidiary, Tyler Construction Company,
continued to  generate losses which resulted in an adjustment to
the minority interest account of $38 for the third quarter of 1996
and $39,393 for the first nine months of 1996.  The Company
experienced net losses for the third quarter and first nine months
of 1996 of $693,811 and $1,342,292, respectively, compared
to net losses of $137,590 and $309,380 for the corresponding 1995
periods, primarily attributed to the increase in the cost of oil
and gas sales and the increased overhead activities of the Company,
 the issuance of Bridge Warrants in connection with the raising
of $600,000 through the placement of Unsecured Notes by the
Company, and the issuance of additional shares to the Debenture
Holders as consideration for extending the due date of said
Debentures.

  For the remainder of 1996, management expects salaries and
wages and other general and administrative expenses to remain at
approximately the same rate that existed in the third quarter of
1996.  The cost of oil and gas produced is expected to fluctuate
with the amount produced and with prices of oil and gas, and
revenues are expected to fluctuate with market prices of oil and
gas during the remainder of 1996.

Net Operating Losses

  The Company has accumulated approximately  $4,400,000 
of net operating loss carryforwards as of September 30, 1996, which
may be offset against future taxable income through the year 2011
when the carryforwards expire.  The use of these losses to reduce
future income taxes will depend on the generation of sufficient
taxable income prior to the expiration of the net operating loss
carryforwards.  In the event of certain changes in control of the
Company, there will be an annual limitation on the amount of net
operating loss carryforwards which can be used.  No tax benefit has
been reported in the financial statements for the period ended 
September 30,1996 because the potential tax benefits of the loss
carryforwards are offset by a valuation allowance of the same
amount.

Liquidity and Capital Resources

  Historically, the Company's working capital needs have been
satisfied through its operating revenues and from borrowed funds. 
As of September 30, 1996, the Company's working capital was a
negative $1,646,111 compared with a negative $862,222 at December
31, 1995.  This decrease in working capital for the first nine
months of 1996 is primarily attributed to due dates of certain
loans to the Company which will become due in less than one year
from September 30, 1996.

  The Company presently has a single line of credit with the
Bank of Paden City in the amount of $100,000.  Such line is
currently fully drawn down.  

  Vulcan's arrangement with its suppliers require payment by the
20th day of the month following the month in which a supplier
delivers oil to Vulcan.  Consequently, Vulcan requires substantial
amounts of available cash to pay its suppliers.  Failure to pay
suppliers on a timely basis could result in the termination of
Vulcan's supply arrangements.  In the event Vulcan is unable to
generate sufficient cash from operations or other sources, such
inability would have a material adverse impact on Vulcan's
business.  Management believes that the assignment of net profits
interest will have no impact on the Company's liquidity or
operations.  

  Vulcan has experienced cash flow problems for the fiscal years
ended December 31, 1993, 1994 and 1995 and for the nine month
period ended September 30, 1996.  The Company has infused an
aggregate of $440,550 in working capital into Vulcan.

<PAGE>
  The Company anticipates meeting its working capital needs
during the remainder of the current fiscal year with revenues from
operations and from anticipated proceeds from its proposed public
offering.  If the Company is unable to realize sufficient funds
from its public offering or from private lenders, management
believes that the Company can continue operations on its existing
wells and oil and gas gathering operations.

  The Company believes that in the absence of the public
offering, cash flows from operations will be sufficient to cover
the general and administrative costs of the Company, including
salaries and wages.  The Company used  $115,810  in cash in
its operating activities for the nine month period ended September
1996, compared to $215,837 in the corresponding 1995 period.  In
the event that the proposed public offering does not close before
December 31, 1996, the Company would immediately negotiate the
extension of the current portion of its long-term debt which makes
up almost one-half (49%) of current liabilities.  Management
believes that it can negotiate an extension of the due dates of
approximately $800,000 of the current portion of its long-term debt
for an additional one-year period.  The Company also believes that
$600,000 of the $800,000 previously discussed could be converted
into stockholders' equity.  For the balance of the approximately
$200,000 of the current portion of its long-term debt, the Company
believes that it will be able to secure financing from both private
and institutional lenders.   Vulcan  has in place a
$1,000,000 line of credit for the factoring of Vulcan's accounts
receivable  pursuant to a Purchase and Sale Agreement with
United Factors,  which enables Vulcan to buy and sell oil at its
present levels.   United Factors purchases eligible accounts
receivable from Vulcan at a base price of 80% of the eligible
receivable plus a bonus ranging from 18.75% to 14.00% of such
receivable if such receivable is paid between 10 and 50 days from
the date of the invoice for such receivable.  Such line of credit
is secured by a security interest in Vulcan's account receivable
and is personally guaranteed by Loren E. Bagley and William F.
Woodburn, President and Vice-President of the Company, by F. Worthy
Walker, President of Vulcan, and by the Company.  The Company,
in anticipation of further growth, has expanded its overhead
activities.  In the event the proposed public offering does not
occur, the Company intends to eliminate costs associated with such
expansion, approximately $15,000 per month, without affecting
revenues.  Such elimination would be effective starting January 1,
1997.

  As of September 30, 1996, the Company had total assets of
$6,672,792  and total stockholders' equity of
$2,041,895, compared to total assets of $6,705,278
and total stockholders' equity of $2,561,187 at December 31,
1995.  This represents a $32,486 (.5%) increase  in total
assets and a $519,292 (20%) decrease in total stockholders
equity.  For this same period, cash increased from $0 to $151,939
and total current assets increased 35% due to increased cash. 
Total current liabilities increased 75% from December 31, 1995 to
September 30, 1996, primarily due to certain loans of the Company
which become due in less than one year from September 30, 1996.

  The Company's current portion of its long term debt is
$1,040,169.  In 1995 and 1996, certain outstanding convertible
debentures having a face value of $95,000 plus accrued interest,
were converted to common stock.

  For the third quarter of 1996 cash provided by the Company's
operating activities was $240,707 compared to cash used of $218,895
for the third quarter of 1995.  For the first nine months of 1996,
cash used by operating activities was $115,810 compared to
cash used of $215,837 for the corresponding period in 1995.  Net
cash used by investing activities for the third quarter and first
nine months of 1996 was $44,169 and $82,508, respectively, compared
to $975,326 and $1,029,217 for each of the corresponding periods of
1995.  The decreases for the 1996 periods are attributed to
decreases in expenditures by the Company for property and equipment
and also acquisitions during the 1996 periods.  Cash used by
financing activities for the third quarter of 1996 was $63,634 and
cash provided for the first nine months of 1996 was
$350,257, respectively, compared with cash provided of
$1,228,052 and $1,273,250 for the corresponding 1995 periods.  The
decreases for the 1996 periods are directly attributed to a
decrease in borrowing by the Company.

  The Company projects that it will attempt to increase the
production of approximately 30 of its wells by installing
artificial lift, or pumping mechanisms during the second half of
1996 at a projected cost of approximately $175,000.  The Company
has installed four such artificial lift systems during the first
nine months of 1996 at an average cost of $5,200.

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

                                  PART II

Item 1.  Legal Proceedings

    There are presently no material pending legal proceedings to
which the Company or any of  its subsidiaries is a party or to
which any of its property is subject and, to the best of its
knowledge, no such actions against the Company are contemplated or
threatened.

Item 2.  Changes In Securities

    This Item is not applicable to the Company.

Item 3.  Defaults Upon Senior Securities

    This Item is not applicable to the Company.
<PAGE>
Item 4.  Submission of Matters to a Vote of Security Holders

    This Item is not applicable to the Company.

Item 5.  Other Information

    This Item is not applicable to the Company.

Item 6.  Exhibits and Reports on Form 8-K

    (a)  Exhibit 27 - Financial Data Schedules

    (b)  Reports on Form 8-K

         No report on Form 8-K was filed by the Company during the
        three month period ended September 30, 1996.

<PAGE>
                                SIGNATURES
                                     

    In accordance with the requirements of the Securities Exchange
Act of 1934, the Registrant caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.

                                            TRANS ENERGY, INC.



Date:  December 17, 1996                    By   /S/ Loren E. Bagley   
                                                 (Signature)
                                                 LOREN E. BAGLEY, President
                                                 and Chief Executive Officer




Date:  December 17, 1996                    By   /S/  Dennis L. Spencer 
                                                 (Signature)
                                                 Dennis L. Spencer,  
                                                 Secretary and Director
                                                (Chief Financial Officer)
                                                (Principal Accounting Officer)