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

                                   FORM 10-QSB

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

                      For the Quarter Ended March 31, 2006

                                       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 [ ]

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

                      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 March 31, 2006
-----------------------------                 --------------------------------
Common Stock, $.001 par value                            4,186,104


<PAGE>

<TABLE>
<CAPTION>

                                TABLE OF CONTENTS

Heading                                                                                                   Page
-------                                                                                                   ----
                          PART I. FINANCIAL INFORMATION

<S>         <C>                                                                                           <C>
Item 1.      Financial Statements....................................................................       1

                  Consolidated Balance Sheets - March 31, 2006 (Unaudited) and
                    December 31, 2005................................................................       2

                  Consolidated Statements of Operations - three months ended
                     March 31, 2006 and 2005 (Unaudited).............................................       4

                  Consolidated Statements of Stockholders' Equity (Deficit)..........................       5

                  Consolidated Statements of Cash Flows - three months ended
                     March 31, 2006 and 2005 (Unaudited).............................................       6

                  Notes to Unaudited Condensed Consolidated Financial Statements ....................       8

Item 2.      Management's Discussion and Analysis or Plan of Operations..............................      15

Item 3.      Controls and Procedures.................................................................      18

                           PART II. OTHER INFORMATION

Item 1.      Legal Proceedings.......................................................................      18

Item 2.      Unregistered Sales of Equity Securities and Use of Proceeds.............................      19

Item 3.      Defaults Upon Senior Securities.........................................................      19

Item 4.      Submission of Matters to a Vote of Securities Holders...................................      19

Item 5.      Other Information.......................................................................      19

Item 6.      Exhibits and Reports on Form 8-K........................................................      19

             Signatures..............................................................................      20
</TABLE>


<PAGE>


                                     PART I

Item 1.       Financial Statements

     The accompanying consolidated balance sheets of Trans Energy, Inc. at March
31, 2006  (unaudited)  and  December 31, 2005,  related  unaudited  consolidated
statements  of  operations,   stockholders'  equity  (deficit)  and  consolidate
statements  of cash flows for the three  months  ended  March 31, 2006 and 2005,
have been prepared by our management in conformity  with  accounting  principles
generally  accepted  in  the  United  States  of  America.  In  the  opinion  of
management,  all adjustments considered necessary for a fair presentation of the
consolidated results of operations and consolidated financial position have been
included and all such  adjustments are of a normal recurring  nature.  Operating
results for the quarter ended March 31, 2006, are not necessarily  indicative of
the results that can be expected for the fiscal year ending December 31, 2006.









                               TRANS ENERGY, INC.
                                 AND SUBSIDARIES

                        CONSOLIDATED FINANCIAL STATEMENTS

                      March 31, 2006 and December 31, 2005



                                      -1-
<PAGE>




<TABLE>
<CAPTION>

                       TRANS ENERGY, INC. AND SUBSIDIARIES
                           Consolidated Balance Sheets




                                     ASSETS

                                                                    March 31,     December 31,
                                                                      2006            2005
                                                                   -----------    -----------
                                                                   (Unaudited)
CURRENT ASSETS

<S>                                                                <C>            <C>
   Cash                                                            $   444,672    $   439,258
   Accounts receivable, net                                          1,227,151      1,396,696
   Prepaid expenses                                                     11,745          9,617
                                                                   -----------    -----------

     Total Current Assets                                            1,683,568      1,845,571
                                                                   -----------    -----------

PROPERTY AND EQUIPMENT, NET                                          2,039,211      2,160,256
                                                                   -----------    -----------

OTHER ASSETS
   Assets of discontinued operations                                      --        6,672,688
   Deposits                                                              1,223          4,914
   Investments                                                         175,000        175,000
   Life insurance, cash surrender value                                 75,995         75,995
                                                                   -----------    -----------

     Total Other Assets                                                252,218      6,928,597
                                                                   -----------    -----------

     TOTAL ASSETS                                                  $ 3,974,997    $10,934,424
                                                                   ===========    ===========
</TABLE>

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


                                      -2-
<PAGE>

<TABLE>
<CAPTION>

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


                 LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

                                                                    March 31,     December 31,
                                                                      2006            2005
                                                                  ------------    ------------
                                                                  (Unaudited)
CURRENT LIABILITIES

<S>                                                               <C>             <C>
   Accounts payable - trade                                       $  2,482,964    $  2,355,429
   Related party payables (Note 6)                                     788,848         855,502
   Accrued expenses                                                    879,034         860,368
   Judgments payable (Note 3)                                           77,767          77,767
   Debentures payable                                                   50,000          50,000
   Notes payable - current portion                                     659,205         659,205
                                                                  ------------    ------------


     Total Current Liabilities                                       4,937,818       4,858,271
                                                                  ------------    ------------

LONG-TERM LIABILITIES

   Notes payable                                                        60,543           6,872
   Liabilities of discontinued operations                                 --         4,772,812
   Asset retirement obligation                                         803,939         799,393
                                                                  ------------    ------------

     Total Long-Term Liabilities                                       864,482       5,579,077
                                                                  ------------    ------------

       Total Liabilities                                             5,802,300      10,437,348
                                                                  ------------    ------------

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' EQUITY (DEFICIT) (Note 7)

   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; 4,952,148 shares issued
   and 4,186,104 and 4,707,515 shares outstanding, respectively          4,952           4,952
   Capital in excess of par value                                   30,856,798      30,856,798
   Treasury stock                                                     (755,737)       (286,467)
   Accumulated deficit                                             (31,933,316)    (30,078,207)
                                                                  ------------    ------------

     Total Stockholders' Equity (Deficit)                           (1,827,303)        497,076
                                                                  ------------    ------------

     TOTAL LIABILITIES AND STOCKHOLDERS'
       EQUITY (DEFICIT)                                           $  3,974,997    $ 10,934,424
                                                                  ============    ============
</TABLE>

                                      -3-
<PAGE>

<TABLE>
<CAPTION>

                       TRANS ENERGY, INC. AND SUBSIDIARIES
       Consolidated Statements of Operations and Other Comprehensive Loss
                                   (Unaudited)


                                                        For the Three Months Ended
                                                                 March 31,
                                                           2006            2005
                                                        -----------    -----------

<S>                                                     <C>            <C>
REVENUES                                                $ 1,712,307    $   752,220
                                                        -----------    -----------

COSTS AND EXPENSES

  Cost of oil and gas                                     1,520,392        624,248
  Salaries and wages                                         81,658         67,900
  Depreciation, depletion, amortization and accretion       139,750        103,856
  Selling, general and administrative                       111,940        107,279
                                                        -----------    -----------

     Total Costs and Expenses                             1,853,740        903,283
                                                        -----------    -----------

INCOME (LOSS) FROM OPERATIONS                              (141,433)      (151,063)
                                                        -----------    -----------

OTHER INCOME (EXPENSE)

  Gain on disposal of asset                                    --            2,355
  Loss on sale of asset                                        --          (14,894)
  Gain on settlement of debt                                   --            2,306
  Interest expense                                          (31,370)       (27,175)
                                                        -----------    -----------

     Total Other Income (Expense)                           (31,370)       (37,408)
                                                        -----------    -----------

LOSS FROM OPERATIONS BEFORE INCOME TAXES                   (172,803)      (188,471)

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

NET LOSS BEFORE DISCONTINUED OPERATIONS                    (172,803)      (188,471)

GAIN FROM DISCONTINUED OPERATIONS                           183,776        121,983
LOSS ON DISPOSAL OF DISCONTINUED OPERATIONS              (1,866,082)          --
                                                        -----------    -----------

NET LOSS                                                $(1,855,109)   $   (66,488)
                                                        ===========    ===========

BASIC (LOSS) GAIN PER SHARE

  Continuing Operations                                 $     (0.04)   $     (0.04)
  Discontinued Operations                                     (0.40)          0.03
                                                        -----------    -----------

                                                        $     (0.44)   $     (0.01)
                                                        ===========    ===========

WEIGHTED AVERAGE SHARES OUTSTANDING                       4,707,515      4,381,090
                                                        ===========    ===========
</TABLE>



                                      -4-
<PAGE>

<TABLE>
<CAPTION>

                       TRANS ENERGY, INC. AND SUBSIDIARIES
            Consolidated Statement of Stockholders' Equity (Deficit)





                                         Preferred Stock               Common Stock         Capital In
                                   --------------------------  --------------------------    Excess of
                                                                 Treasury                   Accumulated
                                      Shares        Amount        Shares        Amount       Par Value       Stock        Deficit
                                   ------------  ------------  ------------  ------------  ------------  ------------  ------------

<S>                                <C>           <C>              <C>        <C>           <C>           <C>           <C>
Balance, December 31, 2005                 --    $       --       4,952,148  $      4,952  $ 30,856,798  $   (286,467) $(30,078,207)


Shares received for discontinued
  operations on March 31, 2006
  (unaudited)                              --           --            --            --            --        (469,270)         --

Net loss for the three months
   endedMarch 31, 2006
   (unaudited)                             --            --            --            --            --            --      (1,855,109)
                                   ------------  ------------  ------------  ------------  ------------  ------------  ------------

Balance, March 31, 2006
   (unaudited)                             --    $       --       4,952,148  $      4,952  $ 30,856,798  $   (755,737) $(31,933,316)
                                   ============  ============  ============  ============  ============  ============  ============
</TABLE>



                                      -5-
<PAGE>

<TABLE>
<CAPTION>

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


                                                                For the Three Months Ended
                                                                        March 31,
                                                                  2006            2005
                                                               -----------    -----------

CASH FLOWS FROM OPERATING ACTIVITIES:

<S>                                                            <C>            <C>
   Net loss                                                    $(1,855,109)   $   (66,488)
   Adjustments to reconcile net loss to net cash provided by
    operating activities:
     Depreciation, depletion, amortization and accretion           139,750        305,892
     Net gain from sale of assets                                     --           (2,355)
     (Gain) loss on extinguishment of debt                            --           (2,306)
      Discontinued operations                                    1,430,606           --

   Changes in operating assets and liabilities:
     Decrease (Increase) in accounts receivable                    169,545        (26,834)
     (Increase) in prepaid expenses                                 (2,128)       (83,908)
     (Increase) in other assets                                      3,691        (41,365)
     (Decrease) increase in accounts payable and
      current liabilities                                          127,535       (229,610)
     Increase (Decrease) in accrued expenses                        23,212        (48,579)
                                                               -----------    -----------

       Net Cash Provided (Used) by Operating Activities             37,102       (195,553)
                                                               -----------    -----------

CASH FLOWS FROM INVESTING ACTIVITIES:

   Proceeds from sale of assets                                       --            1,260
   Cash acquired from subsidiary                                      --          408,333
   Expenditures for property and equipment                         (18,705)      (198,443)
                                                               -----------    -----------

       Net Cash Provided (Used) by Investing Activities            (18,705)       211,150
                                                               -----------    -----------

CASH FLOWS FROM FINANCING ACTIVITIES:

   Proceeds from notes payable                                      14,540           --

   Payments on related party payables                               (5,431)        (6,640)
   Proceeds from related party notes                                  --          168,328
   Principal payments on notes payable                             (22,092)       (92,743)
                                                               -----------    -----------

       Net Cash Provided (Used) by Financing Activities            (12,983)        68,945
                                                               -----------    -----------

NET INCREASE IN CASH                                                 5,414         84,542

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

CASH, END OF PERIOD                                            $   444,672    $   164,204
                                                               ===========    ===========
</TABLE>

                                      -6-
<PAGE>


<TABLE>
<CAPTION>

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


                                                               For the Three Months Ended
                                                                        March 31,
                                                                  2006           2005
                                                               -----------    -----------

CASH PAID FOR:
<S>                                                            <C>            <C>
   Interest                                                    $    18,915    $      --
   Income taxes                                                $      --      $      --

NON-CASH FINANCING ACTIVITIES:

   Common stock issued for debt relief                         $      --      $    50,000
   Common stock issued for services to                         $      --      $    92,500
     be rendered
   Common stock issued for the net assets
   over liabilities in the purchase
     of Arvilla Inc. and subsidiary                            $      --      $ 2,370,048
                                                               -----------    -----------
</TABLE>


                                      -7-
<PAGE>


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



NOTE 1 -      BASIS OF FINANCIAL STATEMENT PRESENTATION

              The  accompanying   unaudited  condensed   consolidated  financial
              statements have been prepared by the Company pursuant to the rules
              and regulations of the Securities and Exchange Commission. Certain
              information  and  footnote   disclosures   normally   included  in
              financial   statements  prepared  in  accordance  with  accounting
              principles generally accepted in the United States of America have
              been  condensed  or  omitted  in  accordance  with such  rules and
              regulations.  The information  furnished in the interim  condensed
              consolidated   financial   statements  includes  normal  recurring
              adjustments and reflects all adjustments, which, in the opinion of
              management,   are  necessary  for  a  fair  presentation  of  such
              financial statements. Although management believes the disclosures
              and information presented are adequate to make the information not
              misleading,   it  is  suggested   that  these  interim   condensed
              consolidated  financial statements be read in conjunction with the
              Company's  most  recent  audited  financial  statements  and notes
              thereto  included in its December  31, 2005 Annual  Report on Form
              10-KSB.  Operating  results for the three  months  ended March 31,
              2006 is not  necessarily  indicative  of the  results  that may be
              expected for the year ending December 31, 2006.

NOTE 2 -      GOING CONCERN

              The Company's  condensed  consolidated  financial  statements  are
              prepared using  accounting  principles  generally  accepted in the
              United  States of  America  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 March 31, 2006 of $
              31,933,316, and has a working capital deficit at March 31, 2006 of
              $3,254,250.  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 -      CONTINGENCIES AND COMMITTMENTS

              On July 28,  1999 Core  Laboratories,  Inc.  obtained  a  judgment
              against us for  non-payment of an accounts  payable.  The judgment
              calls for  monthly  payments  of $351 and is bearing  interest  at
              10.00%  per  annum.  At March  31,  2006 we had  accrued a balance
              including  interest  of  $14,062  as a current  liability.  We are
              currently in default on this judgment.

              On July 1, 1998,  RR Donnelly  obtained a judgment  against us 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
              March 31,  2006,  we had accrued a balance  including  interest of
              $63,705 as a current  liability.  We are  currently  in default on
              this judgment.

                                      -8-
<PAGE>


NOTE 3 -      CONTINGENCIES AND COMMITMENTS (continued)

              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.

 NOTE 4 -     BUSINESS SEGMENTS

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

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

<TABLE>
<CAPTION>

                                        For the
                                     Three Months
                                         Ended      Oil and Gas    Pipeline              Well
                                        March 31,     Sales      Transmission          Servicing
                                     ------------  ----------    -------------       ------------
                                                                                     (Discontinued)
<S>                                      <C>       <C>           <C>                 <C>
Oil and gas revenue                      2006      $  324,075    $   1,388,232       $       --
                                         2005         227,621          524,312          1,798,607

Operating income (loss)
 applicable to industry
 segment                                 2006        (117,160)         (24,273)              --
                                         2005        (216,811)         (11,201)           183,755

General corporate expenses
 not allocated to industry
 segments                                2006            --               --                 --
                                         2005            --               --                 --

Interest expense                         2006         (31,003)            (367)              --
                                         2005         (18,867)          (8,198)           (47,021)

Other income (expenses)                  2006            --               --                 --
                                         2005         (12,601)          (1,120)             3,488

Assets
 (net of intercompany accounts)          2006       2,516,498        1,458,499               --
                                         2005       3,485,768          551,992          7,662,130
</TABLE>



                                      -9-
<PAGE>

<TABLE>
<CAPTION>

NOTE 4 -      BUSINESS SEGMENTS (continued)


<S>                                     <C>           <C>                <C>
Depreciation and amortization           2006          136,490            3,260               --
                                        2005           85,415           18,441            202,036

Property and equipment
 Acquisitions (Deletions)               2006           18,705             --                 --
                                        2005          (14,286)            --              575,936
</TABLE>


NOTE 5 -      SIGNIFICANT EVENTS

              Sale of Arvilla

                  Effective  March 31, 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.  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,  our wholly owned  subsidiary,
              Arvilla, Inc. 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  Services 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.

                                      -10-
<PAGE>


NOTE 5 -      SIGNIFICANT EVENTS (Continued)

              Sale of Arvilla (Continued)

                  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 will hold a
              lien on a certain Lyon  Leasehold  Deed of Trust until the debt is
              satisfied.

                  An additional term of the definitive  agreement  provided that
              each of  Clarence  and Rebecca  Smith  received  bonuses  equal to
              approximately $85,000. A further condition of the closing included
              the  written  consent for the sale of AOS from  certain  banks and
              lenders having the right to call a loan on the ownership  transfer
              of AOS.

                  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 that (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  are  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  certain  wells,
              overriding  royalties and undeveloped  acreage located in Campbell
              County,  Wyoming.  The  assets  have been  sold at public  auction
              through the Oil & Gas Asset  Clearinghouse in Houston,  Texas. The
              gross  sales  price for the  properties  is  $1,003,000,  which is
              expected to be paid to us when the sales close on or about May 12,
              2006.

                  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,
              Sagebrush  Federal  #2) and Tract  TR4-B,  and  2,530  undeveloped
              acres, also located in Campbell County.

                                      -11-
<PAGE>

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


NOTE 6 -      RELATED PARTIES

              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,  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.

              Certain  officers and  directors  of the Company  have  personally
              guaranteed specific notes payable.

NOTE 7 -      EQUITY

              The  Company  has  adopted  the   disclosure-only   provisions  of
              Statement of Financial  Standards  (SFAS) No. 123,  Accounting for
              Stock-Based  Compensation.  Accordingly,  no compensation cost has
              been recognized in the financial statements for employees,  except
              when the exercise  price is below the market price of the stock on
              the date of grant.  Had  compensation  cost for our  stock  option
              plans  been  determined  based on the fair value at the grant date
              for  awards  in  fiscal  year  2006 and 2005  consistent  with the
              provisions of SFAS No. 123, our  approximate net loss and loss per
              share would have been the pro forma amounts indicated below:

                                                 For the Three Months Ended
                                                          March 31,
                                               ------------------------------
                                                   2006              2005
                                               -------------    -------------
             Net loss:
  As reported                                 $  (1,855,109)   $     (66,488)
Addback:
  Stock-based employee compensation
  expense determined under intrinsic value
  based method for all awards, net of
  related tax effects                                  --               --
Deduct:
  Total stock-based employee compensation
  expense determined under fair value based
  method for all awards, net of related
  tax effects                                          --           (837,416)
                                              -------------    -------------

  Pro forma                                   $  (1,855,109)   $    (903,904)
                                              =============    =============


Basic loss per share:
As reported                                   $       (0.44)   $       (0.01)
Pro forma                                     $       (0.44)   $       (0.19)



                                      -12-
<PAGE>



NOTE 7 - EQUITY (continued)

              Stock  Warrants - A summary of the status of the warrants  granted
              under various  agreements at March 31, 2006 and 2005,  and changes
              during the years then ended is presented below:


  <TABLE>
<CAPTION>

                                                     March 31, 2006                 March 31, 2005
                                            -----------------------------   ---------------------------
                                              Weighted                       Weighted
                                              Average       Exercise          Average      Exercise
                                               Shares        Price            Shares         Price
                                            -----------   ---------------   -----------   -------------
<S>                                         <C>           <C>                             <C>
         Outstanding at beginning of period     553,324   $       1.95             --              --
         Granted                                   --                --         553,324   $    1.95
         Exercised                                 --                --            --              --
         Forfeited                                 --                --            --              --
         Expired                                   --                --            --              --
                                            -----------   ---------------   -----------   -------------


         Outstanding at end of Period           553,324   $       1.95          553,324   $       1.95
                                            ===========   ===============   ===========   =============

Weighted average fair value of options
           granted during the year                 --     $        --           553,324   $       1.95
                                            ===========   ===============   ===========   =============

Weighted average fair value of options
           granted during the year                 --     $        --           553,324   $      1.95
                                            ===========   ===============   ===========   =============
</TABLE>
<TABLE>
<CAPTION>

                                                  Options Outstanding                   Options Exercisable
                                          -------------------------------------   -------------------------------
                                          Weighted-Average     Weighted-Average   Weighted-Average
          Range of          Number            Remaining           Exercise             Number           Exercise
       Exercise Prices    Outstanding     Contractual Life         Price            Exercisable          Price
       ---------------    -----------     ----------------     ----------------   ----------------    -----------
<S>        <C>               <C>            <C>                    <C>               <C>                  <C>
           $1.95             553,324        8.75 years             $ 1.95            553,324              $1.95
                          ------------                                            ----------------

                             553,324                                                 553,324
                          ============                                            ================
</TABLE>



                                      -13-
<PAGE>


Item 2.       Management's Discussion and Analysis or Plan of Operations

Recent Developments

     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 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,  our wholly owned subsidiary,  Arvilla,  Inc. was sold to
Clarence  E.  Smith and  Rebecca  L.  Smith,  both  directors  of Trans  Energy,
including  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  Services 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 will hold a lien on a certain Lyon Leasehold
Deed of Trust  until the debt is  satisfied.  These notes have been paid and the
lien released.

     An  additional  term of the  definitive  agreement  provided  that  each of
Clarence and Rebecca Smith received  bonuses equal to approximately  $85,000.  A
further  condition of the closing  included the written  consent for the sale of
AOS from  certain  banks  and  lenders  having  the  right to call a loan on the
ownership transfer of AOS.

     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 that
(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.

                                      -14-
<PAGE>

     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 are 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  certain  wells,  overriding  royalties  and
undeveloped  acreage located in Campbell County,  Wyoming.  The assets have been
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.

Results of Operations

     The  following  table  sets  forth  the  percentage  relationship  to total
revenues  of  principal  items  contained  in  our  consolidated  statements  of
operations  for the three month periods ended March 31, 2006 and 2005. It should
be noted that  percentages  discussed  throughout this analysis are stated on an
approximate basis.

                                                        Three Months Ended
                                                              March 31,
                                                       --------------------
                                                       2006            2005
                                                       ----            ----
                             (Unaudited)
            Total revenues........................      100 %           100 %
            Total costs and expenses..............      108             120
            Loss from operations..................       (8)            (20)
            Other income (expense)................       (2)             (5)
            Discontinued operations...............      (98)             16
            Net loss..............................     (108)             (9)


     Total  revenues from  continuing  operations  for the three months  ("first
quarter")  ended March 31, 2006  increased 128% compared to the first quarter of
2005,  primarily due to the increase in energy  prices and the gas  distribution
contracts  the Company  entered into in the summer of 2005.  Our cost of oil and
gas for the first  quarter of 2006 also  increased  by $896,144 or 144% from the
comparable 2005 period, because of the gas purchased to fulfill our distribution
contracts.

     Salaries and wages  increased 20% for the first quarter of 2006 compared to
the 2005 period, due to raises given to our management employees.  Depreciation,
depletion  and  amortization  and  accretion  expense  increased  35%  due to an
impairment  of  mineral  properties  recorded  in the first  quarter  of 2006 of
$40,697.  Selling, general and administrative expenses increased $4,661 or 4% in
the first  quarter of 2006 from the first quarter of 2005 due to raises given to
management.

     Our loss  from  operations  for the  first  quarter  of 2006  was  $141,433
compared to a loss of $151,063 for the first quarter of 2005. The improvement is
related to the increase in oil and gas prices.  We realized total other expenses
of $31,370  during the first quarter of 2006 compared to total other expenses of
$37,408 for the first  quarter of 2005.  The first  quarter of 2006 results were
due to interest expense of $31,370.

                                      -15-
<PAGE>

     We recorded a loss of $1,682,306 on the disposition of Arvilla in the first
quarter of 2006.  Our statement of operations  for the first quarter of 2005 was
restated to reflect the operations of Arvilla as discontinued.

     Our net loss for the  first  quarter  of 2006 was  $1,855,109  compared  to
$66,488 for the first quarter of 2005.

     For the remainder of fiscal year 2006, management expects selling,  general
and  administrative  expenses  to remain at  approximately  the same rate as the
first quarter of 2006. The cost of oil and gas produced is expected to fluctuate
with  the  amount  produced  and with  prices  of oil and  gas,  and  management
anticipates that revenues are likely to increase during the remainder of 2006.

Liquidity and Capital Resources

     Historically,  we have  satisfied our working  capital needs with operating
revenues and from borrowed  funds.  At March 31, 2006, we had a working  capital
deficit of $3,254,250  compared to a deficit of $3,012,700 at December 31, 2005.
This 8% increase in working capital  deficit is primarily  attributed to the net
loss in the first quarter of 2006.

     During the first quarter of 2006, operating activities provided net cash of
$37,102  compared  to net cash used of $195,553  for the first  quarter of 2005.
These results are primarily  attributed to the reduction in accounts  receivable
and an increase in current liabilities.

     Net cash used by  investing  activities  for the first  quarter of 2006 was
$18,705 for the  purchase  of well  equipment,  compared  to  $211,150  provided
primarily from the acquisition of a subsidiary during the first quarter of 2005.

     During the first quarter of 2006, we used net cash in financing  activities
of $12,983 in the  repayment of notes  payable  compared to net cash provided by
notes  payable  of $68,945  in the first  quarter of 2005.  Our cash was used to
repay related and unrelated notes payable.

     We anticipate meeting our working capital needs during the remainder of the
current fiscal year with revenues from our ongoing operations, particularly from
our wells in Wetzel County,  West Virginia and new third party natural gas wells
drilled in West Virginia,  which gas goes into our 6-inch pipeline. In the event
revenues are not sufficient to meet our working  capital needs,  we will explore
the  possibility  of  additional  funding from either the sale of debt or equity
securities.  There can be no assurance  such funding will be available to us or,
if available, it will be on acceptable or favorable terms.

     As of  March  31,  2006,  we had  total  assets  of  $3,974,997  and  total
stockholders' deficit of $1,827,303, compared to total assets of $10,934,424 and
total  stockholders'  equity of $497,076 at December 31, 2005.  The decrease was
due to the disposition of Arvilla.

     Because we have incurred  significant  cumulative  operating losses through
March  31,  2006  and have a  working  capital  deficit  at  March  31,  2006 of
$3,254,250,  there exists  substantial  doubt about our ability to continue as a
going  concern.  Historically,  our revenues  have not been  sufficient to cover
operating costs.  However, we may potentially need to rely on proceeds from sale
of common stock, debt or equity financing, and increased operating revenues from
new  developments  to allow 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.

     We included a footnote to our  financial  statements  for the period  ended
December 31, 2005 stating that because of our continued losses,  working capital
deficit,  and need for  additional  funding,  there is  substantial  doubt as to
whether we can continue as a going concern.

                                      -16-
<PAGE>

Inflation

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

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:

     *   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 energy 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.

Item 3.       Controls and Procedures

     As of the end of the period  covered  by this  report,  we  carried  out an
evaluation,  under the  supervision  and with the  participation  of management,
including our chief executive officer and principal  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.  Based upon that evaluation,  our chief executive  officer
and principal  financial  officer  concluded  that our  disclosure  controls and
procedures  are  effective  to cause the  material  information  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.  There have been no significant  changes
in our internal  controls or in other factors which could  significantly  affect
internal controls subsequent to the date we carried out our evaluation.


                                     PART II

Item 1.       Legal Proceedings

     Information  concerning 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

                                      -17-
<PAGE>

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 us for
non-payment of an accounts  payable.  The judgment calls for monthly payments of
$351 and is bearing  interest at 10% per annum. At March 31, 2006 we had accrued
a balance including interest of $20,330 as a current liability. We are currently
in default on this judgment.

     On July 1, 1998, RR Donnelly obtained a judgment against us for non-payment
of accounts  payable.  The judgment calls for monthly  payments of $3,244 and is
bearing  interest at 10% per annum.  At March 31, 2006, we had accrued a balance
including  interest  of  $91,857 as a current  liability.  We are  currently  in
default on this judgment.

     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 2.       Unregistered Sales of Equity Securities and Use of Proceeds

     None.

Item 3.       Defaults Upon Senior Securities

     None.

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

     No matters were  submitted to a vote of our  securities  holders during the
first quarter ended March 31, 2006.

 Item 5.      Other Information

     The following  reports were filed with the SEC on Form 8-K during the three
month period ended March 31, 2006.

     January 9, 2006 -  reporting  under Item 101 that Trans  Energy has entered
     into an  agreement  to sell  certain  assets,  including  Arvilla  Oilfield
     Services,  LLC held by Arvilla,  Inc.,  our wholly  owned  subsidiary,  and
     reporting under Item 502 the  resignation of our Chief  Executive  Officer,
     Clarence  E. Smith,  and the  appointment  of James K.  Abcouwer as our new
     President and Chief Executive Officer

     April 13, 2006 - reporting  under Item 2.01 the  completion  of the sale of
     Arvilla,  Inc.  and  reporting  under  Item  502  the  resignations  of two
     directors, Clarence E. Smith and Rebecca L. Smith.

     April 27,  2006 - reporting  under Item 1.01 the sale of certain  wells and
     properties located in Campbell County Wyoming.

Item 6.       Exhibits

     Exhibit 31.1   Certification  of  C.E.O.  Pursuant  to  Section  302 of the
                    Sarbanes-Oxley Act of 2002.

     Exhibit 31.2   Certification  of Principal  Accounting  Officer Pursuant to
                    Section 302 of the Sarbanes-Oxley Act of 2002.

                                      -18-
<PAGE>

     Exhibit 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.

     Exhibit 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.

                                   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: June 21, 2006           By  /S/  JAMES K. ABCOUWER
                                 -----------------------------------------------
                                       JAMES K. ABCOUWER
                                       Chief Executive Officer and Director




Date: June 21, 2006             By  /S/  WILLIAM F. WOODBURN
                                   ---------------------------------------------
                                       WILLIAM F. WOODBURN
                                       Chief Operating Officer,
                                       Secretary / Treasurer and Director
                                       (Principal Accounting Officer)


                                      -19-