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 September 30, 2001

                                       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 September 30, 2001
     ------------------------=----        ------------------------------------
     Common Stock, $.001 par value                    176,683,189


                                       -1-

<PAGE>


<TABLE>
<CAPTION>

                                                 TABLE OF CONTENTS

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

<S>                                                                                                         <C>
Item 1.      Financial Statements....................................................................       3

                  Consolidated Balance Sheets -- September 30, 2001 and
                    December 31, 2000................................................................       4

                  Consolidated Statements of Operations -- three and nine months ended
                    September 30, 2001and 2000.......................................................       6

                  Consolidated Statements of Stockholders' Equity (Deficit)..........................       7

                  Consolidated Statements of Cash Flows - nine months ended
                    September 30, 2001 and 2000......................................................       8

                  Notes to Consolidated Financial Statements ........................................       9

Item 2.      Management's Discussion and Analysis and Results of Operations..........................      13

                                            PART II. OTHER INFORMATION

Item 1.      Legal Proceedings.......................................................................      15

Item 2.      Changes In Securities and Use of Proceeds...............................................      16

Item 3.      Defaults Upon Senior Securities.........................................................      17

Item 4.      Submission of Matters to a Vote of Securities Holders...................................      17

Item 5.      Other Information.......................................................................      17

Item 6.      Exhibits and Reports on Form 8-K........................................................      17

             SIGNATURES..............................................................................      18
</TABLE>


                                       -2-

<PAGE>



                                     PART I

Item 1.           Financial Statements

         The  following  unaudited  Consolidated  Financial  Statements  for the
period ended September 30, 2001 have been prepared by the Company.


                               TRANS ENERGY, INC.

                        CONSOLIDATED FINANCIAL STATEMENTS

                    September 30, 2001 and December 31, 2000

                                       -3-

<PAGE>



                       TRANS ENERGY, INC. AND SUBSIDIARIES
                           Consolidated Balance Sheets


                                     ASSETS
                                     ------

                                                September 30,  December 31,
                                                   2001            2000
                                                -----------    -----------
                                                (Unaudited)
CURRENT ASSETS

  Accounts receivable, net                      $   226,032    $    71,006
                                                -----------    -----------

     Total Current Assets                           226,032         71,006
                                                -----------    -----------

PROPERTY AND EQUIPMENT

  Vehicles                                           59,013         59,013
  Machinery and equipment                            10,092         10,092
  Pipelines                                       2,254,908      2,254,908
  Well equipment                                     49,155         49,155
  Wells                                           3,449,540      3,315,019
  Leasehold acreage                                 180,000        180,000
  Accumulated depreciation                       (1,889,793)    (1,706,648)
                                                -----------    -----------

     Total Fixed Assets                           4,112,915      4,161,539
                                                -----------    -----------

OTHER ASSETS

  Restricted cash                                    65,689         65,689
  Deposits                                            1,420          1,420
                                                -----------    -----------

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

     TOTAL ASSETS                               $ 4,406,056    $ 4,299,654
                                                ===========    ===========

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



                                       -4-

<PAGE>


<TABLE>
<CAPTION>

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


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

                                                               September 30,    December 31,
                                                                  2001              2000
                                                               ------------    ------------
                                                               (Unaudited)
<S>                                                            <C>             <C>
CURRENT LIABILITIES

   Cash overdraft                                              $     82,365    $     11,608
   Accounts payable - trade                                       1,699,877       1,444,692
   Accrued expenses                                                 762,930         638,466
   Salaries payable                                                 457,998         367,998
   Notes payable - current portion                                1,381,956       1,538,855
   Related party payables                                           439,132         288,042
   Debentures payable                                               331,462         331,462
                                                               ------------    ------------

     Total Current Liabilities                                    5,155,720       4,621,123
                                                               ------------    ------------

NET LIABILITIES IN EXCESS OF THE ASSETS OF
 DISCONTINUED OPERATIONS                                               --             5,400
                                                               ------------    ------------

LONG-TERM LIABILITIES

   Notes payable                                                    658,766         658,766
                                                               ------------    ------------

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

     Total Liabilities                                            5,814,486       5,285,289
                                                               ------------    ------------

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' EQUITY (DEFICIT)

   Preferred stock; 10,000,000 shares  authorized
    at $0.001 par value; 300 and
    300 shares issued and outstanding,
    respectively                                                       --              --
   Common stock; 300,000,000 shares authorized at $0.001
    par value; 176,683,189 and 172,028,189 shares issued and
    outstanding, respectively                                       176,682         172,027
   Capital in excess of par value                                22,776,278      22,608,733
   Accumulated deficit                                          (24,361,390)    (23,766,395)
                                                               ------------    ------------

     Total Stockholders' Equity (Deficit)                        (1,408,430)       (985,635)
                                                               ------------    ------------

     TOTAL LIABILITIES AND STOCKHOLDERS'
      EQUITY (DEFICIT)                                         $  4,406,056    $  4,299,654
                                                               ============    ============
</TABLE>

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


                                       -5-

<PAGE>


<TABLE>
<CAPTION>

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


                                                                    For the                              For the
                                                                Nine Months Ended                   Three Months Ended
                                                                   September 30,                       September 30,
                                                    -----------------------------------  ------------------------------------
                                                            2001              2000                2001               2000
                                                    ----------------  -----------------  ----------------   ----------------

REVENUES                                            $      1,036,553  $         890,185  $        374,722   $        346,211
                                                    ----------------  -----------------  ----------------   ----------------

<S>                                                          <C>                <C>               <C>                <C>
COSTS AND EXPENSES

  Cost of oil and gas                                        731,860            571,746           318,042            236,427
  Salaries and wages                                          52,053             62,718            18,086             18,640
  Depreciation, depletion and amortization                   183,145            233,051            52,252             77,684
  Selling, general and administrative                        496,099          1,222,200            73,022            135,233
                                                    ----------------  -----------------  ----------------   ----------------

     Total Costs and Expenses                              1,463,157          2,089,715           461,402            467,984
                                                    ----------------  -----------------  ----------------   ----------------

LOSS FROM OPERATIONS                                        (426,604)        (1,199,530)          (86,680)          (121,773)
                                                    ----------------  -----------------  ----------------   ----------------

OTHER INCOME (EXPENSE)

  Other income                                                 1,218              6,126                60              1,673
  Interest expense                                          (169,609)          (275,447)          (58,668)           (41,524)
                                                    ----------------  -----------------  ----------------   ----------------

     Total Other Income (Expense)                           (168,391)          (269,321)          (58,608)           (39,851)
                                                    ----------------  -----------------  ----------------   ----------------

LOSS FROM OPERATIONS BEFORE
 INCOME TAXES                                               (594,995)        (1,468,851)         (145,288)          (161,624)
                                                    ----------------  -----------------  ----------------   ----------------

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

NET LOSS                                            $       (594,995) $      (1,468,851) $       (145,288)  $       (161,624)
                                                    ================  =================  ================   ================

BASIC LOSS PER SHARE                                $          (0.00) $           (0.03) $          (0.00)  $          (0.00)
                                                    ================  =================  ================   ================

WEIGHTED AVERAGE NUMBER OF
 SHARES OUTSTANDING                                      174,429,507         46,259,026       176,552,754         97,285,306
                                                    ================  =================  ================   ================
</TABLE>

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


                                       -6-

<PAGE>


<TABLE>
<CAPTION>

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



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

<S>                                    <C>            <C>          <C>            <C>              <C>               <C>
Balance, December 31, 1999                      --    $     --          7,107,746    $     7,107    $  15,250,242    $ (19,887,784)

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

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

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

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

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

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

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

Net loss for the year ended
 December 31, 2000                              --          --               --             --               --         (3,878,611)
                                       -------------  ------------  --------------  --------------   --------------  --------------
Balance, December 31, 2000                       300        --        172,028,189        172,027       22,608,733      (23,766,395)

Common stock issued for
 services at $0.04 per share
 (unaudited)                                    --          --          3,655,000          3,655          142,545             --

Common stock issued for
 services at $0.026 per share
 (unaudited)                                    --          --          1,000,000          1,000           25,000             --

Net loss for the nine months
 ended September 30, 2001
 (unaudited)                                    --          --               --             --               --           (594,995)
                                       -------------  ------------  --------------  --------------   --------------  --------------
Balance, September 30, 2001
 (unaudited)                                     300  $     --        176,683,189    $   176,682      $22$776,278      (24,361,390)
                                       =============  ============  ==============  ==============   ==============  ==============
</TABLE>

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


                                       -7-

<PAGE>


<TABLE>
<CAPTION>

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


                                                                              For the Nine Months Ended
                                                                                     September 30,
                                                                             --------------------------
                                                                                 2001          2000
                                                                             -----------    -----------
<S>                                                                          <C>            <C>
CASH FLOWS FROM OPERATING ACTIVITIES:

  Net loss                                                                   $  (594,995)   $(1,468,851)
  Adjustments to reconcile net loss to net cash (used) by
   operating activities:
    Depreciation, depletion and amortization                                     183,145        233,051
    Common stock issued for services                                             172,200        434,475
  Changes in operating assets and liabilities:
    Decrease (increase) in accounts receivable                                  (155,025)         1,448
    (Increase) decrease in restricted cash                                          --          156,184
    Decrease (increase) in prepaid and other current assets                         --         (122,485)
    Increase in accounts payable and accrued expenses                            237,846        439,201
                                                                             -----------    -----------

       Net Cash (Used) by Operating Activities                                  (156,829)      (326,977)
                                                                             -----------    -----------

CASH FLOWS FROM INVESTING ACTIVITIES:

  Expenditures for property and equipment                                       (134,522)          (240)
                                                                             -----------    -----------

       Net Cash (Used) by Investing Activities                                  (134,522)          (240)
                                                                             -----------    -----------

CASH FLOWS FROM FINANCING ACTIVITIES:

  Increase in cash overdraft                                                      70,757         30,538
  Proceeds from related party notes                                              176,477        239,540
  Proceeds from notes payable                                                    150,147        213,730
  Principal payments on notes payable                                            (85,242)      (149,578)
  Principal payments on related party notes                                      (20,788)       (20,490)
                                                                             -----------    -----------

      Net Cash Provided by Financing Activities                                  291,351        313,740
                                                                             -----------    -----------

NET INCREASE (DECREASE) IN CASH                                                     --          (13,477)

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

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

CASH PAID FOR:

  Interest                                                                   $   106,234    $   126,836
  Income taxes                                                               $      --      $      --

NON-CASH FINANCING ACTIVITIES:

  Common stock issued for debt                                               $      --      $ 5,286,977
  Common stock issued for services                                           $   172,200    $   434,475

</TABLE>

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


                                       -8-

<PAGE>



                       TRANS ENERGY, INC. AND SUBSIDIARIES
                 Notes to the Consolidated Financial Statements
                    September 30, 2001 and December 31, 2000


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  generally
              accepted  accounting  principles have been condensed or omitted in
              accordance  with  such  rules  and  regulations.  The  information
              furnished  in  the  interim   condensed   consolidated   financial
              statements  include 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, 2000 Annual Report on Form 10-KSB.  Operating  results for the
              nine  months  ended   September  30,  2001  are  not   necessarily
              indicative of the results that may be expected for the year ending
              December 31, 2001.

NOTE 2 -      GOING CONCERN

              The Company's consolidated financial statements are prepared using
              generally  accepted  accounting  principles  applicable to a going
              concern  which   contemplates   the   realization  of  assets  and
              liquidation of  liabilities in the normal course of business.  The
              Company has incurred cumulative operating losses through September
              30, 2001, and has a working capital deficit at September 30, 2001.
              Revenues have not been sufficient to cover its operating costs and
              to allow it to continue as a going concern. The potential proceeds
              from the sale of common stock,  other contemplated debt and equity
              financing,   and   increases  in  operating   revenues   from  new
              development  would  enable  the  Company  to  continue  as a going
              concern. There can be no assurance that the Company can or will be
              able to complete  any debt or equity  financing.  If these are not
              successful,  management  is committed  to meeting the  operational
              cash flow needs of the Company.

NOTE 3 -      COMMITMENTS AND CONTINGENCIES

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



                                       -9-

<PAGE>



                       TRANS ENERGY, INC. AND SUBSIDIARIES
                 Notes to the Consolidated Financial Statements
                    September 30, 2001 and December 31, 2000


NOTE 3 -      COMMITMENTS AND CONTINGENCIES (Continued)

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

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

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

              The Settlement Agreement provided that, subject to the approval of
              the  Bankruptcy  Court,  the  Company  agreed  to pay to the Baker
              Entities  $759,664,  plus  interest  at 10%.  In  addition  to the
              $200,000 payable from the escrow, the Company agreed to pay to the
              Baker Entities an initial  payment of $117,261 within fifteen days
              from the date of the Dismissal Order (due February 21, 2001).  The
              Company also agreed to make additional  payments of $100,000 every
              thirty days following the initial payment,  with the first payment
              due beginning no later than March 23, 2001,  continuing  until the
              total  obligation  plus  interest  is paid in full.  Further,  the
              Company  pledged  as  collateral  certain   properties,   personal
              property  and  fixtures and two  directors  each  pledged  750,000
              shares of the Company's  common stock which they  personally  own.
              The Company has only paid $50,000  subsequent  to the  settlement.
              The  Company  is not  current  with its  payments  related  to the
              settlement,  however,  the  Company  and the  Baker  Entities  are
              negotiating to extend the payments.


                                      -10-

<PAGE>



                       TRANS ENERGY, INC. AND SUBSIDIARIES
                 Notes to the Consolidated Financial Statements
                    September 30, 2001 and December 31, 2000


NOTE 3 -      COMMITMENTS AND CONTINGENCIES (Continued)

              On April 10,  2000,  a company  recorded and served its Notice and
              Statement of Lien in the Sixth Judicial District, Campbell County,
              Wyoming,  against the Company for non-  payment of  services.  The
              Company has recorded a liability  of $78,651  which is included in
              accounts payable at December 31, 2000. Subsequent to year end, the
              Company  entered into a settlement  agreement  wherein the Company
              will  transfer  a portion  of the  Powder  River  Basin  leasehold
              acreage  in  Campbell  County,  Wyoming  held by the  Company  for
              settlement  of the  liability.  The  Company  has  agreed  to this
              settlement  and the  transaction  should be  finalized  during the
              fourth quarter of 2001.

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

              On February 13, 2001,  Ross Forbus obtained a judgment of $428,018
              against  the  Company  to  satisfy a  promissory  note  previously
              entered into by the Company with Mr. Forbus on April 8, 1996.  The
              Company has recorded the balance in notes  payable at December 31,
              2000. The Company is not current with its payments  related to the
              judgment,  however, the Company and Ross Forbus are negotiating to
              extend the payments.

              On September 28, 2001, the Securities and Exchange Commission (the
              "Commission")  announced  that it had filed a civil action in U.S.
              District  Court for the  District  of Columbia  (Civil  Action No.
              1:01CV020060) against the Company and two of its directors,  Loren
              E.  Bagley  and  William  F.  Woodburn.   The  complaint   alleges
              violations  of the  anti-fraud  and  reporting  provisions  of the
              federal  securities laws and seeks  injunctive  relief against the
              Company,  Mr.  Bagley and Mr.  Woodburn to enjoin them from future
              violations of  securities  laws.  The  complaint  also seeks civil
              penalties against Messrs. Bagley and Woodburn.

              The  Commission's  action  is  premised  on the  dissemination  of
              alleged false and misleading  statements  through press  releases,
              website  postings and Commission  filings.  The complaint  alleges
              that these statements contained  misrepresentations,  inaccuracies
              and  omissions  during a  period  when Mr.  Bagley  served  as the
              Company's  President  and Mr.  Woodburn as the Vice  President and
              principal  financial  officer.  The Company's  counsel is actively
              reviewing the complaint and determining an appropriate response.

NOTE 4 -      MATERIAL EVENTS

              On July 30,  2001,  the Company  entered  into an  agreement  with
              Millennium Energy, LLC (Millennium),  whereby the Company assigned
              and transferred  half of its 51% interest and shares in Gas & Oil,
              Inc.  in exchange  for part of  Millennium's  Trenton-Black  River
              drilling  rights.  In  accordance  with  APB  29,  Accounting  for
              Nonmonetary Transactions,  the Company has recorded its investment
              in the  Trenton-Black  River drilling  rights at the fair value of
              half  the  Company's  interest  in Gas &  Oil,  Inc.  The  Company
              previously  had fully  allowed for its interest in Gas & Oil, Inc.
              and has thus recorded the new investment in Trenton-Black River at
              $-0-.

                                      -11-

<PAGE>



                       TRANS ENERGY, INC. AND SUBSIDIARIES
                 Notes to the Consolidated Financial Statements
                    September 30, 2001 and December 31, 2000


NOTE 4 -      MATERIAL EVENTS (Continued)

              On September 10, 2001, Mr. Bagley  resigned as President and Chief
              Executive Officer of the Company and Mr. Woodburn resigned as Vice
              President,  although  Mr.  Woodburn  continues  as  Secretary  and
              Treasurer.  Mr. Bagley was then  appointed as a Vice President and
              Robert  L.  Richards  was  elected  as the  new  President,  Chief
              Executive Officer and a director.

                                      -12-

<PAGE>



Item 2.           Management's Discussion and Analysis or Plan 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 and nine month periods ended  September 30, 2001 and
2000. It should be noted that percentages discussed throughout this analysis are
stated on an approximate basis.

<TABLE>
<CAPTION>

                                              Three Months Ended                  Nine months Ended
                                                     September 30,                     September 30,
                                               ------------------------         --------------------------
                                                2001             2000            2001              2000
                                                ----             ----            ----              ----
                                                      (Unaudited)                        (Unaudited)
<S>                                            <C>               <C>            <C>                <C>
Total revenues..............................   100%              100%           100%               100%
Total costs and expenses....................   123               135            141                235
Loss from operations........................   (23)              (35)           (41)              (135)
Other income (expense)......................   (16)              (12)           (16)               (30)
Net loss....................................   (39)              (47)           (57)              (165)

</TABLE>

         Total revenues for the three months ("third  quarter")  ended September
30, 2001 increased 8% when compared with the third quarter of 2000. For the nine
months ("first nine months") ended September 30, 2001, total revenues  increased
16%  compared to the first nine months of 2000.  The  increases  during the 2001
periods  are  primarily  due to higher gas sales and higher oil and gas  prices.
Cost of oil and  gas  for the  third  quarter  and  first  nine  months  of 2001
increased  35% and 28%,  respectively,  from the third  quarter  and first  nine
months of 2000 due to increased  sales,  land lease  expenses and  increased gas
prices to the  Company.  Selling,  general and  administrative  expenses for the
third quarter and first nine months of 2001 declined 46% and 59%,  respectively,
when  compared  to the third  quarter  and first nine  months of 2000  primarily
attributed to fewer stock issuances for services and a smaller working staff.

         Depreciation, depletion and amortization expenses for the third quarter
and first nine months of 2001 decreased 33% and 21%,  respectively,  compared to
the same 2000  periods.  This  decrease is  attributed  to the  write-off of the
Wyoming  properties  that were impaired  during 2000.  Also,  salaries and wages
decreased  3% and 17% for the  first  nine  months  and third  quarter  of 2001,
respectively,  compared to the 2000 period  primarily  due to a smaller  working
staff.

         Total costs and expenses as a percentage  of total  revenues  decreased
from 234% in the third  quarter  of 2000 to 141% for the third  quarter of 2001,
and from 135% for the  first  nine  months  of 2000 to 123% for the  first  nine
months of 2001.  Actual  total costs and  expenses  decreased 1% and 30% for the
third  quarter and first nine months of 2001,  respectively.  The  decreases are
primarily  attributed  to the decreases in selling,  general and  administrative
expenses and depreciation, depletion and amortization.

         The  Company's  net loss for the third quarter and first nine months of
2001  was  $145,288  and  $594,995,  respectively,   compared  to  $161,624  and
$1,468,851 for the same 2000 period. This decrease in the Company's net loss for
the 2001  periods is  primarily  attributed  to the  increase  in  revenues  and
corresponding  decreases  in selling,  general and  administrative  expenses and
depreciation, depletion and amortization.

         For the  remainder  of fiscal year 2001,  management  expects  selling,
general and administrative  expenses to remain at approximately the same rate as
the third  quarter of 2001.  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 2001.





                                      -13-

<PAGE>



         The Company has included a footnote to its financial statements for the
periods ended September 30, 2001 stating that because of the Company's continued
losses,  working  capital  deficit  and need for  additional  funding,  there is
substantial doubt as to whether the Company can continue as a going concern. See
Note 2 to the consolidated financial statements.

Net Operating Losses

         The Company has accumulated  approximately $16,000,000 of net operating
loss  carryforwards  as of December 31, 2000, which may be offset against future
taxable income through the year 2020 when the carryforwards  expire.  The use of
these  losses to reduce  future  income taxes will depend on the  generation  of
sufficient  taxable  income prior to the  expiration of the net  operating  loss
carryforwards.

         In the event of certain  changes in control of the Company,  there will
be an annual limitation on the amount of net operating loss carryforwards  which
can be used. No tax benefit has been reported in the  financial  statements  for
the year ended  December 31, 2000 or the nine month period ended  September  30,
2001 because the  potential tax benefits of the loss  carryforward  is offset by
valuation allowance of the same amount.

Liquidity and Capital Resources

         Historically,  the Company's  working capital needs have been satisfied
through its operating  revenues and from borrowed  funds. At September 30, 2001,
the Company had a working capital deficit of $4,929,688 compared to a deficit of
$4,550,117 at December 31, 2000. This 8% decline in working capital is primarily
attributed to the increases in trade accounts  payable (18%),  accrued  expenses
(20%),  salaries  payable  (25%)  and  related  party  payables  (52%),  and was
partially offset by the 218% increase in net accounts receivable.

         During  the  first  nine  months  of  2001,  the  Company's   operating
activities  used net cash of $156,829  compared to $326,977 net cash used in the
first nine months of 2000. The Company's decrease in net loss for the first nine
months of 2001 was  partially  offset by the decrease in common stock issued for
services and smaller  increase in accounts  payable during the 2001 period,  and
decreases in payroll and in interest expenses due to conversion of debentures in
2000.

         The  Company  also  reported   $134,522  net  cash  used  by  investing
activities in the first nine months of 2001 due to expenditures for property and
equipment,  compared to $240  expended in 2000.  During the first nine months of
2001, the Company realized $291,351 in cash from financing  activities  compared
to $313,740  realized in the 2000  period.  This  result is due  primarily  from
decreased proceeds from related party notes and notes payable.

         The Company  anticipates  meeting its working  capital needs during the
remainder of the current fiscal year with revenues from operations, particularly
from its Powder  River Basin  interests  in Wyoming and its New Benson gas wells
drilled in West  Virginia.  In the event revenues are not sufficient to meet the
Company's  working  capital needs, it 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 the Company or, if  available,  it
will be on acceptable or favorable terms to the Company.

         As of September  30, 2001,  the Company had total assets of  $4,406,056
and total  stockholders'  deficit of  $1,408,430,  compared  to total  assets of
$4,299,654 and total stockholders' deficit of $985,635 at December 31, 2000.

         In 1998,  the  Company  issued  $4,625,400  face  value  of 8%  Secured
Convertible  Debentures  Due  September 30, 1999. A portion of the proceeds were
used to acquire the oil and gas properties and interest in Wyoming. During 2000,
all but one of the remaining outstanding  debentures were converted into commons
stock.  At September 30, 2001, the Company owed $331,462 in connection  with the
debentures  consisting of $50,000 for one debenture  holder that the Company has
been unable to contact and $281,462 in penalties and interest.

                                      -14-

<PAGE>



Inflation

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

Forward-Looking and Cautionary Statements

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

                                     PART II

Item 1.   Legal Proceedings

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

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

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

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

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


                                      -15-

<PAGE>



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

         On April 10,  2000,  Bellevue  Resources,  Inc.  recorded  and served a
Notice and Statement of Lien in the Sixth Judicial  District,  Campbell  County,
Wyoming, against the Company for non-payment of services. The Company recorded a
liability of $78,651 in its financial  statements under accounts payable for the
year ended  December  31, 2000 to reflect  this claim.  Bellevue  Resources  has
agreed to take certain  lease  acreage in Campbell  County,  Wyoming held by the
Company as payment for this liability. The Company has agreed to this settlement
and the transaction should be finalized during the fourth quarter of 2001.

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

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

         On September 28, 2001, the Securities and Exchange Commission announced
that it had filed a civil  action in U.S.  District  Court for the  District  of
Columbia  (Civil  Action No.  1:01CV020060)  against  the Company and two of its
directors,  Loren E.  Bagley and  William F.  Woodburn.  The  complaint  alleges
violations of the anti-fraud and reporting  provisions of the federal securities
laws and seeks  injunctive  relief  against  the  Company,  Mr.  Bagley  and Mr.
Woodburn to enjoin them from future violations of securities laws. The complaint
also seeks civil penalties against Messrs. Bagley and Woodburn.

         The  Commission's  action is premised on the  dissemination  of alleged
false and misleading  statements  through press releases,  website  postings and
Commission  filings.  The  complaint  alleges  that these  statements  contained
misrepresentations,  inaccuracies  and omissions during a period when Mr. Bagley
served as the  Company's  President and Mr.  Woodburn as the Vice  President and
principal  financial  officer.  The Company's counsel is actively  reviewing the
complaint and determining an appropriate response.

         On  September  10, 2001,  Mr.  Bagley  resigned as President  and Chief
Executive  Officer of the Company and Mr.  Woodburn  resigned as Vice President,
although he continues as Secretary and Treasurer.  Mr. Bagley was then appointed
as a Vice  President  and Robert I.  Richards was elected as the new  President,
Chief Executive Officer and a director.

Item 2.   Changes In Securities and Use of Proceeds

         During the third quarter of 2001 the Company issued 1,000,000 shares of
its common  stock to one person in exchange  for  services  valued at $0.026 per
share,  or an  aggregate  of  $26,000.  The shares  were  issued  pursuant  to a
registration statement on Form S-8.





                                      -16-

<PAGE>



Item 3.           Defaults Upon Senior Securities

         In 1998,  the  Company  issued  $4,625,400  face  value  of 8%  Secured
Convertible  Debentures  due March 31, 1999 (the  "Debentures")  Interest on the
Debentures  accrued  upon  the date of  issuance  until  payment  in full of the
principal sum was been made or duly provided for. Holders of the Debentures have
the option,  at any time,  until  maturity,  to convert the principal  amount of
their  Debenture,  or any  portion  of the  principal  amount  which is at least
$10,000 into shares of the Company's Common Stock at a conversion price for each
share equal to the lower of (a) seventy percent (70%) of the market price of the
Company's  Common Stock averaged over the five trading days prior to the date of
conversion, or (b) the market price on the issuance date of the Debentures.  Any
accrued and unpaid interest shall be payable,  at the option of the Company,  in
cash or in shares of the  Company's  Common Stock  valued at the then  effective
conversion  price.  During  2000,  all  but  one  of the  remaining  outstanding
debentures were converted into commons stock. At September 30, 2001, the Company
owed $331,462 in  connection  with the  debentures  consisting of $50,000 to one
debenture holder and $281,462 in penalties and interest.

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

         This Item is not applicable

Item 5.           Other Information

         This Item is not applicable

Item 6.           Exhibits and Reports on Form 8-K

         (b)      Reports on Form 8-K

                  On July 13, 2001,  the Company filed a Current  Report on Form
                  8-K reporting  under Item 5 that on July 29, 2001, Gary Lawyer
                  had resigned as a director of the Company.

                  On October 11,  2001,  the Company  filed a Current  Report on
                  Form 8-K reporting under Item 5 that on September 28, 2001 the
                  Securities and Exchange  Commission filed a complaint  against
                  the  Company  and  two  of  its  directors.  The  Report  also
                  disclosed  that on September 10, 2001 the Company's  President
                  and Chief Executive Officer resigned as did the Company's Vice
                  President,  and  Robert I.  Richards  was  elected  as the new
                  President, Chief Executive Officer and a director.




                                      -17-

<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: November 14, 2001           By  /S/ ROBERT I. RICHARDS
                                     ---------------------------------------
                                          ROBERT I. RICHARDS, President,
                                          Chief Executive Officer and Director




Date:  November 14, 2001          By  /S/ WILLIAM F. WOODBURN
                                     -----------------------------------
                                          WILLIAM F. WOODBURN
                                          Secretary / Treasurer
                                         (Principal Accounting Officer)


                                      -18-