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 June 30, 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 June 30, 2006

Common Stock, $.001 par value                             5,152,148


<PAGE>

<TABLE>
<CAPTION>

                                TABLE OF CONTENTS

Heading                                                                                                   Page
                          PART I. FINANCIAL INFORMATION

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

                  Consolidated Balance Sheets - June 30, 2006 (Unaudited) and
                    December 31, 2005................................................................       2

                  Consolidated Statements of Operations - three months and six months ended
                     June 30, 2006 and 2005 (Unaudited)..............................................       4

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

                  Consolidated Statements of Cash Flows - six months ended
                     June 30, 2006 and 2005 (Unaudited)..............................................       6

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

Item 2.      Management's Discussion and Analysis or Plan of Operations..............................      14

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

                           PART II. OTHER INFORMATION

Item 1.      Legal Proceedings.......................................................................      19

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.......................................................................      20

Item 6.      Exhibits and Reports on Form 8-K........................................................      20

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


<PAGE>


                                     PART I

Item 1.       Financial Statements

     The accompanying  consolidated balance sheets of Trans Energy, Inc. at June
30, 2006  (unaudited)  and  December 31, 2005,  related  unaudited  consolidated
statements  of  operations,  stockholders'  equity  (deficit)  and  consolidated
statements  of cash flows for the six months ended June 30, 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 six months ended June 30, 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

                       June 30, 2006 and December 31, 2005

                                      -1-
<PAGE>
Microsoft Word 11.0.6568;

<TABLE>
<CAPTION>

                       TRANS ENERGY, INC. AND SUBSIDIARIES
                           Consolidated Balance Sheets



                                     ASSETS

                                                                    June 30,       December 31,
                                                                      2006             2005
------------------------------------------------------------------------------------------------
                                                                  (Unaudited)
CURRENT ASSETS

<S>                                                               <C>             <C>
   Cash                                                           $   487,515     $   439,258
   Accounts receivable, net                                           861,209       1,396,696
   Receivable from sale of assets                                     210,000            --
   Prepaid expenses                                                    13,461           9,617
                                                                  -----------     -----------

     Total Current Assets                                           1,572,185       1,845,571
                                                                  -----------     -----------

PROPERTY AND EQUIPMENT, NET                                         2,277,957       2,160,256
                                                                  -----------     -----------

OTHER ASSETS
   Assets of discontinued operations                                     --         6,672,688
   Deposits                                                             1,223           4,914
   Investments                                                        475,453         175,000
   Life insurance, cash surrender value                                75,995          75,995
                                                                  -----------     -----------

     Total Other Assets                                               552,671       6,928,597
                                                                  -----------     -----------

     TOTAL ASSETS                                                 $ 4,402,813     $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)

                                                                   June 30,       December 31,
                                                                     2006            2005
----------------------------------------------------------------------------------------------
                                                                  (Unaudited)
CURRENT LIABILITIES
<S>                                                              <C>             <C>
   Accounts payable - trade                                      $  1,458,918    $  2,355,429
   Related party payables (Note 6)                                    750,153         855,502
   Accrued expenses                                                   709,140         860,368
   Judgments payable (Note 3)                                         114,158          77,767
   Debentures payable                                                  50,000          50,000
   Notes payable - current portion                                    659,205         659,205
                                                                 ------------    ------------


     Total Current Liabilities                                      3,741,574       4,858,271
                                                                 ------------    ------------

LONG-TERM LIABILITIES

   Notes payable                                                      840,085           6,872
   Liabilities of discontinued operations                                --         4,772,812
   Asset retirement obligation                                        709,218         799,393
                                                                 ------------    ------------

     Total Long-Term Liabilities                                    1,549,303       5,579,077
                                                                 ------------    ------------

       Total Liabilities                                            5,290,877      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; 5,152,148 shares issued and 4,386,104
   and 4,707,515 shares outstanding, respectively                       5,152           4,952
   Capital in excess of par value                                  30,974,598      30,856,798
   Treasury stock                                                    (755,737)       (286,467)
   Accumulated deficit                                            (31,112,077)    (30,078,207)
                                                                 ------------    ------------

     Total Stockholders' Equity (Deficit)                            (888,064)        497,076
                                                                 ------------    ------------

     TOTAL LIABILITIES AND STOCKHOLDERS'
       EQUITY (DEFICIT)                                          $  4,402,813    $ 10,934,424
                                                                 ============    ============
</TABLE>

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

                                      -3-
<PAGE>


<TABLE>
<CAPTION>

                       TRANS ENERGY, INC. AND SUBSIDIARIES
                      Consolidated Statements of Operations
                                   (Unaudited)
                                                                For the                      For the
                                                          Three Months Ended            Six Months Ended
                                                               June 30,                      June 30,
                                                     --------------------------    --------------------------
                                                        2006            2005           2006           2005
                                                     -----------    -----------    -----------    -----------

<S>                                                  <C>            <C>              <C>            <C>
REVENUES                                             $   812,107    $   861,468      2,524,414      1,613,688
                                                     -----------    -----------    -----------    -----------

COSTS AND EXPENSES

  Cost of oil and gas                                    601,619        779,094      2,122,011      1,403,342
  Salaries and wages                                      97,747         48,779        179,405        116,679
  Depreciation, depletion and
   amortization                                           54,267        111,830        194,017        215,686
  Selling, general and
   administrative                                        298,496        239,886        410,436        347,165
                                                     -----------    -----------    -----------    -----------

     Total Costs and Expenses                          1,052,129      1,179,589      2,905,869      2,082,872
                                                     -----------    -----------    -----------    -----------

LOSS FROM OPERATIONS                                    (240,022)      (318,121)      (381,455)      (469,184)
                                                     -----------    -----------    -----------    -----------

OTHER INCOME (EXPENSE)

 Gain on extinguishment
   of debt                                                 5,208           --            5,208          2,306
  Net gain (loss) on sale of assets                      704,116          4,674        704,116         (7,865)
  Other income                                            85,087          5,581         85,087          5,581
  Interest expense                                       (40,429)       (26,097)       (71,799)       (53,272)
                                                     -----------    -----------    -----------    -----------

     Total Other Income
      (Expense)                                          753,982        (15,842)       722,612        (53,250)
                                                     -----------    -----------    -----------    -----------

INCOME (LOSS) FROM OPERATIONS
 BEFORE INCOME TAXES                                      13,960       (333,963)       341,157       (522,434)

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

NET INCOME (LOSS) BEFORE
 DISCONTINUED OPERATIONS                                 513,960       (333,963)       341,157       (522,434)

GAIN (LOSS) FROM DISCONTINUED
 OPERATIONS                                                 --         (191,894)       183,775        (69,911)
GAIN (LOSS) ON DISPOSAL OF
 DISCONTINUED OPERATIONS                                 307,279           --       (1,558,802)          --
                                                     -----------    -----------    -----------    -----------

NET INCOME (LOSS)                                    $   821,239    $  (525,857)   $(1,033,870)   $  (592,345)
                                                     ===========    ===========    ===========    ===========

BASIC INCOME (LOSS) PER SHARE
    Continuing Operations                            $      0.12    $     (0.07)   $      0.07    $     (0.11)
    Discontinued Operations                                 0.07          (0.04)         (0.30)         (0.02)
                                                     -----------    -----------    -----------    -----------

                                                     $      0.19    $     (0.11)   $     (0.23)   $     (0.13)
                                                     ===========    ===========    ===========    ===========
DILUTED INCOME PER SHARE
    Continuing Operations                            $      0.11                   $      0.07
    Discontinued Operations                                 0.06                         (0.27)
                                                     -----------                   -----------

                                                     $      0.17          N/A      $     (0.20)         N/A
                                                     ===========    ===========    ===========    ===========
WEIGHTED AVERAGE
 NUMBER OF SHARES
 OUTSTANDING                                           4,328,961      4,815,098      4,514,311      4,599,293
                                                     ===========    ===========    ===========    ===========

DILUTED WEIGHTED AVERAGE
 NUMBER OF SHARES
 OUTSTANDING                                           4,882,285          N/A        5,067,635          N/A
                                                     ===========                   ===========
</TABLE>

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

                                      -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>           <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)        --


Shares issued for services (unaudited)          --           --        200,000          200      117,800         --           --


Net loss for the six months ended
   June 30, 2006 (unaudited)                    --           --           --           --           --           --      (1,033,870)
                                        ------------ ------------ ------------ ------------ ------------ ------------  ------------

Balance, June 30, 2006 (unaudited)              --   $       --      5,152,148 $      5,152 $ 30,974,598 $   (755,737) $(31,112,077)
                                        ============ ============ ============ ============ ============ ============  ============

</TABLE>


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

                                      -5-

<PAGE>

<TABLE>
<CAPTION>

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


                                                                For the Six Months Ended
                                                                        June 30,
                                                                   2006           2005
                                                               -----------    -----------

CASH FLOWS FROM OPERATING ACTIVITIES:

<S>                                                            <C>            <C>
   Net loss                                                    $(1,033,870)   $  (592,345)
   Adjustments to reconcile net loss to net cash provided by
    operating activities:
     Depreciation, depletion, amortization and accretion           244,539        720,778
     Net gain from sale of assets                                 (704,116)        (3,254)
     (Gain) loss on extinguishment of debt                            --           (2,306)
      Discontinued operations                                    1,638,214           --
      Contributed services                                            --           75,000
      Shares issued for services                                   118,000           --

   Changes in operating assets and liabilities:
     Decrease (Increase) in accounts receivable                    535,487       (170,461)
     (Increase) in prepaid expenses                                 (3,844)       (74,326)
     (Increase) in other assets                                   (296,762)       (87,182)
     (Decrease) increase in accounts payable and
      current liabilities                                         (896,511)       (58,018)
     Increase (Decrease) in accrued expenses                      (114,837)       126,449
                                                               -----------    -----------

       Net Cash Provided (Used) by Operating Activities           (513,700)       (65,665)
                                                               -----------    -----------

CASH FLOWS FROM INVESTING ACTIVITIES:

   Proceeds from sale of assets                                    726,824         15,260
   Cash acquired from subsidiary                                      --          408,333
   Expenditures for property and equipment                        (685,123)      (477,545)
                                                               -----------    -----------

       Net Cash Provided (Used) by Investing Activities             41,701        (53,952)
                                                               -----------    -----------

CASH FLOWS FROM FINANCING ACTIVITIES:

   Proceeds from notes payable                                     683,866           --
   Payments on related party payables                             (105,349)        (6,640)
   Proceeds from related party notes                                  --          637,088
   Principal payments on notes payable                             (58,261)      (255,864)
                                                               -----------    -----------

       Net Cash Provided (Used) by Financing Activities            520,256        374,584
                                                               -----------    -----------

NET INCREASE IN CASH                                                48,257        254,967

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

CASH, END OF PERIOD                                            $   487,515    $   334,629
                                                               ===========    ===========
</TABLE>

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


                                      -6-
<PAGE>

<TABLE>
<CAPTION>

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


                                                                  For the Six Months Ended
                                                                         June 30,
                                                                     2006         2005
---------------------------------------------------------------------------   -----------

CASH PAID FOR:

<S>                                                              <C>          <C>
   Interest                                                      $   44,886   $     --
   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
   Contributed services                                          $     --     $   75,000
   Investments purchased by the assumption of debt               $  207,608   $     --

</TABLE>

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

                                      -7-
<PAGE>


                       TRANS ENERGY, INC. AND SUBSIDIARIES
       Notes to the Unaudited Condensed Consolidated Financial Statements
                       June 30, 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 six months ended June
          30, 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  June  30,  2006 of $  31,112,077,  and has a  working
          capital deficit at June 30, 2006 of $2,169,389. 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 June 30,  2006 we had  accrued  a  balance  including  interest  of
          $20,687 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
          June 30, 2006, we had accrued a balance including  interest of $93,471
          as a current liability. We are currently in default on this judgment.

                                      -8-
<PAGE>
E>

                       TRANS ENERGY, INC. AND SUBSIDIARIES
       Notes to the Unaudited Condensed Consolidated Financial Statements
                       June 30, 2006 and December 31, 2005



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
                                   Six Months
                                                        Ended      Oil and Gas       Pipeline          Well
                                                      June 30,        Sales       Transmission       Servicing
--------------------------------------------------------------   ----------------   ------------ ------------------
                                                                                                   (Discontinued)

<S>                                                     <C>        <C>             <C>             <C>
              Oil and gas revenue                       2006       $      522,507  $    2,001,907  $          --
                                                        2005              509,770       1,103,917        4,275,514

              Operating income (loss)
               applicable to industry
               segment                                  2006             (265,371)       (116,084)            --
                                                        2005             (404,307)        (64,875)          70,122

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

              Interest expense                          2006              (57,779)        (14,020)             --
                                                        2005              (35,283)        (17,990)       (142,747)

              Other income (expenses)                   2006              788,585           5,826              --
                                                        2005               (3,288)          3,309            2,714

              Assets
               (net of intercompany accounts)           2006            3,411,953         990,860              --
                                                        2005            3,613,560         588,788        7,708,573
</TABLE>


                                      -9-
<PAGE>

                       TRANS ENERGY, INC. AND SUBSIDIARIES
       Notes to the Unaudited Condensed Consolidated Financial Statements
                       June 30, 2006 and December 31, 2005


<TABLE>
<CAPTION>

NOTE 4 -      BUSINESS SEGMENTS (continued)


<S>                                                     <C>               <C>              <C>            <C>
              Depreciation and amortization             2006              157,313          36,704             --
                                                        2005              178,805          36,881          505,092

              Property and equipment
               Acquisitions (Deletions)                 2006           (2,457,388)           --               --
                                                        2005              (17,651)           --            477,545
</TABLE>

NOTE 5 -  SIGNIFICANT EVENTS

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

          Effective March 31, 2006, the Company  finalized the agreement to sell
          its 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 the
          Company's  board of directors to agree on the direction of the Company
          with Arvilla,  Inc. ("Arvilla') as a significant  subsidiary.  Arvilla
          holds all of the outstanding  membership interests of Arvilla Oilfield
          Services,  LLC, a West Virginia  limited  liability  company  ("AOS').
          Under  the  terms of the  definitive  agreement,  Arvilla  was sold to
          Clarence E. Smith and Rebecca L. Smith,  both former  directors of the
          Company.

          Arvilla provides well servicing,  work over 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.

          The Company 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,  the Company  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 the Company.


                                      -10-
<PAGE>


                       TRANS ENERGY, INC. AND SUBSIDIARIES
       Notes to the Unaudited Condensed Consolidated Financial Statements
                       June 30, 2006 and December 31, 2005



NOTE 5 -  SIGNIFICANT EVENTS (Continued)

          Sale of Arvilla (Continued)
          ---------------------------

          As a result of  consummating  the definitive  agreement,  Clarence and
          Rebecca Smith  returned to the Company  521,411  shares of their Trans
          Energy common stock.  The Smiths have also conveyed to the Company all
          of their  interest  in and to five oil and gas wells  located in Tyler
          County,  West  Virginia  subject to loan of  $207,608,  assumed by the
          Company. Assignments for the wells originally was to be held in escrow
          pending  satisfaction  by the Company 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 the  Company  agreed to pay AOS  $176,239 on or before
          April 30, 2006, and pay Arvilla  Pipeline  $115,000 on or before April
          30,  2006.  To secure  these  payments by Trans  Energy,  Clarence and
          Rebecca  Smith held a lien on a certain Lyon  Leasehold  Deed of Trust
          until the debt is satisfied.

          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 the Company and  Arvilla,  Inc.  Clarence and
          Rebecca  Smith  have  also  agreed  not to sell  an  amount  of  their
          remaining  Company  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 the Company's 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 the Company 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,  of which $210,000 remains unpaid as of June
          30, 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
                       June 30, 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:
<TABLE>
<CAPTION>

                                                                  For the Six Months Ended
                                                                           June 30,
                                                                ------------------------------
                                                                     2006             2005
                                                                --------------   -------------
              Net loss:
<S>                                                             <C>              <C>
                As reported                                     $  (1,033,870)   $   (592,345)
              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                                       $   (1,033,870)  $ (1,429,761)
                                                                ==============   =============


              Basic loss per share:
              As reported                                       $       (0.23)   $       (0.13)
              Pro forma                                         $       (0.23)   $       (0.31)
</TABLE>



                                      -12-
<PAGE>


                       TRANS ENERGY, INC. AND SUBSIDIARIES
       Notes to the Unaudited Condensed Consolidated Financial Statements
                       June 30, 2006 and December 31, 2005


NOTE 7 - EQUITY (continued)

              Stock Warrants - A summary of the status of the warrants granted
              under various agreements at June 30, 2006 and 2005, and changes
              during the years then ended is presented below:

<TABLE>
<CAPTION>
                                                                    June 30, 2006                  June 30, 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                           --        $        --          53,324   $       1.95
                                                           ============     ============    ===========   ============
              Weighted average fair value of options
                   granted during the year                        --        $        --         553,324   $       1.95
</TABLE>



              A summary of the status of the warrants granted under the various
              agreements at June 30, 2006, are presented in the table below:

<TABLE>
<CAPTION>
                                           Warrants Outstanding                           Warrants 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        8.50 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.  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 six and three month periods ended June 30, 2006 and 2005. It
should be noted that percentages  discussed  throughout this analysis are stated
on an approximate basis.

                                                              Six Months Ended
                                                                  June 30,
                                                           --------------------
                                                           2006            2005
                                                           ----            ----
                        (Unaudited)
       Total revenues..................................      100 %        100 %
       Total costs and expenses........................      115          129
       Loss from operations............................      (15)         (29)
       Other income (expense)..........................       28           (3)
       Discontinued operations.........................      (54)          (4)
       Net loss........................................      (41)         (36)

                                                            Three Months Ended
                                                                  June 30,
                                                           --------------------
                                                           2006            2005
                                                           ----            ----
                        (Unaudited)
       Total revenues..................................      100 %        100 %
       Total costs and expenses........................      130          137
       Loss from operations............................      (30)         (37)
       Other income (expense)..........................       93           (2)
       Discontinued operations.........................       38          (22)
       Net loss........................................      101          (61)
                                                          ----------------------

     Total revenues from  continuing  operations  for the three months  ("second
quarter")  ended June 30, 2006  decreased  6% compared to the second  quarter of
2005, primarily due to the sale of the Cobham properties in the fall of 2005 and
the sale of the Wyoming  properties  in the spring of 2006 offset by an 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 second quarter of 2006 also
decreased by $177,475 or 23% from the  comparable  2005 period,  because more of
the gas used to fulfill our distribution contracts came from our own wells.

                                      -15-
<PAGE>


     Salaries and wages  increased  100% for the second quarter of 2006 compared
to the 2005 period,  due to the hiring of the  Company's CEO and raises given to
the other members of management.  Depreciation,  depletion and  amortization and
accretion  expense  decreased  51% due to the  sale of the  Cobham  and  Wyoming
mineral  properties.  Selling,  general and  administrative  expenses  increased
$58,610 or 24% in the second  quarter of 2006 from the same  quarter of 2005 due
to a signing bonus given to the Company's new president and CEO in shares of the
Company's common stock valued at $118,000.

     Our loss  from  operations  for the  second  quarter  of 2006 was  $240,022
compared to a loss of $318,121 for the second quarter of 2005.  The  improvement
is related to the  decrease in the cost of oil and gas sold.  We realized  total
other  income of $753,982  during the second  quarter of 2006  compared to total
other  expenses of $15,842 for the same quarter of 2005.  The second  quarter of
2006  results  were  due to a gain on the  sale  of the  Wyoming  properties  of
$704,116 offset by interest  expense of $40,429  compared to interest expense of
$26,097 in 2005.

     We recorded a gain of $307,279 on the  disposition of Arvilla in the second
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 income for the second  quarter of 2006 was  $821,239  compared to a
loss of $525,857 for the second 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.
We do not  expect to  recognize  a gain from the sale of  properties  during the
remainder of 2006.

     Total revenues from continuing operations for the six months ("first half")
ended June 30, 2006 increased 56% compared to the first half of 2005,  primarily
due to 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
$718,669 or 51% from the comparable 2005 period, because more of the gas used to
fulfill our distribution contracts came from our own wells.

     Salaries and wages increased 54% for the first half of 2006 compared to the
2005 period,  , due to the hiring of the  Company's  CEO and raises given to the
other  members of  management.  Depreciation,  depletion  and  amortization  and
accretion  expense  decreased  10% due to the  sale of the  Cobham  and  Wyoming
mineral  properties.  Selling,  general and  administrative  expenses  increased
$63,271 or 18% in the first  half of 2006 from the same  period of 2005 due to a
signing  bonus given to the  Company's  new  president  and CEO in shares of the
Company's common stock valued at $118,000.

     Our loss from  operations for the first half of 2006 was $381,455  compared
to a loss of $469,184 for the first half of 2005. The  improvement is related to
the  decrease  in the  cost of oil and gas sold as a  percentage  of  sales.  We
realized  total other income of $722,612  during the first half of 2006 compared
to total other  expenses of $53,250 for the same period of 2005.  The first half
of 2006  results  were due to a gain on the sale of the  Wyoming  properties  of
$704,116 offset by interest  expense of $71,799  compared to interest expense of
$53,272 in 2005.

     We recorded a loss of $1,558,802 on the disposition of Arvilla in the first
half 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 half of 2006 was  $1,033,870  compared to a loss
of $592,345 for the first half of 2005.

                                      -16-
<PAGE>


     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.
We do not expect to recognize a gain from the sale of properties 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 June 30, 2006,  we had a working  capital
deficit of $2,169,389  compared to a deficit of $3,012,700 at December 31, 2005.
This 28% decrease in working capital deficit is primarily attributed to the sale
of the Wyoming properties in the first half of 2006.

     During  the  first  half of  2006,  operating  activities  used net cash of
$513,700  compared to net cash used of $65,665 for the first half of 2005. These
results are primarily  attributed to the reduction in accounts receivable offset
by a decrease in current liabilities.

     Net cash  provided by investing  activities  for the first half of 2006 was
$41,701.  $685,123 of cash was used for the purchase of well  equipment  and the
drilling  of wells and cash of  $726,824  was  received  from the sale of wells,
compared  to net  cash  used of  $53,952  primarily  from the  acquisition  of a
subsidiary during the first half of 2005 offset by $477,545 used in the purchase
of well equipment and the drilling of wells.

     During  the first  half of 2006,  we were  provided  net cash in  financing
activities of $520,256 from the borrowings of notes payable compared to net cash
provided by related  party notes  payable of $637,088 in the first half 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  June  30,  2006,  we  had  total  assets  of  $4,402,813  and  total
stockholders'  deficit of $888,064,  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 and the Wyoming properties.

     Because we have incurred  significant  cumulative  operating losses through
June 30, 2006 and have a working capital deficit at June 30, 2006 of $2,169,389,
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.

Inflation

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

                                      -17-
<PAGE>



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

     We maintain  disclosure  controls  and  procedures  that are designed to be
effective in providing  reasonable  assurance  that  information  required to be
disclosed in our reports under the Securities  Exchange Act of 1934 is recorded,
processed,  summarized  and reported  within the time  periods  specified in the
rules  and  forms of the SEC,  and that  such  information  is  accumulated  and
communicated  to our  management to allow timely  decisions  regarding  required
disclosure.

     In designing and evaluating disclosure controls and procedures,  management
recognizes  that any controls and  procedures,  no matter how well  designed and
operated,  can provide only reasonable,  not absolute assurance of achieving the
desired  objectives.  Also, the design of a control system must reflect the fact
that  there are  resource  constraints  and the  benefits  of  controls  must be
considered relative to their costs.  Because of the inherent  limitations in all
control systems,  no evaluation of controls can provide absolute  assurance that
all control  issues and instances of fraud,  if any, have been  detected.  These
inherent limitations include the realities that judgments in decision-making can
be faulty and that breakdowns can occur because of simple error or mistake.  The
design of any system of controls is based,  in part,  upon  certain  assumptions
about the  likelihood  of future  events and there can be no assurance  that any
design will succeed in achieving  its stated  goals under all  potential  future
conditions.

     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 Exchange  Act.
Based upon that evaluation,  management  concluded that our disclosure  controls
and procedures are effective to cause the  information  required to be disclosed
by us in reports  that we file or submit  under the  Exchange  Act is  recorded,
processed,  summarized and reported  within the time periods  prescribed by SEC,
and that  such  information  is  accumulated  and  communicated  to  management,


                                      -18-
<PAGE>


including  our chief  executive  officer and  principal  financial  officer,  as
appropriate, to allow timely decisions regarding required disclosure.

     There was no change  in our  internal  controls  over  financial  reporting
identified in connection with the requisite  evaluation that occurred during our
last fiscal quarter that has  materially  affected,  or is reasonably  likely to
materially affect, our internal control over financial reporting.

                                     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
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 June 30, 2006 we had accrued a
balance including interest of $20,687 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 June 30, 2006,  we had accrued a balance
including  interest  of  $93,471 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

         Date        No. of Shares        Title          At             Reason
         ----        -------------        -----          --             ------
April 27, 2006         200,000            Common       $0.59          Services

     The  200,000  shares of common  stock  issued for  services  were valued at
$118,000,  or $0.59 per share.  The shares were issued in a private,  non public
isolated transaction pursuant to exemption from registration provided by Section
4(2) of the Securities Act of 1933.

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
second quarter ended June 30, 2006.


                                      -19-
<PAGE>



 Item 5.      Other Information

     The following  reports were filed with the SEC on Form 8-K during the three
month period ended June 30, 2006.

          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.

     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: August 14, 2006           By  /S/  JAMES K. ABCOUWER
                                   ---------------------------------------------
                                         JAMES K. ABCOUWER
                                         Chief Executive Officer and Director




Date: August 14, 2006             By  /S/  WILLIAM F. WOODBURN
                                     -------------------------------------------
                                         WILLIAM F. WOODBURN
                                         Chief Operating Officer,
                                         Secretary / Treasurer and Director
                                         (Principal Accounting Officer)


                                      -20-