UNITED STATES
                    SECURITIES AND EXCHANGE COMMISSION
                          Washington, D.C. 20549
  
                             Amendment No. 1 

                                    to

                               FORM 10-QSB/A

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

                    For the Quarter Ended June 30, 1996

                                    OR

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

        For the transition period from              to            

                      Commission File Number  0-23530

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

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

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

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

     Check whether the issuer (1) filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934
during the past 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days.
Yes   X   No       

                   APPLICABLE ONLY TO CORPORATE ISSUERS

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

          Class                            Outstanding as of
                                           December 31, 1996    
Common Stock, $.001 par value                3,238,677

<PAGE>
                             TABLE OF CONTENTS

Heading                                                  Page    
                      PART I.  FINANCIAL INFORMATION

Item 1.   Financial Statements . . . . . . . . . . . . .    1

                                                             
          Consolidated Balance Sheets -- June 30, 1996
          and December 31, 1995. . . . . . . . . . . . .    2

          Consolidated Statements of Operations -- 
          three months ended June 30, 1996 and
          1995, and six months ended June 30, 1996
          and 1995 . . . . . . . . . . . . . . . . . . .    4

          Consolidated Statements of Stockholders' Equity   6

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

          Notes to Consolidated Financial Statements . .    9

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

                        PART II. OTHER INFORMATION

Item 1.   Legal Proceedings. . . . . . . . . . . . . . .   26

Item 2.   Changes In Securities. . . . . . . . . . . . .   26

Item 3.   Defaults Upon Senior Securities. . . . . . . .   26

Item 4.   Submission of Matters to a Vote of 
          Securities Holders . . . . . . . . . . . . . .   26

Item 5.   Other Information. . . . . . . . . . . . . . .   26

Item 6.   Exhibits and Reports on Form 8-K . . . . . . .   26

          SIGNATURES . . . . . . . . . . . . . . . . . .   27














                                    -i-

<PAGE>
                                  PART I

Item 1.  Financial Statements

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













                           TRANS  ENERGY,  INC.

                           FINANCIAL STATEMENTS

                    June 30, 1996 and December 31, 1995

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

 Cash                                  $      -     $   19,035     
 Accounts receivable - trade (Note 1)      328,012     341,013 
 Inventory (Note 1)                         15,956     330,515 

   Total Current Assets                    343,968     690,563 

FIXED ASSETS (Note 2)

 Land                                       35,000      35,000 
 Building                                   65,000      65,000 
 Vehicles                                  113,244     113,244 
 Machinery and equipment                   588,493     617,322 
 Pipeline                                2,107,740   2,107,740 
 Well equipment                            290,972     290,972 
 Wells                                   3,178,916   3,188,426 
 Leasehold acreage                         263,500     263,500 
 Accumulated depreciation               (1,458,009) (1,557,570)

   Total Fixed Assets                    5,184,856   5,123,634 

OTHER ASSETS

 Deferred stock offering costs (Note 1)    275,000      39,500 
 Goodwill, net (Note 1)                    728,013     648,887 
 Deposits                                      355         491 
 Bond (Note 4)                              50,000      50,000 
 Loan acquisition costs                    108,187     580,500 
 Loan - related party (Note 6)              14,899          27 

   Total Other Assets                    1,176,454   1,319,405 

   TOTAL ASSETS                         $6,705,278  $7,133,602     

<PAGE>
                            TRANS ENERGY, INC.
                        Consolidated Balance Sheets


                   LIABILITIES AND STOCKHOLDERS' EQUITY
                                (Restated)

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

 Accounts payable - trade               $  521,438  $  737,864
 Interest payable                           58,981      36,160
 Accrued expenses                           71,231      32,266
 Long-term debt - current portion (Note 3) 554,540   1,053,560

   Total Current Liabilities             1,206,190   1,859,850

LONG-TERM LIABILITIES

 Loans payable - related parties (Note 6)  683,586     771,902
 Notes payable (Note 3)                  2,214,922   2,016,106 

   Total Long-Term Liabilities           2,898,508   2,788,008

   Total Liabilities                     4,104,698   4,647,858

MINORITY INTERESTS (Note 1)                 39,393          38

STOCKHOLDERS' EQUITY (Note 9)

 Common Stock:  30,000,000 shares authorized
   at $0.001 par value; 3,174,122 and
   3,238,677 shares issued and 
   outstanding, respectively                 3,174       3,239
 Capital in excess of par value          5,629,734   6,202,669
 Accumulated deficit                    (3,071,721) (3,720,202)

   Total Stockholders' Equity            2,561,187   2,485,706

   TOTAL LIABILITIES AND 
     STOCKHOLDERS' EQUITY             $  6,705,278  $7,133,602     

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

                            For the Three Months         For the Six Months     
                               Ended June 30,               Ended June 30, 
                              1995           1996          1995        1996 
REVENUES                 (Unaudited)      (Unaudited)  (Unaudited)  (Unaudited)
                                          (Restated)                (Restated)
  Oil and gas sales       $ 684,004       $ 1,525,872  $ 1,257,217  $ 2,307,004
  Other                        -                 -             347         - 

    Total Revenues          684,004         1,525,872    1,257,564    2,307,004

COSTS AND EXPENSES

  Cost of oil and gas
    produced                489,301         1,166,496      885,933    1,824,135
  Salaries and wages         68,294            34,576      161,086       75,397 
  Depreciation and depletion 59,790            99,228       91,126      193,506
  Selling, general and
   administrative           112,284           238,960      276,550      455,728

   Total Costs and Expenses 729,669         1,539,260    1,414,685    2,548,766

     Net Income (Loss) 
      from Operations       (45,665)          (13,388)    (157,131)    (241,762)

OTHER INCOME (EXPENSE)

  Interest                  (35,083)         (295,603)     (69,920)    (455,706)

    Total Other Income
     (Expense)              (35,083)         (295,603)     (69,920     (455,706)

NET INCOME (LOSS) BEFORE
 INCOME TAXES AND MINORITY
 INTERESTS AND
 EXTRAORDINARY INCOME (LOSS)(80,748)         (308,991)    (227,051)    (697,468)

INCOME TAXES                   -                 -            -            - 

NET INCOME (LOSS) BEFORE 
 MINORITY INTERESTS AND
 EXTRAORDINARY INCOME(LOSS) (80,748)         (308,991)    (227,051)    (697,468)

MINORITY INTERESTS           (6,314)           23,471      (19,739)      39,431

NET INCOME (LOSS) BEFORE
 EXTRAORDINARY INCOME (LOSS)(87,062)         (285,520)    (246,790)    (658,037)

EXTRAORDINARY INCOME
 Forgiveness of debt           -                 -            -          20,000
 Early payoff of debt          -                 -            -         (10,444)
TOTAL EXTRAORDINARY 
 INCOME (LOSS)                 -                 -            -           9,556
NET INCOME (LOSS)          $(87,062)        $(285,520)  $ (246,790)  $ (648,481)

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

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

NET INCOME (LOSS) BEFORE
 EXTRAORDINARY INCOME          $  (0.02)   $  (0.09)   $  (0.07)    $  (0.20)

EXTRAORDINARY INCOME               -           -           -             NIL

NET INCOME (LOSS)              $  (0.02)   $  (0.09)   $  (0.07)    $  (0.20)

FULLY DILUTED EARNINGS
 (LOSS) PER SHARE

NET INCOME (LOSS) BEFORE
 EXTRAORDINARY INCOME          $  (0.02)   $  (0.09)   $  (0.07)    $  (0.20)

EXTRAORDINARY INCOME               -           -           -             NIL

NET INCOME (LOSS)              $  (0.02)   $  (0.09)   $  (0.07)    $  (0.20)

<PAGE>
                             TRANS ENERGY, INC.
              Consolidated Statements of Stockholders' Equity
                                 (Restated)
                                                     Capital in   
                                    Common Shares    Excess of   Accumulated
                                  Shares    Amoun    Par Value      Deficit     

Balance,
 December 31, 1994               3,024,122  $ 3,024  $ 3,612,852  $ (866,643)

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

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

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

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

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

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

Balance, December 31, 1995       3,174,12    3,174     5,629,734  (3,071,721)

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

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

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

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

Net loss for the six months ended
  June 30, 1996 (Unaudited)          -         -            -       (648,481)

Balance, June 30, 1996 
  (Unaudited)                   3,238,677 $  3,239    $6,202,669 $(3,720,202)

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


                                  For the Three Months  For the Six Months     
                                     Ended June 30,        Ended June 30,       
                                    1995        1996        1995      1996
CASH FLOWS FROM 
 OPERATING ACTIVITIES:           (Unaudited) (Unaudited) (Unaudited) (Unaudited)
                                             (Restated)              (Restated)
  Net income (loss)                 $(87,062) $(285,520)  $(245,790) $ (648,481)
  Adjustments to Reconcile 
   Net Income to Cash
   Provided by Operating Activities:
    Depreciation and depletion        59,790    142,416      91,126     306,364
    Minority interest                  6,314    (23,395)     19,739     (39,355)
    Common stock issued for services    -          -        150,000      24,000
  Changes in Operating Assets 
   and Liabilities:
    Decrease (increase) in accounts
     receivable                      (12,490)    78,046      31,712     (13,001)
    Decrease (increase) in inventory    -      (289,754)       -       (314,559)
    Decrease (increase) in deposits       23       -             23        (136)
    Decrease (increase) in loan 
     acquisition costs                   463    193,500         926     174,087 
    Increase (decrease) in
     accounts payable and
      accrued expenses               (70,114)    (2,069)    (57,400)    177,457
    Increase (decrease) in 
     interest payable                  9,442     (9,464)     13,722     (22,821)

       Cash Provided (Used) 
        by Operating Activities      (93,634)  (196,240)      3,058    (356,445)

CASH FLOWS FROM 
 INVESTING ACTIVITIES:

  Increase in notes receivable        (2,581)      -         (2,581)       - 
  Expenditures for property 
   and equipment                     (51,310)   (15,607)    (51,310)    (38,339)

       Cash Provided (Used) 
        by Investing Activities   $  (53,891)  $(15,607)   $(53,891) $  (38,339)

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

                                  For the Three Months    For the Six Months 
                                      Ended June 30,        Ended June 30,      
                                    1995        1996        1995       1996 
CASH FLOWS FROM FINANCING 
 ACTIVITIES:                     (Unaudited) (Unaudited) (Unaudited) (Unaudited)
                                             (Restated)              (Restated)
  Payment of deferred stock 
   offering costs                 $   -         $(39,500)   $   -    $  (39,500)
  Borrowings of long-term debt     117,570       213,931     117,570    551,309
  Loans to related parties            -           15,310        -        14,872
  Borrowings from related parties     -           49,900        -        88,315
  Principal payments on 
   long-term debt                     -          (46,780)    (72,372)  (201,105)

      Cash Provided (Used) by 
       Financing Activities        117,570       192,861      45,198    413,819 

NET INCREASE (DECREASE) 
 IN CASH                           (29,955)      (18,986)     (5,635)    19,035 

CASH AND CASH EQUIVALENTS,
  BEGINNING OF PERIOD               31,423        38,021       7,103       -

CASH AND CASH EQUIVALENTS,
  END OF PERIOD                   $  1,468      $ 19,035    $  1,468   $ 19,035

CASH PAID FOR:

  Interest                        $ 32,233      $ 92,639    $ 64,220  $ 168,356 
  Income taxes                    $   -         $   -       $   -     $    - 

NON-CASH FINANCING ACTIVITIES:

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

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

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

       a.  Organization

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

       The Company was engaged in mining activities in the 1960's. 
       The Company was inactive for several years but started up
       operations again in August of 1987.  The Articles of
       Incorporation were reinstated on September 4, 1987.  On
       January 11, 1988, the Company changed its name to Apple
       Corporation.  In 1988, the Company acquired oil and gas
       leases and other assets from Ben's Run Oil Company (a
       Virginia limited partnership) and has since engaged in the
       business of oil and gas production.

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

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

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

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

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

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

       b.  Accounting Method

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

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

       c.  Prior Period Adjustments

       The results of operations for the three and six months
       ended June 30, 1996 have been restated to correct the
       application of accounting principles related to the
       treatment of the value of additional shares pursuant to the
       extension of convertible debentures and the valuation of
       Bridge Warrants issued in March 1996.  The effect of the
       related adjustments increased net loss before extraordinary
       items and net loss by $243,108 and $377,075 for the three
       and six months ended June 30, 1996, respectively.  Primary
       and fully diluted loss per share for the three and six
       months ended June 30, 1996 both increased before and after
       extraordinary income (loss) by $(0.08) and $(0.12) per share,
       respectively.

       d.  Loss per Share of Common Stock

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

       e.  Provision for Taxes

       At December 31, 1995, and June 30, 1996 the Company had net
       operating loss carryforwards totaling approximately
       $3,100,000 and $3,700,000, respectively, may be offset
       against future taxable income through 2011.  No tax benefit
       has been reported in the financial statements, because the
       potential tax benefits of the net operating loss
       carryforwards is offset by a valuation allowance of the
       same amount.

       f.  Cash Equivalents

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

       g. Principles of Consolidation

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

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

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

       h. Depreciation

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

       i. Accounts Receivable

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

       j. Inventory

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

       k. Goodwill

       Goodwill was recorded from the purchase of Vulcan Energy
       Corporation on August 7, 1995 (see Note 2).  The amount is
       amortized using the straight-line method over a useful life
       of five years.  Accumulated amortization at December 31,
       1995 and June 30, 1996 was $63,240 and $139,128,
       respectively.

       l. Deferred Stock Offering Costs

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

NOTE 2 - FIXED ASSETS

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

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

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

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

NOTE 2 - FIXED ASSETS (Continued)

       and appraisal of the oil and gas reserves performed on the
       West Virginia properties.  Based upon this study and
       appraisal, the Company estimated the fair market value of
       the properties to be $2,015,109 at the time of acquisition. 
       However, due to the uncertainties involved in estimating
       oil and gas reserves, there is no assurance that the
       Company will fully recover this amount recorded as the
       investment in the properties.

       On November 15, 1994, the Company acquired six oil and gas
       wells at a cost of $1,082,222 and other equipment totaling
       $8,710 from Dennis Spencer in exchange for shares of the
       Company's common stock.  All assets were recorded at their
       market value (which was approximately the same as book
       value) at the time of acquisition based on the purchase
       method of accounting.  

       Based upon the reserve estimates, depletion and
       depreciation on these properties and the related equipment
       is computed under the units-of-production method as
       required by generally accepted accounting principles.  In
       1994 and 1993, the Company refurbished a number of wells. 
       In 1995, the Company obtained a reserve study which showed
       that the oil and gas reserves are higher than originally
       reported because the fix-up work allowed the producing
       wells to produce greater quantities and put some non-
       productive wells into production.  

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

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

NOTE 3 - LONG-TERM DEBT

       The Company had the following debt obligations at December
       31, 1995 and June 30, 1996:

                                                    December 31,      June 30,
                                                       1995             1996
                                                                     (Unaudited)
    Convertible Debentures (Note 5)                  $   50,000      $     -

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

    Calhoun County Bank, secured by oil and gas
      well interests, payable in monthly installments
      of $3,136 including interest at variable rates,
      (lender's base rate of 9.75% as of December 31,
     1995) matures June 1, 1996.                         59,472          54,581

    Balance forward                                    $116,977      $   54,581

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

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

    Balance forward                                  $ 116,977       $   54,581

    Calhoun County Bank, secured by oil and
      gas well interests, payable in monthly
      installments of $1,029 including interest at
      variable rates, (lender's base rate of 9,75% as of
      December 31, 1995) matures February 13, 1996.     9,164             7,895

    Calhoun County Bank, secured by oil and
      gas well interests, payable in monthly
      installments of $3,651 including interest at
      variable rates, (lender's base rate of 9,75% as of
      December 31, 1995) matures February 19, 1996.    43,359            38,172

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

    Wesbanco Bank, secured by oil and gas wells, 
     principal and interest payments of $841 at 
     12.5% interest rate, matures October 11, 1997.    17,328            12,356

    Wesbanco Bank, secured by vehicle,
     principal and interest payments of $155 at
     10.25% interest rate, matures September 30, 1997.  3,115             2,384

    First National Bank of St. Marys, $9,244 payable
      monthly, 12.5% interest rate, secured 
      by equipment.                                   657,632           642,542

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

    Note due private company, principal and interest
      of $163 payable monthly, interest rate of 10.75%,
      secured by vehicle.                               4,997             4,025

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

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

    Bank of Paden City, secured by officers' 
     personal assets, demand note, interest payments
     due monthly at 9.75%.                            100,000           100,000

    Balance forward                                $1,375,999        $1,285,382

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

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

    Balance forward                                $1,375,999        $1,285,382

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

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

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

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

    Note payable to Ross Forbus in equal monthly
      installments of $6,529 with interest at 7.5%,
      secured by assets of subsidiary, matures on
      September 22, 2005.                             545,909           510,848

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

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

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

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

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

    Various equipment purchase contracts secured
      by vehicles.                                     82,354           164,316

         Less Current Portion                        (554,540)       (1,053,560)

         Total Long-Term Debt                      $2,214,922        $2,016,106

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

NOTE 3 - LONG-TERM DEBT (Continued)

    In March 1996 the Company completed a bridge financing of
    $600,000 of Unsecured Notes and 330,000 Bridge Warrants. 
    Of the $600,000 in Unsecured Notes, $270,000 of the
    previously secured note holders converted to Unsecured Note
    holders.  Under the terms of the Unsecured Notes, interest
    is accrued at the rate of 12% per annum.  The principal is
    due and payable upon completion of the Company's proposed
    public offering or on March 31, 1997.  See Note 8 for a
    discussion regarding the Bridge Warrants.

    Schedule of Maturities

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

          Total                           $2,769,462 

NOTE 4 -      BOND

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

NOTE 5 - CONVERTIBLE DEBENTURES

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

NOTE 6 - RELATED PARTY TRANSACTIONS

    a.  Loans

    At the end of December 1995, there were several related
    party loans payable and loans receivable outstanding.  The
    receivable amount is non-interest bearing and considered
    short-term in nature.  The payable amount is also non-
    interest bearing and considered long-term in nature.  Loans
    receivable at December 31, 1995 and June 30, 1996 totalled
    $14,899 and $27, respectively.  Loans payable at December
    31, 1995 and June 30, 1996 totalled $683,586, and $771,902,
    respectively.  

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

NOTE 6 - RELATED PARTY TRANSACTIONS (Continued)

    b.  Management Agreement

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

NOTE 7 - ECONOMIC DEPENDENCE AND MAJOR CUSTOMERS

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

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

NOTE 8 - COMMON STOCK, OPTIONS AND WARRANTS

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

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

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

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

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

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

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

NOTE 9 - COMMITMENTS AND CONTINGENCIES

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

NOTE 10 - GOING CONCERN

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

NOTE 11 - OTHER TRANSACTIONS

    a.  Line of Credit

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

    b.  Forgiveness of Debt

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

NOTE 12 - CONSOLIDATED PROFORMA STATEMENTS OF OPERATIONS

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

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

NOTE 12 - CONSOLIDATED PROFORMA STATEMENTS OF OPERATIONS (Continued)

                                             For the Year Ended 
                                              December 31, 1995 

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

    COST AND EXPENSES

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

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

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

    OTHER INCOME (EXPENSE)

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

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

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

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

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

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

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


S.F.A.S. 69  SUPPLEMENTAL DISCLOSURES


    (1)                 Capitalized Costs Relating to
                       Oil and Gas Producing Activities
                                       
                                             December 31,         June 30,   
                                                1995                1996      
                                                                 (Unaudited)
    Proved oil and gas producing properties 
     and related lease and well equipment     $3,733,388          $3,733,388 
    Accumulated depreciation and depletion      (390,540)           (418,164)

    Net Capitalized Costs                     $3,342,848          $3,315,224 


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

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


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




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

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

    (3)                   Results of Operations for
                             Producing Activities

                                             For the   For the Six   
                                           Year Ended  Months Ended
                                           December 31,  June 30,  
                                                1995      1996      
                                                       (Unaudited)

    Sales                                     $205,152  $ 139,290 

    Production costs                          (110,141)   (74,782)
    Depreciation and depletion                 (10,556)    (5,343)

    Results of operations
     for producing activities
     (excluding corporate
     overhead and interest
     costs)                                   $ 84,455  $  59,165 


    (4)                  Reserve Quantity Information

                                                 Oil       Gas      
                                                 BBL       MCF     
    Proved developed and undeveloped reserves:

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

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

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

        Production                              (1,005)   (42,192)
        Quantity estimates made                   -          -      

    Balance, June 30, 1996                     198,065  1,747,462 

       Proved developed reserves:
                                                 Oil      Gas     
                                                 BBL      MCF     
  
         Beginning of the year 1995            200,485  1,457,405
         End of the year 1995                  199,070  1,789,654
         Beginning of the year 1996            199,070  1,789,654
         End of June 1996                      198,065  1,747,462

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

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

(4)                Reserve Quantity Information (Continued)

During 1995, 1992, 1991 and 1990, the Company had reserve studies and
estimates prepared on the various properties acquired from Black
Petroleum Corporation.  The difficulties and uncertainties involved in
estimating proved oil and gas reserves makes comparisons between
companies difficult.  Estimation of reserve quantities is subject to
wide fluctuations because it is dependent on judgmental interpretation
of geological and geophysical data.

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

                             At December 31, 1995

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

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


                               At June 30, 1996
                                 (Unaudited)
                                                       Trans Energy
                                                            and      
                                                        Subsidiaries 
Future cash inflows                                     $19,631,285
Future production and development costs                  (7,035,486)
Future net inflows before income taxes                   12,595,799
Future income tax expense                                (4,282,572)
Future net cash flows                                     8,313,227
10% annual discount for estimated timing of cash flows   (4,311,146)

Standardized measure of discounted future net cash flows $4,002,081     

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

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

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

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

                                              For the            For the Six  
                                            Year Ended           Months Ended
                                            December 31,           June 30,   
                                                1995                 1996      
                                                                 (Unaudited)

Standardized measure, beginning of year      $3,602,626          $ 4,063,885
Oil and gas sales, net of production costs     (107,818)             (61,804)
Sales of mineral in place                          -                    -     
Quantity estimates made                         569,077                 -     

Standardized measure, end of period          $4,063,885          $ 4,002,081

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

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

(6)                     Earnings (Loss) Per Share Data

                                            December 31,   June 30,   
                                                1995        1996      
                                                         (Unaudited)
                                            (Restated)   (Restated)
Primary earnings (loss) per share
  Weighted average outstanding shares         3,116,435    3,227,918
  Income (loss) before extraordinary income  $  (0.71 )   $    (0.20)
  Extraordinary income                       $     -      $     NIL

Fully diluted earnings (loss) per share
  Weighted average outstanding shares         3,182,415    3,227,918
  Income (loss) before extraordinary income  $    (0.71)  $    (0.20)
  Extraordinary income                       $     -      $     NIL

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

    The following table sets forth the percentage relationship to total
revenues of principal items contained in the Company's Consolidated
Statements of Operations for the three month and six month periods ended
June 30, 1996 and 1995.  It should be noted that percentages discussed
throughout this analysis are stated on an approximate basis.
   
                            Three Months Ended     Six Months Ended
                                   June 30,            June 30,     
                             1996          1995    1996        1995
                                 (Unaudited)          (Unaudited)  
Total revenues . . . . . . .  100%          100%    100%        100%
Total costs and expenses . .  120           112     130         118 
Net income (loss) before
  income taxes, minority 
  interest and extraordinary
  income (loss). . . . . . .  (20)          (12)    (30)        (18)
Income taxes . . . . . . . .    -             -       -           - 
Minority interest. . . . . .    1            (1)      2          (2)
Extraordinary income (loss).    -             -     Nil           -
Net income (loss). . . . . .  (19)          (13)    (28)        (20)
                       
    
Results of Operations

  Total revenues for the three month period ended June 30, 1996
("second quarter of 1996") and the six month period ended June 30, 1996
("first half of 1996"), increased 123% and 83%, respectively, as
compared to the corresponding periods for 1995 ("second quarter of 1995"
and "first half of 1995", respectively).  This increase is attributed to
an increase in natural gas prices and volumes sold by the Company and
increased revenues from the operations of the Company's subsidiary,
Vulcan Energy Corporation ("Vulcan"), which was acquired by the Company
on August 7, 1995.  Total costs and expenses as a percentage of total
revenues    increased     for the second quarter of 1996 as compared to
the corresponding 1995 period and     also increased      for the first
half of 1996 as compared to the first half of 1995.  Actual costs and
expenses for the     second      quarter of 1996 and first half of 1996
increased     140% and 102%     , respectively, as compared to the
corresponding 1995 periods.  These increases are primarily attributed to
the 138% increase in cost of oil and gas sales for the second quarter of
1996 due to higher oil and gas sales by the Company, and the 106%
increase in the cost of oil and gas sales for the first half of 1996
also due to higher oil and gas sales.

  Salaries and wages decreased 49% and 53% for the     second     
quarter of 1996 and first half of 1996, respectively, due to the
issuance by the Company in 1995 of its common stock for services
rendered to the Company valued at     $150,000, of which $75,000 was
attributed to salaries and wages.      Depreciation and depletion
increased 66% for the second quarter of 1996 and 112% for the first half
of 1996, respectively, and interest increased     191%      for the
second quarter of 1996 and     552%      for the first half of 1996,
respectively, as compared to the respective corresponding periods in
1995.  Both increases are attributed to the acquisition of Vulcan    
and the increase in interest expense is further attributed to the
issuance of Bridge Warrants in connection with the raising of $600,000
through the placement of unsecured notes by the Company, and the
issuance of additional shares to the Debenture Holders as consideration
for extending the due date of said Debentures.  Selling      general and
administrative expenses increased     285%      for the second quarter
of 1996 and     65%      for the first half of 1996, respectively, as
compared to the corresponding 1995 periods reflecting increased overhead
due to increased business activities and sales by the Company.

  The Company's minority interests decreased $23,471 for the second
quarter of 1996 and $39,431 for the first half of 1996 due to increased
losses by Tyler Construction Company, a 65% owned subsidiary.  The
Company experienced net losses for the second quarter and the first half
of 1996 of     $285,520 and $648,481,     respectively, compared to net
losses of $87,062 and     $246,7900      for the corresponding 1995 periods,
attributed to the increase in the cost of oil and gas and the increased
overhead activities of the Company.

  For the remainder of 1996, management expects salaries and wages
and other general and administrative expenses to remain at approximately
the same rate as for the first half of 1996.  The cost of oil and gas
produced is expected to fluctuate with the amount produced and with
prices of oil and gas, and revenues are expected to increase during the
remainder of 1996.

Net Operating Losses

  The Company has accumulated approximately     $3,700,000      of
net operating loss carryforwards as of June 30, 1996, which may be
offset against future taxable income through the year 2011 when the
carryforwards expire.  The use of these losses to reduce future income
taxes will depend on the generation of sufficient taxable income prior
to the expiration of the net operating loss carryforwards.  In the event
of certain changes in control of the Company, there will be an annual
limitation on the amount of net operating loss carryforwards which can
be used.  No tax benefit has been reported in the financial statements
for the period ended  June 30,1996 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.  As of
June 30, 1996, the Company's working capital was a negative $1,169,287
compared with a negative $862,222 at December 31, 1995.  This decrease
in working capital for the first half of 1996 is primarily attributed to
due dates of certain loans to the Company which will become due in less
than one year from June 30, 1996.  This decrease in working capital was
partially offset by an increase in inventory from $15,956 at December
31, 1995 to $330,515 at June 30, 1996, due to purchases of oil for
resale by Vulcan.

  The Company anticipates meeting its working capital needs during
the remainder of the current fiscal year with revenues from operations
and from proceeds from the Company's proposed public offering.  If the
Company is unable to secure financing from the sale of its securities or
from private lenders, management believes that the Company can continue
operations of its existing wells and oil and gas gathering operations. 
By maximizing current production and minimizing expenses, management
believes the Company can continue such limited operations for an
extended period until additional funding can be arranged.

  As of June 30, 1996, the Company had total assets of     $7,133,602
     and total stockholders' equity of     $2,485,706     , compared to
total assets of     $6,705,278      and total stockholders' equity of
    $2,561,187      at December 31, 1995.  This represents a    
$428,324 (6%) increase      in total assets and a     $75,481 (3%)     
decrease in total stockholders equity.  For this same period, cash
increased from $0 to $19,035 and total current assets increased 100% due
to increased cash and the increase in accounts receivable and inventory. 
Total current liabilities increased 54% from December 31, 1995 to June
30, 1996, primarily due to certain loans of the Company which become due
in less than one year from June 30, 1996.

  The Company's current portion of its long term debt is  $1,053,560. 
In 1995 and 1996, certain outstanding convertible debentures having a
face value of $95,000 plus accrued interest, were converted to common
stock.  The Company currently anticipates that it will be able to
provide for its debt obligations and repayments coming due during the
remainder of 1996 from revenues generated by the Company and from the
Company's proposed public offering.

  For the second quarter of 1996 cash used by the Company's operating
activities was     $196,240      compared to cash used of $93,634 for
the     second quarter of 1995.      For first half of 1996, cash used
by operating activities was     $356,445      compared to cash provided
of $3,058 for the corresponding period in 1995.  Net cash used by
investing activities for the second quarter and first half of 1996 was
$15,607 and $38,339, respectively, compared to $53,891 for each of the
corresponding periods of 1995.  The decreases for the 1996 periods is
attributed to a decrease in expenditures by the Company for property and
equipment during the 1996 periods.  Cash provided by financing
activities for the second quarter and first half of 1996 were    
$192,861 and $413,819,     respectively, compared with $117,570 and
$45,198 for the corresponding 1995 periods.  The increases for the 1996
periods is directly attributed to increased borrowing by the Company.

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

<PAGE>
                                   PART II

Item 1.  Legal Proceedings

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

Item 2.  Changes In Securities

    This Item is not applicable to the Company.

Item 3.  Defaults Upon Senior Securities

    This Item is not applicable to the Company.

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

    This Item is not applicable to the Company.

Item 5.  Other Information

    This Item is not applicable to the Company.

Item 6.  Exhibits and Reports on Form 8-K

    (b)     Reports on Form 8-K

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

<PAGE>
                                  SIGNATURES
                                       

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

                                               TRANS ENERGY, INC.




Date:  December 13, 1996                  By   /S/ Loren E. Bagley   
                                               (Signature)
                                               LOREN E. BAGLEY, President
                                               and Chief Executive Officer




Date:  December 13, 1996                  By   /S/  Dennis L. Spencer 
                                               (Signature)
                                               Dennis L. Spencer, Secretary
                                               and Director
                                              (Chief Financial Officer)
                                              (Principal Accounting Officer)