Going Concern

6 Months Ended

Jun. 30, 2012

Going Concern [Abstract]

GOING CONCERN

NOTE 2 — GOING CONCERN

Trans Energy’s unaudited interim 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. Trans Energy has incurred cumulative operating losses through June 30, 2012 of $(16,077,798). At June 30, 2012, Trans Energy had stockholders’ equity of $26,249,913.

Revenues during the six months ended June 30, 2012 were not sufficient to cover its operating costs and interest expense 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 Trans Energy to continue as a going concern. On April 26, 2012, a wholly owned subsidiary of the company closed a new $50 million credit agreement. The proceeds of the loan must be used for drilling and leasehold acquisitions. See Note 6 for details on the new credit agreement.

During 2012, we have drilled 7 gross wells and 2.84 net wells. As of June 30, 2012, 1.44 net wells have been completed and fractured. We expect the 2.84 net wells to be put online during the fourth quarter of 2012, which will improve cash flow.