U.S. SECURITIES AND EXCHANGE COMMISSION

Litigation Release No. 17385 / February 27, 2002

   SEC v. TRANS ENERGY, INC., LOREN E. BAGLEY, AND WILLIAM F. WOODBURN,
   U.S. District Court for the District of Columbia, Civil Action No.
   1-01-CV-02060

   On February 26, 2002, the United States District Court for the
   District of Columbia entered a permanent injunction against Trans
   Energy, Inc. (Trans Energy), its former president, Loren E. Bagley
   (Bagley), and its former vice president and principal financial
   officer, William F. Woodburn (Woodburn), permanently enjoining them
   from future violations of Sections 10(b) and 13(a) of the Securities
   Exchange Act of 1934 (Exchange Act) and Rules 10b-5, 12b-20, 13a-1,
   and 13a-13 thereunder. The Court's order further enjoins Bagley and
   Woodburn from aiding and abetting violations of Section 13(a) of the
   Exchange Act and Rules 12b-20, 13a-1, and 13a-13 thereunder and orders
   Bagley and Woodburn to each pay a $20,000 civil penalty. Trans Energy,
   Bagley, and Woodburn consented to entry of the permanent injunction
   and the imposition of civil penalties without admitting or denying the
   Commission's allegations.

   The Commission's Complaint alleged that from 1998 through 2000, Trans
   Energy, at the direction of Bagley and Woodburn, disseminated a number
   of false and misleading statements to the investing public through
   press releases, wesbite postings, and Commission filings.
   Specifically, Trans Energy issued press releases in October 2000
   touting a supposed $612 million worth of oil reserves. The Complaint
   alleged that Trans Energy had no reasonable basis to value the
   potential reserves at that amount. The Complaint further alleged that
   in a November 2000 posting on its website, Trans Energy inaccurately
   minimized the significance of the "going concern statement" included
   in its most recent filing with the Commission at a time when Trans
   Energy's ability to continue as a going concern was greatly in doubt.
   Additionally, the Commission claimed that in a December 2000 press
   release about its Chapter 7 bankruptcy, Trans Energy misled the
   investing public by failing to disclose that the bankruptcy arose from
   Trans Energy's inability to pay a $600,665.36 consent judgment entered
   earlier that year, and that a Chapter 7 trustee had been appointed.
   Finally, the Complaint alleged that Trans Energy's Commission filings
   from 1998 through 2000 misrepresented the status of, or failed to
   disclose the existence of, material lawsuits that resulted in over $1
   million in consent judgments against the company. The Complaint
   alleged that Bagley and Woodburn, as Trans Energy's only officers,
   knew or were reckless in not knowing that the above statements were
   false and misleading.
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