Commission File No. 000-23530

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                            SCHEDULE 14C INFORMATION

                 Information Statement Pursuant to Section 14(c)
                     of the Securities Exchange Act of 1934

Check the appropriate box:

[ ]    Preliminary Information Statement
[ ]    Confidential for Use of the Commission Only (as permitted
         by Rule 14c-5(d)(2))
[X]    Definitive Information Statement

                               TRANS ENERGY, INC.
                ------------------------------------------------
                (Name of Registrant as Specified in its Charter)


Payment of Filing Fee (Check the appropriate box):

[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14c-5(g) and 0-11.

         (1)      Title  of  each  class  of  securities  to  which  transaction
                  applies: n/a

         (2)      Aggregate number of securities to which  transaction  applies:
                  n/a

         (3)      Per  unit  price  or other  underlying  value  of  transaction
                  computed  pursuant  to  Exchange  Act Rule 0-11 (set forth the
                  amount on which the filing fee is calculated  and state how it
                  was determined): n/a.

         (4)      Proposed maximum aggregate value of transaction: n/a

         (5)      Total fee paid: -0-

[ ]      Fee paid previously with preliminary materials.

[ ]      Check box  if any part of the fee is  offset as  provided  by  Exchange
         Act Rule  0-11(a)(2)  and identify the filing for which the  offsetting
         fee was paid  previously.  Identify the previous filing by registration
         statement number, or the Form or Schedule and the date of its filing.

         (1) Amount Previously Paid:

         (2) Form, Schedule or Registration Statement No.:

         (3) Filing Party:

         (4) Date filed:






                                                              

                               TRANS ENERGY, INC.
                                210 Second Street
                                  P.O. Box 393
                         St. Marys, West Virginia 26170


NOTICE OF ACTION TAKEN BY WRITTEN CONSENT OF OUR MAJORITY STOCKHOLDERS

Dear Stockholders of Trans Energy, Inc.:

     We are  writing to advise you that Trans  Energy,  Inc.  will  implement  a
reverse  split of our  outstanding  common  stock on a one share for 150  shares
basis.  The reverse stock split has been  approved by unanimous  approval of our
board of  directors  and by  stockholders  owning a  majority  of our issued and
outstanding shares by written consent in lieu of a meeting of stockholders.

     We have  also  entered  into an  agreement  to  acquire  Arvilla,  Inc.,  a
privately  held  Nevada  corporation  based in St.  Marys,  West  Virginia.  The
acquisition  is  to be  accomplished  through  a  merger  of  our  wholly  owned
subsidiary, Trans Energy Acquisitions, Inc., with and into Arvilla, with Arvilla
being the survivor of the merger. Under the terms of the merger transaction, all
of Arvilla's  outstanding  capital stock will be converted  into shares of Trans
Energy common stock.

     No action is required by you.  The  accompanying  information  statement is
furnished only to inform stockholders of the reverse stock split described above
before it takes  effect in  accordance  with Rule  14c-2  promulgated  under the
Securities Exchange Act of 1934, as amended.

PLEASE NOTE THAT  STOCKHOLDERS  OWNING A MAJORITY OF TRANS ENERGY'S  OUTSTANDING
COMMON STOCK HAVE VOTED TO APPROVE THE REVERSE STOCK SPLIT.  THE NUMBER OF VOTES
HELD BY THESE  STOCKHOLDERS  IS  SUFFICIENT  TO  SATISFY  THE  STOCKHOLDER  VOTE
REQUIREMENT FOR THIS ACTION AND NO ADDITIONAL VOTES WILL  CONSEQUENTLY BE NEEDED
TO APPROVE THE ACTION.

WE ARE NOT ASKING YOU FOR A PROXY AND YOU ARE  REQUESTED NOT TO SEND US A PROXY.
COMPLETION OF THE ACQUISITION WILL RESULT IN THE ASSUMPTION OF ARVILLA'S ASSETS,
LIABILITIES AND OPERATIONS BY TRANS ENERGY.

     The accompanying information statement is for information purposes only and
describes the reverse stock split and explains the terms of the  acquisition  of
Arvilla  and related  transactions.  Please  read the  accompanying  information
statement carefully.

December 31, 2004                                    Very truly yours,

                                                     /s/  ROBERT L. RICHARDS
                                                     -----------------------
                                                     Robert L. Richards
                                                     President


                               TRANS ENERGY, INC.
                                210 Second Street
                                  P.O. Box 393
                         St. Marys, West Virginia 26170

                 INFORMATION STATEMENT PURSUANT TO SECTION 14(c)
                   OF THE SECURITIES EXCHANGE ACT OF 1934 AND
                            REGULATION 14C THEREUNDER

     This information  statement is being sent by first class mail to all record
and beneficial  owners of the common stock,  $0.001 par value,  of Trans Energy,
Inc., a Nevada  corporation,  which we refer to herein as "Trans  Energy,"  "our
company," "we," "our" or "us." The mailing date of this information statement is
on or about December 31, 2004.

     On December  20,  2004,  the record date for  determining  the  identity of
stockholders who are entitled to receive this information statement, 496,566,131
shares of our  common  stock  were  issued and  outstanding.  The  common  stock
constitutes  the sole  outstanding  class of voting  securities of Trans Energy.
Each  share of common  stock  entitles  the  holder  thereof  to one vote on all
matters submitted to stockholders.

     NO VOTE OR OTHER  CONSENT OF OUR  STOCKHOLDERS  IS SOLICITED IN  CONNECTION
     WITH THIS INFORMATION STATEMENT.  WE ARE NOT ASKING YOU FOR A PROXY AND YOU
     ARE REQUESTED NOT TO SEND US A PROXY.

     On November 29,  2004,  our board of directors  adopted the  resolution  to
implement a one share for 150 shares  reverse  split of our  outstanding  common
stock,  consented to in writing by stockholders who beneficially own 256,287,738
shares, or approximately  51.6%, of our issued and outstanding common stock. The
effective  date of the reverse split will be set by our board and is expected to
occur  immediately  prior  to  the  acquisition  of  Arvilla,   Inc.,  a  Nevada
corporation referred to herein as "Arvilla." Our stockholders have not consented
to or considered any other corporate action.

     Because  stockholders  holding at least a majority of the voting  rights of
our outstanding  common stock have voted in favor of the foregoing reverse stock
split,  and these  stockholders  have  sufficient  voting  power to approve  the
proposal through their ownership of common stock, no other stockholder  consents
will be solicited in connection  with this  information  statement.  Pursuant to
Rule 14c-2 under the  Securities  Exchange Act of 1934,  the proposals  will not
become  effective  until a date at least 20 days  after  the date on which  this
information  statement has been mailed to the  stockholders.  We anticipate that
the action  regarding  the  reverse  stock  split  contemplated  herein  will be
effected on or about January 20, 2005. This information  statement will serve as
written notice to stockholders pursuant to the Nevada Revised Statutes.

                                       -1-




                                                 TABLE OF CONTENTS
                                                 -----------------

                                                                                                              Page
                                                                                                              ----
                                                                                                            
FORWARD-LOOKING STATEMENTS..................................................................................   3
GENERAL ....................................................................................................   4
SUMMARY.....................................................................................................   4
     Reverse Stock Split....................................................................................   4
     Acquisition of Arvilla.................................................................................   4
     Parties to the Merger..................................................................................   4
     Structure of the Acquisition of Arvilla................................................................   5
     Merger Consideration...................................................................................   6
     Reasons for the Merger.................................................................................   6
     Costs and Expenses of the Merger.......................................................................   6
     Appraisal Rights.......................................................................................   6
     Risk Factors...........................................................................................   6
     Directors and Executive Management Following the Acquisition of Arvilla................................   7
MAJORITY STOCKHOLDERS.......................................................................................   7
SECURITY OWNERSHIP OF BENEFICIAL OWNERS, MANAGEMENT AND AFFILIATES
     FOLLOWING THE ACQUISITION OF ARVILLA...................................................................   7
RISK FACTORS................................................................................................   7
     Risks Relating to Reverse Stock Split..................................................................   7
     Risks Relating to Acquisition of Arvilla...............................................................   7
     Risks Relating to Our Business After Completion of Arvilla Acquisition.................................   9
     Risks Relating to Ownership of Our Common Stock........................................................  11
REVERSE STOCK SPLIT.........................................................................................  12
     Amendment to Articles of Incorporation.................................................................  13
     Effect of the Reverse Split............................................................................  13
MERGER AGREEMENT AND PLAN OF REORGANIZATION.................................................................  15
     Background of the Merger...............................................................................  15
     Trans Energy's Reasons for the Merger..................................................................  16
     Arvilla's  Reasons for the Merger......................................................................  16
     Material Terms of the Merger Agreement and Plan of Reorganization......................................  17
     Effective Time of the Merger...........................................................................  17
     Merger Consideration...................................................................................  17
     Representations and Warranties.........................................................................  18
     Certain Covenants of the Parties.......................................................................  19
     Conditions to the Merger...............................................................................  20
     Termination............................................................................................  21
     Cost and Expenses of the Merger........................................................................  22
     Amendment..............................................................................................  22
     Extension and Waiver...................................................................................  22
     Certain Federal Income Tax Consequences and Accounting Treatment of Acquisition of Arvilla.............  22
     Appraisal Rights.......................................................................................  22
     Federal Securities Law Consequences....................................................................  22
ANTICIPATED BUSINESS FOLLOWING THE ACQUISITION OF ARVILLA...................................................  23
     Information Concerning Trans Energy, Inc...............................................................  23
     Arvilla, Inc...........................................................................................  26
     Strategy...............................................................................................  26
     Services...............................................................................................  26
     Marketing..............................................................................................  27
     Facilities.............................................................................................  27
     Management.............................................................................................  27
     Employees..............................................................................................  30
     Competition............................................................................................  31
FINANCIAL INFORMATION FOR ARVILLA...........................................................................  31
WHERE YOU CAN FIND MORE INFORMATION.........................................................................  31
     Appendix  A  -  Agreement and Plan of Reorganization
     Appendix  B  -  Amendment to Articles of Incorporation


                                                        -2-

                          FORWARD LOOKING INFORMATION

     This  information  statement  and other  reports  that we file with the SEC
contain certain forward-looking  statements relating to, among other things, the
reverse  stock  split,  the  acquisition  of Arvilla  and our  future  financial
performance or future events.  In some cases,  you can identify  forward-looking
statements by terminology such as "may," "will" "should," "expects,"  "intends,"
"plans,"  "anticipates,"   "believes,"   "estimates,"  "predicts,"  "potential,"
"continue," or the negative of these terms or other comparable terminology. Such
statements  are subject to  numerous  known and  unknown  risks,  uncertainties,
assumptions  and other factors,  including  those set forth in this  information
statement, that could cause actual future events or results to differ materially
from historical results,  or those described in the  forward-looking  statement.
The forward-looking statements  contained  in this information  statement should
be  considered  in  light  of  these  factors.  Although  we  believe  that  the
expectations  reflected in the  forward-looking  statements are  reasonable,  we
cannot   guarantee   future   results,   levels  of  activity,   performance  or
achievements.   You  are  cautioned  not  to  place  undue   reliance  on  these
forward-looking statements,  which speak only as of the date of this information
statement.

     Except  as  required  under  federal  securities  laws  and the  rules  and
regulations of the SEC, we and our merger subsidiary, Trans Energy Acquisitions,
do not  undertake  to update  forward-looking  information  contained  herein or
elsewhere to reflect actual results,  changes in assumptions or changes in other
factors affecting such forward-looking information.  Should one or more of these
risks or  uncertainties  materialize,  or should  underlying  assumptions  prove
incorrect,   actual  results  may  vary  materially  from  those  indicated  in,
contemplated by or implied by such statements.

     For a detailed discussion of these and other risk factors,  please refer to
our filings with the SEC on Forms 10-KSB,  10-QSB and 8-K. You can obtain copies
of these reports and other filings for free at the SEC's Web site at www.sec.gov
or from commercial document retrieval services.

                                     GENERAL

     This information statement is being furnished to all of our stockholders of
record on December  20,  2004 in  connection  with the  approval by our board of
directors  and  majority  stockholders  to  implement a one share for 150 shares
reverse split of our common stock to be effective  prior to the  acquisition  of
Arvilla.  We will file with the State of Nevada an  amendment to our articles of
incorporation  to  reflect  the  split,  a copy of  which  is  attached  to this
information statement as Appendix B.

     Following  effectiveness of the reverse stock split and upon the closing of
the acquisition of Arvilla, we will issue approximately  1,185,024 shares of our
post-reverse  split common  stock to the  stockholders  of Arvilla  and/or their
assigns  in  exchange  for all of the  issued and  outstanding  common  stock of
Arvilla.  In addition,  our board of directors  will  increase our board to five
persons by appointing two new directors nominated by Arvilla. The acquisition is
expected to close on or about January 21, 2005,  and will become  effective upon
the filing of  certificate  of merger with the Secretary of State of Nevada.  We
anticipate that the filing will occur on or about January 21, 2005.

     The  elimination  of the need for a  special  meeting  of  stockholders  to
approve the proposed  reverse  stock split set forth above is  authorized by the
Nevada Revised  Statutes,  referred to herein as the NRS.  Section 78.320 of the
NRS provides that the written consent of the holders of the  outstanding  shares
of voting stock, having not less than the minimum number of votes which would be
necessary  to  authorize  or take such  action at a meeting  at which all shares
entitled to vote thereon were present and voted,  may be substituted  for such a
special meeting. In order to eliminate the costs and management time involved in

                                      -3-


holding a special  meeting of  stockholders  and in order to approve the reverse
stock split, the board of directors determined to use the written consent of the
holders of a majority in interest of our outstanding common stock.

     Stockholders who beneficially  own  approximately  51.6% of our outstanding
common  stock  entitled to vote on the  reverse  stock  split,  have given their
written consent to the approve the reverse stock split.  Accordingly,  the above
action  will not be  submitted  to our  other  stockholders  for a vote and this
information statement is being furnished to our stockholders only to provide the
prompt notice of the taking of such action.

     We will pay all costs and expenses associated with the distribution of this
information  statement,  including  the costs of printing and  mailing.  We will
reimburse  brokerage  firms and other  custodians,  nominees and fiduciaries for
reasonable  expenses  incurred by them in sending this information  statement to
the beneficial owners of our common stock.


                                     SUMMARY

     This summary highlights  selected  information set forth herein and may not
contain all of the information that is important to you. To understand fully the
reverse stock split and  acquisition of Arvilla,  you should read carefully this
entire information  statement and the accompanying  documents to which we refer.
See "Where You Can Find More  Information."  The merger agreement is attached as
Appendix  A to  this  information  statement.  We  encourage  you to  read  this
document.  We have included page  references in  parentheses  to direct you to a
more complete description of the topics presented in this summary.

Reverse Stock Split (Page 12)

     Our  board  of  directors  and  stockholders  holding  a  majority  of  our
outstanding  common stock have approved a one share for 150 shares reverse split
of our common  stock.  Our board will have the  discretion of  establishing  the
effective  date of the split.  Presently,  we anticipate the reverse split to be
effective on or about January 20, 2005.

Acquisition of Arvilla (Page 15)

     Our board of directors  has approved the plan to acquire  Arvilla  Oilfield
Services,  LLC, a private West Virginia limited  liability company that provides
well servicing,  workover and related transportation services to independent oil
and natural gas  producers  in the  northeast  region of the United  States.  To
facilitate  the  acquisition,  on  December  3, 2004,  we entered  into a merger
agreement and plan of reorganization  with Arvilla,  Inc., a newly formed Nevada
corporation  that  owns all of the  membership  interests  in  Arvilla  Oilfield
Services,  LLC. The  acquisition is to be  accomplished  through a merger of our
wholly owned subsidiary, Trans Energy Acquisitions, Inc., with and into Arvilla,
Inc., with Arvilla being the survivor of the merger. Each issued and outstanding
share of  Arvilla  capital  stock  will be  converted  into the right to receive
shares of Trans Energy common stock,  which shares will represent  approximately
25% of our total  outstanding  shares  (post-split)  following the  transaction,
including  shares to be issued in connection  with the separate  acquisition  of
assets from Texas  Energy  Trust  Company.  Arvilla  will  operate as a separate
business entity 100% owned by Trans Energy.

Parties to the Merger  (Page 23)

     Trans Energy,  Inc.
     210 Second Street
     P.O. Box 393
     St. Marys, West Virginia 26170

                                      -4-


     We are engaged in the  transportation,  marketing and production of natural
gas  and oil and in  certain  exploration  and  development  activities.  We own
interests in oil and gas wells in West Virginia and oil wells in Wyoming that we
do not operate.  We also own and operate gas  transmission  lines located within
West  Virginia in the Counties of Ritchie,  Tyler and  Pleasants.  This pipeline
system gathers natural gas produced from our wells and from wells owned by third
parties. We also have approximately 11,000 gross acres under lease in the Powder
River Basin in Campbell, Crook and Weston Counties, Wyoming.

     Trans Energy Acquisitions, Inc.
     210 Second Street
     P.O. Box 393
     St. Marys, West Virginia 26170

     Trans Energy  Acquisitions,  Inc. was created in September 2000 as a Nevada
corporation,  a wholly owned  subsidiary of Trans  Energy.  The  subsidiary  was
organized  for the specific  purpose of  effecting  acquisitions  and/or  merger
transactions. Trans Energy Acquisition has not conducted any business during any
period of its existence  except in  furtherance  of the proposed  acquisition of
Arvilla.

     Arvilla, Inc.
     7994 South Pleasant Highway
     P.O. Box 432
     St. Marys, West Virginia 26170-0432

     Arvilla,  Inc. is a newly  formed  Nevada  corporation  that was created to
facilitate the  acquisition  of Arvilla  Oilfield  Services,  LLC. The owners of
Arvilla initially acquired Arvilla Oilfield Services in June 2004 and negotiated
with Trans Energy in  connection  with our  acquisition  of Arvilla.  Arvilla is
engaged  in  providing  well  servicing,  workover  and  related  transportation
services to independent oil and natural gas producers.

Structure of the Acquisition of Arvilla  (Page 15)

     The  acquisition  of  Arvilla  will  be  finalized  upon  the  filing  of a
certificate of merger with the Secretary of State of Nevada,  referred to herein
as the "effective time of the merger." The acquisition  will be effected through
the following actions:

     o   Trans Energy Acquisitions, our wholly owned subsidiary, will merge with
         and into  Arvilla,  the  separate  corporate  existence of Trans Energy
         Acquisitions  will  cease and  Trans  Energy  will  become  the  parent
         corporation of Arvilla;

     o   we will have effected,  immediately  prior to the effective time of the
         merger,  a one  share  for  150  shares  reverse  stock  split  of  the
         then-outstanding  shares of Trans Energy common stock and, accordingly,
         the shares of Trans Energy  common  stock to be issued and  outstanding
         after the merger  transaction  will give effect to such  reverse  stock
         split;

     o   Trans  Energy  will  issue to the  Arvilla  stockholders  newly  issued
         (restricted)  Trans  Energy  common  stock in exchange  for 100% of the
         issued and outstanding shares of Arvilla capital stock;

     o   Arvilla's stockholders and/or assigns will become stockholders of Trans
         Energy and will  collectively own  approximately  25% of our issued and
         outstanding  shares of common stock. Our current  stockholders will own
         approximately 75% of our issued and outstanding shares of common stock;
         and

     o   we will  expand  our board of  directors  by adding  two new  directors
         nominated by Arvilla.
                                      -5-


Merger Consideration (Page 17)

     In the merger  transaction  between Trans Energy  Acquisitions and Arvilla,
each issued and outstanding share of Arvilla common stock will be converted into
the right to receive shares of Trans Energy common stock in accordance  with the
ratio set forth in the merger  agreement.  In the aggregate,  current holders of
Arvilla  capital  stock  will  receive  approximately  1,185,024  shares  of our
post-split common stock.  Fractional  shares will not be issued,  rather Arvilla
stockholders  will receive cash for any fractional  interest  resulting from the
conversion of shares.  After the acquisition,  current Arvilla stockholders will
no longer own a direct equity interest in Arvilla.

Reasons for the Merger (Page 16)

     Our board of directors  considered  various factors in approving the merger
agreement  and  believe  the  acquisition  of  Arvilla  and  will be in the best
interest of our stockholders.  Our board analyzed Arvilla's current  operations,
prospects and managerial  resources and believes that acquiring Arvilla's growth
potential by means of a merger is the best  opportunity to increase value to our
stockholders.  Also,  Arvilla's oilfield services business is expected to add to
our asset base and future  revenues.  Our board of  directors  did not request a
fairness opinion in connection with the merger.

Cost and Expenses of the Merger (Page 22)

     The merger  agreement  provides  that all costs and expenses in  connection
with the merger will be paid by the party incurring these costs and expenses. We
have agreed to pay all expenses related to the preparation, printing and mailing
of the information statement and all related filing and other fees.

Appraisal Rights  (Page 22)

     Under  applicable  Nevada  law,  our  stockholders  do no have the right to
demand  appraisal  of their  shares in  connection  with the  action to effect a
reverse stock split that we are taking by written consent, or in connection with
the acquisition of Arvilla.

Risk Factors  (Page 7)

     The  acquisition  of Arvilla as well as the  ownership  of our common stock
after the merger involves a high degree of risk to our stockholders.  You should
carefully  consider  the  information  set forth in the section  entitled  "Risk
Factors," as well as the other information in this information statement.

     o   Upon  completion  of  the  merger,  we  will  assume  Arvilla's assets,
         liabilities and operations.

     o   If we need to seek additional funds to continue our operations,  we may
         have to borrow additional funds or make an offering,  either private or
         public, of our common stock. There can be no assurance that such future
         financing can be obtained, or that we will be able to secure such funds
         on terms favorable to us and our business.

     o   Our current  stockholders  will be diluted by the shares issued as part
         of the merger  transaction  and may be diluted by future  issuances  of
         shares, if necessary,  to satisfy working capital needs. We are issuing
         shares of our common stock as part of the acquisition  which,  together
         with possible  future  issuances of stock to raise  additional  working
         capital,   will  reduce  the  percentage   ownership  of  our  existing
         stockholders substantially.

                                      -6-


Directors and Executive  Management  Following the  Acquisition of Arvilla (Page
27)

     Immediately  prior to effective date of the merger,  our board of directors
will  appoint two new  directors,  Clarence  E. Smith and  Rebecca L. Smith,  as
designated by Arvilla.

                              MAJORITY STOCKHOLDERS

     On November 29,  2004,  our board of directors  adopted the  resolution  to
implement the one share for 150 shares reverse split of our  outstanding  common
stock. The board also received written consents by stockholders who beneficially
own 256,287,738  shares, or approximately  51.6%, of our 496,566,131  issued and
outstanding common shares, to approve the proposed reverse stock split.

     Under  Nevada  law,  we are not  required to call for and hold a meeting of
stockholders or to give stockholders  written notice of actions taken by written
consent  without  a  stockholders  meeting.   However,  pursuant  to  applicable
securities laws  promulgated by the SEC, we are required to notify  stockholders
of such actions by written  consent by way of an  information  statement.  Under
Section  14(c) of the  Securities  Exchange  Act of 1934,  the actions  taken by
written consent without a meeting of stockholders  cannot become effective until
20 days after the mailing date of this Information Statement. We are not seeking
written  consent  from any of our other  stockholders  nor will they be given an
opportunity to vote with respect to the actions taken.  All necessary  corporate
approvals  have  been  obtained  to  effect  the  reverse  stock  split and this
information   statement  is  furnished   solely  for  the  purpose  of  advising
stockholders of the actions taken by written consent as required by the Exchange
Act.

     Stockholders  who were not afforded an  opportunity to consent or otherwise
vote  with  respect  to the  reverse  stock  split,  will not  have  dissenters'
appraisal  rights in  conjunction  with the reverse  stock  split,  the proposed
acquisition of Arvilla or other corporate actions to be taken in connection with
acquisition and merger transaction.

       SECURITY OWNERSHIP OF BENEFICIAL OWNERS, MANAGEMENT AND AFFILIATES
                      FOLLOWING THE ACQUISITION OF ARVILLA

     The  following  table sets forth  certain  information  with respect to the
anticipated beneficial ownership of our common stock, after giving effect to the
reverse stock split and acquisition of Arvilla, by each stockholder  expected by
us to be the beneficial owner of more than 5% of our common stock and by each of
our  anticipated  directors  and executive  officers and all of the  anticipated
directors and executive  officers as a group.  Unless otherwise  indicated,  the
address of each of the persons  listed below is Trans Energy,  Inc.,  210 Second
Street, P.O. Box 393, St. Marys, West Virginia 26170. Unless otherwise indicated
in the footnotes to the following  table,  shares are owned, or will be owned of
record and  beneficially  by the named  person.  For  purposes of the  following
table,  a person is deemed to be the  beneficial  owner of any  shares of common
stock (i) over which the person has or shares, directly or indirectly, voting or
investment power, or (ii) of which the person has a right to acquire  beneficial
ownership  at any time  within 60 days after the  effective  time of the merger.
"Voting  power"  is the  power  to vote or  direct  the  voting  of  shares  and
"investment  power"  includes the power to dispose or direct the  disposition of
shares. An asterisk denotes beneficial ownership of less than 1%.

                                      -7-

Name and Address                        Amount and Nature of     Percent
of Beneficial Owner                     Beneficial Ownership    of Class(1)
---------------------                   --------------------    -----------

Directors and Executive Officers:
Robert L. Richards                                 91,275(2)        1.9 %
Loren E. Bagley                                   239,647(3)        5.1 %
William F. Woodburn                               419,724(4)        8.9 %
Clarence E. Smith                                 531,437          11.2 %
Rebecca L. Smith                                  531,437          11.2 %

All directors and executive officers
  a group (5 persons)                           1,813,520          38.3 %

     (1) Based upon 4,740,097 shares of common stock estimated to be outstanding
         on following  the one share for 150 shares  reverse  stock  split,  the
         acquisition of Arvilla and the transactions  contemplated  thereby, and
         the issuance of shares in connection  with  acquisition  of oil and gas
         leases  and  leasehold  interests  from  Texas  Energy  Trust  Company.
         Percentage  ownership is calculated  separately  for each person on the
         basis of the actual number of outstanding shares immediately  following
         the acquisition of Arvilla.
     (2) Includes 80,084 shares held in the name of Argene Richards, wife of Mr.
         Richards.
     (3) Includes  33,667 shares held in the name of Carolyn S. Bagley,  wife of
         Mr. Bagley, over which Mrs. Bagley retains voting power.
     (4) Includes  133,667 shares in the name of Janet L. Woodburn,  wife of Mr.
         Woodburn,  over which shares Mrs.  Woodburn  retains voting power,  and
         133,333  in the  name of a  corporation  owned  by  William  and  Janet
         Woodburn.

                                  RISK FACTORS

     You should consider  carefully the following risk factors relating to Trans
Energy and Arvilla, any of which could materially harm our business.

Risks Relating to Reverse Stock Split

     Our current  stockholders  have no opportunity to approve or disapprove the
     reverse stock split described herein
     ---------------------------------------------------------------------------
     Under  Nevada law, the action to effect the reverse  stock split  described
herein,  that would  routinely be taken at a meeting of  stockholders,  is being
taken by written consent of stockholders having not less than the minimum number
of votes that would be necessary to authorize or take the action at a meeting of
stockholders.  Accordingly,  stockholders other than stockholders who have given
their written consent,  are not being asked to approve or disapprove this action
or any other matters.

     The  reverse  stock  split  will  reduce the number of shares of our common
     stock traded in the public  market which may have a negative  effect on the
     trading of our common stock.
     ---------------------------------------------------------------------------
     By effecting the one share for 150 shares  reverse stock split,  the number
of shares  available  for  trading in the public  market  will be  significantly
reduced.  There can be no assurance that our shares will trade at a higher price
or a multiple of 150 times our current price, or that any price increase will be
sustained. Also, the fewer number of shares in the public float may cause a less
liquid market that could negatively affect our stock price. Further, the reverse
split may  increase  the number of  stockholders  who own less than 100  shares.
These  stockholders  owning "odd lots" may experience an increase in the cost of
selling their shares and greater difficulty in executing such sales.

Risks Relating to Acquisition of Arvilla

     Our  stockholders   have  no  opportunity  to  approve  or  disapprove  the
     acquisition of Arvilla  described  herein,  have no dissenters'  rights and
     will experience substantial dilution in connection with the transaction.
     ---------------------------------------------------------------------------
     The  acquisition of Arvilla has been approved by our board of directors and
is being  facilitated by a merger of our wholly owned  subsidiary  into Arvilla.
Stockholders  will have no opportunity to approve or disapprove the  acquisition
and will not be entitled to  dissenters'  rights.  In  addition,  because  Trans
Energy shares will be used to acquire  Arvilla,  our current  stockholders  will
experience substantial dilution in their ownership interest in our company.

                                      -8-

     If the  merger and  acquisition  of  Arvilla  does not  occur,  we will not
     benefit from the expenses we have incurred in the pursuit of the merger.
     ---------------------------------------------------------------------------

     The  acquisition  of  Arvilla  by way of a  merger  with our  wholly  owned
subsidiary  may not be completed.  If conditions to completion of the merger are
not  satisfied or the merger is not otherwise  completed,  we will have incurred
expenses  for which no ultimate  benefit will have been  received.  We currently
expect to incur out of pocket expenses of approximately  $60,000 for services in
connection  with the  merger,  consisting  of legal  and  accounting  fees,  and
financial printing and other related charges, much of which may be incurred even
if the acquisition is not completed. We anticipate paying for such expenses from
available working capital, which expenses will be treated as current liabilities
on our financial statements.

     Following completion of the acquisition and merger, it may be necessary for
     us to  seek  additional  funding,  which  may  not be  available  on  terms
     favorable to us, or at all.
     ---------------------------------------------------------------------------
     Following the  acquisition,  management  believes that we may need to raise
funds in order to take advantage of the expansion of our business.  If we cannot
meet future  capital  requirements  through  realized  revenues from our ongoing
business,  we may have to raise  additional  capital by  borrowing or by selling
equity or equity-linked securities,  which securities would dilute the ownership
percentage of our existing stockholders.  Also, these securities could also have
rights,  preferences  or  privileges  senior  to  those  of  our  common  stock.
Similarly,  if we raise  additional  capital by issuing debt  securities,  those
securities may contain covenants that restrict us in terms of how we operate our
business,  which could also affect the value of our common stock.  We may not be
able to raise capital on reasonable terms or at all.

     We cannot  assure you that there will be an active  trading  market for the
     our common stock.
     ---------------------------------------------------------------------------
     Even  though our shares of common  stock are  expected  to  continue  to be
quoted on the OTC  Bulletin  Board,  we  cannot  predict  the  extent to which a
trading  market will  continue or how liquid that market might become  following
the acquisition of Arvilla and reverse stock split. Accordingly,  holders of our
common  stock may be required to retain  their shares for a long period of time.
If a liquid, active market for our shares does not exist in the future,  holders
of our stock and new  purchasers  may not be  readily  able to  liquidate  their
shares  which could cause them to lose a portion or all of their  investment  in
our shares.

Risks Relating to Our Business After Completion of Arvilla Acquisition

     Trans Energy has recorded  operating  losses for the past several years and
     continuing losses may exhaust our capital resources and force us to curtail
     or discontinue operations.
     ---------------------------------------------------------------------------
     For the years ended December 31, 2003 and 2002, we have reported net losses
of $1,582,180 and $1,946,959,  respectively. We cannot assure you that even with
the addition of Arvilla, we will be able to achieve  profitability in 2004 or in
the  immediate  future  thereafter.  Accordingly,  if we continue to  experience
operating losses we may exhaust our capital  resources and, without the infusion
of additional funds, we may have to curtail our operations significantly,  or be
forced to cease operations totally.

                                      -9-

     Trans Energy has a significant working capital deficit, which makes it more
     difficult to obtain capital necessary for our operations and which may have
     an adverse effect on our future business.
     ---------------------------------------------------------------------------
     As of September 30, 2004, we had a working capital deficit of approximately
$6,378,430. If our business when combined with Arvilla does not produce positive
working capital in the future,  our business and financial  condition would most
likely be materially and negatively impacted.

     The industry in which Arvilla operates is highly  competitive and increased
     competition could result in margin erosion,  which would make profitability
     even more difficult to achieve and sustain.
     ---------------------------------------------------------------------------
     The market for the oilfield service  industry is extremely  competitive and
the barriers to entry are relatively low. Increased  competition could result in
reduced operating margins,  as well as a loss of market share for Arvilla.  Many
existing and potential  competitors  have greater  financial  resources,  larger
market share and more customers than Arvilla, which may enable them to establish
a  stronger  competitive  position  than we have.  Also,  there is  considerable
competition for qualified personnel to operate the equipment used by Arvilla. If
we fail to address competitive developments quickly and effectively, we will not
be able to grow.

     Our  business  could  be  adversely   affected  by  any  adverse   economic
     developments in the oil and gas industry and/or the economy in general.
     ---------------------------------------------------------------------------
     The oil and gas  industry is  susceptible  to  significant  change due to a
variety of factors, many of which are outside our control. Some of these factors
include

     o   varying demand for oil and gas;
     o   fluctuations in price;
     o   competitive factors that affect pricing;
     o   changes in generally  accepted  accounting  policies, especially  those
         related to the oil and gas industry; and
     o   new government legislation or regulation.

Any of the above factors or a  significant  downturn in the oil and gas industry
or with  economic  conditions  generally,  could have a  negative  effect on our
business and on the price of our common stock.

     If Arvilla  fails to keep up with  changes  affecting  the markets  that it
     serves,  it  will  become  less  competitive,  adversely  affecting  future
     financial performance.
     ---------------------------------------------------------------------------
     In order to remain competitive and serve its customers effectively, Arvilla
must  respond on a timely  and  cost-efficient  basis to changes in  technology,
industry  standards and  procedures and customer  preferences.  Arvilla needs to
continuously  upgrade and update its  services to address new  developments  and
changing  customer  demands.  In some cases these changes may be significant and
the cost to comply with these changes may be  substantial.  We cannot assure you
that we will be able to adapt to any  changes in the future or that we will have
the financial  resources to keep up with changes in the  marketplace.  Also, the
cost of adapting  Arvilla's  services may have a material and adverse  effect on
our operating results.

     Our future success  depends on retaining  existing key employees and hiring
     and  assimilating  new key  employees.  The  loss of key  employees  or the
     inability to attract new key  employees  could limit our ability to execute
     our growth strategy,  resulting in lost  profitability and a slower rate of
     growth.
     ---------------------------------------------------------------------------
     Our  future  success  depends,  in part,  on the  ability  to retain  Trans
Energy's and Arvilla's key employees including executive officers. Following the


                                      -10-


acquisition of Arvilla we do not anticipate entering into employment  agreements
with  their  executives  or key  personnel.  Also,  we do not  carry,  nor do we
anticipate  obtaining,  "key  man"  insurance  on our  executives.  It  would be
difficult  for us to replace any one of these  individuals.  In addition,  as we
grow  we may  need  to  hire  additional  key  personnel.  We may not be able to
identify and attract  high quality  employees  or  successfully  assimilate  new
employees into our existing management structure.

     If we are unable to manage  our  growth  effectively,  our  operations  and
     financial performance could be adversely affected .
     ---------------------------------------------------------------------------
     The  ability  to  manage  and  operate  our  business  as  we  execute  our
anticipated  growth will require effective  planning.  Significant future growth
could strain our internal  resources,  leading to a lower quality of service and
other problems that could adversely affect our financial performance.  Arvilla's
efforts to grow have placed,  and we expect will continue to place,  a strain on
its personnel,  management  systems,  infrastructure  and other  resources.  Our
ability to manage future growth effectively will also require us to successfully
attract, train, motivate, retain and manage new employees and continue to update
and improve our operational,  financial and management  controls and procedures.
If we do not manage our growth  effectively,  our operations  could be adversely
affected,  resulting  in slower  growth  and a failure  to  achieve  or  sustain
profitability.

Risk Related to Ownership of Our Common Stock

     Being a public  company  increases our  administrative  costs,  which could
     result in lower net income,  and make it more  difficult  for us to attract
     and retain key personnel.
     ---------------------------------------------------------------------------
     As a public  company,  we incur  significant  legal,  accounting  and other
expenses  that  Arvilla did not incur as a private  company.  In  addition,  the
Sarbanes-Oxley Act of 2002, as well as new rules subsequently implemented by the
SEC,  have  required  changes  in  corporate   governance  practices  of  public
companies.  We expect that these new rules and  regulations  will  increase  our
legal  and  financial  compliance  costs  and make  some  activities  more  time
consuming. For example, in connection with being a public company, we may create
several board committees,  implement  additional  internal controls and disclose
controls and  procedures,  retain a transfer  agent, a bank note company,  and a
financial  printer,  adopt an insider trading policy and incur costs relating to
preparing  and  distributing  periodic  public  reports in  compliance  with our
obligations  under the securities  laws.  These new rules and regulations  could
also make it more  difficult for us to attract and retain  qualified  members of
our  board of  directors,  particularly  to serve on our  audit  committee,  and
qualified executive officers.

     We do not anticipate paying dividends in the foreseeable future. This could
     make our stock less attractive to potential investors.
     ---------------------------------------------------------------------------
     We  anticipate  that we will  retain  all  future  earnings  and other cash
resources for the future operation and development of our business and we do not
intend to declare or pay any cash dividends in the  foreseeable  future.  Future
payment of cash  dividends  will be at the  discretion of our board of directors
after  taking into  account  many  factors,  including  our  operating  results,
financial  condition and capital  requirements.  Corporations that pay dividends
may be viewed as a better investment than corporations that do not.

     Future sales or the potential for sale of a substantial number of shares of
     our common  stock could cause the market  value to decline and could impair
     our ability to raise capital through subsequent equity offerings.
     ---------------------------------------------------------------------------


                                      -11-


     Sales by Trans  Energy  of a  substantial  number of our  common  shares to
individuals or in the public  markets,  or the  perception  that these sales may
occur,  could  cause the market  price of our common  stock to decline and could
materially  impair our ability to raise  capital  through the sale of additional
equity securities.  Once the acquisition of Arvilla is completed, in addition to
the shares of our common stock actually  issued and  outstanding,  there will be
approximately  495  million  shares of common  stock  held in our  treasury  for
possible future issuance.

     It may be difficult for a third party to acquire us, and this could depress
     our stock price.
     ---------------------------------------------------------------------------
     Following the acquisition of Arvilla, our directors, executive officers and
other principal  stockholders will control  approximately 38% of our outstanding
common shares.  This could delay, defer or prevent a future change in control of
our  company  or our  management,  discourage  proxy  contests  and make it more
difficult  for you and other  stockholders  to elect  directors  and take  other
corporate  actions.  As a result, the price that investors are willing to pay in
the future for shares of our common stock could be limited.  Also,  the board of
directors may issue additional shares that could make it even more difficult for
minority  investors  to achieve any  control.  Further,  there is no  cumulative
voting in the election of  directors,  which would  otherwise  allow less than a
majority of stockholders to elect director candidates.

     "Penny Stock"  Regulation could negatively  affect the trading and price of
     our shares.
     ---------------------------------------------------------------------------
     Even following the reverse stock split of our common stock,  trading in our
shares on the OTC  Bulletin  Board may be subject to certain  provisions  of the
Securities Exchange Act of 1934, commonly referred to as the "penny stock" rule.
A penny stock is generally  defined to be any equity  security that has a market
price less than $5.00 per share, subject to certain exceptions.  If our stock is
deemed to be a penny stock,  trading in our stock will be subject to  additional
sales practice requirements on broker-dealers. These may require a broker dealer
to:

     o   make a  special  suitability  determination  for  purchasers  of  penny
         stocks;
     o   receive the purchaser's written consent to the transaction prior to the
         purchase; and
     o   deliver to a prospective purchaser of a penny stock, prior to the first
         transaction,  a risk  disclosure  document  relating to the penny stock
         market.

     Consequently,  penny stock rules may restrict the ability of broker-dealers
to trade and/or maintain a market in our common stock.  Also,  many  prospective
investors  may not  want to get  involved  with  the  additional  administrative
requirements,  which may have a material  adverse  effect on the trading and the
price of our shares.

                               REVERSE STOCK SPLIT

     On November 29, 2004,  our board of directors  and  stockholders  holding a
majority of our  outstanding  common  stock  approved a one share for 150 shares
reverse  split of our  common  stock.  The  effective  date of the split will be
established  by our board for a date prior to the  effective  date of the merger
agreement with Arvilla.  We presently  anticipate the split to occur on or about
January 20, 2005.

                                      -12-


     All shares of our  common  stock have  equal  rights  and  privileges  with
respect to voting,  liquidation  and dividend  rights.  Each share  entitles the
holder thereof to (i) one  non-cumulative  vote for each share held of record on
all matters submitted to a vote of the stockholders; (ii) to participate equally
and to receive  any and all such  dividends  as may be  declared by the board of
directors;  and  (iii) to  participate  pro rata in any  distribution  of assets
available for distribution upon liquidation. Holders of our common stock have no
preemptive  rights to  acquire  additional  shares of common  stock or any other
securities.  The  common  stock is not  subject  to  redemption  and  carries no
subscription or conversion rights.

Amendment to Articles of Incorporation

     In connection  with the stock split,  we will file with the State of Nevada
an amendment to our articles of  incorporation to reflect the reverse split. Our
current authorized capitalization will remain unchanged at 500 million shares of
common stock with a par value of $0.001

     Under applicable Nevada law, a corporation may effect a reverse stock split
without  correspondingly  decreasing the number of authorized shares of the same
class or series if:

     (a) The board of directors  adopts a resolution  setting forth the proposal
         to decrease the number of issued and  outstanding  shares of a class or
         series; and

     (b) The proposal is approved by the vote of stockholders holding a majority
         of the voting power of the outstanding  shares of the affected class or
         series.

     As our  board of  directors  has  approved  the  reverse  stock  split  and
shareholders  holding a majority of our outstanding  shares of common stock have
also  approve the split by written  consent,  we are not  required to change our
authorized  capitalization.  Accordingly,  our  amendment  to  our  articles  of
incorporation  will reflect that our outstanding shares have been reverse split,
but that our  capitalization  will be unchanged.  Upon the  effectiveness of the
split,  each share of our issued and  outstanding  common  stock will be reverse
split on a one share for 150 shares basis.  No fractional  shares will be issued
in  connection  with the reverse  split.  Stockholders  who would  otherwise  be
entitled to receive fractional  shares,  because they hold a number of shares of
common  stock  that is not evenly  divided  by 150,  will have the number of new
shares to which they are entitled rounded up to the next whole number of shares.
No stockholders will receive cash in lieu of fractional shares.

Effect of the Reverse Split

     Any new shares  issued in  connection  with the reverse split will be fully
paid and  non-assessable.  The number of stockholders will remain unchanged as a
result of the reverse  split.  The  reverse  split will  decrease  the number of
outstanding  common shares but will not affect any  stockholder's  proportionate
interest in our company prior to the closing of the merger  transaction,  except
for minor differences  resulting from the rounding up of fractional  shares. The
par value of our common stock will remain  unchanged.  While the  aggregate  par
value of our outstanding common stock will be decreased,  our additional paid-in
capital will be  increased by a  corresponding  amount.  Therefore,  the reverse
split will not affect our total  stockholders'  equity.  All share and per share
information will be retroactively  adjusted to reflect the reverse split for all
periods presented in our future financial reports and regulatory filings.

     Although it is  generally  expected  that a reverse  split will result in a
proportionate  increase in the market price of the split shares, there can be no
assurance  that our  common  stock  will  trade at a  multiple  of 150 times our


                                      -13-


current price, or that any price increase will be sustained. If the market price
of our stock  declines  after  the  implementation  of the  reverse  split,  the
percentage  decline as an  absolute  number and as a  percentage  of our overall
market  capitalization would be greater than would be the case in the absence of
the reverse split.

     Furthermore,  the  possibility  exists that the  reduction in the number of
outstanding  shares  will  adversely  affect the market for our common  stock by
reducing the relative  level of  liquidity.  In addition,  the reverse split may
increase  the  number of the  stockholders  who own odd  lots,  or less than 100
shares.  Stockholders who hold odd lots typically will experience an increase in
the cost of selling  their  shares,  as well as possible  greater  difficulty in
effecting such sales.  Consequently,  there can be no assurance that the reverse
stock split will achieve the desired results outlined above.

     Following  the  reverse  split,   we  will  have  issued  and   outstanding
approximately  3,310,440  shares of common stock,  without  giving effect to the
rounding up of fractional  shares,  after which  approximately  1,185,024 shares
will be issued pursuant to the acquisition of Arvilla and approximately  244,633
shares  will be issued for the  acquisition  of assets from Texas  Energy  Trust
Company. We will have the corporate authority to issue approximately 495 million
additional  shares of  authorized  but  unissued  common  stock.  The  remaining
authorized and unissued shares may be issued without stockholder approval at any
time,  in the sole  discretion  of our board of directors.  The  authorized  and
unissued  shares may be issued for cash,  to acquire  property  or for any other
purpose that is deemed in the best  interests  of our  company.  Any decision to
issue additional shares will reduce the percentage of our  stockholders'  equity
held by our current  stockholders  and could dilute our net tangible book value.
We will not become a private company as a result of the reverse split, we expect
that our common stock will  continue to be quoted on the OTC Bulletin  Board and
we plan to continue to file  periodic  and other  reports with the SEC under the
Exchange Act.

     Following  the  reverse  split,  the share  certificates  you now hold will
continue  to be valid.  In the  future,  new share  certificates  will be issued
reflecting the stock split,  but this in no way will effect the validity of your
current share  certificates.  The reverse split will occur on the effective date
without any further action on the part of our stockholders.  After the effective
date of the  reverse  split,  each  share  certificate  representing  shares  of
pre-split common stock will be deemed to represent 1/150th share of Trans Energy
common stock.  Certificates  representing post-split common stock will be issued
in due course as old share certificates are tendered for exchange or transfer to
our transfer agent:  Interstate Transfer Company, 6084 South 900 East #101, Salt
Lake City, Utah 84121. We request that  stockholders do not send in any of their
stock certificates at this time.

     As applicable, new share certificates evidencing post-split shares that are
issued  in  exchange  for old  pre-split  certificates  representing  restricted
shares,  will contain the same  restrictive  legend as on the old  certificates.
Also, for purposes of determining the term of the restrictive  period applicable
to the new  post-split  shares,  the time period during which a stockholder  has
held their  existing  pre-split  shares will be  included  in the total  holding
period.

     We are hereby  notifying  our  stockholders  of the approval of the reverse
stock split and, pursuant to the Exchange Act, filing this information statement
on Schedule 14C,  which will be mailed to all  stockholders  of record as of the
record date established therefore.

                                      -14-


                   MERGER AGREEMENT AND PLAN OF REORGANIZATION

     The  following is only a summary of the material  provisions  of the merger
agreement and plan of reorganization, dated as of December 3, 2004, by and among
Trans Energy, Trans Energy Acquisitions,  Arvilla and the majority  stockholders
of Arvilla. The agreement is attached to this information  statement as Appendix
A. Please read the agreement in its entirety.

     On  September  10,  2004,  we  entered  into a letter of intent to  acquire
Arvilla,  which was finalized by the merger agreement and plan of reorganization
being  executed on  December 3, 2004.  Arvilla,  Inc. is a newly  formed  Nevada
corporation  that was created to facilitate the acquisition of Arvilla  Oilfield
Services, LLC. The acquisition of Arvilla is to be accomplished through a merger
of our wholly owned subsidiary,  Trans Energy Acquisitions,  Inc., with and into
Arvilla,  Inc.,  with Arvilla being the survivor of the merger.  Pursuant to the
terms of the merger,  each issued and outstanding share of Arvilla capital stock
will be converted into the right to receive shares of Trans Energy common stock.
Prior to the  effective  date of the merger,  we will effect a one share for 150
shares reverse split of our common stock.

     Following the merger,  current stockholders of Arvilla and/or their assigns
will  own  approximately  25%  of  our  issued  and  outstanding   common  stock
(post-split)  and our  current  stockholders  will own  approximately  75%.  The
purpose  of the merger is to allow us to acquire  and carry on the  business  of
Arvilla as our wholly owned subsidiary and to continue the current operations of
Trans Energy.

     The terms of the  merger  and merger  agreement  are more  fully  described
below.

Background of the Merger

     Historically,  our  management has known and worked with Clarence E. Smith,
the current President of Arvilla Oilfield Services, for over 20 years. Mr. Smith
and two of our  directors,  William F. Woodburn and Loren E. Bagley,  have for a
period of time,  been looking for additional  business  opportunities  for Trans
Energy.

     In March 2004, Mr. Smith learned that Arrow Oilfield  Services was going to
be sold by Belden & Blake, located in Canton, Ohio, and informed Trans Energy of
the pending sale.  Mr. Smith met with our management and asked that in the event
he acquired Arrow Oilfield  Services,  would Trans Energy consider merging Arrow
Oilfield Services into Trans Energy.  After a careful and thorough review of the
proposed  transaction,  our  board of  directors  decided  that  Arrow  Oilfield
Services  would be favorable  acquisition  candidate and that it would be in the
best interest of the company and our stockholders to pursue the acquisition.

     On June 29, 2004, Clarence E. Smith acquired Arrow Oilfield Services, which
became Arvilla Oil Field  Services,  LLC. On July 2, 2004, we began  negotiating
with Clarence and Rebecca Smith,  the owners of Arvilla Oilfield  Services,  for
the purpose of acquiring  the business.  Following  additional  discussions  and
negotiations,  we entered into a letter of intent on September 10, 2004, whereby
we agreed to acquire Arvilla Oilfield Services.

     In order to facilitate  the  transaction,  Mr. and Mrs.  Smith formed a new
Nevada  corporation,  Arvilla,  Inc.,  that acquired the ownership  interests of
Arvilla  Oilfield  Services.  We then determined that Trans Energy would acquire
Arvilla by merging our wholly owned subsidiary, Trans Energy Acquisitions,  with
and into Arvilla with Arvilla  being the  surviving  corporation.  After further
negotiations,  we structured the terms and conditions of the transaction and, on
December  3,  2004,   we  entered  into  the  merger   agreement   and  plan  of
reorganization with Arvilla.

                                      -15-


Trans Energy's Reasons for the Merger

     In considering and approving the merger and the merger agreement, our board
of directors considered various factors including:

     o   lack of significant growth in our current business endeavors;

     o   our prospects for future growth and expansion through acquisitions;

     o   Arvilla's   prospects  for  offering  full  service   oilfield  service
         operations and providing many units of oilfield  equipment and vehicles
         to enhance operations;

     o   Arvilla employs approximately 100 skilled and experienced employees;

     o   Arvilla's  operations  in  Ohio,  Pennsylvania,   New  York,  Virginia,
         Kentucky  and West  Virginia,  geographically  cover the main  focus of
         Trans Energy's business;

     o   the  experience  and  expertise  that Clarence E. Smith offers to Trans
         Energy; and

     o   anticipated  increase  in our  stockholder  values  as a result  of the
         acquisition.

     In  agreeing  to the  merger,  our  board  believes  that the  addition  of
Arvilla's  management,  assets and operations will eventually add value to Trans
Energy. Our board of directors reached this conclusion after analyzing Arvilla's
operations,  prospects  and  managerial  resources,  which are described in more
detail below, and believes that acquiring Arvilla's growth potential is the best
opportunity to increase value to our stockholders.

Arvilla's Reasons for the Merger

     In considering and voting upon the merger and merger agreement, the Arvilla
board of directors considered the following:

     o   information  with  respect  to  the  financial  condition,  results  of
         operations, business and prospects of Trans Energy and the economic and
         market conditions affecting Trans Energy;

     o   increased market liquidity  expected to result from exchanging stock in
         a private company for securities of a publicly traded company;

     o   the ability to use registered securities to make future acquisitions of
         assets or businesses;

     o   increased visibility in the oilfield services community;

     o   enhanced access to the capital markets;

     o   improved transparency of operations; and

     o   perceived  credibility and enhanced corporate image of being a publicly
         traded company.

     Neither  Trans Energy nor Arvilla  retained  the services of an  investment
banker  or  requested  a  fairness   opinion  in  connection   with  the  merger
transaction.

     The above  discussion  of material  factors  considered by Trans Energy and
Arvilla is not intended to be exhaustive,  but sets forth the principal  factors

                                      -16-


considered.  In view of the variety of factors  considered  in  connection  with
their  evaluation of the  acquisition  of Arvilla,  the parties  considered  the
factors as a whole and did not find it  practicable  to, and did not quantify or
otherwise assign relative weight to, the specific factors considered in reaching
their  determinations.  In addition,  individual  members of the boards may have
given different weight to different factors.

Material Terms of the Merger Agreement and Plan of Reorganization

     Subject  to the  terms  and  conditions  of the  merger  agreement,  at the
effective time of the merger, our subsidiary,  Trans Energy  Acquisitions,  will
merge with and into Arvilla,  Inc.,  the separate  corporate  existence of Trans
Energy  Acquisitions  will cease and we will  become the parent  corporation  of
Arvilla.  We will issue an aggregate of  approximately  1,185,024  shares of our
post-reverse split common stock to the Arvilla stockholders in exchange for 100%
of the issued and  outstanding  shares of Arvilla  capital stock.  The effective
time of the merger and the  issuance of our common stock in the merger will take
place  immediately  after we have  effected a one share for 150  shares  reverse
stock  split of the  then-outstanding  shares  of  Trans  Energy  common  stock.
Accordingly,  the shares of our common stock to be issued and outstanding  after
the merger transaction give effect to the reverse stock split.

     At the  effective  time  of the  merger,  members  of  Arvilla's  board  of
directors  immediately  prior to the  effective  time  will  remain  as  Arvilla
directors.  Those persons holding  executive offices of Arvilla at the effective
time, will continue to hold the same offices of the surviving corporation.

     Also at the effective  time,  our existing  board of directors will move to
expand  the board by adding  two  nominees  of  Arvilla,  Clarence  E. Smith and
Rebecca L. Smith, to the board.

     Effective Time of the Merger

     The merger  agreement  provides that,  subject to the approval of Arvilla's
stockholders and the satisfaction or waiver of other conditions, the merger will
be  consummated  by filing with the Nevada  Secretary of State a certificate  of
merger and any other requisite documents in accordance with relevant Nevada law.
We expect the merger to be consummated  promptly after  fulfilling the terms and
conditions of the agreement.

     We  anticipate  that the closing will take place at a mutually  agreed upon
time, but no later than five days after all  conditions  precedent have been met
satisfied or waived and all required documents have been delivered.  The parties
have agreed to use their reasonable  commercial  efforts to cause the closing to
occur on or before January 17, 2005.

     Merger Consideration

     Upon consummation of and by virtue of the merger agreement, and without any
action on the part of any holder of any capital  stock of Arvilla,  Trans energy
or Trans Energy Acquisitions,

     o   all shares of common stock of Trans Energy  Acquisition  owned by Trans
         Energy  will be  converted  into one 1,000  shares  of common  stock of
         Arvilla; and

     o   all shares of Arvilla  common stock owned by its  stockholders  will be
         converted  into,  and become  exchangeable  for shares of Trans  Energy
         common stock determined by the conversion ratio set forth in the merger
         agreement.

                                      -17-


     The conversion ratio defined in the merger agreement means a fraction,  the
numerator of which is equal to the number of whole shares of Trans Energy common
stock which represents not less than 25% of the issued and outstanding shares of
Trans Energy common stock immediately following the effective time, plus 244,633
shares;  and the  denominator of which is equal to the number of shares of Trans
Energy common stock issued and outstanding  immediately  following the effective
time,  plus 244,633  shares.  No fractional  shares will be issued to any former
holder of Arvilla capital stock;  rather, a cash payment will be paid in lieu of
fractional shares.

     Following the above exchange, current holders of Arvilla capital stock will
receive approximately 1,185,024 shares of Trans Energy common stock. As a result
of the merger, the shares of Arvilla capital stock,  except for the 1,000 shares
to be held by Trans Energy, will no longer be outstanding, will automatically be
cancelled and retired and will cease to exist,  and each holder of a certificate
representing  such share  immediately prior to the merger will cease to have any
rights with respect to such certificate,  except the right to receive the shares
of our common stock described above.

Representations and Warranties

     The merger agreement contains customary  representations  and warranties of
the parties. Trans Energy's and Trans Energy Acquisitions's  representations and
warranties to Arvilla relate to, among other things:

     o   organization, standing, corporate power and similar corporate matters;
     o   authorization, execution, deliver and enforceability of the agreement;
     o   valid issuance of Trans Energy common stock;
     o   capital structure;
     o   accuracy of financial statements and other information;
     o   absence of certain adverse changes;
     o   absence of material litigation;
     o   absence of liabilities or claims not previously disclosed;
     o   timely filing of all required tax returns;
     o   delivery of all requested information;
     o   material contracts;
     o   compliance  with the  federal  securities  laws,  including  applicable
         provisions of the  Sarbanes-Oxley  Act of 2002, and the accuracy of all
         information  filed with the SEC;
     o   absence of employee benefit plans;
     o   compliance with all applicable laws; and
     o   absence of any untrue statement of a material fact.

     Arvilla's  representations  and warranties to Trans Energy and Trans Energy
Acquisitions relate to, among other things:

     o   organization, standing, corporate power and similar corporate matters;
     o   authorization,  execution,  deliver  and  enforceability  of the merger
         agreement;
     o   valid issuance of Arvilla capital stock;
     o   capital structure;
     o   accuracy of financial statements and other information;
     o   absence of certain adverse changes;
     o   absence of material litigation;
     o   absence of liabilities or claims not previously disclosed;
     o   timely filing of all required tax returns;
     o   delivery of all requested information;
     o   material contracts;
     o   compliance with all applicable laws;
     o   accuracy of  information  provided to Trans Energy for inclusion in any
         filing by us with the SEC; and
     o   absence of any untrue statement of a material fact.

                                      -18-

     All representations,  warranties, covenants and agreements in the agreement
will survive until two years after the effective date.

Certain Covenants of the Parties

     The parties to the merger  agreement  have agreed to take  certain  actions
prior the closing, including the following:

     o   The parties will  provide to each other,  their  counsel,  accountants,
         designated  employees  and  other   representatives,   all  information
         relating to their respective businesses deemed necessary.

     o   Except as  otherwise  agreed  upon,  none of the  parties  are to make,
         declare, pay or set aside for payment any extraordinary dividend, issue
         any  capital  except  as set  forth  in the  agreement,  or  incur  any
         indebtedness  for  borrowed  money  except  in the  ordinary  course of
         business.

     o   Each party will conduct  their  respective  businesses  in the ordinary
         course of  business,  consistent  with past  practice  and in  material
         conformity  with all applicable  laws,  rules and  regulations  and use
         reasonable  efforts to maintain  satisfactory  relations  with valuable
         customers and others having business relationships with them.

     o   Arvilla  is to  provide  unaudited  monthly  balance  sheets and income
         statements until the closing of the transaction.

     o   Arvilla is to cause a meeting of its stockholders to approve the merger
         agreement and transactions contemplated thereby.

     o   Trans  Energy's  board of directors is to approve the merger  agreement
         and transactions  contemplated thereby and also approve a reverse stock
         split of our  issued  and  outstanding  shares  on a one  share for 150
         shares  basis,  which  stock  split is to be  approved  by the  written
         consent of a majority of Trans Energy stockholders.

     o   As soon as practical  after  execution of the merger  agreement,  Trans
         Energy will cause to be prepared,  filed with the SEC and mailed to our
         stockholders an Information  Statement pursuant to Section 14(c) of the
         Securities   Exchange  Act  of  1934  and  Regulation  14C  thereunder,
         concerning  action to effect the  reverse  stock split taken by written
         consent.

     o   Each  party  is  to  use  its  best  efforts  to  obtain  all  permits,
         authorizations,  consents,  waivers and approvals from third parties or
         governmental  authorities  necessary  to  consummate  the  transactions
         contemplated by the merger agreement.

     In  addition  to the above  covenants,  Trans  Energy  has agreed to do the
following:

     o   Convert certain  designated debt and other  obligations  into the Trans
         Energy common stock.  Accordingly,  on October 26, 2004, we distributed
         an aggregate of 203 million  shares of common stock in exchange for the
         conversion of debt in the amount of $2,401,424  previously  incurred by
         us, which satisfies this covenant.

     o   Prior to the effective date, our board of directors will cause Clarence
         E.  Smith  and  Rebecca  L.  Smith  to be  appointed  to our  board  of
         directors.

     o   Prior to the  effective  date,  our board of  directors  will cause our
         bylaws to be amended so that any of the following  actions will require
         the affirmative vote of 80% of the members of the board:

                                      -19-

         (a)  an amendment of our articles of incorporation or bylaws;

         (b)  any merger or  consolidation  involving Trans Energy or any of our
              affiliated entities;

         (c)  the issuance of, or any offer to issue, any voting or,  non-voting
              common or preferred stock of Trans Energy or any of our affiliated
              corporations,  or any  interest  in any  of  our  affiliated  non-
              corporate entities;

         (d)  the sale,  exchange or transfer of substantially all of our assets
              or any of our affiliated entities;

         (e)  the sale, exchange or transfer of any interest in Arvilla, Inc. or
              Arvilla Oilfield  Services,  LLC, whether for or in the absence of
              adequate consideration;

         (f)  the  borrowing,  incurrence of debt, or  expenditure  of more than
              $25,000; or

         (g)  any other act or action by or of our board of  directors  which is
              not in the regular, ordinary course of business.

     o   We have also  agreed to give to Clarence E. Smith and Rebecca L. Smith,
         or their  personal  representatives,  the  right of  first  refusal  to
         reacquire   Arvilla,   at  its  fair  market  value  as  determined  by
         independent appraisal, or at the same price and upon the same terms and
         conditions as those set forth in a written offer of a  third-party,  in
         the event our board of directors,  or any affiliated entity, decides to
         dispose of Arvilla, whether directly or indirectly.

     o   We have agreed that the  separate  legal  status of Arvilla,  Inc.  and
         Arvilla Oilfield Services, LLC will be maintained, and their assets and
         business  operations  will remain a part of Arvilla  that will remain a
         wholly owned subsidiary of Trans Energy.

Conditions to the Merger

     The  respective  obligations  of  Arvilla,  Trans  Energy and Trans  Energy
Acquisitions to complete the merger are subject to the satisfaction or waiver of
various conditions, including normal and customary closing conditions such as:

     o   the  merger  agreement  will have been  duly  approved  by the board of
         directors and/or stockholders of each of the parties;

     o   all  regulatory  approvals  required  to  consummate  the  transactions
         contemplated by the merger agreement will have been obtained;

     o   no  governmental  authority  shall  have  promulgated  or  entered  any
         statute, rule regulation judgment decree,  injunction or order which in
         effect prohibits consummation of the contemplated transactions;

     o   no  injunction or other decree will have been issued by any court which
         prevents the merger; and

     o   all consents and approvals  required for the contemplated  transactions
         will have been obtained.

     In addition to the  foregoing,  the  obligation  of Arvilla to complete the
merger  is  also  subject  to  the  satisfaction  or  waiver  of  the  following
conditions:

     o   the  representations  and  warranties  of Trans Energy and Trans Energy
         Acquisitions will be true and correct;

                                      -20-


     o   Trans  Energy and Trans Energy  Acquisitions  will have  performed  all
         obligations  required to be performed under the agreement and will have
         delivered to Arvilla a certificate to such effect; and

     o   Arvilla  will have  received  an opinion of counsel as to the  tax-free
         nature of the acquisition and reorganization.

     The  obligation of Trans Energy and Trans Energy  Acquisitions  to complete
the  merger  is  also  subject  to  satisfaction  or  waiver  of  the  following
conditions:

     o   the representations and warranties of Arvilla will be true and correct;

     o   Arvilla will have  performed all  obligations  required to be performed
         under the agreement  and will have  delivered to Trans Energy and Trans
         Energy Acquisitions a certificate to such effect; and

     o   Trans  Energy  and Trans  Energy  Acquisitions  will have  received  an
         opinion of counsel as to the tax-free  nature  of the  acquisition  and
         reorganization.

Termination

     Termination by either Arvilla or Trans Energy.  The merger agreement may be
terminated  at any time prior to the  effective  date,  whether  before or after
approval by Arvilla's stockholders:

     o   by mutual consent of Trans Energy or Arvilla;

     o   by  either  Trans  Energy  or  Arvilla  if  the  merger  has  not  been
         consummated on or before January 14, 2005 (the "termination date");

     o   if the  transaction  has not been approved by Trans  Energy's  board of
         directors;

     o   if any  governmental  or  regulatory  body,  the  consent of which is a
         condition  to  the   obligations  of  the  parties  to  consummate  the
         acquisition, does not grant its consent to the transaction; or

     o   any  court of  competent  jurisdiction  shall  have  issued  an  order,
         judgment or decree restraining,  enjoining or otherwise prohibiting the
         merger

     Effect of  Termination.  In the event of termination by either Trans Energy
or Arvilla, the merger agreement will become void and there will be no liability
or obligation on the part of any of the parties or their respective  officers or
directors,  except  for  liability  arising  out of  any  breach  of the  merger
agreement.

                                      -21-


Cost and Expenses of the Merger

     All costs and expenses in connection with the contemplated transaction will
be paid by the party incurring  these costs and expenses.  We have agreed to pay
all expenses related to the preparation, printing and mailing of the information
statement  and all related  filing and other fees paid to the SEC in  connection
with the merger and acquisition of Arvilla. We estimate that the total costs and
expenses  that  we  will  pay  in  connection  with  the  transaction   will  be
approximately  $60,000,  which consists of legal and professional fees, printing
and mailing costs,  filing fees and other miscellaneous  expenses.  Arvilla will
pay all costs and expenses it incurs in connection with the transaction.

Amendment

     The merger  agreement  may be amended at any time in writing  signed by all
parties, but not after approval by the Arvilla stockholders.

Extension and Waiver

     At any time  before the  effective  time,  any of the parties to the merger
agreement  may  waive  any  breach of  representations,  warranties,  covenants,
conditions or documents of another party.

Certain Federal Income Tax Consequences and Accounting  Treatment of Acquisition
of Arvilla

     Because no action is being taken in connection with the current outstanding
shares  of Trans  Energy  common  stock,  no gain or loss is  anticipated  to be
recognized by our stockholders in connection with the acquisition of Arvilla and
related merger.  It is the intent of the parties that the acquisition of Arvilla
under the terms of the merger  agreement  will qualify,  for federal  income tax
purposes, as a reorganization with the meaning of Section 368(a) of the Internal
Revenue Code of 1986, as amended (the "Code").  As such, we will not recognize a
gain or loss as a  result  of the  acquisition,  nor will  Arvilla  stockholders
recognize a gain or loss. It is  anticipated  that the issuance of our shares of
common stock to Arvilla  stockholders  and pursuant to the merger agreement will
be tax-free to those persons.

     You are  urged to  consult  your own tax  advisor  as to any  possible  tax
consequences  related  to the  acquisition  of  Arvilla,  including  tax  return
reporting  requirements  and the  applicability  and effect of  federal,  state,
local, foreign and other applicable tax laws.

Appraisal Rights

     Under  applicable  Nevada  law,  our  stockholders  do no have the right to
demand  appraisal of their shares in connection the approval by written  consent
of the  reverse  stock  split  or other  actions  that  may be  contemplated  in
connection with the acquisition of Arvilla pursuant to the merger.

Federal Securities Law Consequences

     Trans  Energy   shares  of  common  stock  to  be  issued  to  the  Arvilla
stockholders  in  connection  with the merger  agreement  will not be registered
under the Securities Act of 1933. It is intended that such shares will be issued
pursuant to private  placement  exemptions  available  under Section 4(2) and/or
Regulation D of the Securities Act. These shares are deemed  "restricted  stock"
and will bear an appropriate  restrictive  legend  indicating that the resale of
such shares may be made only pursuant to  registration  under the Securities Act
or pursuant to an available exemption from such registration.

                                      -22-


     After  completing the  acquisition of Arvilla,  we anticipate  that the our
common  stock will  continue  to be listed on the OTC  Bulletin  Board under the
trading  symbol  "TSRG."  Certain  of our  outstanding  shares of common  stock,
including those issued pursuant to the merger  transaction,  will be "restricted
securities" within the meaning of Rule 144 promulgated under the Securities Act.
Under the  provisions of Rule 144,  restricted  securities  may be sold into the
public market, subject to holding period, volume and other limitations set forth
under the Rule. In general,  under Rule 144 as currently in effect, a person (or
persons  whose shares are  aggregated)  who has  beneficially  owned  restricted
shares  for at least one year,  including  any person who may be deemed to be an
"affiliate,"  as defined under the Securities  Act, is entitled to sell,  within
any three-month period, an amount of shares that does not exceed the greater of:

     o   the average  weekly  trading  volume in the common  stock,  as reported
         through  the  automated  quotation  system of a  registered  securities
         association, during the four calendar weeks preceding such sale, or

     o   1% of the shares then outstanding.

     In order for a  stockholder  to rely on Rule 144,  Trans  Energy  must have
available  adequate current public  information with respect to our business and
financial status. A person who is not deemed to be an affiliate and has not been
an  affiliate  for the most recent  three  months,  and who has held  restricted
shares for at least two years would be  entitled to sell such shares  under Rule
144(k) without regard to the various resale limitations of Rule 144.

     Under  Rule 144,  the  one-year  holding  period  will  commence  as of the
effective  time of the  merger for the  stockholders  and  debenture  holders of
Arvilla who receive  shares of our common stock in the merger.  Sales under Rule
144 are also subject to manner of sale provisions and notice requirements and to
the availability of current public information about us.

            ANTICIPATED BUSINESS FOLLOWING THE ACQUISITION OF ARVILLA

Information Concerning Trans Energy, Inc.

     Business

     Following the  acquisition  of Arvilla,  in addition to the new business of
Arvilla we will continue our current business of the transporting, marketing and
producing  natural gas and oil and engaging in certain  limited  exploration and
development activities.

     Our business strategy is to economically increase reserves,  production and
the sale of gas and oil from  existing  and  acquired  properties  in the Powder
River Basin, Appalachian Basin and elsewhere, in order to maximize shareholders'
return over the long term. Our strategic location in West Virginia enables us to
actively pursue the acquisition and development of producing  properties in that
area that will  enhance our  revenue  base  without  proportional  increases  in
overhead costs.

     We operate oil and natural gas  properties and transport and market natural
gas through  our  transmission  systems in West  Virginia.  Although  management
desires to acquire  additional oil and natural gas properties and to become more
involved in exploration and development, this can only be accomplished if we can
secure future  funding.  Management  intends to continue to develop and increase
the  production  from oil and  natural gas  properties  that we  currently  own.
Although  we will  continue  to  transport  and market  natural  gas through our
pipelines,  there  are no  current  plans to  acquire  or to lay any  additional
pipeline.  Accordingly,  during 2003 we have sold approximately 7.6 miles of our
6-inch pipeline and  approximately  10 miles of our 4-inch pipeline for cash and
other  consideration.  In 2004, we sold approximately 3 miles of 6-inch pipeline
and approximately 5.7 miles of 4-inch pipeline.

                                      -23-


     Marketing

     We operate exclusively in the oil and gas industry.  Natural gas production
from wells owned by us is generally  sold to various  intrastate  and interstate
pipeline companies and natural gas marketing companies. Sales are generally made
on the spot market or under  short-term  contracts (one year or less)  providing
for variable or market sensitive prices.  These prices often are tied to natural
gas futures contracts as posted in national publications.

     Natural  gas  delivered  through  our  pipeline  network is sold  through a
contract  with  Sancho Oil and Gas  Corporation  to  Dominion  Hope Gas, a local
utility.  Some of the gas is sold at a fixed price on a year long basis and some
at a variable price per month per Mcf.  Under our contract with Sancho,  we have
the right to sell natural gas subject to the terms and  conditions  of a 20-year
contract,  as amended,  that  Sancho  entered  into with Hope Gas in 1988.  This
agreement  is a flexible  volume  supply  agreement  whereby we receive the full
price which Sancho  charges the end user less a $.05 per Mcf  marketing fee paid
to Sancho.  In  addition  to the  natural  gas  produced  by our wells,  we also
purchased approximately 500 Mcf of natural gas per day in 2003.

     We sell our oil production to third party  purchasers  under  agreements at
posted  field  prices.  These  third  parties  purchase  the oil at the  various
locations where the oil is produced.

     Although  management  believes  that  we are  not  dependent  upon  any one
customer,  our marketing arrangement with Sancho accounted for approximately 82%
of our revenue for the year ended December 31, 2003, and  approximately  26% for
the year ended December 31, 2002.  This  marketing  agreement is in effect until
September 1, 2008.

     Competition

     We are in direct  competition  with numerous oil and natural gas companies,
drilling and income  programs and  partnerships  exploring  various areas of the
Appalachian and Powder River Basins and elsewhere competing for customers.  Many
competitors are large, well-known oil and gas and/or energy companies,  although
no single entity dominates the industry. Many of our competitors possess greater
financial  and  personnel  resources  enabling them to identify and acquire more
economically  desirable energy producing  properties and drilling prospects than
us.  Additionally,  there is  competition  from other fuel choices to supply the
energy needs of consumers and industry.  Management believes that there exists a
viable  market  place  for  smaller  producers  of  natural  gas and oil and for
operators of smaller natural gas transmission systems.

     Recent Acquisition of Assets

     On November 5, 2004,  we  finalized  an  agreement  with Texas Energy Trust
Company,  having offices in Irving,  Texas  ("TETCO"),  whereby we acquired from
TETCO certain oil and gas leases and leasehold  interests  located in Wetzel and
Marion  Counties,   West  Virginia,   and  other  assets.  The  acquisition  was
accomplished by our wholly owned subsidiary,  Prima Oil Company, Inc., acquiring
from TETCO 100% of the issued and  outstanding  shares of Cobham Gas Industries,
Inc. Under the terms of the agreement,  we are acquiring certain wells,  leases,
pipelines, gas purchase agreements, oil hauling agreements,  equipment, right of
ways and  other  miscellaneous  items  related  to the  leases  located  in West
Virginia.  A total of 229 wells are being  acquired,  of which 98 are  currently
producing,  located on  approximately  15,000  leased  acres.  We also  acquired
certain vehicles and heavy equipment and various other drilling equipment.

     In consideration for the acquired property,  we are paying a purchase price
of $1,975,058,  of which approximately 25% is being paid in cash and the balance
in  244,633  shares  of  restricted  Trans  Energy  common  stock,  to be issued
following  effectiveness  of the reverse  stock split.  The shares are valued at

                                      -24-


$1,485,794.  Of the total  cash  payment  of  $489,264,  an  initial  payment of
$250,000  was  paid  at the  closing,  with  the  remaining  balance  to be paid
quarterly in equal  installments of $59,816  beginning January 1, 2005, with the
final payment due October 1, 2005.

     Government Regulation

     The oil and gas industry is  extensively  regulated  by federal,  state and
local  authorities.  The scope and  applicability  of  legislation is constantly
monitored for change and expansion.  Numerous agencies,  both federal and state,
have issued  rules and  regulations  binding on the oil and gas industry and its
individual members, some of which carry substantial penalties for noncompliance.
To date, these mandates have had no material effect on our capital expenditures,
earnings or competitive position.

     Legislation and implementing  regulations adopted or proposed to be adopted
by the Environmental Protection Agency ("EPA") and by comparable state agencies,
directly and indirectly,  affect our  operations.  We are required to operate in
compliance  with certain air quality  standards,  water  pollution  limitations,
solid  waste  regulations  and other  controls  related  to the  discharging  of
materials into, and otherwise protecting the environment. These regulations also
relate to the  rights of  adjoining  property  owners  and to the  drilling  and
production  operations  and  activities  in  connection  with  the  storage  and
transportation of natural gas and oil.

     We may be  required  to  prepare  and  present to  federal,  state or local
authorities data pertaining to the effect or impact that any proposed operations
may have upon the environment. Requirements imposed by such authorities could be
costly, time-consuming and could delay continuation of production or exploration
activities.  Further,  the  cooperation  of other  persons  or  entities  may be
required for us to comply with all environmental regulations.  It is conceivable
that future legislation or regulations may significantly  increase environmental
protection  requirements  and,  as a  consequence,  our  activities  may be more
closely regulated which could significantly  increase operating costs.  However,
management is unable to predict the cost of future compliance with environmental
legislation.  As of  the  date  hereof,  management  believes  that  we  are  in
compliance with all present environmental regulations.  Further, we believe that
our oil and gas  explorations  do not pose a  threat  of  introducing  hazardous
substances into the environment.  If such event should occur, we could be liable
under certain  environmental  protection  statutes and laws. We presently  carry
insurance for environmental liability.

     Our exploration and development  operations are subject to various types of
regulation at the federal,  state and local levels. Such regulation includes the
requirement of permits for the drilling of wells, the regulation of the location
and density of wells,  limitations on the methods of casing wells,  requirements
for surface use and restoration of properties upon which wells are drilled,  and
governing the abandonment and plugging of wells.

Exploration  and production  are also subject to property  rights and other laws
governing the correlative rights of surface and subsurface owners.

     We are subject to the  requirements of the  Occupational  Safety and Health
Act, as well as other state and local labor  laws,  rules and  regulations.  The
cost of compliance  with the health and safety  requirements  is not expected to
have a material impact on our aggregate  production expenses.  Nevertheless,  we
are unable to predict the ultimate cost of compliance.

     Although  past sales of natural gas and oil were  subject to maximum  price
controls,  such controls are no longer in effect. Other federal, state and local
legislation, while not directly applicable to us, may have an indirect effect on
the cost of, or the demand for, natural gas and oil.

                                      -25-


     Employees

     We currently employ seven people full-time, consisting of three executives,
one marketing and clerical  person,  and three  production  persons.  Management
presently anticipates hiring additional employees as business conditions warrant
and as funds are available.

     Facilities

     We currently occupy  approximately 4,000 square feet of office space in St.
Marys, West Virginia,  which we share with our subsidiaries,  Tyler Construction
Company  and  Ritchie  County  Gathering  Systems.  We  lease  an  aggregate  of
approximately  4,000 square feet from an unaffiliated third party under a verbal
arrangement for $1,400 per month,  inclusive of utilities.  Management  believes
that our  present  office  facilities  are  adequate  for our  current  business
operations.

     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:

     o   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.

     o   On January 15, 2003, a suit against us entitled Lario Oil & Gas Company
         vs. Trans  Energy,  Inc.  (Civil Action No. 24575) was initiated in the
         Sixth District Court of Campbell County, Wyoming. Lario's suit asks for
         $50,692.10  which it claims we owe for operating  fees on the Sagebrush
         #1 and #2 and the Pinon Fee #1 wells, operated by Lario and in which we
         have  working  interests.  We asked for a  complete  accounting  of all
         monies owed. Lario retained our share of monthly oil production  monies
         and applied  them to the amount  owed.  On August 23,  2004,  the court
         dismissed the action with prejudice.

     Registration under the Securities Exchange Act of 1934

     Trans Energy is registered  under the Securities  Exchange Act of 1934 and,
accordingly we are required to file certain  periodic,  annual and other reports
with the SEC.  Following the  acquisition  of Arvilla,  we will continue to be a
reporting  company under the Exchange Act and continue to file periodic  reports
and be subject to the proxy solicitation requirements of the Exchange Act. It is
anticipated that our common stock will not be listed on any national  securities
exchange or on The Nasdaq Stock  Market,  but will  continue to be listed on the
OTC Bulletin Board.

Arvilla, Inc.

     Following  the merger  transaction,  we will assume all of the  operations,
assets and liabilities of Arvilla,  Inc., a Nevada corporation that owns all the
membership  interests in Arvilla Oilfield  Services,  LLC. Arvilla is engaged in
providing  well  servicing,  workover  and  related  transportation  services to
independent oil and natural gas producers in the northeast  region of the United
States.  Arvilla 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.  Arvilla offers its services in Ohio,  Pennsylvania,  New York, Virginia,
Kentucky and West Virginia.
                                      -26-


     Typically,  Arvilla will provide a well  servicing or swab rig, the crew to
operate the rig, and such other specialized equipment as may be needed to meet a
customer's requirements. Arvilla also owns a fleet of equipment that provides:

     o   brine hauling and disposal;
     o   pipeline and facility construction;
     o   well location  preparation and lease road construction;
     o   oil hauling; and
     o   trucking of oilfield equipment, such as rigs, casings, tubing and rods.

     Arvilla's  operations were previously  conducted as Arrow Oilfield  Service
Company,  a division of Belden & Blake  Corporation  ("B&B"),  a privately  held
company  engaged  in the  exploration,  development  and  production  of oil and
natural gas reserve.  In June 2004,  Mr. and Mrs.  Smith acquired Arrow Oilfield
Services from B&B and created Arvilla  Oilfield  Services,  LLC as the operating
entity.  Mr. and Mrs. Smith then negotiated  with Trans Energy which  ultimately
led to  the  acquisition  of  Arvilla  by us and  the  execution  of the  merger
agreement and plan of reorganization.

     Arvilla's  principal  executive  offices are located at 7994 South Pleasant
Highway,  St. Marys,  West  Virginia  26170,  and its telephone  number is (304)
665-2652.

Strategy

     Management believes that the Appalachian Basin in the northeastern  portion
of the United States  provides  significant  opportunities  for  exploration and
production  companies to develop  reserves at shallow  depths.  Because  Arvilla
operates in Ohio, Pennsylvania,  New York, Virginia, Kentucky and West Virginia,
we feel  that  Arvilla's  well  servicing  operations  are  well  positioned  to
capitalize  on existing  market  opportunities  and  established  demand for its
services.

     Arvilla's service area is located within 500 miles of the major gas markets
for the United  States.  This  strategic  location is  important  as oil and gas
companies   develop  natural  gas  reserves  for  future   markets.   Management
anticipates that demand for natural gas will grow  significantly in the next few
years and, as a result of the demand,  it is expected  that there to be a marked
increase in drilling  activity in the  Appalachian  Basin served by Arvilla.  As
drilling activity increases,  the need for the services provided by Arvilla will
increase.  Every well drilled  requires service of the type that Arvilla is able
to  provide.  As the  drilling  activities  increase,  we expect  the demand for
Arvilla's services in its operation area will also increase.

Services

     Through  its  experienced  work force,  Arvilla is able to provide  various
services to the oil and gas industry that include:

     Trucking  services.  Arvilla  owns a  fleet  of  trucks  that  can  provide
customers with the ability to move equipment, tanks, drill pipe, and other types
of trucking  needs  necessary in the oil and gas  business.  Each time a well is
drilled,  all  drilling  equipment  must be moved by trucks from one site to the
next.  This  equipment  includes  generators,   water  pumps,  drill  pipe,  air
compressors, drilling rigs, and many other associated items used in drilling.

     Excavating equipment.  Arvilla provides dozer, excavators, and loaders that
are used to build access  roads,  cut drill sites for wells,  dig pits,  reclaim
drill sites  after  drilling  is  completed,  reclaim  access  roads,  and seed,
fertilize, lime, and mulch disturbed areas.

                                      -27-


     Service and swab rigs.  Arvilla  maintains  a fleet of 14 service  rigs and
swab rigs  capable of  servicing  wells up to 6,000 feet in depth.  This service
includes  running  pipe,  tubing,  rods,  and swabbing  capabilities.  All wells
drilled require services of this type.

     Brine and  water  hauling.  Arvilla  provides  a fleet of 20 vacuum  trucks
designed to deliver  water to drilling  rigs and fracs.  Arvilla  also hauls and
disposes of brine water from  producing  wells and disposes of pit water used in
well completions.

     Disposal  wells.  Arvilla has 14 brine  disposal  wells  located at various
locations in Ohio. These wells are used for the disposal of brine and pit water.

     Oil  hauling.  Arvilla  maintains a fleet of 6 oil tankers that pick up oil
from producers at the well site and delivers the oil to terminals, from which it
is shipped to refineries.

     Pipelines.  Arvilla has the  capability of  constructing  pipelines for the
delivery of natural gas or oil. Most wells  drilled  require  construction  of a
natural gas line to deliver gas from the well to a gathering system,  which will
ultimately take the gas to market.

Marketing

     Arvilla  markets its services  through its various office  locations.  Each
office has a designated  person who will market the services for that  offices's
given area. Currently,  the marketing is done from Canton, Ohio,  Pleasantville,
Pennsylvania and St. Marys,  West Virginia.  Arvilla  advertises its services in
oil and gas trade journals as well as direct verbal and written communication to
oil ad gas  companies  operating  in the areas  served by Arvilla.  Arvilla also
maintains  a web  site  that  will be  available  for  current  and  prospective
customers to review.  Brochures will also be prepared for distribution that will
explain those services available.

Facilities

     Arvilla currently operates out of facilities located in or near its service
areas.  Arvilla's corporate headquarters are located in St. Marys, West Virginia
and consist of a leased 6,400 square foot shop and office facility.  This office
manages work in West  Virginia,  Virginia,  and Kentucky.  Arvilla owns a 20,000
square foot office and shop  located on 39 acres in Canton,  Ohio,  that manages
most of  Arvilla's  work in Ohio and some in Western  Pennsylvania.  This office
reports to the main office in St.  Marys.  West  Virginia.  Arvilla  also uses a
leased shop and office located in Cambridge,  Ohio that manages work in Southern
Ohio and reports to the Canton, Ohio office. Further, Arvilla maintains a leased
shop and office  located in  Pleasantville,  Pennsylvania  that  manages work in
Pennsylvania  and New York and  reports to the main  office in St.  Marys,  West
Virginia.

Management

     Immediately  prior  to the  effective  time of the  merger,  our  board  of
directors will appoint two new directors, Clarence E. Smith and Rebecca L. Smith
and elect them as officers. Trans Energy's board currently consists of Robert L.
Richards,  Loren E. Bagley and William F. Woodburn.  Accordingly,  the following
persons will make up our board of directors and hold the  respective  offices as
indicated.

                                      -28-


     Name                         Age      Position
     ----                         ---      --------
     Robert L. Richards             59     President, CEO and Director
     Loren E. Bagley                62     Vice President and Director
     William F. Woodburn            62     Secretary / Treasurer and Director
     Clarence E. Smith              41     Vice President and Director
     Rebecca L. Smith               36     Director
----------------------------

     The business experience of each of the persons listed above during the past
five years is as follows:

     Robert L. Richards became a director and was appointed President and CEO in
September  2001.  From 1982 to the present,  he has been  President of Robert L.
Richards,  Inc.  as a  consulting  geologist  with 27  years  experience  in the
petroleum  industry.  He has also served as a geologist with Exxon,  exploration
geologist  with Union Texas  Petroleum,  and  regional  exploration  manager for
Carbonit  Exploration,  Inc. From 2000 to the present, he has been President and
CEO of Derma - Rx, Inc., a formulator and marketer of skin care products.  Also,
from 1992 to August 2000, Mr. Richards was CEO of Kaire Nutraceuticals,  Inc., a
developer and marketer of health and nutritional  products.  Mr. Richards served
as Vice President of Continental Tax Corporation from March 1989 to August 1992.
He has five and one-half  years  experience in the United States Air Force as an
Instructor Pilot. Mr. Richards holds a B.S. degree in geology from Brigham Young
University.

     Loren E. Bagley  served as our  President  and CEO from  September  1993 to
September  2001, at which time he resigned as President  and was appointed  Vice
President.  From 1979 to the present,  Mr. Bagley has been self -employed in the
oil and gas industry as president, CEO or vice president of various corporations
which he has either started or purchased,  including  Ritchie  County  Gathering
Systems,  Inc. Mr.  Bagley's  experience  in the oil and gas  industry  includes
acting as a lease agent, funding and drilling of oil and gas wells,  supervising
production of over 175 existing wells,  contract negotiations for purchasing and
marketing  of  natural  gas  contracts,   and  owning  a  well  logging  company
specializing in analysis of wells. Prior to becoming involved in the oil and gas
industry,  Mr.  Bagley was  employed by the United  States  government  with the
Agriculture  Department.  Mr. Bagley  attended Ohio University and Salem College
and earned a B.S. Degree.

     William F.  Woodburn has served as our Vice  President  from August 1991 to
September  2001,  at which time he resigned as Vice  President and was appointed
Secretary / Treasurer. Mr. Woodburn has been actively engaged in the oil and gas
business in various  capacities  for the past twenty  years.  For several  years
prior to 1991, Mr. Woodburn supervised the production of oil and natural gas and
managed the pipeline  operations of Tyler Construction  Company,  Inc. and Tyler
Pipeline,  Inc. Mr.  Woodburn is a stockholder  and serves as President of Tyler
Construction Company, Inc. He is also a stockholder of Tyler Pipeline, Inc. that
owns and  operates oil and gas wells in addition to natural gas  pipelines,  and
Ohio Valley Welding, Inc. that owns a fleet of heavy equipment that services the
oil and gas industry.  Prior to his involvement in the oil and gas industry, Mr.
Woodburn  was employed by the United  States Army Corps of Engineers  for twenty
four years and was  Resident  Engineer  on several  construction  projects.  Mr.
Woodburn  graduated  from  West  Virginia   University  with  a  B.S.  in  civil
engineering.

     Clarence E. Smith  graduated from St. Marys (West Virginia) High School and
the PRT  Technical  School in 1981.  He  started  Arvilla  Well  Service in 1981
providing well location construction and clean-up and wellhead hook-up services.
Mr. Smith expanded his business into pipeline  construction which became Arvilla
Pipeline  Construction Co.,  operating from Bristol,  Tennessee to Corning,  New
York. This business provides  construction  services to most large gas companies


                                      -29-


in the area such as Dominion Transmission, Equitrans, Columbia Natural Resources
and other smaller companies.  Arvilla Pipeline employees approximately 90 people
and can lay up to 20" inch diameter  pipe.  In the summer of 2004,  Clarence and
his wife Rebecca  purchased  Arrow  Oilfield  Services from the Belden and Blake
Corporation.  Arrow was renamed Arvilla Oilfield  Services,  LLC. Mr. Smith also
owns Arvilla  Rental & Equipment,  LLC and is registered  with the State of West
Virginia as an oil and gas producer.

     Rebecca L. Smith graduated from Harrisville  (West Virginia) High School in
1986 and then from the Wilma Boyd Travel School in Pittsburgh, Pennsylvania. She
was then employed as a travel agent in  Philadelphia.  Mrs. Smith joined Arvilla
Well  Service as a part-time  employee  in 1995  became a full-time  employee of
Arvilla  Pipeline in 2000. Mrs. Smith is currently part owner and vice president
of Arvilla Pipeline  Construction  Co., Inc. and is part owner and acting member
of Arvilla  Rental &  Equipment,  LLC and Arvilla  Oilfield  Services,  LLC. Her
responsibilities  include  supervising  all the offices and the pipeline shop as
well as  overseeing  the pipeline bid process.  She is also active in the public
relations  business  of both  companies  and  contributed  to the design of both
Arvilla's brochure and web site.

Employees

     Arvilla Oilfield  Services,  LLC has  approximately 103 full time employees
consisting of the following:

     o   38 rig hands that  operate or work  directly  on a service  rig or swab
         rig;
     o   20 truck drivers who drive various types of trucks that haul oil, brine
         or oilfield equipment;
     o   2  equipment   operators  who  operate   various  types  of  excavating
         equipment;
     o   11 roustabouts  who perform various types of labor work associated with
         oil and gas production such as setting tank  batteries,  meter runs and
         laying or repairing gas lines;
     o   10 mechanics  that repair and  maintain  all types of trucks,  rigs and
         equipment;
     o   4 clerical employees;
     o   6 managerial persons; and
     o   2 executives.

     Arvilla's  employees  are not members of any union,  nor have they  entered
into  any  collective   bargaining   agreements.   Arvilla   believes  that  its
relationship  with its employees is good. With the successful  implementation of
our business plan, we may seek  additional  employees in the next year to handle
anticipated  potential  growth.  We  anticipate  that  we  may  hire  additional
employees  in  the  areas  of  rig  operators,   truck  drivers,  mechanics  and
roustabouts.

     The following persons are considered key employees of Arvilla:

     Randy Ile. Mr. Ile is the rig  superintendent for Arvilla's Ohio region and
is primarily  responsible for the region's service and swag rig activity. He has
been with Arrow  Oilfield  Services  (which is now Arvilla)  since 1997. Mr. Ile
graduated  from high school in 1966 and served in the armed  forces from 1966 to
1969. From 1971 to 1977, he worked as a "roughneck"  (oilfield worker) for three
years  before  becoming a  driller.  Mr. Ile also  became a  toolpusher  for PEP
Drilling from 1977 to 1987 and then a drilling superintendent from 1987 to 1997.
He is a  member  of the Ohio  Oil & Gas  Association  and  completed  BOP  (???)
training in 1989.

                                      -30-


     James  Hawkins.  Mr. Hawkins is the supervisor of oil and water hauling for
Arvilla's Ohio region. He has been with Arrow Oilfield Services  (Arvilla) since
1982 when he was initially  hired as a rig hand.  While with Arrow,  Mr. Hawkins
has  been a  well  tender,  treat  truck  driver,  roustabout,  heavy  equipment
operator,  oil truck  driver  and  dispatcher  of  Arrow's  Ohio  Fluid  hauling
operations.

Competition

     Arvilla is in direct  competition  with  numerous  other  oilfield  service
companies  that  operate in the same areas in which  Arvilla  operates.  Some of
Arvilla's  competitors include Bishop Well Services,  Key Energy,  Triad, Carper
Well Services,  Danny Long and S & H Water Service.  Some existing and potential
competitors  have  greater  financial  resources,  larger  market share and more
customers  than  Arvilla,   which  may  enable  them  to  establish  a  stronger
competitive  position than we have. There is also much competition for qualified
personnel  that operate the  equipment  used in the oilfield  service  business.
Management  believes  that  Arvilla can  successfully  compete  with these other
businesses in securing trained personnel and additional customers.

                        FINANCIAL INFORMATION FOR ARVILLA

     Upon completion of the  acquisition of Arvilla,  we intend to file with the
SEC  a  Form  8-K  current  report  that  will  include  additional  information
concerning  Arvilla.  We also intend to file audited  financial  statements  for
Arvilla, that are expected to be ready for filing at the time of the closing the
merger agreement.  However, if the financial  statements have not been finalized
by the time we file the Form 8-K we are required to file the  statements  within
71 days  after the  report is  required  to be  filed.  Accordingly,  we are not
including  financial  statements,  audited or unaudited,  for Arvilla as part of
this information statement or are we including pro forma financial information.


                       WHERE YOU CAN FIND MORE INFORMATION

     As  required  by  law,  we file  annual  and  periodic  reports  and  other
information with the SEC. These reports and other information contain additional
information  about our company.  You can inspect and copy these materials at the
Securities and Exchange  Commission  public reference rooms at 450 Fifth Street,
N.W., Washington,  D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further
information on public  reference  rooms.  Some of this  information  may also be
accessed  on  the  World  Wide  Web  through  the  SEC's  Internet   address  at
"http://www.sec.gov."

     Statements  contained  in this  information  statement  or in any  document
incorporated into this information statement by reference regarding the contents
of any  contract or other  document are not  necessarily  complete and each such
statement is  qualified  in its entirety by reference to such  contract or other
document filed as an exhibit with the SEC.

     The SEC  allows  us to  incorporate  by  reference  into  this  information
statement  documents  we file with the SEC,  which  means  that we can  disclose


                                      -31-


important   information  by  referring  to  those  documents.   The  information
incorporated by reference into this information  statement is considered to be a
part of this information statement,  and later information that we file with the
SEC will update and supersede that information.  We incorporate by reference the
documents listed:

     o   our annual report on Form 10-KSB for the fiscal year ended December 31,
         2003;

     o   our quarterly  reports on Form 10-QSB for the quarters  ended March 31,
         June 30 and September 30, 2004; and

     o   our  current  reports  on Form 8-K  filed  on  September  23,  2004 and
         November 12, 2004.

     We  will  provide  without  charge,  upon  written  or  oral  request  by a
stockholder,  a copy of any and all of the documents referred to above that have
been, or may be,  incorporated by reference  herein.  Written requests should be
sent to our principal offices at 210 Second Street, P.O. Box 393,St. Marys, West
Virginia  26170,  attn:  William F.  Woodburn.  Oral requests may be made to our
principal offices, telephone number (304) 684-7053.

YOU SHOULD RELY ONLY ON THE  INFORMATION  CONTAINED OR INCORPORATED BY REFERENCE
INTO THIS  INFORMATION  STATEMENT.  THE DATE OF THIS  INFORMATION  STATEMENT  IS
DECEMBER  31,  2004.  WE HAVE NOT  AUTHORIZED  ANYONE  TO GIVE  ANY  INFORMATION
DIFFERENT FROM THE  INFORMATION  CONTAINED IN THIS  INFORMATION  STATEMENT.  YOU
SHOULD NOT ASSUME THAT THE  INFORMATION  CONTAINED OR  INCORPORATED BY REFERENCE
INTO THIS  INFORMATION  STATEMENT IS ACCURATE AS OF ANY LATER DATE THAN THE DATE
OF THE INFORMATION  STATEMENT,  AND THE MAILING OF THIS INFORMATION STATEMENT TO
STOCKHOLDERS WILL NOT CREATE ANY IMPLICATION TO THE CONTRARY.


                                        BY ORDER OF THE BOARD OF DIRECTORS

December 31, 2004                       /s/  WILLIAM F. WOODBURN
                                        ----------------------------------
                                        William F. Woodburn
                                        Secretary


                                      -32-


Appendix  A



                   MERGER AGREEMENT AND PLAN OF REORGANIZATION

         THIS MERGER AGREEMENT AND PLAN OR REORGANIZATION,  dated as of December
3, 2004  ("Agreement"),  by and among TRANS ENERGY,  INC., a Nevada  corporation
("Parent"),  TRANS  ENERGY  ACQUISITIONS,  INC.,  a  Nevada  corporation  and  a
wholly-owned  subsidiary  of  Parent  ("Subsidiary"),  ARVILLA,  INC.,  a Nevada
corporation (the "Target") (Subsidiary and Target being hereinafter collectively
referred to as the Constituent  Corporations") and CLARENCE E. SMITH and REBECCA
L. SMITH ("Controlling Shareholders").

         WHEREAS, the Boards of Directors of Parent,  Subsidiary and Target have
approved the acquisition of Target by Parent; and

         WHEREAS, the Boards of Directors of Parent,  Subsidiary and Target have
approved the merger of Subsidiary  into Target (the  "Merger"),  pursuant to the
Agreement and the  transactions  contemplated  herein,  in  accordance  with the
applicable  provisions of the statutes of the State of Nevada, which permit such
Merger; and

         WHEREAS, for federal income tax purposes, it is intended that
the Merger shall qualify as a reorganization  with the meaning of Section 368(a)
of the Internal Revenue Code of 1986, as amended (the "Code"); and

         WHEREAS,  each of the parties to this Agreement desires to make certain
representations,  warranties  and  agreements in connection  with the Merger and
also to prescribe various conditions thereto.

         NOW, THEREFORE,  THIS AGREEMENT WITNESSETH:  That for good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties agree as follows:

                                    ARTICLE I

                                   THE MERGER

         Section 1.1    The Merger.
                        ----------


                   (a) At the  Effective  Time (as  defined in Section  1.2) and
subject  to the terms and  conditions  of this  Agreement,  Subsidiary  shall be
merged into Target and the separate  existence  of  Subsidiary  shall  thereupon
cease, in accordance with the applicable  provisions of the general  corporation
laws of the State of Nevada,  Nevada Revised Statutes:  Chapters 78 and 92A (the
"NGCL").

                   (b) Target will be the  surviving  corporation  in the Merger
(sometimes referred to herein as the "Surviving  Corporation") and will continue
to be governed by the laws of the State of Nevada,  and the  separate  corporate
existence  of  Target  and  all  of  its  rights,  privileges,   immunities  and
franchises,  public  or  private,  and  all  its  duties  and  liabilities  as a
corporation organized under the NGCL, will continue unaffected by the Merger.

                                       1

                   (c) The Merger will have the effects specified by the NGCL.

         Section  1.2  Effective   Time.  As  soon  as   practicable   following
fulfillment  or waiver of the  conditions  specified in Article VII hereof,  and
provided that this  Agreement has not been  terminated or abandoned  pursuant to
Article IX hereof,  the  Constituent  Corporations  will cause a Certificate  of
Merger  (the  "Certificate  of  Merger")  to be  filed  with the  office  of the
Secretary of State of the State of Nevada as provided in Section  92A.200 of the
NGCL.  Subject to and in accordance  with the laws of the States of Nevada,  the
Merger will become  effective at the date and time the  Certificate of Merger is
filed with the office of the  Secretary  of State of the State of Nevada or such
later  time  or date as may be  specified  in the  Certificate  of  Merger  (the
"Effective  Time").  Each of the parties  will use its best efforts to cause the
Merger to be  consummated as soon as  practicable  following the  fulfillment or
waiver of the conditions specified in Article VII hereof.

                                   Article II

                            THE SURVIVING CORPORATION

         Section  2.1   Certificate  of   Incorporation.   The   Certificate  of
Incorporation  of Target as in effect  immediately  prior to the Effective  Time
shall be the Certificate of Incorporation of the Surviving Corporation after the
Effective Time.

         Section 2.2 Bylaws. The Bylaws of Target as in effect immediately prior
to the Effective Time shall be the Bylaws of the Surviving Corporation after the
Effective Time.

         Section 2.3 Board of Directors.  From and after the Effective Time, the
Board of Directors  of Target  shall be the Board of Directors of the  Surviving
Corporation.

                                   Article III

                        CONVERSION AND EXCHANGE OF SHARES

         Section 3.1  Conversion  and Exchange of Target  Parent and  Subsidiary
Shares in the Merger.  Pursuant to this  Agreement,  at the  Effective  Time, by
virtue of the  Merger  and  without  any action on the part of any holder of any
capital stock of Target, Parent or Subsidiary:

                   (a) all shares of Common Stock,  no par value,  of Subsidiary
("Subsidiary  Common  Stock") owned by Parent and any subsidiary of Parent shall
be converted into one thousand  (1,000) shares of Common Stock,  par value $1.00
per share, of Target ("Target Common Stock"); and

                   (b) all  shares  Target  Common  Stock  owned by  Controlling
Stockholders  and all other  stockholders  of Target  shall,  subject to Section
3.3(d) hereof,  be converted  into, and become  exchangeable  for, the number of
shares of validly issued,  fully paid and nonassessable  common stock, par value
$0.001 per share,  of Parent  ("Parent  Common  Stock") equal to the  Conversion
Ratio.  In this Agreement,  the term  "Conversion  Ratio" means a fraction,  the
numerator of which is equal to the number of whole shares of Parent Common Stock
which  represents  not less than  twenty-five  percent (25%) of the  authorized,
issued and outstanding  shares of Parent Common Stock immediately  following the
Effective Time and giving effect to the reverse stock split set forth in Section
6.3(b) below, PLUS 244,633;  and the denominator of which is equal to the number
of shares of Parent Common Stock authorized,  issued and outstanding immediately
following  the  Effective  Time and giving effect to the reverse stock split set
forth in Section 6.3(b) below, PLUS 244,633.  The  consideration  referred to in
this Section 3.1,  together with any cash payments in lieu of fractional  shares
as provided herein, is hereinafter referred to as the "Merger Consideration."

                                       2


         Section    3.2    Status   of    Target    and    Subsidiary    Shares.

                   (a) At the  Effective  Time,  by  virtue  of the  Merger  and
without any action on the part of any holder of any capital stock of Subsidiary,
each  issued  and  outstanding  share of  common  stock of  Subsidiary  shall be
converted into and exchanged for Target Common Stock as provided for herein.

                   (b) At the  Effective  Time,  by  virtue  of the  Merger  and
without  any  action on the part of any holder of any  capital  stock of Target,
each issued and  outstanding  share of common stock of Target shall be converted
into and exchanged for Parent Common Stock as provided for herein.

         Section 3.3 Exchange of Parent Capital Stock Certificates.

                   (a) On or  prior  to the  Closing  Date,  Parent  shall  make
available to the "Exchange Agent" the certificates representing shares of Parent
Common  Stock  required to effect the  exchange  referred to in Section  3.3(b).
Parent shall also make available to the Exchange Agent the cash required to make
the cash payments in lieu of  fractional  shares  referred to in Section  3.3(d)
below.  Shares of Parent  Common Stock into which shares of Target  Common Stock
shall be  converted  in the  Merger  shall be deemed to have been  issued at the
Effective  Time.  Shares of  Subsidiary  Common  Stock shall be converted in the
Merger  into  Shares  of  Target  Common  Stock and shall be deemed to have been
issued at the Effective Time.

                   (b) From and  after  the  Effective  Time,  each  holder of a
certificate   which   immediately   prior  to  the  Effective  Time  represented
outstanding  shares of Target  Common  Stock,  other than shares with respect to
which dissenters'  rights, if any, are granted by reason of the Merger under the
NGCL, shall be entitled to receive in exchange therefor,  upon surrender thereof
to the Exchange Agent, a certificate or certificates  representing the number of
whole shares of Parent  Common Stock into which such  holder's  shares of Target
Common  Stock were  converted  pursuant  to Section  3.1 and cash in lieu of any
fractional  shares of such Parent Common Stock pursuant to Section 3.3(e).  From
and after the Effective Time, Parent shall be entitled to treat the certificates
which  immediately  prior to the  Effective  Time  represented  shares of Target
Common Stock and which have not yet been  surrendered for exchange as evidencing
the ownership of the number of full shares of Parent Common Stock into which the
shares of Target Common Stock represented by such  certificates  shall have been
converted pursuant to Section 3.1, notwithstanding the failure to surrender such
certificates.  However,  notwithstanding  any other provision of this Agreement,
until holders or  transferees of  certificates  which  immediately  prior to the
Effective Time  represented  shares of Target Common Stock have surrendered them


                                       3


for exchange as provided herein,  no dividends shall be paid with respect to any
shares  represented by such  certificates  and no payment for fractional  shares
shall be made. Upon surrender of a certificate  which  immediately  prior to the
Effective  Time  represented  outstanding  shares of Target Common Stock,  there
shall be paid to the  holder of such  certificate  the  amount of any  dividends
which  theretofore  became  payable,  but  which  were not paid by reason of the
foregoing,  with  respect to the number of whole  shares of Parent  Common Stock
represented by the  certificate or certificates  issued upon such surrender.  If
any  certificate  for  shares of Parent  Common  Stock is to be issued in a name
other  than  that in  which  the  certificate,  which  immediately  prior to the
Effective  Time  represented  shares  of Target  Common  Stock,  surrendered  in
exchange  therefor is registered,  it shall be a condition of such exchange that
the person  requesting  such  exchange  shall pay any  transfer  or other  taxes
required  by reason of the  issuance of  certificates  for such shares of Parent
Common  Stock in a name  other  than that of the  registered  holder of any such
certificate surrendered.

                   (c) As soon as  practicable  after the  Effective  Time,  the
Exchange  Agent  shall  mail  to each  holder  of  record  of a  certificate  or
certificates   that   immediately   prior  to  the  Effective  Time  represented
outstanding   shares  of  Target   Common  Stock   (collectively,   the  "Target
Certificates")  (i) a form  letter of  transmittal  (which  shall  specify  that
delivery  shall be effected,  and risk of loss and title to Target  Certificates
shall pass,  only upon actual  delivery of Target  Certificates  to the Exchange
Agent)  and (ii)  instructions  for use in  effecting  the  surrender  of Target
Certificates in exchange for certificates  representing  shares of Parent Common
Stock.  Upon surrender of Target  Certificates  for cancellation to the Exchange
Agent,  together  with a duly  executed  letter of  transmittal  and such  other
documents  as the  Exchange  Agent  shall  require,  the  holder of such  Target
Certificates  shall be entitled to receive in  exchange  therefor a  certificate
representing  that number of whole shares of Parent  Common Stock into which the
shares of Target Common Stock represented by Target  Certificates so surrendered
shall have been converted  pursuant to the provisions of Section 3.1, and Target
Certificates so surrendered  shall forthwith be cancelled.  Notwithstanding  the
foregoing,  neither the Exchange Agent nor any party hereto shall be liable to a
holder of shares of Target Common Stock for any shares of Parent Common Stock or
dividends or distributions  thereon  delivered to a public official  pursuant to
applicable escheat laws.

                   (d) Notwithstanding any other provision of this Agreement, no
certificates  or scrip for  fractional  shares of Parent  Common  Stock shall be
issued upon the surrender for exchange of Target  Certificates  pursuant to this
Article  III in the Merger or upon any  exchange  made  pursuant  to Section 4.4
hereof and no Parent Common Stock dividend, stock split or interest shall relate
to any fractional security,  and such fractional interests shall not entitle the
owner  thereof to vote or to any other rights of a security  holder.  In lieu of
any such  fractional  shares,  each  holder  of  Target  Common  Stock who would
otherwise  have been  entitled to a fraction of a share of Parent  Common  Stock
upon surrender of Target  Certificates for exchange pursuant to this Article III
shall be entitled to receive from the  Exchange  Agent a cash payment in lieu of
such fractional share equal to such fraction multiplied by the Valuation Price.

         Section 3.4 Dissenting Shares. Notwithstanding anything to the contrary
contained  in this  Agreement,  holders  of shares of Target  Common  Stock with
respect to which dissenters' rights, if any, are granted by reason of the Merger
under the NGCL and who do not vote in favor of the Merger and  otherwise  comply
with the NGCL ("Target Dissenting  Shares"),  shall not be entitled to shares of

                                       4


Parent Common Stock pursuant to Section 3.1, unless and until the holder thereof
shall have failed to perfect or shall have  effectively  withdrawn  or lost such
holder's  right to dissent from the Merger under the NGCL, and shall be entitled
to receive  only the payment  provided  for  pursuant  to the NGCL.  If any such
holder shall have failed to perfect or shall have effectively  withdrawn or lost
such holder's dissenters' rights under the NGCL, such holder's Target Dissenting
Shares shall  thereupon be deemed to have been converted into and to have become
exchangeable  for,  as of the  Effective  Time,  the right to receive the Merger
Consideration.

         Section  3.5  Closing of Transfer  Books.From  and after the  Effective
Time,  the stock  transfer  books of Target  shall be closed and no  transfer of
shares of Target Common Stock shall  thereafter be made. If, after the Effective
Time, Target  Certificates are presented to Parent,  they shall be cancelled and
exchanged for the Merger  Consideration  in accordance  with the  procedures set
forth in this Article III.

         Section 3.6  Closing.The  closing (the  "Closing") of the  transactions
contemplated  by this  Agreement  shall take place (a) at the  offices of Bowles
Rice McDavid Graff & Love, LLP, 501 Avery Street, Fifth Floor, Parkersburg, West
Virginia 26101,  at 8:00 a.m.,  local time, on the later of (i) January 7, 2005,
and (ii) the second  business day  immediately  following  the date on which the
last of the  conditions  set forth in Article VII hereof is fulfilled or waived,
or (b) at such  other time and place and on such other date as Parent and Target
shall agree (the "Closing Date").

                                   ARTICLE IV

                      [THIS ARTICLE INTENTIONALLY OMITTED]

                                    ARTICLE V

                         REPRESENTATIONS AND WARRANTIES

         Section 5.1 General Statement. The parties make the representations and
warranties  to each other which are set forth in this Article V. The survival of
all such representations and warranties shall be in accordance with Section 10.1
hereof.  All  representations  and warranties of the parties are made subject to
the  exceptions  which are noted in the  respective  schedules  delivered by the
parties to each other  concurrently  herewith and  identified as, in the case of
Section 5.2, the "Parent  Disclosure  Schedule," and in the case of Section 5.3,
the "Target  Disclosure  Schedule."  Copies of all  documents  referenced in the
Parent  Disclosure  Schedule  (other than documents filed by the Parent with the
Securities  and Exchange  Commission  pursuant to the  Securities Act of 1933 as
amended  (the  "Securities  Act") or the  Securities  Exchange  Act of 1934,  as
amended (the "Exchange  Act")) of Target  Disclosure  Schedule shall be attached
thereto.

         Section 5.2  Representations  and Warranties of Parent and  Subsidiary.
Parent and  Subsidiary  (collectively,  for  purposes of this  Section  5.2, the
"Corporations") jointly and severally represent and warrant to Target, as of the
Date hereof and at the Effective Time, as follows:

                                       5


                   (a)  Organization  and Corporate  Power. The Corporations are
both  corporations  duly incorporated and validly existing under the laws of the
State of Nevada and the  Corporations  are  qualified  to do  business  in every
jurisdiction  in which  their  respective  ownership  of  property or conduct of
business requires it to qualify.  The Corporations have all requisite  corporate
power and  authority  and all  material  licenses,  permits  and  authorizations
necessary to own and operate their  respective  properties and to carry on their
respective businesses as now conducted. The copies of the Corporations' articles
of  incorporation  and bylaws have been  furnished to the Target and such copies
reflect  all  amendments  made  thereto  at any  time  prior to the date of this
Agreement and such copies are correct and complete.

                   (b) Capital Stock and Related Matters. The authorized capital
stock of the Parent consists of 500,000,000  Shares having a par value of $0.001
each,  496,566,131  of which are issued and  outstanding,  and no other  shares,
common or  otherwise,  of the Parent are issued  and  outstanding.  The  parties
mutually  agree that prior to the Effective  Time,  Parent will effect a reverse
stock split of its issued and outstanding  shares of common stock on a one share
for 150 shares basis. The authorized capital stock of the Subsidiary consists of
25,000  Shares having no par value,  1,000 of which are issued and  outstanding,
and all such  Shares of  Subsidiary  are owned by Parent,  and no other  shares,
common or otherwise, of the Subsidiary are issued and outstanding. Except as set
forth on Schedule 5.2(b) hereof,  the  Corporations do not have  outstanding and
have not  agreed,  orally  or in  writing,  to issue any  shares  or  securities
convertible or  exchangeable  for any shares,  nor do they have  outstanding nor
have they  agreed,  orally or in  writing,  to issue  any  options  or rights to
purchase or  otherwise  acquire  their  shares.  Except as set forth on Schedule
5.2(b) hereof, the Corporations are not subject to any obligation (contingent or
otherwise) to repurchase or otherwise acquire or retire any of their shares. The
Corporations have not violated any applicable  securities laws or regulations in
connection with the offer or sale of their securities other than violations that
have been,  or will before the Closing  have been,  corrected  by  post-issuance
filings.  All of the outstanding  shares of the Corporations'  capital stock are
validly issued,  fully paid and nonassessable.  At the Effective Time the Target
Stockholders will have, good and marketable title to the Parent Shares, free and
clear of all security  interests,  liens,  encumbrances or other restrictions or
claims,  subject only to restrictions as to marketability  imposed by securities
laws.  The  Corporations  have not violated nor will not violate any  applicable
securities laws in connection with the offer or sale of the Parent Shares to the
Target Stockholders hereunder.

                   (c) Authorization. The execution, delivery and performance by
the Corporations of this Agreement and all other agreements  contemplated hereby
to which the Target or the Controlling  Stockholders  are a party have been duly
and validly  authorized by all necessary  corporate action of the  Corporations,
and this Agreement and each such other agreement, when executed and delivered by
the parties thereto,  will constitute the legal, valid and binding obligation of
the  Corporations  enforceable  against  both of them in  accordance  with their
terms,  except  as  enforceability  may be  limited  by  applicable  bankruptcy,
insolvency  and similar  statutes  affecting  creditors'  rights  generally  and
judicial limits on equitable remedies.

                   (d) Governmental Authorities. Except as set forth in Schedule
5.2(d),  (i) neither  Parent nor  Subsidiary  are required to submit any notice,
report  or other  filing  with  any  governmental  or  regulatory  authority  in
connection  with the  execution  and delivery by them of this  Agreement and the
consummation of this merger and (ii) no consent,  approval or  authorization  of


                                       6


any  governmental  or  regulatory  authority  is  required to be obtained by the
Parent,  Subsidiary,  or any  affiliate  in  connection  with  their  execution,
delivery and performance of this Agreement and the consummation of this merger.

                   (e) No Conflict with Other Instruments or Agreements.  Except
as set forth on Schedule 5.2(e), the execution,  delivery and performance by the
Parent or Subsidiary of this  Agreement  and all other  agreements  contemplated
hereby to which they are a party will not result in a breach or violation of, or
constitute a default under,  Parent's or Subsidiary's  Articles of Incorporation
or Bylaws or any  material  agreement  to which the Parent or  Subsidiary  are a
party or by which any of them are bound.

                   (f) Conduct of Business;  Liabilities. Except as set forth in
Schedule  5.2(f),  neither  of the  Corporations  is in  default  under,  and no
condition exists that with notice or lapse of time would constitute a default of
either of the Corporations under (i) any mortgage,  loan agreement,  evidence of
indebtedness or other  instrument  evidencing  borrowed money to which either of
the  Corporations  are a party or by which the Corporations or the properties of
the  Corporations  are bound or (ii) any  judgment,  order or  injunction of any
court,  arbitrator or governmental  agency that would  reasonably be expected to
affect materially and adversely the business,  financial condition or results of
operations of the Corporations taken as a whole.

                   (g) No Brokers or  Finders.  Except as set forth in  Schedule
5.2(g), there are no claims for brokerage commissions,  finders' fees or similar
compensation in connection with the transactions  contemplated by this Agreement
based on any  arrangement  or  agreement  made by or on  behalf of either of the
Corporations.

                   (h) Securities  Disclosures.  Parent and Subsidiary have made
all required filings with the federal Securities and Exchange Commission and all
state  securities  regulatory  bodies;  and  all  material  statements  of  fact
disclosed  therein are true and  complete,  and they do not fail to disclose any
material statement of fact required to make such statements true and complete.

                   (i) Absence of Certain  Changes.  Except as  contemplated  or
permitted  by this  Agreement  or as  described  in Schedule  5.2(i),  since the
Statement Date there has not been:

                            (A) Any  material  adverse  change in the  business,
financial condition, operations or assets of the Corporations;

                            (B) Any damage, destruction or loss, whether covered
by insurance or not materially adversely affecting the properties or business of
the Corporations;

                            (C) Any sale or transfer by the  Corporations of any
tangible or intangible asset other than in the ordinary course of business,  any
mortgage or pledge or the creation of any security interest, lien or encumbrance
on any such asset, or any lease of property, including equipment, other than tax
liens with  respect to taxes not yet due and  contract  rights of  customers  in
inventory;

                                       7


                            (D) Any  declaration,  setting aside or payment of a
distribution  in  respect  of or  the  redemption  or  other  repurchase  by the
Corporations of any stock of either of the Corporations;

                            (E) Any  material  transaction  not in the  ordinary
course of businesses of the Corporations;

                            (F) The  lapse of any  material  trademark,  assumed
name,  trade name,  service mark,  copyright or license or any application  with
respect to the foregoing;

                            (G) The grant of any increase in the compensation of
officers  or  employees  (including  any such  increase  pursuant  to any bonus,
pension,  profit-sharing  or other plan)  other than  customary  increases  on a
periodic basis or required by agreement or  understanding in the ordinary course
of business and in accordance with past practice;

                            (H) The  discharge or  satisfaction  of any material
lien or encumbrance or the payment of any material  liability other than current
liabilities in the ordinary course of business;

                            (I) The  making of any  material  loan,  advance  or
guaranty  to or for the  benefit of any person  except the  creation of accounts
receivable in the ordinary course of business; or

                            (J) An agreement to do any of the foregoing.

                   (j) Disclosure.  All matters  required to be disclosed by the
Corporations hereunder shall be made to Target and the Controlling  Stockholders
in  writing  no later  than  thirty  (30) days  prior to the  Closing  Date (the
"Corporations'  Disclosure  Schedule").  Neither this  Agreement  nor any of the
schedules,  attachments,  written statements,  documents,  certificates or other
items prepared or supplied to the Target or the  Controlling  Stockholders by or
on behalf of the  Corporations  with  respect to this merger  contain any untrue
statement  of a material  fact or omit a material  fact  necessary  to make each
statement contained herein or therein not misleading.  No responsible officer or
director of either of the  Corporations  has  intentionally  concealed  any fact
known by such person to have a material  adverse  effect upon the  Corporations'
existing or expected financial condition,  operating results,  assets,  customer
relations, employee relations or business prospects taken as a whole.

                   (k)  Financial  Statements.  The  audited  balance  sheet and
income  statement  of the  Corporations  as of December  31,  2003,  in the form
attached to this Agreement as Exhibit 5.2(k)(A) and the income statement for the
period  ending  December 31,  2003,  in the form  attached to this  Agreement as
Exhibit  5.2(k)(B)  (collectively  the  "2003  Financial  Statements"),   fairly
presents the financial position of the Corporations as at December 31, 2003, and
has been prepared in accordance with generally accepted  accounting  principles,
consistently  applied,  and in a  manner  substantially  consistent  with  prior
financial  statements  of the  Corporations.  The  unaudited,  balance sheet and
income statement of the Corporations as at September 30, 2004, and for the month
then ended,  in the form attached  hereto as Exhibit  5.2(k)(C)  ("September 30,
2004  Financial  Statements"),  fairly  present  the  financial  position of the


                                       8


Corporations  as at  September  30, 2004 and the results of  operations  for the
three  months then ended and have been  prepared in  accordance  with  generally
accepted   accounting   principles   consistently   applied   and  in  a  manner
substantially  consistent  with  the  2003  Financial  Statements,   except  for
differences resulting from normally occurring audit adjustments,  including, but
not  limited  to,  income tax and tax  accrual  adjustments,  or as noted in the
September  30,  2004  Financial  Statements  or the  notes  thereto.  Except  as
contemplated by or permitted under this Agreement, there are no adjustments that
would be required on review of the September 30, 2004 Financial  Statements that
would,  individually or in the aggregate,  have a material  negative effect upon
the Corporations' reported financial condition.

                   (l) No Undisclosed  Liabilities.  Except for (i)  liabilities
and  obligations  incurred in the ordinary course of business since December 31,
2003  ("Statement  Date"),  and (ii)  liabilities  or  obligations  described in
Schedule  5.2(l),  neither  the  Corporations  nor  any of the  property  of the
Corporations  is  subject  to any  material  liability  or  obligation  that was
required to be included or adequately reserved against in the September 30, 2004
Financial  Statements or described in the notes thereto and was not so included,
reserved against or described.

                   (m)  Title  and  Related  Matters.  Except  as set  forth  in
Schedule 5.2(m), the Corporations have good and marketable title to all of their
respective  properties,  real and  personal,  and other  assets  included in the
September 30, 2004 Financial  Statements  (except  properties and assets sold or
otherwise disposed of subsequent to the Statement Date in the ordinary course of
business or as contemplated in this  Agreement),  free and clear of all security
interests,  mortgages,  liens, pledges,  charges,  claims or encumbrances of any
kind or  character,  except  (i)  statutory  liens  for  property  taxes not yet
delinquent or payable  subsequent to the date of this Agreement and statutory or
common law liens  securing the payment or  performance  of any obligation of the
Corporations,  the payment or performance of which is not delinquent, or that is
payable  without  interest  or  penalty  subsequent  to the date on  which  this
representation  is given,  or the  validity of which is being  contested in good
faith by the Corporations; (ii) the rights of customers of the Corporations with
respect to inventory under orders or contracts  entered into by the Corporations
in the ordinary  course of business;  (iii) claims,  easements,  liens and other
encumbrances  of record  pursuant  to  filings  under  real  property  recording
statutes;  and  (iv) as  described  in the  Unaudited  Statements  or the  notes
thereto.

                   (n) Litigation. Except as set forth in Schedule 5.2(n), there
are no material actions, suits,  proceedings,  orders,  investigations or claims
pending  or,  to the best of the  Corporations'  knowledge,  overtly  threatened
against  either of the  Corporations  or any  property  of either,  at law or in
equity, or before or by any governmental department,  commission, board, bureau,
agency or  instrumentality;  the Corporations are not subject to any arbitration
proceedings under collective  bargaining agreements or otherwise or, to the best
of the Corporations'  knowledge,  any governmental  investigations or inquiries;
and, to the best  knowledge of boards of directors and  responsible  officers of
the Corporations, there is no basis for any of the foregoing.

                   (o) Tax Matters.  Except as set forth on Schedule 5.2(o), (i)
the Corporations  have prepared in a substantially  correct manner and has filed
all  federal,  state,  local and foreign  tax  returns  and  reports  heretofore
required to be filed by them and have paid all taxes shown as due  thereon;  and


                                       9


(ii) no taxing  authority has asserted any  deficiency in the payment of any tax
or informed the Corporations that it intends to assert any such deficiency or to
make any audit or other  investigation  of either  of the  Corporations  for the
purpose of determining  whether such a deficiency should be asserted against the
Corporations.

                   (p)  Compliance  with  Laws.  The  Corporations  are,  in the
conduct of their respective businesses, in substantial compliance with all laws,
statutes,  ordinances,  regulations,  orders, judgments or decrees applicable to
them,  the  enforcement  of which,  if the  Corporations  were not in compliance
therewith,  would have a  materially  adverse  effect on the  businesses  of the
Corporations, taken as a whole. The Corporations have not received any notice of
any  asserted  present or past failure by either of the  Corporations  to comply
with such laws, statutes, ordinances, regulations, orders, judgments or decrees.

                   (q)  Insurance.  Schedule  5.2(q)  contains  a list  of  each
insurance policy maintained by the Corporations with respect to their respective
properties,  assets and  businesses,  and each such  policy is in full force and
effect.  The  Corporations  are not in  material  default  with  respect  to its
obligations  under any such policy  maintained by it. The Corporations  have not
been notified of the  cancellation  of any of the insurance  policies  listed on
Schedule  5.2(q) or of any  material  increase in the premiums to be charged for
such insurance policies.

                   (r)  Employees  and Labor  Relations  Matters.  Except as set
forth in Schedule 5.2(r) or as provided in this Agreement, no employee of either
of the  Corporations  is in  violation of any  material  term of any  employment
contract,  patent  disclosure  agreement  or any  other  contract  or  agreement
relating to the relationship of such employee with the Corporations or any other
party  because of the nature of the  businesses  conducted or to be conducted by
either of the  Corporations.  Each employee of the  Corporations  with access to
confidential or proprietary  information has executed, or in the ordinary course
will execute, a proprietary  information  agreement  obligating such employee to
hold confidential the Corporations'  proprietary  information.  The Corporations
are not  aware  that any  officer  or key  employee,  or that  any  group of key
employees,  intends  to  terminate  his or its  employment  with  either  of the
Corporations,  nor do the Corporations have a present intention to terminate the
employment of any key employee.  The Corporations  have in all material respects
complied with all applicable state and federal laws related to employment.

                   (s)  Power of  Attorney.  Except  as set  forth  in  Schedule
5.2(s),  no material  power of attorney  or similar  authorization  given by the
Corporation is presently in effect.

                   (t)  Accounts  Receivable.  All  accounts  receivable  of the
Corporations  reflected in the September 30, 2004 Financial Statements represent
bona fide sales actually made in the ordinary course of business.

                   (u) Agreements and  Commitments.  Schedule  5.2(u) contains a
complete  and  accurate  list  of  each  agreement,   contract,  instrument  and
commitment (including license agreements) to which either of the Corporations is
a party that  provides  for payments in excess of $10,000 per year or whose term
is in excess of one year and is not  cancelable  upon 30 or fewer  days'  notice
without any liability, penalty or premium, other than a nominal cancellation fee


                                       10


or charge ("Third Party Agreements").  Except as otherwise set forth in Schedule
5.2(u),  the  Corporation  is not in  material  default  under any  Third  Party
Agreements,  nor does there exist any event that,  with notice or the passage of
time or both,  would constitute a material default or event of default by either
of the Corporations under any Third Party Agreements.

                   (v) Personal Property.  Without material exception,  Schedule
5.2(v) contains lists of all tangible personal property and assets owned or held
by the  Corporations  and used or useful in the conduct of the businesses of the
Corporations.  Except as set forth in Schedule 5.2(v),  the Corporations own and
have good title to such properties and none of such properties is subject to any
security interest,  mortgage,  pledge, conditional sales agreement or other lien
or  encumbrance  (except for liens for current  taxes,  assessments,  charges or
other  governmental  levies  not yet due and  payable).  The  Corporations  have
delivered to the Target and the  Controlling  Stockholders  copies of all leases
and  other  agreements   relating  to  property  described  in  Schedule  5.2(v)
(including  any and all amendments  and other  modifications  to such leases and
other  agreements) all of which are valid and binding,  and the Corporations are
not in material default under any such leases or agreements. Except as set forth
in Schedule 5.2(v), all material properties listed therein are generally in good
operating condition and repair (ordinary wear and tear excepted), are performing
satisfactorily,  and are  available  for  immediate  use in the  conduct  of the
businesses  and  operations  of the  Corporations.  All such  tangible  personal
property is in compliance in all material respects with all applicable statutes,
ordinances,  rules and  regulations.  The properties  listed in Schedule  5.2(v)
include  substantially all such properties necessary to conduct the business and
operations of the Corporation as now conducted.

                   (w) Real  Property.  Schedule  5.2(w)  contains a list of all
real property  currently owned or leased by the  Corporations and used or useful
in the conduct of the business  operations  of the  Corporations.  Except as set
forth in Schedule 5.2(w),  the Corporations  have good and marketable fee simple
title,  insurable at standard  rates,  to all of their  respective real property
listed  as owned in  Schedule  5.2(w)  free and clear of all  liens,  mortgages,
pledges, covenants,  easements,  restrictions,  leases, charges and other claims
and encumbrances of any nature whatsoever,  and without reservation or exclusion
of any  mineral,  timber or other  rights or  interests,  except  liens for real
estate taxes, assessments, charges, or other governmental levies not yet due and
payable and except for easements, rights of way, and restrictions of record. The
Corporations  have  delivered  to the  Target and the  Controlling  Stockholders
copies of all leases listed in Schedule 5.2(w) (including any and all amendments
and other modifications of such leases), which leases are valid and binding. The
Corporations  are not in material  default  under any such leases.  All property
listed in Schedule 5.2(w)  (including  improvements  thereon) is in satisfactory
condition  and repair  consistent  with its  present  use and is  available  for
immediate use in the conduct of the  businesses of the  Corporations.  Except as
set forth in Schedule 5.2(w),  none of the property listed in Schedule 5.2(w) or
subject to leases listed in Schedule 5.2(w) violates in any material respect any
applicable  building or zoning code or regulation of any governmental  authority
having  jurisdiction.  The  property  and leases  described  in Schedule  5.2(w)
include  all such  property  or  property  interests  necessary  to conduct  the
businesses and operations of the Corporations as they are presently conducted.

                                       11


                   (x) Personnel. Schedule 5.2(x) sets forth a true and complete
list of:

                            (A) The names,  title and  current  salaries  of all
officers of the Corporations;

                            (B) The names of all directors of the Corporations;

                            (C) The wage rates (or ranges,  if  applicable)  for
each  class of exempt  and  nonexempt,  salaried  and  hourly  employees  of the
Corporations;

                            (D)  All  scheduled  or  contemplated  increases  in
compensation or bonuses; and

                            (E)   All   scheduled   or   contemplated   employee
promotions.

                   (y) Intellectual  Property.  The Corporations (i) own or have
the right to use, free and clear of all liens, charges, claims and restrictions,
those patents, trademarks, service marks, trade names, copyrights,  licenses and
other  intellectual  property  rights  necessary  for  the  operation  of  their
respective  businesses now conducted or presently proposed to be conducted,  and
(ii) to their knowledge, and except for the payments required in connection with
those patents, trademarks, service marks, trade names, copyrights,  licenses and
other intellectual  property rights listed on Schedule 5.2(y), are not obligated
or under any liability whatsoever to make any payments by way of royalties, fees
or  otherwise  to any owner or licensee  of, or other  claimant  to, any patent,
trademark,  service mark, trade name,  copyright or other intangible asset, with
respect to the use thereof or in connection with the conduct of their respective
business or otherwise.  To the knowledge of the  Corporations,  the Corporations
have not infringed upon nor is it infringing upon any patent, trademark, service
mark, trade name,  copyright or other intellectual  property of any third party.
The  Corporations  are not aware of any violation by a third party of any of the
Corporations'  patents,  licenses,   trademarks,  service  marks,  trade  names,
copyrights, trade secrets or other proprietary rights.

                   (z) Environmental Issues.

                            (A)  Except as set  forth in  Schedule  5.2(z),  the
Corporations are in compliance with all  Environmental  Laws and the Corporation
has obtained all permits  required  under the  Environmental  Laws in connection
with the construction, ownership and operation of its business. The Corporations
have not  received,  nor are they aware of,  any notice of any past,  present or
anticipated  future  events,  conditions,  activities,   investigations,  plans,
studies or proposals  which (i) would  interfere  with or prevent  compliance by
Corporation with any  Environmental  Law, or (b) may give rise to any common law
or statutory  liability,  or otherwise form the basis of a claim,  action, suit,
proceeding,  investigation or hearing, involving the Corporations and related in
any way to Hazardous Substances or Environmental Laws.

                            (B)  Except  as set  forth on  Schedule  5.2(z),  no
Hazardous Substance has been disposed of, spilled,  leaked or otherwise released
on, in, under,  or from, or otherwise come to be located in the soil or water on
or  under,  the  real  property  owned,  leased  or  otherwise  occupied  by the


                                       12


Corporations,  now or in the past.  Except as set forth in Schedule 5.2(z),  all
wastes   generated  in  connection  with  the  Corporation  are  and  have  been
transported  to and  disposed of at an  authorized  waste  disposal  facility in
compliance with all Environmental  Laws. Except as set forth in Schedule 5.2(z),
none of the  Corporations'  real or personal  properties have  incorporated into
them  any  lead-based  paint,  urea  formaldehyde  foam  insulation,   asbestos,
polychlorinated  biphenyls or any other Hazardous  Substance that is prohibited,
restricted  or regulated  when  present in  buildings,  structures,  fixtures or
equipment.  Except as set forth in Schedule  5.2(z),  the  Corporations  are not
liable under any Environmental Law for remedial, removal, investigation or other
response  costs,  natural  resources  damages or other claims arising out of the
release or threatened  release of any  Hazardous  Substance at any real property
owned,  leased or otherwise  occupied by the  Corporations  or at any other real
property site, now or in the past, and no basis exists for any such liability.

                            (C) Except as set forth in  Schedule  5.2(z),  there
are no  underground  storage  tanks (in or out of service) on any real  property
owned, leased or otherwise occupied by the Corporations.

                            (D)  Except as set  forth on  Schedule  5.2(z),  the
Corporations  have disclosed and made available to the Target true,  correct and
complete copies or results of any and all studies, reports,  monitoring,  tests,
analysis,  correspondence  with governmental  agencies or other documents in its
possession  or  initiated  by  the   Corporations  or  otherwise  known  to  the
Corporations  and  pertaining  to the  existence  or  Hazardous  Substances,  to
compliance  with  Environmental  Laws  or to  any  other  environmental  concern
relating to the Corporations.

                            (E) For purposes of this  Agreement,  "Environmental
Laws" shall mean any federal,  state or local  statute,  ordinance or regulation
pertaining  to the  protection  of  human  health  or the  environment  and  any
applicable orders, decrees, permits, judgments, licenses or other authorizations
or mandates under such statutes, ordinances or regulations.

                            (F)  For  purposes  of  this  Agreement,  "Hazardous
Substance" shall mean any toxic, infectious, hazardous or radioactive substance,
pollutant,  contaminant, material or waste as defined, listed or regulated under
any Environmental Law.

                   (aa) ERISA and Related Matters  Schedule 5.2(aa) sets forth a
description  of all  "Employee  Welfare  Benefit  Plans" and  "Employee  Pension
Benefit  Plans"  (as  defined  in  ss.ss.  3(1) and 3(2),  respectively,  of the
Employee  Retirement Income Security Act of 1974, as amended ("ERISA")) existing
on the date hereof that are or have been  maintained  or  contributed  to by the
Corporation.  Except as listed on Schedule 5.2(aa),  neither of the Corporations
maintains any  retirement or deferred  compensation  plan,  savings,  incentive,
stock option or stock purchase plan,  unemployment  compensation plan,  vacation
pay, severance pay, bonus or benefit  arrangement,  insurance or hospitalization
program or any other fringe benefit arrangement for any employee,  consultant or
agent of either of the Corporations,  whether pursuant to contract, arrangement,
custom or informal understanding, which does not constitute an "Employee Benefit
Plan" (as defined in ss. 3(3) of ERISA), for which the Corporations may have any
ongoing material  liability after Closing.  The Corporations do not maintain nor
have they ever contributed to any Multiemployer  Plan as defined by ss. 3(37) of
ERISA. The  Corporations do not currently  maintain any Employee Pension Benefit

                                       13


Plan subject to Title IV of ERISA. There have been no "prohibited  transactions"
(as  described  in ss. 406 of ERISA or ss. 4975 of the Code) with respect to any
Employee Pension Benefit Plan or Employee Welfare Benefit Plan maintained by the
Corporations  as to which the  Corporations  have been party a party.  As to any
employee pension benefit plan listed on Schedule 5.2(aa) and subject to Title IV
of ERISA,  there have been no reportable  events (as such term is defined in ss.
4043 of ERISA).

                   (bb) Operating  Rights.  The Corporations  have all operating
authority,  licenses, franchises,  permits,  certificates,  consents, rights and
privileges  (collectively  "Licenses")  as are necessary or  appropriate  to the
operation of its business as now  conducted  and as proposed to be conducted and
which the failure to possess would have a material adverse effect on the assets,
operations or financial condition of the Corporations. Such Licenses are in full
force and effect,  no violations have been or are expected to have been recorded
in respect of any such  licenses,  and no proceeding  is pending,  or threatened
that could result in the  revocation  or limitation  of any such  licenses.  The
Corporations  have conducted their respective  businesses so as to comply in all
material respects with all such Licenses.

                   (cc)  Transactions  with  Affiliates.  Except for (i) regular
salary payments and fringe benefits under an individual's  compensation  package
with either of the  Corporations,  and (ii) certain loans that have been made by
either of the  Corporation  to certain key  employees  as  described on Schedule
5.2(cc), none of the officers,  employees,  directors or other affiliates of the
Corporations,  or  members  of  their  families  is a party  to any  agreements,
understandings or proposed transactions with the Corporations.  The Corporations
have not guaranteed or assumed any  obligations of the  Corporations'  officers,
directors or employees.

                   (dd)  Minute  Books.  The  minute  books of the  Corporations
contain a complete summary of all meetings of directors and  shareholders  since
the time of  incorporation  and  reflect  all  transactions  referred to in such
minutes accurately in all material respects.

         Section  5.3  Representations  and  Warranties  of  Target.  Target and
Controlling  Shareholders jointly and severally represent and warrant to each of
Parent and  Subsidiary,  as of the date  hereof and at the  Effective  Time,  as
follows:

                   (a)  Organization;  Power.  The Target is a corporation  duly
incorporated and validly existing under the laws of the State of Nevada, and has
all requisite  corporate  power and  authority to enter into this  Agreement and
perform its obligations hereunder.

                                       14


                   (b) Capital Stock and Related Matters. The authorized capital
stock of the Target  consists of 50,000 Shares having a par value of $1.00 each,
Two  Hundred  Fifty  (250) of which are  issued  and  outstanding,  and no other
shares,  common or otherwise,  of the Parent are issued and outstanding.  Target
does not have outstanding and has not agreed, orally or in writing, to issue any
shares or securities  convertible or  exchangeable  for any shares,  nor does it
have outstanding nor has it agreed,  orally or in writing,  to issue any options
or rights to purchase or otherwise  acquire their shares.  Target is not subject
to any obligation  (contingent or otherwise) to repurchase or otherwise  acquire
or retire any of its shares.  Target has not violated any applicable  securities
laws or regulations in connection with the offer or sale of its securities other
than violations that have been, or will before the Closing have been,  corrected
by  post-issuance  filings.  All of the outstanding  shares of Target's  capital
stock are validly issued,  fully paid and  nonassessable.  At the Effective Time
Parent will have, good and marketable title to the Target Shares, free and clear
of all security interests,  liens, encumbrances or other restrictions or claims,
subject only to restrictions as to marketability imposed by securities laws.

                   (c) Authorization. The execution, delivery and performance by
the Target and all other agreements contemplated hereby to which the Target is a
party have been duly and validly authorized by all necessary corporate action of
the Target, and this Agreement and each such other agreement,  when executed and
delivered by the parties thereto,  will constitute the legal,  valid and binding
obligation of the Target  enforceable  against it in accordance  with its terms,
except as enforceability may be limited by applicable bankruptcy, insolvency and
similar statutes  affecting  creditors'  rights generally and judicial limits on
equitable remedies.

                   (d) Governmental Authorities. Except as set forth in Schedule
5.3(d),  (i) neither  Target nor the  Controlling  Stockholders  are required to
submit any notice,  report or other filing with any  governmental  or regulatory
authority  in  connection  with  the  execution  and  delivery  by  them of this
Agreement and the consummation of the purchase and (ii) no consent,  approval or
authorization  of any  governmental  or  regulatory  authority is required to be
obtained  by the  Target,  or  any  affiliate,  or  either  of  the  Controlling
Stockholders  in connection  with their  execution,  delivery and performance of
this Agreement and the consummation of this merger.

                   (e) No Conflict with Other Instruments or Agreements.  Except
as set forth on Schedule 5.3(e), the execution,  delivery and performance by the
Target  or  the  Controlling  Stockholders  of  this  Agreement  and  all  other
agreements  contemplated  hereby to which  they are a party will not result in a
breach or violation  of, or  constitute a default  under,  Target's  Articles of
Incorporation or Bylaws or any material  agreement to which the Target or either
of the Controlling Stockholders are a party or by which any of them are bound.

                   (f) Conduct of Business;  Liabilities. Except as set forth in
Schedule  5.3(f),  Target is not in default under,  and no condition exists that
with notice or lapse of time would  constitute a default of Target under (i) any
mortgage,   loan  agreement,   evidence  of  indebtedness  or  other  instrument
evidencing  borrowed  money to which Target is a party or by which Target or the
properties of Target is bound or (ii) any  judgment,  order or injunction of any
court,  arbitrator or governmental  agency that would  reasonably be expected to
affect materially and adversely the business,  financial condition or results of
operations of Target taken as a whole.

                                       15


                   (g) No Brokers or  Finders.  Except as set forth in  Schedule
5.3(g), there are no claims for brokerage commissions,  finders' fees or similar
compensation in connection with the transactions  contemplated by this Agreement
based on any arrangement or agreement made by or on behalf of Target.

                   (h) Absence of Certain  Changes.  Except as  contemplated  or
permitted  by this  Agreement  or as  described  in Schedule  5.3(h),  since the
Statement Date there has not been:

                            (A) Any  material  adverse  change in the  business,
financial condition, operations or assets of Target;

                            (B) Any damage, destruction or loss, whether covered
by insurance or not materially adversely affecting the properties or business of
Target;

                            (C) Any sale or transfer  by Target of any  tangible
or intangible asset other than in the ordinary course of business,  any mortgage
or pledge or the creation of any security  interest,  lien or encumbrance on any
such asset, or any lease of property,  including equipment, other than tax liens
with respect to taxes not yet due and contract rights of customers in inventory;

                            (D) Any  declaration,  setting aside or payment of a
distribution  in respect of or the  redemption or other  repurchase by Target of
any stock of Target;

                            (E) Any  material  transaction  not in the  ordinary
course of businesses of Target;

                            (F) The  lapse of any  material  trademark,  assumed
name,  trade name,  service mark,  copyright or license or any application  with
respect to the foregoing;

                            (G) The grant of any increase in the compensation of
officers  or  employees  (including  any such  increase  pursuant  to any bonus,
pension,  profit-sharing  or other plan)  other than  customary  increases  on a
periodic basis or required by agreement or  understanding in the ordinary course
of business and in accordance with past practice;

                            (H) The  discharge or  satisfaction  of any material
lien or encumbrance or the payment of any material  liability other than current
liabilities in the ordinary course of business;

                            (I) The  making of any  material  loan,  advance  or
guaranty  to or for the  benefit of any person  except the  creation of accounts
receivable in the ordinary course of business; or

                            (J) An agreement to do any of the foregoing.

                                       16


                   (i) No Undisclosed  Liabilities.  Except for (i)  liabilities
and  obligations  incurred in the ordinary  course of business since November 1,
2004  ("Statement  Date"),  and (ii)  liabilities  or  obligations  described in
Schedule 5.3(i),  neither Target nor any of the property of Target is subject to
any  material  liability  or  obligation  that was  required  to be  included or
adequately reserved against in the 2004 Target Balance Sheet or described in the
notes thereto and was not so included, reserved against or described.

                   (j) Investment Representations

                            (A) The  Controlling  Stockholders  are  "accredited
investors"  as  defined  by the SEC's  Rule  501(a),  and they have  substantial
experience in  evaluating  and investing in private  placement  transactions  of
securities  in  companies  similar  to the  Parent so that they are  capable  of
evaluating  the  merits  and risks of the  investment  in the Parent and has the
capacity to protect their own interests.

                            (B)  Controlling   Stockholders  are  acquiring  the
Parent's Shares for investment for their own account, not as a nominee or agent,
and not with the view to, or for resale in  connection  with,  any  distribution
thereof.  Controlling  Stockholders  understand  that the  Parent  Shares  to be
acquired  in the merger  have not been,  and will not be,  registered  under the
Securities  Act or the  securities  laws of any state by  reason  of a  specific
exemption  from  the  registration  provisions  of the  Securities  Act  and the
applicable  state securities laws, the availability of which depends upon, among
other things,  the bona fide nature of the investment intent and the accuracy of
the Purchaser's  representations as expressed herein.  Controlling  Stockholders
are acquiring the Shares without expectation,  desire or need for resale and not
with the view toward distribution,  resale,  subdivision or fractionalization of
the Shares.

                            (C)  During the  course of the  negotiation  of this
Agreement,  the Controlling  Stockholders have had an opportunity to discuss the
Parent's business, management and financial affairs with the Parent's management
and the  opportunity  to review the  Parent's  financial  statements,  books and
records,  facilities and business plan. The Controlling  Stockholders  have also
had an opportunity to ask questions of officers of the Parent,  which  questions
were answered to their satisfaction.

                            (D)   Target   and  the   Controlling   Stockholders
understand  that the Parent  Shares to be  acquired  in the merger have not been
registered  under  Securities  Act of 1933  ("1933  Act")  or  under  any  state
securities law.

                            (E) The Controlling Stockholders understand that the
Parent Shares cannot be resold in a transaction  to which the 1933 Act and state
securities laws apply unless (i) subsequently  registered under the 1933 Act and
applicable state securities laws or (ii) exemptions from such  registrations are
available.  The Controlling Stockholders are aware of the provisions of Rule 144
promulgated  under the 1933 Act which permit limited resale of shares  purchased
in a private transaction subject to the satisfaction of certain conditions.

                                       17


                            (F) The Controlling Stockholders understand that the
certificates for the Parent Shares will bear the following legend:

         THIS  CERTIFICATE HAS NOT BEEN  REGISTERED  UNDER THE SECURITIES ACT OF
         1933. THE  CORPORATION  WILL NOT TRANSFER THIS  CERTIFICATE  UNLESS (i)
         THERE IS AN EFFECTIVE  REGISTRATION  COVERING THE SHARES REPRESENTED BY
         THIS  CERTIFICATE  UNDER THE  SECURITIES ACT OF 1933 AND ALL APPLICABLE
         STATE  SECURITIES  LAWS,  (ii)  IT  FIRST  RECEIVES  A  LETTER  FROM AN
         ATTORNEY,  ACCEPTABLE TO THE BOARD OF DIRECTORS OR ITS AGENTS,  STATING
         THAT IN THE OPINION OF THE  ATTORNEY  THE  PROPOSED  TRANSFER IS EXEMPT
         FROM  REGISTRATION  UNDER  THE  SECURITIES  ACT OF 1933 AND  UNDER  ALL
         APPLICABLE  STATE  SECURITIES  LAWS,  OR  (iii)  THE  TRANSFER  IS MADE
         PURSUANT TO RULE 144 UNDER THE SECURITIES ACT OF 1933.

                   (k)  Minute  Books.  The  minute  books of  Target  contain a
complete summary of all meetings of directors and shareholders since the time of
incorporation  and  reflect  all  transactions   referred  to  in  such  minutes
accurately in all material respects.

                   (l)  Financial  Statements.  The  unaudited  balance sheet of
Arvilla  Oilfield  Services,  LLC, a West  Virginia  limited  liability  company
("AOS"),  as of September 30, 2004,  in the form  attached to this  Agreement as
Exhibit 5.3(l)(A), (the "2004 AOS Balance Sheet"), fairly presents the financial
position of Target as at September 30, 2004, and has been prepared in accordance
with generally accepted accounting principles,  consistently applied.  Except as
contemplated by or permitted under this Agreement, there are no adjustments that
would  be  required  on  review  of the  2004  AOS  Balance  Sheet  that  would,
individually or in the aggregate,  have a material negative effect upon Target's
reported financial condition.

                   (m) No Undisclosed  Liabilities.  Except for (i)  liabilities
and obligations  incurred in the ordinary course of business since September 30,
2004  ("Statement  Date"),  and (ii)  liabilities  or  obligations  described in
Schedule 5.3(m),  neither Target nor any of the property of Target is subject to
any  material  liability  or  obligation  that was  required  to be  included or
adequately  reserved  against in the 2004  Target  Balance  Sheet and was not so
included, reserved against or described.

                   (n)  Title  and  Related  Matters.  Except  as set  forth  in
Schedule 5.3(n),  Target has good and marketable title to all of its properties,
real and personal,  and other assets  included in the 2004 Balance Sheet (except
properties and assets sold or otherwise  disposed of subsequent to the Statement
Date in the ordinary course of business or as  contemplated in this  Agreement),
free and clear of all security interests,  mortgages,  liens, pledges,  charges,
claims or encumbrances of any kind or character,  except (i) statutory liens for
property  taxes not yet  delinquent  or payable  subsequent  to the date of this
Agreement and statutory or common law liens  securing the payment or performance
of any  obligation  of  Target,  the  payment  or  performance  of  which is not
delinquent,  or that is payable  without  interest or penalty  subsequent to the
date on which this  representation  is given,  or the validity of which is being
contested in good faith by Target;  (ii) the rights of  customers of Target,  or
its  subsidiaries,  with respect to inventory under orders or contracts  entered


                                       18


into by Target, or its subsidiaries,  in the ordinary course of business;  (iii)
claims,  easements,  liens and other  encumbrances of record pursuant to filings
under real property recording statutes; and (iv) as described in the 2004 Target
Balance Sheet.

                   (o)  Disclosure.  All  matters  required to be  disclosed  by
Target  or the  Controlling  Stockholders  hereunder  shall be made to Parent in
writing no later than thirty (30) days prior to the  Closing  Date (the  "Target
and Controlling  Stockholders' Disclosure Schedule").  This Agreement,  with the
Exhibits hereto, when taken as a whole, do not contain any untrue statement of a
material fact concerning Target or the Controlling Stockholders or omit to state
a  material  fact  necessary  in order to make the  statements  concerning  them
contained herein not misleading in light of the  circumstances  under which they
were made.

                   (p) Litigation. Except as set forth on Schedule 5.3(p), there
are no actions, suits, proceedings or investigations pending against the Target,
or its properties, or either of the Controlling Stockholders before any court or
governmental agency (nor, to their knowledge, is there any threat thereof) which
would  impair in any way their  ability  to enter into and fully  perform  their
commitments   and   obligations   under  this  Agreement  or  the   transactions
contemplated hereby.

                   (q)  Compliance  with  Other   Instruments.   The  execution,
delivery and performance of and compliance with this Agreement, and the issuance
of shares will not result in any material  violation  of, or conflict  with,  or
constitute a material  default  under,  Target's  articles of  incorporation  or
bylaws or any of its  material  agreements  nor  result in the  creation  of any
mortgage,  pledge,  lien,  encumbrance  or charge  against  any of the assets or
properties of the Target or the Target's Shares.

                   (r) No Brokers or Finders. Neither Target nor the Controlling
Stockholders have, nor will they, incur, directly or indirectly,  as a result of
any action  taken by them,  any  liability  for  brokerage  or finders'  fees or
agents' commissions or any similar charges in connection with this Agreement.

                   (s) With respect to Taxes (as defined below):

                            (A) Target and each subsidiary has filed, within the
time and in the manner  prescribed by law, all returns,  declarations,  reports,
estimates,  information returns and statements  ("Returns") required to be filed
under federal,  state,  local or any foreign laws by Target or such  subsidiary,
and all such Returns are true, correct and complete in all material respects.

                            (B)  Except as set forth on  Schedule  5.3(s)(B)  of
Target Disclosure  Schedule,  Target and each subsidiary has within the time and
in the manner prescribed by law, paid (and until the Effective Time will, within
the time and in the manner  prescribed by law, pay) all Taxes (as defined below)
that are due and payable.

                                       19


                            (C) Target and each subsidiary has established  (and
until the Effective  Time will  establish) on its  respective  books and records
reserves (to be specifically  designated as an increase to current  liabilities)
that are adequate for the payment of all Taxes not yet due and payable.

                            (D) There are no liens for Taxes  upon the assets of
Target or any subsidiary except liens for Taxes not yet due.

                            (E) Neither Target nor any subsidiary has filed (and
will not file prior to the Effective  Time) any consent  agreement under Section
341(f) of the Code or agreed to have Section  341(f)(2) of the Code apply to any
disposition  of the  subsection  (f)  assets (as such term is defined in Section
341(f)(4) of the Code) owned by Target or any subsidiary.

                            (F)  Except as set forth in  Schedule  5.3(s)(F)  of
Target  Disclosure  Schedule  (which  shall set forth the type of  return,  date
filed, and date of expiration of the statute of limitations),  no deficiency for
any Taxes has been proposed,  asserted or assessed  against Target or any of its
subsidiaries which has not been resolved and paid in full.

                            (G) There are no  outstanding  waivers or comparable
consents regarding the application of the statute of limitations with respect to
any Taxes or Returns that have been given by Target or any of its subsidiaries.

                            (H)  Except as set forth on  Schedule  5.3(s)(I)  of
Target Disclosure Schedule (which shall set forth the nature of the proceedings,
the type of  return,  the  deficiencies  proposed  or  assessed  and the  amount
thereof, and the taxable year in question),  no federal, state, local or foreign
audits or other  administrative  proceedings or court  proceedings are presently
pending with regard to any Taxes or Returns.

                            (I)  Target  is not a party  to any  tax-sharing  or
allocation  agreement,  nor does Target owe any amount under any  tax-sharing or
allocation agreement.

                            (J) Each of Target and its subsidiaries has complied
(and until the Effective  Time will comply) in all respects with all  applicable
laws,  rules and  regulations  relating to the payment and  withholding of Taxes
(including,  without limitation,  withholding of Taxes pursuant to Sections 1441
or 1442 of the Code or  similar  provisions  under any  foreign  laws) and have,
within the time and in the manner  prescribed  by law,  withheld  from  employee
wages and paid over to the proper governmental  authorities all amounts required
to be so withheld and paid over under all applicable laws.

                            (K) None of  Target  and its  subsidiaries  has ever
been (or has any  liability for unpaid Taxes because it once was) a member of an
"affiliated  group"  within the  meaning of Section  1502 of the Code during any
part of any  consolidated  return  year  within  any  part  of  which  year  any
corporation  other than Target or its current  subsidiaries was also a member of
such affiliated group.

                            (L) For purposes of this  Agreement,  "Taxes"  shall
mean all taxes,  charges,  fees, levies or other assessments of whatever kind or
nature,  including,  without  limitation,  all net income,  gross income,  gross
receipts,  sales,  use,  ad  valorem,  transfer,  franchise,  profits,  license,

                                       20


withholding, payroll, employment, excise, estimated, severance, stamp, occupancy
or property  taxes,  customs  duties,  fees,  assessments or charges of any kind
whatsoever  (together with any interest and any  penalties,  additions to tax or
additional  amounts) imposed by any taxing authority  (domestic or foreign) upon
or payable by Target or any subsidiary.

                   (t)  Power of  Attorney.  Except  as set  forth  in  Schedule
5.3(t), no material power of attorney or similar  authorization  given by Target
is presently in effect.

                   (u) Agreements and  Commitments.  Schedule  5.3(u) contains a
complete  and  accurate  list  of  each  agreement,   contract,  instrument  and
commitment  (including  license  agreements)  to which  Target  is a party  that
provides  for  payments in excess of $10,000 per year or whose term is in excess
of one year and is not  cancelable  upon 30 or fewer  days'  notice  without any
liability,  penalty or premium,  other than a nominal cancellation fee or charge
("Third Party  Agreements").  Except as otherwise set forth in Schedule  5.3(u),
Target is not in material  default  under any Third Party  Agreements,  nor does
there  exist any event that,  with notice or the passage of time or both,  would
constitute  a material  default  or event of  default by Target  under any Third
Party Agreements.

                   (v) Operating  Rights.  Target has all  operating  authority,
licenses,  franchises,  permits,  certificates,  consents, rights and privileges
(collectively  "Licenses")  as are necessary or  appropriate to the operation of
its  business as now  conducted  and as proposed to be  conducted  and which the
failure  to  possess  would  have a  material  adverse  effect  on  the  assets,
operations or financial condition of Target. Such Licenses are in full force and
effect, no violations have been or are expected to have been recorded in respect
of any such  licenses,  and no proceeding is pending,  or threatened  that could
result  in the  revocation  or  limitation  of any  such  licenses.  Target  has
conducted their respective  businesses so as to comply in all material  respects
with all such Licenses.

                                   ARTICLE VI

                                    COVENANTS

         Section 6.1 Conduct of Business of Parties  Pending the Merger.  Target
agrees  that from the date  hereof  and prior to the  Effective  Time or earlier
termination of this Agreement:

                   (a) Target,  Parent and Subsidiary  shall provide each other,
their counsel, accountants,  designated employees and other representatives with
all information relating to their respective businesses deemed necessary by them
and their aforesaid representatives.

                   (b) Except as agreed in writing by the other parties, neither
Parent, Subsidiary nor Target shall:

                            (A) make, declare,  pay or set aside for payment any
extraordinary dividend;

                                       21


                            (B) issue any stock,  whether  common,  preferred or
otherwise,  in addition to the shares issued and  outstanding  as of the date of
this Agreement,  and as set forth on Schedule  6.1(b)(B) of Target's  Disclosure
Schedule; or

                            (C) incur any indebtedness for borrowed money except
in the ordinary course of business.

                   (c)  Target,   Parent  and  Subsidiary  shall  conduct  their
respective  businesses in the ordinary  course of business  consistent with past
practice  and in  material  conformity  with  all  applicable  laws,  rules  and
regulations.   They  shall  use  reasonable  efforts  to  maintain  satisfactory
relations with valuable licensors, suppliers, distributors, customers and others
having business relationships with them.

         Section  6.2  Financial  Statements.  Until the  Closing  Target  shall
furnish an unaudited monthly balance sheet and income statement to Parent.

         Section 6.3 Approval of Shareholders or Directors.

                   (a) Target shall (a) cause a meeting of its  shareholders  to
be duly  called  and held in  accordance  with the laws of the State of  Nevada,
applicable   federal  and  state  securities  laws  and  Target's   Articles  of
Incorporation and Bylaws as soon as practicable for the purpose of voting on the
adoption and approval of this Agreement,  and the Merger (the  "Proposal"),  (b)
recommend to its  shareholders  approval of the  Proposal  (except to the extent
that the board of directors of Target  determines,  after  receiving the written
advice of counsel,  that such act is not permitted by such board of directors in
the discharge of their fiduciary duties to Target),  (c) use its best efforts to
obtain the necessary approval of its shareholders,  (d) take all action required
under the NGCL with respect to the holders of Target Dissenting  Shares, and (e)
in cooperation with Parent mail to shareholders a transmittal letter in form and
substance  reasonably  satisfactory to Parent to be used by such shareholders in
forwarding their certificates for surrender and exchange.  Except with the prior
written  consent of Parent,  neither Target nor Controlling  Shareholders  shall
distribute  any  materials  to  Target's  Shareholders  in  connection  with the
Proposal other than the Proxy Statement.

                   (b)  Parent  shall  (a)  cause  a  meeting  of its  Board  of
Directors to be duly called and held in accordance with the laws of the State of
Nevada,  applicable  federal and state securities laws and Parent's  Articles of
Incorporation and Bylaws as soon as practicable for the purpose of voting on the
adoption and approval of this Agreement,  and the Merger (the  "Proposal"),  (b)
obtain the written consent of a majority of its shareholders for the approval of
a reverse stock split of its issued and outstanding  shares of common stock on a
one  share  for 150  shares  basis,  to be  effective  immediately  prior to the
Effective Time and to cause to be prepared and filed with the State of Nevada an
amendment to its Articles of  Incorporation  reflecting the reverse stock split,
after  receiving  the written  advice of  counsel,  that such acts by the Parent
Board of Directors is authorized  by Nevada law, (c) as soon as practical  after
the date of this Agreement  cause to be prepared,  filed with the SEC and mailed
to its  stockholders an information  statement  pursuant to Section 14(c) of the
Securities  Exchange Act of 1934 and Regulation 14C thereunder (the "Information
Statement"), concerning action taken by written consent, (d) in cooperation with
Target  mail  to  shareholders  a  transmittal  letter  in  form  and  substance


                                       22


reasonably  satisfactory to Target to be used by such shareholders in forwarding
their  certificates  for surrender  and exchange.  Except with the prior written
consent of Target,  neither Parent nor Subsidiary shall distribute any materials
to Parent's  Shareholders  in connection  with the Proposal other than the Proxy
Statement.

         Section 6.4   Securities Law Compliance.

                   (a) Parent shall  promptly  prepare and file the  Information
Statement.  Parent will use its best efforts to cause the Information  Statement
to become effective as soon as practicable.

                   (b) Parent  will take any action  required  to be taken under
applicable  state securities laws and Parent will also take action to secure all
necessary exemptions or clearances under all state securities laws applicable to
(i) the Merger, and (ii) the issuance of Parent Common Stock pursuant thereto.

                   (c) Parent  will  promptly  deliver  to Target  copies of any
filings made by Parent or Subsidiary pursuant to this Section 6.4.

         Section 6.5 Third Party  Consents.  Each party to this Agreement  shall
use its best efforts to obtain, as soon as reasonably practicable,  all permits,
authorizations,   consents,   waivers  and  approvals   from  third  parties  or
governmental   authorities  necessary  to  consummate  this  Agreement  and  the
transactions contemplated hereby or thereby, including,  without limitation, any
permits, authorizations,  consents, waivers and approvals required in connection
with the Merger.

         Section  6.6  Conversion  of  Certain  Debt  of  Parent.  Prior  to the
Effective Date of the Merger,  all debt or other  obligations  owed by which are
set forth on  Schedule  6.6  attached  hereto  and made a part  hereof,  whether
secured or  otherwise,  shall be  converted  into the  capital  common  stock of
Parent.  It is the  intention  of the  parties and the  principals  set forth on
Schedule 6.6 that the debts owed by Parents to said principals and certain other
debts are to be converted.

         Section 6.7 Election to Board of Directors of Parent. Immediately prior
to the Effective Date of the Merger,  the parties hereto shall cause Clarence E.
Smith and Rebecca L. Smith to be elected to the Board of Directors of Parent. As
long as  Arvilla or AOS shall  remain  affiliated  with or under the  control of
Parent,  directly or  indirectly,  the  Controlling  Stockholders,  their heirs,
successors  or assigns  shall have the right to nominate,  appoint and elect two
(2) individuals to the Board of Directors of Parent.

         Section 6.8 Amendment of Parent Bylaws.  Prior to the Effective Date of
the  Merger,  Parent  shall  cause its  Bylaws to be  amended so that any of the
following  actions will require the affirmative  vote of eighty percent (80%) of
its Board of Directors:

                   (a)  Amendment  of  Parent's  Articles  of  Incorporation  or
Bylaws;

                   (b) Any merger or  consolidation  involving  Parent or any of
its affiliated entities;

                                       23


                   (c) The  issuance  of or any  offer to issue any  voting  or,
non-voting  preferred  or  common  stock  of  Parent  or any  of its  affiliated
corporations, or any interest in any of its affiliated non-corporate entities;

                   (d) The sale,  exchange or transfer of  substantially  all of
the assets of Parent or any of its  affiliated  entities,  whether for or in the
absence of adequate consideration;

                   (e) The sale,  exchange or transfer,  directly or indirectly,
of any interest in Target or Arvilla Oilfield Services, LLC, ("Arvilla") whether
for or in the absence of adequate consideration; or

                   (f) The borrowing, incurrence of debt, or expenditure of more
than $25,000;

                   (g) Any other  act or action by or of the Board of  Directors
of Parent which is not in the regular, ordinary course of business.

         Section 6.9 Right of First  Refusal to Reacquire  Arvilla.  Clarence E.
and Rebecca L. Smith, or their personal representatives,  shall have the a right
of first refusal to reacquire Arvilla, at its fair market value as determined by
independent  appraisal  or at the  same  price  and  upon  the  same  terms  and
conditions as those set forth in a written offer of a third-party,  in the event
the Board of Directors of Parent, or any affiliated entity decides to dispose of
Arvilla, whether directly or indirectly.

         Section 6.10 Maintenance of Separate Status.  The separate legal status
of  Arvilla  and  Target  shall  be  maintained,  and the  assets  and  business
operations of Arvilla shall remain a part of Arvilla.

         Section  6.11  No  Inconsistent  Action.   Neither  Target,  Parent  or
Subsidiary will not take any other action  inconsistent  with their  obligations
under this  Agreement  or that  could  hinder or delay the  consummation  of the
transactions contemplated by this Agreement.

         Section 6.12 Tax Liability.  In the event the Controlling  Stockholders
shall  become  liable  for any tax  liability  that may arise as a result of the
transactions  contemplated  by this  Agreement or the results of  operations  of
Target and its single member  limited  liability  company,  AOS,  Target and AOS
shall be jointly and severally responsible for payment of any such taxes.


                                   ARTICLE VII

                              CONDITIONS TO CLOSING

         Section 7.1 Conditions to Each Party's Obligation to Effect the Merger.
The  respective  obligations of each party to effect the Merger shall be subject
to the fulfillment of all of the following  conditions  precedent at or prior to
the Effective Time:
                                       24


                   (a) This Agreement and Plan of Reorganization shall have been
duly approved by the requisite vote of the  stockholders  or Boards of Directors
of Parent,  Subsidiary  and Target.  (b) All  regulatory  approvals  required to
consummate  the  transactions  contemplated  hereby shall have been obtained and
shall  remain in full  force and  effect and all  statutory  waiting  periods in
respect  thereof  shall have  expired and no such  approvals  shall  contain any
conditions,  restrictions  or  requirements  which the  Boards of  Directors  of
Parent,  Subsidiary  or Target  reasonably  determine in good faith would either
before or after the  Effective  Time have a Material  Adverse  Effect on Parent,
Subsidiary or Target.  (c) No Governmental  Authority of competent  jurisdiction
shall have enacted, issued, promulgated,  enforced or entered any statute, rule,
regulation,  judgment,  decree,  injunction or other order  (whether  temporary,
preliminary or permanent)  which is in effect and prohibits  consummation of the
transactions contemplated by this Agreement. (d) The Information Statement shall
have  become  effective  under  the  Securities  Act  and no  objections  to the
Information Statement shall have been issued and no proceedings for that purpose
shall have been  initiated or  threatened  by the SEC. (e) All permits and other
authorizations   under  state   securities  laws  necessary  to  consummate  the
transactions  contemplated hereby and to issue the shares of Parent Common Stock
to be issued in the  Merger  shall have been  received  and be in full force and
effect.  (f) No injunction  or other or decree by any Federal,  state or foreign
court which prevents the  consummation of Merger shall have been issued or be in
force at the Effective Time of the Merger.

                   (g) No statute or  regulation  enacted  which  would  prevent
consummation  of Merger  shall have been issued or be in force at the  Effective
Time of the Merger.

                   (h)  All   governmental  and  other  consents  and  approvals
required for Merger shall have been obtained.

         Section 7.2  Conditions to  Obligations of Target to Effect the Merger.
The  obligation of Target to effect the Merger is subject to  fulfillment of all
of the following conditions precedent at or prior to the Effective Time:

                   (a)  The   representations   and  warranties  of  Parent  and
Subsidiary set forth in this Agreement  shall be true and correct as of the date
of this  Agreement and as of the Effective  Date as though made on and as of the
Effective Date (except that  representations  and warranties that by their terms
speak as of the date of this  Agreement  or some  other  date  shall be true and
correct as of such date) and Target shall have received certificates,  dated the
Effective Date,  signed on behalf of Parent and Subsidiary by the Presidents and
Treasurers of Parent and Subsidiary,  respectively,  to such effect.

                                       25


                   (b)  Parent  and  Subsidiary  shall  have  performed  in  all
material  respects  all  obligations  required to be  performed by it under this
Agreement at or prior to the  Effective  Time,  and Target shall have received a
certificate, dated the Effective Date, signed on behalf of Parent and Subsidiary
by the Presidents and Treasurers of Parent and Subsidiary, respectively, to such
effect.

                   (c) Target  shall  have  received  an opinion of Bowles  Rice
McDavid Graff & Love, LLP, general counsel to Target,  dated the Effective Date,
to the effect that, on the basis of facts,  representations  and assumptions set
forth in such opinion, (i) the Merger constitutes a "reorganization"  within the
meaning of Section  368 of the Code and (ii) no gain or loss will be  recognized
by  stockholders of Target who receive shares of Parent Common Stock in exchange
for shares of Target Common Stock, except that gain or loss may be recognized as
to cash received as Merger Consideration and cash received in lieu of fractional
share interests. In rendering its opinion, Bowles Rice McDavid Graff & Love, LLP
may require and rely upon  representations  contained in letters from Target and
others.

         Section 7.3  Conditions  to  Obligations  of Parent and  Subsidiary  to
Effect the Merger. The obligations of Parent and Subsidiary to effect the Merger
are subject to the fulfillment of all of the following  conditions  precedent at
or prior to the Effective Time:

                   (a) The representations and warranties of Target set forth in
this Agreement shall be true and correct as of the date of this Agreement and as
of the  Effective  Date as though made on and as of the  Effective  Date (except
that  representations and warranties that by their terms speak as of the date of
this  Agreement  or some other date shall be true and  correct as of such date),
and Parent and Subsidiary shall have received a certificate, dated the Effective
Date,  signed on behalf of Target by the  President  and  Treasurer of Target to
such  effect.

                   (b) Target shall have performed in all material  respects all
obligations  required to be performed by it under this  Agreement at or prior to
the Effective Time, and Parent and Subsidiary shall have received a certificate,
dated the  Effective  Date,  signed on  behalf  of Target by the  President  and
Treasurer of Target to such effect.






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                                       26


                                  ARTICLE VIII

                                 INDEMNIFICATION

         Section 8.1 General Indemnification Covenants.

                   (a) Subject to the  provisions  of Section  8.3,  Controlling
Shareholders  shall  indemnify,   save  and  keep  Parent  and  its  affiliates,
successors and permitted assigns (including  Subsidiary and Target) (the "Parent
Indemnitees"), harmless against and from all liability, demands, claims, actions
or causes of action,  assessments,  losses, fines, penalties, costs, damages and
expenses,  including  reasonable  attorneys'  fees,  disbursements  and expenses
(collectively,   "Damages"),   sustained  or  incurred  by  any  of  the  Parent
Indemnitees   as  a  result   of,   arising   out  of  or  by   virtue   of  any
misrepresentation,  breach of any warranty or representation, or non-fulfillment
of any agreement or covenant on the part of Target or Controlling  Shareholders,
whether contained in this Agreement or any exhibit or schedule hereto to thereto
or any written  statement or certificate  furnished or to be furnished to Parent
or Subsidiary  pursuant hereto or in any closing document delivered by Target or
Controlling Shareholders to Parent or Subsidiary in connection herewith.

                   (b)  Subject to the  provisions  of Section  8.3,  Parent and
Subsidiary  shall  indemnify,   save  and  keep  Controlling  Stockholders  (the
"Indemnitees"),  harmless  against  and from  all  liability,  demands,  claims,
actions or causes of  action,  assessments,  losses,  fines,  penalties,  costs,
damages and expenses,  including reasonable  attorneys' fees,  disbursements and
expenses  (collectively,  "Damages"):  (A)  sustained  or incurred by any of the
Indemnitees   as  a  result   of,   arising   out  of  or  by   virtue   of  any
misrepresentation,  breach of any warranty or representation, or non-fulfillment
of any  agreement  or  covenant  on the part of  Parent or  Subsidiary,  whether
contained in this Agreement or any exhibit or schedule  hereto to thereto or any
written  statement  or  certificate  furnished  or to be  furnished to Target or
Controlling Stockholders pursuant hereto or in any closing document delivered by
Parent or  Subsidiary  to  Target  or  Controlling  Stockholders  in  connection
herewith; or (B) sustained or incurred by Target or Controlling  Stockholders by
reason of the failure of the  transactions  contemplated  by this  Agreement  to
satisfy  the  requirements  of  the  Internal  Revenue  Code  of  1986,  or  the
regulations   thereunder,   qualifying   said   transactions   as   a   tax-free
reorganization.

         Section 8.2 Tax Return Preparation and Filing. Controlling Stockholders
shall  prepare  and file any  Return of  Target  and its  subsidiaries  which is
required to be filed after the  Effective  Time and which  relates to any period
(or portion thereof) up to and including the Effective Time.

         Section 8.3 Conditions of Indemnification Pursuant to Section 8.1.

                   (a) Promptly  following the receipt by a Parent Indemnitee or
an Indemnitee  of notice of a demand,  claim,  action,  assessment or proceeding
made or brought by a third  party,  including  a  governmental  agency (a "Third
Party Claim"),  the Parent Indemnitee or Indemnitee  receiving the notice of the
Third Party Claim (i) shall  notify the other  parties to this  Agreement of its
existence,  setting  forth the  facts and  circumstances  of which  such  Parent
Indemnitee or Indemnitee has received notice,  and (ii) if the Parent Indemnitee


                                       27


or Indemnitee giving such notice is a person entitled to  indemnification  under
this Article VIII (an "Indemnified Party"),  specifying the basis hereunder upon
which the Indemnified Party's claim for indemnification is asserted.

                   (b) The Indemnified  Party shall,  upon reasonable  notice by
the party  having an  indemnification  obligation  under this  Article VIII (the
"Indemnifying  Party"),  tender  the  defense  of a  Third  Party  Claim  to the
Indemnifying  Party. If the Indemnifying  Party accepts  responsibility  for the
defense of a Third Party Claim, then Indemnifying Party shall have the exclusive
right to contest,  defend and  litigate the Third Party Claim and shall have the
exclusive  right, in its discretion  exercised in good faith and upon the advice
of counsel, to settle any such matter,  either before or after the initiation of
litigation,  at such time and upon such terms as it deems  fair and  reasonable,
provided that at least ten (10) days prior to any such settlement, it shall give
written  notice  of its  intention  to  settle  to the  Indemnified  Party.  The
Indemnified  Party shall have the right to be  represented by counsel at its own
expense in any defense conducted by Indemnifying Party.

                   (c)  Notwithstanding  the foregoing,  in connection  with any
settlement  negotiated by  Indemnifying  Party,  no  Indemnified  Party shall be
required to (x) enter into any settlement (A) that does not include the delivery
by the  claimant or  plaintiff  to the  Indemnified  Party of a release from all
liability in respect of such claim or litigation,  (B) if the Indemnified  Party
shall, in writing to Indemnifying  Party within the ten (10) day period prior to
such proposed  settlement,  disapprove of such settlement proposal and desire to
have  Indemnifying  Party  tender  the  defense  of  such  matter  back  to  the
Indemnified  Party,  or (C)  that  requires  an  Indemnified  Party  to take any
affirmative  actions as a condition  of such  settlement,  of (y) consent to the
entry of any judgment that does not include a full  dismissal of the  litigation
or proceeding against the Indemnified Party with prejudice;  provided,  however,
that should the Indemnified  Party disapprove of a settlement  proposal pursuant
to Clause (B) above,  the  Indemnified  Party shall  thereafter  have all of the
responsibility for defending, contesting and settling such Third Party Claim but
shall not be entitled to  indemnification  by  Indemnifying  Party to the extent
that,  upon final  resolution  of such Third Party Claim,  Indemnifying  Party's
liability  to  the   Indemnified   Party  but  for  this  proviso  exceeds  what
Indemnifying  Party's  liability  to the  Indemnified  Party  would have been if
Indemnifying  Party  were  permitted  to settle  such Third  Party  Claim in the
absence of the Indemnified Party exercising its right under clause (B) above.

                   (d) If, in accordance  with the foregoing  provisions of this
Section 8.3, an Indemnified Party shall be entitled to indemnification against a
Third Party Claim, and if Indemnifying Party shall fail to accept the defense of
a Third Party Claim which has been tendered in accordance with this Section 8.3,
the Indemnified  Party shall have the right,  without  prejudice to its right of
indemnification  hereunder,  in its discretion  exercised in good faith and upon
the advice of counsel,  to contest,  defend and litigate such Third Party Claim,
and may settle such Third Party Claim,  either before or after the initiation of
litigation, at such time and upon such terms as the Indemnified Party deems fair
and  reasonable,  provided  that at  least  ten  (10)  days  prior  to any  such
settlement,  written notice of its intention to settle is given to  Indemnifying
Party.  If,  pursuant to this Section 8.3, the  Indemnified  Party so defends or
settles  a Third  Party  Claim  for  which  it is  entitled  to  indemnification
hereunder, as hereinabove provided, the Indemnified Party shall be reimbursed by
Indemnifying  Party for the  reasonable  attorneys'  fees and other  expenses of


                                       28


defending the Third Party Claim which are incurred from time to time,  forthwith
following the  presentation  to  Indemnifying  Party of itemized  bills for said
attorneys'  fees  and  other  expenses.  No  failure  by  Indemnifying  Party to
acknowledge in writing his  indemnification  obligations under this Article VIII
shall relieve it of such obligations to the extent they exist.

         Section  8.4  Certain  Information.  Parent,  Subsidiary,   Controlling
Shareholders  and Target agree to furnish or cause to be furnished to each other
(at  reasonable  times and at no charge) upon request as promptly as practicable
such  information  (including  access to books and records)  pertinent to any of
them and assistance  relating to any of them as is reasonably  necessary for the
preparation, review and audit of financial statements, the preparation,  review,
audit  and  filing  of any Tax  Return,  the  preparation  for any  audit or the
prosecution or defense of any claim, suit or proceeding relating to any proposed
adjustment or assessment.  Controlling Shareholders shall grant to Parent access
to all Tax Returns filed with respect to Target or its subsidiaries


                                   ARTICLE IX

                        TERMINATION, AMENDMENT AND WAIVER

         Section 9.1  Termination.  This Agreement may be terminated at any time
prior  to  the  Effective  Time,   whether  before  or  after  approval  by  the
shareholders of Target:

                   (a) by mutual consent of Parent and Target; or

                   (b) by either  Parent or Target if (i) the  Merger  shall not
have been  consummated on or before January 14, 2005 (the  "Termination  Date"),
(ii) the  requisite  vote of the Board of  Directors  of Parent to approve  this
Agreement  and the  transactions  contemplated  hereby and thereby  shall not be
obtained at the meetings, or any adjournments thereof,  called therefore,  (iii)
any  governmental or regulatory body, the consent of which is a condition to the
obligations  of Parent,  Subsidiary  and Target to consummate  the  transactions
contemplated  hereby,  shall have  determined  not to grant its  consent and all
appeals of such determination  shall have been taken and have been unsuccessful,
or (iv) any court of competent  jurisdiction  in the United  States or any State
shall  have  issued  an  order,  judgment  or  decree  (other  than a  temporary
restraining order)  restraining,  enjoining or otherwise  prohibiting the Merger
and such order, judgment or decree shall have become final and nonappealable.

         Section 9.2 Effect of Termination.  In the event of termination of this
Agreement by either Parent or Target, as provided in Section 9.1, this Agreement
shall  forthwith  become  void and there  shall be no  liability  on the part of
either  Target,  Parent,  Subsidiary or their  respective  officers or directors
(except as set forth in this  Section  9.2).  Nothing in this  Section 9.2 shall
relieve any party from liability for any breach of this Agreement.

         Section 9.3  Amendment.  There shall be no material  amendments to this
Agreement after shareholder approval.

                                       29


                   Section 9.4 Waiver.  Any of the parties to this Agreement may
waive breach of representations,  warranties, covenants, conditions or documents
of another party, provided, however, any such waiver shall be in writing.


                                    ARTICLE X

                                  MISCELLANEOUS

         Section 10.1 Survival of Representations, Warranties and Covenants. All
representations,  warranties, covenants and agreements made by any party in this
Agreement or pursuant  hereto shall survive the Merger until two (2) years after
the Effective Time, except for the  representations,  warranties,  covenants and
agreements  contained  in Sections  5.2(h),  5.2(n),  5.2(o),  5.2(z),  5.2(aa),
5.3(e),  5.3(g),  5.3(i),  and 5.3(l) of this Agreement  which shall survive the
Merger until the  expiration  of the  applicable  statutes of  limitations  with
respect to such matters,  and the covenants and agreements of Sections 6.7, 6.9,
6.10,  and 6.12 which shall survive  indefinitely.  All claims made by Parent by
virtue of any such representations,  warranties,  covenants and agreements,  and
all claims made by Target except for the  covenants  and  agreements of Sections
6.7, 6.9, 6.10 and 6.12 shall be made under,  and subject to the limitations set
forth in, Article VIII hereof. The parties acknowledge that ordinary damages for
a breach of the covenants and agreements of Sections 6.7, 6.9, 6.10 and 6.12 are
and will be inadequate,  and, therefore,  the parties agree that the Controlling
Stockholders shall be entitled to specific  performance and such other legal and
equitable remedies as a court of competent jurisdiction may award.

         Section 10.2 Publicity. Neither party shall issue any press releases or
engage in any other  publicity  before  the  Effective  Time  without  the prior
written consent of the other parties,  except for the filing with the SEC of any
notice or report that may be required by applicable  regulations  promulgated by
the SEC.

         Section 10.3 Notice. All notices required or permitted to be
given  hereunder shall be in writing and shall be deemed given when delivered in
person or sent by  confirmed  facsimile,  or when  received  if given by Federal
Express or other nationally  recognized  overnight courier service,  or five (5)
business days after being deposited in the United States mail,  postage prepaid,
registered or certified mail, addressed to the applicable party as follows:

                                     Trans Energy, Inc.
                                     210 Market Street
                                     P. O. Box 393
                                     St. Marys, West Virginia 26170

                                     Copy to:

                                     Leonard Neilson, Esq.
                                     8160 South Highland Drive, Suite 209
                                     Sandy, Utah  84903

                                       30


                                     Arvilla, Inc.
                                     P. O. Box 432
                                     St. Marys, West Virginia 26170-0432

                                     Copy to:

                                     Richard A. Hudson, Esq.
                                     Bowles Rice McDavid Graff & Love, LLP
                                     P. O. Box 49
                                     Parkersburg, West Virginia 26102

         Section 10.4 Entire  Agreement.  This Agreement  constitutes the entire
agreement between the parties and shall be binding upon and inure to the benefit
of the parties hereto and their respective legal representatives, successors and
permitted  assigns.  The  parties  and  their  respective   affiliates  make  no
representations  or  warranties  to each  other,  except  as  contained  in this
Agreement,  and any and all prior  representations  and  statements  made by any
party or its representatives, whether verbally or in writing, are deemed to have
been merged into this Agreement,  it being intended that no such representations
or statements shall survive the execution and delivery of this Agreement.

         Section 10.5 Non-Waiver.  The failure in any one or more instances of a
party to insist upon performance of any of the terms, covenants or conditions of
this Agreement,  to exercise any right or privilege conferred in this Agreement,
or the  waiver by said party of any  breach of any of the  terms,  covenants  or
conditions of this Agreement,  shall not be construed as a subsequent  waiver of
any such terms, covenants,  conditions, rights or privileges, but the same shall
continue and remain in full force and effect as if no such forbearance or waiver
had occurred. No waiver shall be effective unless it is in writing and signed by
an authorized representative of the waiving party.

         Section  10.6   Counterparts.   This   Agreement  may  be  executed  in
counterparts, and each such counterpart shall be considered as an original.

         Section 10.7  Severability.  The  invalidity  of any  provision of this
Agreement shall not affect the validity of any other provisions hereof.

         Section 10.8 Governing Law. This Agreement  shall be and is governed by
and interpreted in accordance with the laws of the State of Nevada as applied to
contracts made and performed entirely within the State of Nevada.

         Section 10.9 Binding Arbitration.  Except in the case of violation of a
restrictive  covenant,  which shall entitle a party to this  Agreement to obtain
injunctive relief, all other controversies,  claims and breaches arising out of,
or  relating  to,  this  Agreement  shall be settled by binding  arbitration  in
accordance with the Rules of the American  Arbitration  Association  (Commercial
Rules), with the arbitration taking place in Pleasants County, West Virginia.

                                       31


         Section 10.10 Binding Effect. This Agreement shall inure to the benefit
of and be binding upon the parties  hereto and their  successors  and  permitted
assigns. Nothing in this Agreement, express or implied, is intended to confer on
any person other than the parties  hereto and their  respective  successors  and
permitted assigns, any rights, remedies,  obligations or liabilities under or by
reason of this Agreement, including, without limitation, third party beneficiary
rights.

         Section 10.11 Assignability. This Agreement shall not be
assignable by either party without prior written consent of other party.

         Section  10.12  Headings.  The  headings  in  this  Agreement  are  for
convenience  of  reference  only,  and  shall  not  be  considered  when  giving
interpreting to any of its provisions.

         IN WITNESS  WHEREOF,  the parties have executed this Agreement and Plan
of Reorganization on the date first above written.

PARENT:                                    SUBSIDIARY:

Trans Energy, Inc.                         Trans Energy Acquisitions, Inc.


By:  /s/ Loren E. Bagley                 By: /s/    Loren E. Bagley
   ---------------------------                 ---------------------------------
         Its Vice President                         Its President


TARGET:                                    CONTROLLING STOCKHOLDERS:

Arvilla, Inc.                              /S/  (Clarence E. Smith)
                                           ------------------------------------
                                                    (Clarence E. Smith)
By:  /s/ Clarence E. Smith
     ---------------------------------
         Its President                     /S/   (Rebecca L. Smith)
                                           -------------------------------------
                                                   (Rebecca L. Smith)



                                       32



Appendix   B

DEAN HELLER                             Certificate of
Secretary of State                        Amendment
202 North Carson St.          (PURSUANT TO NRS 78.385 and 78.390)
Carson City, NV 89701



              Certificate of Amendment to Articles of Incorporation
                         For Nevada Profit Corporations
          (Pursuant to NRS 78.385 and 78.390 - After Issuance of Stock)
                             - Remit in Duplicate -

1.       Name of Corporation: Trans Energy, Inc.


2.       The articles have been amended as follows (provide article numbers,  if
         available):

         Article #3 - is amended by adding the following paragraph:

                  "As of January __,  2005,  a one share for 150 shares  reverse
                  stock  split of the then  issued  and  outstanding  shares  of
                  common stock of the  corporation  was  effected.  Accordingly,
                  each 150 shares of common stock, par value $0.001,  issued and
                  outstanding  immediately  prior to the  effective  time of the
                  split was  automatically and without any action on the part of
                  the holder thereof  reclassified and changed,  pursuant to the
                  reverse  stock  split,  into one  share of post  split  common
                  stock, par value $0.001 per share,  subject to the rounding up
                  of any fractional  shares to the next higher whole share.  The
                  total   authorized   capitalization   of  the  corporation  is
                  unchanged and remains at  500,000,000  shares of common stock,
                  par value $0.001 per share, and 10,000,000 shares of preferred
                  stock, par value $0.001 per share."

3.  The  vote by  which  the  stockholders  holding  shares  in the  corporation
entitling  them to  exercise at least a majority  of the voting  power,  or such
greater  proportion of the voting power as may be required in the case of a vote
by classes or series, or as may be required by the provisions of the articles of
incorporation  have  voted in  favor of the  amendment  is:  256,287,738  shares
(51.6%) voting for (by written consent) and zero shares voting against.

4. Officer Signature (Required):

  /s/  Robert L. Richards
-------------------------------------
       Robert L. Richards, President

* If any proposed amendment would alter or change any preference or any relative
or other  right  given to any class or series of  outstanding  shares,  then the
amendment  must be approved by the vote,  in  addition to the  affirmative  vote
otherwise  required,  of the  holders of shares  representing  a majority of the
voting power of each class or series  affected by the  amendment  regardless  of
limitations or restrictions on the voting power thereof.


IMPORTANT:  Failure to include any of the above information and remit the proper
fees may cause this filing to be rejected.