The Pennsylvania Department of Environmental Protection‘s Office of Oil and Gas Management faces a $2.9 million deficit in fiscal year (FY) 2016-2017, which begins in July, according to the state budget office. It also faces a $9.8 million deficit in FY 2017-2018. The oil and gas office, which is staffed by 227 people and regulates the state’s oil and natural gas industry, is funded entirely by permit fees, which have plummeted with the decline in activity in the state related to low commodity prices. Last month, DEP Secretary John Quigley said the DEP remains severely underfunded and understaffed (see Shale Daily, March 1). The deficit means that the office can’t fill vacant positions. There were 17 rigs running in the state at the end of last week, compared to 50 at the same time last year, according to Baker Hughes Inc. Quigley told lawmakers in March during state budget hearings that the situation could lead to another increase in oil and gas permit fees, which were last increased in 2014 (see Shale Daily, June 13, 2014). The agency is not alone: the state faces a $2 billion budget deficit, and lawmakers only recently passed the rest of the FY 2015-2016 budget after a nine month impasse (see Shale Daily, March 23).
Atlas Energy Group LLC has entered into an amendment to its first lien credit facility. Among other things, the change allows it to establish a second lien position. The company said it utilized the second lien to reduce the first lien by $36 million. Atlas owns all of the general partner interest, distribution rights and a 23% limited partner interest in upstream subsidiary Atlas Resource Partners LP, a separately traded company with producing wells and reserves in 17 states that include assets in the Barnett, Eagle Ford, Marcellus and Utica shales. Atlas also announced success in replacing existing financial covenants that would give it more financial flexibility moving forward. The company has struggled during the commodities downturn. It was recently forced to start trading its units on the over-the-counter market OTCQX, after the New York Stock Exchange suspended trading of its common units and moved forward with delisting procedures (see Shale Daily, March 18; Dec. 31, 2015). The units were delisted because the company’s market capitalization had fallen below the $50 million minimum over a consecutive 30-day trading period.
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