Residents of Dimock Township in Susquehanna County, PA, whose drinking water supplies were contaminated by natural gas, are to receive a share of $4.1 million that Cabot Oil & Gas Corp. agreed to pay under a settlement negotiated with the state's Department of Environmental Protection (DEP).

The settlement, announced Thursday, would enable the affected families to "address their individual circumstances as they see fit," said the state. The settlement also binds Cabot to offer and pay to install whole-house gas mitigation devices in each of the 19 affected homes. In addition Cabot agreed to pay $500,000 to offset the state's expense for its two-year investigation of Dimock residents' water supplies.

"The 19 families in Dimock who have been living under very difficult conditions for far too long will receive a financial settlement that will allow them to address their own circumstances in their own way," said DEP Secretary John Hanger. He said the amount paid to each family will equal two-times the value of their home, with a minimum payment of $50,000.

"In addition to the significant monetary component of this settlement, there is a requirement that Cabot continue to work with us to ensure that none of their wells allow gas to migrate," Hanger said.

Cabot CEO Dan Dinges said the agreement "provides a reasonable and pragmatic way forward for all parties. The common ground we found to settle provides the right balance of regulations, financial payments, timely execution and operational safeguards that in the end will protect the resources of Pennsylvania, promote economic development of clean-burning natural gas and continue to create good paying jobs in the natural gas industry.

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