A version of this story was published by the Pittsburgh Post-Gazette.

Residents of Dimock, Pa., said they were surprised -- and in some cases upset -- by the settlement that state environmental regulators reached last week with Cabot Oil & Gas, which the Department of Environmental Protection says contaminated 18 water wells with methane from its gas drilling operations.

The homeowners were told in September that the DEP was going to provide them with fresh water by building a pipeline from a nearby water treatment facility. A state infrastructure fund would have fronted the $11.8 million cost of the project, and the DEP was going to seek reimbursement from Cabot.

But last week the DEP announced that the pipeline project was dead and that Cabot had agreed instead to give the homeowners $4.1 million and provide treatment systems for their well water. The 19 families who draw water from the wells will be offered payments equal to twice the value of their homes, with a minimum payment of $50,000. The settlement also gives the DEP $500,000 to cover the cost of the investigation.

Some of the residents are outraged by the change in plans, even though they say they will accept Cabot's offer.

"They destroy your life, your water, and for compensation they wave a little bit of money and expect you to take it and abandon your home," said Julie Sautner, who says her well was the first to be contaminated, in September 2008. "Just take the money and shut up. This is America, and I never expected this."

Sautner and several other homeowners filed a federal lawsuit against Cabot last year, seeking damages for their losses and a fund to cover the cost of any medical treatment that might be caused by the contamination. They also want to stop the company from any further drilling in the area. The new settlement is not expected to affect this separate civil suit.

Sautner said Cabot installed a treatment system in her home two years ago. She said she later disconnected it because it didn't work.

But Loren Salsman, who is not part of the lawsuit, said the methane separator Cabot installed at his house works fine. He said his well has always had methane, which sometimes occurs naturally in well water, but that the levels increased as a result of drilling in August 2009. He said he's not concerned about the methane, because it is not toxic and evaporates out of water.

"I was thrilled with the decision," Salsman said, speaking of the settlement.

George Stark, a Cabot spokesperson, said the treatment systems the company is offering now are more sophisticated than those it installed in the past. He said the systems can be retooled based on the nature of a specific well's contamination to remove the methane as well as any other impurities that may be in the water.

"I believe the new systems we'll be installing are fully functional," he said.

Stark said he did not know how long the systems usually last, or whether Cabot will pay for maintenance or replacement if they don't work.

Michael Smith, a DEP spokesperson, said in an e-mail that the department decided to settle with Cabot because there was "wide opposition" to the pipeline and it likely would never have been built.

"This settlement is intended to give the affected families some options for how they can address their particular situation," he said.

A group of pro-drilling residents and business owners in the area, who started a campaign called Enough Already, organized a vocal opposition to the project, saying it was an intrusive solution that would jeopardize water supplies for the neighboring town of Montrose, where water for the pipeline would have come from. Some of the businesses that participated in the campaign work with Cabot. One, run by Guy Parrish, has been making water deliveries to the affected families in Dimock and will be installing the new treatment systems.

Eric Brunges, manager at Brunges Commercial Supply, said the group was "all for the people in Dimock having good water" but worried that the project would run over budget and that taxpayers would bear the costs.

Brunges said the group met with Cabot to get information about the pipeline but received no money from the company and made its decisions independently.

Homeowner Julie Sautner said she will get about $250,000 from Cabot in the settlement. She said the county tax assessor's records say her home is valued at about $130,000 but that she recently got an independent assessment that valued it at around $190,000.

Residents say their land values have plummeted since the water became contaminated.

"There is no property value here no more," said Norma Fiorentino, whose well exploded on New Year's Day, 2009. Fiorentino said she'll be getting $228,928. "Nobody wants to build a house where there's no water."

In November of last year, the DEP found Cabot responsible for polluting what the agency later determined to be 18 wells. It said faulty drilling practices allowed methane, the primary component of natural gas, to leak into the aquifer. Cabot did not agree with the department's findings but agreed to fulfill the obligations laid out in the settlement.

Methane is not toxic, but it can build up in wells and cause explosions. Tests done later by a private firm found toxic chemicals in some of the Dimock wells, but those chemicals were not scientifically linked to Cabot's drilling.

The DEP has halted Cabot's drilling activities around the affected wells, but the agreement establishes a path for the company to resume those operations in April.

"The agreement lays out a clear timeline on how Cabot must test pressure readings at the gas well and levels of combustible gas in nearby water wells," Smith said by e-mail. "If gas levels persist in the water supplies, the company must properly vent the water wells so they do not post a danger to residents or property in the area. Ultimately, the company must demonstrate that their gas wells are no longer allowing methane to migrate and contaminate nearby water supplies."

The families have up to 85 days to decide whether or not to accept the offer. Those who decline have until Dec. 31, 2012 to change their minds. After that date, the money reverts to Cabot.

The agreement allows Cabot to stop delivering the potable water it has been providing to residents, whether or not a family agrees to the offer.

In a separate letter sent after the settlement, Sautner and Fiorentino said Cabot offered to pay them immediately if they released the company from any legal claims, such as the federal civil suit.

"People are desperate but not that desperate," Sautner said. "Give up our lawsuit? I mean, we've been working on this for two years now. What are they, crazy?"

Nolan Ely, another homeowner, said he is outraged by the agreement between Cabot and the DEP. He said the amount he'll get, which he wouldn't disclose, wasn't much more than the minimum and not enough to pay for a lifetime supply of water, should the treatment system not work.

Ely is in an unusual position, because until recently he worked as a heavy-equipment operator for Cabot. Two years ago he was working on a well just hundreds of feet from his own property, which he had leased to the company, when he said drillers hit an unexpected pocket of gas.

"I had to hit the emergency button and shut down the operation," he said. "Probably a month or so after that we started having problems with our water. And I begged Cabot to come check our water, and they didn't."

Ely later joined the civil lawsuit against Cabot and was put in the uncomfortable spot of suing the company that sent him both paychecks and royalty payments.

Ely said Cabot fired him a few months ago, citing conflict of interest because of the lawsuit. Stark, the Cabot spokesman, said Ely was put on paid leave and chose not to come back.