In the Matter of:

COMMONWEALTH OF PENNSYLVANIA

DEPARTMENT OF ENVIRONMENTAL PROTECTION

Cabot Oil and Gas Corporation :

Dimock and Springville Townships :

Susquehanna County :

Clean Streams Law,

the Oil and Gas Act, and

the Solid Waste Management Act

CONSENT ORDER AND AGREEMENT

This Consent Order and Agreement is entered into this 4th day of November 2009, by and

between the Commonwealth of Pennsylvania, Department of Environmental Protection

("Department") and Cabot Oil and Gas Corporation ("Cabot").

Findings

The Department has found and determined the following:

A. The Department is the agency with the duty and authority to administer and enforce

The Clean Streams Law, Act of Jnne 22, 1937, P.L. 1987, as amended, 35 P.S. §§691.1-691.1001

("Clean Streams Law"); the Oil and Gas Act, Act of December 19, 1984, P.L. 1140, as amended, 58

P.S. §§601.101-601.605 ("Oil and Gas Act"); the Solid Waste Management Act, Act of July 7, 1980,

P.L. 380, as amended, 35 P.S. §§6018.101-6018.1003 ("Solid Waste Management Act"); Section

1917-A of the Administrative Code of 1929, Act of April 9, 1929, P.L. 177, as amended, 71 P.S.

§§510-17 ("Administrative Code"); and the rules and regulations promulgated thereunder

("Regulations").

B. Cabot is a Delaware corporation registered to do business in Pennsylvania and is

engaged in various oil and gas exploration and production activities in Pennsylvania, including in

Dimock and Springville Townships, Susquehanna County. Cabot maintains a mailing address

of 5 Penn Center West, Suite 401, Pittsburgh, PA 15276.

HESI302996
BACKGROLIND ON GAS MIGRATION

C. Cabot is the "owner" and "operator," as those terms are defined in Section 103 of the

Oil and Gas Act, 58 P.S. §601.103, of certain gas wells, or hasreceived permit authorization from

the Department to drill wells, within an area defined as follows: South of 41 degrees 45 minutes

latitude; East of-75 degrees 54 minutes 1 i seconds longitude; North of 41 degrees 42 minutes 14

seconds latitude; and West of-75 degrees 50 minutes 48 seconds longitude in Dimock and

Springville Townships, Susquehanna County, Pennsylvania ("Affected Area"). A list of Cabot’s

drilled wells and wells permitted but not drilled in the Affected Area arelisted as Exhibit A and

incorporated herein ("Cabot Wells"). A map of the Affected Area is attached as Exhibit B and

incorporated herein.

D. On January 1, 2009, an explosion was reported in an outside, below-grade water well

pit at a home located in the Affected Area near the intersection of State Route 2024 and Carter Road

in Dimock Township, Susquehanna County.

E. Due to the close proximity of the home described in Paragraph D, above, to the Cabot

Wells, the Department began an investigation to determine if the incident was the result of gas

drilling activities by Cabot.

F. During its investigation since January 2009, the Department documented that

combustible gas was present in the headspaces of wells that provide drinking water to certain homes

located near the Cabot Wells, and/or documented that elevated levels of dissolved methane was

present in wells that provide drinking water to certain homes located near the Cabot Wells.

G. On February 27, 2009, the Department issued Cabot a Notice of Violation for, among

other things, discharging natural gas, a polluting substance, to waters of the Commonwealth without

authorization, and for failing to prevent gas from entering fresh .groundwater.

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HESI302997
H. On May 13, 2009, the Department issued Cabot a Notice of Violation for failing to

properly cement easing at certain of the Cabot Wells, and for failing to prevent gas from entering

groundwater from the Cabot Well known as the Gesford 3 Well.

Excessive Pressure/Improper or Insufficient Cemented Casings

I. Based upon its investigation since January 2009, the Department has determined the

following:

1. Two Cabot Wells known as the Baker 1 Well and the Ely 4 Well had

excessive pressures.

2. The Cabot Wells known as the Gesford 3 Well, Gesford 9 Well, and Teel 5

Well have insufficient or improper cemented casings that allow gas to vent between various

cemented casings and/or from behind the surface casing.

3. The Cabot Wells known as the Brooks 1H Well, Ely 5H Well, and Ely 7V

Well have gas venting in the cellar of these Wells indicating that these Wells may have insufficient

or improper cemented casings.

4. As of the date of this Consent Order and Agreement, Cabot has not corrected

the insufficient or improper cemented, casings at the Gesford 3 Well, Gesford 9 Well, and Teel 5

Well.

Pollution of Private Water Supplies

J. During its investigation since January 2009, the Department has collected samples

from wells that provide drinking water to 13 homes located near the Cabot Wells ("Affected Water

Supplies"), and these samples contained elevated levels of dissolved methane gas. In addition, the

Department identified combustible gas in the headspaces of seven of the Affected Water Supplies. A

list identifying the Affected Water Supplies is attached as Exhibit C and incorporated herein.

HESI302998
Ko

following:

Based upon its investigation since January 2009, the Department has determined the

1. Ten of the Affected Water Supplies are less than 1,000 feet from one or more

of the Cabot Wells. These 10 Affected Water Supplies have elevated levels of dissolved methane "

and/or the presence of combustible gas in the drinking water wells.

2. The presence of dissolved methane and/or combustible gas in the 10 Affected

Water Supplies occurred within six months of completion of drilling of one or more of the Cabot

Wells. As such, Cabot is presumed to be responsible for the pollution to these 10 Affected Water

Supplies, pursuant to Section 208(c) of the Oil and Gas Act, 58 P.S. §601.208(c).

3. Three of the Affected Water Supplies are within 1,300 feet of one or more of

the Cabot Wells. Based upon the presence of elevated methane in the water supplies~ the presence of

combustible gas in water well headspaces, the close proximity of these three Affected Water

Supplies to the Cabot Wells, the close proximity of these three Affected Water Supplies to the other

10 Affected Water Supplies, and other factors, the Department has determined that Cabot is also

responsible for the pollution to these three Affected Water Supplies. A chart identifying the

distances of all of the Af~’ected Water Supplies from the Cabot Wells is attached as Exhibit D and

incorporated herein.

Discharge of Natural Gas into the Groundwater

L. Based upon its investigation since January 2009, the Department has determined the

following:

1. Cabot had caused or allowed the unpermitted discharge of natural gas, a

polluting substance, into the groundwater, which constitutes a "water of the Commonwealth," as that

term is defined in 35 P.S. §691.1.

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HESI302999
2. As of the date of this Consent Order and Agreement, Cabot has taken certain

actions approved by the Department to prevent the ongoing, unpermitted discharge of natural gas

into the waters of the Commonwealth.

Gas Migration Violations

M. Cabot’s failure to properly case and cement the Gesford 3 Well, Gesford 9 Well, and

Teel 5 Well to prevent the migration of gas or other fluids into sources of fresh groundwater is a

violation of 25 Pa. Code §78.81(a).

N. Cabot’s failure to correct the insufficient or improperly cemented casing at the

Gesford 3 Well, Gesford 9 Well, and Teel 5 Well is a violation of 25 Pa. Code §78.86.

O. Cabot’s pollution of the Affected Water Supplies and failure to restore or replace the

Affected Water Supplies to the quality at least equal of the .water supply prior to becoming affected is

a violation of Section 208(a) of the Oil and Gas Act, 58 P.S. §601.208(a), and 25 Pa. Code

§78.51(d).

P. Cabot’s unpermitted discharge of natural gas to the groundwater is a violation of

Section 401 of the Clean Streams Law, §35 P.S. 691.401, and 25 Pa. Code §78.73(a).

Q. The violations set forth in the Paragraphs M through P, above, constitute unlawful

conduct pursuant to Section 509 of the Oil and Gas Act, 58 P.S. §601.509, and Section 611 of the

Clean Streams Law, 35 P.S. §691.611.

BACKGROUND ON OTItER VIOLATIONS

R. Cabot is the "owner" and "operator," as those terms are defined in Section 103 of the

Oil and Gas Act, 58 P.S. §601.103, of the wells listed in Exhibit E, which is attached and

incorporated herein.

HESI303000
Black 2H Well Site

S. On September 19, 2008, a representative of Cabot reported to the Department that he

had observed drilling mud discharging to a spring seep located down-slope of the Black 2H Well

site. At that time, he indicated that the drilling mud appeared to have migrated from an unlined

trench that had been excavated at the Black 2H Well site to accommodate the drill mud circulating

system.

T. Between September 19, 2008, and September 24, 2008, Cabot lined the trench

described in Paragraph S, above, and constructed a series of controls below the spring seep to capture

and contain the drilling mud discharge.

U. On September 24, 2008, the Department inspected the Black 2H Well site and

documented that the drilling mud was not being contained by the liner which had been placed in the

trench described in Paragraph T, above, that drilling mud was discharging to the ground under the

liner, and that drilling mud continued to discharge from the spring seep.

V. The drilling mud described in Paragraph S, above, is an "industrial waste" as defined

in Section 1 of the Clean Streams Law, 35 P.S. §691.1, and a "residual waste" as defined in Section

103 of the Solid Waste Management Act, 35 P.S. §6018.103.

W. The spring seep described in Paragraph S, above, is a "water of the Commonwealth"

as defined in Section 1 of the Clean Streams Law, 35 P.S. §691.1.

X. Cabot did not have a permit or authorization from the Department to discharge

industrial waste and/or residual waste onto the ground or into waters of the Commonwealth from the

Black 2H Well site.

Y. Cabot’s discharge of industrial waste and/or residual waste onto the ground and into

waters of the Commonwealth from the Black 2HWell site without first obtaining a permit or

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HESI303001
approval from the Department is contrary to the requirements of 25 Pa. Code §§78.54 and 78.56(a),

and is a violation of Sections 307 and 401 of the Clean Streams Law, 35 P.S. §§691.307 and

691.401, and Section 301 of the Solid Waste Management Act, 35 P.S. §6018.301. As of the date of

this Consent Order and Agreement, Cabot has corrected this violation.

Gesford 3 Well Site

Z. On January 30, 2009, a representative of Cabot reported to the Department that

approximately 100 gallons of diesel fuel spill had spilled at the Gesford 3 Well site.

AA. On February 2, 2009, the Department inspected the Gesford 3 Well site and

documented that the spill occurred when a leak developed in a fuel line for a drilling mud pump at

the site.

AB. Spilled diesel fuel is a "residual waste" as defined in Section 103 of the Solid Waste

Management Act, 35 P.S. §6018.103.

AC. Cabot’s spill of diesel fuel onto the ground at the Gesford 3 Well site without first

obtaining a permit or approval from the Department is a violation of Section 301 of the Solid Waste

Management Act, 35 P.S. §6018.301. As of the date of this Consent Order and Agreement, Cabot

has corrected this violation.

B Severeool 1 Well Site

AD. On February 18, 2009, the Department inspected the B Severcool 1Well site and

documented that drilling mud had discharged onto the ground at the site when the on-site drilling

mud pump developed a leak. At that time, the Department estimated that 25 to 50 barrels of drilling

mud flowed to a diversion ditch around the site, and approximately 5 to 10 barrels of drilling mud

flowed from the diversion ditch into an adjacent field.

HESI303002
AE. The drilling mud described in Paragraph AD, above, is a "residual waste" as defined

in Section 103 of the Solid Waste Management Act, 35 P.S. §6018.103.

AF. Cabot’s discharge of residual waste onto the ground at the B Servercool 1 Well site

without first obtaining a permit or approval from the Department is contrary to the requirements of

25 Pa. Code §78.56(a), and is a violation of Section 301 of the Solid Waste Management Act, 35

P.S. §6018.301. As of the date of this Consent Order and Agreement, Cabot has corrected this

violation.

Gesford 1 Well Site

AG. On March 6, 2009, a Cabot representative reported to the Department that Cabot had

caused or allowed a discharge of drilling mud at the Gesford 1 Well site. Cabot subsequently

informed the Department that the drilling mud had flowed off-site and into Burdick Creek, and that

the discharge occurred when the drilling mud traveled up and outside of the conductor pipe for the

Gesford 1 Well.

AH. On March 9, 2009, the Department inspected the Gesford 1 Well site and verified that

the discharge reported by Cabot as described in Paragraph AG, above, had flowed across the ground

and into Burdick Creek.

AI. The drilling mud described in Paragraph AG, above, is an "industrial waste" as

defined in Section 1 of the Clean Streams Law, 35 P.S. §691.1, and a "residual waste" as defined in

Section 103 of the Solid Waste Management Act, 35 P.S. §6018.103.

AJ. Burdick Creek is a "water of the Commonwealth" as defined in Section 1 of the Clean

Streams Law, 35 P.S. §691.1.

HESI303003
AK. Cabot does not have a permit or authorization from the Department to discharge

industrial waste and/or residual waste onto the ground or into waters of the Commonwealth fi’om the

Gesford 1 Well site.

AL. Cabot’s discharge of industrial waste and/or residual waste onto the ground and into

waters of the Commonwealth fi’om the Gesford 1 Well site without first obtaining a permit or

approval from the Department is contrary to the requirements of 25 Pa. Code §§78.54 and 78.56(a),

and is a violation of Sections 307 and 401 of the Clean Streams Law, 35 P.S. §§691.307 and

691.401, and Section 301 of the Solid Waste Management Act, 35 P.S. §6018.301. As of the date of

this Consent Order and Agreement, Cabot has corrected this violation.

AM. The violations described in Paragraphs Y, AC, AF, and AL, above, constitute

unlawful conduct under Section 611 of the Clean Streams Law, 35 P.S. §691.611, Section 509 of the

Oil and Gas Act, 58 P.S. §601.509, and/or Section 302 of the Solid Waste Management Act, 35 P.S.

§6018.302, and subject Cabot to a claim for civil penalties under Section 605 of the Clean Streams

Law, 35 P.S. §691.605, Section 506 of the Oil and Gas Act, 58 P.S. §601.506, and/or Section 605 of

the Solid Waste Management Act, 35 P.S. §6018.605.

Failure to Submit Well Records

AN. On February 18, 2009, a review of the Department’s files documented that Cabot had

failed to submit the required well records to the Department within 30 days of cessation of drilling

for all of the Wells identified at Exhibit E, except for the B Servercool 1 Well and the Gesford 1

Well.

AO. Cabot’s failure to submit well records as specified in Paragraph AN, above, is a

violation of Section 212(b) of the Oil andGas Act, 58 P.S. §601.212(b). As of the date of this

Consent Order and Agreement, Cabot has corrected this violation.

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HESI303004
Failure to Maintain Driller’s Log at Well Site

AP. On March 5, 12, and 18, 2009, the Department inspected the Gesford 1 Well site and

documented that Cabot had failed to keep a detailed drillers log at the Well site available for

inspection until drilling is completed.

AQ. Cabot’s failure to keep a detailed drillers log at the well site available for inspection

until drilling is completed is a violation of 25 Pa. Code §78.122(a). As of the date of this Consent

Order and Agreement, Cabot has corrected this violation.

AR. The violations described in Paragraphs AO and AQ, above, constitute unlawful

conduct under Section 509 of the Oil and Gas Act, 58 P.S. §601.509, and subject Cabot to a claim

for civil penalties under Section 506 of the Oil and Gas Act, 58 P.S. §601.506.

Order

After full and complete negotiation of all matters set forth in this Consent Order and

Agreement, and upon mutual exchange of the covenants contained herein, the Parties desiring to

avoid litigation and intending to be legally bound, it is hereby ORDERED by the Department and

AGREED to by Cabot as follows:

1. Authority. This Consent Order and Agreement is an Order of the Department

authorized and issued pursuant to Section 5 of the Clean Streams Law, 35 P.S. §691.5; Section 503

of the Oil and Gas Act, 58 P.S. §601.503; Section 602 of the Solid Waste Management Act, 35 P.S.

§6018.602; and Section 1917-A of the Administrative Code.

2. Findings.

a. Cabot agrees that the Findings in Paragraphs A-L, R-U, W-X, Z-AA, AD,

AG-AH, AJ-AK, AN, and AP, above, are true and correct and, in any matter or proceeding involving

Cabot and the Department, Cabot shall not challenge the accuracy or validity of these Findings.

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HESI303005
b. The Parties do not authorize any other persons to use the Findings in this

Consent Order and Agreement in any matter or proceeding.

3. Compliance with Environmental Laws And Regulations. Cabot shall take all

actions necessary, including the corrective actions set forth in this Consent Order and Agreement, to

maintain compliance with all applicable environmental laws and regulations, including all applicable

provisions of the Clean Streams Law, Oil and Gas Act, Solid Waste Management Act, and the

Regulations.

4. Corrective Actions.

a. Cabot shall not begin hydrofracturing of Cabot Wells in the Affected Area

until it has received written authorization from the Department.

b. Cabot shall not complete the drilling of any existing Cabot Well within the

Affected Area and shall not begin the drilling of any new Well within the Affected Area except in

accordance with the requirements of this Consent Order and Agreement.

c. As of the date of this Consent Order and Agreement, Cabot has submitted and

the Department has approved both the cement bond logs for the surface water protection casing and

the casing and cementing plan for the Ely 7H Well, Gesford 5H Well, and the Gesford 8H Well.

d. Upon execution of this Consent Order and Agreement, Cabot may resume

further drilling of the Ely 7H Well, Gesford 5H Well, and/or the Gesford 8H Well.

e. Regarding any new Well within the Affected Area, Cabot shall submit to the

Department the casing and cementing plan for a new Well at least 10 business days before it

proposes to begin drilling the new Well within the Affected Area.

f. Cabot may begin drilling a new Well within the Affected Area only upon the

Department’s written notice that it has approved the casing and cementing plan for the new Well.

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HESI303006
g. Cabot shall complete the drilling of the Ely 7H Well, Gesford 5H Well, and

Gesford 8H Well, and shall complete the drilling of any new Well within the Affected Area in

compliance with the requirements of this Consent Order and Agreement, including the requirements

of Paragraphs 3, above, and any documents approved by the Department under this Consent Order

and Agreement.

h. Within 10 days Of the date of this Consent Order and Agreement, Cabot shall

notify the Department, in writing, of the names and addresses of all other persons in the Affected

Area not listed at Exhibit C that Cabot is providing and maintaining temporary potable water and/or

gas mitigation devices for, and/or has received complaints from alleging that their water supply

quantity or quality has been affected by Cabot’s drilling activities. For any persons that reside within

the Affected Area and are not listed at Exhibit C, Cabot shall continue to provide and maintain

temporary potable water and/or gas mitigation devices for such persons in accordance with 25 Pa.

Code §78.51, or as otherwise approved by the Department.

i. Within 15 days of the date of this Consent Order and Agreement, Cabot shall

submit a plan to the Department that identifies, in detail, how Cabot shall test for and ensure the

integrity of the casing and cement on the Cabot Wells identified in Paragraphs 1.1., 1.2. and 1.3.,

above. The plan shall include an implementation schedule and, at a minimum, the following:

1) a date by when Cabot proposes to start the integrity testing;

2) a schedule for submitting to the Department a report within 60 days of

the date of this Consent Order and Agreement that describes the tests

completed, test results, and any corrective actions needed; and

3) a final compliance date no later than March 31, 2010, unless otherwise

approved by the Department in writing, by when Cabot shall complete

all of the actions specified in the plan to correct the deficiencies to the

casing and cement in the identified Wells, or plug the Wells in

accordance with Paragraph 4.j., below.

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HESI303007
j. Unless otherwise agreed to by the Department in writing, if Cabot fails to

correct, in accordance with 25 Pa. Code §78.86, the improper and/or insufficient cemented casings in

the Cabot Well(s) identified by the Department in Paragraphs I. 1., 1.2, and 1.3., above, Cabot shall

plug such Cabot Well(s) by March 31,2010, in accordance with Section 210(a) of the Oil and Gas

Act, 58 P.S. §601.210(a), and 25 Pa. Code §§78.91-78.98.

k. As of the date of this Consent Order and Agreement, Cabot has either

provided whole house potable water and/or gas mitigation devices to the Affected Water Supplies, or

has identified an alternative to such that has been approved in writing by the Department. If Cabot

provides water by purchasing from a water purveyor, Cabot shall assure that the users of the Affected

Water Supplies will receive water in amounts sufficient to continually satisfy water usage needs until

the Department notifies Cabot, in writing, that the Department has determined that the Affected

Water Supply has been restored such that Cabot is no longer required to provide such purchased

water.

1. By March 31,2010, Cabot shall have completed any and all actions to prevent

the unpermitted discharge of natural gas (if any) from the Cabot Wells or any other well owned

and/or operated by Cabot within the Affected Area and into the waters of the Commonwealth.

m. By March 31, 2010, Cabot shall submit to the Department a plan and an

implementation schedule, to permanently restore or replace, in accordance with Section 208 of the

Oil and Gas Act, 58 P.S. §601.208, and 25 Pa. Code §78.51, the Affected Water Supplies, and the

other water supplies identified by Cabot pursuant to Paragraph 4.h., above, that the Department

determines have been affected by Cabot’s drilling activities. Upon approval by the Department,

Cabot shall implement the plan in accordance with the approved implementation schedule.

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5. Submission of Documents. With regard to any document that Cabot is required to

submit pursuant to this Consent Order and Agreement, the Department will review Cabot’s

document and will approve or disapprove the document, or portion thereof, in writing. If the

document, or any portion of the document, is disapproved by the Department, Cabot shall submit a

revised document to the Department that addresses the Department’s concerns within a reasonable

time, as specified by the Department. The Department will approve or disapprove the revised

document in writing. Upon approval by the Department, the document, and the Departmentapproved schedule therein, shall become a part of this Consent Order and Agreement for all purposes

and shall be enforceable as such.

6. Civil Penalty Settlemen~ Upon signing this Consent Order and Agreement, Cabot

shall pay a civil penalty of $120,000. This payment is in. settlement for the violations set forth in the

Findings, above, coveting the dates set forth herein. The payment shall be made by corporate check

or the like made payable to "Commonwealth of Pennsylvania" and sent to the Department at the

address set forth in Paragraph 11, below.

7. Stipulated Civil Penalties.

a. If Cabot fails to comply wi~h the provisions of this Consent Order and

Agreement, Cabot shall be in violation of this Consent Order and Agreement and, in addition to

other applicable remedies, shall pay a civil penalty as follows:

1) If Cabot drills a new well within the Affected Area before complying

with all of the obligations set forth in Paragraphs 4.e.-4.f., above, Cabot shall pay a stipulated penalty

of $15,000 per each well where such drilling has commenced.

2) If Cabot fails to meet the obligations set forth in Paragraphs 4.g.-4.m.,

above, Cabot shall pay a stipulated penalty of $1,000 per day for each violation.

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HESI303009
b. Stipulated civil penalty payments shall be payable monthly on or before the

15th day of each succeeding month, and shall be made by corporate check or the like made payable to

"Commonwealth of Pennsylvania" and sent to the Department at the address set forth in Paragraph

11, below.

c. Any payment under this Paragraph shall neither waive Cabot’s duty to meet its

obligations under this Consent Order and Agreement nor preclude the Department from commencing

an action to compel Cabot’s compliance with the terms and conditions of this Consent Order and

agreement. The payment resolves only Cabot’s liability for civil penalties arising from the violation .

of this Consent Order and Agreement for which the payment is made.

8. Reservation of Rights. The Department reserves the right to require additional

measures to achieve compliance with applicable law. Cabot reserves the right to challenge any

action which the Department may take to require those measures.

9. Liability of Cabot. Cabot shall be liable for any violations of the Consent Order and

Agreement, including those caused by, contributed to, or allowed by its officers, directors, agents,

employees, contractors, successors, and assigns.

10. Transfer of the Cabot Wells and/or Leases.

a. Cabot’s duties and obligations under this Consent Order and Agreement shall

not be modified, diminished, terminated, or otherwise altered by the transfer of the Cabot Wells,

leases, any other wells owned and/or operated by Cabot within the Affected Area, and/or any parts

thereof, except as hereinafter provided.

b. If before the termination of this Consent Order and Agreement, Cabot intends

to transfer the Cabot Wells, leases, any other wells owned and/0r operated by Cabot within the

Affected Area, and/or any parts thereof, Cabot shall provide a copy of this Consent Order and

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HESI303010
Agreement to the prospective transferee at least 30 days prior to the contemplated transfer and shall

simultaneously inform the Department of such intent pursuant to Paragraph 11 (Correspondence with

Department), below.

c. The Department, in its sole discretion, may agree to modify or terminate

Cabot’s duties and obligations under this Consent Order and Agreement and may agree to a transfer

upon determination that Cabot is in full compliance with this Consent Order and Agreement,

including payment of any stipulated penalties owed, and upon the transferee entering into a Consent

Order and Agreement with the Department concerning the Wells and/or leases at issue. Cabot agrees

to waive any fight that it may have to challenge the Department’s decision in this regard.

11. Correspondence with Department. All correspondence with the Department

concerning this Consent Order and Agreement shall be addressed to:

Oil and Gas Management

Department of Environmental Protection

230 Chestnut Street

Meadville, PA 16335-3481

Telephone: (814) 332-6860

Fax: (814) 332-6121

12. Correspondence with Cabot. All correspondence with Cabot concerning this

Consent Order and Agreement shall be addressed to:

Mr. Jason Clark and

Mr. Phil Stalnaker

Cabot Oil and Gas Corporation

5 Penn Center West, Suite 401

Pittsburgh, PA 15276

Telephone: (412) 249-3850

Fax: (412) 249-3855

Cabot shall notify the Department whenever there is a change in the contact person’s name, title, or

address. Service of any notice or any legal process for any purpose under this Consent Order and

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HESI303011
Agreement, including its enforcement, may be made by mailing a copy by certified mail, return

receipt requested, to the above address.

13. Decisions Under Consent Order andAgreement. Except as provided in Paragraph

10.c, above, any decision which the Department makes under the provisions of this Consent Order

and Agreement, including a notice that stipulated civil penalties are due, is intended to be neither a

final action under 25 Pa. Code § 1021.2, nor an adjudication under 2 Pa.C.S.A. § 101. Any objection,

which Cabot may have to the decision will be preserved until the Department enforces this Consent

Order and Agreement.

14. Severability. The Paragraphs of this Consent Order and Agreement shall be severable

and should any part hereof be declared invalid or unenforceable, the remainder shall continue in full

force and effect between the Parties~.

15. Entire Agreement. This Consent Order and Agreement shall constitute the entire

integrated agreement of the Parties as to the subject matter hereof. No prior or contemporaneous

communications or prior drafts shall be relevant or admissible for purposes of determining the

meaning or intent of any provisions herein in anylitigation or any other proceeding.

16. Attorney Fees. The Parties shall bear their respective attorney fees, expenses, and

other costs in the prosecution or defense of this matter or any related matters, arising prior to

execution of this Consent Order and Agreement.

17. Modifications. No changes, additions, modifications, or amendments of this Consent

Order and Agreement shall be effective unless they are set out in writing and signed by the Parties.

18. Titles. A title used at the beginning of any Paragraph of this Consent Order and

Agreement may be used to aid in the construction of that Paragraph, but shall not be treated as

controlling.

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19. Termination of Consent Order and Agreement. Cabot’s obligations, but not the

Findings, of this Consent Order and Agreement shall terminate when Cabot has: completed all of

the requirements of this Consent O~der and Agreement, and paid any outstanding stipulated penalties

due under Paragraph 7, above; or by September 30, 2010, whichever is sooner.

IN WITNESS WHEREOF~ the Parties have caused this Consent Order and Agreement to be

executed by their duly authorized representative. The undersigned representative of Cabot certifies

under penalty of law, as provided by 18 Pa.C.S.A. §4904, that he/she is authorized to execute this

Consent Order and Agreement on behalf of Cabot, that Cabot consents to the entry of this Consent

Order and Agreement as a final ORDER of the Department; and that Cabot hereby knowingly waives

its right to appeal this Consent Order and Agreement and to challenge its content or validity, which

rights may be available under Seeti0n 4 of the Environmental Hearing Board Act, the Act of July 13,

1988, P.L. 530, No. 1988-94, 35 P:S. §7514; the Administrative Agency Law, 2 Pa.C.S.A. §103(a)

and Chapters 5A and 7A; or any Other provision of law. -Signature by Cabot’s attorney certifies only

that the Consent Order and Agreement has been signed after consulting with counsel.

FOR CABOT OIL AND GAS FOR THE COMMONWEALTH OF

CORPORATION: PENNSYLVANIA, DEPARTMENT OF

ENVIRONMENTAL PROTECTION:

Vice President/Regional Manager

Attomey for Cabot

S. :Craig Lobins

Regional Manager

Oil and Gas Management Program

Northwest Region

Regional Counsel

HESI303013
EXHIBIT A

CABOT WELLS WITHIN AFFECTED AREA

WELL NAME PERMIT NO. WELL NAME PERMIT NO.

TEEL 1

TEEL 2

TEEL 6

TEEL 7

BROOKS 1

TEEL 5

ELY 1

ELY 2

ELY 4

HUBBARD 1

HUBBARD 2

KAHLE 1

RATZEL 1

GESFORD 1

GESFORD 2

GESFORD 3

HEITSMAN 1

HEITSMAN 2

BAKER 1

BLACK 1

LEWIS 2

ELY 4H

LEWIS 1

COSTELLO 1

ELY 6H

COSTELLO 2

BLACK 1H

ELY" 1H

HEITSMAN 1H

RATZEL 1H

BROOKS 1H

ELY 5H

115-20007 BLACK 2H

115-20010 ROZANSKI 1

115-20011 GREENWOOD 2H

115-20023 GESFORD 4R

115-20014 J GRIMSLEY 1

115-20024 ELY 7V

115-20029 RATZEL 2H

115-20015 R HULL 1H

115-20016 R HULL 2H

115-20039 GREENWOOD 3V

115-20017 HUBBARD 3

115-20018 RATZEL 3V

115-20025 HEITSMAN 3V

115-20040 HEITSMAN 2

115-20033 HUBBARD 5H

115-20019 HUBBARD 6H

115-20020 A & M HIBBARD 2H

115-20021 HEITSMAN 4H NW

115-20026 GESFORD 7H NW

115-20028 BROOKS 3V

115-20030 TEEL 12H NW

115-20034 BLACK 3V

115-20035 J GRIMSLEY 2H SE

115-20036 R HULL 3V

115.20041 ELY 7H SE

115-20043 GESFORD 8H NW

115-20048 GESFORD 9

115-20049 P KELLEY 1

115-20050 GESFORD 5H NW

115-20047 A & M HIBBARD 4

115-20051 BAKER 3

115’20054

115-20056

115-20057

115-20085

115-20091

115-20095

115-20096

115-20152

115-20122

115-20121

115-20142

115-20131

115-20117

115-20123

115-20140

115-20148

115-20147

115-20149

115-20162

115-20163

115-20161

115-20167

115-20133

115-20171

115-20173

115-20160

115-20183

115-20187

115-20196

.115-20201

115-20222

115-20226

HESI303014
HESI303015
EXHIBIT C

AFFECTED WATER SUPPLIES

Norma Fiorentino

RR 6, Box 6212

Montrose, PA 18801

William and Sheila Ely

RR1, Box 6176

Montrose, PA 18801

Craig and Julie Sautner

RR 6, Box 6147

Montrose, PA 18801

Victoria Switzer

P.O. Box 113

Dimock, PA 18816

Michael Ely

RR 6, Box 3176

Montrose, PA 18801

Nolan Ely

P.O. Box 39

Dimock, PA 18816

Victoria Hubert

P.O. Box 111

Dimock, PA 18801

Ronald Teel

RR 6, Box 6182

Montrose, PA 18801

Ronald and Jean Carter

P.O. Box 82

Dimock, PA 18816

Michael and Suzanne Johnson

1129 Timber Ridge Drive

Tampa, FL 33625

Timothy and Deborah Maye

RR 6, Box 6147A

Montrose, PA 18801

Richard Seymour

RR 6, Box 6177A

Montrose, PA 18801

Eric and Susan Roos

RR 6, Box 6194

Montrose, PA 18801

HESI303016
HESI303017
~ EXHIBIT E

WELLS WITH OTHER VIOLATIONS

WELL NAME

Teel 1

Greenwood 1

Teel 2

Teel 6

Ely 2

Gesford 3

Teel 7

Teel 5

Baker 1

Lewis 2

Gesford 2

Ely 4

Lewis 1

Costello 1

Hubbard 1

Gesford 1

Ely 6H

Costello 2

Black 1H

Ely 1H

Heitsman 1H

Brooks 1H

Black 2H

B Severcool 1

PERMIT NUMBER

115-20007

115-20008

115-20010

115-20011

115-20015

115-20019

115-20023

115-20024

115-20026

115-20030

115-20033

115-20034

115-20035

115-20036

115-20039

115-20040

115-20041

115-20043

115-20048

115-20049

115-20050

115-20051

115-20056

115-20080

HESI303018