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BILLINGS - A conservation group and energy development company have agreed to settle a lawsuit involving coal-bed methane development in southern Montana, officials for both sides said Monday.

The case brought by Northern Plains Resource Council against Fidelity Exploration & Production Co. had been set for trial this week in U.S. District Court in Billings.

In its lawsuit, Northern Plains said Fidelity had discharged "dredge or fill material" into waterways without a proper permit and in violation of the federal Clean Water Act.

Among other allegations, Northern Plains claimed Fidelity constructed wastewater holding ponds in intermittent streams running through a project area but didn't have the proper permit. Under the Clean Water Act, companies and others need a permit from the Army Corps of Engineers before building in waterways, Northern Plains said.

Under the agreement reached last week, a copy of which was provided by Northern Plains, Fidelity agreed to apply for permits "for any work that is required for it to comply with its obligations" set forth in the document. Other terms include the removal and reclaiming of certain impoundments or holding ponds.

The document says that nothing within it "constitutes any admission of liability or wrongdoing by any party."

Northern Plains said a judge must still approve the agreement.

Mike Caskey, executive vice president and chief operating officer with Fidelity, said the firm believed it "probably didn't have a problem" where it was doing work.

In the future, he said, "we'll make sure we jump through the additional hurdles of filing, if there is any doubt at all" for the permits.

Roger Muggli, a Northern Plains member, considered the agreement a victory.

"Hopefully it gets their attention that they can't get away with things," he said.

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