Cadiz to begin construction of three new groundwater wells at Cadiz Ranch in California in October; company also completes engineering study for the conversion of the company’s 220-mile oil and gas pipeline to transport water

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LOS ANGELES , September 22, 2022 (press release) –

Construction of three new wells at Cadiz property slated to begin Q4 2022, increasing wellfield capacity to 36,000 acre-feet

Cadiz Inc. (NASDAQ: CDZI/CDZIP) (“Cadiz”, the “Company”) announced today that it will begin construction of three new groundwater wells at Cadiz Ranch in October and initial engineering study for the conversion of the Company’s 220-mile oil and gas pipeline to transport water (“Northern Pipeline Project”) has been completed. Once the three new wells are constructed and come online in early 2023, Cadiz will have 12 wells in operation with a total capacity of 36,000 acre-feet of water per year (AFY), a 33% increase over the current wellfield production capacity of 27,000 AFY.

Cadiz retained global engineering firm Stantec (NYSE: STN) to conduct the engineering study for the Northern Pipeline Project. The study identifies practical off-take locations, pumping stations, cleaning, retrofitting and other improvements that will enable the pipeline to be pressurized and convey approximately 25,000 AFY of water uphill from Cadiz to Barstow on its way to the State Water Project, and approximately 30,000 AFY downhill into Cadiz for storage.

“With so many communities desperate for water, we are urgently working to complete construction of our infrastructure and put it to beneficial use as soon as possible for people, farms, and communities in need,” said Scott Slater, Chief Executive Officer of Cadiz. “With these new wells online, our wellfield will have sufficient capacity to fill our Northern Pipeline and meet the needs of our agricultural operations.”

The Cadiz wellfield at the Ranch captures groundwater that would otherwise be lost to evaporation from the Mojave Desert watershed. Over three decades, Cadiz has developed sophisticated water conservation technologies to irrigate and sustainably grow commercial crops, including citrus, hemp, and grain crops, in extreme arid conditions. The Cadiz Ranch agricultural operation follows a sustainable groundwater management plan that has been administered by the County of San Bernardino since 1993.

In 2012, the Desert Research Institute conducted measurements of evaporation rates from the Bristol and Cadiz Dry Lakes located at the base of the watershed.   Based on their measurements, the combined annual evaporation is conservatively estimated to be 31,590 AFY.  In October 2012, the County of San Bernardino approved the Cadiz Water Conservation and Storage Project and an enhanced groundwater management plan that authorized the recovery of an average of 50,000 acre-feet per year for 50 years for use in California communities.

Conserved water not used for irrigation would be stored in the aquifer or transported to communities in need via two pipelines, including the 220-mile Northern Pipeline, which is already in the ground.

“Our analysis found the Northern Pipeline can be readied for water service quickly, giving the Cadiz Water Project one of the shortest timelines to delivering new water to the region,” said John Hanula, Senior Vice President, Global Major Pursuits for Stantec.

The three new wells will be built by the San Bernardino County office of Yellow Jacket Drilling Services LLC in accordance with existing permits. Cadiz will fund the construction with working capital.

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