Cadiz Inc. operates as a land and water resource development company in the United States. The company engages in the water resource, and land and agricultural development activities in San Bernardino County properties. Water Resource Development The company’s portfolio of water resources is located in proximity to the Colorado River and the Colorado River Aqueduct (CRA), the principal source of imported water for Southern California, and provides the company with the opportunity to participate in various water supply, water storage, and conservation programs with public agencies and other partners. The Cadiz Valley Water Conservation, Recovery and Storage Project The company owns approximately 34,000 acres of land and the subsurface strata, inclusive of the unsaturated soils and appurtenant water rights in the Cadiz and Fenner valleys of eastern San Bernardino County (the Cadiz/Fenner Property). The aquifer system underlying this property is recharged by precipitation (both rain and snow) within a watershed of approximately 1,300 square miles. The Cadiz Valley Water Conservation, Recovery and Storage Project (the ‘Water Project’ or ‘Project’) is designed to supply, capture and conserve billions of gallons of renewable native groundwater being lost annually to evaporation from the aquifer system underlying its Cadiz/Fenner Property, and provide a reliable water supply to water users in southern California. The Project also offers participants the ability to carry-over their annual supply, and store it in the groundwater basin from year to year. A second phase of the Water Project, Phase II, would offer approximately 1 million acre-feet of underground storage capacity that can be used to hold imported water supplies at the Water Project area. Existing Pipeline Asset The company holds ownership rights to a 96-mile existing idle natural gas pipeline from the Cadiz/Fenner Property to Barstow, California that would be converted for the transportation of water. In 2011, the company entered into an agreement with El Paso Natural Gas (EPNG), a subsidiary of Kinder Morgan Inc., providing the company with rights to purchase approximately 220-miles of idle, natural gas pipelines between Bakersfield and Cadiz, California. Upon conversion, the 30-inch line could transport between 20,000 and 30,000 acre-feet of water per year between the Water Project area and various points along the Central and Northern California water transportation network. In 2012, the company entered into a new agreement with EPNG dividing the 220-mile pipeline in Barstow, California, with the company gaining ownership rights to the 96-mile eastern segment between Barstow and the Cadiz Valley and returning to EPNG rights to the 124-mile western segment for its own use. The Barstow area serves as a hub for water delivered from northern and central California to communities in southern California’s High Desert. Agricultural Development Within the Cadiz/Fenner Property, 9,600 acres have been zoned for agriculture and the company has developed a total of 1,920 acres of the property for agricultural operations. The infrastructure includes six wells that are interconnected within a portion of this acreage for agricultural use, and three additional production wells, with the nine wells together having total annual production capacity of approximately 20,000 acre-feet of water. Permanent crops in production include 160 acres of vineyard used to produce dried-on-the-vine raisins and 340 acres of lemon orchards. All crops are farmed using sustainable agricultural practices. Approximately 340 acres of lemons are being farmed under a 2013 lease agreement with Limoneira Company (Limoneira). Limoneira has planted 140 acres of new lemons under a lease agreement. In 2015, Limoneira also acquired 200 acres of young lemon trees and associated irrigation lines from the company and one of its leasing tenants and amended its lease with the company to include the additional 200 acres. Under the amended lease agreement, Limoneira has the right to plant up to an additional 1,140 acres of lemons over the next three years. Additional Eastern Mojave Properties The company also owns approximately 11,000 acres outside of the Cadiz/Fenner Valley area in other parts of the Mojave Desert in eastern San Bernardino County. The company’s primary landholding outside of the Cadiz area is approximately 9,000 acres in the Piute Valley. This landholding is located approximately 15 miles from the resort community of Laughlin, Nevada, and approximately 12 miles from the Colorado River town of Needles, California. Additionally, the company owns acreage located near Danby Dry Lake, approximately 30 miles southeast of its Cadiz/Fenner Valley properties. Land Conservation Bank Approximately 10,000 acres of the company’s properties outside of the Cadiz/Fenner Valley area are located within terrain designated by the federal government as Critical Desert Tortoise Habitat and/or Desert Wilderness Areas. In 2015, the California Department of Fish and Wildlife approved its establishment of the Fenner Valley Desert Tortoise Conservation Bank (Fenner Bank), a land conservation bank that makes available approximately 7,500 acres of its properties located within Critical Desert Tortoise Habitat for mitigation of impacts to tortoise and other sensitive species that would be caused by development in the Southern California desert. Business Strategy The company’s business strategy is to pursue the development of its landholdings for their highest and best uses. History Cadiz Inc. was founded in 1983.
cadiz inc (CDZI:NASDAQ GM)
550 South Hope Street
Los Angeles, CA 90071
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