SMWD, Cadiz sign agreement for 5,000 AFY of
water via Northern Pipeline with price cap of $1,650 AFY
LOS
ANGELES, June 20, 2024 /PRNewswire/ -- Cadiz,
Inc. (NASDAQ: CDZI / CDZIP) ("Cadiz" or the "Company"), a
California water solutions
company, today announced that the Company signed a definitive
agreement with Santa Margarita Water District ("SMWD") to deliver
water from the Cadiz Water Supply and Storage Project in the Mojave
Desert through the Company's Northern Pipeline. SMWD's board of
directors approved the agreement by unanimous vote at the agency's
board meeting on June
5th. The 50-year take or pay agreement with
SMWD follows the previously announced term sheet entered into with
SMWD in February 2024.
SMWD's decision to contract for delivery of water through
Cadiz's Northern Pipeline provides key revenue streams expected to
support infrastructure financing for the pipeline project. Under
the agreement Cadiz is expected to deliver 5,000 acre-feet per year
to groundwater banks located along the 220-mile pipeline in the
High Desert in exchange for water that can be delivered to SMWD by
State Water Contractors with local water suppliers. In
accordance with the agreement the price per acre-foot of water from
Cadiz, inclusive of all capital, operating and maintenance costs,
will not exceed $1,650 per AFY.
"Santa Margarita has been a
leader in conservation and efficiency for the last two decades,"
said Susan Kennedy, Chairman and
Chief Executive Officer of Cadiz. "Santa
Margarita's agreement to take delivery of water via the
Northern Pipeline will help us meet an aggressive construction
schedule to have the pipeline online in 2026."
"The Cadiz project will help us diversify our water supply
portfolio and reduce our dependence on Colorado River and State
Water Project resources," said SMWD board member, Frank Ury. "Utilizing Cadiz' Northern
Pipeline will allow us to diversify faster, keep costs down and
build resilience at a regional level."
SMWD holds existing contractual rights that enable it to acquire
up to 15,000 AFY from the Cadiz Project by delivery through the
Colorado River Aqueduct. Now this agreement allows SMWD to
obtain delivery of up to 5,000 AFY of that quantity through the
Northern Pipeline without having to wait for the construction of a
completely new pipeline.
Currently, the Company has signed water supply agreements for
65% of the capacity of the Northern Pipeline and is in late-stage
discussions with additional agencies for the remaining
capacity.
For additional information regarding the terms and conditions of
the agreement with SMWD, please refer to our Current Report on Form
8-K filed on March 4,
2024.
About Cadiz, Inc.
Founded in 1983, Cadiz, Inc.
(NASDAQ: CDZI/ CDZIP) is a
California water solutions company
dedicated to providing access to clean, reliable and affordable
water for people through a unique combination of water supply,
storage, pipeline and treatment solutions. With 45,000 acres of
land in California, 2.5 million
acre-feet of water supply, 220 miles of pipeline assets and the
most cost-effective water treatment filtration technology in the
industry, Cadiz offers a full suite of solutions to address the
impacts of climate change on clean water
access.
For more information, please visit www.cadizinc.com.
FORWARD LOOKING STATEMENTS: This release contains
forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. These forward-looking
statements include, but are not limited to, the expected benefits
to be derived from our agreements with SMWD and the projected
timeline for construction and operation of the Northern Pipeline,
which are subject to risks and uncertainties, many of which are
beyond the control of the Company, including the Company's ability
to fulfill the required contractual conditions and complete the
needed construction for water delivery to occur. Although the
Company believes that the expectations reflected in our
forward-looking statements are reasonable, we can give no assurance
that such expectations will prove to be correct. Factors that
could cause actual results or events to differ materially from
those reflected in the Company's forward-looking statements include
potential delays in the supply chain for materials, whether the
parties to the agreement with SMWD described in this release will
be able to obtain the grant funding contemplated by the agreement,
and other factors detailed in the Company's Securities and Exchange
Commission filings, including our Annual Report on Form 10-K for
the year ended December 31, 2023 and
subsequent quarterly and current reports. We undertake no
obligation to publicly update any forward-looking statement,
whether written or oral, that may be made from time to time,
whether as a result of new information, future developments or
otherwise.
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SOURCE Cadiz, Inc.