“Cadiz is committed to providing a safe and reliable water supply solution for Southern California,” said Scott Slater, Cadiz Inc. President and General Counsel. “We look forward to working with the County and SMWD to implement a sound management program that will conserve precious groundwater resources without harm to the environment.”

About Cadiz Inc.

Founded in 1983, Cadiz Inc. is a publicly-held renewable resources company that owns 70 square miles of property with significant water resources and clean energy potential in eastern San Bernardino County, California. The Company is engaged in a combination of water supply and storage and organic farming projects. In 2009 Cadiz adopted a wide-ranging “Green Compact” to implement environmental conservation and sustainable management practices at its properties. For more information about Cadiz, visit www.cadizinc.com<http://www.cadizinc.com/>.

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Los Angeles — Today Cadiz Inc. [NASDAQ: CDZI] (“Cadiz”), a land and water resource development company with 45,000 acres in California’s San Bernardino County, announced that the County Board of Supervisors voted yesterday to approve a Memorandum of Understanding (MOU) establishing the County’s role in enforcing the groundwater management plan for the Cadiz Valley Water Conservation, Recovery and Storage Project.   The Water Project proposes to provide an annual reliable water supply to Southern California communities by capturing and conserving thousands of acre-feet of native groundwater currently being lost to evaporation from the aquifer system beneath the Company’s property in eastern San Bernardino County’s Cadiz Valley.  The MOU grants the County full enforcement authority over the Project’s Groundwater Management, Monitoring, and Mitigation Plan (GMMMP), a key component of the Project designed to monitor aquifer conditions and establish measures to protect against impacts to critical desert resources.

The County is a responsible agency in the ongoing California Environmental Quality Act (“CEQA”) review and permitting process for the Project and must regulate groundwater extraction from County aquifers under its Desert Groundwater Management Ordinance (“Ordinance”).  As part of the CEQA process, the Project must comply with the Ordinance by either receiving a permit from the County or qualifying for an exemption through implementation of a County-approved management plan. The MOU acted upon yesterday authorizes an exclusion from the Ordinance and establishes a framework for finalizing the GMMMP with the County in the final enforcement role.  Additionally, the MOU also reserves up to 20% of the Project’s annual yield for the benefit of water providers in the County for future use under terms and conditions similar to those of other Project participants.

“Establishing the County’s impartial enforcement role over Project operations is a significant step for the Project,” said Cadiz President and General Counsel Scott Slater. “We welcome the decision by the Board of Supervisors to accept the management role to ensure a safe and sustainable Project.”

Once finalized, the GMMMP will set forth guidance criteria for the Project operations through monitoring of aquifer conditions, including groundwater levels, groundwater quality, land subsidence, surface vegetation, air quality, third-party wells and springs, and it will establish a mitigation program in the event of potential undesirable impacts resulting from Project operations. The monitoring will be commenced at least one year before the first production of groundwater from the Project area.

The final GMMMP will be submitted to the County for approval following the release of the Project’s Final Environmental Impact Report (“Final EIR”) by Santa Margarita Water District (“SMWD”), the lead agency of the CEQA process. The Final EIR is expected to be released shortly and submitted for approval to SMWD’s Board after all public comments received on the Draft EIR have been considered.  After the Final EIR is released, the County will consider both the Final EIR and the GMMMP and take action to affirm its role. Once the Project is implemented, the County will manage all monitoring and reporting required under the GMMMP and its provisions will also be subject to enforcement by the County.

About Cadiz Inc.

Founded in 1983, Cadiz Inc. is a publicly-held renewable resources company that owns 70 square miles of property with significant water resources and clean energy potential in eastern San Bernardino County, California. The Company is engaged in a combination of water supply and storage and organic farming projects. In 2009 Cadiz adopted a wide-ranging “Green Compact” to implement environmental conservation and sustainable management practices at its properties. For more information about Cadiz, visit www.cadizinc.com

Los Angeles — Cadiz Inc. [NASDAQ: CDZI] (“Cadiz”), a land and water resource development company with 45,000 acres in California’s San Bernardino County, announced today a significant pledge to support County-based labor and materials upon implementation of the Company’s Cadiz Valley Water Conservation, Recovery and Storage Project (“Project”). As part of the Pledge, the Company has committed to purchase 80% of the materials necessary to construct the Project’s facilities from County businesses and to dedicate 50% of the Project’s jobs to County residents, including a goal of 10% for local veterans.
The Water Project proposes to provide a reliable water supply to Southern California communities by capturing and conserving thousands of acre-feet of native groundwater currently being lost to evaporation from the aquifer system beneath the Company’s property in the Cadiz Valley.  The Project’s Phase I construction cost requirements are estimated at approximately $225 – $275 million.

According to Inland Empire economist Dr. John Husing, the Project’s total economic impact over its first and second phase could reach approximately $878 million, including significant new tax revenues for the County and the local school district. Dr. Husing also estimates that the Project would create an annual average of approximately 1,100 direct and indirect jobs during construction.

“The Cadiz Project would bring exactly the kind of quality jobs we need in our area, and support local manufacturers,” said City of Fontana Mayor Aquanetta Warren. “With this pledge to keep the project investment and job creation local in the County, the Cadiz Project is a significant opportunity to help the local economy bounce back.”

The County of San Bernardino, which has a population of more than 2 million people, has experienced some of the highest unemployment rates in the State of California and U.S. in recent years.  In March 2012, unemployment in San Bernardino County was 12.6%, much higher than the national unemployment rate of 8.2%.  In some of the County’s high desert communities, unemployment is considerably higher.

“The project has many benefits and we believe that it has significant benefits for the local economies in San Bernardino County including the potential impact to Adelanto,” said Eric Jensen, President of the Adelanto Chamber of Commerce.  “These jobs are good paying jobs that would help support local families and would have a positive ripple effect in our community.”

Several other local Chambers of Commerce in the County, including Rancho Cucamonga, Twentynine Palms, and Needles, have also expressed support for the Project in recognition of its potential to stimulate the local economy.

Construction of the Project facilities, which include a 43-mile steel pipeline and a wellfield, will require a broad array of materials and varied labor force in the areas of construction material production or planning, engineering, fabricated pipe and pipe fitting manufacturing, management, scientific and technical consulting, and firms assisting those operations.  Many of the premier suppliers of the materials needed for the Project, including steel, piping and well drilling equipment, are based in San Bernardino County. The Project will rely on these first-class vendors.

“Our San Bernardino County facilities employ over 200 union workers.  This project would help to employ these workers during the manufacturing and construction of the required 43 mile pipeline,” said Dennis Shearer, District Sales Manager for NOV Ameron which has facilities in Etiwanda and Fontana.

About the Pledge

With its pledge, the Company will dedicate 80% of purchases required for the Project’s infrastructure and facilities to San Bernardino County businesses. Once hiring begins following completion of the permitting process, Cadiz commits that 50% of the new jobs created will be reserved for San Bernardino County residents.  Veterans in San Bernardino County, including those based in nearby Twentynine Palms, have been among the hardest hit by economic downturn in the County.  The Company will provide local veterans first preference over a minimum of 10% of available Project jobs and will work with local military bases to ensure this goal is achieved.

Project hiring will not begin until the Project’s permitting process is complete.  To view a copy of the Pledge, visit www.cadizinc.com/County-Pledge. Additional information about the economic impacts of the Project can be found at http://cadizinc.com/downloads/EconomicImpact_Report.pdf.

About the Project

The Project proposes to capture and conserve thousands of acre-feet of native groundwater that will otherwise be lost to evaporation and deliver approximately 50,000 acre-feet per year throughout Southern California.  The Project also offers storage capacity that can be used to “bank” annual supplies in wet years without the high rates of evaporative loss suffered by local surface reservoirs.

Through implementation of established groundwater management practices, the Project will create a sustainable annual water supply for Project participants, which include Santa Margarita Water District, Three Valleys Municipal Water District, Suburban Water Systems, Golden State Water Company, Jurupa Community Services District and California Water Company. To safeguard the environment, the Project includes a broad monitoring and mitigation safety net for Project operations features to provide the strongest assurance that the Project will be operated in a manner that causes no significant impact.

About Cadiz Inc.

Founded in 1983, Cadiz Inc. is a publicly-held renewable resources company that owns 70 square miles of property with significant water resources and clean energy potential in eastern San Bernardino County, California. The Company is engaged in a combination of water supply and storage and organic farming projects. In 2009 Cadiz adopted a wide-ranging “Green Compact” to implement environmental conservation and sustainable management practices at its properties. For more information about Cadiz, visit www.cadizinc.com

Winston H. Hickox, former secretary of the California Environmental Protection Agency,  is a principal with the consulting firm California Strategies. He is responding to the April 13 Viewpoints article, “Plan to tap groundwater for profit shows need for better state policy.” That article stated: “The bottom line is that the project relies on unsustainable mining of groundwater, designed to extract groundwater at a rate exceeding natural recharge.”

As the former secretary of California’s Environmental Protection Agency and a member of the Cadiz Inc. board of directors, I felt compelled to respond to John Bredehoeft and Newsha Ajami’s mischaracterizationof the Cadiz Valley Water Project and California groundwater policy.

California faces many water challenges. Northern California supplies are environmentally challenged. Our erratic climate has long droughts. Water rates are escalating. Water agencies are exploring projects to improve supply reliability, including groundwater projects in partnership with private companies.

Cadiz Inc. is a publicly traded company that owns 70 square miles of land in San Bernardino County, including 34,000 acres in the Cadiz Valley. The company has maintained an organic agriculture operation there for more than 20 years utilizing groundwater for irrigation.

This property is located at the base of a 1,300-square-mile, sparsely populated Mojave Desert watershed that contains 17 million to 34 million acre-feet of water – a quantity on par with Lake Mead or Lake Tahoe- but it is not and has never been a surface water system. This water is deep below ground, beyond the reach of plant and animal life. It slowly marches downhill from the mountains and ultimately to dry lakes where it becomes saline and evaporates.

Over three years, Cadiz has invested more than $10 million in scientific analysis to understand these groundwater resources. Working with the best science and policy experts, the project was designed following proven groundwater basin management practices to safely and sustainably put a small portion of the water – less than 1 percent of the system per year – to beneficial municipal use.

This is a goal supported by statewide water policy and recognized in the California Constitution. A key project design feature is a state-of-the-art groundwater monitoring program, which follows the highest groundwater policy standards long championed by the environmental community. It would be imposed as part of any permit for the project.

Cadiz has been a part of the desert community for more than two decades and intends to remain, investing locally in a region hard hit by economic decline.

The project would create much-needed jobs and bring new tax revenue and stimulus throughout the local economy.

This public-private partnership takes advantage of the private sector’s ability to aggregate and utilize capital to provide for much-needed municipal water supplies, and eliminates upfront risk for the ratepayers and taxpayers.

To not support this project would be a monumental failure of statewide water policy.

March 29, 2012

The following provides an overview of the Cadiz Valley Water Conservation, Recovery and Storage Project and offers a response to questions recently voiced in the online community about the science behind the Project.  The Project is a Southern California water conservation project that would capture and conserve groundwater to provide a new, reliable water supply for approximately 200,000 individuals across the region per year.

Water in California

The economy of Southern California is dependent on the importation of surface water from the Owens Valley, the San Francisco/San Joaquin Delta and the Colorado River.  Even the wastewater we use for recycling requires the maintenance of imported supplies as the original source water and for blending.  However, there is large annual hydrologic variability between wet and dry years in California.  Over the last decade this hydrologic variability has combined with stiffening regulatory standards to reduce the quantity of water that may be reliably imported to Southern California.

Local water supplies are also limited.  There are areas within Southern California that have little or no access to groundwater and others that overlie water quality impaired sources.  Those areas that do enjoy access to groundwater are often subject to sharing restrictions governing how much water can be withdrawn in any year.

The economic threat caused by shortage is more acute because there are few local options available to off-set reductions in imported water.  Consequently, Southern California water agencies tasked with the public duty of providing water to their customers must decide how they will address the existing and projected shortages and at what expense.

Increased conservation and local projects appear as the most rational approaches to manage demand and diversify water supply portfolios.  Efforts to restore and maintain the imported water deliveries to Southern California at a higher level must continue, but the relative magnitude of those efforts and their ultimate cost can be shaped by our ability to achieve local successes.

About the Project

Six water agencies are currently exploring the Cadiz Valley Water Conservation, Recovery and Storage Project as a way to improve their water supply reliability and in turn benefit the region.  By design, the Project, located in eastern San Bernardino County’s Cadiz Valley, would capture and conserve 50,000 acre-feet per year of groundwater without causing significant adverse environmental impacts on the desert environment (apart from temporary construction emissions) and provide a new, reliable water supply throughout Southern California. The groundwater currently flows through the aquifer system beneath a 35,000-acre desert property owned by Cadiz Inc. and ultimately evaporates from the nearby Bristol and Cadiz Dry-Lakes at the base of the watershed.  The Project facilities would be placed entirely on Cadiz-owned property and other private, disturbed land, instead of creating new paths across undisturbed parts of the desert.

A second phase of the Project would provide underground storage for imported surplus water in wet years but only after the first phase of the Project proves viable and after the second phase undergoes a second round of environmental review.  During the second phase, stored water would be banked in the aquifer system and held in storage until it was needed in dry-years or in the event of a catastrophe in the Delta that significantly reduces supplies available to Southern California.

An earlier formulation of the Project was pursued from 1998 – 2002 with the Metropolitan Water District of Southern California (“MWD”) that would have allowed for the storage and recovery of up to 150,000 acre-feet of groundwater in any year.  The earlier project was designed differently to address a specific need at a different time. At the time, the project’s primary goal was as a dry-year groundwater storage opportunity that would complement other programs intended to get California within its Colorado River entitlement of 4.4 million acre-feet.   And even though the United States Department of the Interior exhaustively reviewed this earlier project, including granting all necessary federal approvals, it faced opposition from environmental groups and ultimately failed to obtain approval by the MWD Board.

Cadiz was not blind to the criticisms of the earlier project, and the present Project was designed with respect for the historical concerns raised about the desert watershed and its habitats.  More than $10 million and three years were spent in revisiting commentary regarding the earlier project, gathering new data and developing an innovative plan that proposes to conserve groundwater before it evaporates from the Bristol and Cadiz Dry-Lakes.

The great weight of scientific literature, observed physical conditions and collected data demonstrate that the dry-lakes function as an evaporative pump transmitting groundwater into the atmosphere.  Some critics of the Project are understandably confused by the geologic function of dry-lakes.  However, the massive salt deposits that have successfully been mined for generations directly from Bristol and Cadiz Dry-Lakes provide irrefutable proof of the natural evaporative process occurring there.

Article 10, Section 2 of the California Constitution was added by the State’s voters in 1928 to promote the efficient use of water and prohibit waste.  The Amendment has been consistently interpreted by the Courts of California and the policy now guides our use of all water, wherever it may be found.

The Project embraces this notion.  Accordingly, the Project seeks to benefit from decades of experience in groundwater management techniques to withdraw groundwater beneath our property for two principal purposes: the conservation of natural recharge and the retrieval of fresh potable groundwater before it can become hyper-saline and evaporate.  The groundwater that is presently destined for waste by evaporation at the Bristol and Cadiz Dry-Lakes cannot be conserved and saved for beneficial use without technological intervention.

The Project is not a mining project; the resource is renewable. The Project has a term of 50 years and is being permitted as such.  While we believe it is bad public policy to allow the waste of water, if the Project is not renewed after the initial term, whatever quantities of groundwater are removed from the ground as part of the Project can be replaced by rainfall and recharge once the Project concludes.  If we don’t implement the Project, however, the opportunity to conserve groundwater that evaporates each year will be lost forever.

New Science for a Sustainable Project

The steps that Cadiz has undertaken to implement a safe and sustainable project are substantial.  First, in 2008, Cadiz entered into a lease agreement with an existing railroad operation at the Project area allowing the water pipeline to be constructed within the railroad’s disturbed right of way rather than crossing undisturbed federal desert.  The pipeline will also provide water to the railroad operator for fire suppression to reduce the risk and environmental impacts of trestle fires.

In 2009, to address questions raised in connection with the former project, we also retained top and trusted industry professionals to undertake a new and comprehensive analysis of groundwater resources in the 1,300 sq. mile watershed. New data had been developed by the United States Government and was available within public data bases.  We drilled wells, video-logged the drilling, mapped the geology, visited the springs in the surrounding mountains, checked washes, measured precipitation and sampled the soils.  And we did all of this before initiating environmental review.

One of our consultants, CH2M HILL, a global leader in water, environmental, energy, and resources consulting, analyzed all of the new physical data and, using a current U.S. Geological Survey model called Infil3.0, estimated the annual recharge to the basin and the amount of water in storage underground in the watershed.  The watershed area tributary to the Project is more than twice the size of the City of Los Angeles and roughly the size of the state of Rhode Island.  CH2M HILL estimated that the aquifer system contains between 17-34 million acre-feet already in storage, with tens of thousands of acre-feet evaporating ever year.

Applying the USGS Infil 3.0 model, which was developed in 2008 specifically for desert environments, natural recharge is estimated to be approximately 32,000 acre-feet per year.  CH2M HILL found this to be neither the highest nor the lowest estimate of natural recharge for the area.  However, it is the estimate arrived at after the most exhaustive and comprehensive review and it has been peer reviewed.  The estimation of recharge was followed by the development of a groundwater modeling effort to examine potential impacts if the estimation were off by as much as 85 percent.

Groundwater Protection & Environmental Review

Both the CH2M HILL study and a separate impact analysis along with a proposed monitoring and mitigation strategy were made available for a peer review evaluation by the Cadiz Project Groundwater Stewardship Committee (GSC).  The GSC is chaired by Dr. John Sharp a professor at the University of Texas at Austin.  Dr. Sharp is a leading expert in groundwater hydrology and carbonate aquifers, similar to one of the aquifers found beneath the Project area.  Other members of the GSC include Dr. Charles Groat, former director of the United States Geological Survey (USGS) during the time the former project was evaluated, and international groundwater experts from the regulatory, institutional, and academic sectors.  Dr. Groat has said about the Project: “I find the project to be viable and capable of being implemented and administered without deleterious effects on the environment.”

The Project proposes to employ a comprehensive Groundwater Management, Monitoring, and Mitigation Plan (GMMMP).  The GMMMP is extraordinary and includes far-reaching and extensive specific monitoring measures for water, air, springs, subsidence and saline/fresh water movement even where there is no data to suggest there will be an adverse impact for the purpose of ensuring that the basin is managed safely. The plan also includes extensive measures to address a broad range of concerns or impacts to other users of water in the basin.

Against this backdrop, the Project is currently undergoing a public review process under the California Environmental Quality Act (CEQA).  A Draft Environmental Impact Report (DEIR) was released in December 2011 and a public comment period was held for 100 days.  During that time, proponents and opponents sent in written comment letters.  In addition, two public comment meetings were held to receive verbal comments. A workshop was also held, attended by most of the experts that contributed to the DEIR, to answer questions about the science and the Project.

Addressing Concerns

One of the comment letters received during the comment period included a report by environmental engineering firm Johnson Wright Inc. (JWI) that challenges some of the science behind the Project. That report was recently circulated.  The JWI report is not based upon any new data or test results, the JWI preparers did not visit the site and they have not indicated whether their report was subjected to any peer-review as was the underlying project.  It is apparent that opponents of the Project hired JWI and released the report for the purpose of calling into questions the quantity of annual recharge and the estimates by CH2M HILL and create doubt about impacts of the Project.

The comments and report, however, miss the mark.  The DEIR already provides a detailed overview of the wide range of recharge estimates for the area.  Many previous estimates, especially those referred to by JWI, did not include the wealth of published data developed since 2001, the rigorous, localized detail or the updated modeling available from USGS since 2008 to reach their conclusions. As described above, based on the USGS Infil 3.0 model, the most comprehensive and best estimate (and not the highest) is that the recharge for these Watersheds would average 32,447 acre-feet/year.

More importantly, given the level of scrutiny and perceived uncertainty of the recharge rate during the review of the former project, the technical work for the new Project employed an impact analysis that addressed any potential disagreement regarding recharge rates.  Accordingly, the impact analysis specifically uses a range of potential recharge values, including 5,000 acre-feet/yr, 16,000 AF/Y as well as 32,000 acre-feet.  The JWI estimate is within this range.  Even assuming a recharge of rate of 15% of the present best estimate, the modeling results show no adverse significant impacts on critical resources of the desert.

The release of the JWI report brought up a few other misconceptions about the Project that are important to address:

Desert Ecosystem. The proposed groundwater pumping will not impact desert wildlife that relies on springs that occur in the local mountain ranges located throughout the region. Data show that the plants and wildlife in the area are supported by precipitation that occurs annually throughout the watershed and not by groundwater in storage deep underground.  The closest spring in the watershed to the proposed project wellfield is more than 10 miles away and substantially uphill (approximately 750 feet higher in elevation than the adjacent valley floor) in different geologic units.  Where there are springs that support wildlife, including bighorn sheep, they have been found to be fed by rainfall, not groundwater.  Springs cannot pull water to the surface against gravity from a groundwater basin hundreds of feet below ground.

Lowering of the Water Table. The Project provides for the temporally limited and planned draw down of the existing water table over 50 years.  This is a customary and routine effect from groundwater pumping. The Project purposely lowers the water level to change the direction of flow of underground water to intercept natural recharge and prevent groundwater already in storage from continuing towards the saline brine zone and ultimately evaporating.  Groundwater withdrawn as part of the Project will be replaced by rainfall and natural recharge.  Once the Project term concludes, water levels will return to their current level.

Evaporation.  The Project aims to stop losses of high-quality drinking water occurring at local dry-lakes. The dry-lake losses are not from evaporation of seasonal standing water from storm flows, but rather evaporation of shallow ground water that occurs over vast areas of the dry-lake surface. This is the water that will be conserved.  Surface water evaporation and evapotranspiration by plant life will continue and will not be adversely impacted by Project operations.

Commitment to the Community

We have worked diligently for many years to design a project that does not harm the environment. Aside from the substantial water supply benefits, this innovative project will supply immediate and long-term economic stimulus as well.  Inland Empire economist John E. Husing, Ph.D. reported that it would create and support over 5,900 jobs over 4 years and more than $878 million in economic activity.   Cadiz has reserved a portion of the Project’s water for San Bernardino County and committed to using San Bernardino County based vendors for construction and implementation.  The property tax revenues from the Project alone will provide millions of dollars every year to the County.

We believe we are pursuing this Project in the best way.  We have proposed a safe and sustainable Project from a location in Southern California.  It will provide reliable water at a higher quality than the nearby Colorado River supplies and it will not harm the desert — a community that we have been a part of for over 20 years through our ongoing organic farm operation.  We will always be committed to our neighbors and the region.  We are constantly exploring legacy commitments for the scenic and cultural benefit of the Cadiz Valley and we expect to make further announcements on the progress of these efforts in the coming months. To learn more, visit  http://cadizinc.com/water-project/ .

February 29, 2012
Los Angeles — Today Cadiz Inc. [NASDAQ: CDZI] (the “Company”) is pleased to update plans to purchase idle natural gas pipelines for conversion to water transmission, including a 220-mile pipeline owned by El Paso Natural Gas (“EPNG”) that originates south of Bakersfield, California and stretches into Cadiz, California, where the Company’s primary landholdings are located.  The conversion of the EPNG pipeline, which could link the State’s water distribution network to Cadiz in several locations, may benefit the Company’s projects and landholdings and would create new opportunities for the movement and storage of water in California.

The Company entered into an option agreement with EPNG in September 2011. Feasibility assessments and technical analysis conducted since that time indicate that the 30-inch line has excellent potential to transport up to 30,000 acre-feet of water per year along the pipeline corridor across California’s Kern and San Bernardino Counties, areas of increasing long-term demand for water supplies, storage and water infrastructure improvements.  Evaluations of the EPNG line also indicate that the pipeline could be used as a method to bring water supplies from the California State Water Project to Cadiz for storage during Phase II of the Cadiz Valley Water Conservation, Recovery and Storage Project (the “Project“).  The potential use of the existing EPNG line for the Project is also being analyzed as part of the ongoing California Environmental Quality Act (“CEQA”) review process.  The Company is committed to ensuring that this new opportunity is consistent with its goal of safely and sustainably providing a reliable water supply to Southern California.

Based on the strength of the feasibility assessments, the Company yesterday made a $1 million payment to EPNG to continue the term of the option agreement through March 2013. The extension provides the Company time to fully analyze opportunities for the pipeline through completion of the Project’s environmental review and permitting process. The purchase price of the line at the conclusion of the option period is $40 million.

“The El Paso line is in place and can be readily converted to the safe movement of water without disturbing the environment,” said Cadiz President Scott Slater.  “By creating a potential connection between the California Aqueduct, the Cadiz Valley and the Colorado River Aqueduct, the Project can achieve vastly greater versatility with the ability to directly satisfy and store water supply for potential partners throughout the diverse region.”

The Company is also currently exploring opportunities that are offered by a second smaller line owned by Questar Corporation (“Questar”). The 16-inch Questar line extends from the Palm Springs area to Long Beach, California and has the capacity to provide multiple short-term pick-up and delivery exchanges per year in increments of up to 10,000 acre-feet.  The use of this line upon conversion would be independent from the Project.   The conversion of the Questar pipeline would offer water providers along the route an ability to move water in areas that currently lack access to transportation infrastructure. The Company has an option agreement with Questar through December 31, 2012.  The purchase price of the line at the conclusion of the option period is $10 million.

About Cadiz Inc.

Founded in 1983, Cadiz Inc. is a publicly-held renewable resources company that owns 70 square miles of property with significant water resources and clean energy potential in eastern San Bernardino County, California. The Company is engaged in a combination of water supply and storage and organic farming projects. In 2009 Cadiz adopted a wide-ranging “Green Compact” to implement environmental conservation and sustainable management practices at its properties. For more information about Cadiz, visit www.cadizinc.com.

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This release contains forward-looking statements that are subject to significant risks and uncertainties, including statements related to the future operating and financial performance of the Company and the financing activities of the Company.  Although the Company believes that the expectations reflected in our forward-looking statements are reasonable, it 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 the Company’s ability to maximize value for Cadiz land and water resources, the Company’s ability to obtain new financing as needed, the receipt of positive feasibility and environmental approvals for the pipeline and water projects and other factors and considerations detailed in the Company’s Securities and Exchange Commission filings.

For over three decades, Hannon Armstrong has been providing and arranging capital for companies and governmental entities seeking innovative, low-cost capital structures for new infrastructure assets. Hannon Armstrong has particular expertise in structuring and placing long term infrastructure project finance, including projects involving multiple governmental agencies. Last year Hannon Armstrong’s $400 million Hudson Ranch 1 geothermal power project located in Imperial County, CA received the Project Finance Deal of the Year award from EuroMoney magazine.

The Water Project facilities include an expanded wellfield on the Company’s property and a 43-mile underground water conveyance pipeline that would deliver conserved water to the Colorado River Aqueduct, one of Southern California’s primary water distribution facilities.  Capital costs for construction of the Water Project facilities are estimated at approximately $225 million and Hannon Armstrong expects that these facilities can be privately financed with lower-cost senior debt supporting a lower cost of water.

“Given the Water Project’s sound fundamentals and Cadiz’s strong asset position, opportunities exist to develop a comprehensive finance solution that will fund the capital requirements on terms customary for public water purveyors,” said Jeffrey Eckel, President and CEO of Hannon Armstrong.  “The finance solution will be an attractive investment opportunity for long-term investors, such as insurance companies and pension funds, seeking steady fixed-income returns.”

Over the last 3 years, the Company has invested more than $15 million in development activities critical to designing a Project that once permitted will avoid environmental harm.   The Company has sufficient cash on hand to continue to fund development activities throughout the entitlement phase.  The Project is currently undergoing an environmental review pursuant to the California Environmental Quality Act (“CEQA”).  A Draft Environmental Impact Report (“EIR”) for the Water Project was issued in December 2011 by the Santa Margarita Water District, the Lead Agency for the CEQA review.  A public comment period is open until March 14, 2012 and a Final EIR is expected to be issued once all comments have been considered and analyzed.

The Water Project is expected to provide numerous benefits for local communities throughout Southern California, including improvement of local water supply reliability, reduced demand for imported water from Northern California and certain economic improvements.  According to a study published by Inland Empire economist Dr. John Husing in May 2011, the Water Project will support over 5,900 jobs, generate more than $878 million in economic activity in the Inland Empire, and infuse millions of dollars in tax revenue to local governments, including $5.4 million per year for San Bernardino County and approximately $613,000 per year for the Needles Unified School District.

About Hannon Armstrong

Hannon Armstrong Securities, LLC is a registered broker dealer and member of FINRA and SIPC that specializes in financing infrastructure assets by arranging capital for companies and governments that are solving the critical infrastructure issues of today. With a head office in Annapolis, MD and a branch office in California, Hannon Armstrong serves a national client base of primarily Fortune 100 companies. Hannon Armstrong has an experienced team of finance professionals committed to creating, funding and managing sound transactions that make a positive contribution to the nation’s economic and environmental health. For more information about Hannon Armstrong, visit www.hannonarmstrongsecurities.com<http://www.hannonarmstrongsecurities.com>.

About Cadiz
Founded in 1983, Cadiz Inc. is a publicly-held renewable resources company that owns 70 square miles of property with significant water resources and clean energy potential in eastern San Bernardino County, California. The Company is engaged in a combination of water supply and storage, organic farming and solar energy projects, including the Cadiz Valley Water Conservation, Recovery and Storage Project. In 2009 Cadiz adopted a wide-ranging “Green Compact” to implement environmental conservation and sustainable management practices at its properties. For more information about Cadiz, visit www.cadizinc.com

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This release contains forward-looking statements that are subject to significant risks and uncertainties, including statements related to the future operating and financial performance of the Company and the financing activities of the Company.  Although the Company believes that the expectations reflected in our forward-looking statements are reasonable, it 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 the Company’s ability to maximize value for Cadiz land and water resources, the Company’s ability to obtain new financing as needed, and other factors and considerations detailed in the Company’s Securities and Exchange Commission filings.

Courtney Degener
CADIZ INC.
Office: 213.271.1603
Mobile: 703.888.6054
cdegener@cadizinc.com

February 16, 2012

LOS ANGELES, CA – Cadiz Inc. [NASDAQ: CDZI] announced today the appointment of Mr. Scott Slater to its Board of Directors.  Mr. Slater, who is currently the Company’s President and General Counsel, has been added to the Board in recognition of his growing leadership role in the Company and his success in advancing the Company’s Cadiz Valley Water Conservation, Recovery and Storage Project (“Water Project”).

Mr. Slater, one of the nation’s foremost experts in water policy and groundwater law, joined Cadiz in 2008 as General Counsel to oversee the company’s land and water resource management efforts, including development of the Water Project.   He was appointed Company President in April 2011.

In addition to his role with the Company, Mr. Slater is also a shareholder in Brownstein Hyatt Farber Schreck, L.L.P., the nation’s leading water practice firm. For 27 years, Mr. Slater’s practice has emphasized the negotiation of agreements related to the acquisition, distribution, and treatment of water.  He has served as lead negotiator on a number of important water transactions, including the negotiation of the largest conservation-based water transfer in U.S. history on behalf of the San Diego County Water Authority.

Mr. Slater is also the author of California Water Law and Policy, a two volume treatise on the subject, and has taught law and graduate courses at Pepperdine University, the University of California, Santa Barbara and the University of West Australia.  In addition, Mr. Slater has served in a variety of key water policy positions, including chair of the Natural Resources Subsection of the California State Bar, member of the Board of Directors of the American Ground Water Trust, member of the Board of Directors of the California Groundwater Resources Association, and member of the Groundwater Committee of the Association of California Water Agencies.

About Cadiz
Founded in 1983, Cadiz Inc. is a publicly-held renewable resources company that owns 70 square miles of property with significant water resources and clean energy potential in eastern San Bernardino County, California. The Company is engaged in a combination of water supply and storage, organic farming and solar energy projects, including the Cadiz Valley Water Conservation, Recovery and Storage Project. In 2009 Cadiz adopted a wide-ranging “Green Compact” to implement environmental conservation and sustainable management practices at its properties. For more information about Cadiz, visitwww.cadizinc.com.

Contact: Courtney Degener, 213-271-1600

Today Santa Margarita Water District (SMWD), the Lead Agency for the proposed Cadiz Valley Water Conservation, Recovery and Storage Project (“Project”), announced that it has extended the public comment period for the Project’s Draft Environmental Impact Report (DEIR)  an additional 30 days. The comment period will now conclude on March 14, 2012.
Cadiz Inc. supports SMWD’s decision to extend the comment period and provide the public additional time to review the science and technical information that has been developed for the Project. The Company is committed to providing a safe and sustainable water supply solution for Southern California and will continue working with interested parties throughout the environmental review process.

SMWD’s press release and the Notice of Extension of the Comment Period are available at

http://www.smwd.com/operations/the-cadiz-valley-project.html

The innovative Cadiz Valley Water Conservation, Recovery and Storage Project would enable water to be beneficially used in California by capturing water that is currently being lost to evaporation in the Mojave Desert.  The Project is currently undergoing a public review under the California Environmental Quality Act (CEQA).  As with any public process, opponents are entitled and encouraged to question CEQA documents and challenge a project’s design or assumptions.  However, many of the most vocal critics of the Cadiz Project have never visited the project area or reviewed any studies and rely instead on misinformation and assumptions that are simply incorrect, untrue and wrong.

As the authors of the geologic and hydrologic studies and many of the technical reports included in the Draft Environmental Impact Report (DEIR) for the Cadiz Project, we strongly believe that the project is based on sound modern water management practices that will provide a reliable and sustainable water supply without harm to the environment. In a transparent and open public process, all supporting studies are available to the public and included as Appendices to the DEIR and are available from the following link – http://www.smwd.com/operations/cadiz-project-draft-eir.html.

Prior to inclusion of the hydrological studies in the DEIR, they were reviewed and validated by an independent peer review panel, the Project’s Groundwater Stewardship Committee (GSC).  The GSC is chaired by Dr. John Sharp a professor at the University of Texas at Austin.  Dr. Sharp is the leading expert in groundwater hydrology and carbonate aquifers, similar to one of the aquifers found beneath the Project area.  Other members of the GSC include Dr. Charles Groat, former director of the United States Geological Survey (USGS), and international groundwater experts from the regulatory, institutional, and academic sectors.  For the summary of findings of this panel, see the Groundwater Stewardship Committee report here – http://www.smwd.com/assets/downloads/GSCSum_10-20-11.pdf.

The following summarizes our responses to questions and clarifies the facts about  the project:

The Water is Renewable.  The Project is Sustainable.
First and foremost, extensive study has been done to validate that the water at Cadiz is a renewable resource.  Using a current U.S. Geological Survey model, Infil3.0, (which was developed for desert environments and accounts for local conditions), the annual recharge to the basin is estimated at approximately 32,000 acre-feet per year.  Water will continue percolating slowly into the aquifer for centuries. The estimate of 17 – 34 million acre-feet of water in the basin, and largely up-gradient of the proposed wellfield, is based on extensive test well drilling, which has been used to construct a calibrated groundwater model that was also validated with historical data.  The model was calibrated over a range of recharge rates and shows that, even with no recharge, the project would only remove 2.5 million acre-feet over 50 years.  This is less than approximately 10% of the available water stored in the basin.

The Water is Currently Being Lost to Evaporation.
The project area is centered in the middle of a closed basin.  As the basin does not have outlets to rivers, streams, freshwater lakes, or the ocean, it is considered closed.  The only discharge for the groundwater, which is slowly migrating hydraulically down-gradient (or moving downhill) towards the highly saline dry lakes, is by evaporation.

The water is generally more than 100 feet below the surface, and no plants or animals use this groundwater.  Springs at the surface that are known to support wildlife also do not use groundwater; they are fed from precipitation that occurs in the highest elevations of the surrounding mountains of the watershed. The closest springs in the area are more than 10 miles up-gradient from the project area and in different geological formations than the project wells.

The springs cannot pull water against gravity to the surface from the groundwater basin hundreds of feet below ground.   Precipitation that makes it into the deeper soil column in the higher elevations percolates by gravity drainage downward to the regional groundwater system, and some exits to the surface as springs in the mountains. Groundwater in the system continues downhill and eventually becomes saline beneath the dry lakes and ultimately evaporates.  This fresh water is being lost and can and should be put to beneficial use.

The following link explains the hydrology of the project in detail: http://www.cadizwaterproject.com/eir/downloads/4_09_Hydrology.pdf.

Using 50,000 Acre-Feet per Year Is Optimal for Conservation.
The managed yield of the basin is considered to be that amount, which will capture and conserve annual recharge plus an optimal amount to minimize losses due to evaporation from the dry lakes. If the project only captured recharge, it would not be able to conserve water already in storage and migrating towards the dry lakes (and subsequently evaporating).  Under natural conditions, approximately three-million acre-feet of fresh water will be lost in this process over the next 100 years.  To stop the loss and reduce the flow of water to the dry lakes, extraction wells will pump groundwater and reverse the hydraulic gradient (or water table slope) before it reaches the highly saline brine of the dry lakes.  Model results show that pumping an average of 50,000 acre-feet per year will accomplish that.

The Project has No Long-Term Impacts to the Desert Environment.
After thorough examination of the potential for the project to have an effect on the immediate project area, local environment, far reaches of the watershed, and the region as a whole, the DEIR concludes that the only unmitigable impacts are short-term emissions from heavy equipment during construction and secondary effects of growth in Southern California due to making water more reliable.  (See: http://www.cadizwaterproject.com/eir/downloads/0_Exec%20Summary.pdf  )
Every other potential short- or long-term impact will be mitigated.  The project’s state of the art Groundwater Monitoring, Management and Mitigation Plan (GMMMP) is the most comprehensive groundwater plan proposed in the State of California.   The GMMMP includes far-reaching and extensive specific monitoring measures for water, air, springs, subsidence and saline/fresh water movement to ensure that the basin is managed safely. The plan also includes extensive measures to address any concerns or impacts to other users of water in the basin. For example, potential lowering of groundwater levels in private wells or in the vicinity of the dry lakes can be addressed with measures included in the GMMMP.

Because any lowering of the groundwater level occurs very slowly, the GMMMP monitoring will detect any potential impact or conditions which are not consistent with any of the predictive surface and groundwater modeling. Changes or impacts (measured in the field-water levels, water quality and subsidence) would then be used to refine the predictive models in order to allow adjustments to be made to project operations if needed, to stop any impacts before they become significant.

The Cadiz Project Work Is In Accordance With Industry Standards.
Having physically worked in the Project site area many times over the past decade, we have physically observed geologic, hydrologic and various testing (pumping and recharge tests), for many years.  The project design represents best industry practices in groundwater basin management.  When compared with use of surface water and the environmental cost of moving water from the Delta or the Colorado River, the Cadiz Valley Water Conservation, Recovery and Storage Project is completely sustainable as planned.  The Project will make a new reliable source of water available to Southern California for the next 50 years and could be a critical component of the water supply portfolio in the region.

Terry Foreman has over 30 years of consulting experience in water resources projects, mostly in the Southwestern United States. He has authored over 30 technical papers and presentations and is a Registered Geologist and Certified Hydrogeologist in California. He is a member of several professional organizations, where he has held many different officer positions through his active membership.

Dr. Dennis Williams has over 35 years of experience in ground water hydrology. He has been a consultant to the United Nations and is currently a part-time research professor at the University of Southern California’s Civil and Environmental Engineering Department where he has taught graduate level classes in geohydrology and groundwater modeling since 1980. He has authored over 30 publications on ground water and wells and was the principal author of the Handbook of Ground Water Development (John Wiley & Sons, 1990.)