Cadiz Inc. announced on March 13, 2024, Cadiz Inc. and Fenner Gap Mutual Water Company entered into a water supply agreement with Golden State Water Company (GSWC), an investor-owned utility serving the City of Barstow, California (GSWC Agreement). The GSWC Agreement provides that GSWC will amend and exercise a 2010 Option Agreement through a First Amendment to purchase an annual supply of 5,000 acre-feet of water from the Company?s Water Conservation, Supply and Storage project (the Project) for service in the City of Barstow, California with conveyance through the Company?s 30-inch diameter, 220-mile, existing steel pipeline originating at the Company?s Cadiz property with a terminus at Wheeler Ridge (the Northern Pipeline). Under the terms of the GSWC Agreement, GSWC will pay approximately $1,450 per acre-foot year (AFY) in 2024 dollars as the as delivered price for Project water. The payments will be subject to an agreed upon annual adjustment pegged to an agreed upon index (e.g., CPI Water and Sewer Index).

In addition, GSWC will reserve the right to acquire specified carry-over storage in the Project for $1,500 per AF and an annual management fee of $20 per AF of acquired storage capacity. Under the GSWC Agreement the parties have agreed to exercise good faith and reasonable best efforts to jointly pursue federal, state, and local grant funding to offset the capital costs for development of pipeline conveyance and appurtenant facilities. Any grant funding received by public water systems will be credited against the as delivered price for water to GSWC.

Cadiz expects to receive net revenue of $850 per AFY, subject to annual inflation adjustments, for producing conserved water to be conveyed to each of the parties under the GSWC Agreement through the Northern Pipeline. The Company?s Northern Pipeline has a delivery capacity of 25,000 AFY. The GSWC Agreement along with other agreements entered into as of this date are anticipated to represent 60% of the delivery capacity of the Northern Pipeline.

In addition to the GSWC Agreement, the Company holds option agreements with several public water systems and is in negotiations with those public water systems to exercise and/or amend those option agreements to take delivery of water from the Northern Pipeline via direct delivery or by exchange with State Water Project contractors. Annual payments for water supply made available from the Project under the GSWC Agreement would begin when conditions precedent are met, construction is complete, and water deliveries begin.