Why Is CDZI Stock Rising Today?

• The approval allows the company to begin construction work necessary to convert its Northern Pipeline, which it purchased back in 2020.
• Cadiz said it will source water from the Mojave Groundwater Bank, a new water-supply and groundwater-storage project.
• The federal permit has been secured for a 50-year term.

Shares of Cadiz Inc. (CDZI) surged on Friday after the company received approval to convert a natural gas pipeline to transport water on BLM-managed lands.

At the time of writing, CDZI stock was up more than 15%.

Cadiz Gets Federal Approval For Pipeline Conversion

The company said the U.S. Bureau of Land Management (BLM) approved the right-of-way grant, which allows it to begin construction work necessary to convert its Northern Pipeline. Cadiz had purchased the buried 220-mile steel pipeline from El Paso Natural Gas in 2020.

Cadiz said it will source water from the Mojave Groundwater Bank and move it through the pipeline to High Desert and Inland Empire communities in California's San Bernardino County.

What Does Cadiz Do?

Cadiz is a water solutions company developing the Mojave Groundwater Bank, a new water supply and groundwater storage project in partnership with Lytton Rancheria of California, a federally recognized Native American Tribe.

The company owns about 45,000 acres of land, including the Cadiz Ranch, which is estimated to hold between 30 and 50 million acre-feet of high-quality groundwater.

Why Does The Approval Matter For Cadiz

The approval comes as a breakthrough for the company, which has been trying for many years to convince the government to grant it access to groundwater to supply drought-stricken areas in California, but has faced hurdles from activists and Native American tribal leaders who argue that such a move would deplete the natural resource and be detrimental to the environment, according to a report by the Los Angeles Times.

"After many years of planning and environmental review, the project is now ready to begin the construction stage," said CEO Susan Kennedy. "With long-term offtake agreements and construction contracts in place, this federal permit marks a key milestone as we finalize project financing with prospective investors."

The federal permit has been secured for a 50-year term, the company said.

On Stocktwits, retail sentiment toward CDZI stock turned ‘bullish’ from ‘bearish’ over the last 24 hours. CDZI shares have climbed roughly 50% over the past 12 months, outperforming the S&P 500.

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