CADIZ REPORTS PROGRESS ON WATER
PROGRAM IN LETTER TO SHAREHOLDERS

Santa Monica, CA - Cadiz Inc., (Nasdaq: CLCI ) today announced that it issued the following letter to shareholders:

Dear Shareholder,

As we begin 1999, we are pleased to provide you an update on the Cadiz Groundwater Storage and Dry-Year Supply Program, the cooperative water management effort between Cadiz Inc. ("the Company") and the Metropolitan Water District of Southern California ("Metropolitan"). To date, significant progress has been achieved in moving forward with program implementation, most notably our efforts in the environmental review process, reflecting substantial time and financial investments by the two program partners.

Intended as a supplement to information provided in our reporting of quarterly results, the update will seek to provide our shareholders and interested parties with regular, yet brief, bulletins on material events as the Company moves forward with implementation of the program - from environmental documentation, through design and engineering, to construction and operation. As such, the attached document outlines the most significant program milestones, as well as immediate next steps for the coming months.

For those individuals new to the Company, the Cadiz Groundwater Storage and Dry-Year Supply Program will enhance Southern California water supply reliability in two ways, providing a new dry-year water supply and much-needed storage. During wet years or periods of excess supply, Metropolitan will store surplus Colorado River water in the aquifer system underlying the Company's Cadiz valley property. During dry years, the previously imported water, together with additional existing groundwater, will be extracted and delivered, via a 35-mile conveyance pipeline, to Metropolitan's service area. During the 50-year term of the agreement, Metropolitan will store a minimum of 500,000 acre-feet of Colorado River water and purchase a minimum of 1,100,000 acre-feet of existing groundwater for transfer.

We look forward to hearing your comments and addressing any further questions you may have regarding the Company and/or its water development and agricultural operations. As always, thank you for your continued interest and support.

Yours sincerely,

Keith Brackpool
President and Chief Executive Officer

January 29, 1999

Cadiz Groundwater Storage & Dry-Year Supply Program
· Progress and Milestones ·

• Executed principles and terms for agreement with Metropolitan and authorized preparation of a final agreement based on these principles and terms
  
  
• Appropriated $4 million, shared equally by the two entities, to fund environmental documentation and engineering and hydrological studies
  
  
• Selected team of program consultants and awarded contracts
  
  
• Launched environmental review process
  

According to state and federal environmental laws, an Environmental Impact Report/Environmental Impact Statement (EIR/EIS) that considers, documents and mitigates potential environmental effects from the program must be prepared by the Company and Metropolitan. Prior to the preparation and circulation of a Draft EIR/EIS, a series of procedural requirements, such as field surveys and public meetings, must be completed. The environmental review process is well underway and characterized below in three main phases:

1. Commence Environmental Analysis
   Prepare & Circulate Notice of Intent/Notice of Preparation (NOI/NOP)
   45-day Public Comment Period
2. Prepare & Circulate Draft EIR/EIS
   60-Day Public Comment Period
3. Prepare & Circulate Final EIR/EIS

• Commenced environmental analysis

Field studies and surveys that analyze a variety of environmental resources, including biological and cultural, are required prior to the preparation of a Draft EIR/EIS. More importantly, many of these studies or surveys must be conducted during specific time periods in the year. The Company and Metropolitan commenced these studies in October 1998 and will continue during the next several months.

• Prepared NOI/NOP and scheduled distribution for the week of February 1

This document not only provides a detailed program description, but more importantly, launches the initial public comment period. This process, which includes the hosting of public meetings or workshops, seeks to broaden public understanding of the program and provide a forum for questions and comments.

• Scheduled public meetings for the week of February 22
  
• Commenced preparation of the Draft EIR/EIS

• Completed exploratory drilling for pilot spreading basin project
  
• Constructed pilot spreading basin project

Reflecting three months of extensive surveying and drilling, construction of a pilot spreading basin project, which will model and further analyze the storage and extraction of water, is near completion. To date, a high-yield production well and ten monitoring wells are in place and a five-acre spreading basin is currently under construction. The pilot project, which will be a valuable mechanism for demonstrating the program's capacities, will be operational and open for public viewing in March 1999. The capital facilities constructed for this pilot project will become a component of the final program.

• Optimized capital facilities and alternatives

Engineering and optimization studies are currently finalizing design criteria for conveyance facilities that will ultimately move water to and from the Cadiz property. Thus far, four pipeline alignment alternatives and the associated conveyance and capital facilities, such as extraction wells, pumping plants and spreading basins, have been identified and are being evaluated in order to minimize costs and maximize operational flexibility. Of important note, these studies have determined that the program will likely have the capacity to convey, for either storage or supply operations, up to 150,000 acre-feet per year, in comparison to earlier estimates of 100,000 acre-feet.

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Forward-looking statements contained within this update are subject to significant risks and uncertainties, including statements related to the future operating and financial performance of the Company. Although the Company believes that the expectations reflected in its 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 price and yield fluctuations in the agricultural operations, seasonality, timing and terms of various approvals required to complete the Program, and other factors and considerations detailed in the Company's Securities and Exchange Commission filings.

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