Natural Fuel jumps on Europe deal

Shares in Subiaco-based Natural Fuel have skyrocketed as much as 76 per cent today after the company signed a 12-month contract to supply biodiesel to a Europe-based oil and gas company.

Under the deal, Natural Fuel will supply up to 50,000 tonnes of biodiesel per month from its Jurong facility in Singapore to the unnamed oil and gas trading company .

Natural said the contract will see it running at full capacity this calendar year.

"Payment arrangements are to be secured by Letter of Credit and monthly deliveries will be priced-indexed to allow for sustainable margins," Natural Fuel said in a statement.

Shares in the company jumped to an intraday high of 8.1 cents before cooling to close at 7.1c, a gain of 2.5c or 54 per cent.

Meantime the company said it was also in advanced talks with several major banks for the provision of additional working capital.

Negotiations are expected to be finalised following the Chinese New Year.