Shares in D1 Oils soared 17% after the jatropha specialist revealed it had agreed a break-up of its loss-making joint venture with oil behemoth BP.

D1 Oils said it would hand BP £500,000 upfront, with up to a further £600,000 to follow, paid as a levy of £30 per tonne of crude jatropha oil produced.

The price represented a "significant discount" to the value of the joint venture, D1–BP Fuel Crops, which had a book value of £7.6m at the end of June, including £6.1m in cash, the statement said.

Options sweetener

However, BP will also receive an improvement to terms on options over 16% of shares in D1, which will merge the joint venture with its existing plant science division.

The options will be split into four tranches with exercise prices of 13p, 14p, 16p and 18.5p, rather than the range of 210-300p set when the deal joint venture was formed two years ago.

The exercise period for all options will be extended from three to 10 years.

D1 last month prepared investors for the group's fourth cash call since it was floated in 2004, after cash reserves fell to £11.3m.

Canada deal 

The deal, which follows a fruitless search to find a fresh investor into the venture, will also free D1's plant science division from restrictions to serve only D1-BP Fuel Crops.

In a separate announcement, D1 on Friday revealed a deal  to provide jatropha agronomy and breeding services to Bedford Biofuels, a Canada-based jatropha group with plantations in Kenya and Zambia.

"Generating revenue through the sale of plant science and planting technology and services… is a key element of our strategy as we restructure D1," Mr Good said.

"Unified ownership and management will give us the ability to reduce cash burn, and be more flexible and responsive in developing the business."

D1 shares closed 1.0p higher at 6.75p in London.