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Saffron Energy - Shell News: good but largely expected, shares will re-rate

By HotStockRockets | Thursday 16 March 2017

Disclosure: Financial Investigative Media Limited, which is not owned by Tom Winnifrith but by a trust for his dependants, owns shares in companies mentioned in this article. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from ShareProphets). I have no business relationship with any company whose stock is mentioned in this article.

Saffron Energy (SRON) has announced the extension of the natural gas offtake contract between its Italian subsidiary Northsun and Shell. The contract has been extended to 1 October 2018, with an option to extend for a further year to 1 October 2019, and provides for offtake of gas supply for all of the Group's Italian gas fields.

It is that latter part which is the good news. Right now there is 1 field in production. That will soon be two and then three and now there is a set buyer for the lot. Shell will sell the gas directly onto the Italian National Grid.

The shares are now trading at 8p-8.25p but as news of a rapid ramp up in production starts to emerge over the coming weeks and months we expect a more dramatic re-rate. The stance is a very strong hold with a view to selling at 12p+ before very long.

This article first appeared on HotStockRockets - where we tipped this at 5p a few weeks ago.  If you missed out on this red hot share tip, fear not there are TWO more on the way within the next three weeks and you can access both and all of our archive for just £5, HERE

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