WorleyParsons Limited 

Contract extension by Chevron Australia Pty Ltd: WorleyParsons Limited (ASX: WOR) is awarded a contract extension by Chevron Australia to continue providing services to support Chevron’s assets of Australasian Strategic Business Unit. After this extension, WOR will continue to provide brownfield engineering services to support the onshore and offshore Gorgon and Wheatstone LNG assets and the Barrow and Thevenard Islands oil assets in Western Australia. This contract was initially for 5 years but it is now extended for further two years with options for one additional two-year term and one additional one-year term. Moreover, WOR has also secured a contract by Tullow Oil to provide services for the foundation phase of the South Lokichar onshore oil field development (Project) in Kenya. In this project, WOR will have to develop Ngamia and Amosing fields to produce approximately 60,000 barrels per day of oil, which will be transported to Lamu, on the coast, via a 900km export pipeline. Moreover, as per the contract, WOR will provide front end engineering design for the central processing facilities and will support Tullow Oil in the Project delivery as part of an integrated project management team. Additionally, WOR’s backlog is strong, has strong operating and financial metrics, bid activity is increasing and UK acquisition is delivering results.
 
The group lately bagged the offshore engineering, procurement, construction, installation and commissioning (EPCIC) contract by Neptune Energy; and a contract extension by Maersk Oil UK. With commodity prices moving in the right direction, the group is expected to get a boost from many contractual works from the mining and energy companies.
 
As a result, WOR stock has risen 21.81% in three months as on June 29, 2018. Based on the foregoing, we give a “Hold” recommendation on the stock at the current price of $ 17.830, up 2% on July 02, 2018.


Backlog remains strong (Source: Company Reports)

 
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