Why the Worley (ASX:WOR) share price will be on watch today

The Worley Ltd (ASX: WOR) share price will be on watch today following a front-end engineering design contract win. Here's the details.

Aaron Teboneras

Author bio Aaron Teboneras is an ASX investment writer with a background in business, marketing and finance. He has been a contributor to The Motley Fool since 2020, covering market news, company announcements, broker views and financial results. Aaron’s previous notable appointments include National Australia Bank, and Computershare where he discovered his passion for the Australian sharemarket. Aaron has been investing for almost 20 years, using both fundamental and technical analysis to find opportunities. Aaron completed a Technical Analysis course with Mint Analysis in 2022 and is currently studying Training and Assessment. Outside the market, he has travelled to more than 45 countries and enjoys trekking, meeting new people and seeing different parts of the world. Areas of expertise ASX growth shares Founder-led companies Company announcements and financial results Fundamental and technical analysis Education Bachelor of Business from RMIT University Social media LinkedIn Instagram Favorite investment quote “If you don't find a way to make money while you sleep, you will work until you die.” — Warren Buffett

Published February 23, 2021 9:50 am AEDT

The Worley Ltd (ASX: WOR) share price will be on watch this morning following the company's announcement regarding a front-end engineering design (FEED) contract. At the market close yesterday, the Worley share price finished the day 1.2% higher to $10.54.

It will be interesting to watch how the company's shares perform today as investors digest this morning's update.

ASX share price on watch represented by man looking through magnifying glass — Image source: Getty Images

What did Worley announce?

The Worley share price could be on the move today as the company reported its latest contract win.

According to this morning's release, Worley advised it has been awarded a FEED contract from 1PointFive Inc. This contract is for a direct air capture (DAC) project.

1PointFive Inc. is a partnership created by Oxy Low Carbon Ventures (a subsidiary of Occidental Petroleum Corporation) and Rusheen Capital. The group is focused on implementing low-carbon technologies that offer sustainable business solutions. This is made by utilising Occidental's leadership in carbon management and carbon dioxide storage with Rusheen's knowledge of carbon-to-value projects.

Under the deal, Worley will commence work on 1PointFive's first DAC unit for its DAC facility. This will be constructed in the United States Permian Basin, which is located across western Texas and southeastern New Mexico. Worley stated that it will use its Houston office to lead the project. Additionally, the project will utilise the support of its Global Integrated Delivery team in India.

The company noted that this will be the first commercial-scale development using Carbon Engineering Ltd's DAC technology. When fully operational, the DAC unit will remove around 1 million tonnes of carbon dioxide (CO2) from the air each year.

Once the FEED contract has been fulfilled, it is expected that Worley and 1PointFive will form an alliance. Consequently, this will flow onto additional projects in which Worley will provide engineering, procurement and construction work for further DAC's. Currently, there are three additional DAC projects in the pipeline.

CEO commentary

Worley CEO Chris Ashton welcomed the new deal, saying:

We are delighted to have been awarded the FEED contract and we are looking forward to forming the alliance with 1PointFive. This direct air capture project is a starting point for the deployment of commercial-scale DAC to help companies meet CO2 emission reduction targets and aligns with Worley's strategic focus of delivering a more sustainable world.

About the Worley share price

The Worley share price has fallen more than 24% over the past 12 months. The company's shares hit a low of $4.63 cents in March last year, before moving on an upwards trajectory later that month.

Based on the current share price, Worley commands a market capitalisation of around $5.5 billion.

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