Worley (ASX:WOR) share price edges lower despite contract award

The Worley Ltd (ASX: WOR) share price is edging lower in mid-morning trade despite announcing a new contract award. We take a closer look.

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 April 8, 2021 12:19 pm AEST

The Worley Ltd (ASX: WOR) share price is edging lower in mid-morning trade despite announcing a new contract award.

At the time of writing, the global engineering company's shares are fetching $10.79, down 1.1%.

energy asx share price flat represented by worker in hi vis gear shrugging — Image source: Getty Images

New contract

Investors appear to be unfazed by the company's latest update, sending Worley shares in negative territory.

According to its release, Worley advised it has won a front-end engineering services contract with Phillips 66 Company (Phillips 66).

The new deal will see Worley provide services to transform Phillips 66's San Francisco refinery into a renewable fuels-manufacturing facility. Located in Rodeo, California, the project once completed is expected to produce 2.5 billion litres annually of renewable transportation fuels. The facility will be fed from cooking oils, fats, greases and vegetable oils and convert them into clean energy.

Worley noted that the renewable fuels-manufacturing facility is set to be one of the world's largest of its kind.

The project will be managed by Worley's North America West team, with support from its Global Integrated Delivery team.

Worley CEO, Chris Ashton welcomed the deal, saying:

As a global company headquartered in Australia, this project aligns with our strategic focus on sustainability and delivering a more sustainable world. We are pleased that Phillips 66 has engaged Worley in this important renewable fuels project and look forward to supporting Phillips 66's energy transition goals, while also supporting Worley's strategic focus on future fuels.

Worley share price summary

Over the past 12 months, the Worley share price has moved over 50% higher after hitting multi-year lows during COVID-19. Since the beginning of this calendar year, however, the company's shares have dropped around 6%. Worley shares are currently sitting in the mid-range of the 52-week performance, between its low of $6.36 and high of $14.01.

On valuation grounds, Worley presides a market capitalisation of approximately $5.63 billion, with more than 522 million shares on issue.

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