The Worley Ltd (ASX: WOR) share price has jumped in early trade after a contract extension announcement this morning.
What did Worley announce this morning?
Worley has been awarded a two-year contract extension by BP Exploration (Alaska) Inc. this morning. The contract is for the provision of wells support services and fluids hauling for BP's North Slope operations.
The extension comes hot on the heels of BP's North Slope sale to Hilcorp Alaska LLC but was granted prior. Worley will provide maintenance, modifications, operations and drilling support for new and existing wells and well sites.
Worley's Alaskan team will execute the services with support from Worley's global business.
What's happening to the Worley share price?
The Worley share price jumped higher in early trade and is currently trading 0.7% higher at $14.16 per share.
Worley has a market cap of $7.3 billion and is trading at a price-to-earnings (P/E) ratio of 38x earnings.
Worley shares have surged nearly 5% higher in the last 5 days as the company continues to sign contract agreements in November.
The Worley share price jumped on Tuesday after announcing a new contract with Nouryon Chemicals B.V.
Nouryon awarded Worley an engineering, procurement and construction management services contract covering 20 of its chemical sites across Europe for 5.5 years.
Should you buy Worley shares?
The Worley share price is currently trading at $14.16 per share, but that looks to be a little pricey at the moment.
Worley's acquisition of 3sun Group has boosted its UK offshore wind energy business heading into 2020.
The company is continuing to diversify its earnings streams and could be cheap after edging lower over the past 12 months.
The big concern for me would be the company's high P/E ratio at 38x earnings. Given the average for the ASX 200 sits below 20x, I'm not sure the growth prospects justify the price.
