Woodside Petroleum’s shares have been given a boost after the company said it was walking away from an expensive liquefied natural gas plant at James Price Point in Western Australia.
At 11:30 AM Shares in Woodside were trading up 2.69%, or 96 cents.
IG Markets market strategist Evan Lucas told AAP that the market was responding to the fact that Woodside’s capital expenditure would drop away substantially in the short term.
“There would have been a considerable construction period before it even started production with more overhang,” he told AAP.
Investors had been concerned that their share of the company could have been diluted if a capital raising was required to fund the project.
Now they will expect share buybacks or capital returns, Lucas told AAP.