Inpex Corp. (1605) shares fall on Ichthys LNG strike, acquisition rejection
Inpex Corp. (1605) shares are trading down 3.1%, influenced by the ongoing strike at its Ichthys LNG project in Australia and Woodside Energy's move to block an acquisition. The company's stock is currently trading at ¥3,480, a decline from its previous close of ¥3,592.
The Australian Fair Work Commission rejected Inpex's application to halt protected industrial action at the Ichthys LNG project on June 14. This decision could lead to a project shutdown this week, and the market is reacting to this possibility. Separately, Woodside Energy announced on June 12 that it exercised pre-emption rights to block Inpex's acquisition of PetroChina's interest in the Browse gas field. This development could impact Inpex's future growth prospects.
Inpex shares briefly rose 3.9% earlier today following an upgraded earnings forecast, but subsequently turned lower due to these new developments. The company's stock had softened this week after reaching ¥3,607 last week.
Why the Ichthys LNG Strike is Pressuring Inpex Shares
Inpex Corp. is a leading integrated energy company in Japan, engaged in the exploration, development, production, and sale of crude oil and natural gas. It plays a crucial role in supporting Japan's energy supply by extracting resources from oil and gas fields worldwide. Its earnings are largely influenced by international crude oil and natural gas prices, as well as its production volumes.
Today, the primary reason for the decline in Inpex's share price is the ongoing labour dispute at the Ichthys LNG project in Australia. The country's Fair Work Commission rejected Inpex's application to halt the strike, which heightened the possibility of the project stopping production this week. This led the market to be concerned about the negative impact on earnings due to production halts. Woodside Energy's move to block the acquisition of Browse gas field interests also influenced this decline.
This specific concern regarding the continuation of the labour dispute caused Inpex's share price to fall by 3.1% from yesterday's close of ¥3,592, currently trading at ¥3,480.
This situation is comparable to a factory suddenly being notified that a crucial component supply will cease, facing the risk of its production line stopping. If the supply of components is interrupted, product manufacturing will inevitably be delayed, directly impacting sales. Investors have likely factored in this production halt risk, reflecting it in the share price.
Inpex Corp.
Inpex Corporation engages in the research, exploration, development, production, and sale of oil, natural gas, and other mineral resources in Japan, rest of Asia and Oceania, Europe and NIS countries, the Middle East and Africa, and the Americas. It is also involved in the investment and lending to the companies engaged in mineral resources business, etc. In addition, the company transports natural gas, as well as operates, manages, and maintains gas pipelines. As of December 31, 2021, its proved reserves were 2,704 million barrels for crude oil, condensate, and LPG; and 5,118 billion cubic feet for natural gas, for a total of 3,645 million BOE. Inpex Corporation was founded in 1966 and is headquartered in Tokyo, Japan.