Australia’s top commodity export, iron ore, is already in trouble and Australia is now dealing with a 40% decline in the price of crude oil since mid-June.

Plus, Australian companies involved in the $180 billion (all currencies in U.S. dollars) construction of infrastructure to export liquefied natural gas (LNG) are under pressure because LNG prices in Asia are linked to oil declining prices. This includes AE Portfolio Aggressive Holdings Oil Search Ltd, Origin Energy Ltd and Woodside Petroleum Ltd.

Resource-focused engineering firm WorleyParsons Ltd, which generated 61% of fiscal 2014 revenue from hydrocarbon services, is also getting squeezed.

Oil Search’s (ASX: OSH, OTC: OISHF, ADR: OISHY) Papua New Guinea LNG project has exceeded all expectations to date, with focus shifting to expansion.

The Papua New Guinea LNG project has world-class utilization rates of about 98%, and there’s strong potential for further earnings increases.

Oil Search remains committed to developing additional LNG trains at PNG, though the slide in crude may delay expansion.

In October Oil Search outlined a new policy to pay out 35% to 50% of core net profit after tax beginning with the final dividend for 2014.

This increase is in line with expectations, with timing about six months ahead of when analysts thought PNG LNG’s promise would start to pay off.

Based on full-year 2013 and half-year 2014 core NPAT figures, Oil Search will likely declare a final dividend of 12 cents per share for 2014 and an interim dividend of 12 cents per share for 2015.

Oil Search is a buy under $9 on the ASX using the symbol OSH and on the U.S. over-the-counter (OTC) market using the symbol OISHF.

Oil Search also trades as an American Depositary Receipt (ADR) on the U.S. OTC market under the symbol OISHY. Oil Search’s ADR represents 10 underlying shares traded on the ASX and is a buy under $90.

Origin (ASX: ORG, OTC: OGFGF, ADR: OGFGY) has responded to declining commodity prices by increasing a borrowing facility by $619 million to $6.1 billion, extending repayment terms and reducing interest costs.

Origin’s operations provide ballast for the company, generating strong cash flow that supports the annualized dividend rate of 41 cents per share. As of Dec. 12 the stock is yielding 4.6%.

Management is weighing the deferral of proposed projects, including the $825 million Ironbank project in Queensland, though Origin sees no problem making investments in projects already approved.

Origin Energy remains a buy under $15.

Woodside may be in the best position among Australia’s E&Ps, with a strong balance sheet that will allow it to buy assets now while they’re cheap.

Management continues to look for opportunities at a cost of about $5 billion.

Woodside’s standing with analysts had been relatively low, as the company had few opportunities to reinvest its cash.

But the decline in oil prices has changed the calculus. Now more assets are on the market, cheaper than at any time since the Global Financial Crisis.

Woodside has a great opportunity to grow its its production because it is essentially debt-free and generating strong cash flows from LNG contracts and conventional oil projects. It has reportedly made a multi-billion dollar offer for Apache Corp. assets, with a deal. possible before Christmas.

Woodside Petroleum is a buy under $42.

WorleyParsons (ASX: WOR, OTC: WYGPF, ADR: WYGPY) presents a unique dilemma, though CEO Andrew Wood is buying shares at current, depressed levels. WorleyParsons has sunk to a six-year low, as with energy issues causing extreme weakness in the global mining sector.

The stock is now priced at just 9.1 times fiscal 2014 earnings and 8.3 times forecast fiscal 2015 earnings.

In October management stated that fiscal 2015 will be similar to fiscal 2014, with earnings skewed to the second half of the year. The company sees short-term challenges, but remains confident.

Still a high-quality company, WorleyParsons continues to book new business, winning a $137 million engineering, procurement, construction and installation contract from ConocoPhillips for a project at the Ekofisk oil field in the Norwegian sector of the North Sea.

The company continues to generate strong cash flow, and the balance sheet is solid, with low overall debt relative to total assets, strong interest cover and low average cost of debt.

WorleyParsons is a buy for aggressive investors with the patience to wait for a turnaround up to our reduced buy-under limit of $12.

WorleyParsons’s policy, like those of most in Australia, is to pay out a fixed percentage or within a range of earnings. It pays 60% to 80% of underlying net profit after tax; the dividend rate is not fixed.

So while is current dividend yield is 9.2%, a decline in earnings could result in a lower dividend.

AGGRESSIVE UPDATE

A Nov. 21, 2014, guidance update by Cardno Ltd precipitated another sharp selloff for the stock.

Management expects fiscal 2015 first-half operating NPAT of $22 million to $25 million, about 17% below the $29 million reported for the second half of fiscal 2014 and 33% lower than the $35.5 million reported for the prior period.

Cardno fell from $4.15 per share on Nov. 19 to as low as $2.37 on Dec. 2. The price has recovered somewhat, to $2.57, but Cardno is still down more than 57% from its , 52-week high in May.

Cardno has yet to see an uptick that would have offset the decline in consulting related to global mining and energy exploration and production.

As the stock is reacting to the reversal of fortunes in the commodity space, we’re taking a Safety Rating point as well as moving Cardno from the Conservative to the Aggressive Holdings.

Although the infrastructure and environmental services consultancy is geographically diversified, with a majority of its revenue derived from North America, the decline in mining investment in Australia, and the high-margin projects that went along with it, is expected to cause a $9.9 million erosion in earnings before interest and taxation (EBIT for the first half of fiscal 2015.

That’s more than 20% of fiscal 2014 second-half EBIT.

In addition to the pinch from the bear market in crude oil prices, the integration of Houston-based oil and gas engineering services firm PPI, following its acquisition by Cardno earlier this year, is proceeding more slowly than anticipated, with a lower contribution to earnings as a result.

Cardno noted a backlog of $774.6 million, a company record, as demand picks up for its engineering services related to infrastructure and urban development.

Management also announced plans to cut costs and focus on efficiency by cutting staff and consolidating offices.

The infrastructure and urban development work will eventually mean higher sales and profits. But Cardno is more commodity-sensitive than we thought.

Now an Aggressive Holding, Cardno is a buy under our reduced target of $4.

CONSERVATIVE UPDATE

APA Group’s effort to consolidate ownership of Envestra Ltd fell short.

The sale of its 33% stake in the natural gas infrastructure company to a consortium including Cheung Kong Infrastructure Holdings Ltd (Hong Kong: 1038, OTC: CKISF, ADR: CKISY), Cheung Kong Holdings Ltd (Hong Kong: 0001, OTC: CHEUF, ADR: CHEUY) and Power Assets Holdings Ltd (Hong Kong: 0006, OTC: HGKGF, ADR: HGKGY) generated approximately $646.8 million in pre-tax profit.

APA (ASX: APA, OTC: APAJF) is putting those proceeds to work, laying the foundation for future growth with its winning bid for the 337-mile pipeline network that feeds BG Group Plc’s Gladstone LNG export facility on Australia’s east coast.

The $5 billion acquisition, which adds to a system that already carries more than half of the country’s natural gas, will boost operating cash flow per share by about 10% in the first full year.

And it gives APA exposure to the globally significant east coast LNG sector and expands APA’s contracted revenue base. APA will likely pursue deals for pipeline assets connected to other LNG projects in Queensland.

APA plans to sell $1.5 billion in shares to help fund the acquisition.

APA’s bid trumped at least two others. IFM Investors Pty, an Australian fund manager, bid with QIC Ltd, while AMP Capital Investors Ltd led a group with backing from Chinese parties.

The pipeline, which has locked in revenue under 20-year contracts, will provide more steady income for APA, which has the option to take over operation of the pipeline after 12 months.

The pipeline is expected to contribute operating cash flow of about $165 million to $182 million for the year ending June 30, 2016.

APA is a buy up to $7.