Archer Ltd (ARCHER) rose to its highest price in almost six weeks in Oslo trading after the oilfield services provider named a new chief executive, which RS Platou Markets AS said raises the prospect of a profit improvement.
Shares in the Hamilton, Bermuda-based company rose as much as 6.2 percent, the steepest gain since July 5, and traded 5.7 percent higher at 4.43 kroner as of 2:37 p.m. in the Norwegian capital, the stock’s highest level since May 30. More than 1.3 million shares have traded so far today, 24 percent more than the three-month average daily volume.
Archer today named David King, who was previously head of Halliburton Co. (HAL:US)’s Completion and Production Division, its new CEO. King replaces Fredrik Halvorsen, who is also the head of Seadrill Ltd. (SDRL) and was appointed interim CEO of Archer after Jorgen Rasmussen left the position in January 2012.
“We view the appointment of an industry heavyweight like David King as a major step in the right direction,” Turner Holm, an analyst at RS Platou, said in a note to clients today.
Archer’s management has “room to improve profitability even without significant improvements in market conditions” after reporting margins for earnings before interest, taxes, depreciation and amortization “well below mid-size peers,” said Turner, who has a neutral rating on the stock.
Archer, 40 percent-owned by Seadrill Ltd., is trimming its operations after a decline in prices for land-based oil services in North America. The company, whose stock has dropped 59 percent in the last 12 months, sold its North American rental and tubular unit for $244 million to an affiliate of Clearlake Capital Group to cut debt, it said May 22.
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