LONDON (Bloomberg) -- Premier Oil rose the most this month in London trading after saying it’s benefiting from a decline in the British pound following the UK’s vote to leave the European Union.

 

The shares climbed as much as 6.6% on Tuesday, the biggest gain since June 29, and traded up 4.7% at 72 pence as of 11:30 a.m. local time. The stock has lost half its value in the past year.

 

“There are benefits from Brexit,” Tony Durrant, CEO of the London-based explorer, said in a phone interview. “A lot of our costs in the North Sea are in sterling, so with the weaker sterling exchange rate, we’re actually the beneficiary of that.”

 

The pound has fallen about 12% against the dollar since the UK voted to leave the EU last month. It’s currently trading at $1.3161, compared with $1.4877 on June 23, the day of the poll.

 

A weaker pound may help Premier cut the cost of its major Catcher project in the North Sea, due to produce first oil in October next year. The expense of developing Catcher was originally set at a rate of $1.60 to the pound. That’s been lowered to $1.31, representing about $100 million of savings on the project, Durrant said.

 

About half of Premier’s global operating and capital-expenditure costs are denominated in pounds, according to the CEO.

 

“The amount of sterling-denominated costs at Premier Oil is higher than we thought,” said Stephane Foucaud, an analyst at FirstEnergy Capital LLP in London. “Premier Oil should be able to save around $40 million in the second half,” based on an exchange rate of $1.30 per pound, he said. “That’s not bad for a company with a market capitalization just under $500 million.”

 

Premier has seen debt rise amid spending on the Catcher project, while oil’s slump last year resulted in a wider annual loss at the explorer. The company is in talks with lenders to negotiate an extension to loan funding.

 

Negotiations are taking “some time” but showing “good progress,” Durrant said Tuesday. Lenders earlier this month agreed to waive a test of covenants due at the end of June, shifting it to the end of July. The test—which requires a company to keep its debt-to-earnings ratio below a particular level—will probably be extended by another month, according to the CEO.