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What: Kosmos Energy Ltd provided its investors with a double dose of good news today. The company announced that it made a significant gas discovery offshore Mauritania and that its TEN project offshore Ghana is expected to continue after a ruling on a disputed maritime border came in Ghana's favor. This news helped to fuel a double-digit rally in Kosmos Energy's stock.
So what: The news of a significant natural gas discovery offshore Mauritania really is needle-moving for the company. Not only because of the size of this one discovery, which far exceeded pre-drill expectations, but the fact that it is a "play-opening discovery" meaning Kosmos is a first mover in this frontier field. This opens the door for additional discoveries in the region and sets it up to take the lead in potentially bringing the play online.
In addition to that, the company also announced that a Special Chamber of the International Tribunal of the Law of the Sea has issued a response to the ongoing maritime boundary dispute between Ghana and Cote d'Ivoire. Most importantly, it rejected the request that Ghana suspend all of its exploration and development operations in the disputed area meaning that Kosmos' TEN project is expected to move forward. The project is already 55% complete and is expected to deliver first oil in the second half of next year.
Now what: Today's news from Kosmos Energy helps to settle its near-term outlook as the TEN project is now expected to deliver first oil, and first cash flow, next year. Meanwhile, the company's longer-term outlook also received a boost from the discovery of natural gas offshore Mauritania. That play has the potential to drive a lot of long-term value creation for the company.
The article Significant Discovery Fuels 10% Surge in Kosmos Energy Ltds Stock originally appeared on Fool.com.
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