What happened

Shares of Kosmos Energy (NYSE:KOS) skyrocketed on Monday, rising more than 15% by 10:45 a.m. EDT. Fueling the rally were the company's expectation-beating first-quarter results and the revelation of another major gas discovery with its partner, BP (NYSE:BP).

So what

Kosmos Energy reported an adjusted loss of $42.7 million, or $0.11 per share, during the first quarter, which was $0.02 per share better than analysts expected. Driving that result were rising production and oil prices as well as falling production costs. Meanwhile, the company also reported a significant improvement in its financial strength thanks to strong cash generation during the quarter and the closing of its joint venture with BP.

Offshore Jack Up Rig with rainbow.

Image source: Getty Images.

Speaking of that joint venture, Kosmos Energy unveiled another significant gas discovery offshore Senegal. The Yakaar-1 well uncovered three pools of gas, once again confirming that there are substantial resources in the region. This find continued the company's recent string of successes, and further confirms its belief that this is a "world-class hydrocarbon basin." In fact, this latest discovery supports the company's view that it has the resources to build a second LNG hub in the region. That project would follow the development of its Tortue discovery, which it expects will start producing in 2021 with BP's help.

Now what

Kosmos Energy appears to be sitting on a bountiful supply of natural gas offshore West Africa. That said, it will take years to bring these discoveries into production because the company and partner BP need to construct the costly liquefaction facilities required to export this gas to markets. Because of that, it will be quite a while before today's discovery fuels production growth and profits for the company.

Matt DiLallo has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.