What happened

Shares of Kosmos Energy (KOS -1.32%) plunged on Tuesday and were down nearly 12% at 2:30 p.m. EST. The culprit was an update on the offshore oil and gas producer's exploration program in Mauritania, which is on the northwestern coast of Africa.

So what

Kosmos Energy announced that its Lamantin-1 exploration well offshore Mauritania failed to find commercial hydrocarbons. The company owns a 28% stake in this well as part of a joint venture agreement it signed with BP (BP 1.58%). While the partners well did discover traces of oil and gas, they mostly encountered water. Because of that, they plugged and abandoned the well. This well was the second failed attempt since Kosmos began the second phase of its exploration program in Mauritania and neighboring Senegal earlier this year after signing an agreement with BP. In that well, the only thing they found was water. Though, the partners did find some success in Senegal earlier in the year.

The silhouette of an offshore drilling rig at sunset.

Image source: Getty Images.

In commenting on the what Kosmos Energy plans to do next, CEO Andrew Inglis said, "We are still in the early stages of exploring this newly emerging basin and our forward drilling program remains unchanged given the independent nature of the prospects." As such, he noted that "the drillship will now proceed as planned to test the independent Requin Tigre prospect offshore Senegal." The hope is that it will find more success in that country.

Now what

As Kosmos' drilling record this year shows, offshore exploration can be hit or miss. Because of that, investing in this offshore-focused stock remains a big gamble since another discovery in Senegal could send the stock soaring while a dry hole could cause it to plunge. That makes Kosmos too risky for most investors, even if it is cheaper after Tuesday's sell-off.