b'KOSMOS ENERGY LTD.Notes to Consolidated Financial Statements (Continued)10. Fair Value Measurements (Continued)The following tables present the Companys assets and liabilities that are measured at fair value ona recurring basis as of December 31, 2018 and 2017, for each fair value hierarchy level:Fair Value Measurements Using:Quoted Prices in SignificantActive Markets for Significant Other UnobservableIdentical Assets Observable Inputs Inputs(Level 1) (Level 2) (Level 3) Total(In thousands)December 31, 2018Assets:Commodity derivatives . . . . . . . . . . . . . . $ $ 53,097 $ $ 53,097Liabilities:Commodity derivatives . . . . . . . . . . . . . .(22,353)(22,353)Total . . . . . . . . . . . . . . . . . . . . . . . . . $ $ 30,744 $ $ 30,744December 31, 2017Assets:Commodity derivatives . . . . . . . . . . . . . . $ $ 704 $ $ 704Interest rate derivatives . . . . . . . . . . . . .1,0171,017Liabilities:Commodity derivatives . . . . . . . . . . . . . .(97,740)(97,740)Total . . . . . . . . . . . . . . . . . . . . . . . . . . . $ $(96,019) $ $(96,019)The book values of cash and cash equivalents and restricted cash approximate fair value based onLevel 1 inputs. Joint interest billings, oil sales, related party and other receivables, and accountspayable and accrued liabilities approximate fair value due to the short-term nature of theseinstruments. Our long-term receivables, after any allowances for doubtful accounts, and other long-termassets approximate fair value. The estimates of fair value of these items are based on Level 2 inputs.Commodity DerivativesOur commodity derivatives represent crude oil collars, put options, call options and swaps fornotional barrels of oil at fixed Dated Brent, NYMEX WTI or Argus LLS oil prices. The valuesattributable to our oil derivatives are based on (i) the contracted notional volumes, (ii) independentactive futures price quotes for the respective index, (iii) a credit-adjusted yield curve applicable to eachcounterparty by reference to the credit default swap (CDS) market and (iv) an independentlysourced estimate of volatility for the respective index. The volatility estimate was provided by certainindependent brokers who are active in buying and selling oil options and was corroborated by market-quoted volatility factors. The deferred premium is included in the fair market value of the commodityderivatives. See Note 9Derivative Financial Instruments for additional information regarding theCompanys derivative instruments.136'