b'blocks in other areas of the deepwater U.S. Gulf of Mexico. This transaction will allow both companiesto leverage complementary skill sets to execute farm-in projects around infrastructure. Kosmos will bedesignated operator and plans to commence drilling operations on the first well in 2019.During the first quarter of 2019, Kosmos executed a farm-in agreement with Chevron covering theright to earn an interest in a strategic block in the deepwater U.S. Gulf of Mexico. This agreementallows Kosmos another opportunity to execute its deepwater U.S. Gulf of Mexico strategy of lower riskprospects with the potential for subsea development near existing midstream infrastructure. Kosmos willbe designated operator and plans to commence drilling operations in 2019.Apply our entrepreneurial culture, which fosters innovation and creativity, to continue our successfulexploration and development programOur employees are critical to the success of our business strategy, and we have created anenvironment that enables them to focus their knowledge, skills and experience on finding, developingand producing new fields and optimizing production from existing fields. Culturally, we have an open,team-oriented work environment that fosters entrepreneurial, creative and contrarian thinking. Thisapproach enables us to fully consider and understand both risk and reward, as well as deliberately andcollectively pursue ideas that create and maximize value and free cash flow.Maintain Financial DisciplineExecution of our strategy requires us to maintain a conservative financial approach with a strongbalance sheet, ample liquidity, a commitment to low leverage and the ability to maintain significantheadroom on our debt covenants. Typically, we fund exploration and development activities from acombination of operating cash flows, debt and partner carries.As of December 31, 2018, our net leverage ratio was just slightly over 2.0 times, largely the resultof borrowing for the Gulf of Mexico acquisition. Our liquidity, after consideration of the additionalRBL Facility commitments which became effective in January 2019, was approximately $0.6 billionavailable to fund our opportunities. When we do increase our net leverage as we did in 2018 with theU.S. Gulf of Mexico acquisition, we develop a well thought out plan to bring leverage back down.Additionally, we use derivative instruments to partially limit our exposure to fluctuations in oilprices and interest rates. We have an active commodity hedging program where we aim to hedge aportion of our anticipated sales volumes on a two-to-three year rolling basis, with the goal to protectagainst the downside price scenario while still retaining partial exposure to the upside. As ofDecember 31, 2018, we have hedged positions covering 15.6 million barrels of oil production from 2019through 2020. We also maintain insurance to partially protect against loss of production revenues fromour producing assets.During 2018, Kosmos generated approximately $260.5 million of cash flow from operations.Operations by Geographic AreaWe currently have operations in Africa and the Americas. Presently, our operating revenues aregenerated from our operations offshore U.S. Gulf of Mexico and Ghana. We also have an equity12'