b'and future economic conditions and commodity prices. Any significant inaccuracies in theseinterpretations or assumptions could materially affect the estimated quantities and present value ofreserves shown in this report. See Item 1. BusinessOur Reserves for information about ourestimated oil and natural gas reserves and the present value of our net revenues at a 10% discount rate(PV-10) and Standardized Measure of discounted future net revenues (as defined herein) as ofDecember 31, 2018.In order to prepare our estimates, we must project production rates and the timing of developmentexpenditures. We must also analyze available geological, geophysical, production and engineering data.The process also requires economic assumptions about matters such as oil and natural gas prices,drilling and operating expenses, capital expenditures, taxes and availability of funds.Actual future production, oil and natural gas prices, revenues, taxes, development expenditures,operating expenses and quantities of recoverable oil and natural gas reserves will vary from ourestimates. Any significant variance could materially affect the estimated quantities and present value ofreserves shown in this report. In addition, we may adjust estimates of proved reserves to reflectproduction history, results of exploration and development, prevailing oil and natural gas prices andother factors, many of which are beyond our control.The present value of future net revenues from our proved reserves will not necessarily be the same as thecurrent market value of our estimated oil and natural gas reserves.You should not assume that the present value of future net revenues from our proved reserves isthe current market value of our estimated oil and natural gas reserves. In accordance with the SECrequirements, we have based the estimated discounted future net revenues from our proved reserves onthe 12-month unweighted arithmetic average of the first-day-of-the-month price for the precedingtwelve months, adjusted for an anticipated market premium, without giving effect to derivativetransactions. Actual future net revenues from our oil and natural gas assets will be affected by factorssuch as:\x7f actual prices we receive for oil and natural gas;\x7f actual cost of development and production expenditures;\x7f derivative transactions;\x7f the amount and timing of actual production; and\x7f changes in governmental regulations or taxation.The timing of both our production and our incurrence of expenses in connection with thedevelopment and production of oil and natural gas assets will affect the timing and amount of actualfuture net revenues from proved reserves, and thus their actual present value. In addition, the 10%discount factor we use when calculating discounted future net revenues may not be the mostappropriate discount factor based on interest rates in effect from time to time and risks associated withus or the oil and gas industry in general. Actual future prices and costs may differ materially fromthose used in the present value estimates included in this report. Oil prices have recently experiencedsignificant volatility. See Item 1. BusinessOur Reserves.We are dependent on certain members of our management and technical team.Our performance and success largely depend on the ability, expertise, judgment and discretion ofour management and the ability of our technical team to identify, discover, evaluate and developreserves. The loss or departure of one or more members of our management and technical team couldbe detrimental to our future success. Additionally, a significant amount of shares in Kosmos held bymembers of our management and technical team has vested. There can be no assurance that our48'