b'KOSMOS ENERGY LTD.Notes to Consolidated Financial Statements (Continued)2. Accounting Policies (Continued)ReceivablesOur receivables consist of joint interest billings, oil and gas sales, related party and otherreceivables. For our oil sales receivable in Ghana, we require a letter of credit to be posted to securethe outstanding receivable. Receivables from joint interest owners are stated at amounts due, net of anyallowances for doubtful accounts. We determine our allowance by considering the length of time pastdue, future net revenues of the debtors ownership interest in oil and natural gas properties we operate,and the owners ability to pay its obligation, among other things. We had an allowance for doubtfulaccounts of $1.2 million and zero in current joint interest billings receivables as of December 31, 2018and 2017, respectively.InventoriesInventories consisted of $83.4 million (including $22.1 million acquired through the Deep GulfEnergy, (together with its subsidiaries DGE) acquisition) and $63.5 million of materials and suppliesand $1.4 million and $8.4 million of hydrocarbons as of December 31, 2018 and 2017, respectively. TheCompanys materials and supplies inventory primarily consists of casing and wellheads and is stated atthe lower of cost, using the weighted average cost method, or net realizable value. We recorded writedowns of $0.3 million, $0.9 million and $14.9 million during the years ended December 31, 2018, 2017and 2016 for materials and supplies inventories as other expenses, net in the consolidated statements ofoperations and other in the consolidated statements of cash flows.Hydrocarbon inventory is carried at the lower of cost, using the weighted average cost method, ornet realizable value. Hydrocarbon inventory costs include expenditures and other charges incurred inbringing the inventory to its existing condition. Selling expenses and general and administrativeexpenses are reported as period costs and excluded from inventory costs.Exploration and Development CostsThe Company follows the successful efforts method of accounting for its oil and gas properties.Acquisition costs for proved and unproved properties are capitalized when incurred. Costs of unprovedproperties are transferred to proved properties when a determination that proved reserves have beenfound. Exploration costs, including geological and geophysical costs and costs of carrying unprovedproperties, are expensed as incurred. Exploratory drilling costs are capitalized when incurred. Ifexploratory wells are determined to be commercially unsuccessful or dry holes, the applicable costs areexpensed and recorded in exploration expense on the consolidated statement of operations. Costsincurred to drill and equip development wells, including unsuccessful development wells, arecapitalized. Costs incurred to operate and maintain wells and equipment and to lift oil and natural gasto the surface are expensed as oil and gas production expense.The Company evaluates unproved property periodically for impairment. The impairmentassessment considers results of exploration activities, commodity price outlooks, planned future sales orexpiration of all or a portion of such projects. If the quantity of potential future reserves determined bysuch evaluations is not sufficient to fully recover the cost invested in each project, the Company willrecognize an impairment loss at that time.112'