KOSMOS ENERGY LTD. Notes to Consolidated Financial Statements (Continued) 10. Fair Value Measurements (Continued) The following tables present the Company’s assets and liabilities that are measured at fair value on a recurring basis as of December 31, 2017 and 2016, for each fair value hierarchy level: Fair Value Measurements Using: Quoted Prices Significant in Active Other Significant Markets for Observable Unobservable Identical Assets Inputs Inputs (Level 1) (Level 2) (Level 3) Total (In thousands) December 31, 2017 Assets: Commodity derivatives . . . . . . . . . . . . . . . . . . . . $— $ 704 $— $ 704 Interest rate derivatives . . . . . . . . . . . . . . . . . . . — 1,017 — 1,017 Liabilities: Commodity derivatives . . . . . . . . . . . . . . . . . . . . — (97,740) — (97,740) Interest rate derivatives . . . . . . . . . . . . . . . . . . . — — — — Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $— $(96,019) $— $(96,019) December 31, 2016 Assets: Commodity derivatives . . . . . . . . . . . . . . . . . . . . $— $ 34,924 $— $ 34,924 Interest rate derivatives . . . . . . . . . . . . . . . . . . . — 582 — 582 Liabilities: Commodity derivatives . . . . . . . . . . . . . . . . . . . . — (33,286) — (33,286) Interest rate derivatives . . . . . . . . . . . . . . . . . . . — (529) — (529) Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $— $ 1,691 $— $ 1,691 The book values of cash and cash equivalents and restricted cash approximate fair value based on Level 1 inputs. Joint interest billings, oil sales and other receivables, and accounts payable and accrued liabilities approximate fair value due to the short-term nature of these instruments. Our long-term receivables, after any allowances for doubtful accounts, and other long-term assets approximate fair value. The estimates of fair value of these items are based on Level 2 inputs. Commodity Derivatives Our commodity derivatives represent crude oil collars, put options, call options and swaps for notional barrels of oil at fixed Dated Brent oil prices. The values attributable to our oil derivatives are based on (i) the contracted notional volumes, (ii) independent active futures price quotes for Dated Brent, (iii) a credit-adjusted yield curve applicable to each counterparty by reference to the credit default swap (‘‘CDS’’) market and (iv) an independently sourced estimate of volatility for Dated Brent. The volatility estimate was provided by certain independent 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 commodity derivatives. See Note 9—Derivative Financial Instruments for additional information regarding the Company’s derivative instruments. 136