The oil and gas industry is very capital intensive. As I mentioned, once you've sold a barrel of oil down the pipeline, you have to find another one to replace it. For small and medium-sized oil and gas producers, it's been a very challenging market. Those are the first companies to feel the chill when the equity markets get nervous. For the last year it's been difficult; for the last six months it's been almost impossible for Canadian companies to raise equity financing.
Of course, with declining commodity prices, cashflows have been cut as much as 75% in the last year because of the drop in crude oil and natural gas prices. That makes it much harder for banks to provide the financing the companies need. After all, the banks provide the financing, just as with a mortgage on a house. The banks lend to oil and gas producers based on what the oil and gas reserves are worth in the ground. They're worth a lot less this year than they were a year or two ago; therefore, the available financing from banks is necessarily going to shrink.
All of that puts a lot of pressure on companies. They can only spend now what their cashflow is, because they can't go to the equity markets to raise money, which is where the small companies typically go, and the banks may be reluctant or unable to lend any more. So they have to live within their cashflow. This means that many of our smaller oil and gas companies are going to be smaller, in terms of the reserves in the ground, a year from now than they are today. They'll have to sell those reserves to bring in the cashflow, but they don't have enough cash left over to develop additional supply.