Energy companies face a second, harsher “financial reckoning” in October when banks re-evaluate the value of oil-and-gas properties, according to The Wall Street Journal.

But the carnage could begin before then, the Journal reports. Some smaller firms have already begun negotiating with lenders, selling assets and delaying payments to vendors.

“It’s raining and it’s going to rain for a long time. We’re all going to get wet. A few people are going to drown,” Freeport-McMoRan Inc. Vice Chairman Jim Flores told the Journal. “You just have to make it to the other side.”

That may prove difficult. Crude prices have settled in the $40s. Despite slashing their budgets, many drillers are still losing money.