Chesapeake Energy's investors seemed to let out a collective sigh of relief.
They were appeased by promises of belt tightening at the cash-strapped U.S. gas producer. A fresh set of activist-imposed board members adds some credibility to the pledge.
Yet with Aubrey McClendon, Chesapeake's spendthrift chief executive, increasing outlays on new energy-rich land and drilling, owners should wait to exhale.
The recent rise in Chesapeake shares had little to do with the second-quarter results. Stripping out gains from asset sales, earnings fell narrowly short of what analysts had been expecting.
Nor can the rise be fully attributed to a promising improvement in oil output. Crude accounts for only about 13 per cent of Chesapeake's production.
Instead, the market probably is inferring something from the statement by Chesapeake, where four new directors were installed in June by two uppity investors, Carl Icahn and Southeastern Asset Management.
The company may be poised to clamp down on Mr. McClendon's profligacy. Chesapeake stressed that the board was "reviewing operations for 2013," which could result in changes to the outlook. In addition, Chesapeake vowed to scale back drilling activity next year and to raise $1.5-billion (U.S.) more in asset sales from the original plan of $11.5-billion.
A look at the spending plans for the rest of 2012, however, suggests that Mr. McClendon's stamp is still on Chesapeake. Planned outlays on land increased to $2-billion, a quarter more than the target announced in May.
Expected drilling costs also grew by $500-million to around $8.25-billion. What's more, Chesapeake's long-term debt pile swelled by $1.2-billion to $14.3-billion.
Maybe shareholders are willing to believe this burst of spending will be Mr. McClendon's final fling.
But given Chesapeake's long history of procrastination, they shouldn't be breathing easy just yet.