"Our motto is to always overpay," says Aubrey McClendon, chairman and chief executive of Chesapeake Energy Corp., one of the industry's most active asset buyers. "Investors always ask me, 'What does it feel like to overpay?' I always say, given their tone of voice, 'It doesn't feel so good.' Truthfully, our margins get better every year." McClendon spoke at the IPAA's annual meeting in Houston recently. He quipped, "Last night, I got back to my room at about 2 a.m....I went through some e-mails, and there's no telling what I did. So if I bought you, I probably overpaid. Congratulations." Important in Chesapeake's business strategy is regional consolidation and working with Pimbies or "Please, in my backyard" land-owners rather than dealing with Nimbies (not in my backyard) land-owners, McClendon added. After closing the pending $2.2-billion acquisition of Columbia Natural Resources, Chesapeake will be the fifth-largest gas producer in the U.S. As for the "graying of the industry," McClendon has found a way to keep the talent at Chesapeake young. In response to a rumor that he offered jobs to every petroleum engineering graduate from the University of Oklahoma, McClendon answered, "Well, there were only six, so we really knocked ourselves out." David Trice, president and chief executive of Newfield Exploration Co., said at the conference that, though compensation is critical in attracting and keeping young employees, it comes down to culture. "We all are going to be able to compete for talent dollar-wise," he said. "It has to be something deeper. We have a culture built on communication. We treat employees like owners and we allow them to have a sense of ownership in their projects." McClendon admits that it was difficult at one time to draw young graduates to Chesapeake's hometown, Oklahoma City, but the success of other Oklahoma City-based companies, such as Kerr-McGee Corp. and Devon Energy Corp., has helped attract new talent to the city. "We have found that it is very important to aggressively hire out of the colleges," he said. "Now, we have 450 petroleum engineering graduates this year and 42,000 lawyers. We still have a long way to go to attract the hearts and minds of young people. We have to make them think they'd like to be an earth scientist rather than a scumbag lawyer." As for ever-expanding drilling costs, James Volker, chairman, president and chief executive of Whiting Petroleum Corp., said he controls prices through contracts. "Our method of controlling prices has been to enter into long-term power and rig contracts whenever we can," Volker said. "The margins will continue to expand, but this won't go on forever. The markets will work." Chesapeake is building drilling rigs. "The big difference between the E&P and the service sector is you can add to the service sector by spending money and no amount of money you spend on E&P will increase capacity," McClendon said. "Our hope is to see the service sector expand at a pace allowing E&P activity to increase. If you don't have a drilling rig, go build one, please." In the end, no amount of spending in the industry will help if the government chooses to reinstate a windfall-profits tax as it did in the early 1980s. The tax was a disaster in the past, and companies continue to shake their heads at the prospect of dealing with it again. Several proposals for such a tax are now in Congress. "I've learned to have very low expectations about our energy leadership in Washington, and they're always met," Trice said. "History says this tax would be counterproductive." McClendon said, "If you want to come take our money, do it. See if that affects the amount of [oil and gas] supply available to consumers."