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Recently, a client planning to participate in a Play in the Western Canadian Sedimentary Basin raised a seemingly simple question with a very complex answer: how much land should we buy? Clearly, there are a great number of variables involved in making this decision, but many of them hinge on the concept of materiality. In the context of hydrocarbons, materiality essentially means “how much presence do we need to make this opportunity worthwhile and control our own destiny?” How much acreage will make the purchase worth the cost, effort and risk? How much will ensure leverage to achieve my business goals efficiently? READ ABOUT how Mr. Bill Haskett tackles this kind of question by assessing materiality from two angles: internal and external.

The usual stage at which risk tolerance is applied is the development phase of a project. Companies are comfortable with the notion of failed exploration wells, but not failed developments. Stringent probability-of-success hurdles often result.

In any situation where you need to make a critical decision, there is always some level of risk – whether you’re working on an internal reorganization or considering a multi-billion dollar acquisition.