A scientific theory is a single framework of ideas that logically relates many observations. A good imagination is necessary for a scientist to think of ways to test a theory with observations or experiments. Science has rules for evaluating evidence. Scientific theories are continuously tested with new evidence. A scientific experiment is a formal procedure to explore an idea.
Lance finds the story hard to believe and is trying to evaluate the evidence.
Whether the account he is hearing is first or second-hand is one criteria for evaluation, as stories often become distorted as they pass from one person to the next. The account by Reverend Harvey of receiving a piece of giant squid tentacle from a fisherman was from a first-hand witness and was accompanied by physical evidence. There were also other witnesses. Harvey was able to have the physical evidence examined by an expert, Addison Emery Verril, who concurred that it was real. In contrast, in relating de Montfort's account of a sailing ship saved by St. Thomas from the arms of a monster no first-hand witnesses were named and no physical evidence was mentioned.