As we began to develop our vast position in the Montney play, we felt it was important to focus our efforts in concentrated areas to take advantage of economies of scale and to avoid having small facilities scattered all over the map. In order to achieve this, Progress came up with the idea of a development pod. The idea for a pod is to lay out 80 drilling locations in a concentrated area, with a centralized facility with 50 MMcf/d of processing capacity. Progress has identified the six pods that are ready for commercial development.
We view the development of a pod occurring over four stages: a test phase with one vertical and one horizontal well, a pilot phase of two to four additional horizontals to further prove up costs and production, a full development phase with fifteen to twenty more horizontals to bring production to 50 MMcf/d, and finally a maintenance phase to maintain production for ten years. A typical pod will require 23 wells and $145MM of capital.