What is Prospero planning and where are they?

PROSPERO
(to FERDINAND) If I have too austerely punished you,
Your compensation makes amends, for I
Have given you here a third of mine own life—
Or that for which I live—who once again
I tender to thy hand. All thy vexations
Were but my trials of thy love and thou
Hast strangely stood the test. Here, afore heaven,
I ratify this my rich gift. O Ferdinand,
Do not smile at me that I boast of her,
For thou shalt find she will outstrip all praise
And make it halt behind her.
FERDINAND
      
As I hope
For quiet days, fair issue, and long life,
With such love as ’tis now, the murkiest den,
The most opportune place, the strong’st suggestion,
Our worser genius can, shall never melt
Mine honor into lust, to take away
The edge of that day’s celebration
When I shall think, or Phoebus' steeds are foundered,