Oromin has executed agreements formalizing the farm-in into the Santa Rosa exploration license in Argentina by Otto Energy Limited and has approved the Exploration Work Program and Budget totaling US $4.1 million with the view to start drilling in H1 2009.
The Santa Rosa Block is a large 7,694 square kilometer onshore concession located in the oil prolific Cuyana Basin of the Mendoza Province of Argentina.
In November 2005, Oromin and Otto agreed to a Letter of Intent to farm-in to the Santa Rosa Block, whereby Otto would initially earn a 32.48% indirect working interest from Oromin.
The Letter of Intent has now been formalised with Otto executing a number of agreements in which Otto will earn a 32.48% shareholding in an Oromin-owned British Virgin Islands company Cynthia Holdings Limited ("Cynthia") that wholly owns an Argentinean company Exploraciones Oromin S.A. ("EOSA"), which in turn holds 100% of the rights to explore and produce from the Santa Rosa Block. The farm-in consideration is for Otto to fund the first US $1.4 million of the approved Exploration Work Program and Budget, after which it contributes it's pro rata equity share.
The interest holders in the Santa Rosa Licence are now indirectly Oromin 67.52% (Operator) and Otto 32.48%. Otto is entitled to take an equivalent direct interest in the Santa Rosa Block at anytime subject only to Argentinean government approvals.
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