Solo Oil has entered into a binding Heads of Agreement with Obtala Resources plc to acquire, subject to title and legal due diligence, Ilakon Limited a wholly owned Obtala subsidiary which holds the rights to the Mina El Carmen block in Argentina.

Highlights:

■ A binding heads of agreement has been signed with Obtala in an all shares transaction valuing the Block at US$750,000 ■ Solo will acquire Ilakon and its Argentinean subsidiary, Spinell Sociedad Anomima, which holds a 100% interest of the 25 claims which make up the Block ■ The Block covers 4,940 acres on the northern side of the Golfo San Jorge basin close to numerous producing fields ■ The Block is lightly explored and has received only limited exploration work since the 1940's ■ Oil and gas shows have been recorded from wells on the Block and the shallow Glauconitico gas bearing reservoir , which produces in the nearby Salamancia gas field, 7 kilometres to the south, is considered proven

Neil Ritson, Solo Executive Director, commented,"The Mina El Carmen Block presents an exciting opportunity to acquire an early phase exploration project in a proven basin setting. This investment is in line with Solo's investing policy of holding a diverse portfolio of oil and gas interests at different stages of maturity."

About the Properties

The Block lies within the proven Golfo San Jorges basin in northern Argentina where oil and gas exploration started over 100 years ago and to date over 3 billion barrels of oil has been produced. About a third of the current Argentine production comes from the San Jorges Basin. Hydrocarbons lie typically in Cretaceous age sediments within fault bounded structures; although stratigraphic traps are also present.

The Mina El Carmen block itself lies on the northern margins of the basin close to the coast in dry Patagonian mesa-type terrain rising from 200 metres above sea-level in the south to over 600 metres in the north. Access to the block is simple with good roads linking the Block with the major oil and gas centre and port at Comodoro Rivadavia, 30 kilometres to the south on the Atlantic coast.

Tags: Solo Oil