Sheep feces are manures like any other forms of manures produced from livestock. The good way to use as a source of organic fertilizer is first to compost them with other organic sources following the standard composting process. The composting facility may be big or small scale, but the procedure of composting is the same. So you can find manuals how to make composting. Open drying is not recommended, because there may be high loss of nitrogen during drying which is the major nutrient content of manures. Fresh application to soils is not also recommended.
Interesting question put up by Dr.Elsherif and good answers by Drs. Antoun and Getachew .In India I have not come across composting of sheep feces. Penning(confined in some temporary enclosure ) of sheep in farmers' fields (usually on some payment in kind or cash) or in village periphery is usual practice.If penning is practiced on other farmers' fields, the feces are directly deposited on soil.If the sheep are confined near village sites then the feces is collected and dried in open sunlight.Composting needs supplementary organic material and water.The sheep are reared in rainfed or dry areas where water availability may be a problem.Even the sheep rearing shepherds will move from one place to another in search of grass/fodder and water for sheep.If sheep or even goat if they are reared in a village and confined to a village site ,if they have access to organic material and water they can go for composting.Also sheep and goat are reared in villages nearer to forest.Forest leaf litter can also be used in composting.The following two references may be consulted.
Sheep201 Nutrient management on sheep farms www.sheep101.info/201/nutrientmgt.html