INTERNSHIP REPORT ON

ZEESHAN ZAFAR MBA – 4(B)

01-120082-081

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Table of contents

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Dedication………………………………………………………………………...4

Acknowledgment………………………………………………………………...5

CHAPTER NO 1 INTRODUCTION

a) Company background…………………………………………...6

b) Major shareholder of the company…………………………......6

CHAPTER NO 2 OPERATIONS

a) How rally energy works………………………………………….7

b) Project development impact & IFC role………………………..8

c) Environment and social management…………………………..8

d) Community benefit……………………………………………….9

e) Contribution of government……………………………………..9

f) Governance context………………………………………………9

CHAPTER NO 3 GROWTH

a) Production growth……………………………………………….11

b) Reserves…………………………………………………………..12

c) Issaran reserve Selection………………………………………...12

d) PAK SAFED KOH Block…………………………………….....13

CHAPTER NO 4 WOKRING AT INTERNSHIP

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a) Analyzing Resumes……………………………………………14

b) Maintenance of medical bill…………………………………..14

c) Travel Expenses……………………………………………….14

d) Managing visitor……………………………………………….14

e) Establish file for the organization…………………………….14

f) Audit of accounts………………………………………………15

g) Prepare agenda for board meeting……………………….......15

h) Skills gained……………………………………………..……...15

i) Documentation Skill……………………………………………15

j) Co-ordination Skill……………………………………………..15

k) Building Relationships…………………………………………15

CHAPTER NO 5 INTERNSHIP EXPERIENCE

a) Identification of a Main Problem ……………………………….16

Conclusion………………………………………………………..17

Recommendation………………………………………………....18

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DEDICATION

I dedicate this report to my parents and friends in recognition of their worth and to

my teachers who are the guiding force for me and it is their effort and hard work

that showed me the path of success and prosperity which would be there for me for

the rest of my life.

My thanks to all those who have generously contributed their heretical knowledge

to this report including my teachers? Without their understanding and support,

completion of this work would not have been possible. I hope people find this

report useful and the subject matter adds to their knowledge.

“Keep your dreams alive. Understand to achieve anything requires faith and

belief in yourself, vision, hard work, determination, and dedication. Remember

all things are possible for those who believe.” - Merlin Olsen

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ACKNOWLEDGEMENT

All the praise is for Allah, the most merciful and beneficent, who blessed me with

the knowledge, gave me the courage, and allowed me to accomplish this task. I am

especially indebted to all my teachers for instilling in me enough knowledge to be

able to carry myself efficiently during my internship.

Secondly, I am bound to thank all the staff of RALLY ENERGY in particular I am

grateful to Mr. Kamran Shahid (administration incharge), his inspiring guidance,

remarkable suggestions, constant encouragement, keen interest, constructive

criticism and friendly discussion helped me to learn and enabled me to complete

this report efficiently.

Introduction

Rally Energy Corp. engages in the acquisition, exploration, development, and production of oil and gas properties in Egypt, Pakistan, and Canada. It primary holds a 100% operating interest in the 20,000 acre Issaran Oilfield for heavy crude oil, which located on the west shore of the Gulf of Suez, Egypt. The company also owns a 30% working interest for natural gas in the 200,000 acre Safed Koh Block in the Province of Punjab, Pakistan. As of December 31, 2006, it had total

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proved and probable reserves of 104,386 million barrels of oil equivalents. In addition, it has a 12% non-operated working interest in 1,280 acres in the Gold Creek area, located on the southern flank of the Peace River Arch near Grande Prairie, Alberta, Canada. The company was founded in 1989 as Kirkton Resources Corp. and changed its name to Constellation Capital Enterprises, Inc. in 1995. Further, it changed its name to Raw Creek Resources, Inc. in 1995 and to Rally Energy Corp. in 1996. Rally Energy Corp. is headquartered in Calgary, Canada. As of September 27, 2007, Rally Energy Corp. was taken private.

Operations of the company

Rally’s operations in Egypt are conducted under a petroleum service agreement with Egypt’s General Petroleum Company and cover a 72 square kilometers area of the Ras Issaran Concession located in the eastern desert on the west shore of the Gulf of Suez, about 250 km south-east of Cairo. The location is fairly remote, with the nearest inhabitations, Zafarana (p. 5,000 approx.) 40 km to the north, and Ras Gharib (p. 50,000-100,000) about 60 km to the South. Rally also has an office in Cairo.

In Pakistan, Rally’s non-operated Safed Koh block is also remotely located in the Dera Ghazi

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Overview of company

Rally Energy Corp. (Rally) is a Calgary-based oil and gas company, with interests in Egypt, Pakistan, and Canada. Its operations are primarily focused in Egypt in the Issaran oilfield located in the eastern desert along the western shore of the Gulf of Suez. The company, via its subsidiaries, also has a 22.5% non-operated interest in the Safed Koh concession area in Punjab province, central Pakistan. The Project involves Rally’s ongoing exploration, development and production activities in Egypt and Pakistan, including (i) its heavy oil development and production program in the Issaran oilfield in Egypt (100% operating interest) and (ii) development of the Salsabil gas/condensate field and additional exploration within the Safed Koh block in Pakistan (22.5% non operating interest) (the “Project”). Project investments, via Rally’s subsidiaries, will help develop resources in these concessions, apply established technology that can help enhance recovery of in-place oil reserves in Issaran, and explore for additional natural gas reserves in Pakistan.

Major shareholders of the company

Rally is a Canadian public company listed on the Toronto Stock Exchange (RAL) and on the Frankfurt Stock Exchange (RLE.F). Management and Directors own about 7% of Rally’s shares. Rally’s largest shareholder (15%) is Strategic Capital Partners Inc., a Toronto-based investment and portfolio management firm.

Khan administrative district (about 200 km west of the city of Multan), in the Punjab province in central Pakistan. The project operator is Dewan Petroleum Pvt. Ltd, which is headquartered in Islamabad.

Project Development Impact and IFC's Role

The Project will support development of heavy oil resources in Egypt, as well as development of and exploration for natural gas reserves in Pakistan. These sectors are important to the respective economies; the mining and oil and gas sector constitutes nearly 15% of the Egypt’s GDP and about 37% of its exports. In Pakistan, natural gas, a relatively more affordable and environmentally friendly fuel, currently meets about 46% of the Country’s primary energy needs but where increasing domestic demand is projected to lead to supply deficits. The gas supplied by the Project is a relatively clean source of fuel and will be at significantly less cost than the alternative cost of imports. In addition to contributing production increases to important energy

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sectors in host economies, the project’s key development impacts will be through applying established technologies for enhanced recovery of heavy oil resources, in generating local jobs and providing training, in the form of incremental revenues to the governments from production sharing, royalties and taxes, from outlay in social programs in Pakistan, and from local sourcing of goods and services where possible.

IFC will track the Project’s development benefits annually based on information provided by the Company in respect of incremental production, local employment, outlay on social development programs, oil recovery rates in Egypt, and incremental revenue benefits accruing to the governments and their agencies from the Project.

Environmental and Social Management:

The Company’s objective to establish international standards for environmental, health and safety aspects of its operations in Egypt is expected to be among the principal positive outcomes of this Project. Given the small footprint and remote Egyptian eastern desert location, environmental impacts are not considered significant. Rally has reviewed their operations in Issaran and has committed to the implementation of improvements as needed, and seeks to establish comprehensive health, safety, and environmental and social management systems that will ensure sound management of its projects on a sustained basis. A comprehensive health, safety, and environmental audit have already been commissioned based on which Rally will develop action plans for systematic implementation. The Pakistan operations are in the early stage and will also be designed to comply with host country regulations as well as World Bank Group’s safeguard polices and guidelines. Land acquisition negotiations for the field development facilities are underway with assistance from the regional government. Rally, through the operator, will ensure that land acquisition for the Project is consistent with host country regulations and World Bank/IFC policies. As a part of the development planning, the operator is evaluating the requirements for security at the site. If specific security arrangements are considered necessary, the sponsor will confirm that the operator has implemented appropriate policies concerning the use of security personnel.

Community Benefits:

Both projects lie in remote locations and have very small social footprints. There is no local community in the proximity of the Issaran field, located in the eastern desert on the west shore of the Red Sea, with the nearest inhabitation to the north, Zafarana (p. 5,000 approx.) 40 km away, and Ras Gharib (p. 50,000-100,000) about 60 km to the South. In Pakistan, Rally’s non-operated Safed Koh block is also remotely located in the Punjab province with some communities in the area adjacent to the project site. Some individuals from the local community will gain employment during field development. The operator has also already provided some development contribution to the community, including a primary school, a medical dispensary, and assistance in obtaining water supplies to this community. More

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generally, within the scope of the Safed Koh concession, Rally and its partners will contribute funds for social welfare programs. IFC expects total outlays on social programs to average about US$80,000 annually, although year to year outlay is subject to minimum provisions of the concession agreement.

Contribution to the Government:

The Project’s benefits to Egypt and Pakistan include revenues that will accrue to these governments in the form of production share, royalties and/or taxes. Based on IFC’s estimates, using the project’s estimated gross proved reserves and World Bank forecast oil prices, the

projects can be expected to generate incremental revenues of US$47 million in Egypt and US$119 million in Pakistan over the life of the respective gross reserves, although this depends on actual oil prices and production rates.

Governance Context:

In terms of overall size, the Project’s revenue contributions to GOE and GOP form an insignificant share - in both cases less than 0.1% - of total government revenues in these countries. In Egypt, the GoE’s share of revenues partly accrues to the Ministry of Petroleum (EGPC/GPC) and for income taxes to Ministry of Finance (MOF). EGPC/GPC shares of revenues are mostly reinvested or directly applied to finance domestic subsidies for petroleum products for the Country’s population. MOF funds are applied directly to Egypt’s federal budgets. In Pakistan, revenue payments in the form of royalties and taxes are paid to the federal government. In addition, the project will benefit gas users by generally providing gas at a cost below that of non-gas alternative commercial fuels. Mandatory investments stipulated in the concession agreement in respect of social welfare programs are to be made directly by the operator in coordination with the local civil administration or the relevant provincial government. Unspent amounts are otherwise to be deposited with these agencies. The partners intend to apply these directly in suitable social development programs; these expenditures will be tracked by the Company annually.In coming to a view of whether to support this Project, the IFC has considered the value of the

project’s benefits, and governance and other risks to these net benefits. It has considered in this respect a range of indicators of governance, including the current relationship between the host countries and the World Bank and IMF. IFC believes the risks to project benefits not being realized, due to governance in these countries, as relatively small. In addition, to ensure transparency, payments to governments will be publicly disclosed by Rally in its annual report. The non-revenue benefits which are significant, such as strengthening domestic energy production, relatively clean and lower cost fuel in Pakistan, technology transfer, generating jobs, local social contribution, purchases of local goods and services are unlikely to be impacted by weak governance. Both projects are also consistent with overall World Bank Group objectives in the countries’ oil and gas sectors, including helping strengthen private sector participation in development of these sectors.

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IFC Role:

IFC’s support to Rally Energy, a small Canadian oil and gas company, is key for its international operations in Egypt and Pakistan considering the Project’s importance in helping develop domestic energy resources in host countries. The provision of medium-term loan facilities will provide the company the financing needed to meet its capital expenditures and the flexibility it needs to grow its operations in these markets. There is limited availability of such financing for emerging market operations for companies like Rally, which has also sought IFC’s involvement because of its strong familiarity with the Egyptian and Pakistani environments. IFC is also working closely with Rally to help build its health, safety, environmental and social management capacity, a key priority area for the Company.

Environmental and social issues This is a Category B project according to IFC’s Procedure for Environmental and Social Review of projects. The review of this project consisted of appraising technical and environmental, health, safety, and social information submitted by the project sponsor, as well as an IFC visit to the sponsor’s operations in Egypt. The following potential environment, health, safety, and social impacts of the projects were analyzed.

Environmental compliance with local legislation and World Bank/IFC policies and guidelines

Solid and liquid waste treatment and disposal

Air and noise emissions

Soil and water contamination from current or past operations

Occupational health and safety management including workforce training

Rally Energy Corp. Reports Earnings Results for the Second Quarter and Six Months Ended June 30, 2007Rally Energy Corp. reported earnings results for the second quarter and six months ended June 30, 2007. For the quarter, the company reported net earnings of CAD 5,781,344 or CAD 0.049 per diluted share on oil and gas revenue of CAD 25,797,838 against net earnings of CAD 4,213,546, or CAD 0.043 per diluted share on oil and gas revenue of CAD 19,605,132 for the same period a year ago. For the six months, the company reported net earnings of CAD 10,446,371 or CAD 0.093 per diluted share on oil and gas revenue of CAD 48,834,859 against net earnings of CAD 5,079,338, or CAD 0.053 per diluted share on oil and gas revenue of CAD 29,666,579 for the same period a year ago.

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Rally Energy Corp. Reports Earnings Results for the First Quarter Ended March 31, 2007Rally Energy Corp. reported earnings results for the first quarter ended March 31, 2007. For the quarter, the company reported net earnings of CAD 4,665,027 or CAD 0.044 per diluted share on oil and natural gas revenues of CAD 23,037,021 compared to net earnings of CAD 865,792 or CAD 0.009 per diluted share on oil and natural gas revenues of CAD 10,061,447 for the same period a year ago. Comprehensive earnings were CAD 4,665,027 compared to CAD 865,792 for the same period a year ago. The revenue increase is attributable to a corresponding production increase, all of which was from the Issaran oilfield in Egypt.

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BRIEF ON WORKED DONE DURING INTERNSHIP:

Analyzing Resumes

The HR Department receives tons of resumes on daily bases. My task was to analyze each resume and grade it accordingly. The grade was according to the qualification and experience of the person. On top of each resume I wrote the title of the degree, the experience of the person and the department of previous experience so that future sorting of resumes becomes easy.

Maintenance of Medical Bills/Facilities

Employees at RALLY ENERGY are provided medical benefits, thus medical reimbursement forms are received on a daily basis with attached receipt of medicines and doctor’s prescription. I recalculated the cost of all the medicines bought by the employee and I ensured that no receipt other than receipts of medicines is attached with the medial reimbursement form. My task also involved cross checking claims, to ensure they satisfied the medical history attached, if not those claims were rejected. The audited data was entered in the RALLY ENERGY database.

Travel Expenses:

As RALLY ENERGY deals with many big agencies and far located areas and as any of the regional office conducts a training program or the seminar or any meeting the travel expenses accrue. These travel expenses were calculated and checked by me I was to make a detailed report of the expenses and was to forward it to the head office.

Managing Visitors:

Many people came to visit the company; the head could only meet one person at a time. If any other visitor comes at that time I was to attend him and take down the name and tell the GM about him. If the person is in hurry I used to arrange another meeting and if the GM wants to have the meeting I used to make the person sit comfortably and offer him tea.

Establish file for the organization:

RALLY ENERGY has lot of filling system. My main work is to establish the office file which is an up heel task for me. Because organization have lot of files which they want to re-organize them. By grace of GOD I did my work with the given time frame. Organization gives me a three week to complete the work.

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Audit of accounts:

As an MBA (FINANCE) I have enjoy to work with the accounts department. My fallow partner who is also internee come from NUML University has a MBA (FINANACE) doing internal audit with me.

Prepare agenda for board meeting:

RALLY ENERGY have an annual meeting with it boards of directors, the meeting is normally held at the end of the year. In meeting RALLY ENERGY offers some necessary items. After board decisions RALLY ENERGY takes action. So this is done by preparing agenda item which is offers to the Board of Directors. So while doing my internship the director admin and finance tell me to prepare a agenda items.

SKILLS GAINED:

During my internship I have performed many tasks that were not performed by me in my life. It helped me a lot to increase my knowledge and skills. The skills that I gained by performing tasks at RALLY ENERGY are as under:

Documentation Skill:

I was not aware of the ways of maintaining and arranging the documentation. So during the internship period I gained this skill, as the admin and account documentation is an important part of organization.

Co-ordination Skill:

My work was to co-ordinate with my senior; here I also gained the Co-ordination and team working skills. Building Relationships:

I have also gained the skill of building good relationships with peoples, because I also develop relationships with some customers and organizations which are affiliated with RALLY ENERGY. So, that was some of the skills that I use and gained during my internship period at RALLY ENERGY.

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ABOUT INTERNSHIP EXPERIENCE:

By the help of this internship I got a clear insight of the Companies operations and

culture.

I got a clear idea of what is happening in actual business world.

This experience boosted my level of confidence.

I found my internship, a very interesting and fruitful experience

Identification of a Main Problem:

All over my tenure of internship the only one problem I saw in RALLY ENERGY was when the MD who is the son of the owner was asked to take over, lead, and control RALLY ENERGY. The MD was an engineer he was a very learned person and was considered to be a good manager turned out to be the worst manager ever. During his stay the loyal employees and hard working employees were not rewarded properly and the environment was discouraging and everyone wanted a change of the management. As a result the productivity and profitability of the company was getting affected.

When the owner came to know of the current problem he called his son and discussed the problem his son told him that management is not his department and he won’t be able to manage the company. On the owners instruction an HR manager was selected who had a lot of experience and will to manage people, he was a very learned person and was very courageous. Every employee in the organization was very happy with him he took great care of every need of theirs.

Once he caught some employees doing their own business in the name of RALLY ENERGY, he tried to fire them, sent the report to MD. Those employees took undue advantage of the acquaintance with the MD and forced the manager not to interfere with their work. On resistance of MD manager left the job.

MD took over as the manager again employees got very disturbed they weren’t comfortable with the new management, only in that time I saw employees rapidly leaving the job and saw a wave of uncomforted over all the employees of RALLY ENERGY. The company still lacks the fearless leadership like the one the previous manger gave they still miss him. They want to have that or similar leadership.

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Conclusions

RALLY ENERGY is a place where one can live his dreams and pursue a career that reflects his skills and passions. People in RALLY ENERGY give flexibility for change, the opportunity to learn and providing career options with endless possibilities.

The finance team at RALLY ENERGY believes that all employees have a right to offer input and be involved in helping their organization grow. The finance department wants to create a work environment in which employees can improve their minds, continuously learn, gain professional growth, and feel inspired by similarly motivated individuals. The finance team takes pride in providing the best possible financial analysis. They take a constant interest in financial instruments and search for new financial techniques to improve the work.

The financial department of RALLY ENERGY is the strong pillar of the organization as it is meant to provide the best information about the financials of the organization, and financials are the base f he organization as it reflects the performance of the organization. The financial team consist of highly qualified and competent individuals. All the employees in RALLY ENERGY are equally treated; there is internal equity as well as external equity. The staff at RALLY ENERGY is given incentives and rewards so that motivation and encouragement is expressed. The skills of employees are developed through proper training & development phases. This becomes a major factor in the career growth of an employee.

The financial is doing a very satisfying job with the financials, yet there is always some room for improvement.

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Recommendations

There is a lot of complicated work in the finance department which makes people hectic and task is difficult to understand..

Most of the RALLY ENERGY employees are sticking to one seat only with the result that they become master of one particular job and lose their grip over the other. In my opinion all the employees should have regular job rotation experience

Refresher courses for the staff are most important in any international organization. All the employees should have these courses according to their requirement. Foreign experts can also be called for this purpose.

Every year some of the employees should be sent for training to other countries and employees from other branches should be sent to the head office. So that they can observe what is going on in the head office.

Such system should be designed that every employee who has some problems with his supervisors can communicate it to the higher management and some steps must be taken to improve that.

There was a fine line between employees and internees, and though that is understandable, the system seemed much closed at times.

The period of internship should be divided into the number of departments in RALLY ENERGY. The internee should be given timetable mentioning the number of days he has to work at different places in the office. Once in a while, in each department internee should be given a lecture by the manager of the department about operations of the department. This would increase the learning of the internee.

Distribution of work is not on equity basis, work has not been allocated properly some workers have to work hard and have to work in late hours without any extra reward. So I suggest that steps should be taken to allocate the work properly.

RALLY ENERGY has policy of orientation but it only includes visits to departments and knowing about the policies and rules of the company. I suggest a proper orientation and socialization session should be there for a new employee so that he may feel comfortable with his new organization.

The late seating of employees has been observed in RALLY ENERGY and many employees work overtime after office hours. They should be properly compensated for their work especially during the overtime period. This would be encouraging for all the employees.

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