FORM 10-Q

                      SECURITIES AND EXCHANGE COMMISSION
                            WASHINGTON, D.C. 20549

(Mark One)

[X]  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
     EXCHANGE ACT OF 1934

                 For the quarterly period ended June 30, 2002

                                     OR

[ ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
     EXCHANGE ACT OF 1934.

            For the transition period from _______ to _______.

                        Commission File Number: 1-10398

                            GIANT INDUSTRIES, INC.
            (Exact name of registrant as specified in its charter)

             Delaware                                 86-0642718
  (State or other jurisdiction of                  (I.R.S. Employer
   incorporation or organization)                 Identification No.)


23733 North Scottsdale Road, Scottsdale, Arizona        85255
 (Address of principal executive offices)             (Zip Code)


            Registrant's telephone number, including area code:
                              (480) 585-8888

Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that
the registrant was required to file such reports) and (2) has been subject
to such filing requirements for the past 90 days.

                              Yes [X]    No [ ]

Number of Common Shares outstanding at July 31, 2002: 8,571,779 shares.


<PAGE>
                   GIANT INDUSTRIES, INC. AND SUBSIDIARIES
                                     INDEX


PART I  - FINANCIAL INFORMATION

Item 1  - Financial Statements

          Condensed Consolidated Balance Sheets June 30, 2002 (Unaudited)
          and December 31, 2001

          Condensed Consolidated Statements of Operations for the Three
          and Six Months Ended June 30, 2002 and 2001 (Unaudited)

          Condensed Consolidated Statements of Cash Flows for the Six
          Months Ended June 30, 2002 and 2001 (Unaudited)

          Notes to Condensed Consolidated Financial Statements (Unaudited)

Item 2  - Management's Discussion and Analysis of Financial Condition
          and Results of Operations

Item 3  - Quantitative and Qualitative Disclosures About Market Risk

PART II - OTHER INFORMATION

Item 1  - Legal Proceedings

Item 4  - Submission of Matters to a Vote of Security Holders

Item 6  - Exhibits and Reports on Form 8-K

SIGNATURE


<PAGE>
<TABLE>
                                  PART I
                           FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS.

                 GIANT INDUSTRIES, INC. AND SUBSIDIARIES
                  CONDENSED CONSOLIDATED BALANCE SHEETS
                              (In thousands)

<CAPTION>
                                                                 June 30,    December 31,
-----------------------------------------------------------------------------------------
                                                                  2002           2001
-----------------------------------------------------------------------------------------
                                                               (Unaudited)
<S>                                                              <C>           <C>
ASSETS
Current assets:
  Cash and cash equivalents                                      $  11,550     $  26,326
  Receivables, net                                                  64,956        43,530
  Inventories                                                      122,361        58,729
  Prepaid expenses and other                                         6,010         3,661
  Deferred income taxes                                             10,135         3,735
-----------------------------------------------------------------------------------------
    Total current assets                                           215,012       135,981
-----------------------------------------------------------------------------------------
Property, plant and equipment                                      658,185       525,345
  Less accumulated depreciation and amortization                  (212,588)     (201,823)
-----------------------------------------------------------------------------------------
                                                                   445,597       323,522
-----------------------------------------------------------------------------------------
Goodwill, net                                                       19,815        19,815
Other assets                                                        39,904        27,856
-----------------------------------------------------------------------------------------
                                                                 $ 720,328     $ 507,174
=========================================================================================

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
  Current portion of long-term debt                              $  12,926     $      45
  Accounts payable                                                  50,367        42,255
  Accrued expenses                                                  38,286        36,537
-----------------------------------------------------------------------------------------
    Total current liabilities                                      101,579        78,837
-----------------------------------------------------------------------------------------
Long-term debt, net of current portion                             436,919       256,749
Deferred income taxes                                               30,395        32,772
Other liabilities                                                   19,092         2,406
Commitments and contingencies (Notes 8 and 9)
Stockholders' equity:
  Preferred stock, par value $.01 per share, 10,000,000
    shares authorized, none issued
  Common stock, par value $.01 per share, 50,000,000
    shares authorized, 12,323,759 and 12,305,859 shares issued         123           123
  Additional paid-in capital                                        73,683        73,589
  Retained earnings                                                 94,991        99,152
-----------------------------------------------------------------------------------------
                                                                   168,797       172,864
  Less common stock in treasury - at cost, 3,751,980 shares        (36,454)      (36,454)
-----------------------------------------------------------------------------------------
    Total stockholders' equity                                     132,343       136,410
-----------------------------------------------------------------------------------------
                                                                 $ 720,328     $ 507,174
=========================================================================================
See accompanying notes to condensed consolidated financial statements.
</TABLE>


<PAGE>
<TABLE>
                            GIANT INDUSTRIES, INC. AND SUBSIDIARIES
                        CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                         (Unaudited)
                              (In thousands except per share data)

<CAPTION>
                                                     Three Months           Six Months
                                                    Ended June 30,         Ended June 30,
-------------------------------------------------------------------------------------------
                                                   2002        2001       2002       2001
-------------------------------------------------------------------------------------------
<S>                                             <C>        <C>         <C>        <C>
Net revenues                                    $ 299,238  $ 281,158   $ 487,634  $ 532,370
Cost of products sold                             246,385    209,917     388,224    410,419
-------------------------------------------------------------------------------------------
Gross margin                                       52,853     71,241      99,410    121,951

Operating expenses                                 33,260     28,737      59,671     57,585
Depreciation and amortization                       9,244      7,940      17,807     15,854
Selling, general and administrative expenses        5,889      8,755      11,086     15,338
Net loss on disposal/write-down of assets           1,033        343       1,063        482
-------------------------------------------------------------------------------------------
Operating income                                    3,427     25,466       9,783     32,692

Interest expense                                   (9,527)    (6,040)    (15,530)   (12,083)
Amortization/write-off of financing costs            (909)      (198)     (1,117)      (397)
Interest and investment income                        261        487         325      1,050
-------------------------------------------------------------------------------------------
Earnings (loss) before income taxes                (6,748)    19,715      (6,539)    21,262

Provision (benefit) for income taxes               (2,464)     7,762      (2,378)     8,359
-------------------------------------------------------------------------------------------
Net earnings (loss)                             $  (4,284) $  11,953   $  (4,161) $  12,903
===========================================================================================

Net earnings (loss) per common share:
  Basic                                         $   (0.50) $    1.33   $   (0.49) $    1.44
===========================================================================================
  Assuming dilution                             $   (0.50) $    1.33   $   (0.49) $    1.44
===========================================================================================

See accompanying notes to condensed consolidated financial statements.
</TABLE>


<PAGE>
<TABLE>
                      GIANT INDUSTRIES, INC. AND SUBSIDIARIES
                  CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)
                                  (In thousands)

<CAPTION>
                                                                     Six Months Ended
                                                                          June 30,
---------------------------------------------------------------------------------------
                                                                    2002        2001
---------------------------------------------------------------------------------------
<S>                                                               <C>          <C>
Cash flows from operating activities:
  Net earnings (loss)                                             $  (4,161)   $ 12,903
  Adjustments to reconcile net earnings (loss) to net
    cash provided by operating activities:
      Depreciation and amortization                                  17,807      15,854
      Amortization/write-off of financing costs                       1,117         397
      Deferred income taxes                                          (2,377)      4,504
      Net loss on disposal/write-down of assets                       1,063         482
      Other                                                             312         229
      Changes in operating assets and liabilities excluding
        the effects of the Yorktown acquisition:
        (Increase) decrease in receivables                          (21,426)     15,011
        Decrease (increase) in inventories                            6,302      (1,953)
        (Increase) decrease in prepaid expenses and other            (2,349)        667
        Increase (decrease) in accounts payable                       8,111      (8,557)
        Increase in accrued expenses                                    673       2,230
---------------------------------------------------------------------------------------
Net cash provided by operating activities                             5,072      41,767
---------------------------------------------------------------------------------------
Cash flows from investing activities:
  Yorktown refinery acquisition                                    (193,992)          -
  Purchases of property, plant and equipment                         (7,552)     (4,929)
  Bloomfield refinery acquisition contingent payment                      -      (5,139)
  Purchase of other assets                                                -      (5,010)
  Proceeds from sale of property, plant and equipment                 2,296         521
---------------------------------------------------------------------------------------
Net cash used by investing activities                              (199,248)    (14,557)
---------------------------------------------------------------------------------------
Cash flows from financing activities:
  Proceeds from long-term debt                                      294,144           -
  Payments of long-term debt                                       (101,134)        (93)
  Deferred financing costs                                          (13,704)          -
  Proceeds from exercise of stock options                                94           -
---------------------------------------------------------------------------------------
Net cash provided (used) by financing activities                    179,400         (93)
---------------------------------------------------------------------------------------
Net (decrease) increase in cash and cash equivalents                (14,776)     27,117
Cash and cash equivalents:
  Beginning of period                                                26,326      26,618
---------------------------------------------------------------------------------------
  End of period                                                   $  11,550    $ 53,735
=======================================================================================

Non-cash Investing and Financing Activities. In the second quarter of 2002, the Company
issued $200,000,000 of 11% Senior Subordinated Notes at a discount of $5,856,000. In the
second quarter of 2001, the Company received 103,430 shares of its common stock valued at
approximately $1,107,000 from its Chairman and Chief Executive Officer as payment for the
exercise of 126,601 common stock options. These shares were immediately cancelled.

See accompanying notes to condensed consolidated financial statements.
</TABLE>


<PAGE>
           NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                               (Unaudited)


NOTE 1 - ORGANIZATION AND BASIS OF PRESENTATION:

     Giant Industries, Inc., a Delaware corporation (together with its
subsidiaries, "Giant" or the "Company"), through its wholly-owned
subsidiary Giant Industries Arizona, Inc. and its subsidiaries ("Giant
Arizona"), is engaged in the refining and marketing of petroleum products
in New Mexico, Arizona, and Colorado, with a concentration in the Four
Corners area where these states adjoin, and with the recent acquisition of
the Yorktown, Virginia refinery, in Virginia, Maryland, North and South
Carolina, and the New York Harbor. In addition, Phoenix Fuel Co., Inc.
("Phoenix Fuel"), a wholly-owned subsidiary of Giant Arizona, operates a
wholesale petroleum products distribution operation. (See Note 2 for a
further discussion of Company operations and Note 4 for a discussion of
the Yorktown refinery acquisition.)

     The accompanying unaudited condensed consolidated financial
statements have been prepared in accordance with accounting principles
generally accepted in the United States of America, hereafter referred to
as generally accepted accounting principles, for interim financial
information and with the instructions to Form 10-Q and Rule 10-01 of
Regulation S-X. Accordingly, they do not include all of the information
and notes required by generally accepted accounting principles for
complete financial statements. In the opinion of management, all
adjustments and reclassifications considered necessary for a fair and
comparable presentation have been included and are of a normal recurring
nature. Operating results for the six months ended June 30, 2002 are not
necessarily indicative of the results that may be expected for the year
ending December 31, 2002. The enclosed financial statements should be read
in conjunction with the consolidated financial statements and notes
thereto included in the Company's Annual Report on Form 10-K for the year
ended December 31, 2001.

     In 2001, the American Institute of Certified Public Accountants
issued an exposure draft of a proposed Statement of Position, "Accounting
for Certain Costs Related to Property, Plant, and Equipment." This
proposed Statement of Position, which would be effective for the Company
in 2004, would create a project timeline framework for capitalizing costs
related to property, plant and equipment construction. It would require
that property, plant and equipment assets be accounted for at the
component level, and require administrative and general costs incurred in
support of capital projects to be expensed in the current period. In
addition, the Statement is expected to require companies to expense the
non-capital portion of major maintenance costs as incurred. The statement
is expected to require that any existing unamortized deferred non-capital
major maintenance costs be expensed immediately. The American Institute of
Certified Public Accountant plans to issue the final Statement of Position
in the fourth quarter of 2002.

      In June 2001, the Financial Accounting Standards Board ("FASB")
issued Statement of Financial Accounting Standards ("SFAS") No. 143,
"Accounting for Asset Retirement Obligations." This Statement addresses
financial accounting and reporting for obligations associated with the
retirement of tangible long-lived assets and the associated asset
retirement costs. It applies to legal obligations associated with the
retirement of long-lived assets that result from the acquisition,
construction, development and/or the normal operation of a long-lived
asset, except for certain obligations of lessees. As used in this
Statement, a legal obligation is an obligation that a party is required to
settle as a result of an existing or enacted law, statute, ordinance, or
written or oral contract or by legal construction of a contract under the
doctrine of promissory estoppel.

     SFAS No. 143 requires that the fair value of a liability for an asset
retirement obligation be recognized in the period in which it is incurred
if a reasonable estimate of fair value can be made. The associated asset
retirement costs are capitalized as part of the carrying amount of the
long-lived asset. Disclosure requirements include descriptions of asset
retirement obligations and reconciliation of changes in the components of
those obligations. This Statement is effective for financial statements
issued for fiscal years beginning after June 15, 2002. The Company has not
determined, but is in the process of evaluating, the effect SFAS No. 143
will have relative to its refining and marketing assets.

     On January 1, 2002, the Company adopted SFAS No. 142, "Goodwill and
Other Tangible Assets."  See Note 3 for applicable disclosures.

     On January 1, 2002, the Company adopted SFAS No. 144, "Accounting for
the Impairment or Disposal of Long-Lived Assets." This Statement defines
an impairment as "the condition that exists when the carrying amount of a
long-lived asset (asset group) is not recoverable and exceeds its fair
value." The Statement provides for a single accounting model for the
disposal of long-lived assets, whether previously held or newly acquired.
This Statement applies to recognized long-lived assets of an entity to be
held and used or to be disposed of, and applies to the entire group when a
long-lived asset is a part of the group. A group is defined as the lowest
level of operations with identifiable cash flows that are largely
independent of the cash flows of other assets and liabilities. The
Statement identifies the circumstances that apply when testing for
recoverability, as well as other potential adjustments or revisions
relating to recoverability. Specific guidance is provided for recognition
and measurement and reporting and disclosure for long-lived assets held
and used, disposed of other than by sale, and disposed of by sale. This
new standard had no impact on the Company's financial position and results
of operations at adoption.

     In April 2002, the FASB issued SFAS No. 145, "Rescission of FASB
Statements No. 4, 44, and 64, Amendment of FASB Statement No. 13, and
Technical Corrections" which supersedes previous guidance for reporting
gains and loss from, among other things, extinguishment of debt and
accounting for leases.  The portion of the statement relating to the early
extinguishment of debt is effective for the Company beginning in 2003. The
Company does not believe the adoption of this statement will have a
material impact on its financial statements.

     In July 2002, the FASB issued SFAS No. 146, "Accounting for Costs
Associated with Exit or Disposal Activities." The Standard requires
companies to recognize costs associated with exit or disposal activities
when they are incurred, rather than at the date of a commitment to an exit
or disposal plan. The guidance should be applied prospectively to exit or
disposal activities initiated after December 31, 2002.

     Certain reclassifications have been made to the 2001 financial
statements and notes to conform to the financial statement classifications
used in 2002.


<PAGE>
NOTE 2 - BUSINESS SEGMENTS:

     The Company is organized into three operating segments based on
manufacturing and marketing criteria. These segments are the Refining
Group, the Retail Group and Phoenix Fuel. A description of each segment
and its principal products follows:

     - Refining Group: The Refining Group owns and operates the Ciniza and
Bloomfield refineries in the Four Corners area of New Mexico and the
Yorktown refinery in Virginia. In addition to these three refineries, the
refining group owns and operates a crude oil gathering pipeline system in
New Mexico that services the Four Corners refineries, two finished
products distribution terminals, and a fleet of crude oil and finished
product truck transports. The Company's three refineries manufacture
various grades of gasoline, diesel fuel, and other products from crude
oil, other feedstocks and blending components. In addition, finished
products are acquired through exchange agreements, from third party
suppliers and from Phoenix Fuel. These products are sold through Company-
operated retail facilities, independent wholesalers and retailers,
industrial/commercial accounts, and sales and exchanges with major oil
companies. Crude oil, other feedstocks and blending components are
purchased from third party suppliers.

     - Retail Group: The Retail Group owns and operates service stations
with convenience stores or kiosks and one travel center. These operations
sell various grades of gasoline, diesel fuel, general merchandise,
including tobacco and alcoholic and nonalcoholic beverages, and food
products to the general public through retail locations. The Refining
Group or Phoenix Fuel supplies the petroleum fuels sold by the Retail
Group. General merchandise and food products are obtained from third party
suppliers.

     - Phoenix Fuel: Phoenix Fuel is a wholesale petroleum products
distribution operation, which includes several lubricant and bulk
petroleum distribution plants, an unmanned fleet fueling ("cardlock")
operation, a bulk lubricant terminal facility, and a fleet of finished
product and lubricant delivery trucks. The petroleum fuels and lubricants
sold are primarily obtained from third party suppliers and to a lesser
extent from the Refining Group.

     Operations that are not included in any of the three segments are
included in the category "Other." These operations consist primarily of
corporate staff operations, including selling, general and administrative
expenses.

     Operating income for each segment consists of net revenues less cost
of products sold, operating expenses, depreciation and amortization, and
the segment's selling, general and administrative expenses. The sales
between segments are made at market prices. Cost of products sold reflects
current costs adjusted, where appropriate, for LIFO and lower of cost or
market inventory adjustments.

     The total assets of each segment consist primarily of net property,
plant and equipment, inventories, accounts receivable and other assets
directly associated with the segment's operations. Included in the total
assets of the corporate staff operations are a majority of the Company's
cash and cash equivalents, various accounts receivable, net property,
plant and equipment, and other long-term assets.



<PAGE>
     Disclosures regarding the Company's reportable segments with
reconciliation to consolidated totals for the three months ended June 30,
2002 and 2001, are presented below.

<TABLE>
<CAPTION>
                                     For the Three Months Ended June 30, 2002          (In thousands)
                                     ----------------------------------------------------------------
                                     Refining   Retail   Phoenix            Reconciling
                                       Group    Group      Fuel     Other      Items     Consolidated
                                     --------  --------  --------  -------  -----------  ------------
<S>                                  <C>       <C>       <C>       <C>       <C>           <C>
Customer net revenues:
  Finished products:
    Four Corners operations          $ 62,137
    Yorktown operations(1)             72,834
                                     --------
    Total                            $134,971  $ 49,669  $ 64,378  $     -   $      -      $249,018
  Merchandise and lubricants                -    37,984     5,453        -          -        43,437
  Other                                 2,061     3,809       873       40          -         6,783
                                     --------  --------  --------  -------   --------      --------
    Total                             137,032    91,462    70,704       40          -       299,238
                                     --------  --------  --------  -------   --------      --------
Intersegment net revenues:
  Finished products                    39,168         -    14,067        -    (53,235)            -
  Other                                 4,351         -         -        -     (4,351)            -
                                     --------  --------  --------  -------   --------      --------
    Total                              43,519         -    14,067        -    (57,586)            -
                                     --------  --------  --------  -------   --------      --------
    Total net revenues               $180,551  $ 91,462  $ 84,771  $    40   $(57,586)     $299,238
                                     ========  ========  ========  =======   ========      ========

Operating income (loss):
  Four Corners operations            $  8,347
  Yorktown operations(1)               (3,090)
                                     --------
    Total                            $  5,257  $  1,869  $  1,567  $(4,233)  $ (1,033)     $  3,427
                                     --------  --------  --------  -------   --------
Interest expense                                                                             (9,527)
Amortization/write-off
  of financing costs                                                                           (909)
Interest income                                                                                 261
                                                                                           --------
Loss before income taxes                                                                   $ (6,748)
                                                                                           ========
Depreciation and amortization:
  Four Corners operations            $  4,083
  Yorktown operations(1)                1,080
                                     --------
    Total                            $  5,163  $  3,258  $    530  $   293   $      -      $  9,244
                                     --------  --------  --------  -------   --------      --------
Capital expenditures                 $  4,474  $    136  $     57  $   553   $      -      $  5,220


(1) Since acquisition on May 14, 2002.

</TABLE>




<PAGE>
<TABLE>
<CAPTION>
                                     For the Three Months Ended June 30, 2001          (In thousands)
                                     ----------------------------------------------------------------
                                     Refining   Retail   Phoenix            Reconciling
                                       Group    Group      Fuel     Other      Items     Consolidated
                                     --------  --------  --------  -------  -----------  ------------
<S>                                  <C>       <C>       <C>       <C>       <C>           <C>
Customer net revenues:
  Finished products                  $ 81,720  $ 67,557  $ 80,571  $     -   $      -      $229,848
  Merchandise and lubricants                -    37,630     6,010        -          -        43,640
  Other                                 2,852     4,134       607       77          -         7,670
                                     --------  --------  --------  -------   --------      --------
    Total                              84,572   109,321    87,188       77          -       281,158
                                     --------  --------  --------  -------   --------      --------
Intersegment net revenues:
  Finished products                    52,687         -    25,577        -    (78,264)            -
  Other                                 3,507         -         -        -     (3,507)            -
                                     --------  --------  --------  -------   --------      --------
    Total                              56,194         -    25,577        -    (81,771)            -
                                     --------  --------  --------  -------   --------      --------
    Total net revenues               $140,766  $109,321  $112,765  $    77   $(81,771)     $281,158
                                     ========  ========  ========  =======   ========      ========

Operating income (loss)              $ 28,566  $  2,526  $  1,757  $(7,040)  $   (343)     $ 25,466
Interest expense                                                                             (6,040)
Amortization/write-off
  of financing costs                                                                           (198)
Interest income                                                                                 487
                                                                                           --------
Earnings before income taxes                                                               $ 19,715
                                                                                           ========
Depreciation and amortization        $  4,011  $  2,934  $    669  $   326   $      -      $  7,940
Capital expenditures                 $  1,751  $    513  $    279  $   164   $      -      $  2,707
</TABLE>


<PAGE>
     Disclosures regarding the Company's reportable segments with
reconciliation to consolidated totals for the six months ended June 30,
2002 and 2001, are presented below.

<TABLE>
<CAPTION>
                                     As of and for the Six Months Ended June 30, 2002  (In thousands)
                                     ----------------------------------------------------------------
                                     Refining   Retail   Phoenix            Reconciling
                                       Group    Group      Fuel     Other      Items     Consolidated
                                     --------  --------  --------  -------  -----------  ------------
<S>                                  <C>       <C>       <C>       <C>        <C>          <C>
Customer net revenues:
  Finished products:
    Four Corners operations          $108,947
    Yorktown operations(1)             72,834
                                     --------
    Total                            $181,781  $ 89,088  $121,159  $      -   $       -    $392,028
  Merchandise and lubricants                -    70,821    11,421         -           -      82,242
  Other                                 3,904     7,769     1,601        90           -      13,364
                                     --------  --------  --------  --------   ---------    --------
    Total                             185,685   167,678   134,181        90           -     487,634
                                     --------  --------  --------  --------   ---------    --------
Intersegment net revenues:
  Finished products                    68,761         -    26,373         -     (95,134)          -
  Other                                 8,823         -         -         -      (8,823)          -
                                     --------  --------  --------  --------   ---------    --------
    Total                              77,584         -    26,373         -    (103,957)          -
                                     --------  --------  --------  --------   ---------    --------
    Total net revenues               $263,269  $167,678  $160,554  $     90   $(103,957)   $487,634
                                     ========  ========  ========  ========   =========    ========

Operating income (loss):
  Four Corners operations            $ 17,406
  Yorktown operations(1)               (3,090)
                                     --------
    Total                            $ 14,316  $  1,197  $  3,040  $ (7,707)  $  (1,063)   $  9,783
                                     --------  --------  --------  --------   ---------
Interest expense                                                                            (15,530)
Amortization/write-off
  of financing costs                                                                         (1,117)
Interest income                                                                                 325
                                                                                           --------
Loss before income taxes                                                                   $ (6,539)
                                                                                           ========
Depreciation and amortization:
  Four Corners operations            $  8,632
  Yorktown operations(1)                1,080
                                     --------
    Total                            $  9,712  $  6,459  $  1,067  $    569   $       -    $ 17,807
                                     --------  --------  --------  --------   ---------    --------
Total assets                         $446,612  $148,860  $ 64,313  $ 60,543   $       -    $720,328
Capital expenditures                 $  5,364  $    444  $    273  $  1,471   $       -    $  7,552


(1)Since acquisition on May 14, 2002.

</TABLE>



<PAGE>
<TABLE>
<CAPTION>
                                     As of and for the Six Months Ended June 30, 2001  (In thousands)
                                     ----------------------------------------------------------------
                                     Refining   Retail   Phoenix            Reconciling
                                       Group    Group      Fuel     Other      Items     Consolidated
                                     --------  --------  --------  -------  -----------  ------------
<S>                                  <C>       <C>       <C>       <C>        <C>          <C>
Customer net revenues:
  Finished products                  $147,769  $124,178  $162,760  $      -   $       -    $434,707
  Merchandise and lubricants                -    70,456    11,668         -           -      82,124
  Other                                 5,805     8,230     1,355       149           -      15,539
                                     --------  --------  --------  --------   ---------    --------
    Total                             153,574   202,864   175,783       149           -     532,370
                                     --------  --------  --------  --------   ---------    --------
Intersegment net revenues:
  Finished products                    91,214         -    46,590         -    (137,804)          -
  Other                                 7,168         -         -         -      (7,168)          -
                                     --------  --------  --------  --------   ---------    --------
    Total                              98,382         -    46,590         -    (144,972)          -
                                     --------  --------  --------  --------   ---------    --------
    Total net revenues               $251,956  $202,864  $222,373  $    149   $(144,972)   $532,370
                                     ========  ========  ========  ========   =========    ========

Operating income (loss)              $ 39,651  $  2,164  $  3,225  $(11,866)  $    (482)   $ 32,692
Interest expense                                                                            (12,083)
Amortization/write-off
  of financing costs                                                                           (397)
Interest income                                                                               1,050
                                                                                           --------
Earnings before income taxes                                                               $ 21,262
                                                                                           ========
Depreciation and amortization        $  7,960  $  5,920  $  1,329  $    645   $       -    $ 15,854
Total assets                         $229,354  $150,238  $ 75,173  $ 79,564   $       -    $534,329
Capital expenditures                 $  3,147  $    933  $    578  $    271   $       -    $  4,929
</TABLE>


<PAGE>
NOTE 3 - GOODWILL AND OTHER INTANGIBLE ASSETS:

     On January 1, 2002, the Company adopted SFAS No. 142, "Goodwill and
Other Intangible Assets." SFAS No. 142 addresses financial accounting and
reporting for intangible assets acquired individually or with a group of
other assets (but not those acquired in a business combination) at
acquisition. This Statement also addresses financial accounting and
reporting for goodwill and other intangible assets subsequent to their
acquisition. SFAS No. 141, "Business Combinations" addresses financial
accounting and reporting for goodwill and other intangible assets acquired
in a business combination at acquisition.

     SFAS No. 142, among other things, specifies that goodwill and certain
intangible assets with indefinite lives no longer be amortized, but
instead be subject to periodic impairment testing. Previously recognized
goodwill and certain intangible assets with indefinite lives are to be
initially tested for impairment as of the beginning of 2002.

     In the first quarter of 2002, the Company determined that there was
no impairment to its indefinite lived intangible assets. These indefinite
lived intangible assets will continue to be evaluated for impairment as
required by SFAS No. 142.

     During the second quarter of 2002, the Company completed the
transitional impairment test for goodwill as required by SFAS No. 142. The
Company identified three reporting units for the purpose of this
transitional impairment test. The fair value of each reporting unit was
determined using a discounted cash flow model based on assumptions
applicable to each reporting unit. The fair value of the reporting units
exceeded their respective carrying amounts, including goodwill. As a
result, the goodwill of each reporting unit is considered not impaired and
the second step of the impairment test, to measure the amount of an
impairment loss, is not necessary. The Company has elected to conduct its
annual goodwill impairment test as of the beginning of each fiscal year.
If events and circumstances indicate that goodwill of a reporting unit
might be impaired, goodwill will be tested for impairment when the
impairment indicator arises.

     At June 30, 2002 and December 31, 2001, the Company had goodwill of
$19,815,000, of which $14,722,000 related to the acquisition of Phoenix
Fuel, $4,968,000 related to various retail acquisitions and the remainder
to the acquisition of certain refining assets.

     Intangible assets with finite lives will continue to be amortized
over their respective useful lives and will be tested for impairment in
accordance with SFAS No. 144, "Accounting for the Impairment or Disposal
of Long-Lived Assets."



     A summary of intangible assets, which are included in Other Assets in
the Condensed Consolidated Balance Sheet, at June 30, 2002 is presented
below:

<TABLE>
<CAPTION>
                                   Gross                      Net
                                  Carrying   Accumulated    Carrying
(In thousands)                     Value     Amortization    Value
--------------------------------------------------------------------
<S>                                <C>          <C>          <C>
Amortized intangible assets:
    Rights-of-way                  $  3,564     $ 2,290      $ 1,274
    Contracts                         3,971       3,417          554
--------------------------------------------------------------------
                                      7,535       5,707        1,828
--------------------------------------------------------------------
Unamortized intangible assets:
    Liquor licenses                   7,303           -        7,303
--------------------------------------------------------------------
Total intangible assets            $ 14,838     $ 5,707      $ 9,131
====================================================================
</TABLE>

     In the second quarter of 2002, the remaining right-of-way costs
relating to certain pipeline assets that were sold were written off. These
rights-of-way had an original cost of approximately $21,000 and
accumulated amortization of approximately $6,900.

     Intangible asset amortization expense for the six months ended June
30, 2002 was $146,000. Estimated amortization expense for the remainder of
2002 and the five succeeding fiscal years is as follows:

                (In thousands)
                ----------------------------
                2002                   $ 144
                2003                     289
                2004                     289
                2005                     289
                2006                     286
                2007                     185



<PAGE>
     The following sets forth a reconciliation of net earnings (loss) and
earnings (loss) per share information for the three and six months ended
June 30, 2002 and 2001 adjusted for the non-amortization provisions of
SFAS No. 142.

<TABLE>
<CAPTION>
                                                     Three Months          Six Months
                                                    Ended June 30,        Ended June 30,
------------------------------------------------------------------------------------------
 (In thousands)                                      2002       2001      2002       2001
------------------------------------------------------------------------------------------
<S>                                               <C>        <C>       <C>        <C>
Reported net earnings (loss)                      $ (4,284)  $ 11,953  $ (4,161)  $ 12,903
Add:  Goodwill amortization, net of tax effect           -        161         -        321
------------------------------------------------------------------------------------------
Adjusted net earnings (loss)                      $ (4,284)  $ 12,114  $ (4,161)  $ 13,224
==========================================================================================
Basic earnings (loss) per share:
  Reported net earnings (loss)                    $  (0.50)  $   1.33  $  (0.49)  $   1.44
  Adjusted net earnings (loss)                    $  (0.50)  $   1.35  $  (0.49)  $   1.48

Diluted earnings (loss) per share:
  Reported net earnings (loss)                    $  (0.50)  $   1.33  $  (0.49)  $   1.44
  Adjusted net earnings (loss)                    $  (0.50)  $   1.35  $  (0.49)  $   1.47
</TABLE>


<PAGE>
NOTE 4 - ACQUISITIONS AND DISPOSITIONS:

     On May 14, 2002, the Company acquired the 61,900 bpd Yorktown
refinery from BP Corporation North America Inc. and BP Products North
America Inc. (collectively "BP") for $127,500,000 plus $65,182,000 for the
value of inventory at closing, the assumption of certain liabilities, and
a conditional earn-out. The liabilities assumed include certain
environmental obligations of approximately $7,500,000, certain pension and
retiree medical obligations of approximately $9,400,000, and certain
personnel obligations of approximately $300,000. In addition, the Company
incurred direct costs related to this transaction of approximately
$2,000,000.

     As part of the Yorktown acquisition, the Company agreed to pay to BP,
beginning in 2003 and concluding at the end of 2005, earn-out payments up
to a maximum of $25,000,000 when the average monthly spreads for regular
reformulated gasoline or No. 2 distillate over West Texas Intermediate
equivalent light crude oil on the New York Mercantile Exchange exceed
$5.50 or $4.00 per barrel, respectively.

     The Yorktown acquisition was funded with cash on hand, $32,000,000 in
borrowings under the Company's new $100,000,000 senior secured revolving
credit facility, $40,000,000 in borrowings from a new senior secured
mortgage loan facility, and part of the proceeds from the issuance of
$200,000,000 of 11% Senior Subordinated Notes due 2012. In addition, the
Company incurred approximately $13,704,000 of financing costs in
connection with these obligations. (See Note 8 for a discussion of the
these obligations).

     Under SFAS No. 141, "Business Combinations", the Yorktown acquisition
was accounted for as a purchase, whereby the purchase price will be
allocated to the assets acquired and liabilities assumed based upon their
respective fair market values at the date of acquisition. The accompanying
financial statements reflect the preliminary purchase price allocation.
The Company is in the process of completing the review and determination
of fair values of assets acquired and liabilities assumed. Accordingly,
the allocation of purchase price is subject to revision, which is not
expected to be material, based on a final determination of appraised and
other fair values. The June 30, 2002 financial statements include the
results of operations of the Yorktown acquisition since the date of
acquisition.

     The preliminary purchase price allocation as of June 30, 2002,
including direct costs incurred in the Yorktown acquisition, is as
follows:

<TABLE>
<CAPTION>
<S>                                                      <C>
Property, plant and equipment                            $ 132,600
Other assets                                                 3,000
Deferred income tax assets                                   6,400
Inventories:
  Feedstocks and refined products                           65,200
  Materials and supplies                                     4,400
Environmental liabilities assumed                           (7,500)
Pension and retiree medical obligations assumed             (9,400)
------------------------------------------------------------------
    Total cash purchase price                            $ 194,700
==================================================================
</TABLE>


<PAGE>
     The following unaudited pro forma financial information for the three
and six months ended June 30, 2002 and 2001 gives effect to the (i)
Yorktown acquisition, (ii) financing transactions described above, and
(iii) redemption of the Company's $100,000,000 of 9 3/4% Senior
Subordinated Notes due 2003 (the "9 3/4% Notes"), as if each had occurred
at the beginning of the periods presented. The pro forma results include
estimates and assumptions which management believes to be reasonable,
based upon limited available information from BP. This pro forma
information is not necessarily indicative of the results of future
operations.

<TABLE>
<CAPTION>
                                           Three Months          Six Months
                                          Ended June 30,        Ended June 30,
--------------------------------------------------------------------------------
(In thousands except per share data)      2002       2001      2002       2001
--------------------------------------------------------------------------------
<S>                                     <C>        <C>       <C>        <C>
Revenues                                $364,946   $456,991  $688,042   $876,803
Net earnings (loss)                     $ (6,505)  $ 13,253  $(15,558)  $ 14,823
Net earnings (loss) per share:
  Basic                                 $  (0.76)  $   1.48  $  (1.82)  $   1.66
  Diluted                               $  (0.76)  $   1.48  $  (1.82)  $   1.65
</TABLE>

     On August 12, 2002, the Company entered into purchase and sale
agreements for the sale of nine retail units in the Phoenix marketing
area. The sale of two of the units is subject to the non-exercise of
rights of first refusal to purchase held by third parties. The Company
expects that these transactions could close in the third quarter of 2002.

     Also, on July 31, 2002, the Company entered into a letter of intent
for the sale of its remaining 26 retail units in the Phoenix and Tucson
marketing areas and is in the process of negotiating a purchase agreement
which would be contingent upon the potential buyer obtaining lender
financing on satisfactory terms. The Company expects that this transaction
could close sometime in the fourth quarter of 2002. In the second quarter
of 2002, the Company recorded an impairment loss of $1,272,000 related to
certain of these units based on an estimate of fair value as compared to
the carrying value of each unit, in accordance with SFAS No. 144.

     Both of the transactions are subject to the approval of the Company's
Board of Directors. If both of these transactions are completed, the
Company expects to receive over $30,000,000 in proceeds and to record a
net overall gain of approximately $2,000,000 before income taxes.

     In addition, the Company is in the process of negotiating for the
possible sale of its corporate headquarters building. These negotiations
are in a very preliminary stage and, accordingly, the Company does not
know whether this transaction will occur.

     In addition to Board approval, these potential sales are subject to
other customary conditions, and, in the case of the sale of the 26 retail
units, the negotiation of an acceptable purchase agreement and the
potential buyer obtaining lender financing on satisfactory terms.
Accordingly, there can be no assurance that the Company will complete
these potential sales when expected or at all.

     The Company hopes to use the proceeds from these potential sales, and
savings or proceeds generated from other parts of the Company's debt
reduction initiative, to reduce long-term debt by $50,000,000 prior to
year-end.



<PAGE>
NOTE 5 - EARNINGS PER SHARE:

     The following is a reconciliation of the numerators and denominators
of the basic and diluted per share computations for net earnings (loss):

<TABLE>
<CAPTION>
                                                Three Months Ended June 30,
------------------------------------------------------------------------------------------------
                                           2002                               2001
------------------------------------------------------------------------------------------------
                                                        Per                                Per
                                Loss        Shares     Share      Earnings     Shares     Share
                             (Numerator) (Denominator) Amount   (Numerator) (Denominator) Amount
------------------------------------------------------------------------------------------------
<S>                           <C>           <C>        <C>       <C>           <C>         <C>
Earnings (loss) per common
  share - basic:

  Net earnings (loss)         $(4,284,000)  8,566,271  $(0.50)   $11,953,000   8,957,684   $1.33

  Effect of dilutive
    stock options                       -           -*      -              -      21,992       -
------------------------------------------------------------------------------------------------
Earnings (loss) per common
  share - assuming dilution:

  Net earnings (loss)         $(4,284,000)  8,566,271  $(0.50)   $11,953,000   8,979,676   $1.33
================================================================================================

*The additional shares would be antidilutive due to the net loss.
</TABLE>

<TABLE>
<CAPTION>
                                                  Six Months Ended June 30,
------------------------------------------------------------------------------------------------
                                           2002                               2001
------------------------------------------------------------------------------------------------
                                                        Per                                Per
                                Loss        Shares     Share      Earnings     Shares     Share
                             (Numerator) (Denominator) Amount   (Numerator) (Denominator) Amount
                             ----------- ------------- ------   ----------- ------------- ------
<S>                           <C>           <C>        <C>       <C>           <C>         <C>
Earnings (loss) per common
  share - basic:

  Net earnings (loss)         $(4,161,000)  8,560,109  $(0.49)   $12,903,000   8,952,873   $1.44

  Effect of dilutive
    stock options                       -           -*      -              -      13,859       -
------------------------------------------------------------------------------------------------
Earnings (loss) per common
  share - assuming dilution:

  Net earnings (loss)         $(4,161,000)  8,560,109  $(0.49)   $12,903,000   8,966,732   $1.44
================================================================================================

*The additional shares would be antidilutive due to the net loss.
</TABLE>

     On April 29, 2002, 17,900 stock options granted May 1, 1992, were
exercised. These stock options were scheduled to expire on April 30, 2002.

     At June 30, 2002, there were 8,571,779 shares of the Company's common
stock outstanding. There were no transactions subsequent to June 30, 2002,
that if the transactions had occurred before June 30, 2002, would
materially change the number of common shares or potential common shares
outstanding as of June 30, 2002.



<PAGE>
NOTE 6 - INVENTORIES:

<TABLE>
<CAPTION>
                                                        June 30,    December 31,
--------------------------------------------------------------------------------
(In thousands)                                           2002           2001
--------------------------------------------------------------------------------
<S>                                                     <C>             <C>
First-in, first-out ("FIFO") method:
  Crude oil                                             $  41,385       $ 12,835
  Refined products                                         55,175         21,982
  Refinery and shop supplies                               12,989          8,111
  Merchandise                                               2,961          3,928
Retail method:
  Merchandise                                               8,680          9,179
--------------------------------------------------------------------------------
    Subtotal                                              121,190         56,035
Adjustment for last-in, first-out ("LIFO") method           1,171          5,996
Allowance for lower of cost or market                           -         (3,302)
--------------------------------------------------------------------------------
    Total                                               $ 122,361       $ 58,729
================================================================================
</TABLE>

     The portion of inventories valued on a LIFO basis totaled $87,507,000
and $30,872,000 at June 30, 2002 and December 31, 2001, respectively. The
following data will facilitate comparison with the operating results of
companies using the FIFO method of inventory valuation.

     If inventories had been determined using the FIFO method at June 30,
2002 and 2001, net earnings (loss) and diluted earnings (loss) per share
for the three months ended June 30, 2002 and 2001, would have been higher
(lower) by $1,003,000 and $0.12, and $(342,000) and $(0.04), respectively,
and net earnings (loss) and diluted earnings (loss) per share for the six
months ended June 30, 2002 and 2001 would have been higher (lower) by
$914,000 and $0.11, and $(2,144,000) and $(0.24), respectively.

     For interim reporting purposes, inventory increments expected to be
liquidated by year-end are valued at the most recent acquisition costs,
and inventory liquidations that are expected to be reinstated by year end
are ignored for LIFO inventory valuation calculations. The LIFO effects of
inventory increments not expected to be liquidated by year-end, and the
LIFO effects of inventory liquidations not expected to be reinstated by
year-end, are recorded in the period such increments and liquidations
occur.



<PAGE>
NOTE 7 - DERIVATIVE INSTRUMENTS:

     The Company is exposed to various market risks, including changes in
certain commodity prices and interest rates. To manage the volatility
relating to these normal business exposures, the Company, from time to
time, uses commodity futures and options contracts to reduce price
volatility, to fix margins in its refining and marketing operations and to
protect against price declines associated with its crude oil and finished
products inventories. In the second quarter of 2002, the Company entered
into various crude oil futures contracts in order to economically hedge
crude oil inventories and crude oil purchases for the Yorktown refinery
operations. For the second quarter of 2002, the Company recorded gains on
these contracts of approximately $1,970,000 in cost of products sold.
These transactions did not qualify for hedge accounting in accordance with
SFAS No. 133 "Accounting for Derivative Instruments and Hedging
Activities," as amended, and accordingly were marked to market each month.
At June 30, 2002, the Company had 525 open crude oil futures contracts
with associated losses of approximately $114,000.


<PAGE>
NOTE 8 - LONG-TERM DEBT:

     Long-term debt consists of the following:

<TABLE>
<CAPTION>
                                                 June 30,     December 31,
-------------------------------------------------------------------------
 (In thousands)                                    2002           2001
-------------------------------------------------------------------------
<S>                                              <C>            <C>
11% senior subordinated notes, due 2012, net
  of unamortized discount of $5,815,
  interest payable semi-annually                 $ 194,185      $       -
9% senior subordinated notes, due 2007,
  interest payable semi-annually                   150,000        150,000
9 3/4% senior subordinated notes, due 2003,
  interest payable semi-annually                         -        100,000
Senior secured revolving credit facility,
  due 2005, floating interest rate,
  interest payable quarterly                        60,000              -
Senior secured mortgage loan facility,
  due 2005, floating interest rate,
  interest payable quarterly                        38,889              -
Capital lease obligations, 11.3%, due
  through 2007, interest payable monthly             6,703          6,703
Other                                                   68             91
-------------------------------------------------------------------------
  Subtotal                                         449,845        256,794
Less current portion                               (12,926)           (45)
-------------------------------------------------------------------------
  Total                                          $ 436,919      $ 256,749
=========================================================================
</TABLE>

     On May 14, 2002, in conjunction with the Yorktown acquisition, the
Company issued $200,000,000 in aggregate principal amount of outstanding
notes (the "11% Notes") in a private placement under Rule 144A under the
Securities Act. The 11% Notes were issued at a discount of $5,856,000 to
effectively yield 11 1/2%. The proceeds from the sale of the 11% Notes,
together with cash on hand and initial borrowings under the Company's new
senior secured credit facilities, were used to fund the acquisition of the
Yorktown refinery and associated inventory, to redeem all $100,000,000 of
the Company's 9 3/4% Notes, and to pay related transaction fees and
expenses. The 11% Notes mature on May 15, 2012, with interest payable
semi-annually on May 15 and November 15 of each year.

     The 11% Notes are fully and unconditionally guaranteed, jointly and
severally, on a senior subordinated basis, by each of the Company's
existing and future domestic restricted subsidiaries. The outstanding
notes and the guarantees are unsecured senior subordinated obligations of
Giant and each guarantor, respectively. Accordingly, they will rank:

     - behind all existing and future senior debt of Giant and each
guarantor, respectively, including our new senior secured credit
facilities;

     - equally with all existing and future unsecured senior subordinated
debt of Giant and each guarantor, respectively, including the $150,000,000
principal amount of 9% senior subordinated notes due 2007; and

     - ahead of any future debt of Giant and each guarantor, respectively,
that expressly provides that it is subordinated to the 11% Notes.

     The indenture supporting the 11% Notes contains restrictive covenants
that, among other things, restrict the ability of the Company and its
subsidiaries to (i) pay dividends, or redeem or repurchase the Company's
stock or prepay indebtedness that is pari passu with, or subordinated in
right of payment to, the 11% Notes; (ii) make certain types of
investments; (iii) borrow money or sell preferred stock; (iv) create
liens; (v) sell stock in the Company's restricted subsidiaries; (vi)
restrict dividends and other payments from the Company's subsidiaries;
(vii) enter into transactions with affiliates; and (viii) sell assets or
merge with other companies. In addition, subject to certain conditions,
the Company is obligated to offer to purchase a portion of the 11% Notes
at a price equal to 100% of the principal amount thereof, plus accrued and
unpaid interest, if any, to the date of purchase, with the net cash
proceeds of certain sales or other dispositions of assets. Upon a change
of control, the Company would be required to offer to purchase all of the
11% Notes at 101% of the principal amount thereof, plus accrued interest,
if any, to the date of purchase.

     The Company may redeem the 11% Notes at the redemption prices
indicated below, plus accrued but unpaid interest to the redemption date,
at any time, in whole or in part, on or after May 15, 2007, if redeemed
during the 12-month period beginning May 15 of the years indicated, as
follows: 2007 - 105.5%, 2008 - 103.667%, 2009 - 101.833%, and 2010 and
thereafter - 100%.

     In addition, at any time prior to May 15, 2007, the Company may
redeem all or part of the 11% Notes at a redemption price equal to the sum
of (i) the principal amount thereof; (ii) accrued and unpaid interest, if
any; and (iii) the Make-Whole Premium. The "Make-Whole Premium" means the
greater of (x) 1% of the principal amount of the 11% Notes or (y) the
excess of (A) the present value at the date of redemption of (1) the
redemption price at May 15, 2007 as described above plus (2) all remaining
required interest payments (exclusive of interest accrued and unpaid to
the date of redemption) due on the 11% Notes through May 15, 2007,
computed using a discount equal to the Treasury Rate plus 50 basis points,
over (B) the then outstanding principal amount of the 11% Notes.

     In addition, on or before May 15, 2005, the Company may redeem up to
35% of the aggregate principal amount of the 11% Notes at a redemption
price of 111% of the principal amount thereof, plus accrued and unpaid
interest, if any, with the net cash proceeds from certain equity
offerings. Such redemptions may only be made, however, if at least 65% of
the aggregate principal amount of the 11% Notes originally issued remains
outstanding after each such redemption.

     In accordance with a Registration Rights Agreement entered into in
connection with the sale of the 11% Notes, the Company filed a
registration statement with the Securities and Exchange Commission
enabling the holders of the 11% Notes to exchange the 11% Notes for
publicly registered exchange notes with substantially identical terms as
the 11% Notes. The Company will accept any and all outstanding 11% Notes
validly tendered and not withdrawn prior to 5:00 p.m., New York City time,
on September 9, 2002.

     In 1997, the Company issued $150,000,000 of 9% senior subordinated
notes due 2007 (the "9% Notes"). The indenture supporting the 9% Notes
contain restrictive covenants that, among other things, restrict the
ability of the Company and its subsidiaries to create liens, to incur or
guarantee debt, to pay dividends, to repurchase shares of the Company's
common stock, to sell certain assets or subsidiary stock, to engage in
certain mergers, to engage in certain transactions with affiliates or to
alter the Company's current line of business. In addition, subject to
certain conditions, the Company is obligated to offer to purchase a
portion of the 9% Notes at a price equal to 100% of the principal amount
thereof, plus accrued and unpaid interest, if any, to the date of
purchase, with the net cash proceeds of certain sales or other
dispositions of assets. Upon a change of control, the Company would be
required to offer to purchase all of the 9% Notes at 101% of the principal
amount thereof, plus accrued interest, if any, to the date of purchase.

     At any time on or after September 1, 2002, the Company may, at its
option, redeem all or any portion of the 9% Notes at the redemption prices
(expressed as percentages of the principal amount of the 9% Notes) set
forth below, plus, in each case, accrued interest thereon to the
applicable redemption date, if redeemed during the 12-month period
beginning September 1 of the years indicated, as follows: 2002 - 104.5%,
2003 - 103.0%, 2004 - 101.5%, and 2005 and thereafter - 100%.

     The 11% Notes and the 9% Notes are fully and unconditionally
guaranteed, jointly and severally, on a senior subordinated basis, by each
of the Company's existing and future domestic restricted subsidiaries,
subject to a limitation designed to ensure that such guarantees do not
constitute a fraudulent conveyance. Except as otherwise provided in the
indentures pursuant to which the notes were issued, there are no
restrictions on the ability of such subsidiaries to transfer funds to the
Company in the form of cash dividends, loans or advances. General
provisions of applicable state law, however, may limit the ability of any
subsidiary to pay dividends or make distributions to the Company in
certain circumstances.

     Separate financial information for the subsidiary guarantors of both
the 11% Notes and the 9% Notes and the parent company are not provided as
the parent company has no independent assets or operations, the guarantees
are full and unconditional and joint and several, any of the subsidiaries
of the Company other than the subsidiary guarantors are minor, and the
separate financial statements and other disclosures concerning the
subsidiaries are not deemed material to investors.

     On June 28, 2002, the Company redeemed all $100,000,000 of the 9 3/4%
Notes at par plus accrued interest. To permit this redemption, the Company
obtained a consent from the holders of the 9% Notes at a cost of
approximately $1,200,000.

     In connection with the Yorktown acquisition, the Company also entered
into a new $100,000,000 three-year senior secured revolving credit
facility (the "Credit Facility") with a group of banks. The Credit
Facility replaced the Company's $65,000,000 amended and restated credit
agreement. The obligations under this facility have been guaranteed by
each of the Company's principal subsidiaries and secured by a security
interest in the personal property of the Company and the personal property
of the Company's subsidiaries, including accounts receivable, inventory,
contracts, chattel paper, trademarks, copyrights, patents, license rights,
deposit and investment accounts and general intangibles, but excluding
most fixed assets. The new Credit Facility is due and payable in full in
three years on May 13, 2005.

     The Credit Facility is primarily a working capital and letter of
credit facility. The Credit Facility also allows the Company to borrow up
to $10,000,000 for other acquisitions as defined in the Credit Facility.
The availability of funds under this facility is the lesser of (i)
$100,000,000, or (ii) the amount determined under a borrowing base
calculation tied to the eligible accounts receivable and inventories. At
June 30, 2002, the availability of funds under the Credit Facility was
$100,000,000. There were $60,000,000 in direct borrowings outstanding
under this facility at June 30, 2002, and there were approximately
$6,877,000 of irrevocable letters of credit outstanding, primarily to
crude oil suppliers, insurance companies and regulatory agencies. At
August 9, 2002 there were $40,000,000 in direct borrowings outstanding
under this facility and there were approximately $11,102,000 of
irrevocable letters of credit outstanding.

     The interest rate applicable to the Credit Facility is tied to
various short-term indices. At June 30, 2002, this rate was approximately
4.5% per annum. The Company is required to pay a quarterly commitment fee
of 0.50% per annum of the unused amount of the facility.

     The Credit Facility contains negative covenants limiting, among other
things, the Company's ability, and the ability of the Company's
subsidiaries, to incur additional indebtedness; create liens; dispose of
assets; consolidate or merge; make loans and investments; enter into
transactions with affiliates; use loan proceeds for certain purposes;
guarantee obligations and incur contingent obligations; enter into
agreements restricting the ability of subsidiaries to pay dividends to the
Company; make distributions or stock repurchases; make significant changes
in accounting practices or change the Company's fiscal year; and except on
terms acceptable to the senior secured lenders, to prepay or modify
subordinated indebtedness.

     The Credit Facility also requires the Company to maintain certain
financial ratios, each calculated on a pro forma basis for the Yorktown
acquisition, including maintaining a minimum consolidated tangible net
worth, a minimum fixed charge coverage ratio, a total leverage ratio, and
a senior leverage ratio of consolidated senior indebtedness to
consolidated EBITDA.

     The Company's failure to satisfy any of these financial covenants is
an event of default under the Credit Facility. The Credit Facility also
includes other customary events of default, including, among other things,
a cross-default to the Company's other material indebtedness and certain
changes of control.

     In connection with the Yorktown acquisition, the Company also entered
into a new $40,000,000 three-year senior secured mortgage loan facility
(the "Loan Facility") with a group of financial institutions. The loan is
secured by the Yorktown refinery property, fixtures and equipment,
excluding inventory, accounts receivable and other Yorktown refinery
assets securing the Credit Facility. The Company and its principal
subsidiaries have guaranteed the loan.

     The Company issued notes to the lenders, which bear interest at a
rate that is tied to various short-term indices. At June 30, 2002, this
rate was approximately 6.2% per annum. The notes fully amortize during the
three-year term as follows: 2002 - $7,778,000, 2003 - $10,222,000, 2004 -
$11,111,000, and 2005 - $10,889,000.

     The Loan Facility contains negative covenants limiting the Company's
ability and the ability of the Company's subsidiaries to, among other
things, incur debt; create liens; dispose of assets; consolidate or merge;
make loans and investments; enter into transactions with affiliates; use
loan proceeds for certain purposes; guarantee obligations and incur
contingent obligations; pay dividends or make distributions or stock
repurchases; make significant changes in accounting practices; or change
the Company's fiscal year.

     The Company's failure to satisfy any of these financial covenants is
an event of default under the Loan Facility. The Loan Facility also
includes other customary events of default, including, among other things,
a cross-default to the Company's other material indebtedness and certain
changes of control.

     The Loan Facility also requires the Company to maintain certain
financial ratios, including maintaining (a) ratios substantially the same
as the Credit Facility and (b) a total senior debt to tangible net worth
(consolidated senior funded indebtedness to total consolidated net worth
less intangible assets) ratio.

    The Company also had approximately $6,703,000 of capital lease
obligations outstanding at June 30, 2002, which require annual lease
payments of approximately $753,000, all of which are recorded as interest
expense. The Company intends to purchase the assets associated with these
lease obligations pursuant to options to purchase during the remaining
lease period of approximately five years for $6,703,000, of which
$2,000,000 has been paid in advance and is recorded in "Other Assets" in
the Company's Consolidated Balance Sheets.








<PAGE>
NOTE 9 - COMMITMENTS AND CONTINGENCIES:

     Various legal actions, claims, assessments and other contingencies
arising in the normal course of the Company's business, including those
matters described below, are pending against the Company and certain of
its subsidiaries. Certain of these matters involve or may involve
significant claims for compensatory, punitive or other damages. These
matters are subject to many uncertainties, and it is possible that some of
these matters could be ultimately decided, resolved or settled adversely.
The Company has recorded accruals for losses related to those matters that
it considers to be probable and that can be reasonably estimated. Although
the ultimate amount of liability at June 30, 2002, which may result from
those matters for which the Company has recorded accruals is not
ascertainable, the Company believes that any amounts exceeding the
Company's recorded accruals should not materially affect the Company's
financial condition. It is possible, however, that the ultimate resolution
of these matters could result in a material adverse effect on the
Company's results of operations for a particular reporting period.

     Federal, state and local laws and regulations relating to health and
the environment affect nearly all of the operations of the Company. As is
the case with all companies engaged in similar industries, the Company
faces significant exposure from actual or potential claims and lawsuits
involving environmental matters. These matters include soil and water
contamination, air pollution and personal injuries or property damage
allegedly caused by substances manufactured, handled, used, released or
disposed of by the Company. Future expenditures related to health and
environmental matters cannot be reasonably quantified in many
circumstances for various reasons, including the speculative nature of
remediation and clean-up cost estimates and methods, imprecise and
conflicting data regarding the hazardous nature of various types of
substances, the number of other potentially responsible parties involved,
various defenses which may be available to the Company and changing
environmental laws and interpretations of environmental laws.

     The Company received a draft compliance order from the New Mexico
Environment Department ("NMED") in June 2002 in connection with five
alleged violations of air quality regulations at the Ciniza refinery.
These alleged violations relate to an inspection completed in April 2001.
Potential penalties could be as high as $564,000.

     In August 2002, the Company received a draft notice of violation from
NMED in connection with five alleged violations of air quality regulations
at the Bloomfield refinery. These alleged violations relate to an
inspection completed in August and September of 2001. The Company has no
information at this time on the amount of potential penalties that may be
sought by NMED for the Bloomfield refinery.

     The Company expects to provide information to NMED with respect to
both of the above matters that may result in the modification or dismissal
of some of the alleged violations and reductions in the amount of
potential penalties.

     In 1973, the Company constructed the Farmington Refinery that was
operated until 1982. The Company became aware of soil and shallow
groundwater contamination at this facility in 1985. The Company hired
environmental consulting firms to investigate the contamination and
undertake remedial action. The consultants identified several areas of
contamination in the soils and shallow groundwater underlying the
Farmington property. A consultant to the Company has indicated that
contamination attributable to past operations at the Farmington property
has migrated off the refinery property, including a hydrocarbon plume that
appears to extend no more than 1,800 feet south of the refinery property.
Remediation activities are ongoing by the Company under the supervision of
the New Mexico Oil Conservation Division ("OCD"), although no cleanup
order has been received. The Company's environmental reserve for this
matter is approximately $570,000.

     The Farmington property is located adjacent to the Lee Acres Landfill
(the "Landfill"), a closed landfill formerly operated by San Juan County,
which is situated on lands owned by the United States Bureau of Land
Management (the "BLM"). Industrial and municipal wastes were disposed of
in the Landfill by numerous sources. While the Landfill was operational,
the Company used it to dispose of office trash, maintenance shop trash,
used tires and water from the Farmington refinery's evaporation pond.

     The Landfill was added to the National Priorities List as a
Comprehensive Environmental Response, Compensation and Liability Act
("CERCLA") Superfund site in 1990. In connection with this listing, the
Environmental Protection Agency ("EPA") defined the site as the Landfill
and the Landfill's associated groundwater plume. EPA excluded any releases
from the Farmington refinery itself from the definition of the site. In
May 1991, EPA notified the Company that it may be a potentially
responsible party under CERCLA for the release or threatened release of
hazardous substances, pollutants or contaminants at the Landfill.

     BLM made a proposed plan of action for the Landfill available to the
public in 1996. Remediation alternatives examined by BLM in connection
with the development of its proposed plan ranged in projected cost from no
cost to approximately $14,500,000. BLM proposed the adoption of a remedial
action alternative that it believes would cost approximately $3,900,000 to
implement. BLM's $3,900,000 cost estimate is based on certain assumptions
that may or may not prove to be correct and is contingent on confirmation
that the remedial actions, once implemented, are adequately addressing
Landfill contamination. For example, if assumptions regarding groundwater
mobility and contamination levels are incorrect, BLM is proposing to take
additional remedial actions with an estimated cost of approximately
$1,800,000.

     BLM has received public comment on its proposed plan. The final
remedy for the site, however, has not yet been selected. Although the
Company was given reason to believe that a final remedy would be selected
in 2001, that selection did not occur. The Company has been advised that
the site remedy may be announced in 2002. In 1989, a consultant to the
Company estimated, based on various assumptions, that the Company's share
of potential liability could be approximately $1,200,000. This figure was
based upon estimated Landfill remediation costs significantly higher than
those being proposed by BLM. The figure also was based on the consultant's
evaluation of such factors as available clean-up technology, BLM's
involvement at the site and the number of other entities that may have had
involvement at the site, but did not include an analysis of all of the
Company's potential legal defenses and arguments, including possible
setoff rights.

     Potentially responsible party liability is joint and several, such
that a responsible party may be liable for all of the clean-up costs at a
site even though the party was responsible for only a small part of such
costs. Although it is possible that the Company may ultimately incur
liability for clean-up costs associated with the Landfill, a reasonable
estimate of the amount of this liability, if any, cannot be made at this
time because, among other reasons, the final site remedy has not been
selected, a number of entities had involvement at the site, allocation of
responsibility among potentially responsible parties has not yet been
made, and potentially applicable factual and legal issues have not been
resolved. Based on current information, the Company does not believe that
it needs to record a liability in relation to BLM's proposed plan.

     BLM may assert claims against the Company and others for
reimbursement of investigative, cleanup and other costs incurred by BLM in
connection with the Landfill and surrounding areas. It is also possible
that the Company will assert claims against BLM in connection with
contamination that may be originating from the Landfill. Private parties
and other governmental entities also may assert claims against BLM, the
Company and others for property damage, personal injury and other damages
allegedly arising out of any contamination originating from the Landfill
and the Farmington property. Parties also may request judicial
determination of their rights and responsibilities, and the rights and
responsibilities of others, in connection with the Landfill and the
Farmington property. Currently, however, there is no outstanding
litigation against the Company by BLM or any other party.

     In connection with the acquisition of the Bloomfield Refinery, the
Company assumed certain environmental obligations including Bloomfield
Refining Company's ("BRC") obligations under an administrative order
issued by EPA in 1992 pursuant to the Resource Conservation and Recovery
Act (the "Order"). The Order required BRC to investigate and propose
measures for correcting any releases of hazardous waste or hazardous
constituents at or from the Bloomfield Refinery. EPA has delegated its
oversight authority over the Order to NMED's Hazardous Waste Bureau
("HWB"). In 2000, OCD approved the groundwater discharge permit for the
refinery, which included an abatement plan that addressed the Company's
environmental obligations under the Order. The abatement plan reflects new
information relating to the site as well as remediation methods that were
not originally contemplated in connection with the Order. Discussions
between OCD, HWB and the Company have resulted in proposed revisions to
the abatement plan. Adoption of the abatement plan as the appropriate
corrective action remedy under the Order would significantly reduce the
Company's corrective action costs. The Company estimates that remediation
expenses associated with the abatement plan will be in the range of
approximately $50,000 to $150,000, and will be incurred over a period of
approximately 30 years. If the Company's request is not granted, the
Company estimates that remaining remediation expenses could range as high
as $800,000, after taking into account first quarter 2002 expenditures,
and could be as low as $600,000. The Company's environmental reserve for
this matter is approximately $800,000. If, as expected, the abatement plan
is approved as submitted, the Company anticipates that the reserve will be
reduced.

     The Company has discovered hydrocarbon contamination adjacent to a
55,000 barrel crude oil storage tank (the "Tank") that was located in
Bloomfield, New Mexico. The Company believes that all or a portion of the
Tank and the 5.5 acres owned by the Company on which the Tank was located
may have been a part of a refinery, owned by various other parties, that,
to the Company's knowledge, ceased operations in the early 1960s. Based
upon a January 13, 2000 report filed with OCD, it appears possible that
contaminated groundwater is contained within the property boundaries and
does not extend offsite. The Company anticipates that OCD will not require
remediation of offsite soil based upon the low contaminant levels found
there. In the course of conducting cleanup activities approved by OCD, it
was discovered that the extent of contamination was greater than
anticipated. The Company received approval to conduct a pilot bioventing
project to address remaining contamination at the site, which was
completed on June 26, 2001, at a cost of approximately $15,000. Based on
the results of the pilot project, the Company submitted a remediation plan
to OCD that proposes the use of bioventing to address remaining
contamination. This remediation plan was approved by OCD on June 13, 2002.
The Company anticipates that it will incur approximately $150,000 in
remediation expenses in connection with this plan over a period of one to
two years, and the Company has created an environmental reserve in this
amount.

     The Company has assumed certain liabilities and obligations in
connection with the purchase of the Yorktown refinery, but the Company has
been provided with specified levels of indemnification for certain
matters. These liabilities and obligations include, subject to certain
exceptions and indemnifications, all obligations, responsibilities,
liabilities, costs and expenses under health, safety and environmental
laws, caused by, arising from, incurred in connection with or relating in
any way to the ownership of the refinery or its operation. The Company has
agreed to indemnify BP from and against losses of any kind incurred in
connection with, or related to, liabilities and obligations assumed by the
Company. The Company only has limited indemnification rights against BP.

     The environmental obligations assumed include BP's responsibilities
and liabilities under a consent decree among various parties covering many
locations. Parties to the consent decree include the United States,
BP Exploration and Oil Co., Amoco Oil Company, and Atlantic Richfield
Company. BP entered into the consent decree on August 29, 2001. As
applicable to the Yorktown refinery, the consent decree requires, among
other things, reduction of NOx, SO2 and particulate matter emissions and
upgrades to the refinery's leak detection and repair program. The Company
estimates that it will incur capital expenditures of between $20,000,000
and $27,000,000 to comply with the consent decree and that these costs
will be incurred over a period of approximately five years, although the
Company believes most of the expenditures will be incurred in 2006. In
addition, the Company estimates that it will incur operating expenses
associated with the requirements of the consent decree of between
$1,700,000 and $2,700,000 per year, beginning in 2002.

     The environmental obligations assumed in connection with the Yorktown
acquisition also include BP's obligations under an administrative order
issued by EPA in 1991 pursuant to the Resource Conservation and Recovery
Act, or "RCRA." The order requires an investigation of certain areas of
the refinery and the development of measures to correct any releases of
contaminants or hazardous constituents found in these areas. A RCRA
Facility Investigation and a Corrective Measures Study, or "RFI/ CMS,"
already has been prepared. It was revised by BP, in draft form, to
incorporate comments from EPA and the Virginia Department of Environmental
Quality, although a final RFI/CMS has not yet been approved. The draft
RFI/CMS proposes certain investigation, sampling, monitoring, and cleanup
measures, including the construction of an on-site corrective action
management unit that would be used to consolidate hazardous materials
associated with these measures. These proposed actions relate to soil,
sludge, and remediation wastes relating to certain solid waste management
units, groundwater in the aquifers underlying the refinery, and surface
water and sediment in a small pond and tidal salt marsh on the refinery
property. The Company estimates that expenses associated with the actions
described in the proposed RFI/CMS will be approximately $15,000,000, and
will be incurred over a period of approximately 30 years, with
approximately $5,000,000 of this amount being incurred over an initial 6-
year period. The Company may not be responsible, however, for all of these
expenditures as a result of the environmental indemnification provisions
included in the purchase agreement with BP, as more fully discussed below.

     BP has agreed to indemnify, defend, save and hold the Company
harmless from and against all losses that are caused by, arising from,
incurred in connection with or relate in any way to property damage caused
by, or any environmental remediation required due to, a violation of
health, safety and environmental laws during the operation of the refinery
by BP. In order to have a claim against BP, however, the aggregate of all
such losses must exceed $5,000,000, in which event a claim only relates to
the amount exceeding $5,000,000. After $5,000,000 is reached, a claim is
limited to 50% of the amount by which the losses exceed $5,000,000 until
the aggregate of all such losses exceeds $10,000,000. After $10,000,000 is
reached, a claim would be for 100% of the amount by which the losses
exceed $10,000,000. In applying these provisions, losses amounting to less
that $250,000 in the aggregate arising out of the same occurrence or
matter are not aggregated with any other losses for purposes of
determining whether and when the $5,000,000 or $10,000,000 has been
reached. After the $5,000,000 or $10,000,000 has been reached, BP has no
obligation to indemnify the Company with respect to such matters for any
losses amounting to less than $250,000 in the aggregate arising out of the
same occurrence or matter. Except as specified in the Yorktown purchase
agreement, in order to seek indemnification from BP, the Company must
notify BP of a claim within two years following the closing date. Further,
BP's aggregate liability for indemnification under the refinery purchase
agreement, including liability for environmental indemnification, is
limited to $35,000,000.

     As of June 30, 2002, the Company had an environmental liability
accrual of approximately $9,800,000. Approximately $7,500,000 of the
accrual is for certain environmental obligations assumed in connection
with the acquisition of the Yorktown refinery. Approximately $1,500,000 of
the accrual is for the following previously discussed projects: (i) the
remediation of the hydrocarbon plume that appears to extend no more than
1,800 feet south of the Company's inactive Farmington refinery; (ii)
environmental obligations assumed in connection with the acquisition of
the Bloomfield Refinery; and (iii) hydrocarbon contamination on and
adjacent to the 5.5 acres that the Company owns in Bloomfield, New Mexico.
The remaining amount of the accrual relates to the closure of certain
solid waste management units at the Ciniza Refinery, which is being
conducted in accordance with the refinery's Resource Conservation and
Recovery Act permit; closure of the Ciniza Refinery land treatment
facility including post-closure expenses; and certain other smaller
matters. The environmental accrual is recorded in the current and long-
term sections of the Company's Condensed Consolidated Balance Sheets.

     On June 11, 2001, the Company filed claims against the United States
Defense Energy Support Center ("DESC") in connection with jet fuel that
the Company sold to DESC from 1983 through 1994. The Company asserted that
the DESC underpaid for the jet fuel in the approximate amount of
$17,000,000. The Company believes that its claims are supported by recent
federal court decisions, including decisions from the United States Court
of Federal Claims, dealing with contract provisions similar to those
contained in the contracts that are the subject of the Company's claims.
On March 12, 2002, the DESC denied the Company's claims. The Company has
12 months to bring an action in the United States Court of Federal Claims
relating to the denied claims. The DESC has indicated that it will
counterclaim if the Company pursues its claims and will assert, based on
its interpretation of the contract provisions, that the Company may owe
additional amounts of approximately $4,900,000. The Company is evaluating
its options. Due to the preliminary nature of this matter, there can be no
assurance that the Company would ultimately prevail should it decide to
pursue its claims nor is it possible to predict when any payment would be
received if the Company were successful. Accordingly, the Company has not
recorded a receivable for this claim.

     Giant Arizona leases approximately 8,176 square feet of space from a
limited liability company in which the Company's former Chairman and Chief
Executive Officer ("CCEO") owns a 51% interest. Pursuant to a sublease
between Giant Arizona and a separate limited liability company controlled
by its former CCEO, Giant Arizona subleases the space to such entity for
use as an inn. The initial term for each of the lease and the sublease is
for five years, terminating on June 30, 2003, with one option to renew for
an additional five years, and the annual rent under each currently is
$21.76 per square foot. The rent is subject to adjustment annually based
on changes in the Consumer Price Index. The sublease also provides that
the Company may terminate the sublease at any time upon 120 days prior
written notice. The owner of the 49% interest in the lessor has notified
Giant Arizona that the sublessee is delinquent on the payment of the rent
due, and on or about December 28, 2001, such owner filed a derivative
lawsuit for and on behalf of the lessor against Giant Arizona to collect
all amounts owing under the lease. The suit is for the recovery of rents
past due and owing in excess of $156,990 from August 1, 2000 through the
date of the complaint. The plaintiff claims that the amount owing at June
30, 2002 is approximately $347,500. Pursuant to a letter dated January 16,
2002, the Company made a formal demand on the sublessee for the sublessee
to pay all of the past due amounts. In addition, the Company filed a
motion to dismiss or, alternatively, to compel binding arbitration
pursuant to the terms of the lease. The court has ruled that the
arbitration clause applies, and has referred the dispute to the
arbitrators. On May 23, 2002, the Company also made a separate demand for
arbitration against the sublessee and a request to consolidate the two
arbitrations. In July 2002, the plaintiff filed a motion for summary
judgment in the arbitration.

     James E. Acridge was terminated as the Company's President and Chief
Executive Officer on March 29, 2002, although he remains on the Board of
Directors. The Company paid Mr. Acridge the equivalent of his pre-
termination base salary until July 26, 2002. In addition, the Company
extended the exercise period of Mr. Acridge's stock options until June 29,
2003.

     On July 22, 2002, Mr. Acridge filed a lawsuit in the Superior Court
of Arizona for Maricopa County against Messrs. Holliger, Gust, Cox,
Bullerdick, Bernitsky, Kalen, Rapport, and as yet unidentified
accountants, auditors, appraisers, attorneys, bankers and professional
advisors. The complaint alleges a breach of Mr. Acridge's employment
agreement with the Company, and states that he is invoking his right to
arbitrate, separate from the lawsuit, the termination of his employment
and the Company's alleged breach of the implied covenant of good faith and
fair dealing. The Company intends to defend any such arbitration
proceeding vigorously. With respect to the defendants in the complaint,
Mr. Acridge alleges that they intentionally and wrongfully interfered with
his employment agreement and caused the Company to fire him. The complaint
seeks unspecified general damages for pain, suffering and inconvenience,
special damages including lost benefits of employment and lost business
opportunities, punitive damages, and costs and attorneys' fees. This suit
will be defended vigorously. The defendants may be entitled to
indemnification from the Company in connection with the defense of, and
any liabilities arising out of, this lawsuit.

     In addition, the Company has been informed that Mr. Acridge, and at
least one entity controlled by Mr. Acridge, have commenced Chapter 11
Bankruptcy proceedings.


<PAGE>
NOTE 10 - OTHER:

     In the first quarter of 2002, the Company revised its estimate for
accrued management incentive bonuses for the year ended December 31, 2001,
following the determination of bonuses to be paid to employees. This
resulted in an increase in net earnings for the first quarter of 2002 and
a reduction of the net loss for the six months ended June 30, 2002 of
approximately $283,000 or $0.03 per share.




<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
        AND RESULTS OF OPERATIONS

CRITICAL ACCOUNTING POLICIES

     Inherent in the preparation of the Company's financial statements are
the selection and application of certain accounting principles, policies,
and procedures that affect the amounts that are reported. In order to
apply these principles, policies, and procedures, the Company must make
judgments, assumptions, and estimates based on the best available
information at the time. Actual results may differ based on the accuracy
of the information utilized and subsequent events, some of which the
Company may have little or no control over. In addition, the methods used
in applying the above may result in amounts that differ considerably from
those that would result from the application of other acceptable methods.

     The Company's significant accounting policies are described in Note 1
to the Consolidated Financial Statements included in the Company's Annual
Report on Form 10-K for the year ended December 31, 2001. Certain critical
accounting policies that materially affect the amounts recorded in the
consolidated financial statements are the use of the last in, first-out
("LIFO") method of valuing certain inventories, the accounting for certain
environmental remediation liabilities, the accounting for certain related
party transactions, and assessing the possible impairment of certain long-
lived assets. There have been no changes to these policies in 2002.



<PAGE>
RESULTS OF OPERATIONS

     Included below are certain operating results and operating data for
the Company and its operating segments.

<TABLE>
<CAPTION>
                                                     Three Months           Six Months
                                                    Ended June 30,         Ended June 30,
-------------------------------------------------------------------------------------------
(In thousands, except per share data)              2002        2001       2002       2001
-------------------------------------------------------------------------------------------
<S>                                             <C>        <C>         <C>        <C>
Net revenues                                    $ 299,238  $ 281,158   $ 487,634  $ 532,370
Cost of products sold                             246,385    209,917     388,224    410,419
-------------------------------------------------------------------------------------------
Gross margin                                       52,853     71,241      99,410    121,951

Operating expenses                                 33,260     28,737      59,671     57,585
Depreciation and amortization                       9,244      7,940      17,807     15,854
Selling, general and administrative expenses        5,889      8,755      11,086     15,338
Net loss on disposal/write-down of assets           1,033        343       1,063        482
-------------------------------------------------------------------------------------------
Operating income                                    3,427     25,466       9,783     32,692

Interest expense                                   (9,527)    (6,040)    (15,530)   (12,083)
Amortization/write-off of financing costs            (909)      (198)     (1,117)      (397)
Interest and investment income                        261        487         325      1,050
-------------------------------------------------------------------------------------------
Earnings (loss) before income taxes                (6,748)    19,715      (6,539)    21,262

Provision (benefit) for income taxes               (2,464)     7,762      (2,378)     8,359
-------------------------------------------------------------------------------------------
Net earnings (loss)                             $  (4,284) $  11,953   $  (4,161) $  12,903
===========================================================================================

Net earnings (loss) per common share:
  Basic                                         $   (0.50) $    1.33   $   (0.49) $    1.44
===========================================================================================
  Assuming dilution                             $   (0.50) $    1.33   $   (0.49) $    1.44
===========================================================================================

Net revenues:(1)
  Refining Group:
    Four Corners                                $ 107,651  $ 140,766   $ 190,369  $ 251,956
    Yorktown                                       72,900          -      72,900          -
  Retail Group                                     91,462    109,321     167,678    202,864
  Phoenix Fuel                                     84,771    112,765     160,554    222,373
  Other                                                40         77          90        149
  Intersegment                                    (57,586)   (81,771)   (103,957)  (144,972)
-------------------------------------------------------------------------------------------
  Consolidated                                  $ 299,238  $ 281,158   $ 487,634  $ 532,370
===========================================================================================
Income (loss) from operations:(1)
  Refining Group:
    Four Corners                                $   8,347  $  28,566   $  17,406  $  39,651
    Yorktown                                       (3,090)         -      (3,090)         -
  Retail Group                                      1,869      2,526       1,197      2,164
  Phoenix Fuel                                      1,567      1,757       3,040      3,225
  Other                                            (4,233)    (7,040)     (7,707)   (11,866)
  Net loss on disposal/write-down of assets        (1,033)      (343)     (1,063)      (482)
-------------------------------------------------------------------------------------------
  Consolidated                                  $   3,427  $  25,466   $   9,783  $  32,692
===========================================================================================
(1) The Refining Group owns and operates the Company's three refineries, its crude
    oil gathering pipeline system, two finished products distribution terminals,
    and a fleet of crude oil and finished product truck transports. The Retail
    Group consists of service stations with convenience stores or kiosks and one
    travel center. Phoenix Fuel is a wholesale petroleum products distribution
    operation, which includes several lubricant and bulk petroleum distribution
    plants, an unmanned fleet fueling ("cardlock") operation, a bulk lubricant
    terminal facility, and a fleet of finished product and lubricant delivery
    trucks. The Other category is primarily Corporate staff operations.
</TABLE>


<PAGE>
<TABLE>
<CAPTION>
                                               Three Months          Six Months
                                              Ended June 30,        Ended June 30,
------------------------------------------------------------------------------------
                                             2002       2001       2002       2001
------------------------------------------------------------------------------------
<S>                                        <C>        <C>        <C>        <C>
REFINING GROUP OPERATING DATA:
  Four Corners Operations:
    Crude Oil/NGL Throughput (BPD)           33,144     35,398     33,463     34,413
    Refinery Sourced Sales Barrels (BPD)     34,060     35,709     32,618     33,194
    Average Crude Oil Costs ($/Bbl)        $  23.48   $  26.28   $  21.17   $  27.06
    Refining Margins ($/Bbl)               $   6.41   $  12.27   $   6.86   $  10.41

  Yorktown Operations:*
    Crude Oil/NGL Throughput (BPD)           53,563          -     53,563          -
    Refinery Sourced Sales Barrels (BPD)     54,610          -     54,610          -
    Average Crude Oil Costs ($/Bbl)        $  26.77   $      -   $  26.77   $      -
    Refining Margins ($/Bbl)               $   1.68   $      -   $   1.68   $      -

RETAIL GROUP OPERATING DATA:
  Fuel Gallons Sold (000's)                  49,727     55,374     97,964    106,732
  Fuel Margins ($/gal)                     $  0.157   $  0.168   $  0.144   $  0.160
  Merchandise Sales ($ in 000's)           $ 37,984   $ 37,630   $ 70,821   $ 70,456
  Merchandise Margins                          28.1%      29.4%      27.9%      29.8%
  Number of Units at End of Period              146        168        146        168

PHOENIX FUEL OPERATING DATA:
  Fuel Gallons Sold (000's)                  90,524    104,229    182,995    209,149
  Fuel Margins ($/gal)                     $  0.053   $  0.053   $  0.053   $  0.051
  Lubricant Sales ($ in 000's)             $  5,002   $  5,422   $ 10,389   $ 10,475
  Lubricant Margins                            17.5%      18.8%      17.0%      18.5%

*Since acquisition on May 14, 2002.

</TABLE>

     Certain factors affecting the Company's operations for the three and
six months ended June 30, 2002, include, among other things, the
following:

     - The acquisition of the Yorktown refinery on May 14, 2002.

     - Weak refining margins at the Company's refineries due to, among
       other things, continuing high inventories of distillates resulting
       from a drop in jet fuel demand following the September 11, 2001
       terrorists attack and warmer than normal winter temperatures in
       the Northeast; worldwide crude oil production levels and Middle
       East tensions, which added to higher crude values; and imported
       finished products which placed downward pressure on gasoline
       values. Further, the Company believes that weak refining margins
       have continued since the end of the second quarter.

     - Continuing decline in Four Corners crude oil supplies.

     - Competitive conditions in the Company's Phoenix and Tucson retail
       markets due to increased price competition.

     - Economic conditions in Phoenix Fuel's major markets, which has
       reduced demand for gasoline, diesel fuel, and lubricants.

Earnings (Loss) Before Income Taxes
----------------------------
     For the three months ended June 30, 2002, there was a loss before
income taxes of $6,748,000, a decrease of $26,463,000 from earnings before
income taxes of $19,715,000 for the three months ended June 30, 2001. The
decrease includes the following items related to the operation and
acquisition of the Yorktown refinery: (i) an operating loss of $3,090,000;
(ii) an increase in the amortization and write-off of financing costs of
$711,000, and (iii) additional interest expense of $4,810,000, including
$1,230,000 because, due to the contemporaneous closing of the Yorktown
refinery acquisition and the 11% Notes financing, the Company was unable
to provide the 45 day notice required by the Indenture supporting the
Company's 9 3/4% Notes for refinancing the notes prior to the issuance of
the 11% Notes. As a result, the Company paid interest on the 9 3/4% Notes
for 45 days after the financing related to the Yorktown acquisition. In
addition, an impairment loss of $1,272,000 was recorded for certain
service stations that the Company expects to sell. The remainder of the
decrease, relating to the Company's other operations, was primarily due to
a 48% decline in Four Corners refinery margins. Also contributing to the
decrease was a 5% decline in Four Corner refinery fuel volumes sold; a 10%
decrease in retail fuel volumes sold, along with a 6% decrease in retail
fuel margins; and a 7% decrease in wholesale fuel volumes sold by Phoenix
Fuel to third-party customers, with relatively flat margins. These
decreases were offset in part by reduced operating expenses and lower
selling, general, and administrative ("SG&A") expenses for other Company
operations.

     For the six months ended June 30, 2002, there was a loss before
income taxes of $6,539,000, a decrease of $27,801,000 from earnings before
income taxes of $21,262,000 for the six months ended June 30, 2001. This
decrease includes the items discussed above relating to the Yorktown
acquisition and the impairment of certain service stations. The remainder
of the decrease, relating to the Company's other operations, was primarily
due to a 34% decline in Four Corners refinery margins. Also contributing
to the decrease was a 2% decline in Four Corner refinery fuel volumes
sold; an 8% decrease in retail fuel volumes sold, along with a 10%
decrease in retail fuel margins; a 6% decline in retail merchandise
margins; and an 8% decrease in wholesale fuel volumes sold by Phoenix Fuel
to third-party customers, with slightly higher margins. These decreases
were offset in part by reduced operating expenses and lower SG&A expenses
for other Company operations.

Revenues
--------
     Revenues for the three months ended June 30, 2002, increased
approximately $18,080,000 or 6% to $299,238,000 from $281,158,000 in the
comparable 2001 period. The increase includes revenues for the Yorktown
refinery of $72,900,000. Revenue decreases relating to the Company's other
operations were primarily due to a 21% decline in Four Corner refining
weighted average selling prices, along with a 5% decline in Four Corner
refinery fuel volumes sold; a 10% decrease in Phoenix Fuel's weighted
average selling prices, along with a 7% decline in wholesale fuel volumes
sold by Phoenix Fuel to third-party customers; and a 13% decrease in
retail refined product selling prices, along with a 10% decline in retail
fuel volumes sold. Overall retail merchandise sales were up approximately
1%, while same store merchandise sales were up approximately 7%.

     The volumes of refined products sold through the Company's retail
units decreased approximately 10% from period to period. The volume
declines were primarily related to the sale or closure of 25 retail units
since the end of first quarter of 2001. The volume of finished product
sold from retail units that were in operation for a full year decreased
approximately 3%, primarily due to reduced volumes from stores in the
Company's Phoenix market area because of increased price competition.
Volumes sold from the Company's travel center increased approximately 2%.

     Revenues for the six months ended June 30, 2002, decreased
approximately $44,736,000 or 8% to $487,634,000 from $532,370,000 in the
comparable 2001 period. The decrease includes increased revenues for the
Yorktown refinery of $72,900,000. Revenue decreases relating to the
Company's other operations were primarily due to a 24% decline in Four
Corner refining weighted average selling prices, along with a 2% decline
in Four Corner refinery fuel volumes sold; an 8% decrease in Phoenix
Fuel's weighted average selling prices, along with an 8% decline in
wholesale fuel volumes sold by Phoenix Fuel to third-party customers; and
a 16% decrease in retail refined product selling prices, along with an 8%
decline in retail fuel volumes sold. Overall retail merchandise sales were
up approximately 1%, while same store merchandise sales were up
approximately 6%.

     The volumes of refined products sold through the Company's retail
units decreased approximately 8% from period to period. The volume
declines were primarily related to the sale or closure of 33 retail units
since the end of 2000. The volume of finished product sold from retail
units that were in operation for a full was relatively flat, in spite of
reduced volumes from stores in the Company's Phoenix market area because
of increased price competition. Volumes sold from the Company's travel
center increased approximately 8%.

Cost of Products Sold
---------------------
     For the three months ended June 30, 2002, cost of products sold
increased approximately $36,468,000 or 17% to $246,385,000 from
$209,917,000 in the comparable 2001 period. The increase includes cost of
products sold for the Yorktown refinery of $68,439,000. Cost of products
sold decreases relating to the Company's other operations were primarily
due to a 10% decline in the cost of finished products purchased by Phoenix
Fuel, along with a 7% decrease in wholesale fuel volumes sold by Phoenix
Fuel to third-party customers, and an 11% decline in Four Corners refining
weighted average crude oil costs, along with a 5% decrease in refinery
sourced finished product sales volumes. Cost of products sold also
includes a gain of approximately $1,970,000 from crude oil futures
contracts used to economically hedge crude oil inventories and crude oil
purchases for the Yorktown refinery.

     For the six months ended June 30, 2002, cost of products sold
decreased approximately $22,195,000 or 5% to $388,224,000 from
$410,419,000 in the comparable 2001 period. The decrease includes
additional cost of products sold for the Yorktown refinery of $68,439,000.
Cost of products sold decreases relating to the Company's other operations
were primarily due to a 14% decline in the cost of finished products
purchased by Phoenix Fuel, along with an 8% decrease in wholesale fuel
volumes sold by Phoenix Fuel to third-party customers, and a 22% decline
in Four Corners refining weighted average crude oil costs, along with a 2%
decrease in refinery sourced finished product sales volumes. Cost of
products sold also includes a gain of approximately $1,970,000 from crude
oil futures contracts used to economically hedge crude oil inventories and
crude oil purchases for the Yorktown refinery.

Operating Expenses
------------------
     For the three months ended June 30, 2002, operating expenses
increased approximately $4,523,000 or 16% to $33,260,000 from $28,737,000
in the comparable 2001 period. For the six months ended June 30, 2002,
operating expenses increased approximately $2,086,000 or 4% to $59,671,000
from $57,585,000 in the comparable 2001 period. The increase in both
periods includes operating expenses relating to the Yorktown refinery of
$6,398,000. Operating expense decreases relating to the Company's other
operations in each period were due to, among other things, lower lease
expense due to the repurchase of 59 retail units from FFCA Capital Holding
Corporation ("FFCA") in July 2001 that had been sold to FFCA as part of a
sale-leaseback transaction between the Company and FFCA in December 1998;
and reduced expenses for payroll and related costs, and other operating
expenses, for retail operations, due in part to the sale or closure of 25
retail units since the end of the first quarter of 2001 and 33 since the
end of 2000, as well as the implementation of certain cost reduction
programs. These decreases were offset in part in each period by higher
general insurance premiums and purchased fuel costs for the Four Corner
refineries.

Depreciation and Amortization
-----------------------------
     For the three months ended June 30, 2002, depreciation and
amortization increased approximately $1,304,000 or 16% to $9,244,000 from
$7,940,000 in the comparable 2001 period. For the six months ended June
30, 2002, depreciation and amortization increased approximately $1,953,000
or 12% to $17,807,000 from $15,854,000 in the comparable 2001 period. The
increase in both periods includes depreciation and amortization relating
to the Yorktown refinery of $1,080,000. Depreciation and amortization
increases relating to the Company's other operations in each period were
primarily related to additional depreciation expense related to the
repurchase of 59 retail units from FFCA in July 2001; higher refinery
amortization costs in 2002 due to a 2001 revision in the estimated
amortization period for certain refinery turnaround costs incurred in
1998; and construction, remodeling and upgrades in retail and refining
operations during 2001 and 2002. These increases were offset in part by
reductions in depreciation expense due to the sale or closure of 25 retail
units since the end of the first quarter of 2001 and 33 since the end of
2000, and the non-amortization of goodwill in 2002 due to the adoption of
SFAS 142.

Selling, General and Administrative Expenses
--------------------------------------------
     For the three months ended June 30, 2002, SG&A expenses decreased
approximately $2,866,000 or 33% to $5,889,000 from $8,755,000 in the
comparable 2001 period. For the six months ended June 30, 2002, selling,
general and administrative expenses decreased approximately $4,252,000 or
28% to $11,086,000 from $15,338,000 in the comparable 2001 period. The
decrease in both periods includes SG&A relating to the Yorktown refinery
of $72,000. SG&A expense decreases relating to the Company's other
operations in each period were primarily due to lower expense accruals for
management incentive bonuses in 2002; lower claims experience for the
Company's self-insured health insurance plan; and lower workers
compensation costs. For the six month period the decrease also is due the
revision of estimated accruals for 2001 management incentive bonuses,
following the determination of bonuses to be paid to employees. These
decreases were offset in part by an increase in certain environmental
expenditures.

Interest Expense and Interest Income
------------------------------------
     For the three months ended June 30, 2002, interest expense increased
approximately $3,487,000 or 58% to $9,527,000 from $6,040,000 in the
comparable 2001 period. For the six months ended June 30, 2002, interest
expense increased approximately $3,447,000 or 29% to $15,530,000 from
$12,083,000 in the comparable 2001 period. In each period, approximately
$3,580,000 of the increase is due to borrowings under the Company's new
debt and credit facilities entered into in connection with the acquisition
of the Yorktown refinery as more fully described in Note 8 to the
Company's Condensed Consolidated Financial Statements included in Part I,
Item 1, hereof. In addition, because of the timing of the Yorktown
refinery acquisition and the 11% Notes financing, the Company was unable
to provide the 45 day notice required by the Indenture supporting the
Company's 9 3/4% Notes for refinancing the notes prior to the issuance of
the 11% Notes. As a result, the Company paid interest on the 9 3/4% Notes
for 45 days after the financing, which amounted to approximately
$1,230,000.

     For the three months ended June 30, 2002, interest income decreased
approximately $226,000 or 46% to $261,000 from $487,000 in the comparable
2001 period. For the six months ended June 30, 2002, interest income
decreased approximately $725,000 or 69% to $325,000 from $1,050,000 in the
comparable 2001 period. The decrease in each period was primarily due to a
reduction in interest and investment income from the investment of funds
in short-term instruments. This reduction in interest and investment
income was due in part to a reduction in the amount of funds available for
investment because of the repurchase of 59 retail units from FFCA in July
2001, and funds used to acquire the Yorktown refinery.

Amortization/Write-Off of Financing Costs
-----------------------------------------
     In connection with the acquisition of the Yorktown refinery and
refinancing of the 9 3/4% Notes, the Company incurred approximately
$13,704,000 of deferred financing costs relating to new senior
subordinated debt and new senior secured credit facilities. These costs
are being amortized over the term of the related debt.

     The increase in the amortization/write-off of financing costs for the
three and six months ended June 30, 2002 of $711,000 and $720,000,
respectively, includes amortization of deferred financing costs of
approximately $359,000 related to the new debt and credit facilities and
the write-off of approximately $364,000 in deferred financing costs
relating to the Company's 9 3/4% Notes that were repaid with a portion of
the proceeds of the Company's issuance of $200,000,000 of 11% Notes.

Income Taxes
------------
     The effective tax benefit rate for the three and six months ended
June 30, 2002 was approximately 36%. The Company believes that the tax
benefit will be fully realizable. The effective tax rate for the three and
six months ended June 30, 2001 was approximately 39%. The difference in
the two rates is primarily due to the relationship of permanent tax
differences to estimated annual income used in each period to estimate
income taxes.


LIQUIDITY AND CAPITAL RESOURCES

Cash Flow From Operations
-------------------------
     Operating cash flows decreased for the six months ended June 30, 2002
compared to the six months ended June 30, 2001, primarily as a result of a
decrease in net earnings before depreciation and amortization and deferred
income taxes in 2002, along with a decrease in cash flows related to
changes in operating assets and liabilities in each period. Net cash
provided by operating activities totaled $5,072,000 for the six months
ended June 30, 2002, compared to net cash provided by operating activities
of $41,767,000 in the comparable 2001 period.

Working Capital
---------------
     Working capital at June 30, 2002 consisted of current assets of
$215,012,000 and current liabilities of $101,579,000, or a current ratio
of 2.12:1. At December 31, 2001, the current ratio was 1.72:1 with current
assets of $135,981,000 and current liabilities of $78,837,000.

     Current assets have increased since December 31, 2001, primarily due
to increases in accounts receivable, inventories, prepaids and other, and
current deferred taxes. These increases were offset in part by a decrease
in cash and cash equivalents. Accounts receivable have increased primarily
due to trade receivables recorded in connection with sales by the Yorktown
refinery and an increase in other trade receivables resulting from
increased sales volumes and higher finished product selling prices.
Inventories have increased primarily due to inventories on hand related to
the Yorktown refinery. For other Company operations, inventories have
increased due to an increase in refined product prices and exchange,
terminal, and refinery onsite refined product inventory volumes. These
increases were offset in part by a decrease in Phoenix Fuel and retail
refined product inventory volumes. Prepaids and other have increased
primarily due to margin deposits related to the sale of futures contracts,
offset in part by the expensing of prepaid insurance premiums. The
increase in current deferred taxes relates to the Yorktown refinery
acquisition.

     Current liabilities have increased since December 31, 2001, due to an
increase in accounts payable and accrued expenses. Accounts payable have
increased due to accounts payable recorded in connection with the
operations of the Yorktown refinery, primarily for raw material purchases,
and for other Company operations primarily as a result of higher raw
material and finished product costs, offset in part by reduced trade
payables. Accrued expenses have increased primarily because of the
operations of the Yorktown refinery, and for other Company operations have
decreased as a result of the payment and reversal of 2001 accrued bonuses,
the payment of 401(k) Company matching and discretionary contributions,
and the payment of certain accrued interest balances. These decreases were
offset in part by higher accrued interest balances related in part to the
additional debt incurred in connection with the Yorktown refinery
acquisition and accruals for 2002 401(k) Company matching and
discretionary contributions.

Capital Expenditures and Resources
----------------------------------
     Net cash used in investing activities for the purchase of property,
plant and equipment totaled approximately $7,552,000 for the six months
ended June 30, 2002. Expenditures were primarily for turnaround
expenditures for the Ciniza and Bloomfield refineries, financial
accounting software upgrades, operational and environmental projects for
the refineries, and retail operation upgrades.

     On May 14, 2002, the Company acquired the 61,900 bpd Yorktown
refinery from BP Corporation North America Inc. and BP Products North
America Inc. for $127,500,000 plus $65,182,000 for inventories, the
assumption of certain liabilities, and a conditional earn-out, the maximum
amount of which cannot exceed $25,000,000. The Company also incurred
transaction costs of approximately $2,000,000 in connection with the
acquisition. See Note 4 to the Company's Condensed Consolidated Financial
Statements in Item 1, Part I hereof, for a more detailed discussion of
this transaction.

     In 2001, the Company identified 60 non-strategic or under-performing
retail units for possible divestiture, most of which included kiosks
rather than full convenience stores. As of June 30, 2002, 13 of these
units had been removed from the list due to improved performance. Of the
remaining units, 13 units have been sold; eight units have been closed and
reclassified as assets held for sale; and one leased unit has been
returned to its owner. We continue to operate the remaining 25 stations
and may divest them if acceptable offers are received and negotiated. Some
of these units are included in the transactions described below.

     On August 12, 2002, the Company entered into purchase and sale
agreements for the sale of nine retail units in the Phoenix marketing
area. The sale of two of the units is subject to the non-exercise of
rights of first refusal to purchase held by third parties. The Company
expects that these transactions could close in the third quarter of 2002.

     Also, on July 31, 2002, the Company entered into a letter of intent
for the sale of its remaining 26 retail units in the Phoenix and Tucson
marketing areas and is in the process of negotiating a purchase agreement
which would be contingent upon the potential buyer obtaining lender
financing on satisfactory terms. The Company expects that this transaction
could close sometime in the fourth quarter of 2002. In the second quarter
of 2002, the Company recorded an impairment loss of $1,272,000 related to
certain of these units, based on an estimate of fair value as compared to
the carrying value of each unit in accordance with SFAS N0. 144.

     Both of the transactions are subject to the approval of the Company's
Board of Directors. If both of these transactions are completed, the
Company expects to receive over $30,000,000 in proceeds and to record a
net overall gain of approximately $2,000,000 before income taxes.

     In addition, the Company is in the process of negotiating for the
possible sale of its corporate headquarters building. These negotiations
are in a very preliminary stage and, accordingly, the Company does not
know whether this transaction will occur.

     In addition to Board approval, these potential sales are subject to
other customary conditions, and, in the case of the sale of the 26 retail
units, the negotiation of an acceptable purchase agreement and the
potential buyer obtaining lender financing on satisfactory terms.
Accordingly, there can be no assurance that the Company will complete
these potential sales when expected or at all.

     The Company hopes to use the proceeds from these potential sales, and
savings or proceeds generated from other parts of the Company's debt
reduction initiative, to reduce long-term debt by $50,000,000 prior to
year-end.

     The Company currently owns approximately 239 miles of pipeline for
the gathering and delivery of crude oil to its refineries. During June
2002, the Company sold approximately 132 miles of pipeline acquired in
2000 and 2001. The Company will continue to ship crude oil on the 132
miles of pipeline that were sold.

     The Company has budgeted approximately $18,914,000 for capital
expenditures in 2002, excluding the Yorktown refinery acquisition and any
related capital expenditures, and any other potential acquisitions. Of
this amount, $4,233,000 is for the completion of projects that were
started in 2001. In addition, $10,298,000 is budgeted for non-
discretionary projects, including approximately $7,600,000 of maintenance
capital expenditures that are required by law or regulation or to maintain
the physical integrity of existing assets. These expenditures are
primarily for operational and environmental projects at the Four Corners
refineries, including $2,600,000 for a partial turnaround at the Ciniza
refinery, and operational upgrades and maintenance capital projects for
the retail operations. The remaining budget of $4,383,000 is for general
capital expenditure contingencies and discretionary projects.

     The Company expects that maintenance capital expenditures will be
approximately $5,500,000 and $3,300,000 annually over each of the next
three years for the Four Corners refining operations and the Retail
Group/Phoenix Fuel operations, respectively, exclusive of any growth
projects, acquisitions, and acquisition related capital expenditures.

     For the Yorktown refinery, the Company has budgeted $6,569,000 for
capital expenditures for 2002. Of this amount, $3,795,000 is budgeted for
non-discretionary projects that are required by law or regulation or to
maintain the physical integrity of existing assets. In addition,
$2,374,000 is for the replacement of information services that were
historically provided by BP, and $400,000 is to increase the rack capacity
at the refinery. The Company expects that maintenance capital expenditures
for the Yorktown refinery will be approximately $7,800,000 annually over
each of the next three years, exclusive of any growth projects,
acquisitions, and acquisition related capital expenditures.

     The Company continues to investigate other capital improvements to
its existing facilities. The amount of capital projects that are actually
undertaken in 2002 will depend on, among other things, general business
conditions, results of operations, and financial constraints resulting
from the Yorktown refinery acquisition. The Company also is evaluating the
possible sale or exchange of other non-strategic or under-performing
assets in addition to the assets described above.

	Approximately $13,704,000 of financing fees was paid to various
financial institutions in connection with financing arrangements for the
Company's acquisition of the Yorktown refinery and refinancing of the 9
3/4% Notes.

     The Company anticipates that working capital, including that
necessary for capital expenditures and debt service, will be funded
through existing cash balances, cash generated from operating activities,
and, if necessary, future borrowings. Future liquidity, both short and
long-term, will continue to be primarily dependent on producing or
purchasing, and selling, sufficient quantities of refined products at
margins sufficient to cover fixed and variable expenses. The Company
believes that it will have sufficient working capital to meet its needs
over the next 12-month period.

     The Company's cash flow from operations depends primarily on
producing and selling quantities of refined products at refinery margins
sufficient to cover fixed and variable expenses. In recent years, crude
oil costs and prices of refined products have fluctuated substantially.
These costs and prices depend on numerous factors beyond the Company's
control, including, among other things:

     - the demand for crude oil, gasoline and other refined products;

     - changes in the economy;

     - changes in the level of foreign and domestic production of crude
       oil and refined products;

     - worldwide political conditions;

     - availability of crude oil and refined product imports;

     - the marketing of alternative and competing fuels;

     - the extent of government regulations; and

     - local factors, including market conditions, pipeline capacity, and
       the level of operations of other refineries in the Company's
       markets.

     The Company's crude oil requirements are supplied from sources that
include major oil companies, large independent producers, and smaller
local producers. In general, crude oil supply contracts are relatively
short-term contracts with market-responsive pricing provisions. An
increase in crude oil prices would adversely affect the Company's
operating margins if the Company cannot pass along the increased cost of
raw materials to customers.

     The Company's sale prices for refined products are influenced by the
commodity price of crude oil. Generally, an increase or decrease in the
price of crude oil results in a corresponding increase or decrease in the
price of gasoline and other refined products. The timing of the relative
movement of the prices, however, as well as the overall change in product
prices, could reduce profit margins and could have a significant impact on
the Company's refining and marketing operations, earnings, and cash flows.
In addition, the Company maintains inventories of crude oil, intermediate
products, and refined products, the values of which are subject to rapid
fluctuation in market prices. The Company purchases its refinery
feedstocks prior to selling the refined products manufactured. Price level
changes during the period between purchasing feedstocks and selling the
manufactured refined products from these feedstocks could have a
significant effect on the Company's operating results.

     Moreover, the industry is highly competitive. Many of the Company's
competitors are large, integrated oil companies which, because of their
more diverse operations, larger refineries, stronger capitalization and
better brand name recognition, may be better able than the Company is to
withstand volatile industry conditions, including shortages or excesses of
crude oil or refined products or intense price competition at the
wholesale and retail levels. Because some of the Company's competitors'
refineries are larger and more efficient than the Company's refineries,
these refineries may have lower per barrel crude oil refinery processing
costs.

     Any long-term adverse relationships between costs and prices could
impact the Company's ability to generate sufficient operating cash flows
to meet its working capital needs.

     In addition, the Company's ability to borrow funds under its current
Credit Facility could be adversely impacted by low product prices that
could limit the availability of funds by reducing the borrowing base tied
to eligible accounts receivable and inventories. The Company's Credit
Facility also contains certain restrictive covenants that could limit the
Company's ability to borrow funds if certain thresholds are not
maintained. See the discussion below in "Capital Structure" for further
information relating to Credit Facility covenants.

     The Company presently has senior subordinated ratings of "B3" from
Moody's Investor Services and "B" from Standard & Poor's.

Capital Structure
-----------------
     At June 30, 2002 and December 31, 2001, the Company's long-term debt
was 76.8% and 65.3% of total capital respectively and the Company's net
debt (long-term debt less cash and cash equivalents) to total
capitalization percentages were 76.3% and 62.8%, respectively. The
increase in each percentage is primarily related to the increased debt
incurred in connection with the acquisition of the Yorktown refinery.

     At June 30, 2002 the Company had long-term debt of $436,919,000, net
of current portion of $12,926,000. See Note 8 to the Company's Condensed
Consolidated Financial Statements included in Part I, Item 1 hereof for a
description of these obligations.

     The indentures supporting the Company's notes and the Company's
Credit Facility and Loan Facility contain certain restrictive covenants,
as described in more detail in Note 8, and other terms and conditions that
if not maintained, if violated, or if certain conditions are met, could
result in default, early redemption of the notes, and affect the Company's
ability to borrow funds, make certain payments, or engage in certain
activities. In light of the weak refining margins experienced during the
second quarter and to date in the third quarter, the Company is carefully
monitoring the covenants contained in its notes, the Credit Facility and
the Loan Facility as its compliance cushion under some of these covenants
was very small at the end of the second quarter. A default under any of
the notes, the Credit Facility or the Loan Facility could cause such debt,
and by reason of cross-default provisions, the Company's other debt to
become immediately due and payable. If the Company is unable to repay such
amounts, the lenders under the Company's Credit Facility and Loan Facility
could proceed against the collateral granted to them to secure that debt.
If those lenders accelerate the payment of the Credit Facility and Loan
Facility, the Company cannot provide assurance that its assets would be
sufficient to pay that debt and other debt or that it would be able to
refinance such debt or borrow more money on terms acceptable to it, if at
all. The Company's ability to comply with the covenants, and other terms
and conditions, of the indentures, the Credit Facility and the Loan
Facility may be affected by many events beyond the Company's control, and
the Company cannot provide assurance that its operating results will be
sufficient to comply with the covenants, terms and conditions.

     The Company's high degree of leverage and these covenants may, among
other things:

     - limit the Company's ability to use cash flow, or obtain additional
       financing, for future working capital, capital expenditures,
       acquisitions or other general corporate purposes;

     - require a substantial portion of cash flow from operations to make
       debt service payments;

     - limit the Company's flexibility to plan for, or react to, changes
       in business and industry conditions;

     - place the Company at a competitive disadvantage compared to less
       leveraged competitors; and

     - increase the Company's vulnerability to the impact of adverse
       economic and industry conditions and, to the extent of the
       Company's outstanding debt under senior credit facilities, the
       impact of increases in interest rates.

     The Company cannot provide assurance that sufficient cash flow will
continue to be generated or that it will be able to borrow funds under its
Credit Facility in amounts sufficient to enable it to service its debt, or
meet its working capital and capital expenditure requirements. If the
Company is not able to generate sufficient cash flow from operations or to
borrow sufficient funds to service its debt, due to borrowing base
restrictions or otherwise, it may be required to sell assets, reduce
capital expenditures, refinance all or a portion of its existing debt, or
obtain additional financing. The Company cannot provide assurance that it
will be able to refinance its debt, sell assets or borrow more money on
terms acceptable to it, if at all.

     In addition, the acquisition of the Yorktown refinery could constrain
the Company's ability to borrow funds, make payments, or engage in other
contemplated activities under the terms of the indentures supporting its
notes, the Credit Facility, or the Loan Facility, particularly in the
first three years of operations, but the Company does not believe that any
presently contemplated activities will be constrained. A prolonged period
of low refining margins, however, would have a negative impact on the
Company's ability to borrow funds and to make expenditures for certain
purposes and would have an impact on compliance with the Company's loan
covenants as described above.



     Included in the tables below are a list of the Company's obligations
and commitments to make future payments under contracts and under
commercial commitments as of June 30, 2002.

<TABLE>
<CAPTION>
                                                                   PAYMENTS DUE
                           ------------------------------------------------------------------------------------------
                                                                                                        ALL REMAINING
CONTRACTUAL OBLIGATIONS        TOTAL         2002         2003         2004         2005        2006        YEARS
---------------------------------------------------------------------------------------------------------------------
<S>                        <C>           <C>          <C>          <C>          <C>          <C>         <C>
Long-Term Debt*            $448,957,000  $ 6,688,000  $10,252,000  $11,128,000  $70,889,000  $        -  $350,000,000
Capital Lease Obligations     6,703,000            -            -            -            -           -     6,703,000
Operating Leases             19,508,000    3,609,000    3,700,000    2,856,000    1,982,000   1,351,000     6,010,000
---------------------------------------------------------------------------------------------------------------------
Total Contractual
  Cash Obligations         $475,168,000  $10,297,000  $13,952,000  $13,984,000  $72,871,000  $1,351,000  $362,713,000
=====================================================================================================================
*Excluding original issue discount.
</TABLE>

<TABLE>
<CAPTION>
                                                      AMOUNT OF COMMITMENT EXPIRATION
                           ------------------------------------------------------------------------------------------
OTHER                                                                                                   ALL REMAINING
COMMERCIAL OBLIGATIONS         TOTAL         2002         2003         2004         2005        2006        YEARS
---------------------------------------------------------------------------------------------------------------------
<S>                        <C>           <C>          <C>          <C>          <C>           <C>         <C>
Line of Credit*            $100,000,000  $         -  $         -  $        -   $100,000,000  $        -  $         -
Standby Letters of Credit     6,877,000    6,877,000            -           -              -           -            -

*Standby letters of credit reduce the availability of funds for direct borrowings under the line of credit.
</TABLE>

     The Company is also committed under a long-term purchase contract
that expires in August 2005 to purchase a minimum of 3,500 barrels per day
of natural gasoline at market price plus an additional amount per gallon.

     The Company's Board of Directors (the "Board") previously authorized
the repurchase of up to 2,900,000 shares of the Company's common stock.
These purchases could be made from time to time as conditions permit.
Shares could be repurchased through privately negotiated transactions,
block share purchases and open market transactions. The Company's
authority to repurchase shares under this program expired in the second
quarter of 2002. During the first six months of 2002, the Company made no
purchases of its common stock under the program. Since the inception of
the stock repurchase program, the Company has repurchased 2,582,566 shares
for approximately $25,716,000, resulting in a weighted average cost of
$9.96 per share. The repurchased shares are treated as treasury shares.
Shares repurchased under the Company's program are available for a number
of corporate purposes including, among other things, for options, bonuses,
and other employee stock benefit plans.

     The Board suspended the payment of cash dividends on common stock in
the fourth quarter of 1998. At the present time, the Company has no plans
to reinstate such dividends. The payment of future dividends is subject to
the results of the Company's operations, declaration by the Company's
Board, and compliance with certain debt covenants.

Risk Management
---------------
     The Company is exposed to various market risks, including changes in
certain commodity prices and interest rates. To manage the volatility
relating to these normal business exposures the Company, from time to
time, uses commodity futures and options contracts to reduce price
volatility, to fix margins in its refining and marketing operations and to
protect against price declines associated with its crude oil and finished
products inventories.

     In the second quarter of 2002, the Company entered into various crude
oil futures contracts in order to hedge crude oil inventories and crude
oil purchases for the Yorktown refinery operations. For the second quarter
of 2002, the Company recorded gains on these contracts of approximately
$1,970,000 in cost of products sold. These transactions did not qualify
for hedge accounting in accordance with by SFAS No. 133 "Accounting for
Derivative Instruments and Hedging Activities," as amended, and
accordingly were marked to market each month. At June 30, 2002, the
Company had 525 open crude oil futures contracts with associated losses of
approximately $114,000. The potential loss from a hypothetical 10% adverse
change in commodity prices on these open contracts at June 30, 2002, was
approximately $1,406,000.

     The Company's Credit Facility is floating-rate debt tied to various
short-term indices. As a result, the Company's annual interest costs
associated with this debt may fluctuate. At June 30, 2002, there were
$60,000,000 of direct borrowings outstanding under this Credit Agreement.
The potential increase in interest expense from a hypothetical 10% adverse
change in interest rates on these borrowings at June 30, 2002, was
approximately $272,000.

     The Company's Loan Facility is floating-rate debt tied to various
short-term indices. As a result, the Company's annual interest costs
associated with this debt may fluctuate. At June 30, 2002, there was
$38,889,000 of direct borrowings outstanding under this facility. The
potential increase in interest expense from a hypothetical 10% adverse
change in interest rates on these borrowings at June 30, 2002, was
approximately $237,000.

     The Company's operations are subject to normal hazards of operations,
including fire, explosion and weather-related perils. The Company
maintains various insurance coverages, including business interruption
insurance, subject to certain deductibles. The Company is not fully
insured against certain risks because such risks are not fully insurable,
coverage is unavailable or premium costs, in the judgment of the Company,
do not justify such expenditures.

     Credit risk with respect to customer receivables is concentrated in
the geographic areas in which the Company operates and relates primarily
to customers in the oil and gas industry. To minimize this risk, the
Company performs ongoing credit evaluations of its customers' financial
position and requires collateral, such as letters of credit, in certain
circumstances.

ENVIRONMENTAL AND OTHER
-----------------------
     Federal, state and local laws and regulations relating to health and
the environment affect nearly all of the operations of the Company. As is
the case with other companies engaged in similar industries, the Company
faces significant exposure from actual or potential claims and lawsuits,
brought by either governmental authorities or private parties, alleging
non-compliance with environmental, health, and safety laws and
regulations, or property damage or personal injury caused by the
environmental, health, or safety impacts of the Company's operations or of
historic contamination. These matters include soil and water
contamination, air pollution, and personal injuries or property damage
allegedly caused by substances manufactured, handled, used, released, or
disposed of by the Company. Claims and lawsuits brought by governmental
authorities may seek penalties and fines for alleged violations of
environmental, health, and safety laws and regulations.

     Applicable laws and regulations govern the investigation and
remediation of contamination at the Company's current and former
properties, as well as at third-party sites to which the Company sent
wastes for disposal. The Company may be held liable for contamination
existing at current or former properties, notwithstanding that a prior
operator of the site, or other third party, caused the contamination. The
Company also may be held responsible for costs associated with cleaning up
contamination at third-party disposal sites, notwithstanding that the
original disposal activities accorded with all then applicable regulatory
requirements. The Company is currently engaged in a number of such
remediation projects.

     Future expenditures related to compliance with environmental, health
and safety laws and regulations, the investigation and remediation of
contamination, and the defense or settlement of governmental or private
property claims and lawsuits cannot be reasonably quantified in many
circumstances for various reasons. These reasons include the speculative
nature of remediation and cleanup cost estimates and methods, imprecise
and conflicting data regarding the hazardous nature of various types of
substances, the number of other potentially responsible parties involved,
various defenses that may be available to the Company and changing
environmental laws, regulations, and their respective interpretations. The
Company cannot provide assurance that compliance with such laws or
regulations, such investigations or cleanups, or such enforcement
proceedings or private-party claims will not have a material adverse
effect on the Company's business, financial condition or results of
operation.

     Rules and regulations implementing federal, state and local laws
relating to health and the environment will continue to affect the
operations of the Company. The Company cannot predict what health or
environmental legislation or regulations will be enacted or become
effective in the future or how existing or future laws or regulations will
be administered or enforced with respect to products or activities of the
Company. Compliance with more stringent laws or regulations, as well as
more vigorous enforcement policies of the regulatory agencies, could have
an adverse effect on the financial position and the results of operations
of the Company and could require substantial expenditures by the Company
for, among other things: (i) the installation and operation of refinery
equipment, pollution control systems and other equipment not currently
possessed by the Company; (ii) the acquisition or modification of permits
applicable to Company activities; and (iii) the initiation or modification
of cleanup activities.

     The Company assumed certain obligations, including certain
environmental obligations, in connection with the acquisition of the
Yorktown refinery. For a further discussion of these matters see Note 9 to
the Company's Condensed Consolidated Financial Statements included in Part
I, Item 1, hereof.

     The federal Environmental Protection Agency ("EPA") has issued a rule
that requires refiners, including the Yorktown refinery, to produce ultra
low sulfur, or "Tier 2," gasoline by January 2004 and ultra low sulfur
diesel by 2006. The Company anticipates that it will spend approximately
$40,000,000 to purchase and install the equipment necessary to produce
Tier 2 gasoline at its Yorktown refinery, and projects that it will incur
these expenditures half in 2003 and half in 2004. The Company anticipates
that it will spend approximately $15,000,000 to purchase and install the
equipment necessary to produce ultra low sulfur diesel by 2006 at the
Yorktown refinery, and projects that it will incur these expenditures half
in 2005 and half in 2006. The Company is in the process of attempting to
obtain a postponement of expenditures to meet low sulfur fuels standards
as mandated by EPA at the Yorktown refinery. There can be no assurance,
however, that the Company will be successful in obtaining such relief.

     There are a number of factors that could affect the cost to comply
with the Tier 2 and ULSD standards. The regulations affect the entire
industry, so contract engineering and construction companies will be busy
and may charge a premium for their services. Moreover, detailed
engineering for the Yorktown refinery is not yet completed, and this
refinery may have some unusual circumstances that could be costly to
correct. Also, the relatively short time left to comply might result in
increased costs to expedite ordering for otherwise long delivery items or
added overtime by contractors to meet the implementation schedule.

     The implementation schedule for achieving the Tier 2 and ULSD
requirements at the Yorktown refinery is tight. The Company believes that
BP identified a reasonable plan for achieving these requirements, but made
little actual progress in implementing this plan. Although the Company
still believes it will be possible to complete the Tier 2 and ULSD
projects in a timely manner, this cannot be assured. Any failure to
complete either of these projects by the applicable deadlines could result
in a reduction of the quantity of gasoline and diesel fuel available for
sale, and an increase of the quantity of components available for sale
that are not subject to the requirements, such as heating oil, which would
likely reduce refining earnings.

     With respect to the Ciniza and Bloomfield refineries, based on
production levels of low-sulfur diesel fuel, the Company believes that it
will qualify for an extension of the gasoline low-sulfur standards until
December 2008. The Company anticipates that it will spend approximately
$3,500,000 to make the necessary changes to the Four Corners refineries,
primarily in 2003 and 2004, to comply with the new gasoline rule, and
approximately $15,000,000, primarily in 2005 and 2006, to comply with the
new diesel fuel rule.

     The Company received a draft compliance order from the New Mexico
Environment Department ("NMED") in June 2002 in connection with five
alleged violations of air quality regulations at the Ciniza refinery. In
August 2002, the Company received a draft notice of violation from NMED in
connection with five alleged violations of air quality regulations at the
Bloomfield refinery. The Company expects to provide information to NMED
with respect to both of those matters that may result in the modification
or dismissal of some of the alleged violations and reductions in the
amount of potential penalties. A further discussion of these alleged
violations is found in Note 9 to the Company's Condensed Consolidated
Financial Statements included in Part I, Item 1 hereof.

     As of June 30, 2002, the Company had an environmental liability
accrual of approximately $9,800,000. Approximately $7,500,000 of the
accrual is for certain environmental obligations assumed in connection
with the Yorktown refinery acquisition. Approximately $1,500,000 of the
accrual is for the following projects, all of which are discussed in more
detail, along with Yorktown environmental obligations, in Note 9 to the
Company's Condensed Consolidated Financial Statements included in Part I,
Item 1 hereof: (i) the remediation of the hydrocarbon plume that appears
to extend no more than 1,800 feet south of the Company's inactive
Farmington refinery; (ii) environmental obligations assumed in connection
with the acquisition of the Bloomfield Refinery; and (iii) hydrocarbon
contamination on and adjacent to the 5.5 acres that the Company owns in
Bloomfield, New Mexico. The remaining amount of the accrual relates to the
closure of certain solid waste management units at the Ciniza Refinery,
which is being conducted in accordance with the refinery's Resource
Conservation and Recovery Act permit; closure of the Ciniza Refinery land
treatment facility, including post-closure expenses; and certain other
smaller matters. The environmental accrual is recorded in the current and
long-term sections of the Company's Condensed Consolidated Balance Sheets.

     The Company's Ciniza and Bloomfield refineries primarily process a
mixture of high gravity, low sulfur crude oil, condensate, and natural gas
liquids. The locally produced, high quality crude oil known as Four
Corners Sweet is the primary feedstock of these refineries.

     These refineries continue to be affected by reduced crude oil
production in the Four Corners area. The Four Corners basin is a mature
production area and accordingly is subject to natural decline in
production over time. In the past, this natural decline has been offset to
some extent by new drilling, field workovers, and secondary recovery
projects, which resulted in additional production from existing reserves.
Many of these projects were cut back, however, when crude oil prices
declined dramatically in 1998. Although crude oil prices have recovered
from 1998 levels, a lower than anticipated allocation of capital to Four
Corners basin production activities has resulted in greater than
anticipated net declines in production.

     As a result of the declining production of crude oil in the Four
Corners area since 1997, the Company has not been able to cost-effectively
obtain sufficient amounts of crude oil to operate the Company's Four
Corners refineries at full capacity. The Company's utilization rates
declined from 92% in 1997 to 73% in 2001. The Company's current
projections of Four Corners crude oil production indicate that the
Company's crude oil demand will exceed the crude oil supply that is
available from local sources for the foreseeable future. The Company
expects to operate the Ciniza and Bloomfield refineries at lower levels
than would otherwise be scheduled as a result of shortfalls in Four
Corners crude oil production. Because a large portion of the Company's
refinery costs are fixed, a decrease in utilization could significantly
affect the Company's profitability.

     The Company continues to evaluate supplemental feedstock alternatives
for its Four Corners refineries on both a short-term and long-term basis.
The Company has not, however, identified any significant, cost effective
crude oil feedstock alternatives to date. Whether or not supplemental
feedstocks are used at the refineries depends on a number of factors.
These factors include, among other things, the availability of
supplemental feedstocks, the cost involved, the quantities required, the
quality of the feedstocks, the demand for finished products, and the
selling prices of finished products.

     The Company also is assessing other long-term options to address the
continuing decline in Four Corners crude oil production. The options being
considered include: (a) encouraging, and occasionally sponsoring,
exploration and production activities in the Four Corners area; and (b)
examining other potentially economic raw material sources, such as crude
oil produced outside the Four Corners area. None of these options,
however, may prove to be economically viable.

     The Company cannot provide assurance that the Four Corners crude oil
supply for the Ciniza and Bloomfield refineries will continue to be
available at all or on acceptable terms. Any significant, long-term
interruption or decline in Four Corners crude oil supply, either by
reduced production or significant long-term interruption of crude oil
transportation systems, would have an adverse effect on our Four Corners
refinery operations and on our overall operations.

     The Company has a 239-mile pipeline system for gathering and
delivering crude oil to the refineries and a 13-mile pipeline for natural
gas liquids. If the Company is unable to use either the crude oil pipeline
system or the natural gas liquids pipeline, this could have a material
adverse effect on the Company's business, financial condition or results
of operations.

     The Company is aware of a number of actions, proposals or industry
discussions regarding product pipeline projects that could impact portions
of its marketing areas. One of these projects is the potential conversion
and extension of the existing Texas-New Mexico crude oil pipeline to
transport refined products from West Texas to New Mexico, including
Albuquerque, New Mexico and potentially Bloomfield, New Mexico. Another
potential project would take product on to Salt Lake City, Utah.
Previously, these two projects were referred to as the Aspen Pipeline. In
addition, various actions have been undertaken to increase the supply of
refined products to El Paso, Texas, which is connected by the Chevron
pipeline to the Albuquerque, New Mexico area to the north and by the
Kinder-Morgan pipeline to the Phoenix and Tucson, Arizona markets to the
west. The completion of some or all of these projects, including the
Longhorn Pipeline that runs from Houston, Texas to El Paso, could result
in increased competition by increasing the amount of refined products
potentially available in these markets, as well as improving competitor
access to these areas.

     The Company's refining activities are conducted at its two refinery
locations in New Mexico and the Yorktown refinery in Virginia. These
refineries constitute a significant portion of the Company's operating
assets, and the two New Mexico refineries supply a significant portion of
the Company's retail operations. As a result, the Company's operations
would be subject to significant interruption if any of the refineries were
to experience a major accident, be damaged by severe weather or other
natural disaster, or otherwise be forced to shut down. If any of the
refineries were to experience an interruption in supply or operations, the
Company's business, financial condition and operating results could be
materially and adversely affected.

     In addition, the Company's operations are subject to normal hazards
of operations, including fire, explosion and weather-related perils. The
Company maintains various insurance coverages, including business
interruption insurance, subject to certain deductibles and consistent with
standard practices for comparable companies. The Company is not, however,
fully insured against certain risks because such risks are not fully
insurable, coverage is unavailable or premium costs, in the Company's
judgment, do not justify the expenditures. Any such event that causes a
loss for which the Company is not fully insured could have a material and
adverse effect on the Company's business, financial condition and
operating results.

     James E. Acridge was terminated as the Company's President and Chief
Executive Officer on March 29, 2002, although he remains on the Board of
Directors. For a further discussion of matters relating to Mr. Acridge,
see Note 9 to the Company's Condensed Consolidated financial Statements
included in Part I, Item 1, hereof.

FORWARD-LOOKING STATEMENTS
--------------------------
     This report includes forward-looking statements within the meaning of
Section 27A of the Securities Act and Section 21E of the Exchange Act.
These statements are included throughout this report, including in the
section entitled "Management's Discussion and Analysis of Financial
Condition and Results of Operations." These statements relate to
projections of capital expenditures and other financial statements. These
statements also relate to the Company's business strategy, goals and
expectations concerning our market position, future operations,
acquisitions, dispositions, margins, profitability, liquidity and capital
resources. The Company has used the words "believe," "expect,"
"anticipate," "estimate," "could," "plan," "intend," "may," "project,"
"predict," "will" and similar terms and phrases to identify forward-
looking statements in this report.

     Although the Company believes the assumptions upon which these
forward-looking statements are based are reasonable, any of these
assumptions could prove to be inaccurate, and the forward-looking
statements based on these assumptions could be incorrect. While the
Company has made these forward-looking statements in good faith and they
reflect the Company's current judgment regarding such matters, actual
results could vary materially from the forward-looking statements.

     Actual results and trends in the future may differ materially
depending on a variety of important factors. These important factors
include the following:

     - the availability of Four Corners sweet crude oil and the adequacy
       and costs of raw material supplies generally;

     - the Company's ability to negotiate new crude oil supply contracts;

     - the Company's ability to successfully integrate the Yorktown
       refinery and manage the liabilities, including environmental
       liabilities, that the Company assumed in the Yorktown acquisition;

     - competitive pressures from existing competitors and new entrants,
       including the potential efforts of various pipeline projects and
       various actions that have been undertaken to increase the supply of
       refined products to El Paso, Texas;

     - volatility in the difference, or spread, between market prices for
       refined products and crude oil and other feedstocks, and the risk
       that the weak refining margins experienced by the Company during
       the quarter ended June 30, 2002 and to date in the third
       quarter will continue at least through the end of the year;

     - the Company's ability to reduce operating expenses and non-
       essential capital expenditures;

     - the risk that the Company will not be able to sell non-strategic
       and under-performing assts on terms favorable to the Company;

     - the risk that the Company will not receive the expected amounts
       from the potential sale of 35 retail units and the headquarters
       building;

     - state or federal legislation or regulation, or findings by a
       regulator with respect to existing operations, including the impact
       of government-mandated specifications for gasoline and diesel fuel
       on the Company's operations;

     - unplanned or extended shutdowns in refinery operations;

     - the risk that the Company will not remain in compliance with
       covenants, and other terms and conditions, contained in its notes,
       Credit Facility and Loan Facility;

     - general economic factors affecting the Company's operations,
       markets, products, services and prices;

     - unexpected environmental remediation costs;

     - weather conditions affecting the Company's operations or the areas
       in which its products are refined or marketed; and

     - other risk described elsewhere in this report or described from
       time to time in the Company's filings with the Securities and
       Exchange Commission.

     All subsequent written and oral forward-looking statements
attributable to the Company or persons acting on its behalf are expressly
qualified in their entity by the previous statements. Forward-looking
statements the Company makes represent its judgment on the dates such
statements are made. The Company assumes no obligation to update any
information contained in this report or to publicly release the results of
any revisions to any forward-looking statements to reflect events or
circumstances that occur, or that the Company becomes aware of, after the
date of this report.


ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

     The information required by this item is incorporated herein by
reference to the section entitled "Risk Management" in the Company's
Management's Discussion and Analysis of Financial Condition and Results of
Operations in Part I, Item 2 hereof.



<PAGE>
                                PART II

                           OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

     The Company is a party to ordinary routine litigation incidental to
its business. There is also hereby incorporated by reference the
information regarding Commitments and Contingencies in Note 9 to the
Condensed Consolidated Financial Statements set forth in Part I, Item 1,
hereof and the discussion of certain contingencies contained in Part I,
Item 2, hereof, under the heading "Environmental and Other."

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

     The annual meeting of stockholders was held on May 9, 2002. Proxies
for the meeting were solicited under Regulation 14A. There were no matters
submitted to a vote of security holders other than the election of two
directors and approval of auditors as specified in the Company's Proxy
Statement. There was no solicitation in opposition to management's
nominees to the Board of Directors.

     Anthony J. Bernitsky was elected as a director of the Company. The
vote was as follows:

Shares Voted "For"   Shares Voted "Withholding"
------------------   --------------------------
    5,434,480                 1,480,695

     George M. Rapport was elected as a director of the Company. The vote
was as follows:

Shares Voted "For"   Shares Voted "Withholding"
------------------   --------------------------
    5,434,180                 1,480,995

     Deloitte & Touche LLP was ratified as independent auditors for the
Company for the year ending December 31, 2002. The vote was as follows:

Shares Voted "For"     Shares Voted "Against"   Shares Voted "Abstaining"
------------------     ----------------------   -------------------------
    5,473,476                 1,429,949                  11,750

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

(a)  Exhibits:

      4.1  Indenture, dated as of May 14, 2002, among the Company, as
           Issuer, the Subsidiary Guarantors, as guarantors, and The Bank
           of New York, as Trustee, relating to $200,000,000 of 11% Senior
           Subordinated Notes due 2012. Incorporated by reference to
           Exhibit 4.2 to the Company's Registration Statement on Form S-4
           under the Securities Act of 1933 as filed July 15, 2002, File
           No. 333-92386.

     10.1  Second Amended and Restated Credit Agreement, dated May 14,
           2002, among Giant Industries, Inc., Bank of America, N.A., as
           Administrative Agent and as Letter of Credit Issuing Bank and
           the Lenders parties thereto. Incorporated by reference to
           Exhibit 10.1 to the Company's Registration Statement on Form
           S-4 under the Securities Act of 1933 as filed July 15, 2002,
           File No. 333-92386.

     10.2  Registration Rights Agreement, dated as of May 14, 2002, among
           the Company, the Subsidiary Guarantors, Banc of America
           Securities, LLC, BNP Paribas Securities Corp. and Fleet
           Securities, Inc.  Incorporated by reference to Exhibit 10.36 to
           the Company's Registration Statement on Form S-4 under the
           Securities Act of 1933 as filed July 15, 2002, File
           No. 333-92386.

     10.3  Purchase Agreement, dated May 9, 2002, among the Company, the
           Subsidiary Guarantors, Banc of America Securities, LLC, BNP
           Paribas Securities Corp. and Fleet Securities, Inc.
           Incorporated by reference to Exhibit 10.37 to the Company's
           Registration Statement on Form S-4 under the Securities Act of
           1933 as filed July 15, 2002, File No. 333-92386.

     10.4  Loan Agreement, dated as of May 14, 2002, by and among Giant
           Yorktown, Inc., as Borrower, Wells Fargo Bank Nevada, National
           Association, as Collateral Agent, and the Persons listed on
           Schedule IA thereto, as Lenders.  Incorporated by reference to
           Exhibit 10.38 to the Company's Registration Statement on Form
           S-4 under the Securities Act of 1933 as filed July 15, 2002,
           File No. 333-92386.

     99.1* Chief Executive Officer's Certification Pursuant to Section
           906 of the Sarbanes-Oxley Act of 2002.

     99.2* Chief Financial Officer's Certification Pursuant to Section
           906 of the Sarbanes-Oxley Act of 2002.

     *Filed herewith.

(b)  Reports on Form 8-K: The Company filed the following reports on Form
8-K during the quarter for which this report is being filed and
subsequently up to the filing of this Form 10-Q.

     (i)   Form 8-K dated and filed August 6, 2002 - filed as an exhibit a
press release dated August 6, 2002 providing an update on the Company's
Yorktown refinery acquisition, announcing a debt reduction initiative and
second quarter 2002 operating results.

     (ii)   Form 8-K dated and filed July 15, 2002 - the Company, in
connection with a registration statement filed July 15, 2002 on Form S-4,
reported that it amended its audited financial statements and related
items as originally reported in its 2001 Annual Report on Form 10-K for
the year ended December 31, 2001 to reflect the following:

          - Transitional pro forma disclosures under Statement of
            Financial Accounting Standards No. 142, "Goodwill and Other
            Intangible Assets," adopted January 1, 2002.

          - Information regarding the subsidiary guarantors of Giant
            Industries, Inc.'s $200,000,000 of senior subordinated notes.

     (iii)  Form 8-K filed May 14, 2002 and dated May 14, 2002 - reported
the closing of the Company's acquisition of the Yorktown refinery,
provided certain information regarding the Yorktown refinery, reported the
closing of financing transactions to pay for the Yorktown refinery and
redeem all $100.0 million of the Company's 9-3/4% Senior Subordinated
Notes due 2003, and filed audited balance sheets for the Yorktown refinery
as of December 31, 2001 and 2000 and audited statements of income, parent
company investment and cash flows for the years then ended.

     (iv)   Form 8-K filed April 29, 2002 and dated April 26, 2002 - under
Item 9 (Regulation D Disclosure), provided certain pro forma financial
statements and historical and unaudited pro forma financial and other data
concerning the Company and the Yorktown refinery - this included: (A) an
unaudited pro forma combined condensed balance sheet and an unaudited pro
forma combined condensed statement of operations of Giant Industries, Inc.
and subsidiaries to give effect to the acquisition of the Yorktown
refinery, the redemption of the Company's 9-3/4% Senior Subordinated Notes
due 2003, and the related financing transactions; (B) selected historical
financial information and certain pro forma information after giving
effect to the Yorktown acquisition and the related financing transactions
for each of the years ended December 31, 2001, 2000, 1999, 1998 and 1997;
and (C) certain data with respect to the Yorktown refinery operations and
the primary refined products produced during 1998, 1999, 2000 and 2001.

     (v)    Form 8-K filed April 26, 2002 and dated April 26, 2002 - filed
as an exhibit a press release dated April 26, 2002 announcing the
Company's intent to offer $200 million of Senior Subordinated Notes due
2012.





<PAGE>
                             SIGNATURE

     Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report on Form 10-Q for the quarter
ended June 30, 2002 to be signed on its behalf by the undersigned
thereunto duly authorized.

                         GIANT INDUSTRIES, INC.


                         /s/ GARY R. DALKE
                         ------------------------------------------
                         Gary R. Dalke, Vice President, Controller,
                         Chief Accounting Officer and Assistant Secretary
                         on behalf of the Registrant and as the
                         Registrant's Principal Accounting Officer



Date: August 14, 2002
10