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 September 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 October 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 September 30, 2002
          (Unaudited) and December 31, 2001

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

          Condensed Consolidated Statements of Cash Flows for the Nine
          Months Ended September 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

Item 4  - Controls and Procedures

PART II - OTHER INFORMATION

Item 1  - Legal Proceedings

Item 6  - Exhibits and Reports on Form 8-K

SIGNATURE

CERTIFICATIONS


<PAGE>
<TABLE>
                                         PART I
                                  FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS.

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

<CAPTION>
                                                            September 30,    December 31,
-----------------------------------------------------------------------------------------
                                                                2002             2001
-----------------------------------------------------------------------------------------
                                                             (Unaudited)
<S>                                                           <C>              <C>
ASSETS
Current assets:
  Cash and cash equivalents                                   $  10,164        $  26,326
  Receivables, net                                               68,187           43,530
  Inventories                                                   100,107           58,422
  Prepaid expenses and other                                      1,644            3,661
  Deferred income taxes                                          10,535            3,735
-----------------------------------------------------------------------------------------
    Total current assets                                        190,637          135,674
-----------------------------------------------------------------------------------------
Property, plant and equipment                                   651,406          519,509
  Less accumulated depreciation and amortization               (217,334)        (200,952)
-----------------------------------------------------------------------------------------
                                                                434,072          318,557
-----------------------------------------------------------------------------------------
Goodwill, net                                                    19,565           19,815
Other assets                                                     46,656           33,128
-----------------------------------------------------------------------------------------
                                                              $ 690,930        $ 507,174
=========================================================================================

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
  Current portion of long-term debt                           $  11,589        $      45
  Accounts payable                                               47,196           42,255
  Accrued expenses                                               37,923           36,537
-----------------------------------------------------------------------------------------
    Total current liabilities                                    96,708           78,837
-----------------------------------------------------------------------------------------
Long-term debt, net of current portion                          409,994          256,749
Deferred income taxes                                            37,481           32,772
Other liabilities                                                18,977            2,406
Commitments and contingencies (Notes 10, 11 and 13)
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                                              90,418           99,152
-----------------------------------------------------------------------------------------
                                                                164,225          172,864
  Less common stock in treasury - at cost, 3,751,980 shares     (36,454)         (36,454)
-----------------------------------------------------------------------------------------
    Total stockholders' equity                                  127,770          136,410
-----------------------------------------------------------------------------------------
                                                              $ 690,930        $ 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           Nine Months
                                                        Ended September 30,     Ended September 30,
---------------------------------------------------------------------------------------------------
                                                          2002        2001        2002       2001
---------------------------------------------------------------------------------------------------
<S>                                                    <C>        <C>          <C>        <C>
Net revenues                                           $ 386,579  $ 230,315    $ 857,129  $ 737,720
Cost of products sold                                    333,164    172,670      706,945    561,659
---------------------------------------------------------------------------------------------------
Gross margin                                              53,415     57,645      150,184    176,061

Operating expenses                                        38,366     26,537       95,314     80,897
Depreciation and amortization                              9,442      8,138       26,672     23,503
Selling, general and administrative expenses               6,765      7,659       17,852     22,997
Net (gain) loss on disposal/write-down of assets             (62)     1,301          856      1,783
---------------------------------------------------------------------------------------------------
Operating income (loss)                                   (1,096)    14,010        9,490     46,881

Interest expense                                         (10,455)    (6,026)     (25,985)   (18,109)
Amortization/write-off of financing costs                   (954)      (183)      (2,071)      (581)
Interest and investment income                                74        361          399      1,411
---------------------------------------------------------------------------------------------------
Earnings (loss) from continuing operations
  before income taxes                                    (12,431)     8,162      (18,167)    29,602

Provision (benefit) for income taxes                      (5,132)     3,052       (7,188)    11,482
---------------------------------------------------------------------------------------------------
Earnings (loss) from continuing operations                (7,299)     5,110      (10,979)    18,120

Discontinued operations (Note 5)
  Earnings (loss) from operations of
    discontinued retail assets                              (362)        42       (1,020)      (137)
  Gain on disposal                                         4,921          -        4,789          -
  Net loss on asset sales/write-downs                        (15)         -          (28)         -
---------------------------------------------------------------------------------------------------
                                                           4,544         42        3,741       (137)
  Provision (benefit) for income taxes                     1,817         17        1,496        (55)
---------------------------------------------------------------------------------------------------
Earnings (loss) from discontinued operations               2,727         25        2,245        (82)
---------------------------------------------------------------------------------------------------
Net earnings (loss)                                    $  (4,572) $   5,135    $  (8,734) $  18,038
===================================================================================================

Net earnings (loss) per common share:
  Basic
    Continuing operations                              $   (0.85) $    0.57    $   (1.28) $    2.02
    Discontinued operations                            $    0.32  $       -    $    0.26  $   (0.01)
---------------------------------------------------------------------------------------------------
                                                       $   (0.53) $    0.57    $   (1.02) $    2.01
===================================================================================================
  Assuming dilution
    Continuing operations                              $   (0.85) $    0.57    $   (1.28) $    2.02
    Discontinued operations                            $    0.32  $       -    $    0.26  $   (0.01)
---------------------------------------------------------------------------------------------------
                                                       $   (0.53) $    0.57    $   (1.02) $    2.01
===================================================================================================

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>
                                                                     Nine Months Ended
                                                                        September 30,
---------------------------------------------------------------------------------------
                                                                    2002        2001
---------------------------------------------------------------------------------------
<S>                                                               <C>          <C>
Cash flows from operating activities:
  Net earnings (loss)                                             $  (8,734)   $ 18,038
  Adjustments to reconcile net earnings (loss) to net
    cash provided by operating activities:
      Depreciation and amortization, including
        discontinued operations                                      27,460      24,279
      Amortization/write-off of financing costs                       2,071         581
      Deferred income taxes                                          (2,091)      6,164
      Net loss on disposal/write-down of assets                         856       1,783
      Net gain on disposal/write-down of retail assets
        included in discontinued operations                          (4,761)          -
      Other                                                             344       1,237
      Changes in operating assets and liabilities excluding
        the effects of the Yorktown acquisition:
        (Increase) decrease in receivables                          (24,657)     17,210
        Decrease (increase) in inventories                           28,276      (1,201)
        Decrease in prepaid expenses and other                        2,017       1,035
        Increase (decrease) in accounts payable                       4,941     (14,306)
        Increase (decrease) in accrued expenses                         962      (4,155)
---------------------------------------------------------------------------------------
Net cash provided by operating activities                            26,684      50,665
---------------------------------------------------------------------------------------
Cash flows from investing activities:
  Yorktown refinery acquisition                                    (194,866)          -
  Purchases of property, plant and equipment                         (9,783)    (48,144)
  Bloomfield refinery acquisition contingent payment                      -      (5,139)
  Purchase of other assets                                                -      (6,589)
  Proceeds from sale of property, plant and equipment                13,445       1,482
---------------------------------------------------------------------------------------
Net cash used by investing activities                              (191,204)    (58,390)
---------------------------------------------------------------------------------------
Cash flows from financing activities:
  Proceeds from long-term debt                                      234,144           -
  Payments of long-term debt                                       (104,478)       (919)
  Proceeds from line of credit                                       88,000           -
  Payments on line of credit                                        (53,000)          -
  Deferred financing costs                                          (16,402)          -
  Purchase of treasury stock                                              -        (153)
  Proceeds from exercise of stock options                                94           -
---------------------------------------------------------------------------------------
Net cash provided (used) by financing activities                    148,358      (1,072)
---------------------------------------------------------------------------------------
Net decrease in cash and cash equivalents                           (16,162)     (8,797)
Cash and cash equivalents:
  Beginning of period                                                26,326      26,618
---------------------------------------------------------------------------------------
  End of period                                                   $  10,164    $ 17,821
=======================================================================================
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 then Chairman and Chief Executive Officer as payment for the exercise of
126,601 common stock options. These shares were immediately cancelled. In the third quarter of
2001, the Company repurchased, for cash, 59 service station/convenience stores from FFCA Capital
Holding Corporation ("FFCA") for approximately $38,052,000 plus closing costs. These service
station/convenience stores had been sold to FFCA in a sale-leaseback transaction completed in
December 1998. Certain deferrals on the Balance Sheet relating to the sale-leaseback transaction
reduced the cost basis of the assets recorded in "Property, Plant and Equipment" by approximately
$1,736,000. These deferrals included a deferred gain on the original sale to FFCA and deferred
lease allocations included in "Other Liabilities and Deferred Income," and deferred costs
associated with the original sale included in "Other Assets."

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. With the recent acquisition of the
Yorktown, Virginia refinery, the Company also is engaged in the refining
and marketing of petroleum products 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 interim periods presented as of September 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
("AICPA") issued an exposure draft of a proposed Statement of Position
("SOP"), "Accounting for Certain Costs Related to Property, Plant, and
Equipment." This proposed SOP, which would be effective for the Company in
2004, requires the Company to create a timeline 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 AICPA plans to issue the
final SOP in early 2003. The Company is in the process of evaluating the
effect the proposed SOP will have on its financial position and results of
operations.

     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. This Statement is effective for financial statements
issued for fiscal years beginning after June 15, 2002. The Company is in
the process of evaluating the effect SFAS No. 143 will have relative to its
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.
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. (See
Note 5 for information relating to the impairment of certain assets.)

     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 will 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
("SG&A") expenses.

     Operating income for each segment consists of net revenues less cost
of products sold, operating expenses, depreciation and amortization, and
the segment's SG&A 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.

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

<TABLE>
<CAPTION>
                                            For the Three Months Ended September 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                 $ 62,611
    Yorktown operations(1)                   159,844
                                            --------
    Total                                   $222,455  $ 52,299  $ 69,054  $     -  $      -      $343,808
  Merchandise and lubricants                       -    38,068     5,610        -         -        43,678
  Other                                        2,261     3,674       840       44         -         6,819
---------------------------------------------------------------------------------------------------------
    Total                                    224,716    94,041    75,504       44         -       394,305
---------------------------------------------------------------------------------------------------------
Intersegment net revenues:
  Finished products                           41,488         -    15,787        -   (57,275)            -
  Other                                        3,658         -         -        -    (3,658)            -
---------------------------------------------------------------------------------------------------------
    Total                                     45,146         -    15,787        -   (60,933)            -
---------------------------------------------------------------------------------------------------------
Total net revenues                           269,862    94,041    91,291       44   (60,933)      394,305

Net revenues of discontinued operations            -    (7,726)        -        -         -        (7,726)
---------------------------------------------------------------------------------------------------------
Net revenues of continuing operations       $269,862  $ 86,315  $ 91,291  $    44  $(60,933)     $386,579
=========================================================================================================

Operating income (loss):
  Four Corners operations                   $  5,824
  Yorktown operations(1)                      (5,994)
                                            --------
Total operating income (loss)                   (170) $  1,624  $  1,751  $(4,725) $  4,968      $  3,448
Discontinued operations                            -      (362)        -        -     4,906         4,544
---------------------------------------------------------------------------------------------------------
Operating income (loss) from continuing
  operations                                $   (170) $  1,986  $  1,751  $(4,725) $     62      $ (1,096)
Interest expense                                                                                  (10,455)
Amortization/write-off of financing costs                                                            (954)
Interest income                                                                                        74
---------------------------------------------------------------------------------------------------------
Loss from continuing operations before
  income taxes                                                                                   $(12,431)
=========================================================================================================
Depreciation and amortization:
  Four Corners operations                   $  4,071
  Yorktown operations(1)                       1,646
                                            --------
    Total                                   $  5,717  $  3,128  $    507  $   301  $      -      $  9,653
Discontinued operations                            -       211         -        -         -           211
---------------------------------------------------------------------------------------------------------
Continuing operations                       $  5,717  $  2,917  $    507  $   301  $      -      $  9,442
Capital expenditures                        $  1,447  $    449  $     87  $   248  $      -      $  2,231

(1) Since acquisition on May 14, 2002.

</TABLE>


<PAGE>
<TABLE>
<CAPTION>
                                            For the Three Months Ended September 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                         $ 64,074  $ 59,437  $ 65,313  $      -   $        -    $188,824
  Merchandise and lubricants                       -    38,858     6,724         -            -      45,582
  Other                                        1,161     4,962       642        57            -       6,822
-----------------------------------------------------------------------------------------------------------
    Total                                     65,235   103,257    72,679        57            -     241,228
-----------------------------------------------------------------------------------------------------------
Intersegment net revenues:
  Finished products                           44,303         -    19,063         -      (63,366)          -
  Other                                        5,212         -         -         -       (5,212)          -
-----------------------------------------------------------------------------------------------------------
    Total                                     49,515         -    19,063         -      (68,578)          -
-----------------------------------------------------------------------------------------------------------
Total net revenues                           114,750   103,257    91,742        57      (68,578)    241,228

Net revenues of discontinued operations            -   (10,913)        -         -            -     (10,913)
-----------------------------------------------------------------------------------------------------------
Net revenues of continuing operations       $114,750  $ 92,344  $ 91,742  $     57   $  (68,578)   $230,315
===========================================================================================================

Operating income (loss)                     $ 16,904  $  3,121  $  1,082  $ (5,754)  $   (1,301)   $ 14,052
Discontinued operations                            -        42         -         -            -          42
-----------------------------------------------------------------------------------------------------------
Operating income (loss) from
  continuing operations                     $ 16,904  $  3,079  $  1,082  $ (5,754)  $   (1,301)   $ 14,010
Interest expense                                                                                     (6,026)
Amortization/write-off of financing costs                                                              (183)
Interest income                                                                                         361
-----------------------------------------------------------------------------------------------------------
Earnings from continuing operations
  before income taxes                                                                              $  8,162
===========================================================================================================

Depreciation and amortization               $  4,110  $  3,325  $    682  $    308   $        -    $  8,425
Discontinued operations                            -       287         -         -            -         287
-----------------------------------------------------------------------------------------------------------
Continuing operations                       $  4,110  $  3,038  $    682  $    308   $        -    $  8,138
Capital expenditures                        $  4,015  $ 38,911  $    204  $     85   $        -    $ 43,215
</TABLE>


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

<TABLE>
<CAPTION>
                                      As of and for the Nine Months Ended September 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                 $171,558
    Yorktown operations(1)                   232,678
                                            --------
    Total                                   $404,236  $141,387  $190,213  $      -  $       -     $735,836
  Merchandise and lubricants                       -   108,889    17,031         -          -      125,920
  Other                                        6,165    11,443     2,441       134          -       20,183
----------------------------------------------------------------------------------------------------------
    Total                                    410,401   261,719   209,685       134          -      881,939
----------------------------------------------------------------------------------------------------------
Intersegment net revenues:
  Finished products                          110,249         -    42,160         -   (152,409)           -
  Other                                       12,481         -         -         -    (12,481)           -
----------------------------------------------------------------------------------------------------------
    Total                                    122,730         -    42,160         -   (164,890)           -
----------------------------------------------------------------------------------------------------------
Total net revenues                           533,131   261,719   251,845       134   (164,890)     881,939

Net revenues of discontinued operations            -   (24,810)        -         -          -      (24,810)
----------------------------------------------------------------------------------------------------------
Net revenues of continuing operations       $533,131  $236,909  $251,845  $    134  $(164,890)    $857,129
==========================================================================================================

Operating income (loss):
  Four Corners operations                   $ 23,230
  Yorktown operations(1)                      (9,084)
                                            --------
Total operating income (loss)                 14,146  $  2,821  $  4,791  $(12,432) $   3,905     $ 13,231
Discontinued operations                            -    (1,020)        -         -      4,761        3,741
----------------------------------------------------------------------------------------------------------
Operating income (loss) from
  continuing operations                     $ 14,146  $  3,841  $  4,791  $(12,432) $    (856)    $  9,490
Interest expense                                                                                   (25,985)
Amortization/write-off of financing costs                                                           (2,071)
Interest income                                                                                        399
----------------------------------------------------------------------------------------------------------
Loss from continuing operations before
  income taxes                                                                                    $(18,167)
==========================================================================================================
Depreciation and amortization:
  Four Corners operations                   $ 12,703
  Yorktown operations(1)                       2,726
                                            --------
    Total                                   $ 15,429  $  9,587  $  1,574  $    870  $       -     $ 27,460
Discontinued operations                            -       788         -         -          -          788
----------------------------------------------------------------------------------------------------------
Continuing operations                       $ 15,429  $  8,799  $  1,574  $    870  $       -     $ 26,672
Total assets                                $425,129  $139,417  $ 60,825  $ 65,559  $       -     $690,930
Capital expenditures                        $  6,811  $    893  $    360  $  1,719  $       -     $  9,783
Yorktown refinery acquisition               $194,866  $      -  $      -  $      -  $       -     $194,866


(1)Since acquisition on May 14, 2002.

</TABLE>


<PAGE>
<TABLE>
<CAPTION>
                                      As of and for the Nine Months Ended September 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                        $211,843  $183,615  $228,073  $      -   $       -    $623,531
  Merchandise and lubricants                      -   109,314    18,392         -           -     127,706
  Other                                       6,966    13,192     1,997       206           -      22,361
---------------------------------------------------------------------------------------------------------
    Total                                   218,809   306,121   248,462       206           -     773,598
---------------------------------------------------------------------------------------------------------
Intersegment net revenues:
  Finished products                         135,517         -    65,653         -    (201,170)          -
  Other                                      12,380         -         -         -     (12,380)          -
---------------------------------------------------------------------------------------------------------
    Total                                   147,897         -    65,653         -    (213,550)          -
---------------------------------------------------------------------------------------------------------
Total net revenues                          366,706   306,121   314,115       206    (213,550)    773,598

Net revenues of discontinued operations           -   (35,878)        -         -           -     (35,878)
---------------------------------------------------------------------------------------------------------
Net revenues of continuing operations      $366,706  $270,243  $314,115  $    206   $(213,550)   $737,720
=========================================================================================================

Operating income (loss)                    $ 56,555  $  5,285  $  4,307  $(17,620)  $  (1,783)   $ 46,744
Discontinued operations                           -      (137)        -         -           -        (137)
---------------------------------------------------------------------------------------------------------
Operating income (loss) from
  continuing operations                    $ 56,555  $  5,422  $  4,307  $(17,620)  $  (1,783)   $ 46,881
Interest expense                                                                                  (18,109)
Amortization/write-off of financing costs                                                            (581)
Interest income                                                                                     1,411
---------------------------------------------------------------------------------------------------------
Earnings from continuing operations
  before income taxes                                                                            $ 29,602
=========================================================================================================

Depreciation and amortization              $ 12,070  $  9,245  $  2,011  $    953   $       -    $ 24,279
Discontinued operations                           -       776         -         -           -         776
---------------------------------------------------------------------------------------------------------
Continuing operations                      $ 12,070  $  8,469  $  2,011  $    953   $       -    $ 23,503
Total assets                               $229,385  $179,665  $ 76,967  $ 39,104   $       -    $525,121
Capital expenditures                       $  7,162  $ 39,844  $    782  $    356   $       -    $ 48,144
</TABLE>


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

     In June 2001, the Company adopted SFAS No. 141, "Business
Combinations", which addresses financial accounting and reporting for
goodwill and other intangible assets acquired in a business combination at
acquisition.

     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. 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 four reporting units for the purpose of this
transitional impairment test. The reporting units consist of the Refinery
Unit, the Retail Unit, the Phoenix Fuel Unit and the Travel Center Unit.
The fair value of each reporting unit, except for the Travel Center Unit,
was determined using a discounted cash flow model based on assumptions
applicable to each reporting unit. The fair value of the Travel Center Unit
was based on estimated sales price. 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 first day of each fourth fiscal
quarter (October 1). If, however, events and circumstances indicate that
goodwill of a reporting unit might be impaired, then goodwill also will be
tested for impairment when the impairment indicator arises. Retail unit
goodwill was tested for impairment as of September 30, 2002, due to
activities relating to the sale and marketing of retail units in the third
quarter. No impairment was recorded as a result of this test.

     At September 30, 2002 and December 31, 2001, the Company had goodwill
of $19,565,000 and $19,815,000, respectively.



     The changes in the carrying amount of goodwill for the nine months
ended September 30, 2002, all occurring in the third quarter, are as
follows:

<TABLE>
<CAPTION>
                                     Refining   Retail   Phoenix
(In thousands)                        Group     Group      Fuel     Total
--------------------------------------------------------------------------
<S>                                   <C>       <C>      <C>       <C>
Balance as of January 1, 2002         $125      $4,968   $14,722   $19,815
Impairment losses related to
  retail units held for sale             -          (7)        -        (7)
Goodwill written off related to
  the sale of eight retail units         -        (243)        -      (243)
--------------------------------------------------------------------------
Balance as of September 30, 2002      $125      $4,718   $14,722   $19,565
==========================================================================
</TABLE>

     Certain of the Company's retail units are classified as held for sale
and are tested for impairment when circumstances change. In the third
quarter, offers were received for certain retail units and these units were
tested for impairment. This resulted in an impairment write-down for one
unit of $117,000, including $7,000 of goodwill. Also, goodwill of $243,000
relating to retail units sold was written off and is included in the net
gain on the disposal of these units reported as a part of discontinued
operations. (See Note 5.)

     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 September 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     $ 2,333      $ 1,231
    Contracts                         3,971       3,446          525
    Licenses and permits                786          37          749
--------------------------------------------------------------------
                                      8,321       5,816        2,505
--------------------------------------------------------------------
Unamortized intangible assets:
    Liquor licenses                   7,303           -        7,303
--------------------------------------------------------------------
Total intangible assets            $ 15,624     $ 5,816      $ 9,808
====================================================================
</TABLE>

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

     In the third quarter of 2002, $786,000 of the purchase price
allocation for the Yorktown refinery relating to certain licenses and
permits were recorded as amortizable intangible assets. (See the table
above and Note 4.)

     Intangible asset amortization expense for the nine months ended
September 30, 2002 was $255,000. Estimated amortization expense for the
remainder of 2002 and the five succeeding fiscal years is as follows:

                (In thousands)
                ----------------------------
                2002                   $  94
                2003                     377
                2004                     377
                2005                     377
                2006                     374
                2007                     273

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

<TABLE>
<CAPTION>
                                                     Three Months            Nine Months
                                                  Ended September 30,    Ended September 30,
--------------------------------------------------------------------------------------------
(In thousands)                                      2002       2001        2002       2001
--------------------------------------------------------------------------------------------
<S>                                               <C>        <C>         <C>        <C>
Reported net earnings (loss)                      $(4,572)   $5,135      $(8,734)   $18,038
Add:  Goodwill amortization, net of tax effect          -       160            -        481
--------------------------------------------------------------------------------------------
Adjusted net earnings (loss)                      $(4,572)   $5,295      $(8,734)   $18,519
============================================================================================
Basic earnings (loss) per share:
  Reported net earnings (loss)                    $ (0.53)   $ 0.57      $ (1.02)   $  2.01
  Adjusted net earnings (loss)                    $ (0.53)   $ 0.59      $ (1.02)   $  2.07

Diluted earnings (loss) per share:
  Reported net earnings (loss)                    $ (0.53)   $ 0.57      $ (1.02)   $  2.01
  Adjusted net earnings (loss)                    $ (0.53)   $ 0.59      $ (1.02)   $  2.06
</TABLE>



<PAGE>
NOTE 4 - YORKTOWN ACQUISITION:

     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. 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. These earn-out considerations, if paid,
would be considered additional purchase price and would be allocated to the
assets acquired in the same proportions as the original purchase price was
allocated, not to exceed the estimated current replacement cost, and
amortized over the estimated remaining life of the assets.

     The Yorktown acquisition was funded with cash on hand, $32,000,000 in
borrowings under a $100,000,000 senior secured revolving credit facility,
$40,000,000 in borrowings from a 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 $16,402,000 of financing costs in connection with these
obligations. (See Note 10 for a discussion of the obligations).

     Under SFAS No. 141, "Business Combinations", the Yorktown acquisition
was accounted for as a purchase, whereby the purchase price was 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 the fair
values of the assets acquired and the liabilities assumed. Accordingly, the
allocation of the 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 September 30, 2002 financial statements include the
results of operations of the Yorktown acquisition since the date of
acquisition.

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

<TABLE>
<CAPTION>
----------------------------------------------------------------------
(In thousands)
----------------------------------------------------------------------
<S>                                                          <C>
Property, plant and equipment                                $ 141,396
Other assets                                                       786
Deferred income tax assets, current                              6,700
Inventories:
  Feedstocks and refined products                               65,182
  Materials and supplies                                         4,589
Environmental liabilities assumed                               (7,500)
Pension and retiree medical obligations assumed                 (9,400)
Other employee obligations assumed                                (287)
Deferred income tax liabilities, non-current                    (6,600)
----------------------------------------------------------------------
    Total cash purchase price                                $ 194,866
======================================================================
</TABLE>

     The following unaudited pro forma financial information for the three
and nine months ended September 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"), which occurred on June
28, 2002, as if each had occurred at the beginning of the periods
presented. The pro forma results were determined using 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              Nine Months
                                         Ended September 30,      Ended September 30,
---------------------------------------------------------------------------------------
(In thousands, except per share data)      2002        2001        2002        2001
---------------------------------------------------------------------------------------
<S>                                     <C>         <C>         <C>         <C>
Revenues from continuing operations     $ 386,579   $ 406,148   $1,057,537   $1,257,987
Net earnings (loss)                     $  (4,572)  $   6,535   $  (20,130)  $   21,358
Net earnings (loss) per share:
  Basic                                 $   (0.53)  $    0.73   $   (2.35)   $     2.38
  Diluted                               $   (0.53)  $    0.73   $   (2.35)   $     2.38
</TABLE>


<PAGE>
NOTE 5 - DISCONTINUED OPERATIONS, ASSETS HELD FOR SALE, AND DISPOSITIONS:

     In the third quarter of 2002, the Company sold six retail units and
reclassified 10 others as assets held for sale. Two other retail units were
sold in the second quarter of 2002. The remaining assets and results of
operations of these 18 retail units are included in discontinued operations
in the accompanying financial statements. Earnings from discontinued
operations before income taxes of $4,544,000 for the three months ended
September 30, 2002 include a gain on the disposal of six retail units sold
of $4,921,000, which is net of $243,000 of goodwill write-offs; and a SFAS
No. 144 impairment write-down of $117,000, including $7,000 of goodwill
write-offs, on one of the retail units held for sale. Earnings from
discontinued operations before income taxes of $3,741,000 for the nine
months ended September 30, 2002 include a gain on the disposal of eight
retail units sold of $4,789,000, which is net of $243,000 of goodwill
write-offs; and SFAS No. 144 impairment write-downs of $289,000, including
$7,000 of goodwill write-offs, on three of the retail units held for sale.

     Of the 10 units held for sale, four are expected to close escrow in
the fourth quarter of 2002, two are in contract negotiations, and the
remaining four are being marketed for sale. Two of the remaining four units
are closed and two are being operated, but will be closed if not sold
within 12 months.

     In addition to the 10 units described above, assets held for sale
include vacant residential/commercial property, 12 retail units which were
closed in 2001, a vacant industrial land site, and vacant land adjacent to
several retail units. All of these assets are being marketed for sale.

     Included in "Other Assets" as assets held for sale in the accompanying
Condensed Consolidated Balance Sheets are the following categories of
assets.

<TABLE>
<CAPTION>
(In thousands)                                        September 30, 2002   December 31, 2001
--------------------------------------------------------------------------------------------
<S>                                                         <C>                  <C>
Discontinued operations relating to 10 retail units:
  Property, plant and equipment                             $ 4,239              $ 4,965
  Inventories                                                   280                  307
--------------------------------------------------------------------------------------------
                                                              4,519                5,272
Vacant land - residential/commercial property                 5,602                5,602
Closed retail units                                           2,413                2,521
Vacant land - industrial site                                 1,596                1,596
Vacant land - adjacent to retail units                        1,201                1,201
--------------------------------------------------------------------------------------------
                                                            $15,331              $16,192
============================================================================================
</TABLE>

     Included in discontinued operations is the following operating
information.

<TABLE>
<CAPTION>
                                                     Three Months            Nine Months
                                                  Ended September 30,    Ended September 30,
--------------------------------------------------------------------------------------------
(In thousands)                                      2002       2001        2002       2001
--------------------------------------------------------------------------------------------
<S>                                               <C>        <C>         <C>        <C>
Revenues                                          $ 7,726    $ 10,913    $ 24,810   $ 35,878
Pre-tax operating earnings (loss)                 $  (362)   $     42    $ (1,020)  $   (137)
</TABLE>

     On July 31, 2002, the Company entered into a letter of intent for the
potential sale of its 26 remaining retail units in the Phoenix and Tucson
marketing areas. Two of the retail units were removed from this transaction
and are classified as held for sale. The Company is in the process of
negotiating a purchase agreement for the remaining 24, which would be
contingent upon the potential buyer obtaining lender financing on
satisfactory terms. Due to the uncertainty of the potential buyer obtaining
financing, the Company cannot determine with reasonable certainty that this
transaction will close, or if the units will be sold to other parties
within the next 12 months, and is exploring other options, including
continuing to operate the units. In the second quarter of 2002, the Company
recorded an impairment loss of $1,272,000 related to certain of the 26
units, based on the probability of the sale occurring and an estimate of
fair value as compared to the carrying value of each unit in accordance
with SFAS No. 144. As of September 30, 2002, the remaining 24 retail units
were being operated and were classified as held and used in accordance with
SFAS No. 144.

     On August 12, 2002, the Company entered into purchase and sale
agreements with a buyer for the sale of nine retail units in the Phoenix
marketing area. Six of these units were sold to the buyer in the third
quarter for $10,850,000 and their results of operations are included in
earnings (loss) from discontinued operations as discussed above. Two of the
units were removed from this transaction. One of these two units is being
sold to another buyer and is expected to close in the fourth quarter, and
the other unit is being marketed for sale. The third unit may be subject to
a right to purchase at appraised value in favor of a related party. (See
Note 6 to the accompanying financial statements.) The Company expects that
the sale of this unit will close in the fourth quarter of 2002. As of
September 30, 2002, the three unsold units were classified as held for
sale.

     In addition, the Company is in the process of reviewing proposals for
the possible sale and potential leaseback of its corporate headquarters
building. This process is in a preliminary stage, and as such, the Company
does not know if, or when, this transaction will close.




<PAGE>
NOTE 6 - RELATED PARTY TRANSACTIONS:

     The Company is in the process of selling one of its retail units to a
third-party purchaser. The unit may be subject to a right to purchase at
appraised value. A limited liability company controlled by James E.
Acridge, which subsequently went out of business, previously held this
right. Mr. Acridge was terminated as the Company's President and Chief
Executive Officer on March 29, 2002, although he remains on the Board of
Directors. Mr. Acridge asserts that the right to purchase has passed to his
bankruptcy estate. The Company has asked for guidance from the bankruptcy
court regarding this matter. (See Note 11 for a further discussion of
matters relating to Mr. Acridge.)


<PAGE>
NOTE 7 - EARNINGS PER SHARE:

     The following table sets forth the computation of basic and diluted
earnings (loss) per share:

<TABLE>
<CAPTION>
                                                 Three Months           Nine Months
Numerator                                     Ended September 30,    Ended September 30,
-----------------------------------------------------------------------------------------
(In Thousands)                                  2002       2001        2002       2001
-----------------------------------------------------------------------------------------
<S>                                          <C>        <C>         <C>         <C>
Earnings (loss) from continuing operations   $(7,299)   $  5,110    $(10,979)   $ 18,120
Earnings (loss) from discontinued operations $ 2,727    $     25    $  2,245    $    (82)
-----------------------------------------------------------------------------------------
Net earnings (loss)                          $(4,572)   $  5,135    $ (8,734)   $ 18,038
=========================================================================================
</TABLE>

<TABLE>
<CAPTION>
                                                 Three Months           Nine Months
Denominator                                   Ended September 30,    Ended September 30,
-----------------------------------------------------------------------------------------
                                                2002       2001        2002       2001
-----------------------------------------------------------------------------------------
<S>                                          <C>        <C>         <C>        <C>
Basic - weighted average shares outstanding  8,571,779  8,964,551   8,564,042  8,956,808
Effect of dilutive stock options                     -*    13,446           -*    13,721
-----------------------------------------------------------------------------------------
Diluted outstanding shares                   8,571,779  8,977,997   8,564,042  8,970,529
=========================================================================================

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

<TABLE>
<CAPTION>
                                                 Three Months           Nine Months
Basic earnings per share                      Ended September 30,    Ended September 30,
-----------------------------------------------------------------------------------------
                                                2002       2001        2002       2001
-----------------------------------------------------------------------------------------
<S>                                          <C>        <C>         <C>         <C>
Earnings (loss) from continuing operations   $  (0.85)  $   0.57    $  (1.28)   $   2.02
Earnings (loss) from discontinued operations $   0.32   $      -    $   0.26    $  (0.01)
-----------------------------------------------------------------------------------------
Net earnings (loss)                          $  (0.53)  $   0.57    $  (1.02)   $   2.01
=========================================================================================
</TABLE>

<TABLE>
<CAPTION>
                                                 Three Months           Nine Months
Diluted earnings per share                    Ended September 30,    Ended September 30,
-----------------------------------------------------------------------------------------
                                                2002       2001        2002       2001
-----------------------------------------------------------------------------------------
<S>                                          <C>        <C>         <C>         <C>
Earnings (loss) from continuing operations   $  (0.85)  $   0.57    $  (1.28)   $   2.02
Earnings (loss) from discontinued operations $   0.32   $      -    $   0.26    $  (0.01)
-----------------------------------------------------------------------------------------
Net earnings (loss)                          $  (0.53)  $   0.57    $  (1.02)   $   2.01
=========================================================================================
</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 September 30, 2002, there were 8,571,779 shares of the Company's
common stock outstanding. There were no transactions subsequent to
September 30, 2002, that if the transactions had occurred before September
30, 2002, would materially change the number of common shares or potential
common shares outstanding as of September 30, 2002.


<PAGE>
NOTE 8 - INVENTORIES:

<TABLE>
<CAPTION>
                                                   September 30,    December 31,
--------------------------------------------------------------------------------
(In thousands)                                         2002             2001
--------------------------------------------------------------------------------
<S>                                                  <C>                <C>
First-in, first-out ("FIFO") method:
  Crude oil                                          $  36,626          $ 12,835
  Refined products                                      45,102            21,982
  Refinery and shop supplies                            13,089             8,111
  Merchandise                                            2,847             3,928
Retail method:
  Merchandise                                            8,428             8,872
--------------------------------------------------------------------------------
    Subtotal                                           106,092            55,728
Adjustment for last-in, first-out ("LIFO") method       (5,985)            5,996
Allowance for lower of cost or market                        -            (3,302)
--------------------------------------------------------------------------------
    Total                                            $ 100,107          $ 58,422
================================================================================
</TABLE>

     The portion of inventories valued on a LIFO basis totaled $68,060,000
and $30,872,000 at September 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 September
30, 2002 and 2001, net earnings (loss) and diluted earnings (loss) per
share amounts for the three months ended September 30, 2002 and 2001, would
have been higher (lower) by $4,294,000 and $0.50, and $(791,000) and
$(0.09), respectively, and net earnings (loss) and diluted earnings (loss)
per share for the nine months ended September 30, 2002 and 2001 would have
been higher (lower) by $5,208,000 and $0.61, and $(2,935,000) and $(0.33),
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.

     In the third quarter of 2001, certain higher cost refining LIFO
inventory layers were liquidated resulting in a reduction of earnings of
approximately $170,000 or $0.02 per share for the three and nine months
ended September 30, 2001. There were no similar liquidations in 2002.


<PAGE>
NOTE 9 - 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 and third quarters 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 three and nine months ended September 30, 2002, the
Company recognized losses on these contracts of approximately $3,769,000
and $1,799,000, respectively, 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 September 30, 2002,
the Company had no open crude oil futures contracts or other commodity
derivatives.


<PAGE>
NOTE 10 - LONG-TERM DEBT:

     Long-term debt consists of the following:

<TABLE>
<CAPTION>
                                                 September 30,     December 31,
-------------------------------------------------------------------------------
(In thousands)                                       2002              2001
-------------------------------------------------------------------------------
<S>                                               <C>                <C>
11% senior subordinated notes, due 2012, net
  of unamortized discount of $5,733,
  interest payable semi-annually                  $ 194,267          $       -
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                         35,000                  -
Senior secured mortgage loan facility,
  due 2005, floating interest rate,
  interest payable quarterly                         35,556                  -
Capital lease obligations, 11.3%, due
  through 2007, interest payable monthly              6,703              6,703
Other                                                    57                 91
-------------------------------------------------------------------------------
  Subtotal                                          421,583            256,794
Less current portion                                (11,589)               (45)
-------------------------------------------------------------------------------
  Total                                           $ 409,994          $ 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.

     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. All of the
original 11% Notes were exchanged and the exchange offering was completed
on September 10, 2002.

     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 $100,000,000, three-year senior secured revolving credit facility
(the "Credit Facility") with a group of banks. The Credit Facility is due
and payable in full on May 13, 2005. As more fully described in Note 13 -
Subsequent Events, on October 28, 2002, the Company entered into an
amendment for the Credit Facility (the "Amendment").

     Prior to the Amendment, obligations under the Credit Facility were
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. Pursuant to the Amendment, the Company
granted the lenders additional collateral.

     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
September 30 and November 1, 2002, the availability of funds under the
Credit Facility was $100,000,000. There were $35,000,000 in direct
borrowings outstanding under this facility at September 30, 2002, and there
were approximately $14,808,000 of irrevocable letters of credit
outstanding, primarily to crude oil suppliers, insurance companies and
regulatory agencies. At November 1, 2002 there were $35,000,000 in direct
borrowings outstanding under this facility and there were approximately
$30,408,000 of irrevocable letters of credit outstanding, $16,000,000 of
which expire in November 2002.

     The interest rate applicable to the Credit Facility is tied to various
short-term indices. At September 30, 2002, this rate was approximately 4.6%
per annum. Pursuant to the Amendment, the interest rate has been increased.
At November 11, 2002, this rate was approximately 5.2%. 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 Amendment modifies certain of these
covenants and imposes certain additional covenants.

     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
Earnings Before Income Tax, Depreciation and Amortization ("EBITDA"). The
Amendment also modifies certain of these financial covenants and imposes
certain additional financial covenants.

     The Company's failure to satisfy any of these 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 $40,000,000 three-year senior secured mortgage loan facility (the
"Loan Facility") with a group of financial institutions. As more fully
described in Note 13 - Subsequent Events, on October 28, 2002, the Company
entered into an amendment for the Loan Facility (the "Loan Amendment").

     Prior to the Loan Amendment, the loan was 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 also guaranteed the loan.
Pursuant to the Loan Amendment, the Company granted the lenders additional
collateral.

     The Company issued notes to the lenders, which bear interest at a rate
that is tied to various short-term indices. At September 30, 2002, this
rate was approximately 6.1% per annum. Pursuant to the Loan Amendment, the
interest rate has been increased. At November 11, 2002, this rate was
approximately 6.6%. 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 Loan Amendment also modifies certain of
these covenants and imposes certain additional covenants.

     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 Loan Amendment modifies certain of these
financial covenants and imposes certain additional financial covenants.

     The Company's failure to satisfy any of these 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.



NOTE 11 - 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 September 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,
safety 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 current or historic operations.
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 or by
its predecessors.

     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, health and safety laws, regulations, and their respective
interpretations.

     In June 2002, the Company received a draft compliance order from the
New Mexico Environment Department ("NMED") 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 compliance order from NMED in
connection with four alleged violations of air quality regulations at the
Bloomfield refinery. These alleged violations relate to an inspection
completed in August and September of 2001. Potential penalties could be as
high as $120,000.

     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
and 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
federal 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. The Company has
been advised that the site remedy may be announced in 2002 but is not aware
that any such announcement has been made. 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 approximately $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 year-to-date 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
in June 2001, at a cost of approximately $15,000. Based on the results of
the pilot project, the Company submitted a plan for soil and groundwater
remediation and monitoring to OCD. This remediation plan, including a
proposed soil bioventing remediation system, was approved by OCD on June
13, 2002. The Company anticipates that it will incur approximately $100,000
in remediation expenses in connection with this plan, and the Company has
created an environmental reserve in this amount. Active remediation should
occur over a period of one to two years, followed by groundwater
monitoring. No remediation efforts are being undertaken to date, as the
Company is awaiting OCD approval of its work plan for the proposed soil
bioventing remediation system.

     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.

     On October 21, 2002, the Company received a notice from EPA assessing
it a penalty of $110,000 under the consent decree in connection with a
hydrocarbon flaring incident at the Yorktown refinery. The flaring occurred
during a four-day period in April 2002 following a power outage at the
refinery. Since the Company did not own the Yorktown refinery at the time
that the flaring incident occurred, the Company believes that it will be
entitled to indemnification from BP for the entire amount of the penalty.
It is possible that the Company and BP will contest the penalty.

     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 (the "Yorktown Order"). The Yorktown 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 ("CAMU") 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 believes that final approval of the RFI/CMS
may occur by the first quarter of 2003. The Company estimates that expenses
associated with the actions described in the proposed RFI/CMS would range
from approximately $16,000,000 to $19,000,000, and will be incurred over a
period of approximately 30 years, with approximately $5,000,000 of this
amount being incurred over an initial three-year period, and additional
expenditures in the approximate amount of $5,000,000 being incurred over
the following three-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 than
$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 September 30, 2002, the Company had environmental liability
accruals of approximately $9,600,000. 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 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.

     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 current Company officers Messrs.
Holliger, Gust, Cox, and Bullerdick, and current Company directors Messrs.
Bernitsky, Kalen, and Rapport, and as yet unidentified accountants,
auditors, appraisers, attorneys, bankers and professional advisors. This
suit will be defended vigorously. Certain of the defendants, including the
officers and directors, may be entitled to indemnification from the Company
in connection with the defense of, and any liabilities arising out of, this
lawsuit. 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.

     Mr. Acridge personally, and three entities controlled by Mr. Acridge,
have commenced Chapter 11 Bankruptcy proceedings. The entities controlled
by Mr. Acridge are Pinnacle Rodeo LLC ("Pinnacle Rodeo"), Pinnacle Rawhide
LLC ("Pinnacle Rawhide"), and Prime Pinnacle Peak Properties, Inc. ("Prime
Pinnacle"). The four bankruptcy cases are jointly administered. It is
unknown whether and to what extent creditors, including the Company, will
receive any recovery on their respective debts from any of the four
bankruptcy estates.

     As discussed in more detail in Note 6 to the Company's Consolidated
Financial Statements in the Company's Annual Report on Form 10-K for the
year ended December 31, 2001 (the "10-K Note"), the Company previously
loaned Mr. Acridge $5,000,000 (the "Loan"). As noted in the 10-K Note, in
the fourth quarter of 2001, the Company established a reserve for the
entire amount of the Loan plus interest accrued through December 31, 2001.
As security for the Loan, the Company received pledges of membership
interests in Pinnacle Rawhide and Pinnacle Rodeo. The Company believes that
Pinnacle Rodeo's principal asset is full ownership of Pinnacle Rawhide. The
Company believes that Pinnacle Rawhide's principal asset was certain real
property in north Scottsdale, Arizona, on which the Rawhide Wild West Town
is located, which was subject to secured liens. In the course of the
bankruptcy proceeding, the bankruptcy court permitted the principal
lienholder on the real property to take back title to the property. Under
certain circumstances, the bankruptcy estate(s) may reacquire this property
for sale to a third-party, which could result in proceeds becoming
available to the bankruptcy estate(s). It is unclear at this time, however,
if such reacquisition and subsequent disposition will occur, and if so, if
the proceeds would be sufficient to repay any creditors, including the
Company. As such, the Company continues to maintain the reserve established
as of December 31, 2001 for the Loan.
     Giant Arizona leases approximately 8,176 square feet of space from a
limited liability company (the "Landlord") in which the bankruptcy estate
of Prime Pinnacle has a 51% interest. Pursuant to a sublease between Giant
Arizona and a separate limited liability company controlled by Mr. Acridge,
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. In
August 2001, the owner of the 49% interest in the lessor notified Giant
Arizona that the sublessee was 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. Subsequently, the matter was referred to
arbitration by court order. 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 and, on May 23, 2002, made a separate demand
for arbitration of this matter. In September 2002, the Company entered into
a settlement agreement with the Landlord, subject to certain action by the
bankruptcy court, in which it agreed to pay the Landlord approximately
$375,000 for rent and other monetary obligations allegedly due under the
lease from May 2001 through October 2002, and agreed to be responsible for
future rental payments. This settlement was charged to operations in the
third quarter of 2002. The bankruptcy court has not yet taken the necessary
action to approve the settlement. Notwithstanding the settlement with the
Landlord, the Company's arbitration action against the sublessee is still
pending.



<PAGE>
NOTE 12 - 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 nine months ended September 30, 2002 of
approximately $283,000 or $0.03 per share.


<PAGE>
NOTE 13 - SUBSEQUENT EVENTS:

     On October 28, 2002, the Company and its lenders entered into an
Amendment to the Credit Facility. The Amendment modifies certain of the
financial covenants to reflect in large part, the low refining margin
environment that has persisted throughout the industry for most of 2002 and
because at September 30, 2002, the Company was out of compliance with the
minimum consolidated tangible net worth covenant and total leverage ratio
set forth in the Credit Facility. Under the Amendment, the lenders agreed
to forbear from exercising their rights and remedies under the Credit
Facility until certain conditions were met. Those conditions were
satisfied, and the events of default were waived for the quarter ended
September 30, 2002.

     Under the Amendment, the Company is required to provide additional
collateral to the lenders in the form of first priority liens on the
Bloomfield and Ciniza refineries, including the land, improvements,
equipment and fixtures related to the refineries; certain identified New
Mexico service station/convenience stores; the stock of the Company's
various direct and indirect subsidiaries; and all proceeds and products of
this additional collateral. The Company is required to pay all costs of
providing this additional collateral, including legal fees, fees for
surveys and title reports, and recording and filing fees. The grant of the
liens on the additional collateral must occur on or before January 26,
2003, while title reports and surveys respecting the real property portions
of the additional collateral are permitted to be delivered after such date.
The deadline may be extended for an additional 30 days if the Company has
used its best efforts and the requirements are reasonably likely to be met
within the extension period. The lenders under the Loan Facility are
entitled to participate with the lenders under the Credit Facility in the
additional collateral pro rata based on the obligations owed by the Company
under the Credit Facility and the Loan Facility.

     The Amendment also, among other things:  (a) increases the interest
rate spread under the Credit Facility to 3.75% from 2.75%, (b) increases
the available letter of credit commitment from $25,000,000 to $50,000,000,
(c) amends the fixed charge coverage ratio, the total leverage ratio, and
the minimum consolidated tangible net worth covenant, (d) adds a new
covenant respecting minimum quarterly consolidated EBITDA, (e) requires the
Company to prepay the outstanding principal amount of the revolver by
$15,000,000 from the proceeds of asset sales occurring between October 1,
2002 and June 30, 2003, (f) requires the Company to provide monthly
financial statements by region to the lenders, and (g) limits capital
expenditures through 2003. The Company paid the lenders a fee of $250,000
for the Amendment.

     On October 28, 2002, the Company and its lenders also entered into an
Amendment to the Loan Facility and the related Parent Guaranty. At
September 30, 2002, the Company was out of compliance with the minimum
consolidated tangible net worth covenant and the total leverage ratio
provisions of the Parent Guaranty. As discussed above, the events of
default were waived for the quarter ended September 30, 2002. The Loan
Amendment generally tracks the major changes effected by the Amendment to
the Credit Facility, except that the additional collateral deadline is
December 12, 2002, subject to extension by the lenders, and the title
reports and surveys must be delivered not later than January 26, 2003. The
Company paid the lenders a fee of approximately $86,000 for the Loan
Amendment.

     With these amendments, the Company expects to remain in compliance
with its covenants in the fourth quarter and going forward, and does not
believe that any presently contemplated activities will be constrained.


<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, except
as relates to the adoption of SFAS No. 142 "Goodwill and Other Intangible
Assets" and SFAS No. 144 "Accounting for the Impairment or Disposal of
Long-Lived Assets". See Note 1 to the Company's Condensed Consolidated
Financial Statements included in Part I, Item 1 hereof.


<PAGE>
RESULTS OF OPERATIONS

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

<TABLE>
<CAPTION>
                                                            Three Months           Nine Months
                                                        Ended September 30,     Ended September 30,
---------------------------------------------------------------------------------------------------
                                                          2002        2001        2002       2001
---------------------------------------------------------------------------------------------------
<S>                                                    <C>        <C>          <C>        <C>
Net revenues                                           $ 386,579  $ 230,315    $ 857,129  $ 737,720
Cost of products sold                                    333,164    172,670      706,945    561,659
---------------------------------------------------------------------------------------------------
Gross margin                                              53,415     57,645      150,184    176,061

Operating expenses                                        38,366     26,537       95,314     80,897
Depreciation and amortization                              9,442      8,138       26,672     23,503
Selling, general and administrative expenses               6,765      7,659       17,852     22,997
Net (gain) loss on disposal/write-down of assets             (62)     1,301          856      1,783
---------------------------------------------------------------------------------------------------
Operating income (loss)                                   (1,096)    14,010        9,490     46,881

Interest expense                                         (10,455)    (6,026)     (25,985)   (18,109)
Amortization/write-off of financing costs                   (954)      (183)      (2,071)      (581)
Interest and investment income                                74        361          399      1,411
---------------------------------------------------------------------------------------------------
Earnings (loss) from continuing operations
  before income taxes                                    (12,431)     8,162      (18,167)    29,602

Provision (benefit) for income taxes                      (5,132)     3,052       (7,188)    11,482
---------------------------------------------------------------------------------------------------
Earnings (loss) from continuing operations                (7,299)     5,110      (10,979)    18,120

Discontinued operations (Note 5)
  Earnings (loss) from operations of
    discontinued retail assets                              (362)        42       (1,020)      (137)
  Gain on disposal                                         4,921          -        4,789          -
  Net loss on asset sales/write-downs                        (15)         -          (28)         -
---------------------------------------------------------------------------------------------------
                                                           4,544         42        3,741       (137)
  Provision (benefit) for income taxes                     1,817         17        1,496        (55)
---------------------------------------------------------------------------------------------------
Earnings (loss) of discontinued operations                 2,727         25        2,245        (82)
---------------------------------------------------------------------------------------------------
Net earnings (loss)                                    $  (4,572) $   5,135    $  (8,734) $  18,038
===================================================================================================

Net earnings (loss) per common share:
  Basic
    Continuing operations                              $   (0.85) $    0.57    $   (1.28) $    2.02
    Discontinued operations                            $    0.32  $       -    $    0.26  $   (0.01)
---------------------------------------------------------------------------------------------------
                                                       $   (0.53) $    0.57    $   (1.02) $    2.01
===================================================================================================
  Assuming dilution
    Continuing operations                              $   (0.85) $    0.57    $   (1.28) $    2.02
    Discontinued operations                            $    0.32  $       -    $    0.26  $   (0.01)
---------------------------------------------------------------------------------------------------
                                                       $   (0.53) $    0.57    $   (1.02) $    2.01
===================================================================================================
</TABLE>


<PAGE>
<TABLE>
<CAPTION>
                                                            Three Months           Nine Months
                                                        Ended September 30,     Ended September 30,
---------------------------------------------------------------------------------------------------
                                                          2002        2001        2002       2001
---------------------------------------------------------------------------------------------------
<S>                                                    <C>        <C>          <C>        <C>
Net revenues:(1)
  Refining Group:
    Four Corners operations                            $109,794   $ 114,750    $300,164   $ 366,706
    Yorktown operations                                 160,068           -     232,967           -
  Retail Group                                           86,315      92,344     236,909     270,243
  Phoenix Fuel                                           91,291      91,742     251,845     314,115
  Other                                                      44          57         134         206
  Intersegment                                          (60,933)    (68,578)   (164,890)   (213,550)
---------------------------------------------------------------------------------------------------
  Net revenues of continuing operations                 386,579     230,315     857,129     737,720
  Net revenues of discontinued operations                 7,726      10,913      24,810      35,878
---------------------------------------------------------------------------------------------------
  Total net revenues                                   $394,305   $ 241,228    $881,939   $ 773,598
===================================================================================================
Income (loss) from operations:(1)
  Refining Group:
    Four Corners operations                            $  5,824   $  16,904    $ 23,230   $  56,555
    Yorktown operations                                  (5,994)          -      (9,084)          -
  Retail Group                                            1,986       3,079       3,841       5,422
  Phoenix Fuel                                            1,751       1,082       4,791       4,307
  Other                                                  (4,725)     (5,754)    (12,432)    (17,620)
  Net gain (loss) on disposal/write-down of assets           62      (1,301)       (856)     (1,783)
---------------------------------------------------------------------------------------------------
  Operating income (loss) from continuing operations     (1,096)     14,010       9,490      46,881
  Operating income (loss) from discontinued operations    4,544          42       3,741        (137)
---------------------------------------------------------------------------------------------------
  Total income (loss) from operations                  $  3,448   $  14,052    $ 13,231   $  46,744
===================================================================================================

 (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           Nine Months
                                                        Ended September 30,     Ended September 30,
---------------------------------------------------------------------------------------------------
(In thousands)                                            2002        2001        2002       2001
---------------------------------------------------------------------------------------------------
<S>                                                    <C>        <C>          <C>        <C>
REFINING GROUP OPERATING DATA:
  Four Corners Operations:
    Crude Oil/NGL Throughput (BPD)                       30,902     35,102       32,600     34,645
    Refinery Sourced Sales Barrels (BPD)                 32,408     32,830       32,548     33,071
    Average Crude Oil Costs ($/Bbl)                    $  25.96   $  25.19     $  22.63   $  26.44
    Refining Margins ($/Bbl)                           $   6.04   $   9.45     $   6.59   $  10.09

  Yorktown Operations:(1)
    Crude Oil/NGL Throughput (BPD)                       54,677          -       54,295          -
    Refinery Sourced Sales Barrels (BPD)                 58,803          -       57,365          -
    Average Crude Oil Costs ($/Bbl)                    $  26.57   $      -     $  26.64   $      -
    Refining Margins ($/Bbl)                           $   1.71   $      -     $   1.70   $      -

RETAIL GROUP OPERATING DATA:
  (Continuing operations only)
  Fuel Gallons Sold (000's)                              47,058     49,241      136,197    144,033
  Fuel Margins ($/gal)                                 $  0.143   $  0.177     $  0.144   $  0.166
  Merchandise Sales ($ in 000's)                       $ 35,854   $ 35,967     $101,411   $100,810
  Merchandise Margins                                     28.0%      28.0%        28.0%      29.2%
  Number of Units at End of Period                          140        147          140        147

PHOENIX FUEL OPERATING DATA:
  Fuel Gallons Sold (000's)                              94,703     91,794      277,698    300,943
  Fuel Margins ($/gal)                                 $  0.054   $  0.054     $  0.053   $  0.052
  Lubricant Sales ($ in 000's)                         $  5,234   $  6,217     $ 15,623   $ 16,692
  Lubricant Margins                                       15.8%      15.8%        16.6%      17.5%

(1)Since acquisition on May 14, 2002.
</TABLE>

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

     - The acquisition of the Yorktown refinery on May 14, 2002. Since the
       acquisition, the Yorktown refinery has experienced three significant
       unscheduled unit shutdowns, the last of which occurred on July 23,
       2002. These shutdowns impacted the yield of high value products,
       as well as crude oil charge rates.

     - Weaker 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 that placed downward pressure on gasoline values.

     - Due to the significantly greater volume of products produced and
       sold by the Yorktown refinery, as compared to its other operations,
       the Company has a much larger exposure to volatile refinery margins
       which could positively or negatively affect the Company's
       profitability.

     - Continuing decline in Four Corners crude oil supplies.

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

     - The sale of six retail units during the third quarter, and the sale
       of two others and the closure of two more in the second quarter. The
       units sold resulted in a gain on disposal of approximately
       $4,921,000 for the three months ended September 30, 2002 and
       $4,789,000 for the nine months ended September 30, 2002.
       The gains on disposal are reported as a part of discontinued
       operations.

Earnings (Loss) From Continuing Operations Before Income Taxes
--------------------------------------------------------------
     For the three months ended September 30, 2002, the Company incurred a
loss from continuing operations before income taxes of $12,431,000,
compared to earnings from continuing operations before income taxes of
$8,162,000 for the three months ended September 30, 2001. The decrease
includes the following items related to the operation and acquisition of
the Yorktown refinery: (i) an operating loss of $5,994,000; (ii) an
increase in the amortization of financing costs of $771,000, and (iii)
additional interest expense of $4,429,000. The remainder of the decrease,
relating to the Company's other operations, was primarily due to a 36%
decline in Four Corners refinery margins. Also contributing to the decrease
was a 4% decrease in retail fuel volumes sold, along with a 19% decrease in
retail fuel margins. Four Corner refinery fuel volumes sold declined 1%.
These decreases were offset in part by reduced operating expenses and lower
selling, general, and administrative ("SG&A") expenses for other Company
operations, and a 9% increase in wholesale fuel volumes sold by Phoenix
Fuel to third-party customers with relatively constant margins. In
addition, in the third quarter of 2001, the Company recorded a loss of
$1,301,000 on the write-off/write-down of certain Refinery Group and Retail
Group assets.

     For the nine months ended September 30, 2002, the Company incurred a
loss from continuing operations before income taxes of $18,167,000,
compared to earnings from continuing operations before income taxes of
$29,602,000 for the nine months ended September 30, 2001. The decrease
includes the following items related to the operation and acquisition of
the Yorktown refinery: (i) an operating loss of $9,084,000; (ii) an
increase in the amortization of financing costs of $1,490,000, and (iii)
additional interest expense of $7,876,000. In addition, an impairment loss
of $1,100,000 was recorded, in the second quarter for certain retail
service stations. The remainder of the decrease, relating to the Company's
other operations, was primarily due to a 35% decline in Four Corners
refinery margins. Also contributing to the decrease was a 2% decline in
Four Corner refinery fuel volumes sold; a 5% decrease in retail fuel
volumes sold, along with a 13% decrease in retail fuel margins; a 4%
decline in retail merchandise margins; and a 3% decrease in wholesale fuel
volumes sold by Phoenix Fuel to third-party customers with relatively
constant margins. These decreases were offset in part by reduced operating
expenses and lower SG&A expenses for other Company operations. In addition,
in the first nine months of 2001, the Company recorded a loss of $1,783,000
on the write-off/write-down of Refinery Group and Retail Group assets.

     Continuing the trend of the first six months of the year, refining
margins in the third quarter were well below prior year's levels. The
negative trend in 2002 refining margins appears to have moderated, however,
so far in the fourth quarter. An industry-wide increase in demand, coupled
with reduced production, has been a major factor in the recent improvement
in distillate margins. Nationwide, gasoline demand has continued at strong
levels and reduced gasoline inventories, which recently reached a new one-
year low, may contribute to a continuation of the recent improvement in
gasoline margins. In addition, the Company's crude oil costs recently have
dropped as the OPEC producing members have increased crude oil production
by an estimated 2,700,000 barrels per day. The Company cannot, however,
provide assurance that these trends will continue for the remainder of the
quarter or beyond.

     For the three and nine months ended September 30, 2001, higher than
normal refining margins had a significant impact on earnings from
continuing operations before income taxes.

Revenues From Continuing Operations
-----------------------------------
     Revenues for the three months ended September 30, 2002, increased
approximately $156,264,000 or 68% to $386,579,000 from $230,315,000 in the
comparable 2001 period. The increase includes additional revenues for the
Yorktown refinery of $160,068,000. Revenue decreases relating to the
Company's other operations were primarily due to a 3% decline in Four
Corner refining weighted average selling prices, along with a 1% decline in
Four Corner refinery fuel volumes sold; a 1% decline in Phoenix Fuel's
weighted average selling prices; and a 4% decrease in retail refined
product selling prices, along with a 4% decline in retail fuel volumes
sold. These decreases were offset in part by a 9% increase in wholesale
fuel volumes sold by Phoenix Fuel to third-party customers. Overall retail
merchandise sales were down slightly, while same store merchandise sales
were up approximately 3%.

     The volumes of refined products sold through the Company's retail
units decreased approximately 4% from period to period. The volume declines
were primarily related to the sale or closure of 18 retail units since the
end of second quarter of 2001 and reduced volumes from stores in the
Company's Phoenix market area due to increased price competition. The
volume of finished product sold from retail units that were in operation
for a full year increased approximately 3% in spite of reduced volumes from
stores in the Company's Phoenix market. Volumes sold from the Company's
travel center decreased approximately 4%.

     Revenues for the nine months ended September 30, 2002, increased
approximately $119,409,000 or 16% to $857,129,000 from $737,720,000 in the
comparable 2001 period. The increase includes additional revenues for the
Yorktown refinery of $232,967,000. Revenue decreases relating to the
Company's other operations were primarily due to an 18% 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 3% decline in wholesale fuel
volumes sold by Phoenix Fuel to third-party customers; and a 12% decrease
in retail refined product selling prices, along with a 5% decline in retail
fuel volumes sold. Overall retail merchandise sales were up slightly, while
same store merchandise sales were up approximately 5%.

     The volumes of refined products sold through the Company's retail
units decreased approximately 5% from period to period. The volume declines
were primarily related to the sale or closure of 29 retail units since the
end of 2000 and reduced volumes from stores in the Company's Phoenix market
area due to increased price competition. The volume of finished product
sold from retail units that were in operation for a full year was up
slightly, in spite of reduced volumes from stores in the Company's Phoenix
market area. Volumes sold from the Company's travel center increased
approximately 4%.

Cost of Products Sold From Continuing Operations
------------------------------------------------
     For the three months ended September 30, 2002, cost of products sold
increased approximately $160,494,000 or 93% to $333,164,000 from
$172,670,000 in the comparable 2001 period. The increase includes
additional cost of products sold for the Yorktown refinery of $150,587,000.
Cost of products sold increases relating to the Company's other operations
were primarily due to a 9% increase in wholesale fuel volumes sold by
Phoenix Fuel to third-party customers and slightly higher Four Corners
refining weighted average crude oil costs. Cost of products sold also
includes a loss of approximately $3,769,000 from crude oil futures
contracts used to economically hedge crude oil inventories and crude oil
purchases for the Yorktown refinery. These decreases were offset in part by
a 1% decline in the cost of finished products purchased by Phoenix Fuel and
a 1% decrease in refinery sourced finished product sales volumes.

     For the nine months ended September 30, 2002, cost of products sold
increased approximately $145,286,000 or 26% to $706,945,000 from
$561,659,000 in the comparable 2001 period. The increase includes
additional cost of products sold for the Yorktown refinery of $219,026,000.
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 an 3% decrease in wholesale fuel
volumes sold by Phoenix Fuel to third-party customers, and a 14% 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 loss of approximately $1,799,000 from crude
oil futures contracts used to economically hedge crude oil inventories and
crude oil purchases for the Yorktown refinery.

Operating Expenses From Continuing Operations
---------------------------------------------
     For the three months ended September 30, 2002, operating expenses
increased approximately $11,829,000 or 45% to $38,366,000 from $26,537,000
in the comparable 2001 period. For the nine months ended September 30,
2002, operating expenses increased approximately $14,417,000 or 18% to
$95,314,000 from $80,897,000 in the comparable 2001 period. The increase in
both periods includes operating expenses relating to the Yorktown refinery
of $13,316,000 and $19,714,000 for the three and nine months ended
September 30, 2002, respectively. 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; reduced expenses for payroll and related costs, and
other operating expenses, for retail operations, due in part to the sale or
closure of 18 retail units since the end of the second quarter of 2001 and
29 since the end of 2000, as well as the implementation of certain cost
reduction programs; and lower repair and maintenance and utility
expenditures for refinery operations. These decreases were offset in part
in each period by higher general insurance premiums and purchased fuel
costs for the Four Corners refineries.

Depreciation and Amortization From Continuing Operations
--------------------------------------------------------
     For the three months ended September 30, 2002, depreciation and
amortization increased approximately $1,304,000 or 16% to $9,442,000 from
$8,138,000 in the comparable 2001 period. For the nine months ended
September 30, 2002, depreciation and amortization increased approximately
$3,169,000 or 13% to $26,672,000 from $23,503,000 in the comparable 2001
period. The increase in both periods includes depreciation and amortization
relating to the Yorktown refinery of $1,646,000 and $2,726,000 for the
three and nine months ended September 30, 2002, respectively. 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;
construction, remodeling and upgrades in retail and refining operations
during 2001 and 2002; and for the nine month period higher refinery
amortization costs in 2002 due to a 2001 revision in the estimated
amortization period for certain refinery turnaround costs incurred in 1998.
These increases were offset in part by reductions in depreciation expense
due to the sale or closure of 18 retail units since the end of the first
quarter of 2001 and 29 since the end of 2000, and the non-amortization of
goodwill in 2002 due to the adoption of SFAS No. 142.

Selling, General and Administrative Expenses From Continuing Operations
-----------------------------------------------------------------------
     For the three months ended September 30, 2002, SG&A expenses decreased
approximately $894,000 or 12% to $6,765,000 from $7,659,000 in the
comparable 2001 period. For the nine months ended September 30, 2002, SG&A
expenses decreased approximately $5,145,000 or 22% to $17,852,000 from
$22,997,000 in the comparable 2001 period. The decrease in both periods
includes SG&A relating to the Yorktown refinery of $251,000 and $323,000
for the three and nine months ended September 30, 2002, respectively. 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 workers compensation costs, and expenses incurred in
2001 related to certain related party transactions. For the nine-month
period the decrease also is due to 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 expenses
recorded for the settlement of certain claims, assessments, and legal
matters, including the matter set forth in Note 11 to the Company's
Condensed Consolidated Financial Statements included in Part I, Item 1
hereof.

Interest Expense and Interest Income From Continuing Operations
---------------------------------------------------------------
     For the three months ended September 30, 2002, interest expense
increased approximately $4,429,000 or 73% to $10,455,000 from $6,026,000 in
the comparable 2001 period. For the nine months ended September 30, 2002,
interest expense increased approximately $7,876,000 or 43% to $25,985,000
from $18,109,000 in the comparable 2001 period. For the three and nine
months ended September 30, 2002, approximately $6,889,000 and $10,469,000,
respectively, of the increase is due to the issuance of new senior
subordinated notes and borrowings under the Company's new loan facilities
entered into in connection with the acquisition of the Yorktown refinery as
more fully described in Notes 10 and 13 to the Company's Condensed
Consolidated Financial Statements included in Part I, Item 1 hereof. In
addition, for the nine month period, 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 and nine month periods, these increases were
offset in part by a decrease in interest expense of approximately
$2,438,000 and $3,722,000, respectively, relating to the repayment of the
Company's $100,000,000 of 9 3/4% Senior Subordinated Notes due 2003 with a
portion of the proceeds of the Company's issuance of $200,000,000 of 11%
Notes.

     For the three months ended September 30, 2002, interest income
decreased approximately $287,000 or 80% to $74,000 from $361,000 in the
comparable 2001 period. For the nine months ended September 30, 2002,
interest income decreased approximately $1,012,000 or 72% to $399,000 from
$1,411,000 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. In
addition, no interest was accrued in 2002 relating to a note from a related
party.

Amortization/Write-Off of Financing Costs From Continuing Operations
--------------------------------------------------------------------
     In connection with the acquisition of the Yorktown refinery and the
refinancing of the 9 3/4% Notes, the Company incurred approximately
$16,402,000 of deferred financing costs relating to new senior subordinated
debt and new senior secured loan 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 nine months ended September 30, 2002 was $771,000 and $1,490,000,
respectively. The increase for the nine month period includes the write-off
of approximately $364,000 in deferred financing costs related 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 From Continuing Operations
---------------------------------------
     The effective tax benefit rate for the three and nine months ended
September 30, 2002 was approximately 41% and 40%, respectively. The Company
believes that the tax benefit created in 2002 will be fully realizable. The
effective tax rate for the three and nine months ended September 30, 2001
was approximately 37% and 39%, respectively. The difference in the rates is
primarily due to the relationship of permanent tax differences and certain
tax credits, to estimated annual income used in each period to estimate
income taxes.

Discontinued Operations
-----------------------
     In the third quarter of 2002, the Company sold six retail units and
reclassified 10 others as assets held for sale. Two other retail units were
sold in the second quarter of 2002. The remaining assets and results of
operations of these 18 retail units are included in discontinued operations
in the Company's Condensed Consolidated Financial Statements included in
Part I, Item 1 hereof. Earnings from discontinued operations before income
taxes of $4,544,000 for the three months ended September 30, 2002 include a
gain on the disposal of six retail units sold of $4,921,000, which is net
of $243,000 of goodwill write-offs; and a SFAS No. 144 impairment write-
down of $117,000, including $7,000 of goodwill write-offs, on one of the
retail units held for sale. Earnings from discontinued operations before
income taxes of $3,741,000 for the nine months ended September 30, 2002
include a gain on the disposal of eight retail units sold of $4,789,000,
which is net of $243,000 of goodwill write-offs; and SFAS No. 144
impairment write-downs of $289,000, including $7,000 of goodwill write-
offs, on three of the retail units held for sale. See Note 5 to the
Company's Condensed Consolidated Financial Statements included in Part I,
Item 1 hereof for a further discussion of discontinued operations.


LIQUIDITY AND CAPITAL RESOURCES

Cash Flow From Operations
-------------------------
     Operating cash flows decreased for the nine months ended September 30,
2002 compared to the nine months ended September 30, 2001, primarily as a
result of a decrease in net earnings before depreciation and amortization,
amortization/write-off of financing costs, deferred income taxes, and net
(gain) loss on disposal/write-down of assets in 2002, offset in part by an
increase in cash flows related to changes in operating assets and
liabilities in each period. Net cash provided by operating activities
totaled $26,684,000 for the nine months ended September 30, 2002, compared
to net cash provided by operating activities of $50,665,000 in the
comparable 2001 period.

Working Capital
---------------
     Working capital at September 30, 2002 consisted of current assets of
$190,637,000 and current liabilities of $96,708,000, or a current ratio of
1.97:1. At December 31, 2001, the current ratio was 1.72:1 with current
assets of $135,674,000 and current liabilities of $78,837,000.

     Current assets have increased since December 31, 2001, primarily due
to increases in accounts receivable, inventories, and current deferred
taxes. These increases were offset in part by a decrease in cash and cash
equivalents and prepaids and other. 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 increases in crude oil and refined product prices and
exchange inventory volumes. These increases were offset in part by
decreases in pipeline and refinery onsite crude oil volumes, and decreases
in refinery onsite, terminal, Phoenix Fuel and retail refined product
volumes. Prepaids and other have decreased primarily due to 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 and for other Company operations
primarily as a result of higher raw material and finished product costs,
offset in part by a reduction in other 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 2001
401(k) Company matching and discretionary contributions, the payment of
certain accrued interest balances, and lower excise tax accruals. 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 $9,783,000 for the nine months
ended September 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.

     As described in Note 13 to the Company's Condensed Consolidated
Financial Statements included in Part I, item 1 hereof, the amendments to
the Credit Facility and the Loan Facility limit the Company's capital
expenditures on a quarterly basis through the fourth quarter of 2003.
Capital expenditures are limited to $6,000,000 in the fourth quarter of
2002. The limitations permit all capital expenditures currently anticipated
for 2003. Prior approval from the Company's lenders would be required to
exceed the agreed upon levels and the Company cannot provide assurance that
it could obtain such approval. See the discussion below in "Capital
Structure" for further information relating to the Company's debt
covenants.

     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.

     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.

     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 Part
I, Item 1 hereof, for a more detailed discussion of this transaction.

     Approximately $16,402,000 of financing fees were paid to various
financial institutions in connection with financing arrangements for the
Company's acquisition of the Yorktown refinery and refinancing of the 3/4%
Notes.

     Following the acquisition of the Yorktown refinery, the Company
developed a debt reduction strategy with the goal of reducing indebtedness
by $50,000,000 prior to year-end 2002. The goal is to be accomplished by
managing inventory to a lower level, reducing non-essential capital
expenditures and selling non-core and/or under-performing assets. Cost
cutting measures also have been implemented that should contribute to this
debt reduction strategy. In the third quarter, the Company reduced working
capital inventory levels in excess of $15,000,000 and received proceeds
from the sale of assets of approximately $11,000,000. In the third quarter
the Company reduced the outstanding balance of the Loan Facility by
approximately $3,333,000 and reduced the outstanding balance of its
Revolving Credit facility by $25,000,000. Prior to the end of the second
quarter, the Company had reduced the outstanding balance of the Loan
Facility by $1,111,000. The Company can give no assurances that it can
reach its goal of reducing indebtedness by $50,000,000 prior to year-end
2002. The achievement of this goal would require the closing of certain
transactions described in more detail in the following paragraphs.

     On July 31, 2002, the Company entered into a letter of intent for the
potential sale of its 26 remaining retail units in the Phoenix and Tucson
marketing areas. Two of the retail units were removed from this transaction
and are classified as held for sale. The Company in the process of
negotiating a purchase agreement for the remaining 24, which would be
contingent upon the potential buyer obtaining lender financing on
satisfactory terms. Due to the uncertainty of the potential buyer obtaining
financing, the Company cannot determine with reasonable certainty that this
transaction will close, or if the units will be sold to other parties
within the next 12 months, and is exploring other options, including
continuing to operate the units. In the second quarter of 2002, the Company
recorded an impairment loss of $1,272,000 related to certain of the 26
units, based on the probability of the sale occurring and an estimate of
fair value as compared to the carrying value of each unit in accordance
with SFAS No. 144. As of September 30, 2002, the remaining 24 retail units
were being operated and were classified as held and used in accordance with
SFAS No. 144.

     On August 12, 2002, the Company entered into purchase and sale
agreements with a buyer for the sale of nine retail units in the Phoenix
marketing area. Six of these units were sold to the buyer in the third
quarter for $10,850,000 and their results of operations are included in
earnings (loss) from discontinued operations. Two of the units were removed
from this transaction. One of these two units is being sold to another
buyer and is expected to close in the fourth quarter, and the other unit is
being marketed for sale. The third unit may be subject to a right to
purchase at appraised value in favor of a related party. See Note 6 to the
Company's Condensed Consolidated Financial Statements included in Item 1,
Part 1 hereof. The Company expects that the sale of this unit will close in
the fourth quarter of 2002. As of September 30, 2002, the three unsold
units were classified as held for sale.

     In addition, the Company is in the process of reviewing proposals for
the possible sale and potential leaseback of its corporate headquarters
building. This process is in a preliminary stage, and as such, the Company
does not know if, or when, this transaction will close.

     The Company also is evaluating the possible sale of other non-
strategic or under-performing assets in addition to the assets described
above.

     The Company currently intends 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. As previously
mentioned, the amendments to the Credit Facility and Loan Facility require
the Company to reduce the outstanding principal balance of the Credit
Facility by $15,000,000 from the proceeds of asset sales occurring between
October 1, 2002 and June 30, 2003.

     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.

     Giant purchases crude oil and other feedstocks from a number of
suppliers to operate its Four Corners and Yorktown refineries. The Company
acquires the feedstocks for its Yorktown refinery from a number of domestic
and international suppliers. Giant has not historically participated in
this market, and as such, has not had a credit relationship with these
suppliers. Due to the weak economy and the poor profitability experienced
by refiners and marketers, including Giant, throughout 2002, several
suppliers to the Yorktown refinery have required the Company to provide
letters of credit for either a portion or the full amount of the purchase.

     As of November 1, 2002, the Company had approximately $30,408,000 of
letters of credit outstanding. The Company recently increased the
availability of letters of credit under its Credit Facility from
$25,000,000 to $50,000,000. The inability of the Company to post
satisfactory letters of credit could constrain the Company's ability to
purchase feedstocks on the most beneficial terms.

     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 from them. Price level
changes during the period between purchasing feedstocks and selling the
manufactured refined products could have a significant effect on the
Company's operating results. 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. Furthermore,
because of the significantly greater volume of products produced and sold
by the Yorktown refinery, as compared to its other operations, the Company
has a much larger exposure to volatile refining margins than it had in the
past.

     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.

     In addition, the Company's ability to borrow funds under its current
Credit Facility could be adversely impacted by low product prices that
could reduce the borrowing base tied to eligible accounts receivable and
inventories. The Company's debt instruments also contain certain
restrictive covenants that could limit the Company's ability to borrow
funds if certain thresholds are not maintained. At present, the Company can
only borrow additional amounts under its Credit Facility as a result of the
limitation on additional indebtedness contained in the indentures
supporting the Company's notes. See the discussion below in "Capital
Structure" for further information relating to these loan covenants.

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

Capital Structure
-----------------
     At September 30, 2002 and December 31, 2001, the Company's long-term
debt was 76.2% 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 75.8% 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 September 30, 2002 the Company had long-term debt of $409,994,000,
net of current portion of $11,589,000. See Notes 10 and 13 to the Company's
Condensed Consolidated Financial Statements included in Part I, Item 1
hereof for a description of these obligations.

     As described in more detail in Notes 10 and 13 to the Company's
Condensed Consolidated Financial Statements included in Part I, Item 1
hereof, the indentures supporting the Company's notes and the Company's
Credit Facility and Loan Facility contain certain restrictive covenants,
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. 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.

     If the Company is not able to generate sufficient cash flow from
operations or to borrow sufficient funds to service its debt, or meet its
working capital and capital expenditure requirements, due to borrowing base
restrictions, increased letter of credit requirements, 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. As described in more detail in Note 13 to the
Company's Condensed Consolidated Financial Statements included in Item I,
Part 1 hereof, the Company had loan covenant issues in the quarter ending
September 30, 2002. The amendments to the Credit Facility and the Loan
Facility addressed these issues. The Company expects to be in compliance
with the amended covenants in the fourth quarter and going forward, and
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.

     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 September 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*            $420,613,000  $ 3,344,000  $10,252,000  $11,128,000  $45,889,000  $        -  $350,000,000
Capital Lease Obligations     6,703,000            -            -            -            -           -     6,703,000
Operating Leases             17,126,000    1,229,000    3,700,000    2,855,000    1,982,000   1,351,000     6,009,000
---------------------------------------------------------------------------------------------------------------------
Total Contractual
  Cash Obligations         $444,442,000  $ 4,573,000  $13,952,000  $13,983,000  $47,871,000  $1,351,000  $362,712,000
=====================================================================================================================
*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    14,808,000      908,000   13,900,000           -              -          -            -

*Standby letters of credit reduce the availability of funds for direct borrowings under the line of credit. At
September 30, 2002 there was $35,000,000 of 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 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 and third quarters 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 three and nine months ended September 30, 2002, the
Company recognized losses on these contracts of approximately $3,769,000
and $1,799,000, respectively, 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 September 30, 2002,
the Company had no open crude oil futures contracts or other commodity
derivatives.

     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 September 30, 2002, there was
$35,000,000 of direct borrowings outstanding under this facility. The
potential increase in annual interest expense from a hypothetical 10%
adverse change in interest rates on these borrowings at September 30, 2002,
would be approximately $60,100.

     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 September 30, 2002, there was
$35,556,000 of direct borrowings outstanding under this facility. The
potential increase in annual interest expense from a hypothetical 10%
adverse change in interest rates on these borrowings at September 30, 2002,
would be approximately $61,000.

     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, HEALTH AND SAFETY
-------------------------------
     Federal, state and local laws and regulations relating to health,
safety 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 current or historic operations.
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 or by
its predecessors. 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 may also be held responsible for costs associated with
contamination clean-up at third-party disposal sites, notwithstanding that
the original disposal activities were in accordance with all applicable
regulatory requirements at such time. 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, health and safety 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, safety, and the environment will continue to affect the
operations of the Company. The Company cannot predict what environmental
health or safety 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 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.

     Developments have occurred in connection with the following
environmental, health or safety matters that were previously discussed in
either the Company's Annual Report on Form 10-K for the year ended December
31, 2001, or the Company's Quarterly Report on Form 10-Q for the first and
second quarters of 2002, under the heading "Management's Discussion and
Analysis of Financial Condition and Results of Operations."

     The federal Environmental Protection Agency ("EPA") has issued a rule
that requires refiners, including the Yorktown refinery, to begin producing
gasoline the satisfies low-sulfur, or "Tier 2," gasoline standards in 2004
and to begin producing diesel fuel that satisfies ultra low sulfur diesel
("ULSD") standards by mid-2006. All refiners and importers of Tier 2
gasoline and ULSD are required to be in full compliance with these new
standards by 2008 and 2010, respectively.

     The Company anticipates that it will spend approximately $27,000,000
to purchase and install the equipment necessary to produce Tier 2 gasoline
at its Yorktown refinery, and projects that it will incur half of these
expenditures 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 ULSD by 2006 at the Yorktown refinery, and projects
that it will incur half of these expenditures in 2005 and half in 2006. In
May 2002, the Company applied to the EPA for a postponement of the date
when it must begin making Tier 2 gasoline at the Yorktown refinery. There
can be no assurance, however, that the Company will be successful in
obtaining such temporary relief.

     The implementation schedule for achieving the Tier 2 and ULSD
requirements at the Yorktown refinery are tight. The Company believes that
BP identified a reasonable plan for achieving these requirements, but made
little actual progress in implementing this plan. In lieu of beginning
installation of the necessary equipment in 2004, the Company is exploring
possible operational changes that could postpone necessary equipment
installations until mid-2005. These operational changes could include using
sulfur reduction catalysts, changing the crude oil diet of the refinery,
purchasing sulfur allotments or credits, selling high-sulfur components of
the refinery to other refiners, or a combination of the foregoing. Each of
these options could result in reduced refining earnings. Although the
Company still believes it will be possible to complete the Tier 2 and ULSD
projects at the Yorktown refinery 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, as a result of
certain extensions permitted by the Tier 2 gasoline standards, including an
extension based on anticipated production levels of ULSD, the Company
believes that it will qualify for an extension until 2007 of the date when
the annual average sulfur content of its gasoline must begin to be reduced,
with full compliance required in 2008. The Company anticipates that it will
spend approximately $3,500,000 to make the necessary changes to the Four
Corners refineries, primarily in 2004 and 2005, to comply with the Tier 2
gasoline rule, and approximately $15,000,000, primarily in 2005 and 2006,
to comply with the ULSD rule.

     There are a number of factors that could affect the Company's cost of
compliance with the Tier 2 and ULSD standards. These regulations affect the
entire industry, therefore, 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 at the Yorktown refinery to expedite ordering for otherwise
long delivery items or added overtime by contractors to meet the
implementation schedule.

     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 compliance order from NMED in
connection with four 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 11 to the Company's Condensed Consolidated Financial
Statements included in Part I, Item 1 hereof.

     The Company assumed certain obligations, including certain
environmental obligations, in connection with the acquisition of the
Yorktown refinery. For a discussion of the current status of these matters
see Note 11 to the Company's Condensed Consolidated Financial Statements
included in Part I, Item 1, hereof.

     On October 21, 2002, the Company received a notice from the EPA
assessing a penalty of $110,000 in connection with a hydrocarbon flaring
incident at the Yorktown refinery. Since the Company did not own the
Yorktown refinery at the time that the flaring incident occurred, the
Company believes that it will be entitled to indemnification from BP for
the entire amount of the penalty. A further discussion of this penalty is
found in Note 11 to the Company's Condensed Consolidated Financial
Statements included in Part I, Item 1 hereof.

     As of September 30, 2002, the Company had environmental liability
accruals of approximately $9,600,000. A further discussion of this accrual
is found in Note 11 to the Company's Condensed Consolidated Financial
Statements included in Part I, Item 1 hereof.

OTHER
-----
     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, and remains at approximately 73%
for the first nine months of 2002. 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.

     In addition, the Company 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 the supply of crude oil or other feedstocks for
the Company's Four Corners refineries, either by reduced production or
significant long-term interruption of transportation systems, would have an
adverse effect on our Four Corners refinery operations and on the Company's
overall 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.

     In June 2002, the Company's Board of Directors (the "Board") approved
the election of Larry L. DeRoin to the Board. In addition to serving on the
Board, Mr. DeRoin also serves as a member of the Audit Committee, the
Compensation Committee and the Nominating Committee and is Chairman of the
Stock Incentive Plan Committee. Since September 2000, Mr. DeRoin has been
the President of DeRoin Management, Inc., which provides consulting
services to Northern Border Pipeline Co. and Northern Border Partners, L.P.
From 1993 to September 2000, Mr. DeRoin was Chairman and Chief Executive
Officer of Northern Border Partners, L.P., Chairman of the Management
Committee for Northern Border Pipeline Co., and President of Northern
Plains Natural Gas Co.

     In August 2002, the Board approved the election of Brooks J. Klimley
to the Board. In addition to serving on the Board, Mr. Klimley also serves
as a member of the Audit Committee and the Compensation Committee. Since
September 2002, Mr. Klimley has been the Co-Head of the Global Diversified
Industrial Group for Salomon Smith Barney, Inc. From 2001 to September
2002, Mr. Klimley was the Managing Director, Multisector Industrial Group
for Salomon Smith Barney, Inc., where he was responsible for global client
management of large capitalization industrial companies. From 1998 to 2001,
Mr. Klimley was Senior Managing Director and Co-Head Natural Resources
Group for Bear, Stearns & Co., Inc., where he led origination and execution
teams covering a broad range of natural resources companies. From 1995 to
1998, Mr. Klimley was Managing Director and Global Head of Energy and
Natural Resources Group for UBS Securities LLC. From 1984-1994, Mr. Klimley
was Managing Director and Co-Head of the Natural Resources Group for
Kidder, Peabody & Co. Incorporated. From 1981 to 1984, Mr. Klimley worked
in the Energy & Minerals Group of Chemical Bank.

     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
Notes 6 and 11 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 the Company's 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;

     - the Company's ability to obtain anticipated levels of
       indemnification from BP in connection with the Yorktown refinery
       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 September 30, 2002 could 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 assets on terms favorable to the Company;

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

     - the risk that an acceptable purchase agreement cannot be
       negotiated for the sale of certain retail units in the Company's
       Phoenix and Tucson marketing areas and that the potential buyer
       cannot obtain lender financing on acceptable terms.

     - 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;

     - the risk that the Company will not be able to post satisfactory
       letters of credit;

     - 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.


ITEM 4. CONTROLS AND PROCEDURES

     As of a date within 90 days of the date of this report (the
"Evaluation Date"), under the supervision and with the participation of our
management, including our Chief Executive Officer and Chief Financial
Officer, the Company carried out an evaluation of the effectiveness of the
design and operation of its disclosure controls and procedures as defined
in Rules 13a-14 and 15d-14 under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"). Based upon this evaluation the Company's CEO
and CFO concluded that, as of the Evaluation Date, the Company's disclosure
controls and procedures were adequate to ensure that information required
to be disclosed by the Company in the reports filed or submitted by the
Company under the Exchange Act is recorded, processed, summarized and
reported within the time periods specified in the SEC's rules and forms.

     In addition, there have been no significant changes in the Company's
internal controls or in other factors that could significantly affect these
controls subsequent to the date of their evaluation, including any
corrective actions with regard to significant deficiencies and internal
weaknesses.


<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 certain related party transactions in Note 6 and
commitments and contingencies in Note 11 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
headings "Environmental, Health and Safety" and "Other."

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

(a)  Exhibits:

     10.1*  First Amendment, dated October 28, 2002, to 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.

     10.2*  Amendment to Loan Agreement and Omnibus Amendment, dated as
            of May 22, 2002, among Giant Yorktown, Inc., Giant Industries,
            Inc., Giant Industries Arizona, Inc., Wells Fargo Bank
            Nevada, National Association, as collateral agent, and the
            Lenders listed on the signature pages thereto.

     10.3*  Second Amendment to Loan Agreement and Omnibus Amendment,
            dated as of October 28, 2002, among Giant Yorktown, Inc., Giant
            Industries, Inc., Giant Industries Arizona, Inc., Wells Fargo
            Bank Nevada, National Association, as collateral agent, and the
            Lenders listed on the signature pages thereto.

     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:

     (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.



<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 September 30, 2002 to be signed on its behalf by the undersigned
thereunto duly authorized.

                         GIANT INDUSTRIES, INC.


                         /s/ MARK B. COX
                         -------------------------------------------------
                         Mark B. Cox, Vice President, Treasurer, Chief
                         Financial Officer and Assistant Secretary, on
                         behalf of the Registrant and as the Registrant's
                         Principal Financial Officer


Date: November 13, 2002


<PAGE>
               CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER

     I, Fred Holliger, certify that:

          1.  I have reviewed this quarterly report on Form 10-Q of Giant
Industries, Inc.;

          2.  Based on my knowledge, this quarterly report does not contain
any untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances under
which such statements were made, not misleading with respect to the period
covered by this quarterly report;

          3.  Based on my knowledge, the financial statements, and other
financial information included in this quarterly report, fairly present in
all material respects the financial condition, results of operations and
cash flows of the registrant as of, and for, the period presented in this
quarterly report;

          4.  The registrant's other certifying officers and I are
responsible for establishing and maintaining disclosure controls and
procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the
registrant and we have:

              a)  Designed such disclosure controls and procedures to
          ensure that material information relating to the registrant,
          including its consolidated subsidiaries, is made known to us by
          others within those entities, particularly during the period in
          which this quarterly report is being prepared;

              b)  Evaluated the effectiveness of the registrant's
          disclosure controls and procedures as of a date within 90 days
          prior to the filing date of this quarterly report (the
          "Evaluation Date"); and

              c)  Presented in this quarterly report our conclusions about
          the effectiveness of the disclosure controls and procedures based
          on our evaluation as of the Evaluation Date;

          5.  The registrant's other certifying officers and I have
disclosed, based on our most recent evaluation, to the registrant's
auditors and the audit committee of registrant's board of directors (or
persons performing the equivalent function):

              a)  All significant deficiencies in the design or operation
          of internal controls which could adversely affect the
          registrant's ability to record, process, summarize and report
          financial data and have identified for the registrant's auditors
          any material weaknesses in internal controls; and

              b)  Any fraud, whether or not material, that involves
          management or other employees who have a significant role in the
          registrant's internal controls; and

          6.  The registrant's other certifying officers and I have
indicated in this quarterly report whether or not there were significant
changes in internal controls or in other factors that could significantly
affect internal controls subsequent to the date of our most recent
evaluation, including any corrective actions with regard to significant
deficiencies and material weaknesses.

Date:  November 13, 2002.

By:  /S/ FRED HOLLIGER
------------------------------
Name:  Fred Holliger
Title: Chief Executive Officer


<PAGE>
               CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER

     I, Mark B. Cox, certify that:

          1.  I have reviewed this quarterly report on Form 10-Q of Giant
Industries, Inc.;

          2.  Based on my knowledge, this quarterly report does not contain
any untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances under
which such statements were made, not misleading with respect to the period
covered by this quarterly report;

          3.  Based on my knowledge, the financial statements, and other
financial information included in this quarterly report, fairly present in
all material respects the financial condition, results of operations and
cash flows of the registrant as of, and for, the period presented in this
quarterly report;

          4.  The registrant's other certifying officers and I are
responsible for establishing and maintaining disclosure controls and
procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the
registrant and we have:

              a)  Designed such disclosure controls and procedures to
          ensure that material information relating to the registrant,
          including its consolidated subsidiaries, is made known to us by
          others within those entities, particularly during the period in
          which this quarterly report is being prepared;

              b)  Evaluated the effectiveness of the registrant's
          disclosure controls and procedures as of a date within 90 days
          prior to the filing date of this quarterly report (the
          "Evaluation Date"); and

              c)  Presented in this quarterly report our conclusions about
          the effectiveness of the disclosure controls and procedures based
          on our evaluation as of the Evaluation Date;

          5.  The registrant's other certifying officers and I have
disclosed, based on our most recent evaluation, to the registrant's
auditors and the audit committee of registrant's board of directors (or
persons performing the equivalent function):

              a)  All significant deficiencies in the design or operation
          of internal controls which could adversely affect the
          registrant's ability to record, process, summarize and report
          financial data and have identified for the registrant's auditors
          any material weaknesses in internal controls; and

              b)  Any fraud, whether or not material, that involves
          management or other employees who have a significant role in the
          registrant's internal controls; and

          6.  The registrant's other certifying officers and I have
indicated in this quarterly report whether or not there were significant
changes in internal controls or in other factors that could significantly
affect internal controls subsequent to the date of our most recent
evaluation, including any corrective actions with regard to significant
deficiencies and material weaknesses.

Date:  November 13, 2002.

By:  /s/ MARK B. COX
------------------------------
Name:  Mark B. Cox
Title: Chief Financial Officer