FORM 10-Q

                      SECURITIES AND EXCHANGE COMMISSION
                            WASHINGTON, D.C. 20549

(Mark One)

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

                 For the quarterly period ended June 30, 2003

                                     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 [ ]

Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act).

                              Yes [ ]    No [X]

Number of Common Shares outstanding at July 31, 2003: 8,785,555 shares.


<PAGE>
                   GIANT INDUSTRIES, INC. AND SUBSIDIARIES
                                     INDEX


PART I  - FINANCIAL INFORMATION

Item 1  - Financial Statements

          Consolidated Balance Sheets June 30, 2003 (Unaudited)
          and December 31, 2002

          Consolidated Statements of Operations for the Three and
          Six Months Ended June 30, 2003 and 2002 (Unaudited)

          Consolidated Statements of Cash Flows for the Six
          Months Ended June 30, 2003 and 2002 (Unaudited)

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

Item 6  - Exhibits and Reports on Form 8-K

SIGNATURE



<PAGE>
<TABLE>
                                           PART I
                                   FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS.

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

<CAPTION>
                                                        June 30, 2003   December 31, 2002
                                                        -------------   -----------------
                                                        (Unaudited)
<S>                                                      <C>                <C>
ASSETS
Current assets:
  Cash and cash equivalents.........................     $   10,772         $   10,168
  Receivables, net..................................         75,655             76,088
  Inventories (Note 9)..............................        120,876            107,980
  Prepaid expenses and other........................          5,073              7,877
  Deferred income taxes.............................          9,769              9,769
                                                         ----------         ----------
    Total current assets............................        222,145            211,882
                                                         ----------         ----------
Property, plant and equipment (Notes 3 and 4).......        645,385            630,950
  Less accumulated depreciation and amortization....       (230,030)          (212,801)
                                                         ----------         ----------
                                                            415,355            418,149
                                                         ----------         ----------
Goodwill (Note 5)...................................         19,403             19,465
Other assets (Notes 5 and 6)........................         41,111             52,790
                                                         ----------         ----------
                                                         $  698,014         $  702,286
                                                         ==========         ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
  Current portion of long-term debt (Note 11).......     $    8,473         $   10,251
  Accounts payable..................................         75,055             67,282
  Accrued expenses..................................         44,472             42,818
                                                         ----------         ----------
    Total current liabilities.......................        128,000            120,351
                                                         ----------         ----------
Long-term debt, net of current portion (Note 11)....        378,748            398,069
Deferred income taxes...............................         39,185             37,612
Other liabilities (Note 3)..........................         21,790             18,937
Commitments and contingencies (Notes 11 and 12)
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, 12,537,535
    and 12,323,759 shares issued....................            126                123
  Additional paid-in capital........................         74,660             73,763
  Retained earnings.................................         91,959             89,885
                                                         ----------         ----------
                                                            166,745            163,771
  Less common stock in treasury - at cost,
    3,751,980 shares................................        (36,454)           (36,454)
                                                         ----------         ----------
    Total stockholders' equity......................        130,291            127,317
                                                         ----------         ----------
                                                         $  698,014         $  702,286
                                                         ==========         ==========

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


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

<CAPTION>
                                                         Three Months             Six Months
                                                        Ended June 30,          Ended June 30,
                                                     ---------------------   ---------------------
                                                        2003        2002        2003        2002
                                                     ---------   ---------   ---------   ---------
<S>                                                  <C>         <C>         <C>         <C>
Net revenues......................................   $ 409,708   $ 289,578   $ 891,015   $ 468,886
Cost of products sold.............................     339,380     239,911     749,747     375,633
                                                     ---------   ---------   ---------   ---------
Gross margin......................................      70,328      49,667     141,268      93,253
Operating expenses................................      41,486      30,094      80,513      53,282
Depreciation and amortization.....................       9,433       8,748      18,562      16,800
Selling, general and administrative expenses......       7,272       6,130      14,296      11,555
Net (gain) loss on disposal/write-down of assets..        (177)        504         234         508
                                                     ---------   ---------   ---------   ---------
Operating income..................................      12,314       4,191      27,663      11,108
Interest expense..................................      (9,865)     (9,527)    (20,024)    (15,530)
Amortization/write-off of financing costs.........      (1,197)       (909)     (2,388)     (1,117)
Interest and investment income....................          59         261          83         325
                                                     ---------   ---------   ---------   ---------
Earnings (loss) from continuing operations
  before income taxes.............................       1,311      (5,984)      5,334      (5,214)
Provision (benefit) for income taxes..............         542      (2,159)      2,207      (1,848)
                                                     ---------   ---------   ---------   ---------
Earnings (loss) from continuing operations
  before cumulative effect of change
    in accounting principle.......................         769      (3,825)      3,127      (3,366)

Discontinued operations, net of income tax
  benefit of $214, $306, $233 and $531 (Note 6)...        (322)       (459)       (349)       (795)

Cumulative effect of change in accounting
  principle, net of income tax benefit of
    $468 (Note 3).................................           -           -        (704)          -
                                                     ---------   ---------   ---------   ---------
Net earnings (loss)...............................   $     447   $  (4,284)  $   2,074   $  (4,161)
                                                     =========   =========   =========   =========
Net earnings (loss) per common share:
  Basic
    Continuing operations.........................   $    0.09   $   (0.45)  $    0.36   $   (0.40)
    Discontinued operations.......................       (0.04)      (0.05)      (0.04)      (0.09)
    Cumulative effect of change
      in accounting principle.....................           -           -       (0.08)          -
                                                     ---------   ---------   ---------   ---------
                                                     $    0.05   $   (0.50)  $    0.24   $   (0.49)
                                                     =========   =========   =========   =========
  Assuming dilution
    Continuing operations.........................   $    0.09   $   (0.45)  $    0.36   $   (0.40)
    Discontinued operations.......................       (0.04)      (0.05)      (0.04)      (0.09)
    Cumulative effect of change
      in accounting principle.....................           -           -       (0.08)          -
                                                     ---------   ---------   ---------   ---------
                                                     $    0.05   $   (0.50)  $    0.24   $   (0.49)
                                                     =========   =========   =========   =========

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


<PAGE>
<TABLE>
                            GIANT INDUSTRIES, INC. AND SUBSIDIARIES
                             CONSOLIDATED STATEMENTS OF CASH FLOWS
                                         (Unaudited)
                                        (In thousands)
<CAPTION>
                                                                         Six Months
                                                                       Ended June 30,
                                                                 -------------------------
                                                                    2003            2002
                                                                 ---------       ---------
<S>                                                              <C>             <C>
Cash flows from operating activities:
  Net earnings (loss).......................................     $   2,074       $  (4,161)
  Adjustments to reconcile net earnings (loss) to net
    cash provided by operating activities:
      Depreciation and amortization, including
        discontinued operations.............................        18,971          17,807
      Amortization/write-off of financing costs.............         2,388           1,117
      Deferred income taxes.................................         2,042          (2,377)
      Cumulative effect of change in
        accounting principle, net...........................           704               -
      Net loss on the disposal/write-down of assets
        included in continuing operations...................           234             508
      Net loss on disposal of discontinued operations.......           113             132
      Loss on write-down/write-off of assets included
        in discontinued operations..........................            76             423
      Tax refund received...................................         4,090               -
      Other.................................................           765             312
      Changes in operating assets and liabilities
        (excluding in 2002 the effects of the
        Yorktown acquisition):
        Increase in receivables.............................        (3,657)        (21,426)
        (Increase) decrease in inventories..................       (12,702)          6,302
        Decrease (increase) in prepaid expenses and other...         2,796          (2,349)
        Increase in accounts payable........................         7,773           8,111
        Increase in accrued expenses........................         2,541            673
                                                                 ---------       ---------
Net cash provided by operating activities...................        28,208           5,072
                                                                 ---------       ---------
Cash flows from investing activities:
  Yorktown refinery acquisition.............................             -        (193,992)
  Capital expenditures......................................       (10,150)         (7,552)
  Contingent payment on Yorktown refinery acquisition.......        (5,475)              -
  Proceeds from sale of property, plant and equipment
    and other assets........................................         9,347           2,296
                                                                 ---------       ---------
Net cash used by investing activities.......................        (6,278)       (199,248)
                                                                 ---------       ---------
Cash flows from financing activities:
  Proceeds from long-term debt..............................             -         234,144
  Payments of long-term debt................................        (6,276)       (101,134)
  Proceeds from line of credit..............................        50,000          60,000
  Payments on line of credit................................       (65,000)              -
  Deferred financing costs..................................           (50)        (13,704)
  Proceeds from exercise of stock options...................             -              94
                                                                 ---------       ---------
Net cash (used) provided by financing activities............       (21,326)        179,400
                                                                 ---------       ---------
Net increase (decrease) in cash and cash equivalents........           604         (14,776)
  Cash and cash equivalents:
    Beginning of period.....................................        10,168          26,326
                                                                 ---------       ---------
    End of period...........................................     $  10,772       $  11,550
                                                                 =========       =========

Significant Noncash Investing and Financing Activities. On January 1, 2003, in accordance with
Statement of Financial Accounting Standards ("SFAS") No. 143, "Accounting for Asset Retirement
Obligations," the Company recorded an asset retirement obligation of $2,198,000, asset retirement
costs of $1,580,000 and related accumulated depreciation of $674,000. The Company also reversed a
previously recorded asset retirement obligation for $120,000, and recorded a cumulative effect
adjustment of $1,172,000 ($704,000 net of taxes). See Note 3. On April 3, 2003, the Company
contributed 213,776 newly issued shares of its common stock, valued at $900,000, to its 401(k)
plan as a discretionary contribution for the year 2002. In the second quarter of 2002, the
Company issued $200,000,000 of 11% Senior Subordinated Notes at a discount of $5,856,000.

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


<PAGE>
                NOTES TO 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.
These operations are conducted on both the East Coast (primarily in
Virginia, Maryland, North Carolina, the New England states and the New
York Harbor) and in the Southwest (primarily in New Mexico, Arizona, and
Colorado, with a concentration in the Four Corners area where these states
adjoin). In addition, Phoenix Fuel Co., Inc. ("Phoenix Fuel"), a wholly-
owned subsidiary of Giant Arizona, operates an industrial/commercial
wholesale petroleum products distribution operation primarily in Arizona.
See Note 2 for a further discussion of Company operations.

     The accompanying unaudited 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. These adjustments and reclassifications
are of a normal recurring nature, with the exception of the cumulative
effect of a change in accounting for asset retirement obligations (see
Note 3) and discontinued operations (see Note 6). Operating results for
the six months ended June 30, 2003 are not necessarily indicative of the
results that may be expected for the year ending December 31, 2003. The
accompanying 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, 2002.

     On January 1, 2003, the Company adopted Financial Accounting
Standards Board ("FASB") SFAS No. 143, "Accounting for Asset Retirement
Obligations" ("SFAS No. 143"). 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. See Note 3 for disclosures
relating to SFAS No. 143.

     In December 2002, the FASB issued SFAS No. 148 "Accounting for Stock-
Based Compensation - Transition and Disclosure" ("SFAS No. 148"). SFAS No.
148 amends SFAS No. 123 to permit alternative methods of transition for
adopting a fair value based method of accounting for stock-based employee
compensation. The Company uses the intrinsic value method to account for
stock-based employee compensation. The Company is evaluating whether or
not it will adopt the transition provisions of SFAS No. 148 in 2003. See
Note 8 for disclosures relating to stock-based employee compensation.

     On January 1, 2003, the Company adopted the provisions of FASB
Interpretation No. 45 "Guarantor's Accounting and Disclosure Requirements
for Guarantees, Including Indirect Guarantees of Indebtedness of Others"
("Interpretation No. 45"). Interpretation No. 45 elaborates on existing
disclosure requirements for guarantees and clarifies that a guarantor is
required to recognize, at the inception of a guarantee, a liability for
the fair value of the obligation undertaken in issuing the guarantee. The
initial recognition and measurement provisions of Interpretation No. 45
apply on a prospective basis to guarantees issued or modified after
December 31, 2002. The adoption of Interpretation No. 45 had no effect on
the Company's financial statements.

     In January 2003, the FASB issued FASB Interpretation No. 46
"Consolidation of Variable Interest Entities" ("Interpretation No. 46").
Interpretation No. 46 clarifies the application of existing consolidation
requirements to entities where a controlling financial interest is
achieved through arrangements that do not involve voting interests. Under
Interpretation No. 46, a variable interest entity is consolidated if a
company is subject to a majority of the risk of loss from the variable
interest entity's activities or entitled to receive a majority of the
entity's residual returns. Interpretation No. 46 applies to variable
interest entities created or acquired after January 31, 2003. For variable
interest entities existing at January 31, 2003, Interpretation No. 46 is
effective for accounting periods beginning after June 15, 2003. The
application of Interpretation No. 46 had no effect on the Company's
financial statements.

     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 would create a project timeline framework
for capitalizing costs related to property, plant and equipment ("PP&E")
construction. The costs of planned major maintenance activities such as
maintenance turnarounds at the Company's refineries would be capitalized
or expensed in accordance with the SOP instead of being deferred and
amortized over the period until the next turnaround. The AICPA is in the
process of redrafting the SOP. The final SOP is expected to be issued by
the end of 2003 and will be effective for fiscal years beginning after
December 15, 2004, with early application encouraged. The Company is in
the process of evaluating the effect the SOP will have on its financial
position and results of operations.

     In May 2003, the FASB issued SFAS No. 150, "Accounting for Certain
Financial Instruments with Characteristics of Both Liabilities and
Equity." This Statement establishes standards for how an issuer classifies
and measures certain financial instruments with characteristics of both
liabilities and equity. It requires that an issuer classify a financial
instrument that is within its scope as a liability (or an asset in some
circumstances). Many of those instruments were previously classified as
equity. This statement is effective immediately for financial instruments
entered into or modified after May 31, 2003 and is effective for all other
financial instruments beginning July 1, 2003. The Company is currently
evaluating the standard and does not expect any of its existing financial
instruments to be within the scope of this statement.

     In May 2003, the FASB ratified Emerging Issues Task Force Issue 03-4
("EITF 03-4"), "Determining the Classification and Benefit Attribution
Method for a 'Cash Balance' Pension Plan." EITF 03-4 requires a cash
balance pension plan to be considered a defined benefit plan for purposes
of applying SFAS No. 87, "Employers' Accounting for Pensions." It requires
the traditional unit credit attribution method to be used for accounting
purposes. The effective date of the consensus is the next measurement date
after May 28, 2003. The Company is currently evaluating the impact of EITF
03-4 on its financial statements.

     Certain reclassifications have been made to the 2002 financial
statements and notes to conform to the financial statement classifications
used in the current year. These reclassifications relate primarily to the
discontinued operation requirements of SFAS No. 144. These
reclassifications had no effect on reported earnings or stockholders'
equity.


<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 operates the Company's 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 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 operates the Company's service
       stations with convenience stores or kiosks. Until June 19, 2003,
       when it was sold, the Retail Group also operated a travel center
       located on I-40 adjacent to the Ciniza refinery near Gallup,
       New Mexico. These service stations 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. At June 30,
       2003, the Company operated 129 service stations.

     - Phoenix Fuel: The Company's Phoenix Fuel operation is an
       industrial/commercial 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.

     Other Company 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 the last in, first out ("LIFO") method of valuing certain
inventories and lower of cost or market inventory adjustments.

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


<PAGE>
     Disclosures regarding the Company's reportable segments with a
reconciliation to consolidated totals for the three months ended June 30,
2003 and 2002, are presented below.

<TABLE>
<CAPTION>
                                            For the Three Months Ended June 30, 2003          (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..............   $ 68,091
    Yorktown operations..................    154,880
                                            --------
    Total................................   $222,971  $ 52,436  $ 91,588  $      -   $       -    $  366,995
  Merchandise and lubricants.............          -    34,570     6,707         -           -        41,277
  Other..................................      5,126     3,893       378       145           -         9,542
                                            --------  --------  --------  --------   ---------    ----------
    Total................................    228,097    90,899    98,673       145           -       417,814
                                            --------  --------  --------  --------   ---------    ----------
Intersegment net revenues:
  Finished products......................     40,891         -    11,419         -     (52,310)            -
  Other..................................      4,186         -         -         -      (4,186)            -
                                            --------  --------  --------  --------   ---------    ----------
    Total................................     45,077         -    11,419         -     (56,496)            -
                                            --------  --------  --------  --------   ---------    ----------
Total net revenues.......................    273,174    90,899   110,092       145     (56,496)      417,814
Net revenues of discontinued operations..          -     8,106         -         -           -         8,106
                                            --------  --------  --------  --------   ---------    ----------
Net revenues of continuing operations....   $273,174  $ 82,793  $110,092  $    145   $ (56,496)   $  409,708
                                            ========  ========  ========  ========   =========    ==========
Operating income (loss):
  Four Corners operations................   $ 12,715
  Yorktown operations....................     (2,847)
                                            --------
Total operating income (loss)............   $  9,868  $  4,809  $  2,284  $ (5,033)  $    (150)   $   11,778
Discontinued operations loss.............          -      (209)        -         -        (327)         (536)
                                            --------  --------  --------  --------   ---------    ----------
Operating income (loss)
  from continuing operations.............   $  9,868  $  5,018  $  2,284  $ (5,033)  $     177    $   12,314
                                            --------  --------  --------  --------   ---------
Interest expense.........................                                                             (9,865)
Amortization of financing costs..........                                                             (1,197)
Interest income..........................                                                                 59
                                                                                                  ----------
Earnings from continuing operations
  before income taxes....................                                                         $    1,311
                                                                                                  ==========
Depreciation and amortization:
  Four Corners operations................   $  3,978
  Yorktown operations....................      2,080
                                            --------
    Total................................   $  6,058  $  2,781  $    446  $    313   $       -    $    9,598
    Discontinued operations..............          -       165         -         -           -           165
                                            --------  --------  --------  --------   ---------    ----------
    Continuing operations................   $  6,058  $  2,616  $    446  $    313   $       -    $    9,433
                                            --------  --------  --------  --------   ---------    ----------
Capital expenditures.....................   $  4,574  $    120  $    129  $     55   $       -    $    4,878
Yorktown refinery acquisition
  contingent payment.....................   $  1,489  $      -  $      -  4      -   $       -    $    1,489
</TABLE>


<PAGE>
<TABLE>
<CAPTION>
                                            For the Three Months Ended June 30, 2002          (In thousands)
                                            ----------------------------------------------------------------
                                            Refining   Retail   Phoenix            Reconciling
                                              Group    Group      Fuel     Other      Items     Consolidated
                                            ----------------------------------------------------------------
<S>                                         <C>       <C>       <C>       <C>       <C>           <C>
Customer net revenues:
  Finished products:
    Four Corners operations..............   $ 68,437
    Yorktown operations(1)...............     72,834
                                            --------
    Total................................   $141,271  $ 49,669  $ 64,378  $     -   $      -      $255,318
  Merchandise and lubricants.............          -    37,984     5,453        -          -        43,437
  Other..................................      2,061     3,809       724       40          -         6,634
                                            --------  --------  --------  -------   --------      --------
    Total................................    143,332    91,462    70,555       40          -       305,389
                                            --------  --------  --------  -------   --------      --------
Intersegment net revenues:
  Finished products......................     39,168         -    14,067        -    (53,235)            -
  Other..................................      4,351         -         -        -     (4,351)            -
                                            --------  --------  --------  -------   --------      --------
    Total................................     43,519         -    14,067        -    (57,586)            -
                                            --------  --------  --------  -------   --------      --------
Total net revenues.......................    186,851    91,462    84,622       40    (57,586)      305,389
Net revenues of discontinued operations..          -    15,811         -        -          -        15,811
                                            --------  --------  --------  -------   --------      --------
Net revenues of continuing operations....   $186,851  $ 75,651  $ 84,622  $    40   $(57,586)     $289,578
                                            ========  ========  ========  =======   ========      ========
Operating income (loss):
  Four Corners operations................   $  8,356
  Yorktown operations(1).................     (3,090)
                                            --------
Total operating income (loss)............   $  5,266  $  1,886  $  1,566  $(4,233)  $ (1,059)     $  3,426
Discontinued operations loss.............          -      (210)        -        -       (555)         (765)
                                            --------  --------  --------  -------   --------      --------
Operating income (loss)
  from continuing operations.............   $  5,266  $  2,096  $  1,566  $(4,233)  $   (504)     $  4,191
                                            --------  --------  --------  -------   --------
Interest expense.........................                                                           (9,527)
Amortization/write-off
  of financing costs.....................                                                             (909)
Interest income..........................                                                              261
                                                                                                  --------
Loss from continuing operations
  before income taxes....................                                                         $ (5,984)
                                                                                                  ========
Depreciation and amortization:
  Four Corners operations................   $  4,083
  Yorktown operations(1).................      1,080
                                            --------
    Total................................   $  5,163  $  3,258  $    530  $   293   $      -      $  9,244
    Discontinued operations..............          -       496         -        -          -           496
                                            --------  --------  --------  -------   --------      --------
    Continuing operations................   $  5,163  $  2,762  $    530  $   293   $      -      $  8,748
                                            --------  --------  --------  -------   --------      --------
Capital expenditures.....................   $  4,474  $    136  $     57  $   553   $      -      $  5,220
Yorktown refinery acquisition............   $193,992  $      -  $      -  $     -   $      -      $193,992

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



<PAGE>
     Disclosures regarding the Company's reportable segments with
reconciliation to consolidated totals for the six months ended June 30,
2003 and 2002, are presented below.

<TABLE>
<CAPTION>
                                            As of and for the Six Months Ended June 30, 2003  (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..............   $146,642
    Yorktown operations..................    362,947
                                            --------
    Total................................   $509,589  $104,178  $194,223  $      -   $       -    $  807,990
  Merchandise and lubricants.............          -    65,504    12,717         -           -        78,221
  Other..................................     15,088     7,928       988       210           -        24,214
                                            --------  --------  --------  --------   ---------    ----------
    Total................................    524,677   177,610   207,928       210           -       910,425
                                            --------  --------  --------  --------   ---------    ----------
Intersegment net revenues:
  Finished products......................     86,903         -    24,052         -    (110,955)            -
  Other..................................      8,207         -         -         -      (8,207)            -
                                            --------  --------  --------  --------   ---------    ----------
    Total................................     95,110         -    24,052         -    (119,162)            -
                                            --------  --------  --------  --------   ---------    ----------
Total net revenues.......................    619,787   177,610   231,980       210    (119,162)      910,425
Net revenues of discontinued operations..          -    19,410         -         -           -        19,410
                                            --------  --------  --------  --------   ---------    ----------
Net revenues of continuing operations....   $619,787  $158,200  $231,980  $    210   $(119,162)   $  891,015
                                            ========  ========  ========  ========   =========    ==========
Operating income (loss):
  Four Corners operations................   $ 22,218
  Yorktown operations....................      5,511
                                            --------
Total operating income (loss)............   $ 27,729  $  5,842  $  3,890  $ (9,957)  $    (423)   $   27,081
Discontinued operations loss.............          -      (393)        -         -        (189)         (582)
                                            --------  --------  --------  --------   ---------    ----------
Operating income (loss)
  from continuing operations.............   $ 27,729  $  6,235  $  3,890  $ (9,957)  $    (234)   $   27,663
                                            --------  --------  --------  --------   ---------
Interest expense.........................                                                            (20,024)
Amortization of financing costs..........                                                             (2,388)
Interest income..........................                                                                 83
                                                                                                  ----------
Earnings from continuing operations
  before income taxes....................                                                         $    5,334
                                                                                                  ==========
Depreciation and amortization:
  Four Corners operations................   $  7,958
  Yorktown operations....................      3,814
                                            --------
    Total................................   $ 11,772  $  5,610  $    900  $    689   $       -    $   18,971
    Discontinued operations..............          -       409         -         -           -           409
                                            --------  --------  --------  --------   ---------    ----------
    Continuing operations................   $ 11,772  $  5,201  $    900  $    689   $       -    $   18,562
                                            --------  --------  --------  --------   ---------    ----------
Total assets.............................   $452,207  $117,914  $ 65,076  $ 62,817   $       -    $  698,014
Capital expenditures.....................   $  9,362  $    374  $    333  $     81   $       -    $   10,150
Yorktown refinery acquisition
  contingent payment.....................   $  5,475  $      -  $      -  $      -   $       -    $    5,475
</TABLE>


<PAGE>
<TABLE>
<CAPTION>
                                            As of and for the Six Months Ended June 30, 2002  (In thousands)
                                            ----------------------------------------------------------------
                                            Refining   Retail   Phoenix            Reconciling
                                              Group    Group      Fuel     Other      Items     Consolidated
                                            ----------------------------------------------------------------
<S>                                         <C>       <C>       <C>       <C>        <C>          <C>
Customer net revenues:
  Finished products:
    Four Corners operations..............   $120,747
    Yorktown operations(1)...............     72,834
                                            --------
    Total................................   $193,581  $ 89,088  $121,159  $      -   $       -    $403,828
  Merchandise and lubricants.............          -    70,821    11,421         -           -      82,242
  Other..................................      3,904     7,769     1,301        90           -      13,064
                                            --------  --------  --------  --------   ---------    --------
    Total................................    197,485   167,678   133,881        90           -     499,134
                                            --------  --------  --------  --------   ---------    --------
Intersegment net revenues:
  Finished products......................     68,761         -    26,373         -     (95,134)          -
  Other..................................      8,823         -         -         -      (8,823)          -
                                            --------  --------  --------  --------   ---------    --------
    Total................................     77,584         -    26,373         -    (103,957)          -
                                            --------  --------  --------  --------   ---------    --------
Total net revenues.......................    275,069   167,678   160,254        90    (103,957)    499,134
Net revenues of discontinued operations..          -    30,248         -         -           -      30,248
                                            --------  --------  --------  --------   ---------    --------
Net revenues of continuing operations....   $275,069  $137,430  $160,254  $     90   $(103,957)   $468,886
                                            ========  ========  ========  ========   =========    ========
Operating income (loss):
  Four Corners operations................   $ 17,406
  Yorktown operations(1).................     (3,090)
                                            --------
Total operating income (loss)............   $ 14,316  $  1,197  $  3,039  $ (7,707)  $  (1,063)   $  9,782
Discontinued operations loss.............          -      (771)        -         -        (555)     (1,326)
                                            --------  --------  --------  --------   ---------    --------
Operating income (loss)
  from continuing operations.............   $ 14,316  $  1,968  $  3,039  $ (7,707)  $    (508)   $ 11,108
                                            --------  --------  --------  --------   ---------
Interest expense.........................                                                          (15,530)
Amortization/write-off
  of financing costs.....................                                                           (1,117)
Interest income..........................                                                              325
                                                                                                  --------
Loss before income taxes.................                                                         $ (5,214)
                                                                                                  ========
Depreciation and amortization:
  Four Corners operations................   $  8,632
  Yorktown operations(1).................      1,080
                                            --------
    Total................................   $  9,712  $  6,459  $  1,067  $    569   $       -    $ 17,807
    Discontinued operations..............          -     1,007         -         -           -       1,007
                                            --------  --------  --------  --------   ---------    --------
    Continuing operations................   $  9,712  $  5,452  $  1,067  $    569   $       -    $ 16,800
                                            --------  --------  --------  --------   ---------    --------
Total assets.............................   $446,612  $148,860  $ 64,313  $ 60,543   $       -    $720,328
Capital expenditures.....................   $  5,364  $    444  $    273  $  1,471   $       -    $  7,552
Yorktown refinery acquisition............   $193,992  $      -  $      -  $      -   $       -    $193,992

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



<PAGE>
NOTE 3 - ASSET RETIREMENT OBLIGATIONS:

     On January 1, 2003, the Company adopted SFAS No. 143, "Accounting for
Asset Retirement Obligations." SFAS No. 143 addresses financial accounting
and reporting obligations associated with the retirement of tangible long-
lived assets and the associated asset retirement costs. This Statement
applies to all entities. It addresses 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, statue, ordinance, or
written or oral contract or by legal construction of a contract under the
doctrine of promissory estoppel.

     This Statement requires that the fair value of a liability for an
Asset Retirement Obligation ("ARO") be recognized in the period in which
it is incurred if a reasonable estimate of fair value can be made. The
associated Asset Retirement Cost ("ARC") is capitalized as part of the
carrying amount of the long-lived asset. To initially recognize the
Company's ARO liability, the Company capitalized the fair value of all
ARO's identified by the Company, calculated as of the date the liability
would have been recognized were SFAS No. 143 in effect at that time. In
accordance with SFAS No. 143, the Company also recognized the cumulative
accretion and accumulated depreciation from the date the liability would
have been recognized had the provisions of SFAS No. 143 been in effect, to
January 1, 2003, the date of adoption by the Company. As a result, on
January 1, 2003, the Company recorded an ARO liability of $2,198,000, ARC
assets of $1,580,000 and related accumulated depreciation of $674,000. The
Company also reversed a previously recorded asset retirement obligation
for $120,000, and recorded a cumulative effect adjustment of $1,172,000
($704,000 net of taxes).

     The following ARO's were identified by the Company:

         1.  Landfills - pursuant to Virginia law, the two solid waste
             management facilities at the Yorktown refinery must satisfy
             closure and post-closure care and financial responsibility
             requirements.

         2.  Crude Pipelines - the Company's right-of-way agreements
             generally require that pipeline properties be returned to
             their original condition when the agreements are no longer in
             effect. This means that the pipeline surface facilities must
             be dismantled and removed and certain site reclamation
             performed. The Company does not believe these right-of-way
             agreements will require the Company to remove the underground
             pipe upon taking the pipeline permanently out of service.
             Regulatory requirements, however, may mandate that such
             out-of-service underground pipe be purged.

         3.  Storage Tanks - the Company has a legal obligation under
             applicable law to remove all underground and aboveground
             storage tanks, both on owned property and leased property,
             once they are taken out of service. Under some lease
             arrangements, the Company also has committed to restore the
             leased property to its original condition.


<PAGE>
     The following table reconciles the beginning and ending aggregate
carrying amount of the Company's ARO's for the six and twelve month
periods ended June 30, 2003 and December 31, 2002, respectively.

<TABLE>
<CAPTION>
                                                        December 31,
                                             June 30,      2002
                                              2003      (Pro Forma)
                                            ---------   ------------
                                                (In thousands)
<S>                                          <C>           <C>
Liability beginning of year...........       $2,198        $1,719
Liabilities incurred..................            -           340
Liabilities settled...................          (58)            -
Accretion expense.....................           88           139
Revision to estimated cash flows......            -             -
                                             ------        ------
Liability end of period...............       $2,228        $2,198
                                             ======        ======
</TABLE>

     The effect of the change for the three and six months ended June 30,
2003 was to reduce earnings before the cumulative effect of change in
accounting principle by approximately $45,000 and $0.005 per share and
$91,000 or a $0.01 per share, respectively.

     The pro forma information below for the three and six months ended
June 30, 2002 reflects the effects of additional depreciation and
accretion expense net of related income taxes as if the requirements of
SFAS No. 143 were in effect as of the beginning of the period.

<TABLE>
<CAPTION>
                                       Three Months Ended       Six Months Ended
                                          June 30, 2002          June 30, 2002
                                       ------------------       ----------------
                                                     (In thousands)
<S>                                         <C>                    <C>
Loss from continuing operations.......      $(3,863)               $(3,442)
Loss from discontinued operations.....         (459)                  (795)
                                            -------                -------
                                            $(4,322)               $(4,237)
                                            =======                =======
Net loss per common share:
  Basic and assuming dilution:
    Continuing operations.............      $ (0.45)               $ (0.40)
    Discontinued operations...........        (0.05)                 (0.09)
                                            -------                -------
                                            $ (0.50)               $ (0.49)
                                            =======                =======
</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").

     As part of the Yorktown acquisition, the Company agreed to pay earn-
out payments, up to a maximum of $25,000,000, to BP beginning in 2003 and
concluding at the end of 2005, 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. In the first and
second quarters of 2003, the Company incurred $3,986,000 and $1,489,000,
respectively, under this provision of the purchase agreement. These earn-
out payments are considered additional purchase price and are allocated to
the assets acquired in the same proportions as the original purchase price
allocation, not to exceed the estimated current replacement cost, and
amortized over the estimated remaining life of the assets. No material
adjustments have been made to the Company's initial allocation of the
purchase price of the Yorktown refinery except as noted above.

     The following unaudited pro forma financial information for the three
and six months ended June 30, 2002 gives effect to the: (i) Yorktown
acquisition; (ii) financing transactions entered into in connection with
the Yorktown acquisition; 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 period 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           Six Months
                                               Ended June 30, 2002    Ended June 30, 2002
                                               -------------------    -------------------
                                                  (In thousands, except per share data)
<S>                                                 <C>                   <C>
Revenues from continuing operations..........       $355,286              $669,294
Net loss from continuing operations..........         (6,046)              (14,763)
Net loss.....................................         (6,505)              (15,558)
Net loss from continuing operation per share:
  Basic......................................       $  (0.71)             $  (1.73)
  Diluted....................................       $  (0.71)             $  (1.73)
Net loss per share:
  Basic......................................       $  (0.76)             $  (1.82)
  Diluted....................................       $  (0.76)             $  (1.82)
</TABLE>


<PAGE>
NOTE 5 - Goodwill and Other Intangible Assets:

     At June 30, 2003 and December 31, 2002, the Company had goodwill of
$19,403,000 and $19,465,000, respectively.

     The changes in the carrying amount of goodwill for the six months
ended June 30, 2003 are as follows:

<TABLE>
<CAPTION>
                                         Refining    Retail    Phoenix
                                          Group      Group       Fuel      Total
                                         --------   -------    -------    -------
                                                    (In thousands)
<S>                                      <C>        <C>        <C>        <C>
Balance as of January 1, 2003.........   $   125    $ 4,618    $14,722    $19,465
Goodwill written off related
  to the sale of three retail units...         -        (62)         -        (62)
                                         -------    -------    -------    -------
Balance as of June 30, 2003...........   $   125    $ 4,556    $14,722    $19,403
                                         =======    =======    =======    =======
</TABLE>

     A summary of intangible assets that are included in "Other Assets" in
the Consolidated Balance Sheet at June 30, 2003 is presented below:

<TABLE>
<CAPTION>
                                              Gross                        Net
                                            Carrying     Accumulated    Carrying
                                              Value      Amortization     Value
                                            --------     ------------   --------
                                                        (In thousands)
<S>                                          <C>           <C>          <C>
Amortized intangible assets:
  Rights-of-way..........................    $ 3,564       $ 2,461      $ 1,103
  Contracts..............................      3,971         3,535          436
  Licenses and permits...................        786           103          683
                                             -------       -------      -------
                                               8,321         6,099        2,222
                                             -------       -------      -------
Unamortized intangible assets:
  Liquor licenses........................      7,316             -        7,316
                                             -------       -------      -------
Total intangible assets..................    $15,637       $ 6,099      $ 9,538
                                             =======       =======      =======
</TABLE>



<PAGE>
NOTE 6 - DISCONTINUED OPERATIONS, ASSETS HELD FOR SALE, AND DISPOSITIONS:

     Losses from discontinued operations before income taxes of $536,000
for the three months ended June 30, 2003 include a net loss on the
disposal of two retail units and the Company's travel center of $251,000,
which includes $12,000 of associated goodwill, an impairment write-down on
one closed retail unit of $76,000, and net operating losses of $209,000.
Losses from discontinued operations before income taxes of $582,000 for
the six months ended June 30, 2003 include a net loss on the disposal of
four retail units and the Company's travel center of $113,000, which
includes $62,000 of associated goodwill, an impairment write-down on one
closed retail unit of $76,000, and net operating losses of $393,000.
Losses from discontinued operations before income taxes of $765,000 and
$1,326,000 for the three and six months ended June 30, 2002, respectively,
include a loss on the disposal of two retail units of $132,000, impairment
write-downs of $415,000 on five retail units, and asset write-offs of
$8,000. In addition, net operating losses of $210,000 and $771,000 were
incurred for the three and six months ended June 30, 2002, respectively.

     Revenues included in discontinued operations for the three months
ended June 30, 2003 and 2002, were $8,106,000 and $15,811,000,
respectively, and for the six months ended June 30, 2003 and 2002, were
$19,410,000 and $30,248,000, respectively.

     On June 19, 2003, the Company completed the sale of its Giant Travel
Center to Pilot Travel Centers LLC ("Pilot") and received net proceeds of
approximately $5,820,000, plus an additional $491,000 for inventories. As
a result of this transaction, the Company recorded a pretax loss of
approximately $44,600 which included charges that were a direct result of
the decision to sell the Travel Center. In connection with the sale, the
Company entered into a long-term product supply agreement with Pilot. The
Company will receive a supply agreement performance payment at the end of
five years if there has been no material breach under the supply agreement
and all requirements have been met for such payment.

     Included in "Other Assets" as assets held for sale in the
accompanying Consolidated Balance Sheets are the following categories of
assets. All of these assets are being marketed for sale. In the first six
months of 2003, two closed retail units were sold and impairment write-
downs of $400,000 were recorded relating to various other assets.

<TABLE>
<CAPTION>
                                                           June 30,         December 31,
                                                             2003               2002
                                                        -------------    -----------------
                                                                  (In thousands)
<S>                                                         <C>               <C>
Operating retail units included in
  discontinued operations:
    Property, plant and equipment.....................      $   637           $ 9,170
    Inventories.......................................          166               361
                                                            -------           -------
                                                                803             9,531
Vacant land - residential/commercial property.........        6,278             6,351
Closed retail units...................................        1,735             2,376
Vacant land - industrial site.........................        1,596             1,596
Vacant land - adjacent to retail units................        1,189             1,201
                                                            -------           -------
                                                            $11,601           $21,055
                                                            =======           =======
</TABLE>


<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 Ended      Six Months Ended
                                             June 30,               June 30,
                                       --------------------   --------------------
                                         2003       2002        2003       2002
                                       --------   ---------   --------   ---------
Numerator                                               (In thousands)
<S>                                    <C>        <C>         <C>        <C>
Earnings (loss) from
  continuing operations..............  $    769   $  (3,825)  $  3,127   $  (3,366)
Loss from discontinued operations....      (322)       (459)      (349)       (795)
Cumulative effect of change in
  accounting principle...............         -           -       (704)          -
                                       --------   ---------   --------   ---------
Net earnings (loss)..................  $    447   $  (4,284)  $  2,074   $  (4,161)
                                       ========   =========   ========   =========
</TABLE>

<TABLE>
<CAPTION>
                                        Three Months Ended      Six Months Ended
                                             June 30,               June 30,
                                       --------------------   --------------------
                                         2003       2002        2003       2002
                                       ---------  ---------   ---------  ---------
Denominator
<S>                                    <C>        <C>         <C>        <C>
Basic - weighted average
  shares outstanding.................  8,780,857  8,566,271   8,676,895  8,560,109
Effect of dilutive stock options.....     80,966          -*     61,851          -*
                                       ---------  ---------   ---------  ---------
Diluted - weighted average
  shares outstanding.................  8,861,823  8,566,271   8,738,746  8,560,109
                                       =========  =========   =========  =========

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

<TABLE>
<CAPTION>
                                        Three Months Ended      Six Months Ended
                                             June 30,               June 30,
                                       --------------------   --------------------
                                         2003       2002        2003       2002
                                       --------   ---------   --------   ---------
Basic Earnings (Loss) Per Share
<S>                                    <C>        <C>         <C>        <C>
Earnings (loss) from continuing
  operations.........................  $   0.09   $   (0.45)  $   0.36   $   (0.40)
Loss from discontinued operations....     (0.04)      (0.05)     (0.04)      (0.09)
Cumulative effect of change in
  accounting principle...............         -           -      (0.08)          -
                                       --------   ---------   --------   ---------
Net earnings (loss)..................  $   0.05   $   (0.50)  $   0.24   $   (0.49)
                                       ========   =========   ========   =========
</TABLE>



<PAGE>
<TABLE>
<CAPTION>
                                        Three Months Ended      Six Months Ended
                                             June 30,               June 30,
                                       --------------------   --------------------
                                         2003       2002        2003       2002
                                       --------   ---------   --------   ---------
Diluted Earnings (Loss) Per Share
<S>                                    <C>        <C>         <C>        <C>
Earnings (loss) from continuing
  operations.........................  $   0.09   $   (0.45)  $   0.36   $   (0.40)
Loss from discontinued operations....     (0.04)      (0.05)     (0.04)      (0.09)
Cumulative effect of change in
  accounting principle...............         -           -      (0.08)          -
                                       --------   ---------   --------   ---------
Net earnings (loss)..................  $   0.05   $   (0.50)  $   0.24   $   (0.49)
                                       ========   =========   ========   =========
</TABLE>

     On April 3, 2003, the Company contributed 213,776 newly issued shares
of its common stock to its 401(k) plan as a discretionary contribution for
the year 2002.

     On May 9, 2003, the Company granted 140,500 stock options under its
1998 Stock Incentive Plan.

     At June 30, 2003, there were 8,785,555 shares of the Company's common
stock outstanding. There were no transactions subsequent to June 30, 2003,
that if the transactions had occurred before June 30, 2003, would
materially change the number of common shares or potential common shares
outstanding as of June 30, 2003.



<PAGE>
NOTE 8 - STOCK-BASED EMPLOYEE COMPENSATION:

     The Company has a stock-based employee compensation plan that is more
fully described in Note 16 to the Company's Annual Report on Form
10-K for the year ended December 31, 2002. The Company accounts for this
plan under the recognition and measurement principles of Accounting
Principles Board Opinion No. 25, "Accounting for Stock Issued to
Employees", and related Interpretations. The Company uses the intrinsic
value method to account for stock-based employee compensation. No stock-
based employee compensation cost is reflected in net income, as all
options granted under this plan had an exercise price equal to the market
value of the underlying common stock on the date of grant. The following
table illustrates the effect on net earnings (loss) and net earnings
(loss) per share as if the Company had applied the fair value recognition
provisions of SFAS No. 123, "Accounting for Stock-Based Compensation", to
stock-based employee compensation.

<TABLE>
<CAPTION>
                                           Three Months Ended   Six Months Ended
                                                 June 30,            June 30,
                                           ------------------   -----------------
                                            2003       2002      2003      2002
                                           -------    -------   -------   -------
                                            (In thousands, except per share data)
<S>                                        <C>        <C>       <C>       <C>
Net earnings (loss), as reported.........  $   447    $(4,284)  $ 2,074   $(4,161)
Deduct: Total stock-based employee
  compensation expense determined
  under the fair value based method
  for all awards, net of related
  tax effects............................       55         52        94       127
                                           -------    -------   -------   -------
Pro forma net earnings (loss)............  $   392    $(4,336)  $ 1,980   $(4,288)
                                           =======    =======   =======   =======

Net earnings (loss) per share:
  Basic - as reported....................  $  0.05    $ (0.50)  $  0.24   $ (0.49)
                                           =======    =======   =======   =======
  Basic - pro forma......................  $  0.04    $ (0.51)  $  0.23   $ (0.50)
                                           =======    =======   =======   =======
  Diluted - as reported..................  $  0.05    $ (0.50)  $  0.24   $ (0.49)
                                           =======    =======   =======   =======
  Diluted - pro forma....................  $  0.04    $ (0.51)  $  0.23   $ (0.50)
                                           =======    =======   =======   =======

</TABLE>


<PAGE>
NOTE 9 - INVENTORIES:

<TABLE>
<CAPTION>
                                          June 30, 2003    December 31, 2002
                                          -------------    -----------------
                                                    (In thousands)
<S>                                         <C>                 <C>
First-in, first-out ("FIFO") method:
  Crude oil............................     $ 53,116            $ 34,192
  Refined products.....................       55,357              59,896
  Refinery and shop supplies...........       11,737              11,362
  Merchandise..........................        3,269               3,374
Retail method:
  Merchandise..........................       10,018               8,797
                                            --------            --------
    Subtotal...........................      133,497             117,621
Adjustment for last-in,
  first-out ("LIFO") method............      (12,621)             (9,641)
                                            --------            --------
    Total..............................     $120,876            $107,980
                                            ========            ========
</TABLE>

     The portion of inventories valued on a LIFO basis totaled $81,894,000
and $70,329,000 at June 30, 2003 and December 31, 2002, respectively. The
following data will facilitate comparison with the operating results of
companies using the FIFO method of inventory valuation.

     If inventories had been determined using the FIFO method at June 30,
2003 and 2002, net earnings (loss) and diluted earnings (loss) per share
amounts for the three months ended June 30, 2003 and 2002, would have been
(lower) higher by $(8,644,000) and $(0.98), and $1,003,000 and $0.12,
respectively, and net earnings (loss) and diluted earnings (loss) per
share amounts for the six months ended June 30, 2003 and 2002, would have
been higher by $1,788,000 and $0.20, and $914,000 and $0.11, respectively.

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



<PAGE>
NOTE 10 - 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 first half of 2003, the Company entered into various crude oil
and gasoline futures contracts in order to economically hedge crude oil
and other inventories and purchases for the Yorktown refinery operations.
For the three and six months ended June 30, 2003, the Company recognized
losses on these contracts of approximately $161,000 and $1,594,000,
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. There were no open crude oil
futures contracts or other commodity derivative contracts at June 30,
2003.


<PAGE>
NOTE 11 - LONG-TERM DEBT:

     Long-term debt consists of the following:

<TABLE>
<CAPTION>
                                                        June 30, 2003    December 31, 2002
                                                        -------------    -----------------
                                                                  (In thousands)
<S>                                                        <C>                 <C>
11% senior subordinated notes, due 2012, net
  of unamortized discount of $5,474 and $5,651,
  interest payable semi-annually......................     $194,526            $194,349
9% senior subordinated notes, due 2007,
  interest payable semi-annually......................      150,000             150,000
Senior secured revolving credit facility, due 2005,
  floating interest rate, interest payable monthly....       10,000              25,000
Senior secured mortgage loan facility, due 2005,
  floating interest rate, principal and interest
  payable monthly.....................................       26,000              32,222
Capital lease obligations, 11.3%, due
  through 2007, interest payable monthly..............        6,664               6,703
Other.................................................           31                  46
                                                           --------            --------
  Subtotal............................................      387,221             408,320
Less current portion..................................       (8,473)            (10,251)
                                                           --------            --------
  Total...............................................     $378,748            $398,069
                                                           ========            ========
</TABLE>

     Repayment of both the 11% and 9% senior subordinated notes
(collectively, the "Notes") is jointly and severally guaranteed on an
unconditional basis by the Company's direct and indirect wholly-owned
subsidiaries, subject to a limitation designed to ensure that such
guarantees do not constitute a fraudulent conveyance. Except as otherwise
specified in the indentures pursuant to which the Notes were issued, there
are no restrictions on the ability of such subsidiaries to transfer funds
to the Company in the form of cash dividends, loans or advances. General
provisions of applicable state law, however, may limit the ability of any
subsidiary to pay dividends or make distributions to the Company in
certain circumstances.

     Separate financial statements of the Company's subsidiaries are not
included herein because the aggregate assets, liabilities, earnings, and
equity of the subsidiaries are substantially equivalent to the assets,
liabilities, earnings, and equity of the Company on a consolidated basis;
the subsidiaries are jointly and severally liable for the repayment of the
Notes; and the separate financial statements and other disclosures
concerning the subsidiaries are not deemed by the Company to be material
to investors.

     The Company has a $100,000,000 three-year senior secured revolving
credit facility (the "Credit Facility") with a group of banks. The Company
also has a $40,000,000 three-year senior secured mortgage loan facility
(the "Loan Facility") with a group of financial institutions.

     The Credit Facility is primarily a working capital and letter of
credit facility. The availability of funds under this facility is the
lesser of (i) $100,000,000, or (ii) the amount determined under a
borrowing base calculation tied to the eligible accounts receivable and
inventories. At June 30, 2003, the availability of funds under the Credit
Facility was $100,000,000. There were $10,000,000 in direct borrowings
outstanding under this facility at June 30, 2003, and there were
approximately $35,103,000 of irrevocable letters of credit outstanding,
primarily to crude oil suppliers, insurance companies and regulatory
agencies. On July 31, 2003, there were no direct borrowings outstanding
under this facility and there were approximately $36,410,000 of
irrevocable letters of credit outstanding.

     The interest rate applicable to the Credit Facility is tied to
various short-term indices. At June 30, 2003, this rate was approximately
4.9% per annum. The Company is required to pay a quarterly commitment fee
of 0.50% per annum of the unused amount of the facility.

     The obligations under the Credit Facility are 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. The obligations
under the Credit Facility also are secured by 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 lenders under the Loan Facility are
entitled to participate with the lenders under the Credit Facility in this
additional collateral pro rata based on the obligations owed by the
Company under the Credit Facility and the Loan Facility.

     The Credit Facility contains negative covenants limiting, among other
things, the ability of the Company and its subsidiaries to incur
additional indebtedness; create liens; dispose of assets; make capital
expenditures through 2003; consolidate or merge; make loans and
investments; enter into transactions with affiliates; use loan proceeds
for certain purposes; guarantee obligations and incur contingent
obligations; enter into agreements restricting the ability of subsidiaries
to pay dividends to the Company; make distributions or stock repurchases;
make significant changes in accounting practices or change the Company's
fiscal year; and except on terms acceptable to the senior secured lenders,
to prepay or modify subordinated indebtedness.

     The Credit Facility also requires the Company to meet certain
financial covenants, 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 Interest, Taxes, Depreciation and
Amortization ("EBITDA"); and achieve a minimum quarterly consolidated
EBITDA. The Company also was required to, and did, prepay $15,000,000 of
the outstanding principal amount of the Credit Facility from the proceeds
of asset sales occurring between October 1, 2002 and June 30, 2003.

     Pursuant to the Loan Facility, the Company issued notes to the
lenders, which bear interest at a rate that is tied to various short-term
indices. At June 30, 2003, this rate was approximately 6.7% per annum. The
remainder of the notes fully amortize during the three-year term as
follows: remainder of 2003 - $4,000,000, 2004 - $11,111,000, and 2005 -
$10,889,000.

     The Loan Facility is secured by the Yorktown refinery property,
fixtures and equipment, excluding inventory, accounts receivable and other
Yorktown refinery assets securing the Credit Facility. The Company and its
principal subsidiaries also guarantee the loan and have granted the
lenders the same additional collateral as described above in connection
with the Credit Facility. The Loan Facility contains the same negative
covenants as in the Credit Facility and requires the Company to meet the
same financial covenants as in the Credit Facility.

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


<PAGE>
NOTE 12 - COMMITMENTS AND CONTINGENCIES:

     Various legal actions, claims, assessments and other contingencies
arising in the normal course of the Company's business, including those
matters described below, are pending against the Company and certain of
its subsidiaries. Certain of these matters involve or may involve
significant claims for compensatory, punitive or other damages. These
matters are subject to many uncertainties, and it is possible that some of
these matters could be ultimately decided, resolved or settled adversely.
The Company has recorded accruals for losses related to those matters that
it considers to be probable and that can be reasonably estimated. Although
the ultimate amount of liability at June 30, 2003, that 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 the
environment, health, and safety affect nearly all of the operations of the
Company. As is the case with all companies engaged in similar industries,
the Company faces significant exposure from actual or potential claims and
lawsuits 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 clean-up cost estimates and methods, imprecise
and conflicting data regarding the hazardous nature of various types of
substances, the number of other potentially responsible parties involved,
various defenses that may be available to the Company and changing
environmental, health, and safety laws, regulations, and their respective
interpretations.



<PAGE>
ENVIRONMENTAL ACCRUALS

     As of June 30, 2003 and December 31, 2002, the Company had
environmental liability accruals of approximately $8,040,000 and
$8,367,000, respectively, which are summarized below. Environmental
accruals are recorded in the current and long-term sections of the
Company's Consolidated Balance Sheets.

<TABLE>
<CAPTION>
                          Summary of Environmental Contingencies
                                    (In thousands)


                                            December 31,   Increase               June 30,
                                               2002       (Decrease)   Payments     2003
                                            ------------  ----------   --------   --------
<S>                                          <C>          <C>          <C>        <C>
Farmington Refinery.......................   $   570      $     -      $     -    $   570
Ciniza - Land Treatment Facility..........       189            -            -        189
Bloomfield Tank Farm (Old Terminal).......        89            -          (20)        69
Ciniza - Solid Waste Management Units.....       275            -            -        275
Bloomfield Refinery.......................       310            -          (30)       280
Ciniza Well Closures......................       100            -            -        100
Retail Service Stations - Various.........       119          125           (7)       237
Yorktown Refinery.........................     6,715            -         (395)     6,320
                                             -------      -------      -------    -------
   Totals.................................   $ 8,367      $   125      $  (452)   $ 8,040
                                             =======      =======      =======    =======
</TABLE>

     At June 30, 2003, approximately $7,239,000 of these accruals were for
the following 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 acquisitions of the Yorktown refinery and 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; estimated monitoring well closure costs at the
Ciniza refinery; and amounts for smaller remediation projects.

NOTICES OF VIOLATION AT FOUR CORNERS REFINERIES

     In June 2002, the Company received a draft compliance order from the
New Mexico Environment Department ("NMED") in connection with alleged
violations of air quality regulations at the Ciniza refinery. These
alleged violations relate to an inspection completed in April 2001.

     In August 2002, the Company received a compliance order from NMED in
connection with alleged violations of air quality regulations at the
Bloomfield refinery. These alleged violations relate to an inspection
completed in September 2001.

     In the second quarter of 2003 the United States Environmental
Protection Agency ("EPA") informally advised the Company that it also
intended to allege air quality violations in connection with the 2001
inspections at both refineries. The Company has since participated in
joint meetings with NMED and EPA. At a meeting in July 2003, NMED stated
its intention to increase the number of violations at both refineries,
from nine to 19, and that potential penalties could increase from
approximately $684,000 to approximately $1,500,000. At the same meeting,
EPA stated that potential penalties it would assert could range as high as
$1,000,000. Subsequently, EPA informally advised the Company that it would
not proceed with one of its alleged violations, which the Company expects
will reduce EPA's potential penalty to $500,000.

     The Company is continuing discussions with NMED and EPA with respect
to both of the above matters. These discussions may result in the
modification or dismissal of some of the alleged violations and reductions
in the amount of potential penalties. In lieu of monetary penalties and as
part of an administrative settlement, EPA may require the Company to
undertake an enhanced leak detection and repair program, permanent
reductions in overall flaring, and environmentally beneficial projects,
known as Supplemental Environmental Projects ("SEPs"). The Company has not
yet determined the nature or scope of any SEPs to be proposed.

FARMINGTON REFINERY MATTERS

     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.

LEE ACRES LANDFILL

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

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

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

     BLM has received public comment on its proposed plan. The final
remedy for the site, however, has not yet been selected. Although the
Company was given reason to believe that a final remedy would be selected
in 2002, that selection did not occur. The Company has been advised that
the site remedy may be announced in 2003. 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 amount was
based upon estimated Landfill remediation costs significantly higher than
those being proposed by BLM. The amount 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. The Company has not recorded a liability in relation to BLM's
proposed plan because the amount of any potential liability is currently
not determinable.

     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.

BLOOMFIELD REFINERY ENVIRONMENTAL OBLIGATIONS

     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, the OCD approved the groundwater discharge permit for
the refinery, which included an abatement plan that addressed the
Company's environmental obligations under the Order. Discussions between
OCD, HWB and the Company have resulted in revisions to the abatement plan.
As of June 30, 2003, the Company had an accrual of $280,000 for
remediation expenses associated with the abatement plan, and anticipates
that these expenses will be incurred through approximately 2018.

BLOOMFIELD TANK FARM (OLD TERMINAL)

     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. The
Company received approval to conduct a pilot bioventing project to address
remaining contamination at the site, which was completed in June 2001.
Based on the results of the pilot project, the Company submitted a
remediation plan to OCD proposing the use of bioventing to address the
remaining contamination. This remediation plan was approved by OCD in June
2002, work on the bioventing project began in January 2003 and active
remediation is currently in process. The Company anticipates that it will
incur soil remediation expenses through approximately 2004 in connection
with the bioventing plan followed by continued groundwater monitoring and
testing until natural attenuation has completed the process of groundwater
remediation. At June 30, 2003, the Company had an environmental accrual of
$69,000 for this matter.

YORKTOWN ENVIRONMENTAL LIABILITIES

     The Company assumed certain liabilities and obligations in connection
with its purchase of the Yorktown refinery from BP, but was provided with
specified levels of indemnification for certain matters. In view of the
indemnification from BP, the Company established an environmental accrual
for the liabilities and obligations assumed. This accrual currently has a
balance of approximately $6,320,000. These liabilities and obligations
include, subject to certain exceptions and indemnifications, all
obligations, responsibilities, liabilities, costs and expenses under
environmental, health, and safety laws that are caused by, arise from, or
are incurred in connection with or relate in any way to the ownership or
operation of the refinery. 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.

     Environmental obligations assumed by the Company include BP's
responsibilities 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. The Company assumed BP's responsibilities as of January 18, 2001,
the date the consent decree was lodged with the court. As applicable to
the Yorktown refinery, the consent decree requires, among other things,
reduction of NOx, SO2 and particulate matter emissions and adoption of
enhancements to the refinery's leak detection and repair program. The
Company estimates that it will incur capital expenditures in the
approximate amount of $20,000,000 to $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 approximately $1,600,000 to $2,600,000 per year.

     The environmental obligations assumed in connection with the Yorktown
acquisition also include BP's obligations under an administrative order
(the "Yorktown Order") issued by EPA in 1991 pursuant to the Resource
Conservation and Recovery Act ("RCRA"). 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 ("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 ("VDEQ"), although a final RFI/CMS has
not yet been approved. The draft RFI/CMS proposes certain investigation,
sampling, monitoring, and cleanup measures, including the construction of
an on-site corrective action management unit that would be used to
consolidate hazardous materials associated with these measures. These
proposed actions relate to soil, sludge, and remediation wastes relating
to certain solid waste management units, groundwater in the aquifers
underlying the refinery, and surface water and sediment in a small pond
and tidal salt marsh on the refinery property. The Company anticipates
that EPA may issue a proposed course of action for public comment in the
second half of 2003. Following the public comment period, EPA will issue
an approved RFI/CMS in coordination with VDEQ and will make a final remedy
decision. The Company estimates that expenses associated with the actions
described in the proposed RFI/CMS will cost approximately $19,000,000 to
$21,000,000, and will be incurred over a period of approximately 30 years,
with approximately $5,000,000 of this amount being incurred over an
initial 3-year period, and additional expenditures in the approximate
amount of $5,000,000 being incurred over the following 3-year period. The
Company, however, may not be responsible for all of these expenditures as
a result of the environmental indemnification provisions included in its
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.

     On October 21, 2002, the Company received a notice from EPA assessing
the Company a penalty under the consent decree in connection with a
hydrocarbon flaring incident at the Yorktown refinery. The flaring
occurred during a five-day period in April 2002 following a power outage
at the refinery. BP owned the refinery at the time of the incident. On
April 14, 2003, the Company settled this penalty in full by making a
payment of $50,000 to EPA. The Company has since received reimbursement
for the entire amount of the settlement from BP.

DEFENSE ENERGY SUPPORT CENTER CLAIM

     On February 11, 2003, the Company filed a complaint against the
United States in the United States Court of Federal Claims in connection
with military jet fuel that the Company sold to the Defense Energy Support
Center ("DESC") from 1983 through 1994. The Company asserted that the
United States, acting through 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 Court of Federal Claims, dealing with contract provisions similar to
those contained in the contracts that are the subject of the Company's
claims. The DESC has indicated that it may counterclaim and assert, based
on its interpretation of the contract provisions, that the Company owes
additional amounts ranging from approximately $2,100,000 to $4,900,000.
DESC denied all liability in a motion for partial summary judgment filed
in the second quarter of 2003. On July 23, 2003, the Company responded to
DESC's motion and filed its own cross-motion for partial summary judgment.
Due to the preliminary nature of this matter, there can be no assurance
that the Company will ultimately prevail on its claims or DESC's
counterclaims, nor is it possible to predict when any payment will be
received if the Company is successful. Accordingly, the Company has not
recorded a receivable for these claims or a liability for any potential
counterclaim.

FORMER CEO MATTERS

     James E. Acridge was terminated as the Company's President and Chief
Executive Officer, and was replaced as the Company's Chairman, on March
29, 2002. 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. These options expired
unexercised.

     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, current Company directors Messrs.
Bernitsky, Kalen, and Rapport, and as yet unidentified accountants,
auditors, appraisers, attorneys, bankers and professional advisors (the
"Lawsuit"). Mr. Acridge alleged that the defendants wrongfully interfered
with his employment agreement and caused the Company to fire him. The
complaint sought unspecified general compensatory damages, punitive
damages, and costs and attorneys' fees. The complaint also stated that Mr.
Acridge intended to initiate a separate arbitration proceeding against the
Company, alleging that the Company breached his employment agreement and
violated an implied covenant of good faith and fair dealing. The court
subsequently ruled that the claims raised in the Lawsuit were subject to
arbitration and the Lawsuit was dismissed. Arbitration proceedings in
connection with the claims described above have not yet been initiated. If
proceedings are initiated, the claims will be defended vigorously. The
Company believes that the named officers and directors of the Company are
entitled to indemnification from the Company in connection with the
defense of, and any liabilities arising out of, the claims asserted by Mr.
Acridge.

     The Company has an outstanding loan to Mr. Acridge in the principal
amount of $5,000,000. 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. In view of developments in bankruptcy
proceedings relating to Mr. Acridge, the Company has continued to maintain
the reserve.

     In 1998, Giant Arizona executed a lease for approximately 8,176
square feet of additional space from a limited liability company (the
"Landlord") in which the bankruptcy estate of Prime Pinnacle (the "Prime
Estate") owned a 51% interest. Giant Arizona also executed a sublease with
a separate limited liability company controlled by Mr. Acridge for use of
the space as an inn. The term for each of the lease and the sublease was
for five years, terminating on June 30, 2003. Except in connection with
the settlement negotiations discussed below, Giant Arizona never made
rental payments to the Landlord, and believes that, in the past, the
Landlord received payments directly from the sublessee. In August 2001,
the owner of the 49% interest in the Landlord (the "Minority Owner")
notified Giant Arizona that the sublessee was delinquent on the payment of
the rent due, and on or about December 28, 2001, the Minority Owner filed
a derivative lawsuit for and on behalf of the Landlord 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 negotiated a settlement agreement with the Minority Owner, in
which the Company 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 rental
payments from November 2002 through June 2003. All settlement amounts have
been paid by the Company and both the lease and sublease have terminated.
Notwithstanding the settlement with the Landlord (now owned 100% by the
Minority Owner), the Company's arbitration action against the sublessee is
still in process.

     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. The
Company has filed proofs of claim in the bankruptcy proceeding seeking to
recover certain amounts it alleges are owed to the Company by Mr. Acridge,
including amounts relating to the outstanding $5,000,000 loan and the
above-described lease. Further, the Company has filed a complaint in the
bankruptcy proceeding in which it seeks a determination that certain of
the amounts it asserts are owed by Mr. Acridge are not dischargeable in
bankruptcy. 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 or whether the Company will be successful
in pursuing its non-dischargeability complaint.



<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, 2002. Certain critical
accounting policies that materially affect the amounts recorded in the
consolidated financial statements are the use of the 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 2003, except as
relates to the adoption of SFAS No. 143 "Accounting for Asset Retirement
Obligations". See Note 3 to the Company's Consolidated Financial
Statements included in Part I, Item 1.


<PAGE>
RESULTS OF OPERATIONS

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

<TABLE>
<CAPTION>
                                                         Three Months             Six Months
                                                        Ended June 30,          Ended June 30,
                                                     ---------------------   ---------------------
                                                        2003        2002        2003        2002
                                                     ---------   ---------   ---------   ---------
                                                         (In thousands, except per share data)
<S>                                                  <C>         <C>         <C>         <C>
Net revenues......................................   $ 409,708   $ 289,578   $ 891,015   $ 468,886
Cost of products sold.............................     339,380     239,911     749,747     375,633
                                                     ---------   ---------   ---------   ---------
Gross margin......................................      70,328      49,667     141,268      93,253
Operating expenses................................      41,486      30,094      80,513      53,282
Depreciation and amortization.....................       9,433       8,748      18,562      16,800
Selling, general and administrative expenses......       7,272       6,130      14,296      11,555
Net (gain) loss on disposal/write-down of assets..        (177)        504         234         508
                                                     ---------   ---------   ---------   ---------
Operating income..................................      12,314       4,191      27,663      11,108
Interest expense..................................      (9,865)     (9,527)    (20,024)    (15,530)
Amortization/write-off of financing costs.........      (1,197)       (909)     (2,388)     (1,117)
Interest and investment income....................          59         261          83         325
                                                     ---------   ---------   ---------   ---------
Earnings (loss) from continuing operations
  before income taxes.............................       1,311      (5,984)      5,334      (5,214)
Provision (benefit) for income taxes..............         542      (2,159)      2,207      (1,848)
                                                     ---------   ---------   ---------   ---------
Earnings (loss) from continuing operations
  before cumulative effect of change
    in accounting principle.......................         769      (3,825)      3,127      (3,366)

Discontinued operations, net of income tax
  benefit of $214, $306, $233 and $531............        (322)       (459)       (349)       (795)

Cumulative effect of change in accounting
  principle, net of income tax benefit of $468....           -           -        (704)          -
                                                     ---------   ---------   ---------   ---------
Net earnings (loss)...............................   $     447   $  (4,284)  $   2,074   $  (4,161)
                                                     =========   =========   =========   =========
Net earnings (loss) per common share:
  Basic
    Continuing operations.........................   $    0.09   $   (0.45)  $    0.36   $   (0.40)
    Discontinued operations.......................       (0.04)      (0.05)      (0.04)      (0.09)
    Cumulative effect of change
      in accounting principle.....................           -           -       (0.08)          -
                                                     ---------   ---------   ---------   ---------
                                                     $    0.05   $   (0.50)  $    0.24   $   (0.49)
                                                     =========   =========   =========   =========
  Assuming dilution
    Continuing operations.........................   $    0.09   $   (0.45)  $    0.36   $   (0.40)
    Discontinued operations.......................       (0.04)      (0.05)      (0.04)      (0.09)
    Cumulative effect of change
      in accounting principle.....................           -           -       (0.08)          -
                                                     ---------   ---------   ---------   ---------
                                                     $    0.05   $   (0.50)  $    0.24   $   (0.49)
                                                     =========   =========   =========   =========
</TABLE>



<PAGE>
<TABLE>
<CAPTION>
                                                         Three Months             Six Months
                                                        Ended June 30,          Ended June 30,
                                                     ---------------------   ---------------------
                                                        2003        2002        2003        2002
                                                     ---------   ---------   ---------   ---------
                                                                      (In thousands)
<S>                                                  <C>         <C>         <C>         <C>
Net revenues:(1)
  Refining Group:
    Four Corners operations......................    $ 115,464   $ 113,951   $ 246,013   $ 202,169
    Yorktown operations(2).......................      157,710      72,900     373,774      72,900
  Retail Group...................................       82,793      75,651     158,200     137,430
  Phoenix Fuel...................................      110,092      84,622     231,980     160,254
  Other..........................................          145          40         210          90
  Intersegment...................................      (56,496)    (57,586)   (119,162)   (103,957)
                                                     ---------   ---------   ---------   ---------
  Net revenues of continuing operations..........      409,708     289,578     891,015     468,886
  Net revenues of discontinued operations........        8,106      15,811      19,410      30,248
                                                     ---------   ---------   ---------   ---------
  Total net revenues.............................    $ 417,814   $ 305,389   $ 910,425   $ 499,134
                                                     =========   =========   =========   =========
Income (loss) from operations:(1)
  Refining Group:
    Four Corners operations......................    $  12,715   $   8,356   $  22,218   $  17,406
    Yorktown operations(2).......................       (2,847)     (3,090)      5,511      (3,090)
  Retail Group...................................        5,018       2,096       6,235       1,968
  Phoenix fuel...................................        2,284       1,566       3,890       3,039
  Other..........................................       (5,033)     (4,233)     (9,957)     (7,707)
  Net gain (loss) on disposal/write-down
    of assets....................................          177        (504)       (234)       (508)
                                                     ---------   ---------   ---------   ---------
  Operating income from continuing operations....       12,314       4,191      27,663      11,108
  Operating loss from discontinued operations....         (536)       (765)       (582)     (1,326)
                                                     ---------   ---------   ---------   ---------
  Total income from operations...................    $  11,778   $   3,426   $  27,081   $   9,782
                                                     =========   =========   =========   =========

(1) The Refining Group 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 operates the Company's service
    stations with convenience stores or kiosks. Until June 19, 2003, when it was sold, the
    Retail Group also operated a travel center located on I-40 adjacent to the Ciniza refinery
    near Gallup, New Mexico. Phoenix Fuel is an industrial/commercial 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.
(2) Acquired May 14, 2002.
</TABLE>



<PAGE>
<TABLE>
<CAPTION>
                                                         Three Months             Six Months
                                                        Ended June 30,          Ended June 30,
                                                     ---------------------   ---------------------
                                                        2003        2002        2003        2002
                                                     ---------   ---------   ---------   ---------
<S>                                                  <C>         <C>         <C>         <C>
Refining Group Operating Data:
  Four Corners Operations:
    Crude Oil/NGL Throughput (BPD)................     31,854      33,144      31,502      33,463
    Refinery Sourced Sales Barrels (BPD)..........     30,472      34,060      31,000      32,618
    Average Crude Oil Costs ($/Bbl)...............   $  27.90    $  23.48    $  29.55    $  21.17
    Refining Margins ($/Bbl)......................   $   9.41    $   6.41    $   8.86    $   6.86
  Yorktown Operations:(1)
    Crude Oil/NGL Throughput (BPD)................     52,316      53,563      54,275      53,563
    Refinery Sourced Sales Barrels (BPD)..........     54,046      54,610      56,703      54,610
    Average Crude Oil Costs ($/Bbl)...............   $  28.06    $  26.77    $  30.74    $  26.77
    Refining Margins ($/Bbl)......................   $   2.82    $   1.68    $   3.57    $   1.68

Retail Group Operating Data:
(Continuing operations only)
  Fuel Gallons Sold (000's).......................     37,980      38,335      73,180      74,245
  Fuel Margins ($/gal)............................   $  0.233    $  0.168    $  0.195    $  0.155
  Merchandise Sales ($ in 000's)..................   $ 32,844    $ 33,225    $ 61,520    $ 61,508
  Merchandise Margins.............................       29.5%       27.4%       29.8%       27.2%

  Operating Retail Outlets at Period End:
    Continuing Operations.........................        126         127         126         127
    Discontinued Operations.......................          3          19           3          19

Phoenix Fuel Operating Data:
  Fuel Gallons Sold (000's).......................    105,148      90,524     208,185     182,995
  Fuel Margins ($/gal)............................   $  0.055    $  0.053    $  0.051    $  0.053
  Lubricant Sales ($ in 000's)....................   $  6,212    $  5,002    $ 11,827    $ 10,389
  Lubricant Margins...............................       15.2%       17.5%       15.7%       17.0%

(1) Acquired May 14, 2002.
</TABLE>

     Certain factors affecting the comparison of the Company's continuing
results of operations for the three and six months ended June 30, 2003
with the same periods in 2002, include, among other things, the following:

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

     - The Yorktown refinery began a crude unit and coker unit turnaround
       at the end of March 2003. The refinery was back in operation April
       16, 2003. On April 28, 2003, a transformer failure disrupted
       operations at the electric generation plant that supplies the
       Company's Yorktown refinery with power. As a result of the failure,
       the refinery suffered a complete loss of power and shut down all
       processing units. The refinery was operating at full capacity
       by the middle of May. The Company incurred costs of approximately
       $1,254,000 as a result of the loss of power, all of which were
       expensed during the three months ended June 30, 2003, and
       estimates that reduced production resulted in lost earnings
       of approximately $3,750,000.

     - Stronger refining margins at the Company's refineries due to, among
       other things, lower domestic crude oil and finished product
       inventories and strong domestic finished product demand, reduced in
       part by losses on various crude oil futures contracts.

     - Lower than anticipated crude oil receipts for the Four Corners
       refineries due to supplier production problems and reduced supply
       availability resulted in reduced refinery production.

     - Stronger finished product sales volumes with relatively
       stable margins for the Company's Phoenix Fuel operations.

     - Improved retail fuel and merchandise margins in several of the
       Company's market areas. In addition, the Company is experiencing
       increased competition in certain of its markets.

Earnings (Loss) From Continuing Operations Before Income Taxes
-------------------------------------------------------

     For the three months ended June 30, 2003, earnings from continuing
operations before income taxes were $1,311,000, compared to a loss of
$5,984,000 for the three months ended June 30, 2002, an increase of
$7,295,000. This amount includes the following items related to the
operation and acquisition of the Yorktown refinery: (i) an operating loss
decrease of $243,000; (ii) an increase in the amortization of financing
costs of $288,000, and (iii) additional interest expense of $338,000. The
remainder of the increase, relating to the Company's other operations, was
primarily due to a 47% increase in Four Corners refinery margins. Also
contributing to the increase was a 25% increase in wholesale fuel volumes
sold by Phoenix Fuel to third-party customers, a 39% increase in retail
fuel margins, and an 8% increase in retail merchandise margins. In
addition, in the second quarter of 2002 impairment write-downs were
recorded for certain retail assets. These increases were offset in part by
higher operating expenses and selling, general, and administrative
("SG&A") expenses for other Company operations, and a 9% decrease in Four
Corners refinery third party fuel volumes sold.

     For the six months ended June 30, 2003, earnings from continuing
operations before income taxes were $5,334,000, compared to a loss of
$5,214,000 for the six months ended June 30, 2002, an increase of
$10,548,000. This amount includes the following items related to the
operation and acquisition of the Yorktown refinery: (i) an increase in
operating earnings of $8,601,000; (ii) an increase in the amortization of
financing costs of $1,271,000, and (iii) additional interest expense of
$4,493,000. The remainder of the increase, relating to the Company's other
operations, was primarily due to a 29% increase in Four Corners refinery
margins. Also contributing to the increase was a 22% increase in wholesale
fuel volumes sold by Phoenix Fuel to third-party customers, a 26% increase
in retail fuel margins, and a 10% increase in retail merchandise margins.
These increases were offset in part by higher operating expenses and
selling, general, and administrative ("SG&A") expenses for other Company
operations, and a 3% decrease in Four Corners refinery third party fuel
volumes sold.

Revenues From Continuing Operations
-----------------------------------

     Revenues for the three months ended June 30, 2003, increased
approximately $120,130,000 or 41% to $409,708,000 from $289,578,000 in the
comparable 2002 period. The increase includes revenue increases of
$84,810,000 for the Yorktown refinery. Revenue increases relating to the
Company's other operations were primarily due to a 17% increase in Four
Corners refining weighted average selling prices, a 10% increase in
Phoenix Fuel's weighted average selling prices, a 25% increase in
wholesale fuel volumes sold by Phoenix Fuel to third-party customers, and
a 14% increase in retail refined product selling prices. These increases
were offset in part by a 9% decline in Four Corners refinery fuel volumes
sold to third parties. Same store retail fuel volumes sold were relatively
flat, while same store merchandise sales were down slightly.

     Revenues for the six months ended June 30, 2003, increased
approximately $422,129,000 or 90% to $891,015,000 from $468,886,000 in the
comparable 2002 period. The increase includes revenue increases of
$300,874,000 for the Yorktown refinery. Revenue increases relating to the
Company's other operations were primarily due to a 36% increase in Four
Corners refining weighted average selling prices, a 22% increase in
Phoenix Fuel's weighted average selling prices, a 22% increase in
wholesale fuel volumes sold by Phoenix Fuel to third-party customers, and
a 22% increase in retail refined product selling prices. These increases
were offset in part by a 3% decline in Four Corners refinery fuel volumes
sold to third parties. Same store retail fuel volumes sold were down
slightly, while same store merchandise sales were relatively flat.

Cost of Products Sold From Continuing Operations
------------------------------------------------

     For the three months ended June 30, 2003, cost of products sold
increased approximately $99,469,000 or 41% to $339,380,000 from
$239,911,000 in the comparable 2002 period. The increase includes cost of
products sold increases of $74,954,000 for the Yorktown refinery. Cost of
products sold increases relating to the Company's other operations were
primarily due to a 19% increase in Four Corners refining weighted average
crude oil costs, a 25% increase in wholesale fuel volumes sold by Phoenix
Fuel to third-party customers, and a 10% increase in the cost of finished
products purchased by Phoenix Fuel. In addition, cost of products sold for
2002 included a gain of approximately $1,970,000 from various crude oil
futures contracts used to economically hedge crude oil inventories and
purchases for the Yorktown refinery. In 2003, losses of $161,000 were
incurred on similar crude oil and gasoline contracts. These increases were
offset in part by a 9% decline in Four Corners refinery fuel volumes sold
to third parties.

     For the six months ended June 30, 2003, cost of products sold
increased approximately $374,114,000 or 100% to $749,747,000 from
$375,633,000 in the comparable 2002 period. The increase includes cost of
products sold increases of $267,909,000 for the Yorktown refinery. Cost of
products sold increases relating to the Company's other operations were
primarily due to a 40% increase in Four Corners refining weighted average
crude oil costs, a 22% increase in wholesale fuel volumes sold by Phoenix
Fuel to third-party customers, and a 23% increase in the cost of finished
products purchased by Phoenix Fuel. In addition, cost of products sold for
2003 included a loss of approximately $1,594,000 from various crude oil
and gasoline futures contracts used to economically hedge crude oil and
other inventories and purchases for the Yorktown refinery. In 2002, a gain
of $1,970,000 was recorded on similar crude oil contracts. These increases
were offset in part by a 3% decline in Four Corners refinery fuel volumes
sold to third parties.

Operating Expenses From Continuing Operations
---------------------------------------------

     For the three months ended June 30, 2003, operating expenses
increased approximately $11,392,000 or 38% to $41,486,000 from $30,094,000
in the comparable 2002 period. For the six months ended June 30, 2003,
operating expenses increased approximately $27,231,000 or 51% to
$80,513,000 from $53,282,000 in the comparable 2002 period. The increases
include operating expense increases of $8,115,000 and $20,574,000 for the
Yorktown refinery for the three and six month periods, respectively.
Operating expense increases relating to the Company's other operations in
both comparable periods were due to, among other things, higher payroll
and related costs, increased purchased fuel costs for the Four Corners
refineries, due to higher prices, and higher general insurance premiums
for all operations.

Depreciation and Amortization From Continuing Operations
--------------------------------------------------------

     For the three months ended June 30, 2003, depreciation and
amortization increased approximately $685,000 or 8% to $9,433,000 from
$8,748,000 in the comparable 2002 period. For the six months ended June
30, 2003, depreciation and amortization increased approximately $1,762,000
or 10% to $18,562,000 from $16,800,000 in the comparable 2002 period. The
increases include depreciation and amortization increases of $1,000,000
and $2,734,000 for the Yorktown refinery for the three and six month
periods, respectively. Depreciation and amortization decreases relating to
the Company's other operations in each comparable period were due to,
among other things, lower refinery turnaround amortization costs in 2003,
reduced depreciation expense relating to certain retail assets becoming
fully depreciated, and the sale of certain pipeline assets in 2002. These
decreases were offset in part by higher costs relating to construction,
remodeling and upgrades in retail and refining operations during 2003 and
2002.

Selling, General and Administrative Expenses From Continuing Operations
-----------------------------------------------------------------------

     For the three months ended June 30, 2003, SG&A expenses increased
approximately $1,142,000 or 19% to $7,272,000 from $6,130,000 in the
comparable 2002 period. For the six months ended June 30, 2003, SG&A
expenses increased approximately $2,741,000 or 24% to $14,296,000 from
$11,555,000 in the comparable 2002 period. The increases include SG&A
expense increases of $376,000 and $846,000 for the Yorktown refinery for
the three and six month periods, respectively. SG&A expense increases
relating to the Company's other operations in each comparable period were
due to, among other things, increased costs for the Company's self-insured
health plan due to higher claims experience, higher workers compensation
costs, increased letter of credit fees, and higher general insurance
premiums. In addition, the first quarter of 2002 included a credit of
$471,000 for the revision of estimated accruals for 2001 management
incentive bonuses, following the determination of bonuses to be paid to
employees.

Interest Expense and Interest Income From Continuing Operations
---------------------------------------------------------------

     For the three months ended June 30, 2003, interest expense increased
approximately $338,000 or 4% to $9,865,000 from $9,527,000 in the
comparable 2002 period. For the six months ended June 30, 2003, interest
expense increased approximately $4,494,000 or 29% to $20,024,000 from
$15,530,000 in the comparable 2002 period. Interest expense increased for
the three and six month comparable periods by $1,491,000 and $8,084,000,
respectively, related to the issuance of new senior subordinated notes,
borrowings under the Company's new loan facilities, and other transactions
related to the May 2002 acquisition of the Yorktown refinery. This
increase was offset in part by a decrease in interest expense of
approximately $1,153,000 and $3,591,000 for the three and six month
comparable periods, respectively, relating to the repayment in 2002 of the
Company's $100,000,000 of 9 3/4% Senior Subordinated Notes due 2003 (the
"9 3/4% Notes") with a portion of the proceeds of the Company's issuance
of new senior subordinated notes.

     For the three and six month comparable periods ended June 30, 2003,
interest income decreased approximately $202,000 and $242,000,
respectively. The decreases were primarily due to interest received in
2002 on funds held in an escrow account in connection with the acquisition
of the Yorktown refinery and a reduction in funds available for investment
in short-term instruments since the acquisition of the Yorktown refinery.

Amortization/Write-Off of Financing Costs From Continuing Operations
--------------------------------------------------------------------

     For the three and six month comparable periods ended June 30, 2003,
amortization of financing costs increased $288,000 and $1,271,000,
respectively. The increase is due to the amortization of $17,436,000 of
deferred financing costs, relating to new senior subordinated debt and new
senior secured loan facilities, incurred in connection with the
acquisition of the Yorktown refinery and the refinancing of the Company's
9 3/4% Notes. These costs are being amortized over the term of the related
debt. In addition, each 2002 period includes the write-off of $364,000 in
deferred financing costs relating to the refinancing of the 9 3/4% Notes.

Income Taxes From Continuing Operations
---------------------------------------

     The effective tax rate for the three and six months ended June 30,
2003 was approximately 41% and effective tax benefit rate for the three
and six months ended June 30, 2002 was approximately 36%. The difference
in the rates is due to, among other things, permanent tax differences,
certain general business tax credits available, and higher tax rates
associated with the Company's operations in Virginia.

Discontinued Operations
-----------------------

     Losses from discontinued operations before income taxes of $536,000
for the three months ended June 30, 2003 include a net loss on the
disposal of two retail units and the Company's travel center of $251,000,
which includes $12,000 of associated goodwill, an impairment write-down on
one closed retail unit of $76,000 and net operating losses of $209,000.
Losses from discontinued operations before income taxes of $582,000 for
the six months ended June 30, 2003 include a net loss on the disposal of
four retail units and the Company's travel center of $113,000, which
includes $62,000 of associated goodwill, an impairment write-down on one
closed retail unit of $76,000 and net operating losses of $393,000. Losses
from discontinued operations before income taxes of $765,000 and
$1,326,000 for the three and six months ended June 30, 2002, respectively,
include a loss on the disposal of two retail units of $132,000, impairment
write-downs of $415,000 on five retail units, and asset write-offs of
$8,000. In addition, net operating losses of $210,000 and $771,000 were
incurred for the three and six months ended June 30, 2002, respectively.

OUTLOOK

     The Company believes that its refining fundamentals continue to
indicate and support an expected improved financial performance over the
next several months. Furthermore, the Company continues to actively search
for more cost-effective raw material sources for the Yorktown refinery,
such as a long-term supply agreement for lower quality or higher acidity
crude oils which the Yorktown refinery has the ability to process. The
Company hopes to develop some of these arrangements by year-end. In the
Company's retail area, fuel and merchandise margins remain strong with
same store fuel and merchandise volumes remaining stable. Phoenix Fuel
continues to see good growth in both wholesale and cardlock volumes with
relatively stable margins.

LIQUIDITY AND CAPITAL RESOURCES

Cash Flow From Operations
-------------------------

     Operating cash flows increased by $23,136,000 for the six months
ended June 30, 2003 compared to the six months ended June 30, 2002,
primarily as a result of an increase in net earnings before depreciation
and amortization, amortization of financing costs, deferred income taxes,
and net (gain) loss on disposal/write-down of assets in 2003 and an
increase in cash flows related to changes in operating assets and
liabilities in each period. Net cash provided by operating activities
totaled $28,208,000 and $5,072,000 for the six months ended June 30, 2003
and 2002, respectively.

Working Capital
---------------

     Working capital at June 30, 2003 consisted of current assets of
$222,145,000 and current liabilities of $128,000,000, or a current ratio
of 1.74:1. At December 31, 2002, the current ratio was 1.76:1 with current
assets of $211,882,000 and current liabilities of $120,351,000.

     Current assets have increased since December 31, 2002, primarily due
to increases in cash and cash equivalents and inventories. These increases
were offset in part by decreases in accounts receivable and prepaid
expenses and other. Inventories have increased primarily due to increases
in refinery onsite crude oil volumes, primarily at Yorktown, and increases
in crude oil and refined product prices. These increases were offset, in
part, by decreases in refined product volumes at the refineries,
terminals, Phoenix Fuel and retail operations. Accounts receivable have
decreased primarily due to the receipt of income tax refunds, offset in
part by an increases in trade receivables resulting from higher finished
product selling prices. Prepaids and other have decreased primarily due to
the expensing of prepaid insurance premiums.

     Current liabilities have increased since December 31, 2002, primarily
due to increases in accounts payable and accrued expenses, offset in part
by a reduction in the current portion of long-term debt. Accounts payable
have increased primarily as a result of higher raw material and finished
product costs and volumes. Accrued expenses have increased primarily as a
result of higher petroleum product taxes payable, higher workers
compensation cost accruals, increased accruals for the Company's self-
insured health plan, and accruals for 2003 401(k) Company matching and
discretionary contributions. These increases were offset in part by the
payment of 2002 401(k) Company matching and discretionary contributions.
The current portion of long-term debt declined due to a reduction in the
current amount due under the Company's Loan Facility.

Capital Expenditures and Resources
----------------------------------

     Net cash used in investing activities for capital expenditures
totaled approximately $10,150,000 for the six months ended June 30, 2003.
Of this amount, expenditures of approximately $7,696,000 were made for the
crude unit and coker unit turnaround at the Yorktown refinery that began
at the end of March 2003. The refinery was back in operation on April 16,
2003. Other expenditures were for operational and environmental projects
for the refineries and retail operations.

     On April 28, 2003, a transformer failure disrupted operations at the
electric generation plant that supplies the Company's Yorktown refinery
with power. As a result of the failure, the refinery suffered a complete
loss of power and shut down all processing units. By the middle of May
2003, the refinery was operating at full capacity. The Company incurred
costs of approximately $1,254,000 as a result of the loss of power, all of
which were expensed in the three months ended June 30, 2003, and estimates
that reduced production resulted in lost earnings of approximately
$3,750,000. The Company is pursuing reimbursement from the power station
owner. There is no guarantee, however, that the Company will be able to
recover anything or what the amount of any recovery might be.

     The Credit Facility and the Loan Facility limit the Company's capital
expenditures on a quarterly basis through the fourth quarter of 2003. 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.

     As part of the Yorktown acquisition, the Company agreed to pay earn-
out payments, up to a maximum of $25,000,000 to BP beginning in 2003 and
concluding at the end of 2005 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. For the first half of 2003, the
Company incurred $5,475,000 under this provision of the purchase
agreement. These earn-out payments are considered additional purchase
price and are 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.

     On June 19, 2003, the Company completed the sale of its Giant Travel
Center to Pilot Travel Centers LLC ("Pilot") and received net proceeds of
approximately $5,820,000, plus an additional $491,000 for inventories. As
a result of this transaction, the Company recorded a pretax loss of
approximately $44,600 which included charges that were a direct result of
the decision to sell the Travel Center. In connection with the sale, the
Company entered into a long-term product supply agreement with Pilot. The
Company will receive a supply agreement performance payment at the end of
five years if there has been no material breach under the supply agreement
and all requirements have been met for such payment.

     The debt reduction strategy implemented by the Company in 2002 is
being carried forward into 2003. In the first half of 2003, the Company
reduced the outstanding balance of its Credit Facility by $15,000,000 and
reduced the outstanding balance of its Loan Facility by $6,222,000. These
reductions were paid from operating cash flows and proceeds of
approximately $9,347,000 from the sale of assets, primarily five of the
Company's retail units and the travel center.

     On July 22, 2003, the Company entered into a purchase and sale
agreement for the sale of an approximate 8-acre tract of land in north
Scottsdale that includes its corporate headquarters building, and
anticipates receiving proceeds of approximately $10,400,000. The sale is
contingent on, among other things, the parties entering into a mutually
acceptable leaseback agreement.

     The Company is marketing a number of its retail service
station/convenience stores, including its remaining units in Phoenix, and
certain vacant land. 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 can provide no assurance, however, that it
will be able to complete the sales of the assets described above or any
other asset sales.

     The Company currently intends to use the proceeds from the potential
sales of assets, and savings or proceeds generated from other parts of the
Company's debt reduction initiative, to further reduce long-term debt. The
Company's loan facilities required the Company to reduce the outstanding
principal balance of its Credit Facility by $15,000,000 from the proceeds
of asset sales occurring between October 1, 2002 and June 30, 2003. With
the sale of the Company's travel center, this requirement was met prior to
June 30, 2003. No further reductions of the Credit Facility's outstanding
principal balance from the proceeds of asset sales is required by the
Company's loan facilities.

     The Company has two capital projects relating to its Four Corners
refinery operations, in which approximately $3,000,000 of spending has
occurred. The projects are currently dormant, although they remain viable.
Before the end of 2003, the Company plans to evaluate the future status of
these projects and will make a determination as to whether some or all of
the costs should be written off.

     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.

Capital Structure
-----------------

     At June 30, 2003 and December 31, 2002, the Company's long-term debt
was 74.4% and 75.8% of total capital, respectively, and the Company's net
debt (long-term debt less cash and cash equivalents) to total
capitalization percentages were 73.9% and 75.3%, respectively.

     At June 30, 2003 the Company had long-term debt of $378,748,000, net
of current portion of $8,473,000, including $150,000,000 of 9% Senior
Subordinated Notes due 2007 (the "9% Notes") and $200,000,000 of 11%
Senior Subordinated Notes due 2012 (the "11% Notes"), collectively, (the
"Notes"). See Note 11 to the Company's Consolidated Financial Statements
included in Part I, Item 1 for a description of these obligations.

     Repayment of the Notes is jointly and severally guaranteed on an
unconditional basis by the Company's direct and indirect wholly-owned
subsidiaries, subject to a limitation designed to ensure that such
guarantees do not constitute a fraudulent conveyance. Except as otherwise
specified in the indentures pursuant to which the Notes were issued, there
are no restrictions on the ability of such subsidiaries to transfer funds
to the Company in the form of cash dividends, loans or advances. General
provisions of applicable state law, however, may limit the ability of any
subsidiary to pay dividends or make distributions to the Company in
certain circumstances.

     Separate financial statements of the Company's subsidiaries are not
included herein because the aggregate assets, liabilities, earnings, and
equity of the subsidiaries are substantially equivalent to the assets,
liabilities, earnings, and equity of the Company on a consolidated basis;
the subsidiaries are jointly and severally liable for the repayment of the
Notes; and the separate financial statements and other disclosures
concerning the subsidiaries are not deemed by the Company to be material
to investors.

     The indentures supporting the 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, if not waived, could
cause such debt, and by reason of cross-default provisions, the Company's
other debt to become immediately due and payable. There is no assurance
that any requested waivers would be granted. If the Company is unable to
repay amounts owed under the Credit Facility and the Loan Facility, the
lenders under the 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 for the Notes, 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 Board suspended the payment of cash dividends on common stock in
the fourth quarter of 1998. At the present time, the Company is unable to
pay dividends under the terms of the indentures for the Notes and has no
plans to reinstate such dividends even if it could. The payment of future
dividends is subject to the results of the Company's operations,
declaration by the Company's Board of Directors, 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 first half of 2003, the Company entered into various crude oil
and gasoline futures contracts in order to economically hedge crude oil
and other inventories and purchases for the Yorktown refinery operations.
For the three and six months ended June 30, 2003, the Company recognized
losses on these contracts of approximately $161,000 and $1,594,000,
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. There were no open crude oil
futures contracts or other commodity derivative contracts at June 30,
2003.

     The Company's Credit Facility is floating-rate debt tied to various
short-term indices. As a result, the Company's annual interest costs
associated with this debt may fluctuate. At June 30, 2003, there were
$10,000,000 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 June 30, 2003,
would be approximately $11,000.

     The Company's Loan Facility is floating-rate debt tied to various
short-term indices. As a result, the Company's annual interest costs
associated with this debt may fluctuate. At June 30, 2003, there was
$26,000,000 outstanding under this facility. The potential increase in
annual interest expense from a hypothetical 10% adverse change in interest
rates on these borrowings at June 30, 2003, would be approximately
$29,000.

     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, 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.

     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.

     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 operations.

     Rules and regulations implementing federal, state and local laws
relating to the environment, health, and safety will continue to affect
the operations of the Company. The Company cannot predict what new
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 to which they have not been previously applied. 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.

     Significant developments have occurred in connection with the
following environmental, health or safety matters that were previously
discussed: (i) in the Company's Annual Report on Form 10-K for the year
ended December 31, 2002, under the heading "Regulatory, Environmental and
Other Matters", the heading "Management's Discussion and Analysis of
Financial Condition and Results of Operations", or Note 18 to the
Company's Consolidated Financial Statements; or (ii) the Company's
Quarterly Report on Form 10-Q for the first quarter of 2003 under the
heading "Environmental, Health and Safety", the heading "Management's
Discussion and Analysis of Financial Condition and Results of Operations"
or Note 11 to the Company's Consolidated Financial Statements.

     The Company received a draft compliance order from the New Mexico
Environment Department ("NMED") in June 2002 in connection with
alleged violations of air quality regulations at the Ciniza refinery. In
August 2002, the Company received a compliance order from NMED in
connection with alleged violations of air quality regulations at the
Bloomfield refinery. In July 2003, NMED stated its intention to increase
the number of alleged violations at both refineries and the amount of
potential penalties. In July 2003, the United States Environmental
Protection Agency ("EPA") also represented that it would assert violations
and impose monetary penalties. The Company has engaged in conversations
with NMED and EPA in connection with both of these matters, which 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 12 to the Company's
Consolidated Financial Statements included in Part I, Item 1.

     The Company was assessed a penalty by the EPA in 2002 in connection
with a hydrocarbon flaring incident at the Yorktown refinery. On April 14,
2003, the Company settled this penalty in full by making a payment of
$50,000 to the EPA. Since the Company did not own the Yorktown refinery at
the time of the flaring incident, the Company requested and received
reimbursement from BP for the entire amount. A further discussion of this
penalty is found in Note 12 to the Company's Consolidated Financial
Statements included in Part I, Item 1.

     As of June 30, 2003, the Company had environmental liability accruals
of approximately $8,040,000. A further discussion of these accruals is
found in Note 12 to the Company's Consolidated Financial Statements
included in Part I, Item 1.

OTHER
-----

     The Company's Ciniza and Bloomfield 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. This natural decline is being
offset to some extent by new drilling, field workovers, and secondary
recovery projects, which have resulted in additional production from
existing reserves.

     As a result of the declining production of crude oil in the Four
Corners area, 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 refinery crude oil utilization
rate for its Four Corners refineries was approximately 72% for 2002 and
was approximately 70% for the first half of 2003. 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. The Company is assessing other long-term
options to address the continuing decline in Four Corners crude oil
production. 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 the Company's Four Corners refinery operations and on
the Company's overall operations. In addition, the Company's future
results of operations are primarily dependent on producing or purchasing,
and selling, sufficient quantities of refined products at margins
sufficient to cover fixed and variable expenses. Because large portions of
the refineries' costs are fixed, a decline in refinery utilization due to
a decrease in feedstock availability or any other reason could
significantly affect the Company's profitability. The Company may increase
its production runs in the future if additional crude oil or refinery
feedstocks become available depending on demand for finished products and
refinery margins attainable.

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 risk that the Company will not be able to find more cost-
       effective sources of raw materials for the Yorktown refinery;

     - the Company's ability to 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;

     - the Company's ability to recover damages from the electric
       generation plant that supplies the Yorktown refinery in connection
       with the April 2003 loss of power;

     - volatility in the difference, or spread, between market prices for
       refined products and crude oil and other feedstocks;

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

     - state or federal legislation or regulation, or findings by a
       regulator with respect to existing 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;

     - the risk that the Company will not be able to resolve the alleged
       air quality violations and associated penalties for its Ciniza and
       Bloomfield refineries on satisfactory terms;

     - 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.

ITEM 4. CONTROLS AND PROCEDURES

     (a)  Evaluation of Disclosure Controls and Procedures

          The Company's management, with the participation of the
Company's Chief Executive Officer and Chief Financial Officer, evaluated
the effectiveness of the Company's disclosure controls and procedures as
of the end of the period covered by this report. Based on that evaluation,
the Chief Executive Officer and Chief Financial Officer concluded that the
Company's disclosure controls and procedures as of the end of the period
covered by this report were effective as of the date of that evaluation.

     (b)  Change in Internal Control Over Financial Reporting

          No change in the Company's internal control over financial
reporting occurred during the Company's most recent fiscal quarter that
has materially affected, or is reasonably likely to materially affect, the
Company's internal control over financial reporting.


<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 contingencies in Note 12 to the Consolidated
Financial Statements set forth in Part I, Item 1, and the discussion of
certain contingencies contained in Part I, Item 2, under the heading
"Liquidity and Capital Resources - Environmental, Health and Safety."

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

     The annual meeting of stockholders was held on May 8, 2003. Proxies
for the meeting were solicited under Regulation 14A. There were no matters
submitted to a vote of security holders other than the election of two
directors and approval of auditors as specified in the Company's Proxy
Statement. There was no solicitation in opposition to management's
nominees to the Board of Directors.

     Fred L. Holliger was elected as a director of the Company. The vote
was as follows:

Shares Voted "For"   Shares Voted "Withholding"
------------------   --------------------------
   5,841,924                   516,986

     Brooks J. Klimley was elected as a director of the Company. The vote
was as follows:

Shares Voted "For"   Shares Voted "Withholding"
------------------   --------------------------
   5,845,416                   513,494

     Deloitte & Touche LLP was ratified as independent auditors for the
Company for the year ending December 31, 2003. The vote was as follows:

Shares Voted "For"     Shares Voted "Against"   Shares Voted "Abstaining"
------------------     ----------------------   -------------------------
   5,742,485                   577,903                   38,522


ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

(a)  Exhibits:

      4.1*  Giant Industries, Inc. & Affiliated Companies 401(k) Plan
            Adoption Agreement, effective June 24, 2003.

      4.2*  First Amendment to Giant Industries, Inc. & Affiliated
            Companies 401(k) Plan Adoption Agreement, effective June 24,
            2003.

      4.3*  Second Amendment to Giant Industries, Inc. & Affiliated
            Companies 401(k) Plan Adoption Agreement, effective July 1,
            2003.

      4.4*  Amendment to Giant Industries, Inc. & Affiliated Companies
            401(k) Plan Service Agreement, effective June 24, 2003.

      4.5*  Giant Industries, Inc. & Affiliated Companies 401(k) Basic
            Plan Document, effective June 24, 2003.

     31.1*  Chief Executive Officer's Rule 13a-14(a)/15d-14(a)
            Certification.

     31.2*  Chief Financial Officer's Rule 13a-14(a)/15d-14(a)
            Certification.

     32.1*  Chief Executive Officer's Section 1350 Certification.

     32.2*  Chief Financial Officer's Section 1350 Certification.

     *Filed herewith.

(b)  Reports on Form 8-K: The Company filed the following reports on Form
     8-K during the quarter for which this report is being filed and
     subsequently:

     (i)  On May 6, 2003, the Company filed a Form 8-K dated May 6, 2003,
          containing a press release detailing the Company's earnings for
          the first quarter of 2003.

     (ii) On August 12, 2003, the Company filed a Form 8-K dated August
          12, 2003, containing a press release detailing the Company's
          earnings for the second quarter of 2003.


<PAGE>
                                SIGNATURE

     Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report on Form 10-Q for the quarter
ended June 30, 2003 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: August 13, 2003


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