FORM 10-Q

                      SECURITIES AND EXCHANGE COMMISSION
                            WASHINGTON, D.C. 20549

(Mark One)

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

              For the quarterly period ended September 30, 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 October 31, 2003: 8,785,555 shares.


<PAGE>
                   GIANT INDUSTRIES, INC. AND SUBSIDIARIES
                                     INDEX


PART I  - FINANCIAL INFORMATION

Item 1  - Financial Statements

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

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

          Consolidated Statements of Cash Flows for the Nine
          Months Ended September 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 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, except shares and per share data)

<CAPTION>
                                                     September 30, 2003   December 31, 2002
                                                     ------------------   -----------------
                                                        (Unaudited)
<S>                                                      <C>                <C>
ASSETS
Current assets:
  Cash and cash equivalents.........................     $   15,674         $   10,168
  Receivables, net..................................         75,179             76,088
  Inventories (Note 9)..............................        113,064            107,802
  Prepaid expenses and other........................          3,968              7,877
  Deferred income taxes.............................          9,769              9,769
                                                         ----------         ----------
    Total current assets............................        217,654            211,704
                                                         ----------         ----------
Property, plant and equipment (Notes 3 and 4).......        636,363            627,444
  Less accumulated depreciation and amortization....       (236,371)          (211,749)
                                                         ----------         ----------
                                                            399,992            415,695
                                                         ----------         ----------
Goodwill (Notes 4 and 5)............................         27,458             19,465
Other assets (Notes 5 and 6)........................         38,382             55,422
                                                         ----------         ----------
                                                         $  683,486         $  702,286
                                                         ==========         ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
  Current portion of long-term debt (Note 11).......     $    9,802         $   10,251
  Accounts payable..................................         66,014             67,282
  Accrued expenses..................................         46,779             42,818
                                                         ----------         ----------
    Total current liabilities.......................        122,595            120,351
                                                         ----------         ----------
Long-term debt, net of current portion (Note 11)....        358,840            398,069
Deferred income taxes...............................         43,252             37,612
Other liabilities (Note 3)..........................         20,980             18,937
Commitments and contingencies (Notes 4, 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.................................         99,487             89,885
                                                         ----------         ----------
                                                            174,273            163,771
  Less common stock in treasury - at cost,
    3,751,980 shares................................        (36,454)           (36,454)
                                                         ----------         ----------
    Total stockholders' equity......................        137,819            127,317
                                                         ----------         ----------
                                                         $  683,486         $  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            Nine Months
                                                      Ended September 30,     Ended September 30,
                                                     ---------------------   ----------------------
                                                        2003        2002        2003        2002
                                                     ---------   ---------   ---------    ---------
<S>                                                  <C>         <C>         <C>          <C>
Net revenues......................................   $ 472,668   $ 382,472   $1,359,900   $ 849,036
Cost of products sold (excluding
  depreciation and amortization)..................     389,182     331,055    1,135,811     704,809
                                                     ---------   ---------   ----------   ---------
Gross margin......................................      83,486      51,417      224,089     144,227
Operating expenses................................      41,197      36,241      121,092      88,950
Depreciation and amortization.....................       9,330       9,169       27,779      25,830
Selling, general and administrative expenses......       8,126       7,031       22,421      18,587
Net loss (gain) on disposal/write-down of assets..       1,081        (157)       1,314        (135)
                                                     ---------   ---------   ----------   ---------
Operating income (loss)...........................      23,752        (867)      51,483      10,995
Interest expense..................................      (9,672)    (10,455)     (29,696)    (25,985)
Amortization/write-off of financing costs.........      (1,202)       (954)      (3,591)     (2,071)
Interest and investment income....................          15          74           98         399
                                                     ---------   ---------   ----------   ---------
Earnings (loss) from continuing operations
  before income taxes.............................      12,893     (12,202)      18,294     (16,662)
Provision (benefit) for income taxes..............       5,239      (5,041)       7,473      (6,586)
                                                     ---------   ---------   ----------   ---------
Earnings (loss) from continuing operations
  before cumulative effect of change
  in accounting principle.........................       7,654      (7,161)      10,821     (10,076)

Discontinued operations, net of income tax
  (benefit) provision of $(84), $1,726, $(344)
  and $894 (Note 6)...............................        (125)      2,589         (515)      1,342

Cumulative effect of change in accounting
  principle, net of income tax benefit of
  $468 (Note 3)...................................           -           -         (704)          -
                                                     ---------   ---------   ----------   ---------
Net earnings (loss)...............................   $   7,529   $ (4,572)   $    9,602   $  (8,734)
                                                     =========   =========   ==========   =========
Net earnings (loss) per common share:
  Basic
    Continuing operations.........................   $    0.87   $   (0.83)  $     1.24   $   (1.18)
    Discontinued operations.......................       (0.01)       0.30        (0.06)       0.16
    Cumulative effect of change
      in accounting principle.....................           -           -        (0.08)          -
                                                     ---------   ---------   ----------   ---------
                                                     $    0.86   $   (0.53)  $     1.10   $   (1.02)
                                                     =========   =========   ==========   =========
  Assuming dilution
    Continuing operations.........................   $    0.86   $   (0.83)  $     1.23   $   (1.18)
    Discontinued operations.......................       (0.01)       0.30        (0.06)       0.16
    Cumulative effect of change
      in accounting principle.....................           -           -        (0.08)          -
                                                     ---------   ---------   ----------   ---------
                                                     $    0.85   $   (0.53)  $     1.09   $   (1.02)
                                                     =========   =========   ==========   =========

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


<PAGE>
<TABLE>
                            GIANT INDUSTRIES, INC. AND SUBSIDIARIES
                             CONSOLIDATED STATEMENTS OF CASH FLOWS
                                         (Unaudited)
                                        (In thousands)
<CAPTION>
                                                                        Nine Months
                                                                    Ended September 30,
                                                                 -------------------------
                                                                    2003            2002
                                                                 ---------       ---------
<S>                                                              <C>             <C>
Cash flows from operating activities:
  Net earnings (loss).........................................   $   9,602       $  (8,734)
  Adjustments to reconcile net earnings (loss) to net
    cash provided by operating activities:
      Depreciation and amortization, including
        discontinued operations...............................      28,362          27,460
      Amortization/write-off of financing costs...............       3,591           2,071
      Deferred income taxes...................................       6,108          (2,091)
      Cumulative effect of change in
        accounting principle, net.............................         704               -
      Net loss (gain) on the disposal/write-down of assets
        included in continuing operations.....................       1,314            (135)
      Net loss (gain) on disposal of discontinued operations..         127          (4,789)
      Loss on write-down/write-off of assets included
        in discontinued operations............................         253            1025
      Tax refund received.....................................       4,090               -
      Other...................................................        (228)            338
      Changes in operating assets and liabilities
        (excluding in 2002 the effects of the
        Yorktown acquisition):
        Increase in receivables...............................      (3,181)        (24,657)
        (Increase) decrease in inventories....................      (4,911)         28,276
        Decrease in prepaid expenses and other.....                  3,901           2,017
        (Decrease) increase in accounts payable...............      (1,268)          4,941
        Increase in accrued expenses..........................       4,849             962
                                                                 ---------       ---------
Net cash provided by operating activities.....................      53,313          26,684
                                                                 ---------       ---------
Cash flows from investing activities:
  Yorktown refinery acquisition...............................           -        (194,866)
  Yorktown refinery acquisition contingent payments...........      (8,120)              -
  Capital expenditures........................................     (11,590)         (9,783)
  Proceeds from sale of property, plant and equipment
    and other assets..........................................       9,900          13,445
                                                                 ---------       ---------
Net cash used by investing activities.........................      (9,810)       (191,204)
                                                                 ---------       ---------
Cash flows from financing activities:
  Proceeds from long-term debt................................           -         234,144
  Payments of long-term debt..................................     (12,947)       (104,478)
  Proceeds from line of credit................................      96,000          88,000
  Payments on line of credit..................................    (121,000)        (53,000)
  Deferred financing costs....................................         (50)        (16,402)
  Proceeds from exercise of stock options.....................           -              94
                                                                 ---------       ---------
Net cash (used) provided by financing activities..............     (37,997)        148,358
                                                                 ---------       ---------
Net increase (decrease) in cash and cash equivalents..........       5,506         (16,162)
  Cash and cash equivalents:
    Beginning of period.......................................      10,168          26,326
                                                                 ---------       ---------
    End of period.............................................   $  15,674       $  10,164
                                                                 =========       =========

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. On September 30, 2003, the Company paid
off certain capital lease obligations by paying approximately $4,703,000 in cash and by applying
a $2,000,000 deposit that had been included in "Other Assets". 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, and North Carolina) 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 nine months ended September 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
adoption of Interpretation No. 45 had no material 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 ("VIE") is consolidated
if a company is subject to a majority of the risk of loss from the VIE's
activities or entitled to receive a majority of the entity's residual
returns. 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 the current practice of
deferring and amortizing these costs over the period until the next
turnaround. The AICPA is in the process of redrafting the SOP. The final
SOP is expected to be effective for fiscal years beginning after December
15, 2004. The Company is 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. The Company has no existing financial instruments that fall 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 EITF 03-4 is the next measurement date
after May 28, 2003. The Company is evaluating the impact of EITF 03-4 on
its financial statements.

     The Company has made certain reclassifications 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. The Refining Group also
       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, the Refining Group acquires finished products 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. The Refining Group purchases crude oil, other
       feedstocks and blending components 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. The
       Refining Group or Phoenix Fuel supplies the gasoline and diesel fuel
       sold by the Retail Group. The Retail Group obtains general
       merchandise and food products from third party suppliers. At
       September 30, 2003, the Company operated 127 service stations.

     - Phoenix Fuel: 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.
       Phoenix Fuel obtains the petroleum fuels and lubricants sold
       primarily 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 September
30, 2003 and 2002, are presented below.

<TABLE>
<CAPTION>
                                                      For the Three Months Ended September 30, 2003
                                            ----------------------------------------------------------------
                                            Refining   Retail   Phoenix            Reconciling
                                              Group    Group      Fuel     Other      Items     Consolidated
                                            ----------------------------------------------------------------
                                                                     (In thousands)
<S>                                         <C>       <C>       <C>       <C>        <C>          <C>
Customer net revenues:
  Finished products:
    Four Corners operations..............   $ 72,194
    Yorktown operations..................    201,722
                                            --------
    Total................................   $273,916  $ 51,707  $100,718  $      -   $       -    $  426,341
  Merchandise and lubricants.............          -    35,387     6,559         -           -        41,946
  Other..................................      3,154     3,916       265        60           -         7,395
                                            --------  --------  --------  --------   ---------    ----------
    Total................................    277,070    91,010   107,542        60           -       475,682
                                            --------  --------  --------  --------   ---------    ----------
Intersegment net revenues:
  Finished products......................     43,579         -    12,512         -     (56,091)            -
  Other..................................      7,669         -         -         -      (7,669)            -
                                            --------  --------  --------  --------   ---------    ----------
    Total................................     51,248         -    12,512         -     (63,760)            -
                                            --------  --------  --------  --------   ---------    ----------
Total net revenues.......................    328,318    91,010   120,054        60     (63,760)      475,682
Net revenues of discontinued operations..          -     3,014         -         -           -         3,014
                                            --------  --------  --------  --------   ---------    ----------
Net revenues of continuing operations....   $328,318  $ 87,996  $120,054  $     60   $ (63,760)   $  472,668
                                            ========  ========  ========  ========   =========    ==========
Operating income (loss):
  Four Corners operations................   $ 13,269
  Yorktown operations....................     10,540
                                            --------
Total operating income (loss)............   $ 23,809  $  5,052  $  2,101  $ (6,147)  $  (1,272)   $   23,543
Discontinued operations loss.............          -       (18)        -         -        (191)         (209)
                                            --------  --------  --------  --------   ---------    ----------
Operating income (loss)
  from continuing operations.............   $ 23,809  $  5,070  $  2,101  $ (6,147)  $  (1,081)   $   23,752
                                            --------  --------  --------  --------   ---------
Interest expense.........................                                                             (9,672)
Amortization of financing costs..........                                                             (1,202)
Interest income..........................                                                                 15
Earnings from continuing operations                                                               ----------
  before income taxes....................                                                         $   12,893
                                                                                                  ==========
Depreciation and amortization:
  Four Corners operations................   $  3,969
  Yorktown operations....................      2,064
                                            --------
    Total................................   $  6,033  $  2,518  $    435  $    405   $       -    $    9,391
    Discontinued operations..............          -        61         -         -           -            61
                                            --------  --------  --------  --------   ---------    ----------
    Continuing operations................   $  6,033  $  2,457  $    435  $    405   $       -    $    9,330
                                            --------  --------  --------  --------   ---------    ----------
Capital expenditures.....................   $    567  $    490  $    271  $    112   $       -    $    1,440
Yorktown refinery acquisition
  contingent payments....................   $  2,645  $      -  $      -  $      -   $       -    $    2,645
</TABLE>


<PAGE>
<TABLE>
<CAPTION>
                                                      For the Three Months Ended September 30, 2002
                                            ----------------------------------------------------------------
                                            Refining   Retail   Phoenix            Reconciling
                                              Group    Group      Fuel     Other      Items     Consolidated
                                            ----------------------------------------------------------------
                                                                     (In thousands)
<S>                                         <C>       <C>       <C>       <C>        <C>          <C>
Customer net revenues:
  Finished products:
    Four Corners operations..............   $ 67,911
    Yorktown operations(1)...............    159,844
                                            --------
    Total................................   $227,755  $ 52,299  $ 69,054  $      -   $       -    $  349,108
  Merchandise and lubricants.............          -    38,068     5,610         -           -        43,678
  Other..................................      2,261     3,674       695        44           -         6,674
                                            --------  --------  --------  --------   ---------    ----------
    Total................................    230,016    94,041    75,359        44           -       399,460
                                            --------  --------  --------  --------   ---------    ----------
Intersegment net revenues:
  Finished products......................     41,488         -    15,787         -     (57,275)            -
  Other..................................      3,658         -         -         -      (3,658)            -
                                            --------  --------  --------  --------   ---------    ----------
    Total................................     45,146         -    15,787         -     (60,933)            -
                                            --------  --------  --------  --------   ---------    ----------
Total net revenues.......................    275,162    94,041    91,146        44     (60,933)      399,460

Net revenues of discontinued operations..          -    16,988         -         -           -        16,988
                                            --------  --------  --------  --------   ---------    ----------
Net revenues of continuing operations....   $275,162  $ 77,053  $ 91,146  $     44   $ (60,933)   $  382,472
                                            ========  ========  ========  ========   =========    ==========
Operating income (loss):
  Four Corners operations................   $  5,816
  Yorktown operations(1).................     (5,994)
                                            --------
Total operating income (loss)............       (178) $  1,638  $  1,752  $ (4,725)  $   4,961    $    3,448
Discontinued operations income (loss)....          -      (489)        -         -       4,804         4,315
                                            --------  --------  --------  --------   ---------    ----------
Operating income (loss) from continuing
  operations.............................   $   (178) $  2,127  $  1,752  $ (4,725)  $     157    $     (867)
                                            --------  --------  --------  --------   ---------
Interest expense.........................                                                            (10,455)
Amortization of financing costs..........                                                               (954)
Interest income..........................                                                                 74
Loss from continuing operations before                                                            ----------
  income taxes...........................                                                         $  (12,202)
                                                                                                  ==========
Depreciation and amortization:
  Four Corners operations................   $  4,071
  Yorktown operations(1).................      1,646
                                            --------
    Total................................   $  5,717  $  3,128  $    507  $    301   $       -    $    9,653
    Discontinued operations..............          -       484         -         -           -           484
                                            --------  --------  --------  --------   ---------    ----------
    Continuing operations................   $  5,717  $  2,644  $    507  $    301   $       -    $    9,169
                                            --------  --------  --------  --------   ---------    ----------
Capital expenditures.....................   $  1,447  $    449  $     87  $    248   $       -    $    2,231

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




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

<TABLE>
<CAPTION>
                                                  As of and for the Nine Months Ended September 30, 2003
                                            ----------------------------------------------------------------
                                            Refining   Retail   Phoenix            Reconciling
                                              Group    Group      Fuel     Other      Items     Consolidated
                                            ----------------------------------------------------------------
                                                                     (In thousands)
<S>                                         <C>       <C>       <C>       <C>        <C>          <C>
Customer net revenues:
  Finished products:
    Four Corners operations..............   $218,836
    Yorktown operations..................    564,669
                                            --------
    Total................................   $783,505  $155,886  $294,941  $      -   $       -    $1,234,332
  Merchandise and lubricants.............          -   100,890    19,277         -           -       120,167
  Other..................................     18,242    11,843     1,253       270           -        31,608
                                            --------  --------  --------  --------   ---------    ----------
    Total................................    801,747   268,619   315,471       270           -     1,386,107
                                            --------  --------  --------  --------   ---------    ----------
Intersegment net revenues:
  Finished products......................    130,483         -    36,564         -    (167,047)            -
  Other..................................     15,876         -         -         -     (15,876)            -
                                            --------  --------  --------  --------   ---------    ----------
    Total................................    146,359         -    36,564         -    (182,923)            -
                                            --------  --------  --------  --------   ---------    ----------
Total net revenues.......................    948,106   268,619   352,035       270    (182,923)    1,386,107
Net revenues of discontinued operations..          -    26,207         -         -           -        26,207
                                            --------  --------  --------  --------   ---------    ----------
Net revenues of continuing operations....   $948,106  $242,412  $352,035  $    270   $(182,923)   $1,359,900
                                            ========  ========  ========  ========   =========    ==========
Operating income (loss):
  Four Corners operations................   $ 35,488
  Yorktown operations....................     16,050
                                            --------
Total operating income (loss)............   $ 51,538  $ 10,894  $  5,991  $(16,105)  $  (1,694)   $   50,624
Discontinued operations loss.............          -      (479)        -         -        (380)         (859)
                                            --------  --------  --------  --------   ---------    ----------
Operating income (loss)
  from continuing operations.............   $ 51,538  $ 11,373  $  5,991  $(16,105)  $  (1,314)   $   51,483
                                            --------  --------  --------  --------   ---------
Interest expense.........................                                                            (29,696)
Amortization of financing costs..........                                                             (3,591)
Interest income..........................                                                                 98
Earnings from continuing operations                                                               ----------
  before income taxes....................                                                         $   18,294
                                                                                                  ==========
Depreciation and amortization:
  Four Corners operations................   $ 11,927
  Yorktown operations....................      5,878
                                            --------
    Total................................   $ 17,805  $  8,128  $  1,336  $  1,093   $       -    $   28,362
    Discontinued operations..............          -       583         -         -           -           583
                                            --------  --------  --------  --------   ---------    ----------
    Continuing operations................   $ 17,805  $  7,545  $  1,336  $  1,093   $       -    $   27,779
                                            --------  --------  --------  --------   ---------    ----------
Total assets.............................   $439,880  $115,642  $ 67,111  $ 60,853   $       -    $  683,486
Capital expenditures.....................   $  9,929  $    864  $    604  $    193   $       -    $   11,590
Yorktown refinery acquisition
  contingent payments.....................  $  8,120  $      -  $      -  $      -   $       -    $    8,120
</TABLE>


<PAGE>
<TABLE>
<CAPTION>
                                                 As of and for the Nine Months Ended September 30, 2002
                                            ----------------------------------------------------------------
                                            Refining   Retail   Phoenix            Reconciling
                                              Group    Group      Fuel     Other      Items     Consolidated
                                            ----------------------------------------------------------------
                                                                     (In thousands)
<S>                                         <C>       <C>       <C>       <C>        <C>          <C>
Customer net revenues:
  Finished products:
    Four Corners operations..............   $188,658
    Yorktown operations(1)...............    232,678
                                            --------
    Total................................   $421,336  $141,387  $190,213  $      -   $       -    $  752,936
  Merchandise and lubricants.............          -   108,889    17,031         -           -       125,920
  Other..................................      6,165    11,443     1,996       134           -        19,738
                                            --------  --------  --------  --------   ---------    ----------
    Total................................    427,501   261,719   209,240       134           -       898,594
                                            --------  --------  --------  --------   ---------    ----------
Intersegment net revenues:
  Finished products......................    110,249         -    42,160         -    (152,409)            -
  Other..................................     12,481         -         -         -     (12,481)            -
                                            --------  --------  --------  --------   ---------    ----------
    Total................................    122,730         -    42,160         -    (164,890)            -
                                            --------  --------  --------  --------   ---------    ----------
Total net revenues.......................    550,231   261,719   251,400       134    (164,890)      898,594

Net revenues of discontinued operations..          -    49,558        -         -            -        49,558
                                            --------  --------  --------  --------   ---------    ----------
Net revenues of continuing operations....   $550,231  $212,161  $251,400  $    134   $(164,890)   $  849,036
                                            ========  ========  ========  ========   =========    ==========
Operating income (loss):
  Four Corners operations................   $ 23,222
  Yorktown operations(1).................     (9,084)
                                            --------
Total operating income (loss)............     14,138  $  2,835  $  4,791  $(12,432)  $   3,899    $   13,231
Discontinued operations income (loss)....          -    (1,528)        -         -       3,764         2,236
                                            --------  --------  --------  --------   ---------    ----------
Operating income (loss) from
  continuing operations..................   $ 14,138  $  4,363  $  4,791  $(12,432)  $     135    $   10,995
Interest expense.........................                                                            (25,985)
Amortization/write-off of financing costs                                                             (2,071)
Interest income..........................                                                                399
Loss from continuing operations before                                                            ----------
  income taxes...........................                                                         $  (16,662)
                                                                                                  ==========
Depreciation and amortization:
  Four Corners operations................   $ 12,703
  Yorktown operations(1).................      2,726
                                            --------
    Total................................   $ 15,429  $  9,587  $  1,574  $    870   $       -    $   27,460
    Discontinued operations..............          -     1,630         -         -           -         1,630
                                            --------  --------  --------  --------   ---------    ----------
    Continuing operations................   $ 15,429  $  7,957  $  1,574  $    870   $       -    $   25,830
                                            --------  --------  --------  --------   ---------    ----------
Total assets.............................   $425,129  $139,417  $ 60,825  $ 65,559   $       -    $  690,930
Capital expenditures.....................   $  6,811  $    893  $    360  $  1,719   $       -    $    9,783
Yorktown refinery acquisition............   $194,866  $      -  $      -  $      -   $       -    $  194,866


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



<PAGE>
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, statute, 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 of
$120,000, and recorded a cumulative effect adjustment of $1,172,000
($704,000 net of taxes).

     The Company identified the following ARO's:

         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 nine and twelve month
periods ended September 30, 2003 and December 31, 2002, respectively.

<TABLE>
<CAPTION>
                                                          December 31,
                                          September 30,      2002
                                              2003        (Pro Forma)
                                          -------------   ------------
                                                (In thousands)
<S>                                          <C>           <C>
Liability beginning of year...........       $2,198        $1,719
Liabilities incurred..................            -           340
Liabilities settled...................         (112)            -
Accretion expense.....................          129           139
Revision to estimated cash flows......            -             -
                                             ------        ------
Liability end of period...............       $2,215        $2,198
                                             ======        ======
</TABLE>

     The effect of the change on earnings for the three and nine months
ended September 30, 2003 was not material.

     The pro forma information below for the three and nine months ended
September 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   Nine Months Ended
                                           September 30, 2002   September 30, 2002
                                           ------------------   ------------------
                                                        (In thousands)
<S>                                             <C>                  <C>
Net loss as reported......................      $(4,572)             $(8,734)
Deduct:
  Accretion expense, net of tax...........          (21)                 (63)
  Depreciation expense, net of tax........          (17)                 (51)
                                                -------              -------
    Pro forma net loss....................      $(4,610)             $(8,848)
                                                =======              =======
Net loss per common share:
  Basic and assuming dilution:
    As reported...........................      $ (0.53)             $ (1.02)
    Pro forma.............................      $ (0.54)             $ (1.03)
</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. For the three and
nine months ended September 30, 2003, the Company incurred $2,645,000 and
$8,120,000, respectively under this provision of the purchase agreement.
These earn-out payments are considered additional purchase price and have
been charged to goodwill as paid. In previous filings the Company reported
that these earn-out payments were being allocated to the assets acquired
in the same proportion as the original purchase price allocation. In the
third quarter of 2003, the Company determined that it was more appropriate
to charge these amounts to goodwill and, therefore, the entire $8,120,000
has been included in goodwill, including $5,475,000 that was included in
property, plant and equipment at June 30, 2003. Management is currently
evaluating the deferred tax impact of the earn-out payments and will make
the appropriate reclassifications between deferred taxes and goodwill in
the fourth quarter of 2003. No material adjustments have been made to the
Company's initial allocation of the purchase price of the Yorktown
refinery except as noted above.



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

     At September 30, 2003 and December 31, 2002, the Company had goodwill
of $27,458,000 and $19,465,000, respectively.

     The changes in the carrying amount of goodwill for the nine months
ended September 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
Yorktown refinery acquisition
  contingent consideration (Note 4)...     8,120          -          -      8,120
Impairment losses related to
  certain retail units held for sale..         -        (49)         -        (49)
Goodwill written off related to
  the sale of certain retail units....         -        (78)         -        (78)
                                         -------    -------    -------    -------
Balance as of September 30, 2003......   $ 8,245    $ 4,491    $14,722    $27,458
                                         =======    =======    =======    =======
</TABLE>

     A summary of intangible assets that are included in "Other Assets" in
the Consolidated Balance Sheet at September 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       $ 2,503      $ 1,061
  Contracts..............................      3,971         3,565          406
  Licenses and permits...................        786           125          661
                                             -------       -------      -------
                                               8,321         6,193        2,128
                                             -------       -------      -------
Unamortized intangible assets:
  Liquor licenses........................      7,365             -        7,365
                                             -------       -------      -------
Total intangible assets..................    $15,686       $ 6,193      $ 9,493
                                             =======       =======      =======
</TABLE>



     Intangible asset amortization expense for the three and nine months
ended September 30, 2003 was $94,000 and $282,000, respectively. Estimated
amortization expense for the five succeeding fiscal years is as follows:

<TABLE>
<CAPTION>
                                                          (In thousands)
                                                          --------------
<S>                                                           <C>
2003 remainder...........................................     $ 95
2004.....................................................      377
2005.....................................................      377
2006.....................................................      374
2007.....................................................      273
2008.....................................................      253
</TABLE>


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

     The following table contains information regarding the Company's
discontinued operations, all of which are included in the Company's Retail
Group and include certain service station/convenience stores in all
periods and the Company's travel center in 2003.

<TABLE>
<CAPTION>
                                           Three Months Ended   Nine Months Ended
                                              September 30         September 30
                                           ------------------   ------------------
                                             2003      2002       2003      2002
                                           --------  --------   --------  --------
                                                        (In thousands)
<S>                                        <C>       <C>        <C>       <C>
Net revenues...........................    $  3,014  $ 16,988   $ 26,207  $ 49,558

Net operating loss.....................    $    (18) $   (489)  $   (479) $ (1,528)
(Loss) gain on disposal................    $    (14) $  4,921   $   (127) $  4,789
Impairment and other write-downs.......    $   (177) $   (117)  $   (253) $ (1,025)
                                           --------  --------   --------  --------
(Loss) earnings before income taxes....    $   (209) $  4,315   $   (859) $  2,236
                                           --------  --------   --------  --------

Net (loss) earnings....................    $   (125) $  2,589   $   (515) $  1,342

Allocated goodwill included in
  (loss) gain on disposal..............    $     16  $    243   $     78  $    243

</TABLE>

     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.

<TABLE>
<CAPTION>
                                                        September 30,      December 31,
                                                            2003               2002
                                                        -------------      -------------
                                                                  (In thousands)
<S>                                                         <C>               <C>
Operating retail units held for sale and included in
  discontinued operations:
    Property, plant and equipment.....................      $ 1,194           $11,625
    Inventories.......................................          186               538
                                                            -------           -------
                                                              1,380            12,163
Vacant land - residential/commercial property.........        6,278             6,351
Closed retail units...................................        1,758             2,376
Vacant land - industrial site.........................        1,596             1,596
Vacant land - adjacent to retail units................        1,189             1,201
                                                            -------           -------
                                                            $12,201           $23,687
                                                            =======           =======
</TABLE>

     All of these assets are being marketed for sale. In the first nine
months of 2003, nine closed retail units with a net book value of
$1,219,000 were reclassified to property, plant and equipment because the
Company was unable to dispose of them within 12 months. In addition, two
closed retail units were added to assets held for sale, two were sold, one
unit was written-off, and impairment write-downs of $400,000 were recorded
relating to various other assets.


<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     Nine Months Ended
                                           September 30,         September 30,
                                       -------------------   --------------------
                                         2003        2002       2003       2002
                                       ---------  ---------   ---------  ---------
Numerator                                             (In thousands)
<S>                                    <C>        <C>         <C>        <C>
Earnings (loss) from
  continuing operations..............  $   7,654  $  (7,161)  $  10,821  $ (10,076)
(Loss) earnings from
  discontinued operations............       (125)     2,589        (515)     1,342
Cumulative effect of change in
  accounting principle...............          -          -        (704)         -
                                       ---------  ---------   ---------  ---------
Net earnings (loss)..................  $   7,529  $  (4,572)  $   9,602  $  (8,734)
                                       =========  =========   =========  =========
</TABLE>

<TABLE>
<CAPTION>
                                        Three Months Ended      Nine Months Ended
                                           September 30,          September 30,
                                       --------------------   --------------------
                                         2003       2002        2003       2002
                                       ---------  ---------   ---------  ---------
Denominator
<S>                                    <C>        <C>         <C>        <C>
Basic - weighted average
  shares outstanding.................  8,785,555  8,571,779   8,713,513  8,564,042
Effect of dilutive stock options.....    102,269          -*     75,323          -*
                                       ---------  ---------   ---------  ---------
Diluted - weighted average
  shares outstanding.................  8,887,824  8,571,779   8,788,836  8,564,042
                                       =========  =========   =========  =========

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

<TABLE>
<CAPTION>
                                        Three Months Ended     Nine Months Ended
                                           September 30,         September 30,
                                       -------------------   --------------------
                                         2003       2002       2003       2002
                                       ---------  ---------   ---------  ---------
Basic Earnings (Loss) Per Share
<S>                                    <C>        <C>         <C>        <C>
Earnings (loss) from continuing
  operations.........................  $    0.87  $   (0.83)  $    1.24  $   (1.18)
(Loss) earnings from discontinued
  operations.........................      (0.01)      0.30       (0.06)      0.16
Cumulative effect of change in
  accounting principle...............          -          -       (0.08)         -
                                       ---------  ---------   ---------  ---------
Net earnings (loss)..................  $    0.86  $   (0.53)  $    1.10  $   (1.02)
                                       =========  =========   =========  =========
</TABLE>



<PAGE>
<TABLE>
<CAPTION>
                                        Three Months Ended     Nine Months Ended
                                           September 30,         September 30,
                                       -------------------   --------------------
                                         2003       2002       2003       2002
                                       --------   --------   --------   ---------
Diluted Earnings (Loss) Per Share
<S>                                    <C>        <C>        <C>        <C>
Earnings (loss) from continuing
  operations.........................  $   0.86   $  (0.83)  $   1.23   $   (1.18)
(Loss) earnings from discontinued
  operations.........................     (0.01)      0.30      (0.06)       0.16
Cumulative effect of change in
  accounting principle...............         -          -      (0.08)          -
                                       --------   --------   --------   ---------
Net earnings (loss)..................  $   0.85   $  (0.53)  $   1.09   $   (1.02)
                                       ========   ========   ========   =========
</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 September 30, 2003, there were 8,785,555 shares of the Company's
common stock outstanding. There were no transactions subsequent to
September 30, 2003, that if the transactions had occurred before September
30, 2003, would materially change the number of common shares or potential
common shares outstanding as of September 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 ("APB") 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. In the
third quarter of 2002, approximately $48,000 of compensation, net of tax,
was recorded in accordance with APB No. 25 relating to certain stock
options for which the exercise period had been extended. 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   Nine Months Ended
                                              September 30,       September 30,
                                           ------------------   -----------------
                                            2003       2002      2003      2002
                                           -------    -------   -------   -------
                                            (In thousands, except per share data)
<S>                                        <C>        <C>       <C>       <C>
Net earnings (loss), as reported.........  $ 7,529    $(4,572)  $ 9,602   $(8,734)
Add: Stock-based employee
  compensation expense included in
  reported net income, net of
  related tax effect.....................        -         48        -         48
Deduct: Total stock-based employee
  compensation expense determined
  under the fair value based method
  for all awards, net of related
  tax effect.............................      (74)       (59)     (167)     (186)
                                           -------    -------   -------   -------
Pro forma net earnings (loss)............  $ 7,455    $(4,583)  $ 9,435   $(8,872)
                                           =======    =======   =======   =======

Net earnings (loss) per share:
  Basic - as reported....................  $  0.86    $ (0.53)  $  1.10   $ (1.02)
                                           =======    =======   =======   =======
  Basic - pro forma......................  $  0.85    $ (0.53)  $  1.08   $ (1.04)
                                           =======    =======   =======   =======
  Diluted - as reported..................  $  0.85    $ (0.53)  $  1.09   $ (1.02)
                                           =======    =======   =======   =======
  Diluted - pro forma....................  $  0.84    $ (0.53)  $  1.07   $ (1.04)
                                           =======    =======   =======   =======

</TABLE>


<PAGE>
NOTE 9 - INVENTORIES:

<TABLE>
<CAPTION>
                                       September 30, 2003  December 31, 2002
                                       ------------------  -----------------
                                                    (In thousands)
<S>                                         <C>                 <C>
First-in, first-out ("FIFO") method:
  Crude oil............................     $ 55,895            $ 34,192
  Refined products.....................       45,615              59,896
  Refinery and shop supplies...........       11,312              11,362
  Merchandise..........................        3,247               3,374
Retail method:
  Merchandise..........................       10,700               8,619
                                            --------            --------
    Subtotal...........................      126,769             117,443
Adjustment for last-in,
  first-out ("LIFO") method............      (13,705)             (9,641)
                                            --------            --------
    Total..............................     $113,064            $107,802
                                            ========            ========
</TABLE>

     The portion of inventories valued on a LIFO basis totaled $80,982,000
and $70,329,000 at September 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 September
30, 2003 and 2002, net earnings (loss) and diluted earnings (loss) per
share amounts for the three months ended September 30, 2003 and 2002,
would have been higher by $651,000 and $0.07, and $4,294,000 and $0.50,
respectively, and net earnings (loss) and diluted earnings (loss) per
share amounts for the nine months ended September 30, 2003 and 2002, would
have been higher by $2,439,000 and $0.28, and $5,208,000 and $0.61,
respectively.

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

     In the third quarter of 2003, certain lower cost refining LIFO
inventory layers were liquidated resulting in an increase in net earnings
of approximately $352,000 or $0.04 per share for the three and nine months
ended September 30, 2003. There were no similar liquidations in 2002.



<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.
There were no such transactions in the third quarter of 2003. For the nine
months ended September 30, 2003, the Company recognized losses on these
contracts of approximately $1,594,000 in cost of products sold. These
transactions did not qualify for hedge accounting in accordance with SFAS
No. 133, "Accounting for Derivative Instruments and Hedging Activities,"
as amended, and accordingly were marked to market each month. There were
no open crude oil futures contracts or other commodity derivative
contracts at September 30, 2003.


<PAGE>
NOTE 11 - LONG-TERM DEBT:

     Long-term debt consists of the following:

<TABLE>
<CAPTION>
                                                     September 30, 2003    December 31, 2002
                                                     ------------------    -----------------
                                                                  (In thousands)
<S>                                                        <C>                 <C>
11% senior subordinated notes, due 2012, net
  of unamortized discount of $5,382 and $5,651,
  interest payable semi-annually......................     $194,618            $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....            -              25,000
Senior secured mortgage loan facility, due 2005,
  floating interest rate, principal and interest
  payable monthly.....................................       24,000              32,222
Capital lease obligations, 11.3%, due
  through 2007, interest payable monthly..............            -               6,703
Other.................................................           24                  46
                                                           --------            --------
  Subtotal............................................      368,642             408,320
Less current portion..................................       (9,802)            (10,251)
                                                           --------            --------
  Total...............................................     $358,840            $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 Company does not deem the separate financial statements and
other disclosures concerning the subsidiaries 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 September 30, 2003, the availability of funds under the
Credit Facility was $100,000,000. There were no direct borrowings
outstanding under this facility at September 30, 2003, and there were
approximately $35,437,000 of irrevocable letters of credit outstanding,
primarily to crude oil suppliers, insurance companies and regulatory
agencies. On October 31, 2003, there were no direct borrowings outstanding
under this facility and there were approximately $36,243,000 of
irrevocable letters of credit outstanding.

     The interest rate applicable to the Credit Facility is tied to
various short-term indices. At September 30, 2003, this rate was
approximately 4.9% per annum. The Company pays 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 its 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 to achieve a minimum quarterly consolidated
EBITDA. The Company also was required to, and did, repay $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 September 30, 2003, this rate was approximately 6.6% per
annum. The remainder of the notes fully amortize during the three-year
term as follows: remainder of 2003 - $2,000,000, 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.

     In the third quarter, the Company paid off certain capital lease
obligations by paying approximately $4,703,000 in cash and by applying a
$2,000,000 deposit that had been included in "Other Assets".




<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 September 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 or cash flows 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
party 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 September 30, 2003 and December 31, 2002, the Company had
environmental liability accruals of approximately $7,864,000 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               September 30,
                                               2002       (Decrease)   Payments       2003
                                            ------------  ----------   --------   -------------
<S>                                          <C>          <C>          <C>          <C>
Yorktown Refinery.........................   $ 6,715      $     -      $  (594)     $ 6,121
Farmington Refinery.......................       570            -            -          570
Bloomfield Refinery.......................       310            -          (30)         280
Ciniza - Solid Waste Management Units.....       275            -            -          275
Ciniza - Land Treatment Facility..........       189            -           (3)         186
Ciniza Well Closures......................       100           40            -          140
Bloomfield Refinery - Discharge...........         -          132          (18)         114
Retail Service Stations - Various.........       119           10          (19)         110
Bloomfield Tank Farm (Old Terminal).......        89            -          (21)          68
                                             -------      -------      -------      -------
   Totals.................................   $ 8,367      $   182      $  (685)     $ 7,864
                                             =======      =======      =======      =======
</TABLE>

     At September 30, 2003, approximately $7,039,000 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.

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 $6,121,000. 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 related to the Yorktown refinery 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 between 2002 and 2006, 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 the United States Environmental
Protection Agency ("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 clean up 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. EPA issued a proposed course of action on
November 4, 2003, for public comment. 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.

FARMINGTON REFINERY MATTERS

     In 1973, the Company constructed the Farmington refinery, which 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 clean up
order has been received. The Company's environmental reserve for this
matter is approximately $570,000.

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 September 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 expenses through approximately 2004 for soil remediation and
additional expenses thereafter for continued groundwater monitoring and
testing until natural attenuation has completed the process of groundwater
remediation. At September 30, 2003, the Company had an environmental
accrual of $68,000 for this matter.

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 believed 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, clean up 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.

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 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 penalties to
$500,000.

     The Company is continuing discussions with NMED and EPA with respect
to both of the inspections. 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 certain other environmentally
beneficial projects, known as supplemental environmental projects
("SEPs"). The Company has not yet determined the nature or scope of any
work that may be required in lieu of monetary penalties.

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.
The DESC responded to the Company's motion on September 17, 2003. 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 potential
counterclaim, 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.
Subsequent to the filing of the claims, Mr. Acridge filed for bankruptcy.
The trustee appointed in the Chapter 11 bankruptcy proceeding (the
"Acridge Trustee") recently has questioned whether the Superior Court
should have stayed the Lawsuit pending arbitration instead of dismissing
it. Regardless, 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 alleged 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 the
bankruptcy proceedings relating to Mr. Acridge described below, the
Company has continued to maintain the reserve.

     In addition to Mr. Acridge's personal bankruptcy filing, 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 proceedings 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. Further, on July 31, 2003, the Company filed
a complaint in the Acridge bankruptcy proceeding in which it seeks a
determination that certain of the amounts it asserts are owed to it by Mr.
Acridge are not dischargeable in bankruptcy.

     A plan of reorganization was filed by the official committee of
unsecured creditors for the jointly administered bankruptcy cases on
November 7, 2003 (the "Plan"). The Plan describes a process for the
liquidation of the estates and the payment of liquidation proceeds to
creditors. It will only become effective if approved by the bankruptcy
court.

     Under the Plan, the Company would make a payment, which would have no
material effect on the Company's financial statements, for the benefit of
unsecured creditors in the Acridge estate.  Additionally, the Company
would give up all of its claims against the estates, with the exception of
a claim for the Company's pro rata share of any assets of the Acridge
estate that have not yet been identified.  In return, the four estates
would release the Company from all of their claims against the Company,
its affiliates and subsidiaries, and its officers, directors and
employees. The Plan would not preclude the Company from pursuing its non-
dischargeability complaint against Mr. Acridge.

     During the third quarter of 2003, the Acridge Trustee asked the
bankruptcy court to permit him to engage in discovery to determine whether
any claims against the Company, or persons or entities associated with the
Company, may exist. Additionally, the trustee in the Prime Pinnacle
proceeding (the "Prime Trustee") recently filed a separate plan of
reorganization (the "Pinnacle Plan"). The Prime Trustee indicated that he
is objecting to the proof of claim filed by the Company in the Prime
Pinnacle proceeding. In addition, the Prime Trustee indicated that he will
be evaluating any possible preferential or fraudulent transfer of assets
from Prime Pinnacle to the Company in satisfaction of debts owed by Mr.
Acridge or his other entities.  Any such allegations will be vigorously
defended by the Company.

     It is unknown whether the Plan or the Pinnacle Plan will be approved
and to what extent creditors, including the Company, will receive any
recovery on their respective debts from any of the four bankruptcy
estates.  Whether the Company will be successful in pursuing its non-
dischargeability complaint also is unknown.



<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            Nine Months
                                                      Ended September 30,     Ended September 30,
                                                     ---------------------   ---------------------
                                                        2003        2002        2003        2002
                                                     ---------   ---------   ---------   ---------
                                                         (In thousands, except per share data)
<S>                                                  <C>         <C>         <C>          <C>
Net revenues......................................   $ 472,668   $ 382,472   $1,359,900   $ 849,036
Cost of products sold (excluding
  depreciation and amortization)..................     389,182     331,055    1,135,811     704,809
                                                     ---------   ---------   ----------   ---------
Gross margin......................................      83,486      51,417      224,089     144,227
Operating expenses................................      41,197      36,241      121,092      88,950
Depreciation and amortization.....................       9,330       9,169       27,779      25,830
Selling, general and administrative expenses......       8,126       7,031       22,421      18,587
Net loss (gain) on disposal/write-down of assets..       1,081        (157)       1,314        (135)
                                                     ---------   ---------   ----------   ---------
Operating income (loss)...........................      23,752        (867)      51,483      10,995
Interest expense..................................      (9,672)    (10,455)     (29,696)    (25,985)
Amortization/write-off of financing costs.........      (1,202)       (954)      (3,591)     (2,071)
Interest and investment income....................          15          74           98         399
                                                     ---------   ---------   ----------   ---------
Earnings (loss) from continuing operations
  before income taxes.............................      12,893     (12,202)      18,294     (16,662)
Provision (benefit) for income taxes..............       5,239      (5,041)       7,473      (6,586)
                                                     ---------   ---------   ----------   ---------
Earnings (loss) from continuing operations
  before cumulative effect of change
  in accounting principle.........................       7,654      (7,161)      10,821     (10,076)

Discontinued operations, net of income tax
  (benefit) provision of $(84), $1,726, $(344)
  and $894........................................        (125)      2,589         (515)      1,342

Cumulative effect of change in accounting
  principle, net of income tax benefit of
  $468............................................           -           -         (704)          -
                                                     ---------   ---------   ----------   ---------
Net earnings (loss)...............................   $   7,529   $ (4,572)   $    9,602   $  (8,734)
                                                     =========   =========   ==========   =========
Net earnings (loss) per common share:
  Basic
    Continuing operations.........................   $    0.87   $   (0.83)  $     1.24   $   (1.18)
    Discontinued operations.......................       (0.01)       0.30        (0.06)       0.16
    Cumulative effect of change
      in accounting principle.....................           -           -        (0.08)          -
                                                     ---------   ---------   ----------   ---------
                                                     $    0.86   $   (0.53)  $     1.10   $   (1.02)
                                                     =========   =========   ==========   =========
  Assuming dilution
    Continuing operations.........................   $    0.86   $   (0.83)  $     1.23   $   (1.18)
    Discontinued operations.......................       (0.01)       0.30        (0.06)       0.16
    Cumulative effect of change
      in accounting principle.....................           -           -        (0.08)          -
                                                     ---------   ---------   ----------   ---------
                                                     $    0.85   $   (0.53)  $     1.09   $   (1.02)
                                                     =========   =========   ==========   =========

</TABLE>



<PAGE>
<TABLE>
<CAPTION>
                                                         Three Months             Nine Months
                                                      Ended September 30,      Ended September 30,
                                                     ---------------------   -----------------------
                                                        2003        2002        2003         2002
                                                     ---------   ---------   ----------   ----------
                                                                      (In thousands)
<S>                                                  <C>         <C>         <C>          <C>
Net revenues:(1)
  Refining Group:
    Four Corners operations......................    $ 125,904   $ 115,094   $  371,918   $  317,264
    Yorktown operations(2).......................      202,414     160,068      576,188      232,967
  Retail Group...................................       87,996      77,053      242,412      212,161
  Phoenix Fuel...................................      120,054      91,146      352,035      251,400
  Other..........................................           60          44          270          134
  Intersegment...................................      (63,760)    (60,933)    (182,923)    (164,890)
                                                     ---------   ---------   ----------   ----------
  Net revenues of continuing operations..........      472,668     382,472    1,359,900      849,036
  Net revenues of discontinued operations........        3,014      16,988       26,207       49,558
                                                     ---------   ---------   ----------   ----------
  Total net revenues.............................    $ 475,682   $ 399,460   $1,386,107   $  898,594
                                                     =========   =========   ==========   ==========
Income (loss) from operations:(1)
  Refining Group:
    Four Corners operations......................    $  13,269   $   5,816   $   35,488   $   23,222
    Yorktown operations(2).......................       10,540      (5,994)      16,050       (9,084)
  Retail Group...................................        5,070       2,127       11,373        4,363
  Phoenix fuel...................................        2,101       1,752        5,991        4,791
  Other..........................................       (6,147)     (4,725)     (16,105)     (12,432)
  Net (loss) gain on disposal/write-down
    of assets....................................       (1,081)        157       (1,314)         135
                                                     ---------   ---------   ----------   ----------
  Operating income (loss) from
    continuing operations........................       23,752        (867)      51,483       10,995
  Operating (loss) income from
    discontinued operations......................         (209)      4,315         (859)       2,236
                                                     ---------   ---------   ----------   ----------
  Total income from operations...................    $  23,543   $   3,448   $   50,624   $   13,231
                                                     =========   =========   ==========   ==========

(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            Nine Months
                                                      Ended September 30,     Ended September 30,
                                                     ---------------------   ---------------------
                                                        2003        2002        2003        2002
                                                     ---------   ---------   ---------   ---------
<S>                                                  <C>         <C>         <C>         <C>
Refining Group Operating Data:
  Four Corners Operations:
    Crude Oil/NGL Throughput (BPD)................     29,244      30,902      30,741      32,600
    Refinery Sourced Sales Barrels (BPD)..........     30,147      32,408      30,713      32,548
    Average Crude Oil Costs ($/Bbl)...............   $  28.90    $  25.96    $  29.34    $  22.63
    Refining Margins ($/Bbl)......................   $   9.51    $   6.04    $   9.03    $   6.59
  Yorktown Operations:(1)
    Crude Oil/NGL Throughput (BPD)................     60,485      54,677      56,368      54,295
    Refinery Sourced Sales Barrels (BPD)..........     62,937      58,803      58,804      57,365
    Average Crude Oil Costs ($/Bbl)...............   $  28.54    $  26.57    $  29.91    $  26.64
    Refining Margins ($/Bbl)......................   $   4.61    $   1.71    $   3.93    $   1.70

Retail Group Operating Data:
(Continuing operations only)
  Fuel Gallons Sold (000's).......................     39,373      38,771     110,384     111,457
  Fuel Margins ($/gal)............................   $  0.207    $  0.152    $  0.199    $  0.154
  Merchandise Sales ($ in 000's)..................   $ 34,769    $ 33,296    $ 95,416    $ 94,000
  Merchandise Margins.............................         29%         27%         29%         27%

  Operating Retail Outlets at Period End:
    Continuing Operations.........................        122         123         122        123
    Discontinued Operations.......................          5          17           5         17

Phoenix Fuel Operating Data:
  Fuel Gallons Sold (000's).......................    109,903      94,703     318,088     277,698
  Fuel Margins ($/gal)............................   $  0.052    $  0.054    $  0.051    $  0.053
  Lubricant Sales ($ in 000's)....................   $  6,140    $  5,234    $ 17,967    $ 15,623
  Lubricant Margins...............................       15.8%       15.8%       15.7%       16.6%

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

     Certain factors affecting the comparison of the Company's continuing
results of operations for the three and nine months ended September 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 breaker 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 in the second quarter of 2003, and estimates that
       reduced production resulted in lost earnings of approximately
       $3,750,000.

     - In the first four and one-half months of operation following
       its acquisition in 2002, the Yorktown refinery experienced three
       significant unscheduled unit shutdowns, which impacted the yield of
       high value products, as well as crude oil charge rates.

     - Stronger refining margins at the Company's refineries in 2003, 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.
       In 2002, the Company experienced weaker refining margins at the
       Company's refineries due to, among other things, continuing high
       inventories of distillates resulting from a drop in jet fuel demand
       following the September 11, 2001 terrorists attack and warmer than
       normal winter temperatures in the Northeast; worldwide crude oil
       production levels and Middle East tensions, which added to higher
       crude values; and imported finished products that placed downward
       pressure on gasoline values.

     - 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. The shutdown of
       the Kinder Morgan pipeline in the middle of August 2003 caused some
       supply imbalances and negatively impacted inventory values. This
       negative impact was offset in part by higher margins for Phoenix
       Fuel's cardlock operations.

     - Strong retail fuel margins and improved merchandise margins in 2003
       for several of the Company's market areas. In addition, the Company
       is experiencing increased competition in certain of its markets.

     - The write-off of $901,000  of capitalized costs relating to a
       capital project associated with the Four Corners refinery
       operations. In the third quarter of 2003, Company management
       completed an ongoing evaluation of this project and determined that
       it was no longer viable.

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

     For the three months ended September 30, 2003, earnings from
continuing operations before income taxes were $12,893,000, compared to a
loss of $12,202,000 for the three months ended September 30, 2002, an
improvement in earnings of $25,095,000. This amount includes an increase
in operating earnings for the Yorktown refinery of $16,534,000, primarily
due to a 170% increase in refinery margins and a 7% increase in fuel
volumes sold. The remainder of the increase, relating to the Company's
other operations, was primarily due to a 57% increase in Four Corners
refinery margins. Also contributing to the increase was a 26% increase in
wholesale fuel volumes sold by Phoenix Fuel to third-party customers, a
36% increase in retail fuel margins, and a 5% increase in retail
merchandise margins. These increases were offset in part by higher
operating expenses and selling, general, and administrative ("SG&A")
expenses.

     For the nine months ended September 30, 2003, earnings from
continuing operations before income taxes were $18,294,000, compared to a
loss of $16,662,000 for the nine months ended September 30, 2002, an
improvement in earnings of $34,956,000. This amount includes the following
items related to the operation and acquisition of the Yorktown refinery:
(i) an increase in operating earnings of $25,134,000; (ii) an increase in
the amortization of financing costs of $1,520,000, and (iii) additional
interest expense of $3,757,000. The remainder of the improvement, relating
to the Company's other operations, was primarily due to a 37% increase in
Four Corners refinery margins. Also contributing to the increase was a 24%
increase in wholesale fuel volumes sold by Phoenix Fuel to third-party
customers, a 29% increase in retail fuel margins, and an 8% increase in
retail merchandise margins. These increases were offset in part by higher
operating expenses and SG&A expenses for other Company operations.

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

     Revenues for the three months ended September 30, 2003, increased
approximately $90,196,000 or 24% to $472,668,000 from $382,472,000 in the
comparable 2002 period. This increase was primarily due to a 17% increase
in Yorktown refinery weighted average selling prices, along with a 7%
increase in Yorktown refinery fuel volumes sold; an 15% increase in Four
Corners refining weighted average selling prices; a 12% increase in
Phoenix Fuel's weighted average selling prices; a 26% increase in
wholesale fuel volumes sold by Phoenix Fuel to third-party customers; and
a 7% increase in retail refined product selling prices. Same store retail
fuel volumes sold increased 2% and same store merchandise sales were up
4%.

     Revenues for the nine months ended September 30, 2003, increased
approximately $510,864,000 or 60% to $1,359,900,000 from $849,036,000 in
the comparable 2002 period. The increase includes revenue increases of
$343,221,000 for the Yorktown refinery. Revenue increases relating to the
Company's other operations were primarily due to a 28% increase in Four
Corners refining weighted average selling prices, an 18% increase in
Phoenix Fuel's weighted average selling prices, a 24% increase in
wholesale fuel volumes sold by Phoenix Fuel to third-party customers, and
a 13% increase in retail refined product selling prices. Same store retail
fuel volumes sold were down 1%, while same store merchandise sales were up
2%.

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

     For the three months ended September 30, 2003, cost of products sold
increased approximately $58,127,000 or 18% to $389,182,000 from
$331,055,000 in the comparable 2002 period. This increase was primarily
due to an 7% increase in Yorktown refinery weighted average crude oil
costs, along with an 7% increase in Yorktown refinery fuel volumes sold;
an 11% increase in Four Corners refining weighted average crude oil costs;
a 26% increase in wholesale fuel volumes sold by Phoenix Fuel to third-
party customers; and a 13% increase in the cost of finished products
purchased by Phoenix Fuel. In addition, cost of products sold for 2002
included a loss of approximately $3,769,000 from various crude oil futures
contracts used to economically hedge crude oil inventories and purchases
for the Yorktown refinery.

     For the nine months ended September 30, 2003, cost of products sold
increased approximately $431,002,000 or 61% to $1,135,811,000 from
$704,809,000 in the comparable 2002 period. The increase includes cost of
products sold increases of $292,514,000 for the Yorktown refinery. Cost of
products sold increases relating to the Company's other operations were
primarily due to a 30% increase in Four Corners refining weighted average
crude oil costs, a 24% increase in wholesale fuel volumes sold by Phoenix
Fuel to third-party customers, and a 19% increase in the cost of finished
products purchased by Phoenix Fuel. In addition, cost of products sold for
2003 included losses 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. Cost of
products sold for 2002 included losses on similar contracts of
approximately $1,799,000.

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

     For the three months ended September 30, 2003, operating expenses
increased approximately $4,956,000 or 14% to $41,197,000 from $36,241,000
in the comparable 2002 period. For the nine months ended September 30,
2003, operating expenses increased approximately $32,142,000 or 36% to
$121,092,000 from $88,950,000 in the comparable 2002 period. For the three
months, increases were primarily due to higher payroll and related costs,
increased purchased fuel costs for the Four Corners refineries due to
higher prices, higher repair and maintenance costs for the refineries and
higher general insurance premiums for all operations. The increase for the
nine months includes operating expense increases of $21,602,000 for the
Yorktown refinery and increases for other company operations for the same
reasons described above.

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

     For the three months ended September 30, 2003, depreciation and
amortization increased approximately $161,000 or 2% to $9,330,000 from
$9,169,000 in the comparable 2002 period. For the nine months ended
September 30, 2003, depreciation and amortization increased approximately
$1,949,000 or 8% to $27,779,000 from $25,830,000 in the comparable 2002
period. The increases include depreciation and amortization expense
increases of $418,000 and $3,152,000 for the Yorktown refinery for the
three and nine 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 September 30, 2003, SG&A expenses
increased approximately $1,095,000 or 16% to $8,126,000 from $7,031,000 in
the comparable 2002 period. For the nine months ended September 30, 2003,
SG&A expenses increased approximately $3,834,000 or 21% to $22,421,000
from $18,587,000 in the comparable 2002 period. SG&A expense increases for
the three months were primarily due to accruals for management incentive
bonuses, increased costs for the Company's self-insured health plan due to
higher claims experience, increased letter of credit fees and higher
general insurance premiums. The increase for the nine months includes SG&A
expense increases of $819,000 for the Yorktown refinery and increases for
other company operations for the same reasons described above plus higher
workers compensation costs. In addition, the first quarter of 2002
included a credit of $471,000 in SG&A 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 September 30, 2003, interest expense
decreased approximately $783,000 or 7% to $9,672,000 from $10,455,000 in
the comparable 2002 period. For the nine months ended September 30, 2003,
interest expense increased approximately $3,711,000 or 14% to $29,696,000
from $25,985,000 in the comparable 2002 period. The decrease in interest
expense for the three-month periods is due to reduced borrowings under the
Company's Credit Facility and the reduction of the outstanding balance
under the Loan Facility. Interest expense increased for the nine-month
period by $7,347,000 related to the issuance of the 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 $3,590,000 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 senior subordinated notes in 2002.

     For the three and nine month comparable periods ended September 30,
2003, interest and investment income decreased approximately $59,000 and
$301,000, respectively. The decreases were primarily due to a reduction in
funds available for investment in short-term instruments since the
acquisition of the Yorktown refinery and for the nine-month period,
interest received in 2002 on funds held in an escrow account in connection
with the acquisition of the Yorktown refinery.

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

     For the three and nine month comparable periods ended September 30,
2003, amortization of financing costs increased $248,000 and $1,520,000,
respectively. The increase is due to the amortization of $17,436,000 of
deferred financing costs, relating to senior subordinated debt and 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, the nine month 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 nine months ended September
30, 2003 was approximately 41% and the effective tax benefit rates for the
three and nine months ended September 30, 2002 were approximately 41% and
40%, respectively.

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

     The following table contains information regarding the Company's
discontinued operations, all of which are included in the Company's Retail
Group and include certain service station/convenience stores in all
periods and the Company's travel center in 2003.

<PAGE>
<TABLE>
<CAPTION>
                                           Three Months Ended   Nine Months Ended
                                              September 30         September 30
                                           ------------------   ------------------
                                             2003      2002       2003      2002
                                           --------  --------   --------  --------
                                                        (In thousands)
<S>                                        <C>       <C>        <C>       <C>
Net revenues...........................    $  3,014  $ 16,988   $ 26,207  $ 49,558

Net operating loss.....................    $    (18) $   (489)  $   (479) $ (1,528)
(Loss) gain on disposal................    $    (14) $  4,921   $   (127) $  4,789
Impairment and other write-downs.......    $   (177) $   (117)  $   (253) $ (1,025)
                                           --------  --------   --------  --------
(Loss) earnings before income taxes....    $   (209) $  4,315   $   (859) $  2,236
                                           --------  --------   --------  --------

Net (loss) earnings....................    $   (125) $  2,589   $   (515) $  1,342

(Loss) gain on disposal includes
  allocated goodwill of................    $     16  $    243   $     78  $    243
</TABLE>


OUTLOOK

     Overall, the Company believes that its current refining fundamentals
are more positive now than the same time last year. Additionally, fuel and
merchandise margins are stronger now in the Company's retail area than the
same time last year, with same store fuel and merchandise volumes above
the prior year's levels. Phoenix Fuel currently continues to see growth in
both wholesale and cardlock volumes with relatively stable margins.
However, the businesses in which the Company engages are volatile and
there can be no assurance that currently existing conditions will continue
for any segment of the Company.

LIQUIDITY AND CAPITAL RESOURCES

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

     Operating cash flows increased by $26,629,000 for the nine months
ended September 30, 2003 compared to the nine months ended September 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. This increase was offset in part by lower 2003 cash flows related to
changes in operating assets and liabilities. Net cash provided by
operating activities totaled $53,313,000 and $26,684,000 for the nine
months ended September 30, 2003 and 2002, respectively.

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

     Working capital at September 30, 2003 consisted of current assets of
$217,654,000 and current liabilities of $122,595,000, or a current ratio
of 1.78:1. At December 31, 2002, the current ratio was 1.76:1 with current
assets of $211,704,000 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 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 and lower sales volumes for the
Yorktown refinery in the September 30, 2003 balance due to hurricane
Isabel. These decreases were offset in part by higher refined product
selling prices and higher pipeline and Phoenix Fuel sales volumes.
Prepaids and other have decreased primarily due to the normal amortization
of prepaid insurance premiums.

     Current liabilities have increased since December 31, 2002, primarily
due to increases in accrued expenses, offset in part by a decrease in
accounts payable and a reduction in the current portion of long-term debt.
Accrued expenses have increased primarily as a result of higher interest
accruals, accruals for management incentive bonuses due to improved
financial results, 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.
Accounts payable have decreased primarily as a result of lower refinery
raw material volumes in the September 30, 2003 balance and lower prices,
offset in part by higher balances relating to Phoenix Fuel refined product
volumes and prices. 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 $11,590,000 for the nine months ended September 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 breaker 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 second quarter of 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 any
amount.

     On September 18, 2003, hurricane Isabel passed near the Yorktown
refinery. As a result, the refinery shut down operations for safety
reasons for a period of time. The refinery incurred minor damage as a
result of the hurricane. All of the refinery units were back in full
operation by October 2, 2003.

     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 three and
nine months ended September 30, 2003, the Company incurred $2,645,000 and
$8,120,000, respectively, under this provision of the purchase agreement.
These earn-out payments are considered additional purchase price and have
been allocated to goodwill.

     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 nine months of 2003, the
Company reduced the outstanding balance of its Credit Facility by
$25,000,000 and reduced the outstanding balance of its Loan Facility by
$8,222,000. In addition, in the third quarter, the Company paid off
certain capital lease obligations by paying approximately $4,703,000 in
cash and by applying a $2,000,000 deposit that had been included in "Other
Assets". These reductions were paid from operating cash flows and proceeds
of approximately $9,900,000 from the sale of assets, primarily five of the
Company's retail units and the Travel Center.

     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 are
required by the Company's loan facilities.

     On November 4, 2003, the Company completed the sale of an 8.47 acre
tract of land in north Scottsdale that includes its corporate headquarters
building. In connection with the sale, the Company has entered into a ten
year leaseback agreement, which under certain circumstances can be
extended for up to one year, with options for the Company to renew for two
additional five year periods. The Company will record a deferred gain of
approximately $1,000,000, which will be amortized over the initial lease
period.

     The Company is marketing a number of its remaining units in the
Phoenix market, and certain vacant land. The Company continues to monitor
and evaluate its assets and may sell additional non-strategic or
underperforming assets that it identifies. 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 sale of
the 8.47 acres described above, as well as proceeds from other potential
sales of assets, and savings generated from other parts of the Company's
debt reduction initiative, for the possible further reduction of long-term
debt and/or other business opportunities.

     In prior years, the Company initiated two capital projects relating
to its Four Corners refinery operations, and capitalized costs associated
with these projects of approximately $3,000,000. In the third quarter of
2003, Company management completed an ongoing evaluation of these projects
and wrote off $901,000 of capitalized costs relating to one project after
determining that it was no longer viable. The Company determined that the
other project was potentially still viable and will continue to monitor
it.

     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 September 30, 2003 and December 31, 2002, the Company's long-term
debt was 72.3% 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 71.3% and 75.3%, respectively.

     At September 30, 2003, the Company had long-term debt of
$358,840,000, net of current portion of $9,802,000, 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.

     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 Company's Board of Directors (the "Board") suspended the payment
of cash dividends on common stock in the fourth quarter of 1998. The
Company is currently able to pay dividends under the terms of the
indentures for the Notes, but has no plans to do so. The payment of future
dividends is subject to the results of the Company's operations,
declaration by the Board, and compliance with certain debt covenants.

Risk Management
---------------

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

     In the 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.
There were no such transactions in the third quarter of 2003. For the nine
months ended September 30, 2003, the Company recognized losses on these
contracts of approximately $1,594,000 in cost of products sold. These
transactions did not qualify for hedge accounting in accordance with SFAS
No. 133, "Accounting for Derivative Instruments and Hedging Activities,"
as amended, and accordingly were marked to market each month. There were
no open crude oil futures contracts or other commodity derivative
contracts at September 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 September 30, 2003, there were
no direct borrowings outstanding under this facility.

     The Company's Loan Facility is floating-rate debt tied to various
short-term indices. As a result, the Company's annual interest costs
associated with this debt may fluctuate. At September 30, 2003, there was
$24,000,000 outstanding under this facility. The potential increase in
annual interest expense from a hypothetical 10% adverse change in interest
rates on these borrowings at September 30, 2003, would be approximately
$27,000.

     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, however, is not
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
party 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. 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 clean up
activities.

     Significant developments occurred since the second quarter of 2003 in
connection with the 2001 air quality inspections at the Company's Ciniza
and Bloomfield refineries that were previously discussed in: (i) 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) in the Company's Quarterly Reports on Form 10-Q for
the first and second quarters of 2003 under the heading "Environmental,
Health and Safety", the heading "Management's Discussion and Analysis of
Financial Condition and Results of Operations" or the Commitments and
Contingencies Note to the Company's Consolidated Financial Statements. For
a discussion of matters related to these inspections, see Note 12 to the
Company's Condensed Consolidated Financial Statements included in Part I,
Item 1.

     As of September 30, 2003, the Company had environmental liability
accruals of approximately $7,864,000. 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
-----

     In September 2003, the Board approved the election of Donald M.
Wilkinson to the Board. In addition to serving on the Board, Mr. Wilkinson
also serves as a member of the Audit Committee. Since 1984, Mr. Wilkinson
has been the Chairman and Chief Investment Officer of Wilkinson O'Grady &
Co., Inc., a global asset management firm located in New York city that he
co-founded in 1972. Mr. Wilkinson also is a member of the Board of
Visitors of the Virginia Military Institute and is Chairman of the Board
of Trustees for the Darden School of Business Management at the University
of Virginia.

     Developments have occurred since the second quarter of 2003 in
connection with James E. Acridge, the Company's former President and Chief
Financial Officer.  Mr. Acridge was terminated as the Company's President
and Chief Executive Officer, and was replaced as the Company's Chairman,
on March 29, 2002, although he remains on the Board of Directors.  Matters
relating to Mr. Acridge were previously discussed in: (i) the Company's
Annual Report on Form 10-K for the year ended December 31, 2002, under the
heading "Management's Discussion and Analysis of Financial Condition and
Results of Operations", and Notes 7 and 18 to the Company's Consolidated
Financial Statements; and (ii) in the Company's Quarterly Reports on Form
10-Q for the first and second quarter of 2003 under the Commitments and
Contingencies Note to the Company's Consolidated Financial Statements.
For a discussion of matters related to Mr. Acridge, see Note 12 to the
Company's Condensed Consolidated Financial Statements included in Part I,
Item 1 hereof.

     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 67% for the first nine months 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 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;

     - 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;

     - the risk that current conditions in the various segments of the
       Company's business will not continue, including conditions relating
       to refinery fundamentals, fuel and merchandise margins in the
       Company's retail areas, and Phoenix Fuel wholesale and cardlock
       volumes and margins;

     - 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 risks 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. The Company also incorporates 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 6.  EXHIBITS AND REPORTS ON FORM 8-K

(a)  Exhibits:

     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 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.

     (ii) On November 10, 2003, the Company filed a Form 8-K dated
          November 10, 2003, containing a press release detailing the
          Company's earnings for the third 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 September 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: November 12, 2003
10